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JAMB Commerce 2012 Objective Past Questions

All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Commerce 2012 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

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Commerce 2012 Objective — Question 1

Which Question Paper Type of Commerce as indicated above is given to you?

  • A. Type Green
  • B. Type blue
  • C. Type Red
  • D. Type YellowCorrect

Explanation

The question paper type is indicated on it.

Commerce 2012 Objective — Question 2

One of the major benefits of commerce to government is to

  • A. improve the standard of living
  • B. generate revenue for growth developmentCorrect
  • C. encourage cooperation among public organizations
  • D. encourage the development

Explanation

Commerce which brings about commercial activities lead to generate revenue which the government can use to expand the economy and also develop it.

Commerce 2012 Objective — Question 3

An example of an activity in the construction industry is

  • A. blacksmithing
  • B. bricklayingCorrect
  • C. car assembling
  • D. shoemaking

Explanation

Bricklaying falls under secondary sector and secondary sector encompasses construction activities.

Commerce 2012 Objective — Question 4

One of the inputs in production that can be motivated by remuneration is

  • A. capital
  • B. entrepreneur
  • C. labourCorrect
  • D. land

Explanation

Labour is the only factor of production which is motivated with remuneration. Other factors of production have more or less fixed reward.

Commerce 2012 Objective — Question 5

The allocation of tasks to different skills in a production process is referred to as

  • A. production technique
  • B. production function
  • C. division of labourCorrect
  • D. delegation of responsibility

Explanation

Division of labour is the act of allocating dividing jobs into different units with each unit dealing with a particular job to improve the total output.

Commerce 2012 Objective — Question 6

The sales of goods through a medium that accepts money and delivers the items to the customer is a/an

  • A. automated teller machine
  • B. vending machineCorrect
  • C. counting machine
  • D. branding machine

Explanation

Vending machine is an automated machine programmed to accept money and release goods to consumers as the amount given to it.

Commerce 2012 Objective — Question 7

The main purpose of branding is to

  • A. create identity for a productCorrect
  • B. make a product look attractive
  • C. create product awareness
  • D. increase sales volume

Explanation

Branding is aimed at creating identity of a product. By branding, a product is given distinctive name different from other names of its close substitutes.

Commerce 2012 Objective — Question 8

The basis for international trade is embedded in the principle of

  • A. absolute advantage
  • B. globalization
  • C. deregulation
  • D. comparative advantageCorrect

Explanation

Comparative cost advantage states that each country should specialise in the production and export of goods which it has comparative cost advantage over the others.

Commerce 2012 Objective — Question 9

The major problem encountered in international trade is that of

  • A. distanceCorrect
  • B. differences in culture
  • C. politics
  • D. differences in currency

Explanation

The major problem in international trade is the distance to take the goods to. In some cases, this factor discourages the trader from exporting.

Commerce 2012 Objective — Question 10

The document a seller uses in dispatching goods to a customer by a carrier is a

  • A. bill of ladingCorrect
  • B. invoice
  • C. advice note
  • D. delivery note

Explanation

Bill of lading gives the customers information of the goods loaded in the ship.

Commerce 2012 Objective — Question 11

A document which serves as an order with details of goods required by an intending purchaser is a

  • A. freight note
  • B. indentCorrect
  • C. bill of lading
  • D. waybill

Explanation

An indent is a document which authorises a third party to buy on behalf of the purchaser the goods which that purchaser want.

Commerce 2012 Objective — Question 12

If a customer pays within nine days of receiving goods and takes advantage of 3% off the invoice price, this is stated as

  • A. 3/9; net 30Correct
  • B. 9/27; net 30
  • C. 30; net 9/3D
  • D. 9/30; net 3

Explanation

3 net 30 means 3% off if money paid within 9 days of 30days in the month.

Commerce 2012 Objective — Question 13

Which of the following is a characteristic of a bearer cheque? It is

  • A. made with transverse lines
  • B. made payable to whoever presents itCorrect
  • C. made Without transverse lines
  • D. only payable into the payee's account

Explanation

A bearer cheque is a cheque payable to whoever present it for payment at the bank.

Commerce 2012 Objective — Question 14

A bill of exchange paid before its due date at an amount less than its face value is said to have been

  • A. Accepted
  • B. Rejected
  • C. DiscountedCorrect
  • D. Dishonoured

Explanation

If a bill of exchange is discounted, in most cases, it is discounted because the person paying it will take the discount for helping to pay earlier before the due date.

Commerce 2012 Objective — Question 15

The most effective type of advertising for branded products is

  • A. mass advertising
  • B. persuasive advertisingCorrect
  • C. informative advertising
  • D. competitive advertising

Explanation

For a branded product, the seller must provide information that makes his brand to be distinctive from other brands. Such advertisement is referred to as informative advertising.

Commerce 2012 Objective — Question 16

A current account holder pays fees for services in form of

  • A. bank chargesCorrect
  • B. interest rates
  • C. commission on turnover
  • D. minimum lending rate

Explanation

Bank charges is the amount the bank charges the holder of current account periodically for activities on the account.

Commerce 2012 Objective — Question 18

Communication is relevant to business activities because it

  • A. creates wealth for people
  • B. reduces the cost and risk of travellingCorrect
  • C. connects people
  • D. enhances delivery of goods and services

Explanation

Communication reduces the cost implication of travelling, the associated risk of travelling and the time that will be wasted if the purpose for travelling failed.

Commerce 2012 Objective — Question 19

The right of an insurance company to stand in place of an insured against a third party, who is liable for the occurrence of a loss, is the principle of

  • A. proximate cause
  • B. insurable interest
  • C. insurance priority
  • D. subrogationCorrect

Explanation

Subrogation means that the ownership of an item that has been fully indemnify goes to the insurance company. Thus, the insurance company can stand in place of the owner.

Commerce 2012 Objective — Question 20

Assurance is different from insurance in that the former is based on

  • A. probability
  • B. possibilityCorrect
  • C. risk
  • D. uncertainty

Explanation

An assurance is based on possibility because it deals with lives. It is taken to cover dependents should the assured die.

Commerce 2012 Objective — Question 21

A person who undertakes life insurance is said to be a/an

  • A. insurerCorrect
  • B. assurer
  • C. assured
  • D. insured

Explanation

The insurer is the one who provides the life insurance policy.

Commerce 2012 Objective — Question 22

Tourism serves the purpose of

  • A. cross-cultural understanding and peaceful interactionCorrect
  • B. opening avenues for leaving the country
  • C. economic development and naturalization
  • D. exploiting the country's natural endowment

Explanation

Through tourism, people of the world tend to understand each other better and leave peaceful because they exchange culture and understand each other very well.

Commerce 2012 Objective — Question 23

The type of letters that are delivered through the normal mail or by air-mail express service is referred to as

  • A. inland letters
  • B. registered letters
  • C. airmail lettersCorrect
  • D. express letters

Explanation

Letters delivered by normal mail or air-mail express service are referred to as airmail letters.

Commerce 2012 Objective — Question 24

A business organization that exploits the capabilities of a member to remedy the weaknesses of another is a

  • A. joint ventureCorrect
  • B. partnership
  • C. nominal partnership
  • D. cooperative

Explanation

The main reason that usually leads to formation of partnership business is the inability of one or two persons to run the business successfully. So, they need each other to compliment each other.

Commerce 2012 Objective — Question 25

The most important business objective is to

  • A. improve investments
  • B. provide quality productsCorrect
  • C. target consumers for satisfaction
  • D. carve a niche for the business

Explanation

The basic objective of business is to improve its investment wealth. Other objectives of the business falls under this central objective.

Commerce 2012 Objective — Question 26

In case of liquidation of a public limited liability company, those that are paid first are ordinary shareholders except

  • A. ordinary shareholders
  • B. preference shareholders
  • C. cumulative preference shareholders
  • D. debenture holdersCorrect

Explanation

Debenture holders are creditors to the business. They are not part of the owner of the business, thus, they are settled first before any shareholder is settled.

Commerce 2012 Objective — Question 27

A feature common to public and private limited liability companies is that

  • A. both can sue and be suedCorrect
  • B. the minimum number of shareholders is five
  • C. the transfer of their shares is not restricted
  • D. their annual accounts are published for public use

Explanation

Both the public and private limited companies are legal entity that can sue and be sued in its name.

Commerce 2012 Objective — Question 28

A business organization can obtain long-term financing through a

  • A. bank overdraft
  • B. the sale of sharesCorrect
  • C. credit purchases
  • D. bureau de change

Explanation

Shares have no maturity date; thus, it is a long-term finance to limited liability companies.

Commerce 2012 Objective — Question 29

The portion of the authorized share capital given out to the public for subscription is

  • A. called-up capital
  • B. issued capitalCorrect
  • C. paid-up capital
  • D. reserved capital

Explanation

Issued capital is the portion of the authorised capital which the company has offered the public for subscription and which has been fully subscribed for.

Commerce 2012 Objective — Question 30

A company has an authorized capital of 40 million shares at #1 each, out of which 32 million are fully paid-up and issued. What happens to the remaining 8 million shares?

  • A. It has been issued but not fully paid-up
  • B. It has not been applied for but not issued
  • C. It is not paid-up
  • D. It is not yet issuedCorrect

Explanation

The remaining of the authorised capital which have not been offered the public for subscription is referred to as unissued capital.

Commerce 2012 Objective — Question 31

If the rate of turnover of a company in 1999 was 4 times while the average stock was N49,600, determine the turnover.

  • A. N198,400Correct
  • B. N100,200
  • C. N99,200
  • D. N49,600

Explanation

Rate of turnover = cost of goods sold(turnover)/Average stock. 4 = cost of goods sold(turnover)/49,600. Cost of goods sold (turnover) = 4×49,600 = N198,400.

Commerce 2012 Objective — Question 32

Given: Opening Stock 1,800; Purchases 2,800; Sales 8,000; Closing stock 350; Carriage on sales 500. Calculate the value of the unused stock.

  • A. 1,800
  • B. 350Correct
  • C. 2,800
  • D. 500

Explanation

The unused stock is the closing stock = 350.

Commerce 2012 Objective — Question 33

The main objective of a trade association is to

  • A. protect its members against litigationCorrect
  • B. boost the trade of its member
  • C. secure credit for its members
  • D. protects its member against victimization

Explanation

The main objective of trade associations is to protect the interest of its members.

Commerce 2012 Objective — Question 34

The promotion and protection of trade, industry and agriculture through trade fairs is a function of

  • A. NACRDB
  • B. NACCIMA
  • C. the Consumer Protection Council
  • D. the Chamber of CommerceCorrect

Explanation

The Chambers of Commerce is in charge of promoting trade by organising trade fairs from time to time.

Commerce 2012 Objective — Question 35

Exchange is restricted to authorized

  • A. companies
  • B. brokersCorrect
  • C. investors
  • D. principals

Explanation

It is only registered brokers that can deal in the stock exchange market for dealings in financial securities.

Commerce 2012 Objective — Question 36

Securities that entitle the investor to coupon rates are

  • A. bondsCorrect
  • B. equities
  • C. treasury bills
  • D. shares

Explanation

Bonds are government financial instrument that has coupons quoted on it. This coupon serves as the interest for other financial instruments.

Commerce 2012 Objective — Question 37

Under what management function will the motivation of employees fall?

  • A. Staffing
  • B. Controlling
  • C. Organizing
  • D. DirectingCorrect

Explanation

The managers can motivate his employees in the way he directs them. Through directing, employees create favourable or unfavourable relationship with the manager.

Commerce 2012 Objective — Question 38

The promotion of team spirit in an organization is referred to as

  • A. unity of direction
  • B. esprit de corpsCorrect
  • C. unity of purpose
  • D. discipline

Explanation

Esprit de corps is a term used to describe oneness in an organisation settings. It promotes one spirit in the organisation.

Commerce 2012 Objective — Question 39

One of the characteristics of a good organizational chart is that it should be

  • A. rigid
  • B. be right for government policy
  • C. facilitate communicationCorrect
  • D. acceptable

Explanation

A good organogram should be clear such that there will be easy communication between the subordinate and the superior.

Commerce 2012 Objective — Question 40

An organization which enables consumer satisfaction is practising

  • A. consumerism
  • B. market segment
  • C. selling concept
  • D. marketing conceptCorrect

Explanation

Marketing concept is all effort of an organisation centred at satisfying the customers.

Commerce 2012 Objective — Question 41

Goods and services are made available to consumers through the

  • A. channel of distributionCorrect
  • B. advertising the medium
  • C. selling agency
  • D. marketing department

Explanation

The channel of distribution is the chart that shows the movement of goods from the producer to the final consumers.

Commerce 2012 Objective — Question 42

A person who, in consideration for an extra commission, guarantees the seller against default of the buyer is a/an

  • A. extra commission agent
  • B. del credere agentCorrect
  • C. broker
  • D. factor

Explanation

Del credere agent is the agent that takes responsibility of the default of the buyer in case of default.

Commerce 2012 Objective — Question 43

Yahya bought a piece of furniture on a credit sale agreement from Ahmed and resold it to Ali before installments were made. The court upheld that Ahmed could not recover the goods from Ali. The reason for the judgement was because

  • A. ownership was transferred on completion of installments
  • B. Ali was indebted to Ahmed for the goods
  • C. ownership of goods was transferred to Ali on deliveryCorrect
  • D. the agreement had already lapsed

Explanation

In credit sales arrangement, ownership of goods is transferred to the buyer on delivery of the goods. Thus, the purchase of Ali from Yahya is well and valid and thus, Ahmed cannot recover the goods from Ali.

Commerce 2012 Objective — Question 44

The body which ensures that products marketed in Nigeria are protected against harmful substances is

  • A. NAFDACCorrect
  • B. SON
  • C. CPC
  • D. CON

Explanation

NAFDAC means National Agency for Food and Drugs Administration Council. They are responsible for ensuring that foods and drugs in the market are safe for consumption.

Commerce 2012 Objective — Question 45

The processing of decoding data in a computer is known as

  • A. default drive
  • B. decryption
  • C. securityCorrect
  • D. facility

Explanation

Codes in computer are written as scripts. In order to decode the codes, it needs to be decrypted.

Commerce 2012 Objective — Question 46

Which of the following is a type of software that, without which, the computer system cannot function properly?

  • A. System softwareCorrect
  • B. hybrid software
  • C. digital computer
  • D. package software

Explanation

System softwares are primary softwares that without them, the computer system cannot function properly.

Commerce 2012 Objective — Question 47

Computers that are programmed to process data based on binary basis are

  • A. analog computers
  • B. digital computers
  • C. hybrid computersCorrect
  • D. package computers

Explanation

Hybrid computers are the computers that are programmed to process data based on binary basis.

Commerce 2012 Objective — Question 48

Modern means of payment is greatly facilitated by

  • A. e-commerce
  • B. paper money
  • C. e-bankingCorrect
  • D. credit transfer

Explanation

E-banking is the act of paying and receiving money without going to the bank premises. E-banking means electronic banking.

Commerce 2012 Objective — Question 49

The provision of quality and safe products which guarantee the health of consumers is an example of

  • A. quality controlCorrect
  • B. profile control
  • C. civic responsibility
  • D. social responsibility

Explanation

Quality control ensures that goods meet minimum standard before it can be carried out for sale. This policy is pursued in order to ensured safety of consumers.

Commerce 2012 Objective — Question 50

A business organization must always consider the overall effect of its actions on the

  • A. consumers
  • B. competitor
  • C. profitCorrect
  • D. society

Explanation

Profit is the basic objective of any business organisation. Thus, all its action is central on maximising the profit.

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