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JAMB Commerce 2013 Objective Past Questions

All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Commerce 2013 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

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Commerce 2013 Objective — Question 1

Which Question Paper Type of Commerce is given to you?

  • A. Type D
  • B. Type ICorrect
  • C. Type B
  • D. Type U

Explanation

The type of the question is indicated on the question paper.

Commerce 2013 Objective — Question 2

The type of labour that makes use of physical effort in production processes is the

  • A. skilled labor
  • B. blue-collar job
  • C. white-collar job
  • D. unskilled labourCorrect

Explanation

Unskilled labour needs no particular education or training to perform its task. All that is needed is energy and physicality.

Commerce 2013 Objective — Question 3

The assembling of products into usable forms is known as

  • A. manufacturingCorrect
  • B. construction
  • C. information
  • D. creation

Explanation

Manufacturing involves conversion of raw materials into a more useful form. It is the creation of utility.

Commerce 2013 Objective — Question 4

The final link in the chain of distribution is

  • A. wholesaling
  • B. consumerCorrect
  • C. retailing
  • D. middlemen

Explanation

In the chain of distribution (channels of distribution), the producer is the first person, then the wholesaler, then the retailer, and finally the final consumer.

Commerce 2013 Objective — Question 5

A country is said to be experiencing an unfavourable balance of trade if her

  • A. visible exports exceed visible imports
  • B. imports and exports are equal
  • C. visible imports exceed visible exportsCorrect
  • D. exports exceed imports

Explanation

Balance of trade is the difference between total receipts from visible exports and total payments for visible imports. It is favourable if receipts exceed payments, and unfavourable in the reverse case (visible imports exceeding visible exports).

Commerce 2013 Objective — Question 6

Trading position of Nigeria is the same as her

  • A. willingness to grant credit to foreigners
  • B. balance of trade
  • C. terms of tradeCorrect
  • D. desire to trade with many countries

Explanation

The trade position of a country is expressed by the rate at which exports pay for imports, which is otherwise known as terms of trade.

Commerce 2013 Objective — Question 7

The role of customs and excise authority includes the

  • A. provision of security at the port
  • B. control of the flow of goods in and out of the countryCorrect
  • C. provision of dockyards for ship repairs
  • D. provision of a good transport system to facilitate imports and exports

Explanation

The major aim of the customs and excise authority is to control the flow of goods into and out of the country. One tool for doing this is by imposing tariffs, which then serve as income for government — but generating income is not the primary objective.

Commerce 2013 Objective — Question 8

The document lodged with the customs authorities before a ship can leave the port is a

  • A. ship report
  • B. ship manifestCorrect
  • C. dock warrant
  • D. shipping note

Explanation

A manifest (customs manifest/cargo document) is a document listing the cargo, passengers and crew of a ship, aircraft or vehicle, for the use of customs and other officials.

Commerce 2013 Objective — Question 9

The document which must be endorsed by the ambassador of a country of destination before shipment of goods is a

  • A. certificate of originCorrect
  • B. bill of lading
  • C. closed indent
  • D. consular invoice

Explanation

The certificate of origin must be endorsed by the ambassador of the country of destination to show that the goods are actually coming from the stated station.

Commerce 2013 Objective — Question 10

A country's terms of trade are said to improve when the ratio of her export

  • A. remains constant
  • B. increasesCorrect
  • C. equals import
  • D. decreases

Explanation

When the ratio at which exports pay for imports increases, we can say the terms of trade of the country has improved.

Commerce 2013 Objective — Question 11

Which of the following advertising medium appeals to only the literate in the society?

  • A. Print media advertisingCorrect
  • B. Television advertising
  • C. Cinema advertising
  • D. Radio advertising

Explanation

Print media requires the ability to read and write. Thus, only the literate can benefit from it.

Commerce 2013 Objective — Question 12

The two main forms of communication are

  • A. verbal and non-verbalCorrect
  • B. e-mail and fax
  • C. traditional and modern media
  • D. oral and written

Explanation

Basically, communication can be divided into verbal communication and non-verbal communication.

Commerce 2013 Objective — Question 13

The most reliable and efficient means of conveying urgent documents is through

  • A. ordinary letters
  • B. registered letters
  • C. courier servicesCorrect
  • D. postal order

Explanation

Courier services provide the fastest means of sending parcels/documents.

Commerce 2013 Objective — Question 14

An undertaking given by a person to another assuring his integrity is

  • A. fidelity guaranteeCorrect
  • B. subrogation
  • C. insurable interest
  • D. proximate clause

Explanation

Fidelity means trustworthiness while guarantee means assurance. Fidelity guarantee is therefore the assurance given by one person about the worthiness of a third party.

Commerce 2013 Objective — Question 15

Use the table below to answer questions 15 and 16. Name | Insured Amount (₦) | Actual Value (₦) | Actual Loss (₦) Mr. N | 25,000 | 100,000 | 30,000 Mr. R | 30,000 | 120,000 | 40,000 Mr. P | 40,000 | 150,000 | 50,000 If Mr. N takes a fire insurance policy with average clause, his compensation will be

  • A. ₦7,500Correct
  • B. ₦70,000
  • C. ₦75,000
  • D. ₦5,000

Explanation

Since only 25% of the actual value is insured (₦25,000 ÷ ₦100,000), only 25% of the loss suffered will be paid: 25% × ₦30,000 = ₦7,500.

Commerce 2013 Objective — Question 16

(Using the same table as Q15) What insurance principle has Mr. P violated, if he decides to overstate the actual value of his property?

  • A. Insurable interest
  • B. Uberrimae fideiCorrect
  • C. Subrogation
  • D. Indemnity

Explanation

Uberrimae fidei is a legal principle in certain contracts, such as insurance, requiring the highest standard of good faith during disclosure — overstating a property's value violates this.

Commerce 2013 Objective — Question 17

The difference between indemnity insurance and non-indemnity insurance is that the latter provides

  • A. cover for importers against risks
  • B. full payment to the insured
  • C. consolation payment to the insuredCorrect
  • D. cover for exporters against risks

Explanation

Non-indemnity insurance occurs in situations such as death. The beneficiaries of the deceased cannot be indemnified; rather they will be given a consolation payment for the deceased.

Commerce 2013 Objective — Question 18

An importance of warehousing is in the

  • A. transportation of goods
  • B. importation of goods
  • C. repackaging of goods
  • D. production of goodsCorrect

Explanation

Warehousing ensures steady production of goods, as the producer will not need to wait to exhaust his product before making new production.

Commerce 2013 Objective — Question 19

In order to increase the capital owned, a sole trader may

  • A. issue debentures
  • B. acquire extra shop fittings on credit
  • C. draw less of his profit for personal useCorrect
  • D. seek for bank loan

Explanation

If the sole trader draws less of his profit, the remaining amount will be ploughed back into the business, increasing the sole trader's capital.

Commerce 2013 Objective — Question 20

A business partner who provides capital but abstains from participation in administration of firm is a

  • A. nominal partner
  • B. secret partner
  • C. dormant partnerCorrect
  • D. general partner

Explanation

A dormant partner, also known as a sleeping partner, is a partner that contributes only capital but has no sufficient time to participate in running the business.

Commerce 2013 Objective — Question 21

Which of the following will NOT be stated in a Memorandum of Association?

  • A. Rights of shareholdersCorrect
  • B. Object clause
  • C. Registered office
  • D. Name clause

Explanation

A memorandum of association is a document that specifies the relationship of the business with internal affairs. Rights of shareholders is external to the business and will be disclosed in the articles of association.

Commerce 2013 Objective — Question 22

The amount of authorized capital that shareholders have subscribed to is

  • A. authorized share capital
  • B. owner's equity
  • C. working capital
  • D. issued share capitalCorrect

Explanation

Issued share capital is the amount of capital which a limited liability company has offered the public for subscription, and which has been fully subscribed for and fully paid up.

Commerce 2013 Objective — Question 23

The rate of turnover of a firm in a given year is 5 times while the average stock is ₦12,500. What is the cost of goods sold? (Note: the source scan's option A is not legible/printed.)

  • A. (not legible in source)
  • B. ₦62,500Correct
  • C. ₦65,000
  • D. ₦24,000

Explanation

Rate of stock turnover = Cost of goods sold (turnover) ÷ Average stock. 5 = COGS ÷ 12,500, so COGS = 5 × 12,500 = ₦62,500.

Commerce 2013 Objective — Question 24

A lawyer that defrauds his client may be disrobed by the Nigerian Bar Association in order to

  • A. protect the integrity of the AssociationCorrect
  • B. compensate the affected client
  • C. prevent the client from suing the association
  • D. protect other lawyers

Explanation

In a professional job, each member acts on behalf of the whole. Thus, each member can sue any member for misrepresentation of the association, in order to protect the integrity of the association.

Commerce 2013 Objective — Question 25

In the Nigerian GSM industry, a parliament is organized by the Nigerian Communication Commission in order to

  • A. protect the interest of government
  • B. encourage more people into the business
  • C. protect the interest of consumersCorrect
  • D. increase profit of service providers

Explanation

The parliament of the NCC is to oversee the job of the network operator, in order to protect network users from exploitation by the operators.

Commerce 2013 Objective — Question 26

Trade Fairs in Nigeria are organized by

  • A. Manufacturers Association of Nigeria
  • B. Ministry of Commerce and Industry
  • C. Chambers of CommerceCorrect
  • D. the Federal Government

Explanation

Chambers of Commerce is responsible for promotion of trade in the country. One of the ways it can promote trade is by organising trade fairs.

Commerce 2013 Objective — Question 27

Money is generally acceptable for transactions due to

  • A. the rule of law
  • B. it's acceptability in the global market
  • C. the Central Bank Governor's signature
  • D. the legal backingCorrect

Explanation

Money is generally acceptable as a means of exchange because it has legal backing.

Commerce 2013 Objective — Question 28

Which of the following is a quality of money?

  • A. ScarcityCorrect
  • B. Indivisibility
  • C. Convertibility
  • D. Availability

Explanation

One of the main features of money that makes it valuable is scarcity.

Commerce 2013 Objective — Question 29

Money can simply be referred to as

  • A. a standard of value
  • B. means of settlementCorrect
  • C. durable asset in doing business
  • D. measure of value

Explanation

The general function of money is that it serves as the means of settlement of all types of transactions.

Commerce 2013 Objective — Question 30

Gilt-edged securities are issued mainly by

  • A. non-governmental organizations
  • B. governmentCorrect
  • C. multi-national companies
  • D. individuals

Explanation

Gilt-edged securities are issued mainly by government.

Commerce 2013 Objective — Question 31

The initial function of a manager is

  • A. coordinating
  • B. planningCorrect
  • C. provision of welfare package
  • D. setting-up an organization

Explanation

A manager cannot be appointed without an establishment already existing. When the manager is appointed, the first task he does is planning.

Commerce 2013 Objective — Question 32

The most suitable organizational structure for small or medium-sized enterprises is

  • A. staff structure
  • B. committee structure
  • C. functional structure
  • D. line structureCorrect

Explanation

In a small organisation, there shouldn't be too much bureaucracy. Thus, it is better for all to report to a single boss, as in the line structure.

Commerce 2013 Objective — Question 33

In a staff-authority relationship, the opinion of a specialist in one department to another is

  • A. an adviceCorrect
  • B. a command
  • C. a delegation
  • D. a directive

Explanation

In a staff structure, each subordinate has a boss to whom he reports, and all heads are independent of each other. Thus, the opinion of a specialist will only serve as advice.

Commerce 2013 Objective — Question 34

Management of a business involves the development of ideas for the

  • A. transportation of goods and services that human wants
  • B. transfer of title of ownership of goods and services to individuals
  • C. production of goods and services that satisfy human needsCorrect
  • D. distribution of goods and services that human wants

Explanation

Management of a business centres on developing ideas that can satisfy people's needs/tastes — i.e. the production of goods and services that satisfy human needs.

Commerce 2013 Objective — Question 35

Which of the following is used as a pricing policy?

  • A. Market selection
  • B. Labelling
  • C. Market skimmingCorrect
  • D. Packaging

Explanation

Price skimming is a price-setting strategy that a firm can employ when launching a product or service for the first time.

Commerce 2013 Objective — Question 36

The essential utility derived from the use of a product is known as

  • A. branded benefit
  • B. core benefitCorrect
  • C. formal benefit
  • D. augmented benefit

Explanation

Utility is the usefulness of something. Thus, the essential utility derived from something is the core benefit that thing has to offer.

Commerce 2013 Objective — Question 37

The breaking down of a market into separated and identifiable elements is known as

  • A. segmentationCorrect
  • B. skimming
  • C. penetration
  • D. differentiation

Explanation

Market segmentation is the practice of dividing your target market into approachable groups.

Commerce 2013 Objective — Question 38

A contract that is acknowledged before law court is referred to as

  • A. formal contractCorrect
  • B. contract of records
  • C. specialty contract
  • D. informal contract

Explanation

A formal contract is a contract which has court backing even before the execution of the contract.

Commerce 2013 Objective — Question 39

An agent employed to sell goods delivered to him by the principal is referred to as

  • A. del credere agent
  • B. factorCorrect
  • C. universal agent
  • D. special agent

Explanation

A factor takes possession of goods and sells them. He is given what is referred to as factorage by both the principal and the buyer.

Commerce 2013 Objective — Question 40

A motor dealer who agreed to sell a car to Mr X but sold and delivered it to Mr Y on the delivery date agreed with Mr. X. He has discharged the contract by

  • A. frustration
  • B. an agreement
  • C. breachCorrect
  • D. performance

Explanation

By selling and delivering the car to a different party (Mr Y) instead of Mr X as agreed, the dealer has discharged (broken) the contract by breach.

Commerce 2013 Objective — Question 41

A contract can be terminated through

  • A. family intervention
  • B. frustrationCorrect
  • C. consultation
  • D. physical combat

Explanation

If a party to a contract is unable to discharge his part of the contract due to happenings beyond his control, such a contract can be discharged/terminated by frustration.

Commerce 2013 Objective — Question 42

The right to retain possession of goods until the contract price is paid is referred to as

  • A. ultra vires
  • B. a breach
  • C. a lienCorrect
  • D. a promise

Explanation

Lien is the right to retain the possession of the property of another until the other person meets the demands of the person in possession.

Commerce 2013 Objective — Question 43

The sole legal right held by the author to publish his book is a

  • A. copyrightCorrect
  • B. patent right
  • C. bookmark
  • D. trademark

Explanation

Copyright is the exclusive right of an author to publish his own work only. This right is given to protect the author's intellectual property.

Commerce 2013 Objective — Question 44

The process of transferring data from one computer to another is referred to as

  • A. faxing
  • B. browsing
  • C. decoding
  • D. downloadingCorrect

Explanation

Downloading is the act of transferring data from one computer to another through some set of connections.

Commerce 2013 Objective — Question 45

The physical components of a computer system is

  • A. hardwareCorrect
  • B. hard disk
  • C. floppy disk
  • D. software

Explanation

A computer system has two parts, namely software and hardware. Software is the part that cannot be seen and touched but is necessary for computer operation, whereas hardware is the part of the computer that can be seen and touched.

Commerce 2013 Objective — Question 46

A computer accessory through which information can be retrieved is the

  • A. input device
  • B. control unit
  • C. floppy disk
  • D. hard diskCorrect

Explanation

The hard disk stores all processed information on the computer. In the case of a breakdown of the computer, the hard disk can be used to recover files on the system.

Commerce 2013 Objective — Question 47

The type of computer application software used mainly for management information is

  • A. autocad
  • B. data baseCorrect
  • C. word perfect
  • D. corel draw

Explanation

A database is used by management to store all records of an organisation.

Commerce 2013 Objective — Question 48

To meet security requirements before gaining access to data, a computer operator supplies

  • A. a yahoo meet address
  • B. a passwordCorrect
  • C. a modem
  • D. an e-mail address

Explanation

A password is an arbitrary string of characters including letters, digits or other symbols, used to block unauthorised access to devices.

Commerce 2013 Objective — Question 49

A major factor that affects business operations is

  • A. supply
  • B. product
  • C. rivalry
  • D. technologyCorrect

Explanation

Technology is a major factor that changes from time to time. Thus, it goes a long way in affecting business operations.

Commerce 2013 Objective — Question 50

The environmental hazard that is most difficult to control is

  • A. water pollution
  • B. air pollutionCorrect
  • C. political unrest
  • D. land pollution

Explanation

Air pollution is the most difficult to control because it travels quickly through the air.

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