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JAMB Commerce 2014 Objective Past Questions

All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Commerce 2014 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

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Commerce 2014 Objective — Question 1

Which Question Paper Type of Commerce is given to you?

  • A. Type F
  • B. Type ECorrect
  • C. Type L
  • D. Type S

Explanation

This is indicated by the question type served to the candidate.

Commerce 2014 Objective — Question 2

Cooperation and friendliness are enhanced among nations through interdependence necessitated by

  • A. tourism
  • B. commerceCorrect
  • C. agriculture
  • D. socio-cultural activities

Explanation

Commerce promotes cooperation among nations, as it is necessary for them to interact through buying and selling since no nation is self-sufficient (an island).

Commerce 2014 Objective — Question 3

One of the products of an extractive industry is

  • A. an air plane
  • B. an iron oreCorrect
  • C. a shoe
  • D. a textile material

Explanation

An extractive industry engages in exploration of raw materials from their sources; iron ore is an output of exploration.

Commerce 2014 Objective — Question 4

The payment for direct service is usually made by the

  • A. local authority
  • B. community
  • C. government
  • D. individualCorrect

Explanation

Any payment made by an individual, in most cases, will directly receive the benefit of the service (direct service).

Commerce 2014 Objective — Question 5

An important feature of land is that it

  • A. has an elastic supply
  • B. is an active factor of production
  • C. is heterogeneous in natureCorrect
  • D. is subject to returns to scale

Explanation

Land is heterogeneous in nature because it has different resources that can be obtained from it, such as water, crude oil, wood, and farms.

Commerce 2014 Objective — Question 6

One of the major determinants of the volume of production is

  • A. the market sizeCorrect
  • B. the availability of banks
  • C. sex distribution
  • D. government

Explanation

The larger the size of the market, the larger the production unit tends to be.

Commerce 2014 Objective — Question 7

Mrs. Jones who lives in the riverine community of Rivers State makes her living through crabbing and fishing. This type of occupation she is in is

  • A. extractiveCorrect
  • B. commercial
  • C. tertiary
  • D. manufacturing

Explanation

She is in extractive industry because she is exploring natural resources from their sources (crabbing and fishing).

Commerce 2014 Objective — Question 8

To eliminate middlemen, there should be a retail outlet such as a

  • A. producer co-operative
  • B. consumer co-operativeCorrect
  • C. multiple shop
  • D. department store

Explanation

With consumer co-operatives, the middlemen can be eliminated because the consumer co-operative can buy directly from the manufacturer.

Commerce 2014 Objective — Question 9

The document issued by a port authority for goods deposited is a

  • A. bill of lading
  • B. bill of sight
  • C. consular invoice
  • D. warehouse warrantCorrect

Explanation

A warehouse warrant is issued to the ship company to acknowledge that goods from the ship have been offloaded at the port and stored in the bonded warehousing pending clearance.

Commerce 2014 Objective — Question 10

The document submitted to the customs authority when full description of imported goods is not provided is

  • A. a bill of sightCorrect
  • B. an invoice
  • C. an indent
  • D. bill of interest

Explanation

Bill of sight refers to a declaration made to the customs office by an importer who is unsure about the exact details of what is being shipped.

Commerce 2014 Objective — Question 11

The role of customs and excise authority includes the

  • A. control of the flow of goods in and out of the countryCorrect
  • B. control of security agents within and out of the country's borders
  • C. provision of dockyards for ship repairs and maintenance
  • D. provision of transport system to facilitate imports and exports

Explanation

The basic function of the custom and excise authority is to regulate the flow of goods within the country. One of the ways of regulating it is by imposing tariffs; the imposition of tariff is secondary function of custom and excise authority.

Commerce 2014 Objective — Question 12

A document recording the transactions of an organization with its customer for a specified period, which normally shows the indebtedness of one to the other, is a

  • A. statement of accountCorrect
  • B. consular invoice
  • C. pro-forma invoice
  • D. statement of affairs

Explanation

A statement of account is the account that shows the detail transactions between two or more persons.

Commerce 2014 Objective — Question 13

In response to an inquiry from a customer, a wholesaler is expected to send back

  • A. a consignment note
  • B. an order
  • C. a quotationCorrect
  • D. an advice note

Explanation

After the supplier access the order requisition of an intending purchaser, he will send a quotation to him showing the detail prices of the goods he wishes to buy.

Commerce 2014 Objective — Question 14

A carton of noodles valued at #2,000 was invoiced at #200 only. The accounting procedure to correct this error is to issue

  • A. an invoice for #2,000
  • B. a debit note #2,000
  • C. a credit note #1,800
  • D. a debit note #1,800Correct

Explanation

Debit note shows the current debt obligation — the shortfall of #1,800 needs a debit note to correct the under-invoicing.

Commerce 2014 Objective — Question 15

Tourists with no fixed address in a town may receive their letters from the post office through

  • A. a post restanteCorrect
  • B. parcel post
  • C. private mail bag
  • D. recorded delivery

Explanation

Recorded delivery enables people with a P.O. box to get their parcels. All they need to do is visit the post office to which the parcel is posted and request for the parcel; post restante serves those without a fixed address.

Commerce 2014 Objective — Question 16

Endowment policy in insurance business is an aspect of

  • A. Accident Insurance policy
  • B. Fidelity Guarantee Insurance Policy
  • C. Motor Vehicle Insurance Policy
  • D. Life AssuranceCorrect

Explanation

An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death.

Commerce 2014 Objective — Question 17

Insurance against burglary is an example of

  • A. Indemnity InsuranceCorrect
  • B. Fidelity Guarantee Insurance
  • C. Non-Insurable risk
  • D. Non-Indemnity Insurance

Explanation

Burglary is the forceful entering of a building to cart away belongings. The belongings in a building can actually be valued and thus such incident is indemnifiable — hence an example of indemnity insurance.

Commerce 2014 Objective — Question 18

The principle which requires the insurance company to disclose to the proposer all material facts of the risk to be covered is

  • A. subrogation
  • B. uberrimae fideiCorrect
  • C. proximate cause
  • D. contribution

Explanation

Uberrimae fidei is applicable to the insurance company as well as the person taking the insurance policy — both must disclose all material details relating to the risk.

Commerce 2014 Objective — Question 19

The insurance principle that allows an insurance company to take over the rights of the insured once he has been compensated is

  • A. indemnity
  • B. proximate cause
  • C. utmost good faith
  • D. subrogationCorrect

Explanation

After an insured has been fully indemnified, the ownership of the remains goes to the insurance company — this is the principle of subrogation.

Commerce 2014 Objective — Question 20

A trader who experienced loss through fire can be restored by

  • A. an insurance companyCorrect
  • B. a trade association
  • C. the bank
  • D. an advertising agency

Explanation

A trader who experiences loss by fire can be restored by an insurance company if he has taken fire insurance policy before the incident.

Commerce 2014 Objective — Question 21

The distribution of petroleum products in Nigeria is through

  • A. rail
  • B. roadCorrect
  • C. sea
  • D. air

Explanation

Since the pipelines are being vandalized/bunked, the main source of distributing petroleum resources in Nigeria for now remains the road through the help of tankers.

Commerce 2014 Objective — Question 22

The deliberate effort geared towards discarding some cargoes in order to lighten the vessel is

  • A. a caveat emptor
  • B. uberrimae fidei
  • C. demurrage
  • D. jettisonCorrect

Explanation

Jettison is an intentional act of throwing overboard ship parts of shipment or dropping out some body part of a vessel in order to save the rest of the shipment or the whole vessel from complete damage.

Commerce 2014 Objective — Question 23

The major aim of establishing a public corporation is to

  • A. establish a monopoly
  • B. provide essential servicesCorrect
  • C. provide employment opportunities
  • D. encourage specialization

Explanation

The main purpose for establishing public corporation is to provide essential service to the public at a relatively cheap amount.

Commerce 2014 Objective — Question 24

The coming together of a manufacturing business with a firm that markets its products is

  • A. backward integration
  • B. forward integrationCorrect
  • C. forward integration
  • D. a syndicate

Explanation

Forward integration is a business strategy that involves expanding a company's activities to include the direct distribution of its products.

Commerce 2014 Objective — Question 25

An association of voluntary organizations that work together for a common aim while retaining their independence is a

  • A. syndicate
  • B. merger
  • C. cartel
  • D. consortiumCorrect

Explanation

A consortium is an association of voluntary organisations that work together for a common aim while retaining their independence.

Commerce 2014 Objective — Question 26

The document that explains the types of shares available for sale to the public is a

  • A. prospectusCorrect
  • B. an invoice
  • C. an open indent
  • D. a closed indent

Explanation

The prospectus is the document used to advertise to the public to subscribe to the share of a company; it has summary account of the company.

Commerce 2014 Objective — Question 27

Which of the following attracts only interest but leaves the capital unpaid?

  • A. A long-term loan
  • B. A development bond
  • C. A redeemable bond
  • D. An irredeemable bondCorrect

Explanation

An irredeemable bond attracts interest without payment of principal.

Commerce 2014 Objective — Question 28

A loan to a customer with a cheque account at a bank in which the account is allowed to go into debit is

  • A. overdraftCorrect
  • B. advance
  • C. interest
  • D. commission

Explanation

Overdraft is the amount above the balance of a current account which an holder is allowed to withdraw.

Commerce 2014 Objective — Question 29

Part payments made on allotted shares by subscribers is usually the

  • A. Subscribed capital
  • B. authorized capital
  • C. issued capital
  • D. Called-up capitalCorrect

Explanation

Called-up capital is part of the subscribed shares which the company has called the applicants to pay for.

Commerce 2014 Objective — Question 30

The net profit is the excess of gross profit and sources of income over all the expenses. This implies that net profit is

  • A. the difference between gross profit and trade expensesCorrect
  • B. the difference between gross profit and net sales
  • C. sales less cost of sales including sales returns
  • D. opening stock add purchase less closing stock

Explanation

Net profit is the excess of gross profit over trade expenses.

Commerce 2014 Objective — Question 31

A form of money with a face value which is greater than the value of the metal content is a

  • A. legal tender
  • B. bank notes
  • C. token moneyCorrect
  • D. commodity money

Explanation

Token money is a form of money whose face value exceeds its intrinsic (metal content) value.

Commerce 2014 Objective — Question 32

An agent who transacts business with the broker in the stock exchange is a

  • A. stag
  • B. bull
  • C. del credere
  • D. jobberCorrect

Explanation

A jobber is a market maker in the stock exchange who transacts business only with the broker, not directly with the public.

Commerce 2014 Objective — Question 33

A document sent by a broker to his client to confirm a purchase or sale made on his behalf is

  • A. a delivery note
  • B. a consignment note
  • C. a transfer form
  • D. a contract noteCorrect

Explanation

A contract note is sent by a broker to confirm a purchase or sale made on behalf of the client.

Commerce 2014 Objective — Question 34

'Cum div' differs from 'ex div' in that, in the latter, it entitles the purchaser to receive a company's current dividend

  • A. it entitles the purchaser to receive a company's current dividend
  • B. it entitles the vendor to receive a company's current dividendCorrect
  • C. it confirms a purchase or sale made on behalf of a shareholder
  • D. it is a document used to transfer ownership of shares

Explanation

Ex-div means that the shares exclude the current dividend; thus, it entitles the vendor to the current dividend, unlike cum-div which includes it.

Commerce 2014 Objective — Question 35

The payment made by a speculator to the buyer when he is unable to deliver stocks on the agreed date is a

  • A. arbitrage
  • B. B.franco
  • C. contango
  • D. backwardationCorrect

Explanation

Backwardation is a percentage paid by a person selling stock for the right of delaying its delivery.

Commerce 2014 Objective — Question 36

Which of the following regulates and controls the activities in the Nigerian Stock Exchange?

  • A. BPE
  • B. SECCorrect
  • C. NDIC
  • D. CBN

Explanation

The Securities and Exchange Commission (SEC) is the body responsible for the regulation of the second-tier security market in which Nigeria Stock Exchange is one of it.

Commerce 2014 Objective — Question 37

The principle of management that emphasizes on the number of subordinates under the direct supervision of a manager is

  • A. span of controlCorrect
  • B. unity of command
  • C. scalar chain
  • D. unity of direction

Explanation

Span of control is the principle of management which specifies the number of persons under direct control of the superior.

Commerce 2014 Objective — Question 38

Marketing differs from selling in that, in the latter, the latter only creates a possession utility

  • A. a possession utilityCorrect
  • B. marginal utility
  • C. form utility
  • D. place utility

Explanation

Marketing differs from selling in that selling only creates a possession utility.

Commerce 2014 Objective — Question 39

A business that focuses attention on the quality of the goods produced by precisely knowing what the consumers desire is said to be operating a

  • A. product conceptCorrect
  • B. market concept
  • C. promotion mix
  • D. production mix

Explanation

A product concept business focuses attention on the quality of the goods produced by precisely knowing what the consumers desire.

Commerce 2014 Objective — Question 40

The physical and psychological satisfaction a customer derives from the purchase of goods and services is a

  • A. price mix
  • B. marketing mix
  • C. promotion mixCorrect
  • D. market mix

Explanation

The physical and psychological satisfaction a customer derives from the purchase of goods and services is a result of the promotion mix.

Commerce 2014 Objective — Question 41

Which of the following marketing aspects stimulates buying by providing free gifts?

  • A. Persona selling
  • B. Sales promotionCorrect
  • C. Sales promotion
  • D. publicity

Explanation

Sales promotion can come in many ways, one of which is giving free gifts to prospective buyers.

Commerce 2014 Objective — Question 42

Which of the following is used as a pricing policy?

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

Explanation

Market skimming is a pricing approach in which the producer sets a high initial price and gradually reduces it, used as a pricing policy.

Commerce 2014 Objective — Question 43

Mr. Taiwo entered into a contract to let a car to Mr. Bunmi for his wedding for two days. However, the car had an accident before the first day. Mr. Bunmi attempted to claim damages but failed. This implies that the contract was terminated by

  • A. bankruptcy
  • B. frustrationCorrect
  • C. breach
  • D. apse of time

Explanation

The accident is beyond the control of Mr. Taiwo. Any events beyond the control of a party to the contract can cause the contract to be terminated by frustration.

Commerce 2014 Objective — Question 44

Hire purchase is advantageous to the seller in that it

  • A. it elevates his living standard
  • B. his turnover will increaseCorrect
  • C. people pay instalmentally
  • D. it enhances level of patronage

Explanation

Hire purchase causes the turnover of the seller to increase because more people tend to patronise the seller because of the credit facility.

Commerce 2014 Objective — Question 45

The difference between a factor and a broker is that the former

  • A. is licensed to sell goods on auction
  • B. has a lien on the goods he possessesCorrect
  • C. is not in possession of the goods
  • D. cannot sell goods in his own name

Explanation

The factor is given authority over the goods of the principal, and unlike a broker, has a lien (right to retain possession) on the goods he possesses.

Commerce 2014 Objective — Question 46

A contract which is devoid of legal effect is

  • A. void contractCorrect
  • B. unenforceable contract
  • C. voidable contract
  • D. valid contract

Explanation

A void contract is a contract that isn't legally enforceable, starting from the time it was created.

Commerce 2014 Objective — Question 47

The three functional units of a modern computer are

  • A. input, processor and output unitsCorrect
  • B. processor FORTRAN and output units
  • C. black box, output and input units
  • D. BASIC, COBOL, and output units

Explanation

All computers have three basic units: the input unit which accepts data into the computer, the processing unit which processes data inputted in the computer, and the output unit which gives out information processed by the computer.

Commerce 2014 Objective — Question 48

Which of the following computers can be used in weather forecast?

  • A. Hybrid computer
  • B. Digital computer
  • C. Mainframe computer
  • D. Analog computerCorrect

Explanation

Analog computer can process and reports in discrete form. Only computer that can process reports in discrete form can be used for weather forecast.

Commerce 2014 Objective — Question 49

A Digital Versatile Disk is an example of a

  • A. transmission control protocol
  • B. microprocessor
  • C. file transfer protocol
  • D. computer storage deviceCorrect

Explanation

Digital Versatile Disk (DVD) is an example of storage device. DVD is used to store computer readable information.

Commerce 2014 Objective — Question 50

The social responsibility factor of an organization is geared towards

  • A. contributing to the sustenance and development of its host communityCorrect
  • B. operating without disrupting the very essence of the environment
  • C. tackling the socio-economic problems of the state
  • D. meeting the needs and demands of the shareholders

Explanation

Social responsibility means that individuals and companies have a duty to act in the best interests of their environment and society as a whole. It is not their primary responsibility but as a way to pay back the host community.

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