All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Commerce 2020 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. Trade and aids to trade are?
Commerce is classified broadly into trade and aids to trade. Thus, these two components form the basis for commerce.
2. Customers' deposit is a
Customers' deposit is a claim against the assets of the banks. Any item that forms a claim against the asset of the owner is a liability.
3. The acronym CAMA stands for
CAMA stands for Companies and Allied Matters Act.
4. The main function of the wholesaler is
The main function of the wholesaler is provision of warehouse facilities. This will assist the producer in continuing production and avail the retailers to get supply when it is needed.
5. The difference between hire purchase and credit sales is a
The major difference between hire purchase arrangement and credit sales is ownership of the product involved. In hire purchase, ownership is with the seller until the last instalment is paid but in credit sales, ownership is transferred to buyer immediately the contract is concluded even though the buyer pays nothing.
6. Del credere commission means a
Del credere is the special commission given to the agent for assuring the principal will be paid or bear the loss in case of default.
7. The best channel of distribution for consumer's good is
All goods have different channels they pass to reach the final consumer. For consumer goods that are produced in large quantity and demanded daily, it must have a longer chain so as to reach a large number of consumers. (Note: options C and D are printed identically in the original source.)
8. Credit note indicates
Credit note indicates indebtedness to the bearer of the note.
9. One of the following causes a share to be issued at a discount
When the price has fallen, goods tend to be sold at a cheaper price than their face value. Thus, deflation is one of the reasons a share can be sold for less than its face value.
10. Which of the following document specifies the relationship of a registered company internally
Memorandum of association is a document that states the way a company will be run as well as some other crucial items that have to do with the company's management.
11. The periodic payment by an insured to the insurance company is referred to as
Premium is the periodic amount paid by an insured to an insurance company for undertaking a policy with the company.
12. When two companies that are producing same thing and at the same level of production comes together to form a single company for the sake of synergy is referred to as
Horizontal integration is the coming together of two or more companies in the same line and level of production to form a single company so as to prevent competition between them and to gain synergy.
13. If the average stock for the year is N500, the purchases totaled N7500, then rate of stock turnover is a
Rate of stock turnover = cost of goods sold / average stock = 7500/500 = 15 times.
14. A preference shareholder is entitled to
Preference shareholder has fixed dividend. Usually, the preference shares are tagged such as 10% preference share. Thus, it means that the holder is entitled to an annual 10% value of the share as dividend.
15. Which of the following is not aids to trade
Commerce is trade and aids to trade. Thus, commerce cannot be aids to trade but vice versa.
16. In a partnership where there is no deed
When the partners do not have agreement, Partnership Act 1890 specifies that 5% interest is on partners' loan.
17. All the following are sources of finance to a sole proprietor except
Only a public limited company is allowed to issue debenture to seek loans from outside the company.
18. The minimum number of shareholders in a public liability company according to CAMA 1990 is a
According to CAMA 1990, the minimum number of persons that can form a public limited company is seven.
19. Dangote group is an example of a
Dangote group is an example of a limited liability company.
20. Capital employed is a
In commerce, capital employed is total assets less total liabilities.
21. Tax imposed on locally made goods is known as a
Excise duties are levies imposed on locally made goods.
22. Scholarship offered by a private organization is a form of a
Offer of scholarship is not any of the fundamental responsibility of organisations. It is just a way of paying back to the society; thus, it is regarded as social responsibility.
23. Privatization is defined as a
When the interest of public corporation (owned by tax payers) is sold to private individual, then, such corporation is privatized.
24. Consideration in contract is
Consideration is the price agreed in the contract to be paid by a party in exchange for goods/service.
25. Voyage loss is loss involved in a
Voyage policy and time policy loss is involved in marine insurance. Marine insurance is a policy that covers transportation on water.
26. The four Ms are
The four Ms in commerce means materials, machine, money and man.
27. One of the responsibilities of Chamber of Commerce is
The Chamber of Commerce aimed at bringing commercial activities closer to the region. It aimed at facilitating commercial activities; thus, to achieve this, they organize trade fairs periodically.
28. Authorized share is the same as
Authorized share is the maximum number of shares which a limited liability company is allowed to issue during its life span. It is contained in the memorandum of association of the company.
29. Flow of authority in an organization is display on a
An organogram is a chart which shows flow of authority in an organisation. It displays who is responsible to who.
30. The difference between domestic trade and foreign trade is a
Domestic trade takes place within a territorial region while foreign trade takes place among regions.
31. Which of the following determines the means of transportation of products
The nature of the product determines the means of transportation.
32. The memory used by computers to process a job is a
RAM is the memory used for processing information from time to time. The bigger the RAM the more items a computer can process at a time.
33. Microfinance banks is a
Microfinance banks are also one of the financial institutions.
34. BOI and BOA respectively stands for
BOI stands for Bank of Industry while BOA stands for Bank of Agriculture.
35. Term of trade is
Term of trade is the rate at which export pays for import. It is calculated thus: Term of trade = export price / import price.
36. The difference between debenture holder and preference shareholder is a
Shareholders are entitled to dividend while debenture holders are entitled to interest.
37. If a person insured goods worth N500 for half the value and a fire incident in which goods valued at N200 were destroyed. The value of compensation expected from the insurer is
An insurance company has responsibility to indemnify an insured to the extent of the loss suffered. Since the loss suffered by the insured as a result of the fire is N200, then the insurance company will indemnify the person to the tune of N200.
38. Which of the following documents is not relevant in foreign trade
Duty is levy imposed on goods and not document.
39. One of the following causes setback for consumer protection agency in Nigeria
Politics is one of the factors that causes setback for the effectiveness of consumer's protection agency in Nigeria.
40. Extractive activities are classified as
Extractive and mining involved exploration of natural resources from their deposits. This is primary production.
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