All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Commerce 2021 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. Use the following details to answer question 1 and 2: Land and building 70000, machinery 20000, stock 32000, debtor 2000, cash 4000, creditor 4500. The capital employed in commerce is a. 128,000 b. 90,000 c. 38,000 d. 123,500
Capital employed is the total assets of the business: 70,000+20,000+32,000+2,000+4,000 = 128,000.
2. Calculate working capital a. 123,500 b. 128,000 c. 33,500 d. None of the above
Working capital = current assets - current liabilities = (32,000+2,000+4,000) - 4,500 = 38,000 - 4,500 = 33,500.
3. The total amount of shares an organisation can issue for offer is a. Issued capital b. Total capital c. Offer for sale d. Authorised capital
Authorised capital is the total amount of shares that an organisation is permitted to offer for sale, as stated in its memorandum of association.
4. In a partnership business, a person whose name only is used in the business is referred to as a. Dormant partner b. Nominal partner c. Active partner d. General partner
A partner whose name (but not capital contribution) is used in the business is called a nominal partner.
5. Which of the following formula is used to compute rate of stock turnover a. cost of goods sold / average stock b. average stock / cost of goods sold c. sales / stock d. stock / sales
Rate of stock turnover = cost of goods sold / average stock, and it is measured in times.
6. Dumping is the act of selling an item at a/an _____ price abroad a. Higher b. Cheaper c. Equal d. Zero
Dumping involves selling goods of lesser quality abroad at a cheaper price while presenting them as being of the same quality as the higher-priced original.
7. One of the advantages of sole proprietorship is a. Capital b. Easy loan c. Cheap labour d. Quick decision making
The sole proprietor is the sole decision-maker for the business, allowing decisions to be made quickly.
8. Which of the following is not aids to trade? a. Fund b. Transportation c. Communication d. Warehousing
Aids to trade are activities that assist easy trading, including banking/finance, advertising, transportation, warehousing and communication. 'Fund' on its own is not one of the standard aids to trade.
9. Which of the following agency ensures conformity with government specifications a. Chambers of commerce b. NAFDAC c. Standard organisation d. Consumer association
The Standard Organisation (in Nigeria, the Standard Organisation of Nigeria - SON) ensures that products conform to set government specifications/standards.
10. A group of companies is made up of a. Firms b. Industries c. Factory d. Partnership
When tools are put together, they form a firm; when firms are put together, they form an industry, which is referred to as a group of companies.
11. A computer output can be a. Softcopy only b. Hardcopy only c. Paper print out d. Softcopy and hardcopy
Computer output can be softcopy (e.g. displayed on screen, cannot be touched) or hardcopy (e.g. printed on paper, can be touched and felt).
12. One of the following is not a function of a wholesaler a. Warehouse facility b. Financing c. Breaking bulk d. Linkage
Breaking bulk is a function of the retailer, not the wholesaler. The wholesaler buys in bulk from producers and sells in smaller (but still bulk) quantities to retailers.
13. [Question 13 is missing/illegible in the original source scan]
This question could not be recovered — it appears blank in the original uploaded scan, and the corresponding answer key also skips directly from Q12 to Q14.
14. The working memory is known as a. CD-ROM b. CD-RAM c. ROM d. RAM
RAM (Random Access Memory) is the temporary/working memory used by a computer to carry out its functions.
15. ROM means a. Read only memory b. Random operation memory c. Read on memory d. None of the above
ROM stands for Read Only Memory.
16. Which of the following is not an African institution a. WHO b. AU c. ECOWAS d. Niger-Basin Commission
WHO (World Health Organisation) is a global institution, not an African-specific one. AU, ECOWAS and the Niger-Basin Commission are all African/regional institutions.
17. Consideration in law of contract means a. Pity b. Decision c. Price d. None of the above
In law of contract, consideration is the price/value which one of the parties to the contract is willing to offer in exchange for something of value.
18. The principle of subrogation in insurance business means a. Indemnifying the loss b. Substitution c. Transfer of rights d. Marginalisation
The principle of subrogation in insurance means a situation where an insurance claim (indemnity payment) is accompanied by the transfer of associated rights and duties to the insurer.
19. Central banks buy at _____ a. Bank credit b. Bank rate c. Open market rate d. Cash reserve ratio
The rate at which the Central Bank buys securities depends on the open market demand and supply forces, i.e. the open market rate.
20. Companies distinguish their products with a. Patent right b. Symbols c. Copyright d. Trademark
A trademark is used by companies to distinguish their products from those of competitors.
21. Commercialisation is the act of a. Selling public enterprises to private bodies b. Making public enterprises profitable c. Subscribing for shares d. All of the above
Commercialisation is the act of making public enterprises run profitably, unlike privatisation which involves selling them to private owners.
22. The last shareholders to be considered in distribution of dividend is a. Ordinary shareholders b. Founder shareholders c. Preference shareholders d. Redeemable shareholders
In the ranking for payment of dividend, founder shareholders are always considered last and typically receive whatever profit remains (the 'lion's share' goes to others first).
23. The process of selling a public enterprise to shareholders is known as a. Conversion b. Commercialisation c. Handling over d. Privatisation
Privatisation is the process of selling a public enterprise to private owners/shareholders.
24. The act of changing from one type of occupation to another is called a. Mobility of labour b. Freelancing c. Jobbing d. Flexibility
Mobility of labour is defined as the ease of changing from one type of job/occupation to another.
25. CAC is a. Christ Apostolic Church b. Chambers and Commerce c. Corporate Affairs Commission d. None of the above
CAC stands for Corporate Affairs Commission — the body responsible for the registration and regulation of companies/artificial bodies in Nigeria.
26. Use the following information to answer questions 26 and 27: Closing stock 5000 and purchase 30,000. What is cost of goods available for sale a. 5000 b. 25000 c. 35000 d. 30000
Cost of goods available for sale equals total purchases in this case (since no opening stock is given), which is 30,000.
27. Calculate rate stock turnover a. 12 times b. 6 times c. 10 times d. Insufficient details
Cost of goods sold = 30,000 - 5,000 = 25,000. Average stock = 5,000/2 = 2,500 (closing stock only, no opening stock given). Rate of stock turnover = 25,000/2,500 = 10 times.
28. Which of the following form of business has no limitation to the number of owners? a. Co-operative society b. Partnership c. Private limited company d. Public limited company
A public limited company has no upper limit on the number of owners (shareholders), unlike partnerships and private limited companies which have restrictions.
29. In foreign trade, FOB means a. Free on-board b. Free on boat c. Forward on bills d. Fire on boat
FOB stands for Free On Board, a shipping term used in foreign trade.
30. The body that regulates Nigeria Stock Exchange is a. CBN b. BOI c. SEC d. BPE
SEC (Securities and Exchange Commission) is the body charged with regulating activities on the Nigeria Stock Exchange.
31. Which of the following is short term a. Treasury bill b. Mortgage loan c. Bond d. Debentures
A short-term loan/instrument is one that matures for repayment within 12 calendar months. Treasury bills usually have maturities as short as 90 days.
32. In marine insurance we have _____ and _____ a. Total loss and general loss b. Total loss and actual loss c. Actual loss and general loss d. Particular loss and general loss
In marine insurance, losses suffered are mainly categorised into total loss and partial (actual) loss.
33. The advantage of public limited liability companies over all other forms of business ownership is a. Access to unlimited loans b. It is transparent c. Anybody can be member d. It is usually the biggest
The major advantage of a public limited liability company over other business forms is its ability to access loans/capital from a wide range of sources (e.g. the stock exchange).
34. Which of the following cannot be categorised under primary industry a. Mining b. Hunting c. Farming d. Constructing
Primary industry involves the extraction of raw materials from their source (e.g. mining, hunting, farming). Constructing is a secondary/tertiary activity, not a primary industry.
35. In hire purchase, ownership is transferred a. When first instalment is paid b. When last instalment is paid c. When half of the value is paid d. When good is hand over to buyer
In hire purchase, the buyer is in possession of the goods, but ownership remains with the seller until the final (last) instalment is paid.
36. One of the following can cause a cheque to be dishonoured a. Amount on the cheque b. Date on the cheque c. Names on the cheque d. Inconsistency on the cheque
One of the major reasons a cheque can be dishonoured is inconsistency on the cheque (e.g. mismatched figures/words, signature discrepancies).
37. Commerce is _____ and _____ a. Buying and selling b. Trade and aids to trade c. Advertising and marketing d. Production and distribution
All activities of commerce can be grouped into trade and aids to trade.
38. Which of the following is not a member to ECOWAS? a. Cameroun b. Togo c. Burkina Faso d. Niger
Cameroun (Cameroon) is not a member of ECOWAS (Economic Community of West African States); Togo, Burkina Faso and Niger are all member states.
39. Loan for industrial development is best sourced from a. Commercial bank b. Mortgage bank c. Development banks d. BOI
BOI (Bank of Industry) specialises in providing loans specifically for industrial development.
40. The acting of making publicity for a product is a function of a. Finance b. Advertising c. Transportation d. Warehousing
Advertising is the act of making a good or product known to as many people as possible through means such as marketing and promotions.
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