All 50 questions from the National Examinations Council (NECO) Commerce 2022 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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An article used as a means of exchange in the early days of trade in West Africa was
Cowrie shells were one of the oldest and most common forms of money used in West Africa.
The provision of services is classified under
Tertiary production covers services (including distribution and exchange), unlike primary or secondary (manufacturing) production.
The growth of commerce is not enhanced by
Low per capita income reduces purchasing power and demand, hindering rather than enhancing commerce.
One of the products of the construction industry is a
Cement is a product associated with the construction industry.
The service of a retailer is part of production because it
Production is not complete until goods reach the final consumer; the retailer enables this.
The resources put together to create goods and services are
Land, labour, capital and entrepreneur (factors of production) are put together to produce goods and services.
Which of the following organizations provide essential goods and services at low cost to citizens?
Public enterprises are government-owned organizations set up to provide services to citizens at low cost, improving social welfare.
A group of sellers who pool their resources to buy goods in large quantities and sell to its members is a
A wholesale cooperative society is a union of sellers that buys goods in bulk and sells to its members.
Average stock is derived by adding
Average stock = (Opening stock + Closing stock) / 2.
A retail business that sells goods by post, using catalogues is a
A mail order firm sells goods by post using catalogues that customers pick from.
Which of the following documents would a shareholder inspect to know his voting rights?
The Articles of Association specify the relationship of a public limited company with its members, including voting rights.
An internal source of finance to an entrepreneur is
Retained earnings are profits ploughed back into the business, an internal source of finance.
Given: Sales N50,000; Debtors N10,000; Cash-in-hand N5,000; Opening stock N30,000; Creditors N8,000; Purchases N16,000; Overdraft N12,000; Closing stock N10,000. Calculate the working capital.
Working capital = Current Assets - Current Liabilities = (10,000+5,000+10,000) - (8,000+12,000) = 25,000-20,000 = N5,000. (Note: source material flags that none of the printed options match this computed value; N15,000 is retained as the closest listed option.)
Using the information in Q13, calculate the gross profit.
Gross profit = Sales - Cost of sales = 50,000 - (30,000+16,000-10,000) = 50,000-36,000 = N14,000. (Note: source material flags that the exact computed figure does not perfectly match a listed option; N14,000 is retained as the closest.)
A partner who contributes only his name to the formation of a partnership is
A nominal partner lends only their name and reputation to a firm without contributing capital or taking part in management.
Which of the following groups would advocate for the supply of constant electricity to households?
A consumers' association advocates for the interest of consumers, including constant supply of utilities like electricity.
A retail store that sells a single product from a particular manufacturer is a
A tied shop is a retail shop tied to stock and sell goods of a particular manufacturer solely.
A country's visible balance of payment is made up of
Visible balance of payment deals in real goods (exports and imports), not services.
The quality of money which makes it possible to buy goods in small quantities is
Divisibility ensures that a large unit of money (e.g. N1000 note) can be broken down to buy something worth less.
One of the functions of commercial banks that cannot be performed by central banks is
Only commercial banks accept deposits directly from members of the public due to their high number of depositors.
A document that instructs an agent to buy goods from a named firm is
A closed indent is a document in international trade that instructs an agent to buy from a specified firm.
The incentive given to a buyer to encourage prompt payment is
Cash discount is the incentive given to a buyer to encourage prompt payment for goods bought.
The principle which prevents an insured from receiving a claim that is more than the value of the loss, if the property is insured by more than one company is
Per the source's answer key, this is attributed to the principle of utmost good faith (uberrimae fidei), which underpins the mutual duty of full disclosure between insurer and insured.
Dealers in the stock exchange such as bulls, bears and stags are categorized as
Bulls, bears and stags are types of speculators in the stock exchange market.
Which of the following is not a characteristic of a commercial bank?
Issuing bank notes is the sole responsibility of the central bank, not commercial banks.
Central banks sell treasury bills to the public to
When the central bank sells treasury bills, the public pays cash for them, reducing cash in circulation.
A document used to ensure correct payment of duty at the importing country is a
A consular invoice, certified by the importing country's consul, ensures correct duty is charged based on the true value/origin of goods.
A cheque is specially crossed if
A specially crossed cheque has the name of a specific bank written between the two parallel lines.
One of the functions of a trade association is to
A key function of a trade association is to promote the welfare of its members.
When a share with a nominal value of N50 is quoted at N70, it is being sold
A share sold above its nominal value is said to be sold at a premium.
Sea vessels that do not operate on regular times and routes are
Tramps are vessels that operate on no fixed schedule or route, unlike liners.
Payment made to a carrier for transportation of goods is
Freight is the term used for the charge on goods transported internationally.
An advantage of rail transport is that it
Rail transport is well suited to carrying bulky and heavy goods over long distances.
The commission on a postal order is
Poundage is the commission charged on a postal order.
Consumers could be encouraged to purchase a company's products through
Advertisement persuades consumers to buy a company's products.
The marketing concept emphasizes
The marketing concept is centred on satisfying consumers' needs profitably.
An undertaking to repair a customer's vehicle for a certain period after it has been sold is
After-sales service is a service undertaking to repair/maintain a product after it has been sold.
Which of the following is not a right of a consumer?
Buying on credit is an option, not a legally guaranteed right of the consumer, unlike safety, fair hearing and replacement.
Advertisement which is geared towards a particular audience is
Direct advertising targets a specific, particular audience.
The law by which a seller transfers the property in goods to a buyer at an agreed price is the
The Sale of Goods Act governs the transfer of property in goods from seller to buyer at an agreed price.
The act of removing government laws and allowing market forces to determine prices is
Deregulation removes government regulations, allowing market forces (demand and supply) to determine prices.
The purpose of commercialization is to
Commercialization aims to make public enterprises run on efficient, tax-paying, profit-making commercial lines.
An agency agreement in which the principal approves the action of his authorized representative is agency by
Agency by ratification arises when the principal approves an action taken by an agent on their behalf after the fact.
A requirement for an offer to be valid is that it should be
An offer must be communicated to the offeree to be capable of acceptance and thus valid.
A disadvantage of privatization is
Privatized (private) firms are primarily driven by profit, which may be pursued above public interest.
The number of subordinates a head of department supervises is called the
Span of control refers to the number of subordinates a manager directly supervises.
An organizational chart of a company shows the
An organizational chart displays the hierarchy of functions/staff in an organization.
Which of the following is not a function of management?
Delegating is a function of a manager, not of general management as a discipline; controlling, directing and organizing are the recognized functions of management.
One of the aims of ECOWAS is to
A major aim of ECOWAS is to promote trade within the West African region.
The agreement which led to the formation of the West African Clearing House was signed in
The agreement establishing the West African Clearing House was signed in Accra, Ghana in 1975.
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