All 50 questions from the West African Examinations Council (WAEC) Commerce 2014 Theory paper, with the correct answer and a full explanation for each. Free, no signup needed.
Advertisement
A price quotation which includes all the expenses involved in loading the goods into a ship is known as
FOB means free on board; the seller bears all costs until the goods are put on the ship, including loading expenses.
Shares, bonds, stocks and debentures traded on the stock exchange are collectively called
Shares, bonds, debentures and stocks are collectively called securities; hence the regulating agency is called the Securities and Exchange Commission.
In a hire purchase contract, the customer becomes the legal owner of the goods by
In hire purchase, ownership is transferred to the buyer only after the last installment has been paid.
Which of the following is engaged in commercial occupation?
All services (such as insurance broking) are classified under commercial occupation.
'Net 3 months' on an invoice means the buyer will
'Net 3 months' indicates the maximum period (3 months) within which the buyer can enjoy a discount; after that, no discount applies.
The ratio between a country's exports and her imports is known as
Terms of trade is the rate at which exports pay for imports — average export price relative to average import price.
The charge paid to a ship owner for the unused part of a ship is known as
When a ship is not fully loaded, dead freight is charged to cover the cost of the remaining unused space.
Fidelity guarantee insurance will only cover
Fidelity guarantee insurance is a cover policy taken against dishonesty of personnel/employees, such as a cashier's fraud.
In the absence of the bill of lading, which of the following is used to clear the goods?
The certificate of origin, which spells out the buyer's and seller's details, can be used to clear goods in the absence of a bill of lading.
A system of sales, where goods are sold to the highest bidder is known as
Auction sales involve bidding for a product; the highest bidder is awarded the product.
The term 'Fiduciary issue' means
Fiduciary issue is an issue of banknotes not backed by gold; the value relies entirely on the reputation of the issuing bank.
An insurance principle which prevents an insured from making profit when compensated is known as
Utmost good faith requires both insured and insurer to declare all relevant details, ensuring the insured is not compensated beyond their actual loss (principle of indemnity is also related, but per the source key the answer is utmost good faith).
A retail outlet with many branches all dealing in similar line of goods is described as
A chain store is a retail outlet that operates branches in many locations but deals in the same line of products.
The person who gave his building as a security for a loan is known as
Per the source, this role is described as a guarantor — a person who pledges assets as collateral against a loan.
A firm that specializes in packing and shipping of goods is known as
A forwarding agent specializes in handling all jobs related to the shipment of a product from one place to another.
Which of the following is a function of the marketing department in a firm?
The marketing department deals with creating a good image for the company's products, adding value to goods and services.
An individual or company that engages in the transportation of any type of goods for a fee is called
A common carrier deals in carrying any type of goods across borders for a fee.
Debentures which are secured by the fixed assets of a company are called
Mortgaged debentures are debentures backed by the fixed assets of the company.
The central bank sometimes calls for special deposits from the commercial banks in order to
Special deposit requests from the central bank are intended to reduce the lending ability of commercial banks.
A principal member of the stock exchange who buys and sells securities on his own is a
A jobber is a market maker who deals only on the stock exchange with traders, and does not trade directly with the public.
Consumer protection places an obligation on producers to ensure that their products
Consumer protection stresses that goods must be original, wholesome, and safe for consumption.
The target for all marketing activities is the
All marketing activities are targeted towards winning the consumer.
Small scale retailers continue to exist in spite of the dominance of large firms because they
In small scale businesses, there is a personal touch between buyers and sellers, which makes buyers loyal to the retailer.
Building and machinery purchased for use in business are examples of
Fixed assets are assets used for more than one accounting period, such as land, premises, and motor vehicles.
Olumide bought shares in a company with: Authorised capital #500,000; Issued capital #450,000; Nominal value #1.00; Market Price #1.20. If the shares are offered to him at #1, the share is sold at
Since the offer price (#1) equals the nominal (par) value, the share is issued at face value.
Using the same information, calculate the number of unissued shares of the company.
Unissued shares = (Authorised capital − Issued capital)/Nominal value = (500,000−450,000)/1.00 = 50,000 shares.
The throwing of goods overboard to prevent a ship from sinking is known as
When goods are thrown overboard into the sea to prevent sinking, this is referred to as jettison.
In insurance, risks that have no statistics for their calculation are
Uninsurable risks are risks for which the actuary cannot determine the probability of occurrence.
The practice of selling goods in foreign countries at lower prices than obtainable in the exporting country is known as
Dumping involves selling a product below its cost price abroad.
The entertainment industry is classified under
The entertainment industry is a commercial industry, involving activities that do not lead to production of a tangible output.
Buying on impulse is encouraged by
Hawkers, who move goods from place to place, stimulate consumers to make unplanned purchases of goods they might have forgotten they need.
A fixed deposit account is beneficial to its holders because
A fixed deposit account attracts a higher interest rate than a regular savings/current account.
An amount paid by a bull who wishes to defer the purchase of shares to the next accounting period is the
Backwardation is the amount paid by a bull (buyer) who wishes to defer the purchase of shares to the next accounting period.
Foreign trade is concerned with
Foreign trade involves the exchange (buying and selling) of goods and services between two or more countries.
The distribution of goods creates
Distribution of goods from one place to another creates place utility.
The document issued by the Registrar of companies which allows a public company to commence business is called
Before an incorporated public company can start trading, it must be issued a certificate of trading (trading certificate).
A cheque bearing a date showing that it was issued more than six months ago is termed a
A stale cheque is a cheque presented long after (typically over six months from) the date on which it was issued.
A system of buying products from a machine is known as
When goods are loaded onto and dispensed from an automated machine, this is referred to as automatic vending.
Carpentry is an activity classified under
Any activity that combines two or more materials/things to create a new product, like carpentry, is under constructive occupation.
A system of buying goods by an agent where the supplier is determined by the principal is
An indent is an instruction to an overseas agent to purchase a product. If the manufacturer/supplier is specified, it is a closed indent.
One of the functions of a central bank is to
The central bank is the regulating authority for all financial institutions in the country, including performing a supervisory role over commercial banks.
The issue of a certificate of incorporation to a company means that it has
A certificate of incorporation gives a company its legal entity status — it has legally come into being.
The part of authorized capital of a company sold to shareholders is
When part of the authorised share capital has been sold, that part sold is referred to as issued capital/share.
A person who contributes money to a partnership business and is also involved in its general supervision is called
An active partner has both money and personal involvement (body) at stake in the partnership business.
A business obtains part of its short-term capital from
Trade credits (like credit purchases, accrued expenses) are short-term, since they are payable within a year.
A postal service that allows a company's customers to reply at the expense of the company is called
A business reply service allows a company's customers to reply to adverts without incurring any postage cost themselves.
A voluntary association which consists of people who represent a cross section of business interest in an area is
A trade association is a voluntary association of people in a particular area formed to protect the interests of its members.
When a ship overstays the allowed number of days at the port, it is made to pay a
Demurrage is a charge paid to the owner of a chartered ship for the extra days it spends before discharge, due to delay.
The place where bankers meet daily to exchange cheques drawn on each other is known as
A clearing house is the place where bankers meet daily to clear cheques drawn against one another.
An advertising campaign designed to sell one's own products at the expense of other brands is
When advertisement is targeted at selling one's product to the detriment of others, such advertising is described as competitive.
Advertisement
…and/or go further with premium services and No Ads.