All 50 questions from the West African Examinations Council (WAEC) Commerce 2015 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The practice of giving a particular name to a product by a manufacturer is
Branding has to do with all effort to differentiate a product from other similar ones such as renaming, packaging etc.
An extra commission paid to an agent who guarantees credit sales made by him is a
A del credere agent is the one who assures the principal of payment for all transactions he enters for him, and is given extra commission known as del-credere.
A professional in insurance who evaluates the level of loss claims is an
The actuary is the specialist that deals in the calculation aspect of insurance.
The insurance services rendered to a foreign shipping company are treated as
All services are categorised as invisible export in the balance of payment accounts.
Dividing the market for a product according to potential buyers who have common characteristics is a
Market segmentation has to do with dividing the market into various units based on some particular features decided by the firm.
Which of the following aids to trade facilitates production ahead of demand?
Through warehouse, producers can produce even when there is no demand and store the goods in the store till there is demand for it.
When a government acquires business enterprise formerly owned by individuals, it is termed
Nationalisation can be defined as the process of converting a private company to government owned corporation.
How many countries make up the River Niger Basin Commission?
The River Niger Basin Commission is made up of Benin, Burkina-Faso, Cameroon, Cote d'Ivoire Guinea, Mali, Niger, Nigeria and Chad (9 countries).
Which of the following means of payment makes the bank both the drawer and drawee?
When a bank issues a bank draft, it becomes the drawer and drawee.
An association that protects the interest of members in the same line of business is a
Trade association is an association established with the aim of protecting the interest of its members.
Bamidele Co. Ltd has authorized capital of #40,000,000 ordinary shares of #4 each. Shares issued and fully paid are 25,000,000. The value of Bamidele Co. Ltd's authorized share capital is
The value of the authorised share = #4 × 40,000,000 = #160,000,000.
The value of the issued capital amounts to
Value of fully paid share = #4 × 25,000,000 = #100,000,000.
The unissued capital amounts to
Value of unissued share = #160,000,000 − #100,000,000 = #60,000,000.
Which of the following aids to trade is used to stimulate demand for goods?
Advertising is the act of creating awareness for a product to stimulate demand for the product.
The term consumer sovereignty means that the
Consumer sovereignty means consumers are the king in the process of buying and selling.
Which of the following activities is classified under extractive industry?
Extractive industry is the industry that deals with exploration of natural resources from their sources.
Calculate the gross profit for BYX Enterprise. [Opening stock D6,000; Purchases D23,000; Salaries and wages D12,000; Closing stock D8,000; Sales D30,000]
Gross profit = Sales − Cost of goods sold = D(30,000+23,000−8,000) − D21,000... = D30,000−(D6,000+D23,000−D8,000) = D30,000−D21,000 = D9,000.
What is the rate of turnover of BYX Enterprise?
Rate of turnover = Cost of goods sold / Average stock = D21,000/D7,000 = 3.0 times.
Which of the following workers is engaged in construction occupation?
Mason is the skill of cutting, dressing, laying of stones in building etc. Construction industry has to do with putting two things together to produce a new output.
A cheque which the bank refused to pay because the drawer had insufficient funds in his account is a
Bounced cheque and dishonoured cheque mean almost the same: if a cheque is dishonoured because of insufficient fund, such cheque is bounced.
Which of the following is a function of the wholesaler?
The retailer provides feedback to the wholesaler who will do same to the producer.
The term utmost good faith in insurance means
The term 'utmost good faith in insurance' means that all parties involved in insurance must disclose all information relating to the policy in true terms without hiding any fact whatsoever.
Which of the following business units enjoys government subsidies?
Public corporation is owned by the government, so the government subsidises it so that it can continue to provide services to the populace to maximise their welfare.
Duty drawback refers to duties paid on
Duty drawback is a refund of duties charged on re-exported imported goods.
The capital that is used in the day-to-day running of a business is
Working capital is the capital that is used in the day-to-day running of a business.
Which of the following is classified under current asset?
Current assets are assets used up within a year. It includes stock, debtors' cash, bank, accrued income, prepaid expenses, bills receivable etc.
The reduction in value of a country's currency in relation to others is
When a country's currency is reduced in relation to other country's, such currency is devalued.
Retail outlets which sell from specialized vans are called
Mobile shops are retail outlets which are opened on a relatively large vehicle which can move from one place to another with some products category to meet and sell to the customers at their convenience.
Which of the following is an aspect of marketing concept?
Product differentiation is an aspect of marketing concepts which advises company to make their brand so exclusive which will make customers prefer them over their competitors.
The practice of selling goods in foreign markets at a price lower than the cost price is
Dumping is the act of selling a product abroad at a price cheaper than the cost price at home. Such products are usually substandard products that cannot be sold in the originating home.
A cheque made payable to a named person is a
An order cheque is a cheque that is only payable to the person or organisation whose name appears on it.
A house insured against damage by flood was burnt down and the owner had no claim. Which of the following principles prevented him from making a claim?
Proximate cause is a term in insurance policy which states that before an insured could be compensated, he must be affected by the cause against which he made the insurance.
The market for short term capital is called
Money market is the market for short term securities.
Which of the following principles stipulates that the insured must be in position to suffer financial loss?
Before a person can take insurance policy against an event, he must have insurable interest in the event i.e. must be affected financially in the case of a loss due to the event.
When shares are sold 'ex-div' it means the
Ex-div means dividend excluded; thus, the seller has the right to take the next dividend before the buyer can be entitled to subsequent dividends.
Turnover could be increased by
If the firm makes more advert, this will likely improve sales which will subsequently improve turnover of the firm.
Commerce started as a result of
The curiosity of man to get what he wants to consume lead to commerce.
Which of the following means of payment makes both the drawer and drawee to be the same at the same time?
With credit transfer, multiple persons can be paid at the same time.
The ordinary share is a unit of ownership in a limited liability company. It specifies the interest of the holder in the company. This describes a
The ordinary share is a unit of ownership in a limited liability company. It specifies the interest of the holder in the company.
When two or more insurance companies come together to insure a single policy, the principle that applies is
Contribution is a situation when two or more insurance companies come together to insure a single policy.
Public relation can be defined as all
Public relation can be defined as all efforts channeled towards creating a good image for the firm.
Which of the following is a disadvantage of foreign trade? It
Dumping is the act of selling a product abroad at a price cheaper than the cost price at home; this is possible through international trade.
Study to discover consumers' preferences and need is called
Market research is centred at knowing consumers better so as to improve sales.
Which of the following is a disadvantage of retailing?
There is virtually no retailer that will not sell on credit. This, in a way, kills business most especially when it is too much.
A private limited liability company differs from a public limited liability company because it
While the public limited liability company issues its share to the public for subscription, the private limited company issued its share to private individuals.
A tax charged in proportion to the value of imported goods is
Ad valorem tax is the tax imposed on goods based on the value of the goods being taxed.
Which of the following is a reason for the failure of public corporations?
The failure of public corporation is highly caused by inadequate allocation of resources leading to overall fall in the economic welfare of the country.
The factor that is not considered when determining the means of transport suitable for cargo is
Manufacturer has nothing to do with the means of transportation.
Which of the following is a document of title to goods?
Bill of lading details the owner of the goods on the ship.
The fee paid for transporting goods by ship is
Freight is the charge paid for cargo transported through ship.
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