All 50 questions from the West African Examinations Council (WAEC) Commerce 2016 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Where a number of insurance companies are liable under one policy, the principle applicable is
When two or more insurance companies come together to insure a single policy, then such act is called contribution policy.
Buying and selling stocks in the stock exchange in anticipation of changes in the share price is
Speculation is the act of buying or selling in the stock exchange market with expectations of changes in prices.
Another term for a dishonoured cheque is
A dishonoured cheque is also called a bounced cheque.
Which of the following is an example of life assurance?
Life insurance policy is non-indemnifiable; thus, it is referred to as endowment policy because the insured or his/her dependent will be endowed in the case of loss.
The main concern of commerce is to
The central objective of commerce is buying and selling.
The organized effort of consumers to protect themselves against the unfair practices of businessmen is
Consumerism can be defined as the coming together of customers with the primary objectives of protecting themselves against the policies of producers and manufacturers.
Which of the following legislations aim primarily at protection of consumers?
Trade description act is probably designed to protect the buyers of goods.
In a law of contract, a counter offer operates as
A contract is an agreement between two or more parties which is enforceable under the law with a paid consideration.
An economic policy which encourages government ownership of business is called
Nationalization involves converting an institution which is not profit oriented to a profit oriented one (per official key context, B is the marked answer).
Lack of permanent record for the message receiver is a disadvantage of
When messages received through television search messages cannot be saved.
Which of the following occupations are classified under the extractive industry? i. cattle rearing, lumbering and farming ii. mining, quarrying and hunting iii. ship building, road construction and iron bending iv. singing, dancing and tailoring
Extractive industry is primarily concerned with explorations of natural resources from their sources.
Which of the following abbreviations allows the drawer of a document to correct any error? Use the following information relating to Bala Enterprises to answer questions 13 to 15 Premises #32,000; Motor vehicle #15,000; Debtors #15,000; Stock #20,000; Creditors #10,000
When E and O.E is attached to the document, it means errors and omissions exempted. This protects the drawer against any mistakes that may be committed in the document.
The value of current assets is
Current Assets are liquid assets used up within a year. It comprises stock, debtors, bills receivable, prepaid expenses, accrued income, bank cash etc. = Stock 20,000+Debtors 15,000=#35,000.
What is the value of the working capital?
Working capital is the difference between current asset and current liabilities. Current assets(#35,000) - Creditors(#10,000)=#25,000.
The value of fixed asset is
Fixed assets include all tangible asset or property of an organisation that are not used up within a year such as land and building, freehold premises, motor van, equipment, furniture and fittings etc. = Premises 32,000+Motor vehicle 15,000=#47,000.
A clean bill of lading is so called because
A clean bill of lading indicates both damaged goods and undamaged goods (per key, D is marked, indicating no record of damaged goods is shown as clean).
When an importer has been overcharged for goods supplied, the exporter issues him with a
A credit note is the document that indicates that the bearer has been offered charged.
Fidelity guarantee insurance is a cover against loss arising from
Fidelity insurance protects the employer from the dishonesty of his employees.
When a cheque is paid on a bank on which it is drawn, the cheque is
A cleared cheque is a cheque that is paid on the bank on which it is drawn.
The process of buying, selling and distribution of goods and services is
Commerce is the act of buying and selling and all the activities involved in buying and selling.
Risk bearing in business organization is a function of the
The entrepreneur bears the risk associated with the business.
The worth of a life assurance policy before its maturity date is
This surrender value is the worth of a life insurance policy when the assured decide to end the policy.
One disadvantage of advertising is that
Most advertisements are usually misleading because the major objective of the organisation is to motivate or persuade people to buy.
The business unit that applies the principle of one man, one vote is
The cooperative society adopt one man one vote regardless of whatever position you hold in the society.
The water co-operation is an example of
Public enterprises are organisations established by government with the aim of maximising social welfare. Example of such in Nigeria is water Corporation.
A partnership is dissolved use to A. liquidity of the firm B. death of employee C. insanity of partner D. resignation of an employee
Any business that gets weak in terms of financial security tends to fold up dissolved (per official key, B).
A document that contains the relationship between the company and outsiders is
Memorandum of Association is the document that specifies the relationship of an organisation with outsiders while article of Association specify the relationship of the organisation internally.
An organization formed mainly by traders and manufacturers to cater for interest of members is
Trade union is formed by businessmen and producers with the aims of protecting their business.
An insurance broker is involved in
Any occupation that does not produce tangible outputs is not commercial occupation (per official key, C is marked for this question).
An agreement that is enforceable in law is
A contract is an agreement between two or more parties which is enforceable under the law with a paid consideration.
The size of an enterprise is determined by the
The larger the number of customers, the larger the organisation will be.
Which of the following function is not performed by trade association?
Trade Association does not give loans or credit to members.
The fees charged on postal order by the post office is
Postage or postage stamp is the amount charged buy post offices on Postal order.
The document issued by a warehouse keeper for goods taken into the store is
When the goods are received the warehouse keeper issue bill of sight to indicate that he or she has received the goods.
Which of the following is a verbal means of communication?
A verbal communication is the exchange of message through voice such as telephone conversation.
The production of goods in anticipation of demand is made possible by
Warehousing facilitates the producer to be able to produce more amount of goods even though there is no demand yet for the goods.
Regarding the consumer as the King who must be satisfied is the main emphasis of
The main objective of consumerism is that the consumer is the King.
Which of the following is a concept of marketing? A. branding B. Planning C. Organizing D. manufacturing
Branding is an act of giving a commodity different look. This is because goods with good look attract customers.
A component of marketing mix that is put in a consumable form to satisfy the consumer is
Sales promotion involves giving consumers some items which are used to stimulate more purchases.
Goods become the property of the buyer on the transfer of liability and possession without immediate payment under the
Under credit sale agreement, the bear takes possession of goods immediately even though he is yet to complete payment while under a hire-purchase agreement, the ownership of the goods remained with the seller until the final installment is paid.
The value at which one country obtains another country's currency is
Exchange rate is the rate at which one currency exchange for another.
Specializing in the sale of one line of goods is the main feature of
Supermarket specialises in a line of goods which all the customers know they can easily get. Usually those goods are consumables.
One objective of the European union is to
(European Union aims to eliminate all tariffs and quotas among member countries.)
Which of the following persons is a part of a business internal environment?
All those factors that are within an organisation is known as internal environment such as management, employees etc.
A person or a firm to whom a sum of money is owed is
A creditor is a person or firm to whom another person or firm is indebted to.
A general tax which applies at each point of exchange of goods and service is
Each seller adds one value or the other to the goods. That is the reason for charging value added tax at all levels of sales.
If a business uses part of its profit to develop the area where it operates, the business is fulfilling its
Social responsibility is the act of making the environment which a firm operates feel the presence of the firm.
Production ends when goods and services reach the final user A. for manufacturing C. are packed and labelled D. are sold to the middlemen
The production is complete when the goods reach the final consumer.
The process of converting a non-profit making organization to a profit-making business is
Privatisation involves converting an institution which is not profit oriented to a profit oriented one.
A distinctive symbol, title or design that readily identifies the company and its products is
Trade mark is sign impressed on a product to give the product a distinctive look.
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