WAEC Commerce 2016 Theory Past Questions

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Importance of Commerce to a nation: - Commerce promotes trading activities which result to economic growth and development in an economy. - It also provides job opportunity for the people thereby reducing pressure on the government and also eliminating associated problem of unemployment. - Through commerce, the government can generate more taxes and revenue which it can use to execute its developmental programmes. - It removes all obstacles that hinder easy buying and selling activity; without commerce, some nations will be lagging behind. - It lessens the burden of the producers by providing appropriate place to present and display their goods. - Through commerce, people are able to satisfy their wants. - It fosters good relationship between persons and also countries.

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(a) Features of self-service shops: - A self-service shop must have adequate security - There must be clear price catalogue of the goods available - Provision of trolleys to aid buyers - Easy pay point to facilitate easy payment (b) Disadvantages of self-service shop: - It gives buyers freedom to make decision that best suit them (this can also lead to poor purchase decisions) - It reduces the cost of salary of attendance on the part of the shop owner - It provides a wide range of goods to the buyer - It gives buyer freedom of privacy (which can also enable shoplifting) (c) Importance of working capital to a business: - Working capital assist the business to meet its daily cash obligations - It spells out the liquidity of the business - It also helps to boost earnings of the business as it will be able to meet any short-term business needs - It helps the management to make rational decision as regard its liquid assets

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(a) Functions of a wholesaler to a retailer: - By providing credit facility: if a wholesaler is intending to give a retailer some credit, such will assist the retailer from going out of stock. - Assisting the retailer to deliver its goods as at and when due at its doorstep. - Updating the retailer about changes in the prices of goods so as to know how to dispose the goods in its disposal. - Offering discount to the retailer in order to be able to make profit from the goods bought. The discount can be both cash and trade discount. - Also, the wholesaler can provide store or help in financing the store. This will ease the burden of the retailer and thus, will be able to load more goods in the store. (b) Advantages of small-scale business over large scale business: - Small scale businesses are flexible to manage and change objectives - Small scale requires little capital to start-up and to boost up - Small scale business does not require high skill to manage - It does not require all sort of registration and documentation - There is personal touch between the buyer and sellers compared with a large scale which is strict formal. Thus, customers tend to show more loyalty to small scale.

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(a) Marine Insurance: Marine Insurance is a type of insurance that covers cargo (goods) losses or damage caused to ships, cargo vessels, terminals, and any transport in which goods are transferred or acquired between different points of origin and their final destination. It involves insurance on water transportation. (b) Accident Insurance: Accident insurance is a type of insurance where the policy holder is paid directly in the event of an accident resulting in injury of the insured. (c) Group Insurance: Group insurance is an insurance that covers a group of people, for example the members of a society or professional association, or the employees of a particular employer for the purpose of taking insurance. (d) Fidelity Guarantee Insurance: Fidelity Guarantee Insurance is the insurance undertaken by an employer against the dishonesty that may occur from his employees. (e) Consequential Loss Insurance: Consequential loss coverage reimburses the insured for business costs due to damaged facilities or equipment. For example, business interruption insurance can cover situations that result when the loss of revenue occurs due to events such as an extended power outage, a flood, or a mudslide.

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(a) Functions performed by a courier firm: - Undertake cargo and bulk shipment of parcels - Sending and receiving of mails: the primary function of the post office is sending and receiving mails. The post office carry mail from sending location to the destination. - Maintenance of private mail bag: also, it opens account for customers to open a mail bag in which their mails can be delivered on arrival. - Ensures safety of mails and parcel received on behalf of customers. (b) Functions of telecommunication firm: - Telecommunication firms provide telegram services - Voice and video services that can connect two or more persons instantly - They also provide real-time services to airline and ships - They provide Internet services to reach a wide range of websites instantly - Provision of fax services to the public - Radio and television services to the public.

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(a) Media of public relations: - print media such as newspaper, magazines - electronic media such as radio and television - printing of handbills, posters and pamphlets - sponsoring events in institutions and others - giving free samples to the populace. (b) After sales services: - visiting the buyers to extract information on the product and assist in any ambiguity - helping the customer to install the product - helping customers to check the product for maintenance - replacing the product in cases of failure most especially for goods that are under warranty - providing home delivery after when the contract has been concluded in places other than home (c) Benefits of after sales service: - after sales services make the customer to be loyal to the seller - it gives buyer confidence in the product - it enables the seller to know where the product lax and lag - it gives seller competitive edge over its rivals - it creates personal relationship between seller and buyer.

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(a) A broker is an agent who create link between a buyer and seller, it does not take possession of goods and receives brokerage as commission meanwhile, the factor takes possession of goods and sell on behalf of the owner. He receives factorage as commission. (b) Duties of employer to employee: - the employer is obliged to pay the employee at regular interval as agreed up. - the employer must protect the employee physically and legally in the course of discharging its employment duties. - also, the employer is obliged to compensate the employee for any loss suffered doing the course of discharging its primary duties. (c) Duties of employee to employer: - the employee must always act in utmost good faith while discharging his duties. - he must protect the interest of the employer always. - also, the employee should inform his employer of any loss that he might forecast. - finally, the employee must give periodic account to his employer.

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(a) Turnover: This can be defined as the number of times a business replenish its stock over a period of time. It is the number of time purchases and sales are generated in the business. It determines the size of profit of the business. (b) Factors that determines turnover of a product: - Selling Price of the product: The price of a product determines how much of it the customers will purchase. - Cost of the product: Also, what the goods cost the seller will determine how much he will buy and stock over time. - Nature of the product: For consumable goods, they tend to have many turnovers has the buyer can store limited amount of it due to fear of spoilage and others. - Also, the volume of stock the seller intends to keep at a particular time may also determine turnover. - The level of advertisement for the product too can determine the turnover. The more the advert made, the more tendency to improve sale and the more the turnover. - Finally, sales promotion too can improve sales which will consequentially improve turnover.