All 50 questions from the West African Examinations Council (WAEC) Commerce 2017 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. Commercial activities received a great boost in West Africa due to contact with
Commercial activities received a great boost in West Africa due to contact with Europeans.
2. The job of the police in keeping law and order in the society is a
The job of the police in keeping law and order in the society is an indirect service (an aid to trade/commerce, not itself commercial).
3. A business which becomes insolvent may result in
When a business become insolvent, such business can be liquidated by a liquidator on the order of court or as may be appropriate.
4. Which of the following activities does not belong to the extractive occupation?
Carving involves using some items to construct a tangible product, so it is not an extractive occupation.
5. The major division of commerce are
Basically, commerce can be divided into trade and aids (auxiliary) to trade.
6. A memorandum of Association is a document
The memorandum of association defines the company relationship with outside.
7. The main purpose of branding is to
Branding is used to differentiate two or more goods which usually are of same category.
8. The facility which is not provided by the port authority is
Port Authority is a body which manages and operates all the activities in a port. A tarmac is a runaway where planes taxi before they take off, and this is only available at an airport, not a port.
9. A cheque could be dishonoured as a result of
When the figure in the account is less than the quoted amount on the cheque, such cheque can be dishonoured.
10. When a company sells shares to existing share-holder at preferential rates, this is
A right issue is the act of selling shares to existing shareholder to compensate them for undistributed profit.
11. The conversion of raw materials into finished goods is performed by the
The manufacturing industry is the industry to convert raw materials to finished goods.
12. Which of the following is not factor of production?
Factors of production include: land, labour, capital and entrepreneur. Exchange is not a factor of production.
13. [Use the following information to answer questions 13-14: Adama's opening stock is D5,000. He purchased goods worth D30,000. His closing stock was D7,000 and sales D55,000] What is the average stock?
Average stock = (opening stock + closing stock)/2 = (5000+7000)/2 = 6000... per the source's answer key, D5,000 is stated as correct.
14. What is the cost of goods sold? (using the data in Q13)
Cost of goods sold = opening stock + purchases - closing stock = 5000+30000-7000 = 28,000.
15. What is the rate of stock turnover? (using the data in Q13)
Rate of stock turnover = cost of goods/average stock = 28000/6000 = 4.7.
16. Which of the following is a source of short-term capital?
Short term loan/capital is advances that are collectible within a year. Trade credit are paid within the year; thus, it is short term.
17. The most suitable channel for the sale of an aircraft is
Aircraft is a heavy equipment. Such item is sold directly by the manufacturer to the consumer.
18. The duty payable on goods produced locally is
Excise duties are taxes levied on internally produced items.
19. An overdraft is granted to holders of
Overdraft is a form of loan. It is an amount over the balance of the current account holder allowed to be withdrawn.
20. The amount of capital used in the day-to-day running of a company is
Working capital is the money used to run day to day activities of the business.
21. An example of an invisible item of trade is
Invisible trade involves all exchanges of service. That is, not the exchange of tangible items such as laptops, oil etc. Shipping is a service, thus an invisible trade item.
22. In a hire purchase agreement, the buyer is the
The buyer in a hire purchase agreement is also the hire.
23. Which of the following terms is not used in price quotation for goods?
E & O.E means Errors and Omissions Excepted, a general legal disclaimer, not a price quotation term for goods (unlike C.I.F, Ex works, F.A.S).
24. Mr. Ojo paid Noak the sum of #3,000 for a piece of land without signing a deed of sale. The element of contract which is lacking in the transaction is
Formality involves putting the contract in form of written and getting all proper documentation.
25. Which of the following documents is used in home trade only?
All the document listed in the options are used foreign trade except Bill of lading, which is used in home trade only.
26. The Central Bank carries out its monetary policy through
The CBN can dictate the rate at which banks gives out loan to regulating the amount the bank can give out. The higher the bank rate, the lesser the ability of the bank to create credit.
27. The expert responsible for the calculation of probability of risks in insurance is
Actuary science is the part of insurance that deals with the calculation aspect. Thus, the actuary is the person that deals with it.
28. A disadvantage of rail transport is that
The rail system is not flexible. It faces just a destination. It cannot reverse or link many places.
29. The advertising medium that makes only audio impression is
Radio makes voice/audio impression only. It cannot provide pictorial information to the listeners.
30. A speculator in the stock exchange market who sells securities in anticipation of a fall in their prices is a
A bear is an investor who is pessimistic about the markets and expects prices to decline in the near- to medium-term.
31. Which of the following activities aims at increasing sales?
The major aim of advertising is to stimulate customers to buy more so as to increase the sales of the firm.
32. A machine supplied by the post office to organisation to imprint stamps on their letters is a
A franking machine is used to stamp an official mark on a letter or parcel to indicate that postage has been paid or does not need to be paid.
33. An agreement between two parties which can be enforced is a
A contract is an agreement between two or more persons to execute a programme with consideration.
34. The marketing mix element which ensures that goods are available when and where needed is
Marketing mix comprise 4Ps: Place, Promotion, Product and Price. Place ensures goods are available when and where needed.
35. An example of a computer's output device is a
Monitor display the output of what the CPU processes.
36. Ocean liners are vessels that
Cargo vessel running on a schedule is sometimes referred to ocean liner.
37. The process of placing the right people in the right position in an organization is
Staffing is the act of recruiting and placement of staff in the proper position.
38. The right of an unpaid seller does not include
A creditor cannot declare its debtor bankrupt. Only court of law can do that.
39. The coming together of people who engage in trade and industry in a particular area is
Chamber of commerce is the association of business man and trader with the aim of promoting their interest.
40. The term which enjoins the buyer to examine goods thoroughly before making a purchase is
Caveat emptor is a Latin phase which means 'let the buyer beware'. It is principle which advises buyer to check the quality of the goods before a purchase is made.
41. Which of the following is not a tool for sales promotion?
Competition is the strive between two or more persons to gain stand, and is not itself a sales promotion tool per this answer key.
42. The organization of local and international trade fairs is the responsibility of
The Chambers of Commerce, aside from promoting interest of members, organise local and international trade fair.
43. Under the principle of subrogation, the insurer has the right to
The principle of subrogation states that the insurance company can act legally on behalf of the insured.
44. The law that protects a musician's work from piracy is
Copyright is an act of protecting literate on its work for a period of fifty years.
45. Which of the following countries is a member of the Lake Chad Basin Commission?
Lake Chad comprise of Cameroon, Chad, Niger, Nigeria, Algeria, the Central African Republic, Libya.
46. Which of the following is a type of marine insurance?
Hull insurance protect the owners against loss caused by damage or destruction of waterborne craft or aircraft.
47. The transfer of ownership of government businesses to individuals is
Privatization is the act of selling the government interest in a public corporation to an individual.
48. One of the aims of ECOWAS is to
Any regional economic union or association such as ECOWAS, EU etc. The main interest is to promote trade within the region.
49. Which of the following business relies on government subvention for its operation?
The public corporation is a fully government owned business. It relies on the government for its finances.
50. Balance of payment deficits may be caused by
When currency is reevaluated, the domestic currency becomes more pricey. Thus, it may result to decrease in export and this will lead to deficit in balance of payment. (Unrestricted imports similarly drain foreign reserves, causing balance of payment deficits.)
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