WAEC Commerce 2017 Theory Past Questions

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E-commerce: This can be defined as buying and selling of goods through electronic means such as internet, vending machine etc. E-commerce is the activity of electronically buying or selling of products on online services or over the Internet.

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Advantages of privatization: - privatisation promotes efficiency in the corporation - it reduces waste of government resources - it also improves service quality delivery since it is profit oriented Disadvantages of privatization: - it is profit oriented, thus, may lead to exploitation of the populace - it may lead to monopoly if it is just one firm - at times, it could short term based because if the investors have realised their money, they may run it non-challantly - tax payers lose potential dividend

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Communication can be defined as the act of exchanging information between two or more persons verbally or in form of written.

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Means of communication in business: - distribution of circular - sharing memorandum - sharing of minutes - instructions - social media - intercoms

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Importance of communication to business: - communication allow managers and staff to perform their basic functions - it serves as foundation for planning - it facilitates exchange of valuable information in the organisation - communication allows top management to get feedback from below

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(i) Departmental store: A department store is a retail establishment offering a wide range of consumer goods under a single roof but divided into a single but divided store, each area specializing in a particular product category. (ii) Mobile store: This is a retail outlet which is opened on a relatively big vehicle which can move from one place to another with some products category to meet and sell to the customers at their convenience. (iii) Chain store: A chain store is a retail outlet in which several locations share a particular brand and have central management, and standardized business practices. Same store at different place such as Shoprite. (iv) Mail order: Mail order is a retail outlet in which buying of goods or services is done through sending mail delivery. The buyer places an order for the desired products with the merchant through some remote methods such as applications or mail. Example of such is Jumia and Konga. (v) Supermarket: A supermarket is a self-service retail shop offering a wide variety of food, beverages and household products, organized into different sections.

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Merits of cooperative society: - a cooperative society is easy to formulating as much documentation is not required compared with other business organisation. - it has an assured going concern - it has limited liability - the management of cooperative society is democratic - it provides members easy access to loan with little or no interest.

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Procedures for formation of private limited liability company: - coming together of the founding shareholder and setting objectives for the company and designing Memorandum and Article of Association - submission of required documents to the Corporate Affairs Commission - issuance of certificate of incorporation - request for subscription to the share of the company - issuance of certificate of trading to the company.

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Features of warehouse: - a warehouse must have sufficient storage place - it must have adequate security - it must have parking space for vehicles - it must have all required safety precaution installed - a good warehouse must also be close to market.

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Importance of warehouse to business: - warehousing enables the producer to continue production: even if the products have not been sold, with warehouse the wholesaler can store the goods so that there will be space in the factory to continue production. - it avails easy availability of goods to the market since in most cases it is located approximately to the market. - also, it helps to stabilised price as goods produced at same cost can be stored and sold in the future when prices of input might have risen. - it also helps to meet unforeseen or sudden changes in demand for goods thereby maintaining customers trust. - warehouse serves as last resort for goods mistakenly produced in excess of demand. - finally, warehouse provides the safest place to store goods.

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Advertising: This can be defined as the act of publicising or sensitising the general public about a particular product.

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Demerits of advertising: - advertising may be costly on the part of the seller because there is almost no free means of advertising - it could be decisive as the seller may present the product to the consumer by window dressing it - it may lead sales of inferior products because the customers may rely on the advert - finally, advertisement may be bad in itself such that it will even discourage prospective buyers.

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Ways producers can create awareness for their goods and services: - the producer can provide free sample of the goods or services to the public. - they can also go to advertising media to advertise the goods or services. - by door to door visiting of prospective consumer of the goods or service. - also, by sales promotion: The producer promotes the goods using one of the sales promotions.

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(a) Standing order: A standing order is an instruction which a bank account holder gives to the bank to pay a certain amount at regular intervals to another account. The instruction is sometimes known as a banker's order. (b) Bank draft: This can be defined as the cheque which a bank drawn on itself. It states that the bank is indebted to the beneficiary whose name appear on the draft. (c) Legal tender: It can be defined as any document or item which is used as a means of exchange which is backed by law and gold. It comprises the coins and paper money. (d) Money order: A money order is a payment order for a pre-specified amount of money. As it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque. (e) I.O.U: I.O.U is an abbreviation for 'I owe you'. It is usually an informal document acknowledging debt. It usually specifies the debtor, the amount owed, and sometimes the creditor. It may be signed or carry distinguishing marks or designs to ensure authenticity.

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(i) C.O.D means Cash on Delivery (ii) C.I.F means Cost, Insurance and Flight (Freight) (iii) F.O.B means Free on Board (iv) E & O.E means Errors and Omissions Excluded

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(i) Trade discount = 5% x Le100,000 = Le5,000 Cash payable = Le100,000 - Le5,000 = Le95,000 (ii) Cash discount = 5% x Le95,000 = Le4,750 (iii) Net amount payable = Le100,000 - (Le5,000 + Le4,750) = Le90,250