All 50 questions from the West African Examinations Council (WAEC) Commerce 2020 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Commerce is defined as
Commerce is trade and aids to trade. It involves all activities that deal with distribution and exchange of goods and services.
The types of occupation that a broker belongs to is
All activities that do not lead to production of tangible output is regarded as commercial occupation; a broker's activity (facilitating transactions) falls under commercial occupation.
A form of money which was not used in the early days of trade is
Coins is one of the newest forms of money; tobacco, metal bars and cowries were used as forms of money/medium of exchange in early trade before coins were introduced.
Which of the following activities is not an example of the extractive industry?
Weaving involves the combination of raw materials to produce a new output; it is a manufacturing activity. Extractive industry involves exploring natural resources from their sources, such as quarrying, hunting and fishing.
The factor of production which bears all the risks of the business is
The entrepreneur takes the risk of putting together all other factors of production.
Production is completed when product reach the
Production is said to be completed when it reaches the final consumer. The final consumers are the users of the good.
A partner whose name is used to boost the image of the business and does not contribute capital is a
A nominal partner only contributes his name to the partnership business; he has no money stake in the business.
One advantage of sole proprietorship is that
In a sole proprietorship business, the owner is the final decision maker; thus, decisions are made promptly since there is no need to contact others in decision making.
A business unit in which savings of members are lent to others by a
The credit and thrift society encourages members to save and use the savings to give loans to needy members.
The document issued to a public company allowing it to commence business is the
After a public company has been incorporated, it must be issued certificate of trading before its business can legally go into business.
Which of the following is not a function of a consumer association?
Consumer associations aim at protecting interest of members; the government is the one that imposes penalty on importers of fake goods, not a consumer association.
An association formed by computer distributors to safeguard and promote their interest is a
Trade association is association of people in similar business.
The issue of prospectus by a company is an invitation to members of the public to
The prospectus is the document used to invite the general public to subscribe to the shares of the company. It contains details related to the company and the issued shares.
Examples of currents assets are
Current assets are assets that are used up within a year. They are used in day to day running of the business, such as accrued expenses, debtors, stock, cash etc.
When the cost of sales is divided by the average stock, the result is
The rate of stock turnover = cost of goods / average stock.
The part of issued share capital that the company has asked the subscribers to pay for is
When a company allots shares to subscribers to its share, when he requests them to pay, such request is referred to as call-up share.
The last link in a channel of distribution is the
In any form of channels of distribution, the consumers always come last in the link.
The difference between a country's imports and exports of goods in a particular year is
Balance of trade is the difference between a country's tangible import and export while balance of payment is the difference between total visible and invisible trade of import and export of a country.
Goods brought into the country for sale are the country's
When goods are brought into the country, then it has visible import.
A feature of supermarkets which distinguishes it from other large-scale retail outlets is that items sold are
The supermarket deals mainly in household products.
One advantage of small-scale retail outlets is
In retail outlet, there is personal touch between the seller and buyers. This makes the buyers have loyalty for the seller.
A discount deducted from the invoice price of goods to enable the retailer to make profit is
A trade discount is the deduction given a buyer to encourage the buyer to buy in large quantity and to enable him make some profit.
A document issued by the seller's own courier and signed by the customer to acknowledge receipt of the goods is a
Delivery note is the document that acknowledges that the goods have been duly delivered to the buyer.
A request for goods from another country by an importer would be made using
An indent is the document used to request for supply of goods from another country.
The right to buy or sell stock in the stock exchange with a stipulated period is
An option is a contract which allows the holder (of the contract) the right to buy or sell assets in the stock exchange at a specified price and on a specified date or period of time.
The share value stated on a share certificate is
The nominal value of a share is what appears on the share's certificate.
The bank which acts as the lender of last resort is the
When all sources failed the commercial bank, the central bank will always bail out, thus it is lender of last resort.
The issue of shares which allows existing shareholder's to buy shares at a preferential price is
When existing shareholders are given preference treatment, then it is a rights issue.
The financial market where existing shares and bonds are bought and sold is the
Stock exchange market is the market where existing securities are traded.
An insurance policy which is not a contract of indemnity is
When a policy is not indemnifiable, it is an endowment; that applies to life assurance.
When a company insures the lives of all its employees' collectively, the policy is a
Group insurance is a policy undertaken to cover a group of people in a community or work place.
A cheque that could be cashed over the counter by the payee is a
When the cheque is signed, it becomes open and thus, can be paid over the counter.
A specially-designed mode of transport for conveying liquid and gas is a
Tanker is the mode of transport used to convey oil and gas and liquid generally.
The safe keeping of goods produced until they are needed is
Warehousing is the act of keeping goods for future till when they are needed.
One of the objectives of the Niger Basin Commission is to
One of the functions of the Niger Basin commission is to regulate usage of the river.
A paid presentation about a product with a view to encouraging by an identifiable sponsor is
When a person is paid to present a product to the general public, such can be referred to as public presentation, i.e. advertisement.
The face-to-face meeting of the seller with the buyer for the purpose of making sales is
Personal selling involves personal interaction between the seller and buyer of goods.
The activity which improves the appearance of a product and also aimed at protecting it is
Packaging is the process of giving a product a look that distinguishes it from others and also protects it.
Which of the following is not a component of the marketing mix?
Marketing mix includes: place, price, product and promotion. Production is not one of the components.
The marketing term which regards the consumer as king that must be satisfied is
In marketing mix, consumers are regarded as kings and their interests are prioritised, which is the marketing concept.
An agreement that is enforceable in law is A. an offer. B. a consideration. C. a contract. D. an acceptance.
A contract is defined as the agreement between two or more persons to execute an obligation which is enforceable under the law.
A Contract will not be discharged through
Acceptance is one of the elements of contracts which stipulates the party's willingness to enter the contract; it does not discharge a contract.
A person engaged for the purpose of bringing his principal and a third party into a contractual relation is A. an arbiter B. an auctioneer C. an agent D. a middle-men.
An agent is a person who links a third party with his principal.
The additional commission paid to agents for guaranteeing payment is
A del-credere agent is the agent that assures the principal of payment in case a third party default. Thus, the agent receives additional commission known as del-credere.
The transfer of ownership of a business from government to the public is
When the government sells its interest in a public corporation to the public (private individual), then privatisation has taken place.
One of the disadvantages of privatization is that it
When firms are privatised, prices will increase because the new investors always aim to maximise profit and cost controlling.
The management function which involves measuring outcomes and taking corrective action to reduce error is
Controlling involves monitoring outcomes if employees' steps are in line with organisational objectives and making adjustment where necessary.
In delegation of authority, the subordinate officer is A. accountable to his immediate superior. B. responsible for his superior's actions. C. only answerable to top management. D. expected to replace his superior.
When authority is delegated, the person to whom it is delegated is only accountable to him who delegated it to him, who in most cases is his immediate superior.
A medium for inter-departmental communication is A. intercom. B. notice board. C. radiophone. D. Circular.
A circular is a written letter which is distributed to a large number of people as a means of communication. In order to pass a piece of information within an organization or among various departments, even within a department, a circular is the best option. (Note: Intercom is a two-way communication system which has a speaker and a microphone and its range is limited.)
Which of the following is not an objective of ECOWAS?
ECOWAS is not interested in promoting language but anything that will boost trade among West African States.
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