All 50 questions from the West African Examinations Council (WAEC) Commerce 2022 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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An article used as a means of exchange in the early days of trade in West Africa was
Cowrie was the article used for exchange in the early days of trade in Africa, before the invention of modern money.
The provision of services is classified under
Services fall under tertiary production, because it requires a high-level skill to provide such services.
The growth of commerce is not enhanced by
Low per capita income means the standard of living is low, which does not promote commerce (unlike modernization, government participation, and population growth).
One of the products of the construction industry is a
A bag of cement is a product of the construction industry.
The service of a retailer is part of production because it
The retailer is the agent that enables goods produced to reach the final consumer, by breaking the bulk purchased from wholesalers into smaller units.
The resources put together to create goods and services are
Factors of production (land, labour, capital and entrepreneur) are resources which facilitate production.
Which of the following organizations provide essential goods and services at low cost to citizens?
The major aim of public enterprises is the provision of essential services to the populace at cheap prices.
A group of sellers who pool their resources to buy goods in large quantities and sell to its members is a
A wholesale cooperative society is formed by a group of sellers who come together to buy goods in large quantities and sell to its members.
Average stock is derived from adding a
Average stock = (opening stock + closing stock) ÷ 2.
A retail business that sells goods by post, using catalogues is a
A mail order firm sells goods by post to buyers, using catalogues to display its goods.
Which of the following documents would a shareholder inspect to know his voting rights?
While the Articles of Association regulates the company's internal affairs (such as shareholders' voting rights), the Memorandum of Association regulates the company's external affairs.
An internal source of finance to an entrepreneur is
Retained earning is part of the profit that the business ploughs back into itself, making it an internal (as opposed to external/borrowed) source of finance.
Using: Sales N50,000, Debtors N10,000, Cash-in-hand N5,000, Opening stock N30,000, Creditors N8,000, Purchases N16,000, Overdraft N12,000, Closing stock N10,000 — calculate the working capital.
Working capital = current assets − current liabilities = (Debtors+Cash+Closing stock) − (Creditors+Overdraft) = (10,000+5,000+10,000) − (8,000+12,000) = 25,000−20,000 = N5,000. None of the listed options match this computed value.
Using the same information, calculate the gross profit.
Gross profit = Sales − Cost of goods sold = 50,000 − (Opening stock+Purchases−Closing stock) = 50,000−(30,000+16,000−10,000) = 50,000−36,000 = N14,000.
A partner who contributes only his name to the formation of a partnership is a
A nominal partner is one whose name only is used for the formation of a partnership; he does not actively partake in running the business.
Which of the following groups would advocate for the supply of constant electricity to households?
Since the final consumers of electricity are the people themselves, they (through their consumers' association) would be the ones advocating for constant electricity supply.
A retail store that sells a single product from a particular manufacturer is a
A tied shop sells a single/specific product from a particular manufacturer, to whom it is 'tied'.
A country's visible balance of payment is made up of
Visible balance of trade/payment is made up of earnings from tangible (visible) goods exported and imported.
The quality of money which makes it possible to buy goods in small quantities is
Money is divisible, making it possible to use a bigger unit of it (or smaller units) to buy something of lesser value/quantity.
One of the functions of commercial banks that cannot be performed by central banks is
Central banks cannot deal directly with the public for other everyday banking functions such as collecting deposits.
A document that instructs an agent to buy goods from a named firm is
A closed indent is the instruction given by an importer to its agent overseas to buy from a specified company.
The incentive given to a buyer to encourage prompt payment is
Cash discount is the discount given to a buyer for paying instantly or at the stipulated time, to encourage prompt payment.
The principle which prevents an insured from receiving a claim that is more than the value of the loss, if the property is insured by more than one company is
The principle of indemnity in insurance ensures that an insured party does not receive a claim more than the value of the actual loss suffered.
Dealers in the stock exchange such as bulls, bears and stags are categorized as
Bulls, bears and stags are all considered speculators in the stock exchange market.
Which of the following is not a characteristic of a commercial bank?
No commercial bank is allowed to issue currency notes; that is the primary responsibility of the central bank.
Central banks sell treasury bills to the public to
By selling treasury bills, the central bank receives cash from the public, thereby reducing the cash in circulation.
A document used to ensure correct payment of duty at the importing country is
The consular invoice is issued by the authority of the importing country and is used to determine the correct duty payable on the imported goods.
A cheque is specially crossed if the
A cheque is specially crossed when the name of a specific bank is written between the two parallel lines drawn across it.
One of the functions of a trade association is to
Trade associations are aimed at promoting trade; one significant function is providing for/promoting the welfare of its members.
When a share with a nominal value of N50 is quoted at N70, it is being sold
When a share is sold above its nominal (face) value, it is said to be sold at a premium.
Sea vessels that do not operate on regular times and routes are
Tramps are sea vessels that do not have fixed routes and schedules, unlike ocean liners which operate on regular times and routes.
Payment made to a carrier for transportation of goods is
Freight is the charge paid for transporting goods on water (or generally, for cargo transportation).
An advantage of rail transport is that it
Rail transportation can be used to carry heavy and bulky goods over long distances.
The commission on a postal order is
The commission imposed on a postal order is referred to as poundage.
Consumers could be encouraged to purchase a company's products through
Advertisement is used to convince/persuade people to buy a particular product.
The marketing concept emphasizes
Marketing concepts use promotional concepts/tools to sell products, but ultimately, they are aimed at achieving consumers' satisfaction at a profit.
An undertaking to repair a customer's vehicle a certain period after it has been sold is
After-sales service is the service provided to a buyer after the sale of a product has been concluded, such as an undertaking to repair a vehicle.
Which of the following is not a right of a consumer?
There is no consumer right to buy on credit; it is only a privilege that a seller considers granting for whomever he wishes.
Advertisement which is geared towards a particular audience is
When advertisement is geared towards a particular group, such advertisement is referred to as direct advertisement.
The law by which a seller transfers the property in goods to a buyer at an agreed price is the
The Sale of Goods Act is the law that governs the transfer of property in goods from a seller to a buyer at an agreed price.
The act of removing government laws and allowing market forces to determine prices is
In deregulation, the forces of demand and supply are allowed to determine prices, as government restrictions are removed.
The purpose of commercialization is to
The purpose of commercialization is to make state-owned firms operate more efficiently, like private businesses.
An agency agreement in which the principal approves the action of his authorized representative is agency by
In agency by ratification, the principal approves the action of his authorized representative after the act has been done.
A requirement for an offer to be valid is that it should be
Before an offer can be valid, it must be communicated to the person to whom the offer is made.
A disadvantage of privatization is
Under privatization, the private enterprise is more interested in profit than in the welfare of the public, which is a disadvantage.
The number of subordinates a head of department supervises is
Span of control states the number of subordinates that are under the control of a leader/head of department.
An organizational chart of a company shows the
An organizational chart shows the hierarchy of office and persons in an organization.
Which of the following is not a function of management?
Delegating an authority is a responsibility of managers, but is not itself listed among the core functions of management (planning, organizing, directing, controlling).
One of the aims of ECOWAS is to
ECOWAS aims at promoting trade among West African countries.
The agreement which led to the formation of the West African Clearing House was signed in
The agreement that led to the formation of the West African Clearing House was signed in Lagos, Nigeria.
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