All 51 questions from the West African Examinations Council (WAEC) Commerce 2025 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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A function of commerce is to
The major function of commerce is to ensure smooth buying and selling of goods and services.
Labour as a factor of production attracts
The reward for labour as a factor of production is wages.
Which of the following industries uses wood to make furniture?
In the construction industry, raw materials (like wood) are transformed into a more useful form/structure.
A factor which will not influence choice of occupation is
Population has very minute effect on the choice of occupation a person will make.
An aid to trade that provides information about a product is
Through advertising, prospective buyers get to know about the product that they want.
A feature of land is that
Land is said to be fixed in supply — its supply cannot be increased or decreased.
The industry that transforms raw material into finished goods is
The manufacturing industry does the job of transforming raw materials into a more useful product.
An organization formed to control prices of commodities by restricting the quantity supplied is a
A cartel, such as OPEC, influences the price of a commodity (e.g. crude oil) by limiting its supply to the world market.
If a groundnut farmer takes over a vegetable oil processing company, the merger is
Since groundnut is a raw material for vegetable oil, a farmer buying over a vegetable oil processing company is a forward integration.
A chamber of commerce is an association of business individuals aimed at promoting the interest of the
A chamber of commerce is an association of producers and business owners; its interest is to promote the product in their business line.
In business, the net value of the owner's assets is
The asset of the owner is his capital owned by him.
Quick decision making is a feature of a
A sole proprietor does not need to consult anyone before making decisions for his business, thus there is quick decision making.
A business unit that is restricted from transferring shares freely is a
Shares of private companies are not allowed to be transferred freely; transfer is done privately among the members/shareholders.
Use the information below to answer questions 14 to 16: Stock as at 01/01/2024 ₦20,000; Stock as at 31/12/2024 ₦50,000; Purchases ₦100,000; Sales ₦90,000. The cost of goods sold is
Cost of goods sold = Opening stock + Purchases − Closing stock = 20,000 + 100,000 − 50,000 = ₦70,000.
(See data above for Q14–16.) The gross profit is
Gross profit = Sales − Cost of goods sold = 90,000 − 70,000 = ₦20,000.
(See data above for Q14–16.) The rate of stock turnover is
Average stock = (Opening + Closing)/2 = (20,000+50,000)/2 = 35,000. Rate of stock turnover = COGS/Average stock = 70,000/35,000 = 2 times.
An organization that protects users of products is
The consumer's association is the organization that protects the interest of consumers.
An attribute of a cooperative society that makes it democratic is
A cooperative society is regarded as democratic because each member is entitled to just a single vote.
A function of a wholesaler to a producer is
The wholesaler performs the function of breaking bulk into smaller quantities with regard to the producer's product.
A deficit in the balance of trade occurs when
Balance of trade is the difference between visible imports and visible exports. If visible imports exceed visible exports, the balance of trade is unfavourable (a deficit).
Which of the following trade documents prevents understatement of prices?
The consular invoice shows all the details of the goods, including their true price, preventing understatement.
The quality of money that enables it to serve as a medium of exchange is
Acceptability is the major quality that allows money to serve as a medium of exchange.
Application for insurance cover could be done using a
A proposal form is the document a person (the proposer) fills out when seeking insurance coverage from an insurance company.
Sharing risks among insurance companies is
Reinsurance is essentially "insurance for insurance companies" — a risk management tool where the ceding company transfers some of its risk to another insurer.
An organization that provides facilities and arranges for the purchase and sale of goods is
The commodity exchange commission organizes facilities for producers to store their goods and provides platforms for buying and selling.
An example of an invisible item in the balance of payment account is
Salaries of expatriates are not a tangible item, so they form part of the invisible items in the balance of payment account.
Which of the following documents would be used to collect imported goods?
The bill of lading details the ship's cargo information and can be used by the receiver to claim goods sent to him.
A merit of credit sale is
Credit sale, when properly managed, is associated with a reduction in the incidence of bad debts.
A financial institution which offers loans to small scale businesses is a
Even though some other financial institutions offer loans to small scale businesses, microfinance is the major institution that offers loans to them more easily.
Dealers in the stock exchange who buy and sell shares on their own account are
Brokers are dealers in the stock exchange that buy and sell shares on their own account.
The price quoted when the exporter bears all expenses up to the port of departure is
Free on Board (F.O.B) means the seller (exporter) bears all risk and expenses until the goods are loaded on the ship.
Use the information below to answer questions 32 and 33: Gibril bought shares from a company at ₦40 per share and sold them to Sam at ₦60 each. Gibril sold the shares at a
When a share is sold at a price above its par value, the share is said to be sold at a premium.
(See data above for Q32–33.) In his decision to buy the share at a high price, Sam is acting as a
A bull refers to an investor who is optimistic about the market and expects prices to rise.
An advert for the sale of cattle placed on a butcher's journal is
This advert is indirect because the butcher is being convinced to buy so he can, in turn, sell to the public/get business.
The fastest means of delivering parcels is through
The courier service is the fastest means of sending and receiving a parcel.
Which of the following communication mediums is used within an organization?
Memo is the most common means of communication within an organization.
A body charged with the responsibility of ensuring that products being sold are of a specified requirement is a
The standard organization (e.g. Standards Organization of Nigeria) is the body charged with ensuring goods meet minimum required standards.
A trade fair is an example of
The major aim of a trade fair is to promote sales; it is usually organized by chambers of commerce.
The document used when goods are delivered by an independent carrier is
A consignment note is a document that provides details about goods being shipped and serves as proof that a carrier has received the consignment for delivery.
A form of advertising where firms jointly finance the advertisement of their products is
When two or more businesses come together to finance an advertisement, it is a form of mass advertising.
A contract of sale where the selling price includes interest is a
In hire purchase, the seller adds his/her interest to the price quoted for the goods.
An advantage of deregulation is that it
When a market is deregulated, restrictions that exist in business decisions are reduced.
A term used to identify a product is
A brand name makes it easy to identify a product even if it has similarities with another product.
If Rose feeds her neighbour's son because of his inability to pick him up on time, she becomes an agent by
When an agent acts in a manner that is necessary given the circumstances, he/she is regarded as an agent by necessity.
Which of the following activities is considered a pre-sale activity?
Display of goods is a pre-sale activity because the actual sale of the goods has not yet taken place.
Recruitment and placement of workers in an organization is a function of the
The human resource department oversees recruitment and the placing of employees within an organization.
A disadvantage of privatization is that
In privatization, investors seek high returns on their investments by all means; thus there is less priority given to providing cheap basic goods/services.
Which of the following is not a business objective?
No business likes competition — it is only something businesses must necessarily navigate around, not an objective they pursue.
An objective of ECOWAS is to
The major objective of ECOWAS is to promote trade among West African countries; one way of achieving this is to eliminate tariffs and quotas among member countries.
Which of the following countries is not a member of the Lake Chad Basin Commission?
The Lake Chad Basin Commission comprises Cameroon, Chad, Niger, Nigeria, the Central African Republic and Libya — Ghana is not a member.
Which of the following countries is not a member of the Lake Chad Basin Commission?
The Lake Chad Basin Commission comprises Cameroon, Chad, Niger, Nigeria, the Central African Republic and Libya — Ghana is not a member.
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