JAMB Commerce 1997 past questions and answers

Which of the following are the components of commerce?
I Trading and advertising
II Warehousing and transportation
III Packaging and branding
IV Insurance and banking.

1. A.I and II
2. B.I and III
3. C.I, II and IV
4. D.II, III and IV.

A royal charter was granted to the Royal Niger Company to do business in Nigeria in

1. A.December 1888
2. B.May 1887
3. C.July 1886
4. D.August 1885.

Transportation, retailing and wholesaling industries rely heavily on

1. A.banking
2. B.insurance
3. C.manufacturing
4. D.railway.

An example of indirect service is rendered by

1. A.civil servants
2. B.family doctors
3. C.household servants
4. D.entertainers.

The objectives of a business are determined by the

1. A.workers
2. B.government
3. C.society
4. D.promoters.

Partnerships are most suitable where

1. A.the partners are family friends
2. B.professionals are involved
3. C.members can easily raise enough capital
4. D.government regulations are favourable.

Use the conversation below to answer this question.
MUSA: Taiwo, why are you in business?
TAIWO: To optimize profit, provide quality products and discharge my social responsibilities. What of you?
MUSA: I am in business to minimize cost, provide products at low prices and as you said, discharge my social responsibilities. What of you, Okon and Kalu?
OKON: I am in business to cater for the need of the consumers at all costs.
KALU: I am in business to make profit, provide quality products at reasonable prices and establish a good reputation for myself.
The businessman that may end up not discharging his social responsibility is

1. A.Musa
2. B.Okon
3. C.Taiwo
4. D.Kalu.

Use the conversation below to answer this question.
MUSA: Taiwo, why are you in business?
TAIWO: To optimize profit, provide quality products and discharge my social responsibilities. What of you?
MUSA: I am in business to minimize cost, provide products at low prices and as you said, discharge my social responsibilities. What of you, Okon and Kalu?
OKON: I am in business to cater for the need of the consumers at all costs.
KALU: I am in business to make profit, provide quality products at reasonable prices and establish a good reputation for myself.
The businessman with the best business objectives is

1. A.Okon
2. B.Taiwo
3. C.Kalu
4. D.Musa.

The business organization in which shareholders have equal votes is

1. A.sole proprietorship
2. B.partnership
3. C.co-operative
4. D.limited liability company.

The major objective of corporate mergers is to

1. A.minimize the effects of taxation
2. B.increase financial advantage
3. C.facilitate profit maximization
4. D.enhance economies of scale.

When it becomes necessary to liquidate a company, the first step to be taken is the appointment of

1. A.a receiver
2. B.an auditor
3. C.an accountant
4. D.a liquidator.

In which of the following circumstances is a court order NOT necessary for the winding up of a company?

1. A.suspension of business for one year.
2. B.special resolution of members
3. C.reduction in the number of members below the legal minimum
4. D.inability to pay its debts.

One type of investment that has a variable income is

1. A.debentures
2. B.preferred shares
3. C.government bonds
4. D.ordinary shares.

A term which indicates that a share is temporarily suspended is

1. A.ex-dividend
2. B.cum-dividend
3. C.bond
4. D.stock.

Leasing is the right to use assets for an agreed period in return for

1. A.profit
2. B.interest
3. C.wages
4. D.rents.

The form of business financing which involves pledging of a specific asset is

1. A.debenture
2. B.mortgage
3. C.loan
4. D.bond.

The total amount that a company is allowed to raise according to its memorandum of association is known as

1. A.issued capital
2. B.authorized capital
3. C.called-up capital
4. D.paid-up capital.

A public limited liability company having a nominal capital made up of 200 000 ordinary shares of 50k each decided to issue 50% of it to the public. What is the authorized capital?

1. A.₦40 000
2. B.₦50 000
3. C.₦100 000
4. D.₦200 000

The turnover of a firm may be affected by

1. A.the demand for its product
2. B.the cost of its goods sold
3. C.its closing stock
4. D.its net assets.

The cost of transporting goods to customers is called

1. A.carriage inward
2. B.carriage forward
3. C.carriage paid
4. D.carriage outward.

The main aim of selling directly to consumers by manufacturers is to

1. A.discourage the activities of middlemen
2. B.make contact with consumers
3. C.eliminate transportation cost
4. D.maximize the profit margin.

In foreign trade, document of title is known as

1. A.bill of lading
2. B.bill at sight
3. C.certificate of origin
4. D.declaration form.

Excise duties are paid on goods that are

1. A.imported into the country
2. B.manufactured within the country
3. C.exported to other countries
4. D.kept in bonded warehouses.

Stevedores as a term in foreign trade means men who

1. A.inspect goods in ships
2. B.import goods by ships
3. C.collect duties in ships
4. D.load and unload ships.

A close indent is an instruction to an agent to

1. A.order goods from a particular manufacturer
2. B.order goods from any manufacturer
3. C.sell goods to any firm
4. D.sell goods to a certain firm.

The basic distinction between cash discount and trade discount is that while trade discount is

1. A.for a period of 30 days, cash discount is for a period of 3 months
2. B.given by a wholesaler, cash discount is given by a bank
3. C.a reduction in the catalogue price of an article, cash discount is a reduction in the invoice value
4. D.a reduction in value of sales, cash discount is a reduction in price of goods.

The cost that arises from failure to load or unload a ship at the port within a stipulated period is known as

1. A.excess charges
2. B.demurrage charges
3. C.premium charges
4. D.trade charges.

The mode of transportation that is noted for on-time dependability and low cost per unit on goods carried is

1. A.pipeline
2. B.air
3. C.rail
4. D.road.

A person who undertakes any risk in insurance business is known as

1. A.a broker
2. B.an underwriter
3. C.an insurer
4. D.an actuary.

The main purpose of insurance is to

1. A.encourage business to survive and grow
2. B.ensure that facilities are available for operations
3. C.accept risks and extend credits to policy holders
4. D.spread individual losses over all covered participants.

Bank giro is a system where

1. A.commercial banks can give loans to all customers
2. B.a central bank opens accounts for commercial banks
3. C.a customer uses a cheque to pay several bills
4. D.a customer closes his account by writing a cheque.

Commercial banks are referred to as departmental stores of banking because they

1. A.have many branches
2. B.have many customers
3. C.are found in the cities
4. D.offer many types of services.

A market where new shares are traded is known as

1. A.primary market
2. B.stock exchange
3. C.secondary market
4. D.money market.

When a firm speaks of stock appreciation, it refers to

1. A.changes in the value of its stock resulting from price movements
2. B.increase in the price of its shares quoted on the stock exchange
3. C.an unexpected increase in the demand for its stocks
4. D.the value of its stocks in the stock exchange.

The process of creating more market for a product is called

1. A.advertising
2. B.marketing
3. C.promotion
4. D.consumerism.

When a vendor supplies newspapers from house to house and across the streets, the element of marketing mix involved is

1. A.product
2. B.price
3. C.promotion
4. D.place.

The main advantage of using cinema as an advertising medium is that it is

1. A.cheap
2. B.accurate
3. C.accessible
4. D.informative.

When old customers stick to the old place to buy goods and serivces, it is known as

1. A.goodwill
2. B.personal factor
3. C.window shopping
4. D.patronage.

The most important piece of legislation governing business and commercial activities in Nigeria currently is the

1. A.Companies Decree, 1968
2. B.Trade Disputes Decree, 1976
3. C.Companies and Allied Matters Decree, 1990
4. D.Banks and Other Financial Institutions Decree, 1991.

One of the criteria for differentiating consumer markets from industrial ones is the

1. A.type of demand
2. B.type of supply
3. C.nature of the services rendered
4. D.price of the goods.

The overriding objective of the food and drug act in Nigeria is to prevent the

1. A.importation of food and drugs that can be locally manufactured
2. B.consumption of food and drugs not tested by the ministries of health
3. C.adulteration of food and drugs sold in the country
4. D.manufacturers of food and drugs from charging excessive prices.

The activities of consumers association in Nigeria have not been effective because

1. A.the consumers are too many
2. B.the government is not favourably disposed towards consumerism
3. C.there is poor enlightenment about consumer rights
4. D.the consumers have no medium for expressing their feelings.

The least of the advantages of indigenization is that

1. A.the standard of living of the indigenes is improved
2. B.the economy is controlled by the nationals
3. C.entrepreneurial skill is developed
4. D.foreigners' domination is avoided.

The main objective of a trade association can best be described as promoting and protecting

1. A.the products
2. B.common interest
3. C.the market
4. D.customer's interest.

The management function of evaluating whether objectives are being achieved is

1. A.planning
2. B.directing
3. C.organizing
4. D.controlling.

In a business organization, the annual operation plan or budget is a form of

1. A.casual plan
2. B.medium-term plan
3. C.long-term plan
4. D.short-term plan.

A key advantage of delegation is that

1. A.workers are prepared for higher responsibilities
2. B.the manager has less work to do
3. C.the manager spends less time on planning
4. D.the organization grows larger in size.

Social responsibility of business requires enterprises to

1. A.hold annual social parties for the public
2. B.draw their workers only from the immediate environment
3. C.address themselves to issues relating to the society
4. D.set up social welfare centers in their areas of operation.

The existing system of governance and the administrative sub-divisions of a country which affect the operations of business in the country is described as

1. A.economic environment
2. B.legal environment
3. C.political environment
4. D.social environment.

Sudden technology changes can have the effect of making

1. A.a company's management style ineffective
2. B.a company's product obsolete
3. C.the control mechanism difficult to implement
4. D.the motivational factors in the company difficult to monitor.