JAMB Commerce 1998 past questions and answers

Which of the following contributed least to the evolution of commercial activities in Nigeria?

1. A.Development of banks
2. B.Development of transportation
3. C.Development of traders' unions
4. D.Development of currencies.

One of the factors which critically determines the choice of occupation is

1. A.training
2. B.skill
3. C.aptitude
4. D.interest.

Extractive industries may also be denominated as

1. A.direct industries
2. B.servicing industries
3. C.primary industries
4. D.indirect industries.

Services which are of absolute monopoly can best be provided by

1. A.private companies
2. B.limited liability companies
3. C.public companies
4. D.public enterprises.

One advantage the co-operative society has over the ordinary company is that the

1. A.latter pays tax while the former does not
2. B.former attracts more capital than the latter
3. C.membership of the former is usually more than that of the latter
4. D.former, unlike the latter, has limited liabilities.

Use the information below to answer questions 7 and 8.
Mr. Obi is a manager of Obi Agricultural Venture. He makes all the decisions and takes all profits from the business. He had agreed with Alhaji Musa (a farmer) to pool their resources together and expand their business. They invited Mr. Abayomi (a cotton grower) to join them. Mr. Abayomi agreed on the condition that his liability in the new firm will be limited to his investment in it. They thus registered Obi, Musa & Abayomi Agricultural Ventures.
It can be deduced from the above that Obi Agricultural Venture is a

1. A.sole proprietorship
2. B.general partnership
3. C.limited partnership
4. D.joint venture.

Use the information below to answer questions 7 and 8.
Mr. Obi is a manager of Obi Agricultural Venture. He makes all the decisions and takes all profits from the business. He had agreed with Alhaji Musa (a farmer) to pool their resources together and expand their business. They invited Mr. Abayomi (a cotton grower) to join them. Mr. Abayomi agreed on the condition that his liability in the new firm will be limited to his investment in it. They thus registered Obi, Musa & Abayomi Agricultural Ventures.
Which of the statements below is true of Mr. Abayomi?

1. A.He can assign his shares to another without consent of other partners
2. B.He cannot take part in the management of the business
3. C.His actions as a limited partner can bind the firm
4. D.His death will automatically dissolve the partnership.

A source of capital to private limited companies is shares issued to

1. A.the public
2. B.selected persons
3. C.members of the Board of Directors
4. D.dedicated members of staff.

Which of the following is an example of a conglomerate?

1. A.National Electric Power Authority
2. B.United Africa Company Nigeria Plc
3. C.The Nigerian Railway Corporation
4. D.First Bank of Nigeria Plc.

Which of the following statements is true of preferred stockholders?

1. A.They have no voting rights at annual general meetings
2. B.They have first claim to company assets before creditors
3. C.They have first claim to company assets after all debts have been settled
4. D.They share dividends equally with common stockholders.

A provision in the charter of a company which gives holders of common stock the first option to purchase additional issues of the firm's common stock is the

1. A.pre-emptive right
2. B.shareholders right
3. C.ex-dividend right
4. D.over-subscription right.

Use the information below to answer questions 13 and 14.
SONU Enterprises Balance Sheet as at 31/3/98
Capital ₦6000.00
Net Profit ₦2000.00
Drawings (₦137.50)
Creditors ₦1000.00
Accruals ₦187.50
Total ₦9050.00
Plant/Machinery ₦2300.00
Motor van ₦2000.00
Stock ₦1250.00
Debtors ₦480.00
Bank ₦3000.00
Cash ₦20.00
Total ₦9050.00
What is the current ratio?

1. A.4:1
2. B.4.5:1
3. C.5:1
4. D.25.5:1

Use the information below to answer questions 13 and 14.
SONU Enterprises Balance Sheet as at 31/3/98
Capital ₦6000.00
Net Profit ₦2000.00
Drawings (₦137.50)
Creditors ₦1000.00
Accruals ₦187.50
Total ₦9050.00
Plant/Machinery ₦2300.00
Motor van ₦2000.00
Stock ₦1250.00
Debtors ₦480.00
Bank ₦3000.00
Cash ₦20.00
Total ₦9050.00
What is the acid ratio?

1. A.2.95:1
2. B.4.25:1
3. C.4.75:1
4. D.5.55:1.

The form of capital which is easily transferred into the form desired is known as

1. A.working capital
2. B.liquid capital
3. C.circulating capital
4. D.capital employed.

If a firm's turnover is ₦15,000 and the cost of goods sold is ₦10,000, what is the percentage of gross profit on sales?

1. A.23.3%
2. B.33.3%
3. C.50.0%
4. D.66.6%.

A machine which enables sales without the physical presence of a sales attendant is a

1. A.computer machine
2. B.vending machine
3. C.telex machine
4. D.fax machine.

What document is required when a country imposes ad valorem import duties on goods?

1. A.A mail transfer
2. B.A shipping note
3. C.A bill of lading
4. D.A consular invoice.

Entrepot trade is said to have taken place when goods are

1. A.held at the port pending payment of custom duty
2. B.sold in the ship under special regulation
3. C.imported and then re-exported
4. D.kept for further processing before sales.

When a price is quoted at F.O.B., it means that the price

1. A.excludes loading charges incurred in bringing the goods to the dock
2. B.excludes all necessary shipping charges payable for insurance
3. C.includes all charges payable on shipping a consignment to the port of destination
4. D.includes charges payable for loading goods onto the ship.

Emeka ordered goods for his retail shop. The manufacturer sells the goods at retail price of ₦500 but would give it to Emeka at ₦400. What kind of discount did he get?

1. A.Cash discount
2. B.Trade discount
3. C.Quantity discount
4. D.Seasonal discount.

Nigerian Postal Services (NIPOST) facilitates commerce in all the following ways except through

1. A.cash on delivery service
2. B.recorded delivery service
3. C.express service
4. D.free on board service.

The document with which a manufacturing enterprise releases stock of raw materials to the factory for production is called

1. A.stock release form
2. B.goods received note
3. C.store issues voucher
4. D.materials release note.

The two main categories under which marine losses fall into are

1. A.particular loss and average loss
2. B.actual loss and general loss
3. C.total loss and partial loss
4. D.voyage policy loss and time policy loss.

Insurance companies operate on the principle of indemnity. This means that an insured person or firm collects

1. A.only half of the loss suffered
2. B.double the value of the loss suffered
3. C.the total sum of the premiums paid prior to the loss
4. D.damage claims equal to the loss suffered.

The most important difference between community banks and peoples' bank is that the

1. A.latter is owned solely by government while the former are not
2. B.former cater for rural dwellers while the latter caters for both rural and urban dwellers
3. C.former are service oriented while the latter is profit oriented
4. D.latter advances loans to the public while the former advance loans to rural dwellers only.

The assets, liabilities and general management of a distressed bank may be taken over by

1. A.International Bank for Reconstruction and Development
2. B.Nigerian Industrial Development Bank
3. C.Nigeria Deposit Insurance Corporation
4. D.Nigerian Bank for Commerce and Industry.

The type of securities that the stock exchange deals with are

1. A.warrants, currency notes, money orders and postal orders
2. B.cheques, bankdrafts, warrants and promissory notes
3. C.bonds ivory, treasury bills, debentures and warrants
4. D.stocks, shares, bonds and warrants.

I. Companies must be registered as private limited liability companies.
II. Companies must have not less than 100 shareholders
III. No shareholder may have more than 75% of issued share capital.
What of the above are requirements for admission into the second-tier securities market?

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

An underlying principle in the marketing of goods is that firms should

1. A.train their personnel
2. B.be consumer oriented
3. C.advertise the goods
4. D.sell through outlets.

Product X was introduced into the market at ₦4.00 with its cost of production at ₦3.90 while competing products are selling at ₦4.50. What pricing policy are producers of X adopting?

1. A.market skimming
2. B.market penetration
3. C.product live promotion
4. D.above the market pricing.

The oral presentation in a conversation with one or more prospective buyers for the purpose of making sales is

1. A.branding of goods
2. B.personal selling
3. C.packaging
4. D.publicity.

Personnel activities that promote the general image of an organization are part of

1. A.advertising
2. B.sales promotion
3. C.public relations
4. D.business correspondence.

An agent must not make any secret profits in the performance of his duties but can only be rewarded by his principal through

1. A.remuneration and indemnity
2. B.payment of commission and salary
3. C.granting of business concessions
4. D.forwarding of business links.

Sabo and Gambo entered into a contract for the sale of two baskets of tomatoes belonging to Gambo. Before the date of delivery and without any default by Gambo, the tomatoes were stolen. This is an example of termination of contract by

1. A.breach
2. B.performance
3. C.fault
4. D.frustration.

A minor is not permitted to enter into a valid contract because he

1. A.cannot pay the consideration
2. B.is too young to interpret the law
3. C.is young in the eye of the law
4. D.may not be able to write the contract.

A person who is cheated in a business transaction can seek legal remedy

1. A.even if the agreement is verbal and the amount involved is large
2. B.only if the business is a sole proprietorship whose owner is known
3. C.regardless of the form of business organization
4. D.only if the transaction is documented in a contract.

The most essential element of a product is the

1. A.price
2. B.utility
3. C.design
4. D.colour

Which of the following is a disadvantage of nationalization?

1. A.It promotes poor economic planning
2. B.The cost of services is not determined by market forces
3. C.It may lead to rationalization of resources
4. D.The development of local skills and technology is retarded.

An example of a consumer protection agency is the

1. A.Nigerian Bar Association
2. B.Nigerian Medical Association
3. C.Federal Environmental Protection Agency
4. D.Manufacturers Association of Nigeria.

The body that organizes, promotes and participates in local and foreign trade fairs is the

1. A.Ministry of Commerce and Tourism
2. B.Ministry of Finance
3. C.Chambers of Commerce
4. D.Export Promotion Council.

The Continental West African Conference is a

1. A.group of all West African countries trading in the same products
2. B.conference to foster unity among the West African countries
3. C.group of shipping lines operating on the same West African route
4. D.trust with shareholders from all West African countries.

The main function of thrift, credit and loans co-operative societies is to

1. A.educate their members
2. B.collect money from their members
3. C.disburse money to their members
4. D.raise investment finance among their members.

Management is described as

1. A.getting things done through people
2. B.implementation of business decisions
3. C.the number of levels in an organization
4. D.the people in authority in an organization.

Under normal circumstances, a business enterprise can be ideally structured

1. A.by products, function or territories
2. B.around the personalities in the enterprise
3. C.on the ruling of the management
4. D.on the basis of an order from stockholders.

[box] → [box] → [box], labelled EXTERNAL ENVIRONMENT, INTERNAL ENVIRONMENT, EXTERNAL ENVIRONMENT.
Which of the following sequences can best fit into the structure above?

1. A.People → control → ideas.
2. B.Material → production → ideas.
3. C.Finance → marketing → production.
4. D.Material → production → product.

When a business enterprise provides free service to its environment, the service is said to be a

1. A.civic responsibility
2. B.philanthropic consideration
3. C.social responsibility
4. D.political consideration.

Inventory control is an aspect of

1. A.operations research
2. B.materials management
3. C.the organizing function
4. D.span of control.

The reduction of import duties among the member countries of ECOWAS is an example of

1. A.preference duties
2. B.preferential treatment
3. C.preferential tariffs
4. D.preferential excise.

In a common market, member countries agree basically to

1. A.place bans on other countries' products
2. B.wage war against other countries' products
3. C.establish common barriers against countries outside the market
4. D.negotiate with countries outside the market for favourable terms of trade.