48 questions. Try each one, then open the answer to check yourself and read the explanation.
An example of a service-rendering trade association is
Answer: A (Nigerian Bar Association)
Lawyers render services, so the Nigerian Bar Association is a service-rendering trade association; the others represent producers.
An obstacle to international trade is
Answer: D (cost of finance)
Financing foreign trade is expensive (letters of credit, insurance, exchange costs), and this high cost discourages international trade.
The right of ownership with respect to goods or property is
Answer: C (title)
In the law of sale of goods, ownership of goods or property is called title, and it passes from seller to buyer.
The main motive of chambers of commerce and trade associations is to
Answer: D (protect and promote the interests of members)
Chambers of commerce and trade associations exist mainly to protect and promote the interests of their member businesses.
A pattern that shows the kinds of participants involved in the production, distribution and ultimate use of a product is referred to as
Answer: C (structure)
The structure (of a distribution channel) shows which kinds of participants, such as producers, wholesalers, retailers and consumers, handle a product.
Goods that are manufactured or acquired by the seller after the contract of sale are
Answer: B (future goods)
Under the Sale of Goods Act, goods that the seller will make or acquire after the contract is made are called future goods.
Use the information below to answer questions 7 and 8.
Ojo purchased the following items from Sani at the specified prices on credit: 200 cartons of milk at ₦1,000 per carton; 150 bags of sugar at ₦500 per bag; 50 bags of rice at ₦3 000 per bag. Sani allowed 10% trade discount and 5% cash discount, if payment is made within the agreed period. Ojo paid within the agreed period.
What was the amount paid by Ojo?
Answer: C (₦363,375)
List price = 200,000 + 75,000 + 150,000 = ₦425,000. Less 10% trade discount = ₦382,500. He paid on time, so less 5% cash discount (₦19,125) = ₦363,375.
Use the information below to answer questions 7 and 8.
Ojo purchased the following items from Sani at the specified prices on credit: 200 cartons of milk at ₦1,000 per carton; 150 bags of sugar at ₦500 per bag; 50 bags of rice at ₦3 000 per bag. Sani allowed 10% trade discount and 5% cash discount, if payment is made within the agreed period. Ojo paid within the agreed period.
How much was the trade discount?
Answer: A (₦42,500)
List price = ₦425,000; 10% trade discount = ₦42,500.
The basic function of the Nigerian Ports Authority is to
Answer: D (coordinate the activities of all the seaports in the country)
The Nigerian Ports Authority was set up to manage and coordinate the activities of all the seaports in Nigeria.
The concept that refers to the sale, transfer or exchange of goods and services is
Answer: B (trade)
Trade means buying and selling, that is, the sale, transfer or exchange of goods and services.
A guarantee given by one person or party to another in which the integrity of the person is assured is
Answer: A (fidelity)
Fidelity guarantee insures an employer against loss caused by the dishonesty of an employee, so it guarantees a person's integrity.
A firm that adapts itself to delivering the desired satisfaction more effectively and efficiently than its competitors is said to be practising
Answer: D (marketing concept)
The marketing concept says a firm succeeds by finding out what customers want and satisfying them better than competitors.
The payment made periodically in respect of an insurance policy entered into is known as
Answer: C (premium)
The premium is the regular payment the insured makes to the insurer to keep the policy running.
An example of service rendered by NIPOST is
Answer: D (mail delivery)
NIPOST (Nigerian Postal Service) collects and delivers mail; telephone and e-mail are telecommunication services.
The focal point of marketing is
Answer: B (the buyer)
Marketing starts and ends with the customer: it finds out what buyers want and satisfies them, so the buyer is its focal point.
The type of marine insurance which covers either damage or loss to the vessel and such as caused by it to other vessels is
Answer: A (hull insurance)
Hull insurance covers the ship itself and damage the ship causes to other vessels.
The management function that makes the difference in intensity of behaviour is
Answer: C (motivation)
Motivation is what makes people work harder or less hard, so it explains differences in the intensity of behaviour.
One of the functions of the seaports is the provision of
Answer: B (loading and off-loading facilities)
Seaports provide facilities for loading goods onto ships and off-loading goods from ships.
The process of dividing tasks into jobs and departments and of delegating authority is known as
Answer: D (organizing)
Organizing is the management function of grouping tasks into jobs and departments and assigning authority.
Communication process involves the transmission of a message over a selected channel to the
Answer: A (receiver)
In communication the sender sends a message through a channel to the receiver.
Stimulation of demand is a kind of communication in marketing which connotes
Answer: C (advertising)
Advertising is paid communication to the public meant to create and stimulate demand for a product.
A functional structure is an organizational structure in which
Answer: C (a specialist enforces his directives)
In a functional structure each specialist (e.g. accounts, marketing) gives directives in his own area of expertise.
Entrepreneurship mainly involves
Answer: A (risk-taking)
The entrepreneur organises the other factors of production and bears the risk of the business.
In the event of the liquidation of a company, the first to be settled are
Answer: A (debenture holders)
Debenture holders are creditors of the company, so they are paid before any shareholders when it is wound up.
The business organisation established mainly for the purpose of carrying out specific assignments for a specific duration is a
Answer: A (joint venture)
A joint venture is a temporary arrangement between parties to carry out a particular project and ends when it is done.
Which of these factors of production is relatively fixed in supply?
Answer: D (Natural resources)
Natural resources (land) are a gift of nature and their total quantity cannot be increased.
The evolution of commerce in Nigeria is traceable to the
Answer: B (desire by human beings to satisfy their needs through the services of other people in the society)
Commerce grew because people could not produce everything they needed and so depended on others to satisfy their wants.
One of the requirements necessary for setting up a business is
Answer: C (knowledge of the business)
Before starting any business, the owner needs knowledge of that line of business to run it successfully.
The assembling of products into usable forms is known as
Answer: A (construction)
Construction is the industrial occupation that puts together (assembles) already-made materials into usable structures such as buildings, roads and bridges.
The government's policy thrust on the business environment is to
Answer: B (attract investors)
Government business policy aims to create a friendly environment that attracts local and foreign investors.
Social responsibility is the ability of an organization to
Answer: C (contribute to sustaining and developing its community)
A socially responsible firm gives back by helping to sustain and develop the community in which it operates.
The act of a person employing another to enter into a contract on his behalf is known as
Answer: D (agency)
In agency, a principal appoints an agent to make contracts with third parties on the principal's behalf.
The ECOBANK is the initiative of
Answer: C (West African states to foster trade)
Ecobank (Ecobank Transnational) was set up with the backing of ECOWAS to promote trade and banking across West Africa.
Privatisation is concerned with
Answer: C (the individual ownership of companies)
Privatisation transfers ownership of government enterprises to private individuals and companies.
Electronic computers differ from human beings in that they process data and minimise errors in a
Answer: A (faster and more accurate manner)
Computers process data much faster than people and with fewer errors.
A major benefit derivable from the privatisation and commercialisation of public enterprises in Nigeria is
Answer: D (revenue generation)
Selling public enterprises raises money for government, and commercialised firms become profitable, so revenue is generated.
The device which interprets and carries out the instructions presented to it by the computer program is known as
Answer: B (microprocessor)
The microprocessor (CPU) reads and carries out program instructions.
The market structure, business conditions and financial systems in Nigeria constitute the
Answer: A (economic environment)
Markets, business conditions and the financial system are economic factors, so they form the economic environment.
The protection of consumers against exploitation by manufacturers is to ensure
Answer: B (that the right quality of goods and services is sold)
Consumer protection aims to make sure consumers get goods and services of the right quality at fair prices.
The most widely used computer language that focuses on solving science-oriented problems is
Answer: A (FORTRAN)
FORTRAN (Formula Translation) was designed for scientific and engineering calculations; COBOL is for business.
Banks are engaged in the business of buying and selling of
Answer: A (bills of exchange)
Banks discount (buy) bills of exchange before they mature and may sell (rediscount) them.
A source of short-term finance to companies is
Answer: C (retained earnings)
Share capital and debentures are long-term; profits kept back (retained earnings) can be used to meet short-term needs.
The body charged with the responsibility to register shares for subscription on the stock market in Nigeria is the
Answer: A (Securities and Exchange Commission)
The Securities and Exchange Commission registers securities before they are offered to the public.
Use the information below to answer questions 46 and 47.
Balance Sheet as at 31st December, 2001
Liabilities (₦): Paid-up capital 200 000; Retained earnings 50 000; Creditors 50 000; Bills payable 50 000; Dividends payable 70 000; Total 420 000
Assets (₦): Building 50 000; Plant & Machinery 35 000; Fixtures 20 000; Debtors 50 000; Stocks 145 000; Bank 120 000; Total 420 000
What is the owners' equity?
Answer: A (₦250 000)
Owners' equity = paid-up capital + retained earnings = 200 000 + 50 000 = ₦250 000.
Use the information below to answer questions 46 and 47.
Balance Sheet as at 31st December, 2001
Liabilities (₦): Paid-up capital 200 000; Retained earnings 50 000; Creditors 50 000; Bills payable 50 000; Dividends payable 70 000; Total 420 000
Assets (₦): Building 50 000; Plant & Machinery 35 000; Fixtures 20 000; Debtors 50 000; Stocks 145 000; Bank 120 000; Total 420 000
Find the current ratio
Answer: B (1.85:1)
Current assets = 50 000 + 145 000 + 120 000 = 315 000. Current liabilities = 50 000 + 50 000 + 70 000 = 170 000. 315 000 ÷ 170 000 ≈ 1.85:1.
Money can simply be referred to as a
Answer: A (medium of exchange)
The basic definition of money is anything generally accepted as a medium of exchange.
A type of long-term loan granted to companies with fixed interest as well as with redeemable and irredeemable features is referred to as
Answer: A (a debenture)
A debenture is a long-term loan to a company carrying fixed interest, and it can be redeemable or irredeemable.
Public debt management is one of the functions of a
Answer: B (central bank)
The central bank is banker to the government and manages the public debt.