45 questions. Try each one, then open the answer to check yourself and read the explanation.
Ships that sail across the ocean and operate on scheduled time tables are
Answer: B (ocean liners)
Ocean liners cross the oceans on fixed routes and fixed timetables, unlike tramp steamers which sail wherever there is cargo.
Non-insurable risks include
Answer: A (gambling)
Losses from gambling are deliberately taken risks that cannot be measured or pooled, so no insurer will cover them.
The program that makes up the operating system in a computer is
Answer: C (system software)
An operating system is system software: the programs that manage the computer itself so other programs can run.
Coverage against unexpected events is called
Answer: A (insurance)
Insurance covers events that may or may not happen, such as fire or theft; assurance covers events that are certain, such as death.
An insured risk which occurs accidentally as a result of defects in a ship is
Answer: D (a particular average)
A particular average is an accidental partial loss that falls only on the owner of the damaged ship or cargo.
Communication enhances business activities by
Answer: A (facilitating interaction between producers and consumers)
Communication lets producers and consumers exchange information, place orders and give feedback. Moving goods is transport and keeping them is warehousing.
In business, the computer is very important especially in
Answer: D (information management)
A computer stores, processes and retrieves information quickly, so its main business use is managing information.
The current highest decision-making body on privatization and commercialization of public enterprises in Nigeria is the
Answer: A (National Council on Privatization)
The National Council on Privatisation, chaired by the Vice-President, approves privatisation policy; the Bureau of Public Enterprises carries it out.
The members of the Niger Basin Commission include
Answer: B (Burkina Faso, Guinea and Nigeria)
The Niger Basin countries are those the River Niger and its tributaries pass through, such as Guinea, Mali, Niger, Burkina Faso, Benin, Nigeria, Cameroon and Chad. Ghana and The Gambia are not among them.
Business environment refers to all elements that are
Answer: A (outside an organization but relevant to its operations)
The business environment is made up of forces outside the firm, such as government, competitors, the economy and society, that affect how it operates.
Consumer rights include the right to
Answer: C (redress)
Consumers have the right to redress: to complain and be compensated when goods or services are faulty.
One important requirement for the membership of the ECOWAS is
Answer: B (independence)
Only independent West African states can join ECOWAS; size and population do not matter.
A transporter who had to sell some perishable goods without the prior authority of the owner becomes an agent by
Answer: B (necessity)
In an emergency, when the owner cannot be reached and the goods would spoil, the law treats the carrier as an agent of necessity.
Poor sewage disposal, oil spill and indiscriminate refuse dumping all lead to
Answer: C (land and water pollution)
Sewage and oil spills foul rivers and the sea, and refuse dumped anyhow spoils the land, so the result is land and water pollution.
One of the advantages of commercialization is that it
Answer: A (encourages entrepreneurship)
Commercialised enterprises must run for profit without subsidies, which encourages enterprise and efficient business practice.
A common element in all contracts is
Answer: D (agreement)
Every contract rests on agreement (offer plus acceptance) between the parties; some contracts, such as those under seal, need no consideration.
Sources of finance to a business include personal savings, shares, debentures and
Answer: B (bank overdrafts)
Businesses commonly borrow from commercial banks by overdraft; the IMF and the Central Bank do not lend to private firms.
Charges for loans paid by commercial banks to the Central Bank of Nigeria are called
Answer: A (bank rates)
The bank rate is the rate the Central Bank charges commercial banks when it lends to them as lender of last resort.
In the primary market, new shares are issued through
Answer: D (a prospectus, an offer for sale and placing)
New shares are issued by public issue through a prospectus, by an offer for sale through an issuing house, or by placing them with chosen investors.
The instruments of credit include
Answer: C (bills of exchange and promissory notes)
Bills of exchange and promissory notes are written promises or orders to pay later, so they are credit instruments.
The shares of a company listed on the stock exchange for sale are referred to as
Answer: D (quoted shares)
Shares listed on the stock exchange have their prices quoted there, so they are called quoted shares.
What is the role of the capital market in the privatization exercise in Nigeria?
Answer: A (Selling the shares and stocks of the companies to be privatized)
The shares of enterprises being privatised are sold to the public through the capital market, mainly the stock exchange.
In international trade, documentary credit is also known as
Answer: B (letters of credit)
A documentary credit is a letter of credit: the importer's bank promises to pay the exporter once the shipping documents are presented.
A specialized institution in Nigeria that deals in capital investments in the form of stocks, shares, bonds and debentures is the
Answer: C (Nigerian Stock Exchange)
The stock exchange is the market where securities such as shares, stocks, bonds and debentures are bought and sold. The SEC supervises it but does not deal.
A group of assets which a business acquires with the intention of reselling them are referred to as
Answer: A (current assets)
Assets bought to be sold again, like stock, turn over within a short time, so they are current assets. Fixed assets are kept for use.
Authorized share capital is also known as
Answer: C (registered share capital)
Authorised capital is the maximum a company may issue as stated in its memorandum when it is registered, so it is also called registered or nominal capital.
An action taken by a company outside its object clause is regarded as
Answer: A (ultra vires)
Ultra vires means 'beyond the powers': an act outside the objects clause of the memorandum is beyond the company's legal powers.
The strategy adopted by a firm that ceases to operate at one or more locations because of inactivity is
Answer: D (consolidation)
Closing branches that are not doing well and concentrating operations in fewer places is consolidation. Diversification is the opposite: spreading into new lines.
A written partnership contract is known as
Answer: B (a deed)
The written agreement between partners is the partnership deed (deed of partnership).
The merger of a textile mill, a cement company and a tannery is referred to as
Answer: A (conglomerate merger)
A merger of firms in unrelated lines of business is a conglomerate merger. A vertical merger joins firms at different stages of the same product.
Use the diagram below to answer questions 34 and 35.
As the branches indicate, iv is
Answer: D (construction)
In the diagram, i is industry, which branches into extraction, manufacturing (iii) and construction (iv).
Use the diagram below to answer questions 34 and 35.
What does v represent?
Answer: A (Aids to trade)
Box ii is commerce, which divides into trade and aids to trade, so v is aids to trade.
The most important function of commerce is
Answer: B (facilitating exchanges among individuals and firms)
Commerce exists to make exchange possible, linking producers with consumers through trade and aids to trade.
The acronym PLC is used to identify a
Answer: C (public company limited by shares)
PLC stands for Public Limited Company, a public company limited by shares; a private company uses 'Ltd'.
Commerce includes all the occupations concerned with
Answer: D (distribution)
Commerce covers all activities that distribute goods and services from producers to consumers: trade and aids to trade.
Factors of production can be described as the
Answer: A (resources required for the provison of goods and services)
Land, labour, capital and entrepreneurship are the resources needed to produce goods and services.
Fluctuations in the supply of goods may be eliminated if the distribution system maintains
Answer: C (warehouse services)
Warehouses store goods in times of plenty and release them in times of scarcity, so supply stays steady through the year.
Loan schemes by thrift societies are
Answer: C (mutual schemes)
Thrift societies pool members' savings and lend to members in turn, so their loans are mutual schemes.
An internal demand for goods to be purchased or drawn from stock is
Answer: B (a requisition)
A requisition is an internal request from a department to the store or buying office; orders and quotations pass between firms.
An order sent by an importer to an overseas supplier stating the details of goods required is known as
Answer: C (an indent)
In foreign trade, the importer's order to an overseas supplier is called an indent.
Organizing trade fairs in Nigeria is the responsibility of
Answer: D (chambers of commerce)
Chambers of commerce, such as the Lagos Chamber of Commerce, organise the international trade fairs in Nigeria.
International trade takes place as a result of
Answer: B (inequitable distribution of natural resources)
Countries have different natural resources, so each trades what it has for what it lacks.
The use of vending machines in retailing is hindered in a developing economy owing to
Answer: D (lack of steady power supply)
Vending machines run on electricity, so frequent power cuts make them unreliable.
Manufacturers' Association of Nigeria contributes to development by advising the government on
Answer: A (industrial policy and harmony)
MAN speaks for manufacturers and advises government on industrial policy and good industrial relations.
Discounts offered by firms to middlemen for bulk purchases are
Answer: A (trade discounts)
A trade discount is a reduction from the list price given to traders who buy for resale, often in bulk; a cash discount is for prompt payment.