47 questions. Try each one, then open the answer to check yourself and read the explanation.
A floating policy is an example of
Answer: A (marine insurance)
A floating policy is a marine policy taken out for a large sum that covers many shipments, each one being declared and deducted as it is sent.
The most important benefit of insurance is that it provides
Answer: D (protection against risks)
Insurance pools the losses of the few among many, protecting businesses and people against financial loss from risks.
Which part of the computer system does the keyboard device belong to?
Answer: C (Input unit)
The keyboard is used to enter data and instructions into the computer, so it is an input device.
The Lake Chad Basin Commission was formed in
Answer: D (1964)
The Lake Chad Basin Commission was set up in 1964 by Nigeria, Niger, Chad and Cameroon.
A major disadvantage of the privatisation policy is that
Answer: D (government would loss control of the economy)
When public enterprises are sold to private owners, government loses its direct say over key sectors of the economy.
The most dangerous pollution is
Answer: D (air pollution)
Polluted air cannot be avoided because everyone must breathe it, and it spreads widely, so air pollution is regarded as the most dangerous.
The primary objective of consumer protection laws is to ensure that
Answer: A (consumers derive maximum satisfaction from goods and services)
Consumer protection laws make sure consumers get safe goods of good quality and value, so they get maximum satisfaction.
The compensation the insured gets depends heavily on the
Answer: C (risk suffered)
Insurance puts the insured back where he was before the loss (indemnity). So what he receives depends on the loss he actually suffered, not on how much premium he paid.
The computer that functions by taking discrete numbers and performing mathematical calculations is called
Answer: B (digital)
Digital computers count in separate (discrete) digits, while analogue computers measure continuous quantities such as temperature.
Commercialization of government corporations brings about an increase in the level of
Answer: C (competition among business operators)
Commercialised corporations must make profits on their own, so they compete with private firms, increasing competition.
The difference between personal selling and sales promotion is that while sales promotion includes free gifts and samples, personal selling involves
Answer: B (face-to-face communication with customers)
Personal selling is a salesperson meeting customers in person to persuade them to buy.
The type of communication from a superior to a subordinate in an organization is referred to as
Answer: C (downward communication)
Messages from a manager down to a junior officer flow downward; from junior to senior is upward.
A step-by-step method of carrying out functions in an office is known as
Answer: A (procedure)
A procedure lists the steps, in order, for doing a task in an office.
The media used for inter-departmental communcation include
Answer: B (memoranda, circulars and the telephone)
Departments communicate internally by memos, circulars and internal telephone; advertising is for the public.
An instrument that is traded in the second-tier foreign exchange market is
Answer: C (travellers' cheque)
The foreign exchange market deals in foreign currency and its instruments such as travellers' cheques. Stocks and debentures are traded on the stock exchange.
The development of a continer and a graphic design for a product is called
Answer: A (packaging)
Packaging is designing and producing the container or wrapper of a product, including its graphics.
A business firm that is involved in conveying goods or people is known as a
Answer: C (carrier)
A carrier is a firm that carries goods or passengers for a charge, such as a shipping line or haulage company.
The factors essential for tourism are
Answer: B (good weather, amenities, accessibility and scenery)
Tourists are drawn by good weather and attractive scenery, and need amenities (hotels, water, power) and easy access.
In CIF contracts, risk passes at the time of shipment but the property does not pass until
Answer: C (the shipping documents are transferred)
Under CIF the seller ships and insures the goods; the buyer becomes owner when he receives the shipping documents, especially the bill of lading.
A partnership is dissolved when
Answer: B (there is bankruptcy)
The bankruptcy of the firm or of a partner ends a partnership by law; losses or quarrels alone do not.
One of the disadvantages of sole proprietorship is
Answer: D (unlimited liability)
The sole trader is personally liable for all the business debts, so his private property can be taken.
The most important concept in production is
Answer: A (utility)
Production means creating utility: making goods and services able to satisfy human wants.
An acquired firm in a merger will always receive a
Answer: A (premium)
To win control, the acquiring firm pays the owners of the acquired firm more than their shares are worth on the market: a premium.
Occupations are classified into
Answer: C (industry, commerce and services)
All occupations fall into industry (making goods), commerce (distributing them) and services.
The Nigerian Telecommunications Limited is a
Answer: B (public corporation)
NITEL was owned and run by the government to provide a public service, so it is classed as a public corporation (public enterprise).
An engineer in government employ is to be rendering
Answer: C (indirect service)
Government employees such as engineers, police and civil servants are paid by the state, not by the people they serve, so they render indirect services.
The availability of goods and services is brought to the notice of consumers through
Answer: D (advertising)
Advertising informs the public that goods and services are available and where to get them.
The necessary documents used in foreign trade are
Answer: C (invoice, shipping note, bill of lading and freight note)
The invoice, shipping note, bill of lading and freight note are the shipping documents used in moving goods abroad.
A cheque drawn by a bank official on the bank's deposits in another bank on a customer's instructions is known as
Answer: B (bankdraft)
A bank draft is a cheque drawn by the bank itself (on its own account), so the payee is sure it will be paid.
A type of credit offered by both commercial and merchant banks in Nigeria is
Answer: D (overdraft)
Both commercial and merchant banks let customers overdraw their current accounts up to an agreed limit.
A major function of a chamber of commerce is
Answer: B (promoting both home and foreign trade)
A chamber of commerce brings together all kinds of businesses and promotes trade at home and abroad, for example through trade fairs.
Which of the middlemen in the channel of distribution has title to the goods he distributes?
Answer: A (The merchant wholesaler)
A merchant wholesaler buys the goods and so owns them; an agent only arranges sales for a commission.
Which of the following confirms the accuracy of the duty charged on imported goods?
Answer: B (Consular invoice)
A consular invoice, certified by the importing country's consul, confirms the value of goods on which import duty is charged.
The association that comprises all types of businesses is referred to as
Answer: A (chamber of commerce)
A chamber of commerce admits businesses of every kind; a trade association is for firms in one line of trade.
Wholesalers can be divided into
Answer: D (merchant wholesalers and agent middlemen)
Wholesalers either buy and own the goods (merchant wholesalers) or only arrange sales for a commission (agents and brokers).
In Nigeria, the ministry in charge of registering trade associations is that of
Answer: B (commerce)
Trade associations deal with trade, so they are registered with the Ministry of Commerce.
The bank that discounts bills of exchange is the
Answer: D (commercial bank)
Commercial banks discount bills of exchange for customers, paying them before the bill falls due.
The market where only indigenous firms are considered is the
Answer: B (second-tier securities market)
The second-tier securities market was set up so that smaller indigenous Nigerian firms could raise capital with easier listing rules.
From which of the following sources can partnerships increase their capital?
Answer: A (Admission of a new partner)
A new partner brings in fresh capital. Partnerships cannot sell shares to the public.
The excess of the assets over the liabilities of a business is called
Answer: B (net worth)
Assets minus liabilities is what the owner is worth in the business: net worth. Working capital uses only current assets and liabilities.
Initial public offering is undertaken through the
Answer: C (primary securities market)
New securities sold for the first time are sold in the primary market; existing ones change hands in the secondary market.
The major participants in the stock market when stock prices are rising generally are the
Answer: A (bulls)
Bulls buy shares expecting prices to rise; bears sell expecting them to fall.
The fixed and current assets of a business are called
Answer: B (capital employed)
The total of fixed and current assets is the (gross) capital employed in the business.
To increase the supply of money in a country, the central bank has to
Answer: A (reduce cash ratio)
A lower cash ratio lets banks keep less in reserve and lend more, increasing money supply.
A good financial instrument which serves as a hedge against inflation is
Answer: B (a share)
Share prices and dividends tend to rise with prices, protecting their value; a bond's fixed interest and capital lose value when prices rise.
One advantage of a crossed cheque is that it can
Answer: C (only be paid into the owner's account)
A crossed cheque cannot be cashed over the counter; it must be paid into the payee's bank account, which makes it safer.
Given:
Sales ₦15 000
Opening stock ₦5 600
Purchases ₦9 700
Closing stock ₦4 400
Gross profit ₦4 500
Net profit ₦2 000
From the data above, calculate the rate of turnover
Answer: D (2.18 times)
Cost of sales = 5,600 + 9,700 − 4,400 = ₦10,900. Average stock = (5,600 + 4,400)/2 = ₦5,000. Rate of turnover = 10,900 ÷ 5,000 = 2.18 times.