47 questions. Try each one, then open the answer to check yourself and read the explanation.
Tourism can be classified as
Answer: D (invisible export)
When foreign tourists spend money in Nigeria, the country earns foreign exchange for a service, so tourism is an invisible export.
Use the diagram below to answer the question.
(Diagram: Sender → Y → X → Feedback, with a dashed line from Feedback back to Sender.)
X represents
Answer: D (receiver.)
In the communication process the message goes from the sender through the medium to the receiver, who then gives feedback. X comes just before feedback, so it is the receiver.
Use the diagram below to answer the question.
(Diagram: Sender → Y → X → Feedback, with a dashed line from Feedback back to Sender.)
In the communication process, Y represents
Answer: B (the medium)
Y lies between the sender and the receiver, so it is the medium (channel) that carries the message.
The input, output and central processing units are the basic components of a computer's
Answer: C (hardware)
Input devices, output devices and the CPU are physical parts of the computer, i.e. its hardware.
An employer insures against his employees' dishonesty by taking up
Answer: A (fidelity guarantee insurance)
Fidelity guarantee insurance covers an employer against loss caused by the fraud or dishonesty of employees.
Payment made to the insured by the insurer outside its legal obligation is
Answer: B (ex gratia payment)
An ex gratia payment is made as a favour or goodwill gesture, even though the insurer is not legally bound to pay.
An important social reason for development tourism in Nigeria is the
Answer: A (promotion of culture interaction)
Tourism brings people of different cultures together; jobs and balance of payments are economic reasons, not social ones.
The mode of transportation that conveys a limited variety of products through fixed laid routes is
Answer: D (pipeline.)
Pipelines carry only a few products such as crude oil, gas and water along fixed laid pipes.
The setting of objectives for an organization and determining how to accomplish them is
Answer: B (planning)
Planning means deciding in advance what to achieve (objectives) and how to achieve it.
An aspect of marketing that stimulates buying by providing free gifts is
Answer: D (sales promotion.)
Sales promotion uses short-term incentives such as free gifts, samples and discounts to encourage buying.
The limit of functions, activities and personnel that a supervisor can effectively manage in a business organization is
Answer: A (span of control)
Span of control is the number of people and activities one supervisor can manage effectively.
A seller attracts and retains patronage by
Answer: D (rendering customer service.)
Good customer service keeps buyers satisfied, so they keep coming back to the seller.
A bond which attracts only interest but leaves the capital unpaid is referred to as
Answer: D (an irredeemable bond.)
An irredeemable bond is never repaid; the holder only receives interest on it.
A public company has 2 000 000 ordinary shares of 50k each and offers 50% for subscription at ₦2 per share. If the shares were fully subscribed, calculate the issued capital.
Answer: D (₦500 000.)
Shares issued = 50% of 2 000 000 = 1 000 000. Issued capital is counted at nominal value: 1 000 000 × 50k = ₦500 000. The extra ₦1.50 per share (₦1 500 000) goes to share premium.
The main requirement for admission to the second-tier securities market is the
Answer: A (provision of a three-year trading record)
The second-tier market lets smaller firms raise capital with easier rules; the main condition is a three-year trading record instead of the five years needed for the main market.
XYZ Balance Sheet As At 31/12/2004
Share capital ₦200 000 | Fixed assets ₦180 000
Reserves ₦100 000 | Investment ₦100 000
Long-term liabilities ₦40 000 | Current assets ₦50 000
Current liabilities ₦30 000 | Fictitious assets ₦40 000
Total ₦370 000 | Total ₦370 000
The total sum for financing short-term projects is
Answer: B (₦30 000)
Short-term projects are financed by short-term funds, i.e. the current liabilities of ₦30 000.
XYZ Balance Sheet As At 31/12/2004
Share capital ₦200 000 | Fixed assets ₦180 000
Reserves ₦100 000 | Investment ₦100 000
Long-term liabilities ₦40 000 | Current assets ₦50 000
Current liabilities ₦30 000 | Fictitious assets ₦40 000
Total ₦370 000 | Total ₦370 000
What is the capital employed?
Answer: D (₦300 000.)
Capital employed = real assets − current liabilities = (180 000 + 100 000 + 50 000) − 30 000 = ₦300 000. Fictitious assets (₦40 000) have no real value and are left out.
Which of the following is a development bank in Nigeria?
Answer: D (Federal Mortgage Bank.)
The Federal Mortgage Bank gives long-term loans for housing development; the others are commercial banks.
Trading on the stock exchange in anticipation of price change in the market value of shares is
Answer: A (speculation)
Speculation is buying or selling shares hoping to profit from future price changes.
A financial institution which uses its capital strength to acquire controlling interests in other firms can be regarded as a
Answer: B (holding company)
A holding company owns enough shares in other companies to control them; those companies are its subsidiaries.
A current account is beneficial to its holder as
Answer: A (cheques can be issued to anybody)
A current account holder can pay anyone by cheque, which makes payments easy and safe.
Capital to a business is technically
Answer: B (a liability)
The business is separate from its owner, so the capital the owner puts in is a debt the business owes him: a liability.
I. Wholesaling II. Fishing III. Canning IV. Retailing
The sequence in which the occupational activities above are performed is
Answer: D (II, III, I and IV.)
Fish are first caught (fishing), then processed (canning), then sold in bulk (wholesaling) and finally sold to consumers (retailing).
The development of commerce resulted from
Answer: D (specialization.)
When people specialise, each produces more of one thing than he needs and must exchange it for other goods. Commerce developed to make this exchange possible.
The difference between a private and public limited liability company is that the former
Answer: A (is unable to offer shares to the public)
A private limited company cannot invite the public to buy its shares; a public company can.
Materials used for further production of goods and services are known as
Answer: B (intermediate goods)
Intermediate goods are materials and parts that go into making other goods, such as flour for bread. Capital goods are tools and machines that are used again and again.
A liquidator's fee is to be charged to the
Answer: A (realization account)
When a business is wound up, the costs of winding up, including the liquidator's fee, are debited to the realisation account.
The safety and quality of products are the social responsibility of
Answer: D (business organizations.)
Making safe, good-quality products is one of a business's social responsibilities to its consumers. SON only sets and enforces the standards.
A feature common to privatization and commercialization is
Answer: A (profit-making)
Both aim to make enterprises run efficiently and profitably instead of depending on government funds.
A protection right which can be reviewed or renewed after seven years is known as
Answer: D (trade mark.)
Under the Trade Marks Act a trade mark is first registered for seven years and can then be renewed again and again.
The headquarters of the Lake Chad Basin Commission is in
Answer: B (N'Djamena)
The Lake Chad Basin Commission has its headquarters in N'Djamena, Chad.
In Nigeria, the main source of pollution is
Answer: D (industrial waste.)
Wastes and fumes discharged by factories into air, water and land are the leading source of pollution across the country.
'Safeguarding the health of the nation' is the slogan used by
Answer: C (NAFDAC)
NAFDAC controls food and drugs, and its slogan is 'Safeguarding the health of the nation'.
When one person approves an act previously done by another in the former's name without authority, this is known as
Answer: A (ratification)
Ratification is when a principal later accepts an act done for him without his authority, making it as if he had authorised it.
The members of ECOWAS include
Answer: D (Togo, Niger, Nigeria and Ghana.)
Togo, Niger, Nigeria and Ghana are all ECOWAS members. Chad, Gabon and Cameroun are in Central Africa, and Mauritania left ECOWAS in 2000.
The most important advantage of privatization is the enhancement of
Answer: D (efficiency.)
Private owners have a strong motive to cut waste, so privatisation mainly improves efficiency.
A trade association consists of members engaged in the same trade while a chamber of commerce is
Answer: B (not restricted on a particular industry)
A chamber of commerce brings together businesses from all kinds of trades and industries in an area.
Hire purchase is beneficial to the seller because
Answer: B (it increases his turnover)
Because buyers can pay in instalments, more people buy, so the seller's sales (turnover) rise.
Consumerism aims at protecting the consumer from
Answer: A (harmful products)
Consumerism is the movement that protects buyers from harmful, fake or substandard products and unfair practices.
The major types of warehouses are
Answer: D (wholesaler, manufacturer, public and bonded.)
The main types of warehouses are manufacturers', wholesalers', public and bonded warehouses.
The Customs and Excise Department is responsible for the collection of
Answer: B (tariffs)
Customs collects import and export duties (tariffs) on goods crossing the border, and excise duties.
A shop which consists of many stores trading under a single roof and which stocks varieties of gods with each unit having its own head is a
Answer: D (departmental store.)
A departmental store has many departments under one roof, each with its own manager.
An objective of the farmers' association is to
Answer: A (ensure that the prices of goods are fair and reasonable)
A farmers' association bargains for its members so that the prices of their goods are fair and reasonable.
The documents used in the purchase and sale of goods which contain other terms of trade are
Answer: C (invoice and order)
The buyer's order and the seller's invoice state the goods, prices and terms of trade such as discounts and payment.
In international trade, exchanging goods for other goods and services purchased instead of paying in foreign currency is known as
Answer: A (countertrade)
Countertrade is international barter: goods are paid for with other goods instead of foreign currency.
The role of a wholesaler in the channel of distribution is to
Answer: C (buy goods in large quantities and sell in small quantities)
The wholesaler buys in bulk from producers and breaks the bulk into smaller lots for retailers.
Foreign trade also involves
Answer: A (providing services for other countries)
Foreign trade covers goods and also services, such as shipping or tourism, provided for other countries.