49 questions. Try each one, then open the answer to check yourself and read the explanation.
Consumers require protection against exploitation to ensure
Answer: C (the sale of quality products)
Consumer protection aims to stop the sale of fake, harmful or substandard goods, so that consumers get quality products.
The business environment that takes into cognizance the age distribution, ethnic mix and educational level of the consumer is
Answer: A (demographic environment)
Demography is the study of population features such as age, ethnic make-up and education.
An agent who takes title to goods and has authority to buy and sell on behalf of another is
Answer: C (a factor)
A factor holds the principal's goods in his possession and can buy and sell them in his own name; a broker does not hold the goods.
Citizens are against privatisation mainly because of
Answer: B (increased prices of goods and services)
Private owners charge prices that cover costs plus profit, so people fear goods and services will become more expensive.
The major achievement of ECOWAS is
Answer: A (the expansion of regional trade)
ECOWAS has increased trade among West African countries by reducing trade barriers; a monetary union has not yet emerged.
An announcement of a person's willingness to enter into a contract is referred to as
Answer: B (an offer)
An offer is a statement of willingness to be bound by a contract on stated terms if the other party accepts.
The macro-environmental forces and trends which are a constraint on business operations are referred to as
Answer: C (external factors)
Macro-environmental forces come from outside the firm and it cannot control them, so they are external factors.
Which of the following best describes inputs for any production activity?
Answer: A (Natural resources.)
All production starts from natural resources such as land and raw materials.
Personal selling is most effective in marketing industrial goods because it involves
Answer: B (personal interaction and information gathering)
Industrial goods are technical, so face-to-face contact lets the seller explain, answer questions and learn the buyer's needs.
The controllable variables that a firm uses to achieve its marketing objectives are called
Answer: B (marketing mix)
The 4 Ps (product, price, place, promotion) are the variables a firm can control, and together they form the marketing mix.
A major function of an entrepreneur is
Answer: A (decision-making)
The entrepreneur organises the business and bears its risks, which means taking the key decisions.
A Memorandum of Association is applicable to a
Answer: B (joint-stock company)
A Memorandum of Association is filed when registering a joint-stock (limited) company; it sets out its external relations.
The sustainable growth of commerce is largely due to
Answer: C (exchange)
Commerce is about the exchange of goods and services, and it grows as exchange grows.
A major advantage of a cooperative society is that it
Answer: D (encourages thrift among members.)
Cooperative societies, especially thrift and credit ones, encourage members to save regularly.
The making of doors from timber planks is a type of
Answer: C (secondary production)
Turning materials (planks) into finished goods (doors) is secondary production.
Law-making is an example of
Answer: A (indirect service)
Direct services are rendered straight to individuals who pay for them (doctors, lawyers). Services by people paid by government for the community, such as law-makers, are indirect services.
A document which advertises the shares of a company is known as a
Answer: D (prospectus.)
A prospectus invites the public to buy a company's shares and gives details about the company.
The scope of economic activities can be enlarged by
Answer: C (trading and aids to trade)
Trade together with aids to trade (transport, banking, insurance, etc.) makes up commerce and widens economic activity.
The creation of utilities to satisfy human wants is referred to as
Answer: A (production)
Production is the creation of goods and services (utilities) to satisfy human wants.
A major criticism of a cooperative society is
Answer: D (management incompetence.)
Cooperatives are often run by members without management training, so poor management is a major weakness.
An economic activity which deals with natural resources is a form of
Answer: A (extraction)
Extractive occupations take natural resources from land and sea, e.g. mining, fishing and farming.
The first stage in tourism planning is
Answer: B (preparing a list of tourist attractions)
Planning starts by identifying the attractions an area has to offer.
An agreement by the insurer to compensate the insured for losses suffered is
Answer: D (indemnity.)
Indemnity means the insurer restores the insured to the position he was in before the loss.
One of the functions of the Nigeria Ports Authority is the provision of
Answer: A (facilities to enhance the speedy loading and offloading of cargoes)
The NPA provides and runs port facilities such as berths and cranes for loading and unloading ships.
The World Tourism Organization has its headquarters in
Answer: C (Madrid)
The World Tourism Organization, a UN agency, is based in Madrid, Spain.
Digital computer is divided into
Answer: B (super, mainframe, mini and micro)
Digital computers are grouped by size and power into supercomputers, mainframes, minicomputers and microcomputers.
A distinctive advantage of GSM is its
Answer: A (mobility)
A GSM phone can be carried and used anywhere within network coverage.
In the permanent storage device, DASD means
Answer: D (Direct Access Storage Device.)
DASD stands for Direct Access Storage Device, e.g. a hard disk, where data can be reached directly.
The major determinant of fire insurance premium is the
Answer: A (type and structure of the property to be insured)
The premium depends on the risk, which depends on the type of building, its materials and its use.
The Internet is a system of telecommunications used for
Answer: C (sending electronic messages)
The Internet links computers worldwide to send electronic messages and data such as e-mail.
A written agreement for hiring a ship for transporting goods is a
Answer: C (charter party)
A charter party is the contract for hiring a whole ship (or part of it) to carry goods.
The major function of a trade association is that it
Answer: D (helps to promote research on behalf of members.)
A trade association serves firms in the same trade, for example by carrying out research that members could not afford alone.
A major setback of international trade is
Answer: B (economic sanctions)
Economic sanctions stop or limit trade with a country, which badly hurts international trade.
Which of the following requires payment into the payee's account?
Answer: A (Crossed cheque.)
A crossed cheque cannot be cashed over the counter; it must be paid into the payee's bank account.
The traditional way of paying cooperative dividend is to distribute profit in proportion to members'
Answer: C (volume of purchases)
In a consumer cooperative, the surplus is shared as a dividend according to how much each member bought.
The abbreviation C & F indicates that the
Answer: B (selling price includes the cost of carriage)
C & F (cost and freight) means the price quoted covers the goods and the freight to the destination port.
The sale of foreign investment and gold reserves can be used to
Answer: C (correct adverse balance of payments)
A balance of payments deficit is settled by running down reserves such as gold and foreign investments.
A share premium is an example of
Answer: D (capital reserve.)
Share premium (the amount above nominal value) is kept as a capital reserve and cannot be paid out as dividend.
A major benefit a debtor can derive from using a credit facility is
Answer: C (convenience)
Credit lets the buyer get goods now and pay later, which is convenient.
The function of money that facilitates the comparison of the quality of goods as a basis of exchange is the
Answer: B (measure of value)
As a measure of value, money lets the worth of different goods be compared by their prices.
The difference between the buying and selling price of shares is known as
Answer: C (jobber's turn)
The jobber's turn is the jobber's profit: the gap between his buying and selling prices.
Which of the following is a risk-free security?
Answer: C (Treasury bill.)
A treasury bill is a government short-term security, so repayment is practically certain.
The central bank controls the quantity of money in circulation through
Answer: A (open-market operations)
Through open-market operations the central bank buys or sells government securities to add or remove money.
The selling of new shares to existing shareholders is referred to as
Answer: C (rights issue)
A rights issue offers new shares to existing shareholders, usually at a discount; a bonus issue is free.
A new company requiring a large amount of equity finance may source funds from the
Answer: A (capital market)
Long-term equity funds are raised by selling shares on the capital market.
A credit instrument which also serves as a legal tender is
Answer: B (paper money)
Paper money (bank notes) is a promise by the central bank and must be accepted in payment by law.
Balance Sheet of XYZ as at 31/12/2003
Ordinary share capital ₦25 000 000 | Fixed assets ₦26 000 000
Revenue reserve ₦10 000 000 | Investment ₦22 000 000
General reserve ₦3 000 000 | Current assets ₦5 000 000
Long-term liabilities ₦4 000 000
Current liabilities ₦11 000 000
Total ₦53 000 000 | Total ₦53 000 000
What is the net working capital?
Answer: D ((₦6 000 000))
Working capital = current assets − current liabilities = 5 000 000 − 11 000 000 = −₦6 000 000, shown in brackets.
Balance Sheet of XYZ as at 31/12/2003
Ordinary share capital ₦25 000 000 | Fixed assets ₦26 000 000
Revenue reserve ₦10 000 000 | Investment ₦22 000 000
General reserve ₦3 000 000 | Current assets ₦5 000 000
Long-term liabilities ₦4 000 000
Current liabilities ₦11 000 000
Total ₦53 000 000 | Total ₦53 000 000
Determine the owners' equity
Answer: A (₦38 000 000)
Owners' equity = share capital + reserves = 25 000 000 + 10 000 000 + 3 000 000 = ₦38 000 000.
The body regulating the sale and purchase of shares in Nigeria is the
Answer: B (Securities and Exchange Commission)
The Securities and Exchange Commission is the regulator of Nigeria's capital market.