47 questions. Try each one, then open the answer to check yourself and read the explanation.
An aspect of commerce that facilitates the distribution of products is
Answer: A (transportation)
Transport moves goods from where they are produced to where consumers are, so it makes distribution possible.
An activity that involves derivation of raw materials from land and sea is
Answer: D (extraction.)
Extraction (mining, fishing, quarrying) takes raw materials straight from the land and sea.
The art of soap-making is an example of
Answer: B (secondary occupation)
Soap-making turns raw materials into finished goods, which is manufacturing, a secondary occupation.
Given:
I. Shoe maker
II. Policeman
III. Fisherman
IV. Gardener
V. Broker
The persons engaged in primary occupation are
Answer: B (III and IV)
Fishing and gardening take produce directly from nature, so they are primary. A shoe maker is secondary; a policeman and a broker are tertiary.
In the long run, all factors of production are
Answer: B (variable)
In the long run a firm has time to change every input, including buildings and machines, so all factors are variable.
The quality and quantity of production mostly depend on the
Answer: A (effectiveness of factors)
How well land, labour, capital and the entrepreneur are combined and used decides how much is produced and how good it is.
A proposed company may not be registered if
Answer: A (the name conflicts with that of another)
The Registrar will refuse a name that is the same as, or too like, that of an existing company.
An example of a cartel is
Answer: A (OPEC)
OPEC is a group of oil producers that agree on output to influence the price, which is what a cartel does.
The cheapest source of funds available to a company is through
Answer: B (retained profits)
Retained profits are the company's own money: no interest, issue costs or new shareholders are involved.
The components of capital employed in a business are
Answer: A (owners' equity and long-term debts)
Capital employed = total assets − current liabilities, which is the same as owners' equity plus long-term borrowing.
Maimani Plc, whose nominal capital is made up of 5000 000 ordinary shares of 50k each, decided to offer 80% of it to the public and realised only 50% of the amount due.
What is the company's authorized share capital?
Answer: A (N2500 000)
Authorised capital = 5 000 000 shares × 50k = ₦2 500 000.
Maimani Plc, whose nominal capital is made up of 5000 000 ordinary shares of 50k each, decided to offer 80% of it to the public and realised only 50% of the amount due.
Determine the company's reserve share capital
Answer: B (N1000 000)
Shares offered = 80% × ₦2 500 000 = ₦2 000 000. Only 50% (₦1 000 000) was realised, so ₦1 000 000 is still to be received.
In order to prevent liquidity problems in commercial banks, the central bank uses
Answer: C (reserve ratio)
The reserve (cash/liquidity) ratio forces banks to keep part of their deposits in liquid form, so they can always meet withdrawals.
An account maintained with a commercial bank for the purpose of foreign exchange transaction is the
Answer: C (domiciliary account)
A domiciliary account holds foreign currency such as dollars in a Nigerian bank.
A trader who gives credit stands to enjoy
Answer: C (increased sales)
Customers who can pay later buy more, so offering credit increases sales.
A person who buys new issues with a view of re-selling at a higher price in the near future is referred to as a
Answer: D (stag.)
A stag applies for newly issued shares hoping to sell them at a profit as soon as dealing begins.
A source of capital that has both elements of debt and equity is a
Answer: D (share.)
A preference share is part of the owners' capital but earns a fixed dividend like interest on a debt, so it has features of both.
A type of retail trade where a group of similar stores which is owned by a firm operates in different locations is a
Answer: B (chain store)
Chain (multiple) stores are many similar shops owned by one firm in different towns.
A warehouse which is used to store goods whose customs duty is not yet paid is a
Answer: B (bonded warehouse)
Imported goods are kept in a bonded warehouse under customs control until the duty is paid.
Balance of payments is made up of
Answer: C (current and capital items)
The balance of payments has a current account (visible and invisible trade) and a capital account (loans and investment flows).
Most of the barriers to international trade have been eliminated through
Answer: B (globalization)
Globalization has brought trade agreements and the WTO that cut tariffs and other trade barriers between countries.
A document sent by a seller to inform a buyer about the prices of goods is the
Answer: B (price list)
A price list simply tells buyers the prices of the goods the seller offers.
When 'FOB' is written on a document, it implies that the buyer bears the
Answer: C (insurance and transport costs)
Free on board: the seller pays until the goods are on the ship; the buyer pays the freight (transport) and insurance from there.
A crossed cheque with the inscription 'not negotiable' must be paid into the
Answer: B (current account of the payee)
A crossed cheque cannot be cashed over the counter; it must be paid into a bank account, normally the payee's current account.
The pooling of business information for the benefit of members is a major function of a
Answer: B (trade association)
Trade associations collect and share information on prices, markets and laws among firms in the same trade.
An association to which all chambers of commerce in Nigeria are affiliated is the
Answer: C (Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture)
The chambers of commerce in Nigeria belong to NACCIMA, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture.
The resources which are necessary for business development include
Answer: C (man, money, materials and machines)
A business needs the 4 Ms: men (labour), money, materials and machines.
The four Ps of marketing are
Answer: C (price, product, place and promotion)
The marketing mix is product, price, place and promotion.
Personal selling is used for the purpose of
Answer: C (creating product awareness)
Salespeople meet customers face to face to make them aware of a product and persuade them to buy it.
Ships used for international transport are
Answer: C (ocean liners)
Ocean liners are large ships that sail between countries on fixed routes.
A function generally performed by authorities of both the air and seaports is the
Answer: D (provision of facilities for landing and refuelling at the ports)
Port and airport authorities provide berths or runways where ships and aircraft land, and fuel for them.
A major factor hindering effective communication process is
Answer: D (noise.)
Noise is anything that disturbs a message between sender and receiver, so it is the main barrier to communication.
The fear of many communities concerning tourism development is the
Answer: A (influence of foreign culture)
Communities fear that visitors will bring foreign values that weaken local culture.
The development of tourism in Nigeria will enhance
Answer: B (revenue generation)
Tourists spend money on hotels, transport and fees, which brings revenue to businesses and government.
A historical building is a feature of
Answer: A (cultural tourism)
Historical buildings show a people's heritage, which is what cultural tourism is about.
The sum of money paid by a policy-holder to an insurer is referred to as
Answer: B (premium)
The premium is the regular payment the insured makes for cover.
An example of a non-insurable risk is
Answer: B (speculation)
Losses from speculation (e.g. a fall in prices) cannot be calculated or pooled, so they are not insurable.
The coordinating section of the central processing unit that manages the flow of data is the
Answer: B (control unit)
The control unit directs and coordinates the movement of data and instructions inside the computer.
An agreement between two parties which is enforceable by law is a
Answer: C (contract)
A contract is an agreement that the law will enforce.
The implied provisions in every sale of goods as contained in the Sales of Goods Act of 1893 are conditions and
Answer: C (warranties)
The Act implies conditions (vital terms) and warranties (lesser terms) into every sale of goods.
When an employee incurs expenses while executing his normal duty, the employer is responsible for his
Answer: D (idemnification.)
The employer must indemnify (repay) an employee for expenses properly incurred while doing his job.
The body charged with divesting government interests in public enterprises is
Answer: C (BPE)
The Bureau of Public Enterprises (BPE) carries out privatisation in Nigeria.
The practice whereby government relinquishes its ownership interest in a public enterprises is
Answer: C (privatization)
Privatisation is the sale of government shares in public enterprises to private owners.
A factor in a business environment which increases the rate of product obsolescence is
Answer: A (technology)
New technology quickly makes existing products out of date.
Which of the following is a form of social responsibility of a business?
Answer: C (Maintaining tidy and safe environment)
Social responsibility is a firm's duty to the community, such as keeping the environment clean and safe.
A computer component that decodes and interprets instructions and also directs program implementation is
Answer: C (control unit)
The control unit fetches each instruction, decodes it and directs the other parts of the computer to carry it out.
Which software program can be used to generate financial reports from a company's client list?
Answer: C (MS Excel)
A spreadsheet such as MS Excel calculates and tabulates figures, so it is used to produce financial reports.