40 questions. Try each one, then open the answer to check yourself and read the explanation.
One of the major benefits of commerce to government is to
Answer: B (generate revenue for growth and development)
Taxes and duties on trade give government revenue to spend on development.
An example of an activity in the construction industry is
Answer: B (bricklaying)
Construction means building houses, roads and bridges, so bricklaying belongs there. Car assembling and shoemaking are manufacturing.
One of the inputs in production that can be motivated by remuneration is
Answer: C (labour)
Labour is human effort, rewarded with wages that motivate workers.
The allocation of tasks to different skills in a production process is referred to as
Answer: C (division of labour)
Division of labour breaks production into tasks, each done by people with the right skill.
The sales of goods through a medium that accepts money and delivers the items to the customer is
Answer: B (a vending machine)
A vending machine takes coins or notes and releases the item bought.
The main purpose of branding is to
Answer: A (create identity for a product)
A brand name or mark gives a product an identity that sets it apart from rivals.
The basis for international trade is embedded in the principle of
Answer: D (comparative advantage.)
Countries gain by specialising in what they produce at the lowest opportunity cost: comparative advantage.
The major problem encountered in international trade is that of
Answer: D (differences in currency.)
Each country has its own currency, so traders must exchange money and face exchange-rate risk.
The document a seller uses in dispatching goods to a customer by a carrier is
Answer: D (a delivery note.)
A delivery note goes with the goods; the customer signs it on receipt to show they arrived.
A document which serves as an order with details of goods required by an intending purchaser is
Answer: B (an indent)
An indent is an order, often to a foreign supplier or agent, listing the goods wanted.
If a customer pays within nine days of receiving goods and takes advantage of 3% off the invoice price, this is stated as
Answer: A (3/9;net 30)
Terms are written as discount/days, then the full credit period: 3% if paid within 9 days, otherwise the net amount within 30 days.
Which of the following is a characteristic of a bearer cheque?
Answer: B (It is made payable to whoever presents it.)
A bearer cheque is paid to whoever holds and presents it at the bank.
A bill of exchange paid before its due date at an amount less than its face value is said to have been
Answer: C (discounted)
Cashing a bill early for less than its face value is discounting it.
A current account holder pays fees for services in form of
Answer: A (bank charges)
Banks take bank charges (for example account maintenance fees) from current accounts for their services.
Communication is relevant to business activities because it
Answer: B (reduces the cost and risk of travelling)
With telephone, mail and internet, business can be done without travelling, which saves cost and avoids road risks.
The right of an insurance company to stand in place of an insured against a third party, who is liable for the occurrence of a loss, is the principle of
Answer: D (subrogation.)
After paying a claim, the insurer takes over (is subrogated to) the insured's right to recover from whoever caused the loss.
Tourism serves the purpose of
Answer: A (cross-cultural understanding and peaceful interaction)
Tourists visit other places and peoples, which builds understanding between cultures and peaceful relations.
The most important business objective is to
Answer: C (target consumers for satisfaction)
A business survives and profits only if it satisfies its customers.
In case of liquidation of a public limited liability company, those that are first paid are
Answer: D (debenture holders.)
Debenture holders are creditors of the company, so they are paid before any shareholders.
A feature common to public and private limited liability companies is that
Answer: A (both can sue and be sued)
Every company is a separate legal person, so it can sue and be sued in its own name.
A business organization can obtain long-term financing through
Answer: B (the sale of shares)
Selling shares brings in permanent capital; overdrafts and credit purchases are short-term.
The portion of the authorized share capital given out to the public for subscription is
Answer: B (issued capital)
Issued capital is the part of the authorised capital actually offered to and taken up by the public.
If the rate of turnover of a company in 1999 was 4 times while the average stock was ₦49,600, determine the turnover.
Answer: B (₦198,400)
Turnover = rate of turnover × average stock = 4 × 49 600 = ₦198 400.
Given:
Opening stock ₦1,800
Purchases ₦2,800
Sales ₦8,000
Closing stock ₦350
Carriage on sales ₦500
Calculate the value of the unused stock.
Answer: C (₦350)
Unused stock is the stock left at the end of the period, the closing stock of ₦350.
The promotion and protection of trade, industry and agriculture through trade fairs is a function of
Answer: D (the Chamber of Commerce.)
Chambers of Commerce organise trade fairs (such as the Lagos International Trade Fair) to promote trade, industry and agriculture.
Dealing in quoted securities on the Nigerian Stock Exchange is restricted to authorized
Answer: B (brokers)
Only licensed stockbrokers may buy and sell on the floor of the Exchange for the public.
Securities that entitle the investor to coupon rates are
Answer: A (bonds)
A bond pays a fixed rate of interest called the coupon; shares (equities) earn dividends instead.
The promotion of team spirit in an organization is referred to as
Answer: B (espirit de corps)
Esprit de corps is the management principle of building team spirit and harmony among staff.
One of the characteristics of a good organizational chart is that it should
Answer: C (facilitate communication)
A good chart shows clear lines of authority, so it is easy to see who reports to whom and to communicate.
An organization which focuses on consumer satisfaction is practising
Answer: D (marketing concept.)
The marketing concept puts satisfying customers' needs at the centre of the business.
Goods and Services are made available to consumers through
Answer: A (the channel of distribution)
The channel of distribution is the whole route by which goods move from producer to consumer.
A person who, in consideration for an extra commission, takes responsibility for goods sold on credit and in case of default is a
Answer: B (del credere agent)
A del credere agent earns extra commission for guaranteeing payment by the buyers he sells to.
Yahaya bought a piece of furniture on a credit sale agreement from Ahmed and resold it to Ali before all installments were made. The court upheld that Ahmed could not recover possession of the items from Ali. The reason for the judgement was because
Answer: B (ownership was transferred on delivery)
Under a credit sale, ownership passes to the buyer on delivery, so Yahaya owned the furniture and could sell it to Ali.
The body which ensures that consumers are protected against harmful product in Nigeria is
Answer: A (NAFDAC)
NAFDAC controls food, drugs and other products to keep harmful ones off the market.
The process of decoding data in a computer is known as
Answer: C (decryption)
Decryption turns coded (encrypted) data back into readable form.
Which of the following is a type of system software?
Answer: A (Utility programs.)
Utility programs (antivirus, disk tools) are system software; registers and hard drives are hardware and packages are application software.
Computers that process all data as binary zeros and ones are
Answer: B (digital computers)
Digital computers represent all data as binary digits, 0 and 1.
Modern means of payment is greatly facilitated by
Answer: C (e-banking)
E-banking (cards, transfers, mobile banking) makes payment fast and cashless.
The provision of quality and safe products which guarantee the health of consumers is an example of
Answer: D (social responsibility.)
A business has duties to the society it serves. Making sure its products are safe and of good quality, so that they do not harm consumers' health, is one of these social responsibilities.
A business organization must always consider the overall effect of its actions on the
Answer: D (society.)
Social responsibility means a business must think about how its actions affect the society around it.