WAEC Commerce 1993 past questions and answers

The function of commerce in production is that it

1. A.helps in the extraction of raw materials
2. B.provides a link between the different arms of production
3. C.is the only branch that satisfies wants
4. D.yields results
5. E.changes raw materials to finished goods

Arrange the following occupational activities in the sequences in which they are performed.
I. Wholesaling
II. Fishing
III. Canning
IV. Retailing

1. A.I, II and IV
2. B.II, I, IV and III
3. C.III, I, IV and II
4. D.III, II, I and IV
5. E.II, III, I and IV

Which of the following is not a basic want of man?

1. A.Transport
2. B.Food
3. C.Water
4. D.Clothing
5. E.Shelter

Which of the following comes last in the chain of distribution? The

1. A.consumer
2. B.manufacturer
3. C.retailer
4. D.wholesaler
5. E.agent

Which of the following is not an aid to trade?

1. A.Transport
2. B.Production
3. C.Banking
4. D.Insurance
5. E.Warehousing

Trade can be described as

1. A.purchase of goods and services
2. B.production of goods
3. C.buying and selling
4. D.distribution of goods
5. E.storage of goods

A system in which people provide their own needs directly is known as

1. A.sub-standard economy
2. B.subsistence economy
3. C.mixed economy
4. D.monetized economy
5. E.specialized economy

Which of the following is not a branch of production?

1. A.Consumption
2. B.Extraction
3. C.Manufacturing
4. D.Distribution
5. E.Direct services

In which class of occupation would doctors, teachers and entertainers be grouped?

1. A.Extractive
2. B.Industrial
3. C.Direct Service
4. D.Commercial
5. E.Indirect Service

Which of the following occupations come under the extractive industry?
I. Cattle-rearing, lumbering, farming
II. Mining, quarrying, hunting
III. Ship building, road construction, iron bending
IV. Singing, dancing, hair-dressing

1. A.I, II and III only
2. B.I, II and IV only
3. C.I and II only
4. D.II, III and IV only
5. E.I and III only

Department stores are usually located

1. A.where low income earners live
2. B.in suburban towns
3. C.at city centres
4. D.in low rental areas
5. E.in areas free from traffic jam

Which of the following statements is true of the manufacturing industry?

1. A.The factors of production cannot move to other occupations
2. B.It is involved in changing raw materials to finished goods
3. C.Its products cannot be distributed to consumers
4. D.It does not benefit from the services of direct labour
5. E.The workers are unskilled.

Any action taken by a company outside its stated objective is regarded as

1. A.caveat vendetta
2. B.a trespass
3. C.ultra vires
4. D.uberrimae fidei
5. E.a nuisance

Incorporation simply means the

1. A.floating of a company
2. B.reorganization of a company
3. C.birth of a company
4. D.registration of the Memorandum of Association
5. E.appointment of a new Board of Directors.

What document is issued by a public limited company when offering shares for sale?

1. A.Proposal forms
2. B.Policy certificate
3. C.Prospectus
4. D.Quotation
5. E.Memorandum

A business unit whose membership ranges from 2-50 is a

1. A.public corporation
2. B.partnership
3. C.public company
4. D.private company
5. E.co-operative society

Preference shareholders are different from ordinary shareholders because

1. A.preference shareholders are creditors to the company
2. B.the number of shares held by preference shareholders is more
3. C.preference shareholders take a fixed percentage of dividends
4. D.the shares of preference shareholders cannot be sold on the stock exchange
5. E.preference shareholders receive interest.

The reward of shareholding in a company is

1. A.profit
2. B.dividend
3. C.interest
4. D.bonus
5. E.premium

Which of the following is not a source of capital to a sole proprietor?

1. A.Loan from friends
2. B.Personal savings
3. C.Ploughing back profit
4. D.Borrowing from relations
5. E.Borrowing through debentures

Which of the following is not an important reason for government ownership of industries?

1. A.Provision of essential services
2. B.Large capital requirements
3. C.Avoiding duplication of services
4. D.Preventing private monopoly
5. E.Making high profit

In a limited partnership, the liability of most of the partners is

1. A.pegged
2. B.unlimited
3. C.limited
4. D.unpredictable
5. E.restricted

The rights, responsibilities and liabilities of each partner are specified in the

1. A.memorandum of association
2. B.prospectus
3. C.articles of association
4. D.deed of partnership
5. E.deed of conveyance

Which of the following statements is not true?

1. A.Government does not nationalize businesses owned by its citizens
2. B.Government nationalizes foreign businesses
3. C.Government does not give nationalized industries to private owners
4. D.Government nationalizes viable industries
5. E.Public corporation are owned by the government.

Which of the following are advantages of indigenization?
I. The economy is controlled by the nationals
II. Entrepreneurial skill is developed
III. Foreigners are encouraged to invest in Nigeria
IV. The standard of living of the indigenes is improved

1. A.I and II only
2. B.I, II and III only
3. C.III and IV only
4. D.II and IV only
5. E.I, II and IV only

When an industry is nationalized, ownership belongs to the

1. A.shareholders
2. B.government
3. C.tax payers
4. D.indigenes
5. E.foreigners

One of the main problems of nationalization is that

1. A.nationals may not welcome the change of ownership
2. B.foreigners are not able to control the economy
3. C.repatriation of profit is increased
4. D.there may be capital flight
5. E.there will be adverse balance of payment

The process of selling government business to the public is known as

1. A.naturalization
2. B.nationalization
3. C.privatization
4. D.commercialization
5. E.indigenization

The handling of telephone and telex services is done by

1. A.NITEL
2. B.NIPOST
3. C.COURIER
4. D.NEC
5. E.NECA

A Post Office service which provides an alternative to delivery of mails by a postman is the

1. A.Post Office Box
2. B.Postcode
3. C.Business Reply Service
4. D.Post Office Guide
5. E.Prepaid Post

A service whereby NIPOST undertakes to collect money due to the sender of a parcel is called

1. A.C.O.D.
2. B.C.W.O
3. C.C.I.F
4. D.F.O.B
5. E.F.O.R

The cost of advertising a product is ultimately borne by the

1. A.manufacturer
2. B.wholesaler
3. C.agent
4. D.consumer
5. E.retailer

Which of the following is used to stimulate sales?

1. A.Finance
2. B.Insurance
3. C.Warehousing
4. D.Advertising
5. E.Banking

Which of the following assigns a name to a product?

1. A.Copyright
2. B.Packaging
3. C.Labelling
4. D.Patent
5. E.Branding

The insured is prevented from making profit from claims under more than one policy for the same risk by the principle of

1. A.contribution
2. B.subrogation
3. C.utmost good faith
4. D.proximate cause
5. E.insurable interest

The performance of business activities that directs the flow of goods and services from the producer to the consumer is

1. A.marketing
2. B.merchandising
3. C.transportation
4. D.production
5. E.marketing mix

Which of the following is not an element of the marketing mix?

1. A.Product
2. B.Pricing
3. C.Promotion
4. D.Purchases
5. E.Place

The concept that consumers decide what goods and services shall be produced is known as consumer

1. A.protection
2. B.surplus
3. C.sovereignty
4. D.behaviour
5. E.co-operative

A person who sells goods belonging to another person in his own name and receives commission is a

1. A.wholesaler
2. B.retailer
3. C.sole trader
4. D.factor
5. E.merchant

When an insured person admits that he has indemnified, he means that

1. A.the insurance company has accepted his claims
2. B.the damaged property has been recovered
3. C.he has paid his premium fully
4. D.the insurance company has restored him to his former position
5. E.he has recovered benefits lost through acting in bad faith

The difference between an overdraft and a loan is that an overdraft

1. A.does not yield interest
2. B.is given to savings account holders only
3. C.yields interest on the total balance in the account
4. D.yields interest only on the sum drawn
5. E.requires no application by the customer before it is granted.

The excess value of the assets of a business over its liabilities is

1. A.capital owned
2. B.working capital
3. C.issued capital
4. D.liquid capital
5. E.reserved capital

Cash is said to be legal tender because it

1. A.can be converted into money order
2. B.can be offered and accepted for payment
3. C.is negotiable
4. D.also takes the form of bank draft
5. E.is portable

A crossed postal order is

1. A.generally acceptable for payment
2. B.easily converted to cash
3. C.the same as money order
4. D.cashed through a bank
5. E.cashed through a post office

A bank whose name is printed on a cheque leaf is known as the

1. A.drawer
2. B.payer
3. C.drawee
4. D.payee
5. E.acceptor

A person who wants to undertake an insurance policy usually completes

1. A.a proposal form
2. B.a promotion form
3. C.an application form
4. D.an agreement form
5. E.a subscription form

The capital that is needed to meet the day-to-day running of a business is the

1. A.fixed capital
2. B.reserved capital
3. C.circulating capital
4. D.liquid capital
5. E.capital employed

An association of local, independent retailers formed to encourage buying in bulk from manufacturers is known as

1. A.voluntary chain
2. B.producer co-operative society
3. C.multiple store
4. D.department store
5. E.hypermarket

Third Party Insurance covers, damages

1. A.to both passengers and the vehicle
2. B.caused by the vehicle insured
3. C.to all parties concerned
4. D.to both vehicles involved
5. E.to the insured vehicle only.

A bank may dishonour a cheque if

1. A.it is not crossed
2. B.an alteration on the cheque is initiated
3. C.the amount on the cheque is less than the amount in the account
4. D.it has been endorsed to a third party
5. E.the amount on the cheque is more than the amount in the account

Which of the following is not one of the 4m's of business resources?

1. A.Method
2. B.Men
3. C.Money
4. D.Material
5. E.Machine

The charge paid for failing to off-load a vehicle within a stipulated time is called

1. A.freight
2. B.demurrage
3. C.fine
4. D.fare
5. E.floating charge

The working capital of a company is

1. A.current assets less current liabilities
2. B.fixed assets less current liabilities
3. C.fixed assets less fixed liabilities
4. D.current assets less fixed liabilities
5. E.current assets less owner's equity

Which of the following defines communication?

1. A.Movement of goods
2. B.Transmission of information
3. C.Movement of people
4. D.Storing of information
5. E.Distribution of newspapers

The telephone service through which one can dial any number, local, trunk or overseas is known as

1. A.internal communication system
2. B.standard dialling system
3. C.subscriber's trunk dialling system
4. D.international telecommunication
5. E.coded dialling order

Which of the following is not a function of warehousing?

1. A.Provision of storage facilities
2. B.Availability of goods where needed
3. C.Availability of goods when needed
4. D.Reduction of price fluctuations
5. E.Production in anticipation of demand

The machine used in sending telex messages is known as

1. A.photocopier
2. B.typewriter
3. C.teleprinter
4. D.punching machine
5. E.dictaphone

Which of the following protects consumers against poor quality goods?

1. A.Nigerian Chambers of Commerce
2. B.Standards Organization of Nigeria
3. C.Trade Association
4. D.Manufacturers Association of Nigeria
5. E.Nigerian National Supply Company

Which of the following terms of price quotation includes cost of transportation to the buyer's premises?

1. A.FOB
2. B.C & F
3. C.FOR
4. D.FAS
5. E.Exship

Net Profit is the

1. A.excess of income over expenses
2. B.total income from the sale of goods
3. C.difference between sales and purchases
4. D.amount of purchase less closing stock
5. E.excess of total sales over total purchases

An instalmental buying system where ownership immediately transfers to the buyer is known as

1. A.deferred payment
2. B.hire-purchase
3. C.spot buying
4. D.cash sales
5. E.prompt payment

A document that is sent to a buyer when credit is not allowed is

1. A.invoice
2. B.consignment note
3. C.debit note
4. D.proforma invoice
5. E.delivery note

Which of the following is true of a delivery note? It

1. A.is sent in anticipation of delivery
2. B.does not show the prices of the goods
3. C.gives additional information about the goods
4. D.shows the pictures of goods being delivered
5. E.is a demand for payment

A parcel of shoes valued at N2,000 was invoiced at N200 only. Which of the following would be used by the seller to correct this error?

1. A.An invoice for N200
2. B.A credit note for N1,800
3. C.A debit note for N1,800
4. D.A debit note for N2,000
5. E.A credit note for N2.200

An increase in turnover is an increase in

1. A.liquid capital
2. B.the volume of sales
3. C.current assets
4. D.fixed assets
5. E.owners' equity

A retailer's mark-up is

1. A.profit divided by the average stock
2. B.sales divided by the average stock
3. C.gross profit less indirect expenses
4. D.total cost less total sales
5. E.the selling price less the cost price.

Foreign trade is also known as

1. A.domestic trade
2. B.international trade
3. C.counter trade
4. D.entrepot trade
5. E.export trade

Which of the following documents in foreign trade states where goods are manufactured?

1. A.Bill of lading
2. B.Consular invoice
3. C.Certificate of Origin
4. D.Insurance Certificate
5. E.Bill of sight

New shares are offered to the public through

1. A.acceptance houses
2. B.the stock exchange
3. C.issuing houses
4. D.discount houses
5. E.finance houses

Speed is an important consideration for the choice of a means of transport where goods are

1. A.bulky
2. B.inferior
3. C.fragile
4. D.perishable
5. E.durable

The main disadvantage of water transport is that it

1. A.is safe
2. B.is slow
3. C.can carry heavy goods
4. D.can go long distances
5. E.is owned by private firms

A company that acquires a majority of the shares of other companies with voting rights is regarded as

1. A.a consortium
2. B.a holding company
3. C.an amalgamator
4. D.a subsidiary company
5. E.cartel

Air transport is of considerable importance today because it

1. A.is faster than other means of transport
2. B.can deliver goods to owner's destination
3. C.is relatively cheaper
4. D.can carry bulky goods
5. E.travels on schedule

When goods are sold, which of the following makes the transfer of ownership effective?

1. A.Banking
2. B.Transportation
3. C.Communication
4. D.Warehousing
5. E.Advertising

The organization that aims at protecting the business interests of a particular area is the

1. A.Trade Association
2. B.Manufacturers Association of Nigeria
3. C.Chamber of Commerce
4. D.Confederation of Industrialists
5. E.Trade Union

Which of the following are advantages of road over air transport?
I. Flexibility
II. Speed
III. Cost
IV. Delivery to owners destination
V. Comfort

1. A.I, III and IV only
2. B.I, II, III and V only
3. C.II, III and V only
4. D.I, II and IV only
5. E.I, II, III and IV only

A group of persons that agrees to pool its resources to achieve a particular objective is known as a

1. A.consortium
2. B.holding company
3. C.cartel
4. D.trust
5. E.subsidiary company

If a motor assembly plant absorbs a tyre manufacturing company solely for its tyre needs, such an arrangement is known as

1. A.vertical integration
2. B.lateral integration
3. C.horizontal integration
4. D.diagonal integration
5. E.forward integration

Which of the following is formed with a view to fixing output for members so that price is maintained at a high level?

1. A.Price Control Board
2. B.Chambers of Commerce
3. C.Cartels
4. D.Holding Companies
5. E.Trade Union

Which of the following is not the function of a Trade Association?

1. A.Conducting research
2. B.Providing technical information
3. C.Giving credit facilities
4. D.Settling disputes among members
5. E.Educating members

The act whereby a manager assigns some of his duties and powers to a subordinate is known as

1. A.authority
2. B.assignment
3. C.decision making
4. D.delegation
5. E.re-organization

Which of the following is a compulsory requirement by the commercial banks when granting loans to customers?

1. A.Collateral
2. B.Referee
3. C.Interest
4. D.Insurance
5. E.Endorsement

Which of the following media combines the advantages of sound and motion?

1. A.Radio
2. B.Neon sign
3. C.Bill Board
4. D.Hoarding
5. E.Television

What is the total number of the member countries of ECOWAS?

1. A.4
2. B.5
3. C.16
4. D.17
5. E.20

Which of the following measures cannot be used to correct a balance of payment deficit in Nigeria?

1. A.Imposing import licenses
2. B.Devaluing the Naira
3. C.Placing total ban on some commodities
4. D.Increasing import duties
5. E.Increasing imports

A foreign bill of exchange is drawn by the

1. A.importer
2. B.shipping and forwarding agent
3. C.importer's bank
4. D.exporter
5. E.discount house

The main objective of ECOWAS is

1. A.promoting economic cooperation and development
2. B.promoting industry
3. C.promoting transport
4. D.promoting agricultural production
5. E.providing credit facilities

The retailer operates from a stall while the wholesaler operates from a

1. A.supermarket
2. B.mobile shop
3. C.hypermarket
4. D.chain store
5. E.warehouse

Which of the following is not an insurable risk?

1. A.Fire accident
2. B.Life assurance
3. C.Burglary
4. D.Marine disaster
5. E.Loss of profit

Which of the following is the basic function of a Personnel Department?

1. A.Recruiting staff
2. B.Organizing training for staff dependants
3. C.Settling disputes among trade unions
4. D.Processing staff salaries and wages
5. E.Conducting product research

The management technique that anticipates the future and determines the appropriate line of action is known as

1. A.planning
2. B.organizing
3. C.consulting
4. D.directing
5. E.controlling

Span of control is the

1. A.ability of the supervisor to control the staff
2. B.qualification possessed by the supervisor
3. C.number of staff under the control of a supervisor
4. D.authority of the supervisor to control the staff
5. E.total number of staff in the whole organization

Commerce 2 (answer five questions)
(a) Describe any four features of a multiple shop.
(b) Give any four reasons why small scale retailing is common in Nigeria.

Commerce 2 (answer five questions)
(a) State any four sources of capital for a public limited company.
(b) Explain any four advantages and disadvantages respectively of converting a business into a public limited company.

Commerce 2 (answer five questions)
Write short notes on the following, showing their main uses in foreign trade:
(a) Shipping notes
(b) Ship's manifest
(c) Bill of sight
(d) Dock warrant
(e) Bill of entry

Commerce 2 (answer five questions)
(a) Describe the functions of the Stock Exchange.
(b) State the types of securities traded in the Stock Exchange.

Commerce 2 (answer five questions)
(a) What are Thrift Societies?
(b) Describe five services rendered by Thrift Societies to their members.

Commerce 2 (answer five questions)
(a) Explain five problems of using rail transport in Nigeria.
(b) Write short notes on:
(i) Tramp liners;
(ii) Ocean liners

Commerce 2 (answer five questions)
(a) What is a contract of sale of goods?
(b) State any three of its provisions.
(c) Explain two conditions that constitute acceptance in the contract of sale of goods.

Commerce 2 (answer five questions)
(a) What is Public Relations?
(b) State and explain any five methods a firm can use to promote its public relations.

Commerce 2 (answer five questions)
Mention and explain any four environments under which a business operates.

Commerce 2 (answer five questions)
(a) Give five examples of trade association.
(b) Outline any three functions of the Employers' Association.
(c) What are the objectives of the Lake Chad Basin Commission?