WAEC Commerce 1994 past questions and answers

Which of the following is not true of commerce?

1. A.It is part of production
2. B.it creates time and place utility
3. C.it is the life blood of a nation's economic activities
4. D.Commercial activities begin after the goods are produced
5. E.It makes goods and services available when and where needed

Capital owned is the same as

1. A.authorised capital
2. B.issued capital
3. C.net worth of a business
4. D.fixed assets of a business
5. E.public limited company

A business that has no upper limit to the number of owners is

1. A.partnership
2. B.private company
3. C.public corporation
4. D.finance company
5. E.public limited company

An agreement between two parties which can be enforced is called

1. A.an agency
2. B.a contract
3. C.a consideration
4. D.an offer
5. E.a warranty

Which of the following terms relate to insurance?
I. Proximate cause
II. Letter of hypothecation
III. indemnity
IV. Caveat emptor
V. uberrimae fidei

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

Which of the following is not used by the Central Bank to restrict lending by commercial banks?

1. A.Management of national debt
2. B.Reserve Requirement
3. C.Open Market Operations
4. D.Special Deposit
5. E.Cash Ratio

Which of the following relies on the government for its initial capital?

1. A.Co-operative Society
2. B.Private Limited Company
3. C.Public Corporation
4. D.Public Limited Company
5. E.Credit and Thrift Society.

A cheque does not contain

1. A.cheque number
2. B.cashier's signature
3. C.payee's name
4. D.drawee's name
5. E.date of issue

The most acceptance and convenient means of payment in foreign trade is

1. A.letter of credit
2. B.bank-draft
3. C.telegraphic money order
4. D.promissory note
5. E.bill of exchange

An establishment that specialises in taking care of risks is called

1. A.a hire-purchase company
2. B.an accepting house
3. C.an insurance company
4. D.a finance company
5. E.a confirming house

An association of firms, producing similar commodities, formed in order to keep up prices by restricting output is called

1. A.a chamber of commerce
2. B.a customs union
3. C.an amalgamation
4. D.a cartel
5. E.a combination

Which of the following is an example of a commercial occupation?

1. A.Wrestling
2. B.Welding
3. C.Shipping
4. D.Brick laying
5. E.Tailoring

Which of the following carries the bulk of goods involved in foreign trade?

1. A.Cargo planes
2. B.Cargo liners
3. C.Tramp vessels
4. D.Steam ship
5. E.Tankers

A stock exchange is a market for

1. A.old stocks of goods
2. B.capital goods only
3. C.raising new shares
4. D.existing shares of quoted companies
5. E.shares of unquoted companies

Which of the following gives a temporary protection to the insured while the policy is being drawn up?

1. A.Proposal form
2. B.Cover note
3. C.Endorsement
4. D.Ex gratia payment
5. E.Certificate

Which of the following is not a function of management?

1. A.Staffing
2. B.Planning
3. C.Organising
4. D.Directing
5. E.Distributing

Which of the following is responsible for the welfare of staff in an organisation?

1. A.Accounts Department
2. B.Administrative Department
3. C.Personnel Department
4. D.Sales Department
5. E.Public Relations Department

Which of the following is not a marketing function?

1. A.Packaging
2. B.Branding
3. C.Advertising
4. D.Accounting
5. E.Pricing

Which of the following is not an aim of advertising? To

1. A.drive away smaller firms
2. B.satisfy consumers
3. C.help firms compete with others
4. D.make one's product known
5. E.increase sales

In which of the following environments does a firm that uses out-dated equipment operate?

1. A.Economic
2. B.Technological
3. C.Social
4. D.Political
5. E.Legal

Which of the following is sent when credit is not allowed?

1. A.Debit note
2. B.Proforma invoice
3. C.Credit note
4. D.Statement
5. E.Advice note

Which of the following does not determine the form of a business unit?

1. A.Available capital
2. B.Risk bearing
3. C.Nearness to market
4. D.Ownership
5. E.Nature of business

Agents who link buyers with sellers receive

1. A.factorage
2. B.brokerage
3. C.bonus
4. D.interest
5. E.premium

Which of the following is not a feature of supermarkets?

1. A.Standard shop fronts
2. B.self service
3. C.use of trolleys
4. D.Small number of sales assistants
5. E.Stocking mainly food items

Which of the following is an objective of indigenisation? To

1. A.increase foreign participation in business
2. B.attract foreign capital
3. C.help Nigerian entrepreneurs become monopolists
4. D.help citizens participate fully in the economy
5. E.distribute income

In which of the following are the objectives of a company stated?

1. A.Annual Report
2. B.Articles of Association
3. C.Certificate of Incorporation
4. D.Certificate of Trading
5. E.Memorandum of Association

The coming together of firms at different stages of the production process is known as

1. A.horizontal integration
2. B.vertical integration
3. C.consortium
4. D.cartel
5. E.holding company

The storing of goods under proper conditions until they are required is a function of

1. A.stock taking
2. B.warehousing
3. C.stock control
4. D.merchandising
5. E.blending

A postal order, either crossed or open is only valid for a period of

1. A.12 months
2. B.10 months
3. C.8 months
4. D.6 months
5. E.5 months

The process of taking over private business by government is known as

1. A.naturalisation
2. B.nationalisation
3. C.privatisation
4. D.commercialisation
5. E.indigenisation

Which of the following is not the objective of Consumer Association? To

1. A.ensure that fair prices are charged
2. B.educate consumers on their rights
3. C.prevent fake goods from entering the market
4. D.prevail on the government to enact consumer protection laws
5. E.ensure correct specifications as to quality of goods

Zaico Ltd invoiced goods valued at N80,000 to Victory Ltd for N8,000. Which of the following will Zaico Ltd send to Victory Ltd to correct the error?

1. A.Consignment note
2. B.Credit note
3. C.Advice note
4. D.Debit note
5. E.Statement

Which of the following is an example of extractive industry?

1. A.Sewing dresses
2. B.Constructing bridges
3. C.Baking bread
4. D.Assemblying iron rods
5. E.Digging for precious stones

The raising of new capital by allowing existing shareholders the privilege to buy shares at preferential rate is called

1. A.bonus issue
2. B.private placing
3. C.offer for sale
4. D.rights issue
5. E.issue by prospectus

The agreed amount payable to a policy holder when the event insured against occurs is

1. A.surrender value
2. B.sum assured
3. C.indemnity
4. D.insurable interest
5. E.endowment

The rate at which one country's products are exchanged for the products of another is

1. A.balance of trade
2. B.balance on current account
3. C.terms of trade
4. D.balance of payments
5. E.foreign exchange.

Which of the following is not performed by the shipping and forwarding agents?

1. A.Reservation of shipping space
2. B.Collection of payment from the importer
3. C.Collection of goods from the factory
4. D.Preparation of the bill of lading
5. E.Arrangement for marine insurance

A group of firms that produce similar goods or services is called

1. A.an industry
2. B.a trade association
3. C.a cartel
4. D.a holding company
5. E.an amalgam

Which of the following is a problem facing mail order business?

1. A.Expensive shop fronts
2. B.cost of postage and advertisement
3. C.Commission to agents
4. D.Increase in branded goods
5. E.Increase in the variety of catalogues

When the exporter arranges for the despatch of goods but leaves the cost of transport to be paid by the importer, the price quoted is

1. A.carriage forward
2. B.franco
3. C.Loco
4. D.free on board
5. E.free alongside ship

The practice of selling goods in foreign countries at lower prices than obtainable in the exporting country is known as

1. A.hedging
2. B.black market
3. C.dumping
4. D.speculation
5. E.gambling

The process of entrusting part of the work of a superior and the corresponding authority to a subordinate in an organisation is called

1. A.delegation
2. B.deputising
3. C.coordinating
4. D.supervision
5. E.motivation

Which of the following is not considered by banks when granting loans to customers?

1. A.Character of the customer
2. B.Amount needed
3. C.Period of repayment
4. D.Amount of interest payable
5. E.Purpose of the loan

Import duty imposed on a commodity according to the quantity imported is

1. A.ad valorem duty
2. B.customs duty
3. C.excise duty
4. D.value added tax
5. E.specific duty

A cheque that is drawn on a bank is called

1. A.certified cheque
2. B.bankdraft
3. C.bank note
4. D.order cheque
5. E.bearer cheque

Which of the following forms of transport moves crude oil to the ports for export?

1. A.Rail
2. B.Pipeline
3. C.Road
4. D.Air
5. E.Sea

The rebate given to the retailer by the wholesaler to enable him make profit is known as

1. A.trade discount
2. B.cash discount
3. C.credit guarantee
4. D.commission
5. E.mark-up

Who among the following is not involved in foreign trade?

1. A.Factor
2. B.Del Credere Agent
3. C.Wholesale Merchant
4. D.Jobber
5. E.Forwarding Agent

Which of the following belongs to the capital market?

1. A.Commercial bank
2. B.Stock exchange
3. C.Ministry of Finance
4. D.Chamber of Commerce
5. E.Discount House

The giving of clear instructions and information to all concerned in an organisation to ensure proper understanding of decisions and policies is

1. A.organising
2. B.planning
3. C.communicating
4. D.directing
5. E.coordinating

Commerce is not concerned with

1. A.changing the place of a product
2. B.changing the form of a product
3. C.changing ownership of a product
4. D.distribution of a product
5. E.warehousing of a product

An alternative term for ordinary shares is

1. A.unit trust
2. B.gilt-edged securities
3. C.equities
4. D.bonus issues
5. E.right issues

The retail of goods through currency operated machines is known as

1. A.mail order business
2. B.automatic vending
3. C.party selling
4. D.impulse buying
5. E.merchandising

Any paid form of non-personal presentation of ideas, goods or services by an identified sponsor is known as

1. A.market research
2. B.market orientation
3. C.open market operation
4. D.advertising
5. E.sales promotion

The art of achieving stated objectives of a business organisation in a most efficient way through the use of human and material resources is

1. A.planning
2. B.co-ordinating
3. C.management
4. D.motivation
5. E.control

Which of the following encourages free trade among member nations?

1. A.IMF
2. B.UNO
3. C.WHO
4. D.OAU
5. E.EEC

ECOWAS headquarters is located in

1. A.Ghana
2. B.Nigeria
3. C.Senegal
4. D.Sierra Leone
5. E.Togo

Which of the following refers to the practice of importing for re-export?

1. A.Counter trade
2. B.Dumping
3. C.Entrepot trade
4. D.Forward trading
5. E.Bilateral trade

Firms merge in order to

1. A.discourage the employment of specialists
2. B.encourage competition
3. C.discourage the use of each other's bye-products
4. D.create a monopoly
5. E.decrease the size of the business

Those who buy and sell shares on their own account in the stock exchange are

1. A.underwriters
2. B.brokers
3. C.clerks
4. D.jobbers
5. E.investors

Which of the following is not a trade association?

1. A.Nigeria Union of Teachers
2. B.Nigerian Medical Association
3. C.Patent Medicine Dealers Association
4. D.Motor Spare Parts Dealers Union
5. E.Textile Manufacturers Association

Which of the following must any form of money possess in order to be generally acceptable?

1. A.Divisibility
2. B.Mobility
3. C.Durability
4. D.Legality
5. E.Scarcity

Which of the following is not a factor of production?

1. A.Labour
2. B.Profit
3. C.Capital
4. D.Land
5. E.Enterprise

Which of the following is not a source of short-term capital?

1. A.Trade credit
2. B.Overdraft
3. C.Bonus issue
4. D.Discounting bills
5. E.Money market

Which of the following is responsible for carrying out the monetary policy of a country?

1. A.The Ministry of Finance
2. B.International Monetary Fund
3. C.Internal Revenue Board
4. D.The Central Bank
5. E.The World Bank

Which of the following indicates the manufacturer from whom goods are to be bought?

1. A.Open indent
2. B.Closed indent
3. C.Consignment note
4. D.Export invoice
5. E.Certificate of origin

Which of the following is not a branch of commerce?

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

When applications are received for more shares than are offered for sale, the issue is said to be

1. A.under subscribed
2. B.selling above par
3. C.selling below par
4. D.offered at a premium
5. E.over subscribed

Which of the following is most suitable for demonstrating the features of a new product?

1. A.Radio
2. B.Newspaper
3. C.Loud speaker
4. D.Poster
5. E.Television

Building societies secure the loans granted to customers by

1. A.debentures
2. B.stocks
3. C.mortgages
4. D.bonds
5. E.shares

A country resorts to counter trade when

1. A.it does not belong to any cartel organisation
2. B.its imports are less than exports
3. C.it wants to raise domestic production
4. D.its foreign exchange is not sufficient to pay for imports
5. E.it desires to be known abroad

An actuary is the expert who

1. A.assesses the extent of risk sustained by an insured
2. B.calculates the premium payable for an insurance policy
3. C.brings clients to an insurance company for a commission
4. D.undertakes to cover a risk or part of it
5. E.writes up insurance cover notes for the insured.

Which of the following is common to ocean liner and train?

1. A.Move on rails
2. B.Form of land transport
3. C.Travel according to schedule
4. D.Fitted with long coaches
5. E.Not affected by weather conditions

Which of the following is used when goods are sent through a common carrier?

1. A.Receipt
2. B.Delivery note
3. C.Proforma invoice
4. D.Consignment note
5. E.Advice note

The issue of shares to interested existing shareholders in proportion to their holding is known as

1. A.private placing
2. B.rights issue
3. C.bonus issue
4. D.issue by prospectus
5. E.public placing

Which of the following is not an essential element of a valid contract?

1. A.Offer
2. B.Acceptance
3. C.Legality
4. D.Consideration
5. E.Compensation

Which of the following provides that the cash price of all goods be clearly shown?

1. A.Sale of Goods Act
2. B.Fair Trading Act
3. C.Food and Drugs Act
4. D.Hire Purchase Act
5. E.Weights and Measures Act.

Which of the following categories of workers does not provide direct service?

1. A.Teachers
2. B.Doctors
3. C.Wholesalers
4. D.Musicians
5. E.Housemaids

Places as a component of the marketing mix is the same as

1. A.market centre
2. B.central location
3. C.distribution
4. D.communication
5. E.warehouse

Which of the following is not a reason for Stock Control? To

1. A.check pilfering of goods
2. B.distinguish a firm's stock of goods from others
3. C.meet customer's demand at all times
4. D.know the amount of goods in stock at any point in time
5. E.identify defects and damages in goods received

The activities of competitors in the market are part of the

1. A.technological environment
2. B.social environment
3. C.legal environment
4. D.political environment
5. E.economic environment

The amount of capital supplied by the owners of a company is known as

1. A.loan capital
2. B.working capital
3. C.capital employed
4. D.share capital
5. E.fixed capital

Which of the following takes possession of goods and sells in his own name?

1. A.Factor
2. B.Del credere agent
3. C.Auctioneer
4. D.Broker
5. E.Special agent

A patent is usually granted to an individual whose work

1. A.can be linked with an existing artistic work
2. B.is a new invention
3. C.took many years to accomplish
4. D.is a transfer from a foreign invention
5. E.is capital intensive

Which of the following is not a tool for sales promotion?

1. A.Advertising
2. B.Free samples
3. C.Personal selling
4. D.Publicity
5. E.Exhibition

Business risks that can be insured against include
I. imitation of a company's product
II. damages caused by the use of a company's product
III. changes in fashion
IV. damages caused by fire
V. damages caused by flood

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

A group of firms that agree to operate a common price is a

1. A.cartel
2. B.customs union
3. C.price ring
4. D.holding company
5. E.subsidiary company

It is important for banks to maintain a high percentage of cash ratio in order to

1. A.make more profits
2. B.invest in long term ventures
3. C.encourage more cash deposits
4. D.meet their customers' demand for cash at any time
5. E.lend to their customers at any time

Which of the following does not aim at protecting the consumer?

1. A.Hire Purchase Act
2. B.Weights and Measures Act
3. C.Indigenisation Act
4. D.Food and Drugs Act
5. E.Sale of Goods Act

Small unit shops continue to exist inspite of stiff competition by large stores because they

1. A.are located near large shops
2. B.employ travelling salesmen
3. C.stock one line of goods
4. D.maintain personal contact with their customers
5. E.buy in bulk and sell at cheaper prices

Which of the following is primarily responsible for projecting the image of a company?

1. A.Sales Department
2. B.Personnel Department
3. C.Public Relations Department
4. D.Accounts Department
5. E.Legal Department

Which of the following is not a barrier to smooth trade among ECOWAS member nations?

1. A.Differences in currencies and languages
2. B.Establishment of a common tariff
3. C.Constant changes in government
4. D.Political and ideological differences
5. E.Fear of domination by bigger countries

Which of the following features of money facilitates small transactions?

1. A.Portability
2. B.Durability
3. C.Divisibility
4. D.Scarcity
5. E.Recognisability

Which of the following widens the market for goods?

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

Which of the following is centrally controlled?

1. A.Multiple shop
2. B.Mobile shop
3. C.Department Store
4. D.Supermarket
5. E.Mail order

The fastest means of sending written information to a parent company abroad is the

1. A.telegram
2. B.telephone
3. C.telex
4. D.express letter
5. E.courier service

Commerce 2 (answer five questions)
(a) What is credit?
(b) Explain three ways by which banks grant credit to customers.
(c) Give two advantages and three disadvantages of credit sales.

Commerce 2 (answer five questions)
Explain any five ways in which nationalised industries differ from public limited companies.

Commerce 2 (answer five questions)
(a) Who is an agent?
(b) Give six duties of an agent.
(c) State three rights of an agent.

Commerce 2 (answer five questions)
(a) What is production?
(b) Explain the different activities involved in industrial, commercial and service occupations.

Commerce 2 (answer five questions)
(a) What is transportation by pipeline?
(b) Explain any four advantages and four disadvantages of transportation by pipeline.

Commerce 2 (answer five questions)
(a) Distinguish between commercial banks and merchant banks.
(b) Explain each of the following:
(i) Order cheque
(ii) Bearer cheque
(iii) Certified cheque
(iv) Non-negotiable cheque

Commerce 2 (answer five questions)
Explain five ways by which NITEL has contributed to the success of business in Nigeria.

Commerce 2 (answer five questions)
(a) What is personal selling?
(b) Explain four reasons why firms engage in personal selling.

Commerce 2 (answer five questions)
(a) Describe four obligations of the employer to the employee.
(b) State four duties of the employee to the employer.

Commerce 2 (answer five questions)
(a) What is planning?
(b) Explain five advantages of delegation of authority.