WAEC Commerce 1996 past questions and answers

Which of the following is not the duty of an entrepreneur?

1. A.Provision of initial capital
2. B.Bearing of risks
3. C.Organization of other factors of production
4. D.Decision on what to produce
5. E.Decision on the amount of tax to pay

The difference between the total amount of money received by a country and the total amount paid to other countries within a given period is the

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

Which of the following is used to transmit typed messages over long distances?

1. A.Dictaphone
2. B.Teleprinter
3. C.Computer
4. D.Telephone
5. E.Radio

When a company buys up firms supplying it with raw materials, this is an example of

1. A.horizontal integration
2. B.a holding company
3. C.backward integration
4. D.consortium
5. E.lateral merger

Industrial, commercial and direct services are branches of

1. A.manufacturing
2. B.occupation
3. C.exchange
4. D.distribution
5. E.specialization

The primary purpose of credit cards is to

1. A.obtain goods without paying cash on the spot
2. B.obtain a loan from a bank
3. C.obtain a loan from a trader
4. D.persuade a businessman to cash a cheque
5. E.provide a means of identifying the holder

Containers are suitable for transporting goods by

1. A.sea only
2. B.road only
3. C.sea and rail only
4. D.road and sea only
5. E.road, sea and rail

An insurance company shares its accepted risk with others in the form of

1. A.reinsurance
2. B.subrogation
3. C.mutual insurance
4. D.fidelity guarantee insurance
5. E.contribution

Which of the following stresses the use of only specialists to head departments?

1. A.Committee organisation structure
2. B.Line organization structure
3. C.line and staff organization structure
4. D.Functional organization structure
5. E.Centralization

The process of involving local businessmen in the ownership and control of businesses that were formerly owned by foreigners is called

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

Which of these management functions involves checking performance against set standards?

1. A.Controlling
2. B.Coordinating
3. C.Planning
4. D.Directing
5. E.Organizing

The form given by the Customs Authority to enable an importer examine goods before the arrival of the bill of lading is known as

1. A.entry for warehousing
2. B.certificate of origin
3. C.bill of sight
4. D.bill of exchange
5. E.dock warrant

An organization that builds access roads for the benefit of the community in which it is located has fulfilled its

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

Which of the following is applicable to foreign trade only?

1. A.Pro forma invoice
2. B.Insurance policy
3. C.Order
4. D.Bill of exchange
5. E.Consular invoice

The department that deals with internal grievances and maintenance of discipline in an organization is the

1. A.accounts
2. B.maintenance
3. C.personnel
4. D.public relations
5. E.production

Another name for consignment note is

1. A.quotation
2. B.waybill
3. C.debit note
4. D.receipt
5. E.credit note

Specialization is possible as a result of

1. A.good roads
2. B.education
3. C.demand for goods
4. D.growth in population
5. E.exchange

Use the organization chart of Oluwa Plc to answer the question.
In which of the boxes in the organization chart would you locate the shareholders of OLUWA PLC?

1. A.F
2. B.X
3. C.V
4. D.T
5. E.W

Use the organization chart of Oluwa Plc to answer the question.
The position of the Departmental Manager would be located in Box

1. A.T
2. B.F
3. C.W
4. D.X
5. E.U

Use the organization chart of Oluwa Plc to answer the question.
The Board of Directors of Oluwa Plc would be in Box

1. A.V
2. B.W
3. C.X
4. D.T
5. E.U

Use the organization chart of Oluwa Plc to answer the question.
The position of the Accounts Clerk would be located in Box

1. A.F
2. B.T
3. C.V
4. D.U
5. E.X

Use the organization chart of Oluwa Plc to answer the question.
The Managing Director would be located in Box

1. A.V
2. B.T
3. C.U
4. D.W
5. E.F

Use the organization chart of Oluwa Plc to answer the question.
Which of the following is represented by the chart?

1. A.Committee organization
2. B.Staff organization
3. C.Line and staff organization
4. D.Line organization
5. E.Centralised organization

Which of the following may serve as a delivery note?

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

Mr. Chidi insured his house against fire. The house was destroyed by flood. Which of the following principles prevented him from being compensated?

1. A.Uberrimae fidei
2. B.Subrogation
3. C.Indemnity
4. D.Proximate cause
5. E.Insurable interest

The price charged for leasing a ship is known as

1. A.way bill
2. B.haulage
3. C.clean bill
4. D.freight
5. E.demurrage

Goods in bonded warehouses are under the strict supervision of the

1. A.Customs Authority
2. B.Ports Authority
3. C.Importer
4. D.Clearing agent
5. E.Exporter

Which of the following regulates and controls the activities of the Nigerian Stock Exchange?

1. A.The Nigerian Capital Market Association
2. B.The Securities and Exchange Commission
3. C.The Nigerian Deposit Insurance Commission
4. D.The Nigerian Reinsurance Corporation
5. E.The Central Bank of Nigeria.

Which of the following is drawn up as a guide to the running of a Partnership?

1. A.Deed of Agreement
2. B.Partnership Act
3. C.Memorandum of Association
4. D.Prospectus
5. E.Articles of Association

The law governing the operations of companies and partnership in Nigeria is the

1. A.Nigerian Companies Decree
2. B.Nigerian Partnership Act
3. C.Nigerian Enterprises Promotion Decree
4. D.Companies and Allied Matters Decree
5. E.Sale of Goods Act

Which of the following is a non-indemnity insurance?

1. A.Personal Accident Insurance
2. B.Burglary insurance
3. C.Fire insurance
4. D.Consequential loss insurance
5. E.Third party insurance

The document issued to a newly formed public company to commence business is called the

1. A.certificate of incorporation
2. B.articles of association
3. C.memorandum of association
4. D.trading certificate
5. E.insurance certificate

Small scale retail attracts a lot of new entrepreneurs in West Africa because

1. A.many people have had good training in retail trade
2. B.it is easy to succeed with the business
3. C.banks are always ready to lend to retailers
4. D.only a small amount of capital is needed to start the business
5. E.government exempts retailers from paying tax

In marine insurance, the deliberate throwing of some goods into the sea to prevent the ship from sinking is an example of

1. A.a constructive total loss
2. B.a partial loss
3. C.a general average loss
4. D.a total loss
5. E.an actual total loss

Tax levied on goods at each stage of their movement from production to the final consumer is known as

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

An association of businessmen engaged in both commerce and industry is called

1. A.trade association
2. B.Trade union
3. C.chamber of commerce
4. D.trust
5. E.cartel

When the government decides to run a statutory corporation as a profit-oriented enterprise, this is known as

1. A.nationalization
2. B.commercialization
3. C.take-over bid
4. D.privatization
5. E.indigenization

The primary aim of commerce is to

1. A.produce goods and services
2. B.warehouse goods
3. C.advertise goods and services
4. D.finance goods and services
5. E.exchange goods and services

Which of the following has a fixed rate of dividend?

1. A.Debenture
2. B.Ordinary share
3. C.Founder's share
4. D.Preference share
5. E.Equity

Which of the following is not a barrier to the smooth functioning of ECOWAS?

1. A.Different currencies
2. B.Different languages
3. C.Adequate population
4. D.Political crisis
5. E.Fear of domination

The capital market is a market

1. A.for long term loans
2. B.for new shares of public companies
3. C.where money is deposited
4. D.where foreign currencies are bought and sold
5. E.for short term loans

Which of the following is primarily established to promote the growth of industry in Nigeria?

1. A.NITEL
2. B.UBA
3. C.NIPOST
4. D.NIDB
5. E.UAC

Another name for sea taxi is

1. A.tramp
2. B.liner
3. C.special freighter
4. D.voyage charter
5. E.flying boat

Contracts for the carriage of goods by sea are generally called

1. A.charter by demise
2. B.charter parties
3. C.voyage charter
4. D.time charter
5. E.marine policy

A nation's earnings from tourism are classified as

1. A.visible exports
2. B.invisible exports
3. C.visible imports
4. D.invisible imports
5. E.entrepot trade items

An Association of employees in an organization is called a

1. A.trade union
2. B.trade association
3. C.consumer association
4. D.credit union
5. E.co-operative society

A firm that accepts a portion of the risk involved in an insurance contract is

1. A.a broker
2. B.an actuary
3. C.a speculator
4. D.an underwriter
5. E.an assessor

Musa places his bicycle for sale at N800.00 and Dada had agreed to pay the amount. In this transaction, Musa is the

1. A.offerer
2. B.offeree
3. C.buyer
4. D.guarantor
5. E.auctioneer

When goods are sent through an independent carrier, the document used by the sender is

1. A.a delivery note
2. B.an advice note
3. C.an invoice
4. D.a consignment note
5. E.a receipt

Which of the following may not be considered when choosing an appropriate channel of distribution for a new product?

1. A.Nature of the product
2. B.Identification of potential consumers
3. C.Operating costs
4. D.Existing local channel of distribution
5. E.Provision of credit facilities to customers

Which of the following may be used to restrict imports?
I. Bill of lading
II. Specific licences
III. Foreign exchange rationing
IV. Letters of credit
V. Customs duties and tariffs

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

Which of the following is not a reason for dishonouring a cheque?

1. A.Insufficient funds
2. B.Different amount in words and in figures
3. C.Uninitiated alteration
4. D.Wrong signature
5. E.Special crossing

Which of the following statements is not true of a private limited company?

1. A.The minimum number of shareholders is two
2. B.Its shares are freely transferable
3. C.There is a limit to the number of shareholders
4. D.It is a separate legal entity
5. E.It is a registered business

A retail co-operative society aims at

1. A.encouraging members to save money
2. B.buying seeds and fertilizers
3. C.Manufacturing goods as cheaply as possible
4. D.lending money to members at low rate of interest
5. E.cutting off the profits of middlemen

The value of a product expressed in monetary terms is known as

1. A.utility
2. B.price
3. C.Premium
4. D.commission
5. E.interest

Which of the following is not true of franking machines?

1. A.Hired by companies and licensed by NIPOST
2. B.Print postage impression on mails
3. C.Can print company's logo on mails
4. D.Advance payment must be made to NIPOST
5. E.Postage stamp is used

Which of the following is suitable for transporting fish a long distance?

1. A.Tramp
2. B.Cargo liner
3. C.Tanker
4. D.Barge
5. E.Refrigerated ship

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

1. A.Consideration
2. B.Probability
3. C.Legality
4. D.Capacity
5. E.Consensus

A partner who does not play an active role in a business but contributes capital is a

1. A.secret partner
2. B.dormant partner
3. C.nominal partner
4. D.limited partner
5. E.general partner

Which of the following is not included in the Memorandum of Association?

1. A.Winding up procedure
2. B.Objectives of the company
3. C.Address of the registered office
4. D.Amount of capital
5. E.Conditions for amendment of the memorandum

Which of the following is not a source of capital?

1. A.Personal savings
2. B.Credit transfer
3. C.Bank loan
4. D.Credit purchase
5. E.Debenture

The contract between ship owners and hirers whereby the hirers take full control of the ship is called

1. A.time charter
2. B.charter by demise
3. C.shipping conference
4. D.voyage charter
5. E.charter party

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

1. A.Sale of Goods Act
2. B.Fair Trading Act
3. C.Price Control Act
4. D.Partnership Act
5. E.Food and Drugs Act

Which of the following activities makes the consumer its focus in decision making?

1. A.Selling concept
2. B.Marketing concept
3. C.Product concept
4. D.Production concept
5. E.Market research

Which of the following is a direct service?

1. A.Banking
2. B.Teaching
3. C.Advertising
4. D.Fishing
5. E.Warehousing

Which of the following is a disadvantage of foreign trade?

1. A.Encourages dumping
2. B.Makes available the products that a country cannot produce
3. C.Widens the world market
4. D.Encourages specialization
5. E.Makes possible the transfer of technology

An agreement that is enforceable in law is called

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

A document signed by a customs officer of the exporting country to confirm the country of export of the goods is

1. A.an export invoice
2. B.a consular invoice
3. C.a certificate of origin
4. D.a letter of hypothecation
5. E.a bill of lading

For which of the following reasons would a seller not issue a credit note to a customer? If

1. A.goods are undercharged
2. B.goods are damaged
3. C.bottles are returned
4. D.goods are overcharged
5. E.fewer goods are returned

A statement of account is a

1. A.summary of goods sold to a customer for a particular item
2. B.note to inform the customer of an addition to his business transaction
3. C.standard letter sent to customers who have not settled their bills
4. D.statement of acceptance of credit facilities to a customer
5. E.Summary of a customer's transactions over a given period

Management is

1. A.getting things done through other people
2. B.the implementation of business decision
3. C.the number of levels in an organisation
4. D.made up of the general manager and the employees
5. E.making goods available in places where they are needed

The sum of money the assurer is prepared to pay the assured in total discharge of a contract before its maturity is

1. A.dividend
2. B.premium
3. C.annuity
4. D.surrender value
5. E.interest

Which of the following services is not rendered by NIPOST?

1. A.Express delivery
2. B.Recorded delivery
3. C.Parcel post
4. D.Telephone
5. E.Cash delivery

Which of the following functions may not be performed by a wholesaler?

1. A.Transporting
2. B.Warehousing
3. C.Financing
4. D.Branding
5. E.Manufacturing

The commercial term 'Caveat emptor' means, 'Let the

1. A.buyer beware'
2. B.seller beware'
3. C.manufacturer beware'
4. D.account be settled'
5. E.endorser be careful'

Which of the following is not a business resource?

1. A.Wages
2. B.Man
3. C.Money
4. D.Material
5. E.Machine

In which of the following business units are the owners mostly the customers?

1. A.Co-operatives
2. B.Partnerships
3. C.Public corporations
4. D.Limited liability companies
5. E.Sole proprietorship

Which of the following is not a way of raising capital for business?

1. A.Issuing of bonds
2. B.Borrowing
3. C.Savings
4. D.Ploughing back profit
5. E.Issuing dividend warrants

In a business environment, which of the following variables can a businessman conveniently control?

1. A.Product
2. B.Politics
3. C.Culture
4. D.Economy
5. E.The laws

Which of the following is not a reason for imposing import duties? To

1. A.improve balance of trade
2. B.improve quality of goods for consumers
3. C.obtain revenue
4. D.protect infant industries
5. E.prevent dumping

The face to face contact between sellers and buyers with the aim of selling a product is known as

1. A.personal selling
2. B.customer coordination
3. C.promotion
4. D.advertising
5. E.public relations

Which of the following is the main tool of mass selling?

1. A.public relations
2. B.Personal selling
3. C.Consumer research
4. D.Customer orientation
5. E.Advertising

The allowance given to a retailer to enable him make profit is known as

1. A.interest
2. B.commission
3. C.trade discount
4. D.cash discount
5. E.dividend

One of the features of supermarkets is

1. A.having similar shop fronts
2. B.having many shops under one roof
3. C.selling common household goods
4. D.having central control from headquarters
5. E.selling without shops

A group of public limited companies that collectively own a joint venture is known as a

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

Which of the following clearly defines business?

1. A.The process of planning, coordinating, organizing and controlling
2. B.The act of achieving goals with the help of others
3. C.The act of buying and selling
4. D.Sole Proprietorship, Partnership and Public Limited Companies
5. E.Any productive activity undertaken for profit motive

Which of the following ensures that the quality of a product is maintained?

1. A.Price Control Board
2. B.Chamber of Commerce
3. C.Food and Drugs Act
4. D.Standards Organization of Nigeria
5. E.Manufacturers' Association of Nigeria

Which of the following would enable customs officers to correctly assess import duties on goods?

1. A.Pro-forma invoice
2. B.Bill of exchange
3. C.Documentary credit
4. D.Consular invoice
5. E.Bill of lading

An insurance policy which benefits one's family only in the event of one's death is known as

1. A.a comprehensive insurance
2. B.a whole-life insurance
3. C.an endowment policy
4. D.an annuity
5. E.a third party insurance

One of the demerits of sole trading is

1. A.quick decision taking
2. B.flexibility in operation
3. C.unlimited liability
4. D.pride of ownership
5. E.ease of commencement

A group of people in the same line of business who come together for the interest of its members is called

1. A.Chamber of Commerce
2. B.trade association
3. C.trade union
4. D.consortium
5. E.cartel

A foreign order which instructs an agent to buy certain goods at a particular place is called

1. A.letter of credit
2. B.letter of attorney
3. C.open indent
4. D.closed indent
5. E.bill of lading

The shares of XYZ Plc are quoted at the stock exchange by a jobber at 85 K for k share. How much will Alabi, an investor who buys 500 shares pay?

1. A.N675.00
2. B.N425.00
3. C.N250.00
4. D.N175.00
5. E.N75.00

An agent who guarantees payments for goods sold is

1. A.a factor
2. B.a del credere agent
3. C.a broker
4. D.a partner
5. E.an auctioneer

Dumping means selling goods abroad

1. A.at a lower price than in the home market
2. B.at a higher price than in the home market
3. C.at the same price as in the home market
4. D.on credit in the foreign market
5. E.for ready cash in the foreign market.

Which of the following are functions of marketing?

1. A.Buying, financing, selling and transporting
2. B.Sorting, grading, managing and storage
3. C.Risk-bearing, storage, production and promotion
4. D.Organizing, risk-bearing, transporting and storage
5. E.Production, promotion, distribution and pricing

Commerce 2 (answer any five questions)
(a) Give two examples of small-scale retail outlets and three examples of large-scale retail outlets.
(b) Explain five reasons for the survival of small-scale retailers.

Commerce 2 (answer any five questions)
(a) State five reasons why road transport would be preferred to rail transport.
(b) Give five functions of the Nigerian Airports Authority.

Commerce 2 (answer any five questions)
Write short notes on each of the following:
(a) Marine insurance
(b) Accident insurance
(c) Group insurance
(d) Export Credit Guarantee insurance
(e) Fire insurance

Commerce 2 (answer any five questions)
(a) Give any five features which are common to both co-operative societies and private limited companies.
(b) Explain any five differences between co-operative societies and private limited companies.

Commerce 2 (answer any five questions)
State five aids to trade and explain how each facilitates trade.

Commerce 2 (answer any five questions)
Explain the social responsibilities of a business to the following:
(a) the community
(b) the employee
(c) the shareholders
(d) the government
(e) the consumers

Commerce 2 (answer any five questions)
(a) Give three similarities and three differences between hire purchase and deferred payment.
(b) Explain four reasons why a trader would prefer the use of cheque to cash for large payments.

Commerce 2 (answer any five questions)
(a) What is public relations?
(b) State and explain five media of public relations.

Commerce 2 (answer any five questions)
(a) Give four uses of an Organization Chart.
(b) Explain three reasons why managers may refuse to delegate authority.
(c) State three advantages of delegation of authority.

Commerce 2 (answer any five questions)
Give two uses of each of the following documents in business transaction:
(i) Pro forma invoice
(ii) Advice note
(iii) Credit note
(iv) Statement of account
(v) Receipt