WAEC Commerce 2005 past questions and answers

The form of trade practised by the early men was characterized by

1. A.exchange of goods for money
2. B.efficient distribution system
3. C.exchange of goods for goods
4. D.organized warehousing.

Which of the following is an advantage of indigenization?

1. A.Checks exploitation by citizens
2. B.Business risks are shared
3. C.Fosters self-reliance
4. D.Leads to monopoly of power

Farming is an activity that falls under

1. A.tertiary occupation
2. B.commercial occupation
3. C.extractive occupation
4. D.secondary occupation.

Which of the following coordinates other factors of production to achieve set objectives?

1. A.Land
2. B.Labour
3. C.Entrepreneur
4. D.Capital

Production is defined as

1. A.an industrial undertaking
2. B.creation of utility
3. C.earning ones daily bread
4. D.the changing of raw materials.

An advantage of a public limited company over a private one is the

1. A.limited liability of shareholders
2. B.easy transferability of shares
3. C.access to retained earnings
4. D.less taxation by government

The distribution of profits based upon the level of patronage in the business is a common feature of

1. A.partnership firms
2. B.public limited companies
3. C.co-operative societies
4. D.private limited companies

The fee which the bank charges for services rendered to their current account customers is

1. A.commission on turnover
2. B.bank rate
3. C.minimum lending rate
4. D.interest.

Which of the following would not affect the form of a business unit?

1. A.Availability of raw materials
2. B.The type of business
3. C.Number of persons involved
4. D.The capital size.

Partnership form of business is most appropriate

1. A.where professionals are needed
2. B.for non-profit making ventures
3. C.where very large capital is required
4. D.where the liability of members is limited.

Use the following information: The nominal capital of a public limited company is made up of 400,000 ordinary shares of 50k each. The Board of Directors decided to issue 50% of it for subscription by the public.
The authorized share capital is

1. A.N400,000
2. B.N200,000
3. C.N100,000
4. D.N50,000

Use the following information: The nominal capital of a public limited company is made up of 400,000 ordinary shares of 50k each. The Board of Directors decided to issue 50% of it for subscription by the public.
The reserved capital is

1. A.N300,000
2. B.N200,000
3. C.N100,000
4. D.N50,000

The nominal value of a share is the same as its

1. A.market value
2. B.below par value
3. C.above par value
4. D.face value

Which of the following is an intangible asset of a firm?

1. A.Goodwill
2. B.Reserve
3. C.Skilled personnel
4. D.Rights issue

The net profit of a business is determined by

1. A.deducting cost of goods sold from sales
2. B.deducting purchases from sales
3. C.adding commissions received to gross profit
4. D.deducting all expenses from gross profit and other income.

An organization formed mainly by traders on the same line of business is known as

1. A.trade union
2. B.cooperative society
3. C.trade association
4. D.chamber of commerce.

A bank's undertaking to pay an exporter on behalf of an importer is a

1. A.documentary credit
2. B.letter of credit
3. C.letter of hypothecation
4. D.bill of exchange

Who among the following cannot be regarded as an itinerant trader?

1. A.Gypsy
2. B.Barrow boy
3. C.Pedlar
4. D.Stall owner

Which of the following will not be considered in choosing a channel of distribution?

1. A.Nature of product
2. B.Preferences of consumers
3. C.Volume of sales
4. D.Quality of product.

A manufacturer of goods that are seasonally demanded will be in dire need of a

1. A.wealthy customer
2. B.suitable means of transport
3. C.warehouse
4. D.large shop frontage

Which of the following is a feature peculiar to multiple shops?

1. A.Central location
2. B.Self service
3. C.Central buying
4. D.One stop shopping

Terms of trade is the

1. A.rate at which the central bank discounts first class bills
2. B.rate at which a country's exports exchange for its imports.
3. C.expected rate of returns on an investment
4. D.rate of payment for goods and services purchased

Which of the following encourages trade between regions?

1. A.Differences in currencies of countries
2. B.Difference in national income of countries
3. C.Existence of trade associations
4. D.Differences in natural resources

Which of the following is not suitable for hire purchase?

1. A.Textiles
2. B.Furniture
3. C.Refrigerators
4. D.Printing machine.

A seller quoting his goods loco price means that

1. A.all charges are borne by the seller
2. B.all charges are borne by the buyer
3. C.the seller pays carriage as far as the buyers warehouse
4. D.the price includes cost, insurance and freight.

Which of the following is the correct sequence in which the following documents are used?

1. A.Order, delivery note, debit note, invoice, statement
2. B.Order, advice note, debit note, invoice, statement
3. C.Order, statement, delivery note, invoice, debit note
4. D.Order, delivery note, invoice, debit note, statement.

A set of measures pursued by an organization in order to maintain goodwill in its environment is referred to as

1. A.human relations
2. B.public relations
3. C.personal relations
4. D.organizational setp-up.

Which of the following organizations aim at providing relief for countries facing adverse balance of payment?

1. A.A.C.P.
2. B.G.A.T.T.
3. C.U.N.C.T.A.D
4. D.I.M.F.

C.O.D. transactions are associated with

1. A.mail order firms
2. B.mobile shops
3. C.supermarkets
4. D.multiple shops.

Postage marks can be printed on letters and parcels using

1. A.teleprinter machine
2. B.facsimile machine
3. C.folding machine
4. D.franking machine

If the amount of dividend paid varies according to the level of profit; what type of share is involved?

1. A.Cumulative preference share
2. B.Preference share
3. C.Deferred share
4. D.Ordinary share

A retail outlet is described as a multiple shop when it

1. A.has many shops under one roof
2. B.sells goods which are not standardized
3. C.sells through catalogue
4. D.deals in one line of goods.

Time policy in insurance is associated with

1. A.motor vehicles
2. B.ships at sea
3. C.life endowment
4. D.goods in transit.

When a quotation is marked 'CWO', it means

1. A.no credit facility is allowed
2. B.no discount is allowed
3. C.the buyer should beware
4. D.the seller should beware.

Which of the following is a function of a stockbroker?

1. A.Provision of short-term capital
2. B.Giving investment advice
3. C.Regulation of stock exchange practices
4. D.Granting of loans to investors.

The people involved in the formation of new companies are called

1. A.members
2. B.directors
3. C.shareholders
4. D.promoters.

Commercial activities among West African countries are greatly hindered by

1. A.nationalization decree
2. B.lack of an acceptable medium of exchange
3. C.good road network
4. D.too many commercial banks.

Which of the following makes it an offence for a trader to make untrue statements about his goods?

1. A.Consumerism
2. B.Consumer Credit Act
3. C.Trade Description Act
4. D.Price Control Act

Which of the following is a means by which a contract of agency could be terminated?

1. A.Mutual agreement
2. B.Lack of consideration
3. C.Failure to insure the contract
4. D.Payment of commission

Which of the following would be necessary before the introduction of a new product?

1. A.Product differentiation
2. B.Target marketing
3. C.Market research
4. D.Market segmentation

People who are against advertising claim that it

1. A.widens the market for consumer goods
2. B.encourages consumers to buy what they do not need.
3. C.emphasizes the good feature of a particular product
4. D.promotes competition among firms.

A distinctive feature of personal selling is the

1. A.face to face meeting of seller and buyer
2. B.selling of cheap items only
3. C.sale of industrial goods only
4. D.hawking of goods.

The practice whereby a firm prepays the postage for the response of its customers is known as

1. A.express delivery
2. B.poste restante
3. C.recorded delivery service
4. D.business reply service.

Which of the following is not provided by the post office?

1. A.Recorded delivery service
2. B.Business reply service
3. C.Express delivery service
4. D.After sales service

Which of the following is not a principle of insurance?

1. A.Indemnity
2. B.Insurable risk
3. C.Subrogation
4. D.Insurable interest.

Which of the following terms is used in marine insurance when the cargo suffers partial loss?

1. A.General Average
2. B.Particular Average
3. C.Floating Policy
4. D.Open Cover.

Which of the following is not a function of money?

1. A.Double coincidence of wants
2. B.Medium of exchange
3. C.Measure of value
4. D.Store of wealth.

Which of the following is true of rail transport?

1. A.Suitable for perishable goods
2. B.Cheaper over long distances
3. C.It does not require trans-shipment of goods
4. D.Has no fixed route

The process of dividing market into identifiable sub-markets is known as

1. A.marketing concept
2. B.market segmentation
3. C.market research
4. D.market orientation

Legal tender consists of

1. A.cheques and coins
2. B.bank drafts and cheques
3. C.currency notes and coins
4. D.money order and currency notes.

Commerce 2 (essay, answer five questions only)
(a) Distinguish between trade and commerce
(b) Describe five different activities engaged in by people in commercial occupations

Commerce 2 (essay, answer five questions only)
(a) State four reasons why transport is important to commerce
(b) Explain three advantages and three disadvantages of air transport.

Commerce 2 (essay, answer five questions only)
List and explain five functions of marketing

Commerce 2 (essay, answer five questions only)
Explain the following terms used in insurance
(a) surrender value;
(b) cover note
(c) policy;
(d) re-insurance;
(e) group insurance.

Commerce 2 (essay, answer five questions only)
List and explain five methods used by the Central Bank to control the activities of the commercial banks.

Commerce 2 (essay, answer five questions only)
(a) State five characteristics of a limited liability company
(b) Explain five sources of funds to a public limited company.

Commerce 2 (essay, answer five questions only)
Explain the following and give three benefits of each:
(a) branding;
(b) after sales service;
(c) self-service;
(d) vending machine.

Commerce 2 (essay, answer five questions only)
The following figures were extracted from the books of Mallama Sefinatu a pure water seller (₦):
Opening stock – 16,000
Purchases – 36,000
Rent – 1,500
Sales – 50,000
Salaries & Wages – 2,400
Closing Stock – 24,000
You are required to calculate;
(a) average stock;
(b) rate of turnover;
(c) gross profit.

Commerce 2 (essay, answer five questions only)
(a) What is Nationalization?
(b) Explain three reasons why government nationalizes some businesses.
(c) State four disadvantages of nationalization.

Commerce 2 (essay, answer five questions only)
Describe the following documents and state one use of each
(a) consignment note;
(b) bill of sight;
(c) catalogue;
(d) manifest;
(e) waybill