56 questions. Try each one, then open the answer to check yourself and read the explanation.
The major divisions of commerce are
Answer: B (trade and auxiliaries to trade)
Commerce has two main branches: trade (home and foreign) and aids to trade (banking, insurance, transport, warehousing, communication, advertising).
E-commerce is the use of
Answer: C (computers to conduct business)
E-commerce is buying and selling using computers and other digital devices connected to the internet.
Workers who drill for oil are engaged in a
Answer: B (primary occupation)
Drilling for oil takes natural resources from the earth, which is extractive (primary) occupation.
The factor of production to which rent is a reward is
Answer: D (land)
Land earns rent.
A feature of sole proprietorship is that
Answer: A (it faces unlimited liability)
A sole trader is personally liable for all the debts of the business.
Investors who receive extra dividend in addition to their fixed rates are
Answer: B (participating preference shareholders)
Participating preference shares get their fixed dividend and also share in extra profits above a set level.
When a group of firms come together to work on a road project, they form a
Answer: D (consortium)
A consortium is a temporary combination of firms to carry out a big project such as a road.
A business unit which needs a trading certificate to start its operation is a
Answer: B (public company)
After incorporation, a public limited company must raise its minimum capital and obtain a trading certificate (certificate to commence business) before it can begin trading. A private company can start on incorporation.
Musa, a debenture holder at AB limited, is entitled to
Answer: C (interest)
A debenture holder is a creditor who lent money to the company, so he earns fixed interest.
Which of the following is not a function of a trade association?
Answer: B (Distribution of goods to customers)
A trade association serves its member firms; it does not itself distribute goods to customers.
Similar businesses in an area could cooperate to protect their interests by forming a
Answer: A (trade association)
Firms in the same line of business form a trade association to protect their common interests.
A factor that could determine the type of employment a job seeker would look for is
Answer: C (policy)
Government and employers' policies (e.g. on wages, conditions and which sectors are encouraged) influence the kind of job a person seeks.
A limitation to division of labour is
Answer: A (insufficient capital)
Division of labour needs machines, tools and many workers, so it is limited where capital is insufficient.
Use the information below to answer questions 14 to 16.
The following are assets and liabilities of Ken's Trading as at December 31, 2025.
Fixed asset - D 10,000
Cash - D 5,000
Stock - D 1,000
Bank overdraft - D 3,000
The value of working capital is
Answer: A (D 3,000)
Working capital = current assets − current liabilities = (5,000 + 1,000) − 3,000 = D3,000.
Use the information below to answer questions 14 to 16.
The following are assets and liabilities of Ken's Trading as at December 31, 2025.
Fixed asset - D 10,000
Cash - D 5,000
Stock - D 1,000
Bank overdraft - D 3,000
What is the value for current assets?
Answer: D (D 6,000)
Current assets = cash + stock = 5,000 + 1,000 = D6,000.
Use the information below to answer questions 14 to 16.
The following are assets and liabilities of Ken's Trading as at December 31, 2025.
Fixed asset - D 10,000
Cash - D 5,000
Stock - D 1,000
Bank overdraft - D 3,000
The value of current liabilities is
Answer: D (D 3,000)
The only current liability is the bank overdraft of D3,000.
The rate at which a country's imports exchange for their exports is
Answer: D (terms of trade)
Terms of trade measure the rate at which a country's exports exchange for its imports.
A consular invoice is used to facilitate the calculation of
Answer: D (customs duties)
The consular invoice certifies the value of goods so the importing country can work out the customs duty.
The financial institution that issues treasury bills is
Answer: A (Central Bank)
The central bank issues treasury bills on behalf of government.
The issue of shares from retained earnings is
Answer: D (bonus issue)
A bonus issue gives free shares to existing shareholders by turning retained profits into share capital.
An amount of money paid to a life assurance policy at the end of the contract period is
Answer: B (assured value)
At maturity the insurer pays the sum (value) assured stated in the policy.
The stock exchange market deals in
Answer: D (shares)
The stock exchange is a market for shares, stocks and other securities.
A feature of hypermarkets is
Answer: A (bulk purchase)
Hypermarkets are very large stores that buy in bulk and sell a huge range of goods at low prices.
An amount payable to an agent based on the value of goods sold is
Answer: C (commission)
An agent is usually paid a commission, a percentage of the value of what he sells.
In which of the following businesses are vending machines used?
Answer: B (Retail)
Vending (automatic) machines sell small items to final consumers, which is retail trade.
A receipt covering goods kept in a warehouse is
Answer: B (dock warrant)
A dock (warehouse) warrant is the receipt and document of title for goods stored in a dock warehouse.
A warehouse where dutiable goods are kept is a
Answer: D (bonded warehouse)
Imported goods on which duty has not been paid are kept in a bonded warehouse.
An internal component of a computer system is a
Answer: C (motherboard)
The motherboard is inside the system unit; keyboard, monitor and mouse are external devices.
The function of money that could motivate farmers to sell their produce and buy other goods later is
Answer: A (store of value)
Money keeps its value over time, so farmers can sell now, hold the money and buy later.
A function of a development bank is to
Answer: B (finance the purchase of equipment)
Development banks give long-term loans for projects, e.g. to buy machinery and equipment.
A type of advertising suitable for a new product is
Answer: B (informative advertising)
People must first be told what a new product is and what it does, so informative advertising is used.
The medium of advertising that could be used by a farm implement dealer to demonstrate the use of a particular tool is
Answer: B (television)
Television shows moving pictures with sound, so it can demonstrate how a tool is used.
Inducing buyers to purchase products by offering gifts is
Answer: C (sales promotion)
Gifts, free samples and discounts that encourage buying are sales promotion.
The type of communication suitable for a management report is
Answer: A (written communication)
A report needs a permanent record that can be studied and filed, so it is written.
A contract could be terminated by
Answer: D (rescission)
Rescission cancels a contract and puts the parties back where they were. Counter offer and lapse of time end an offer, not a contract.
Registration of business is a way in which government
Answer: C (regulates businesses)
By requiring registration, government controls who may operate and keeps businesses under its rules.
A reason for which government deregulates an industry is to
Answer: B (increase investment)
Removing controls attracts private firms to invest in the industry.
Which of the following business environments is concerned about the age structure of a country's population?
Answer: D (Demographic)
The demographic environment deals with population size, age structure and distribution.
A responsibility of a business to the community is
Answer: B (provision of pipe borne water)
Providing amenities such as pipe-borne water is a social responsibility to the community. After-sales service is to customers and salaries are to workers.
Which of the following terms is not a marketing mix?
Answer: D (Penetration)
The marketing mix is product, price, place and promotion. Penetration is a pricing strategy, not one of the four Ps.
An author's exclusive right to his/her published work is
Answer: C (copyright)
Copyright protects an author's published work from being copied without permission.
The regulation under which a buyer of a faulty motorbike could claim for replacement is
Answer: C (Standard Organization Act)
Of these laws, the Standards Organisation Act covers the quality of manufactured goods such as motorbikes.
The number of subordinates that a manager could directly control and supervise is
Answer: C (span of control)
Span of control is the number of subordinates directly under one manager.
A price agreed now by a buyer and seller for delivery of a commodity at a later-date is
Answer: C (futures price)
A futures price is fixed today for goods to be delivered at a future date. A spot price is for immediate delivery.
If government transfers ownership of its electricity company to individuals, this is
Answer: A (privatization)
Transferring government-owned enterprises to private individuals is privatization.
An aim of commercialization is
Answer: A (improvement of revenue base)
Commercialized firms must cover costs and make profit, which improves their revenue base and reduces dependence on government.
The treaty that established the Lake Chad Basin Commission was signed in
Answer: A (1964)
The Lake Chad Basin Commission was set up by the Fort Lamy (N'Djamena) Convention of 22 May 1964.
Which of the following countries is a member of ECOWAS?
Answer: D (Togo)
Togo is a member of ECOWAS. Libya is in North Africa, and Mali and Niger left ECOWAS in January 2025.
(a) Distinguish between commerce and e-commerce.
(b) Explain the following types of e-commerce: (i) business to customer; (ii) government to business
(c) State two advantages and three disadvantages of e-commerce.
(a) Commerce is all activities involved in the buying, selling and distribution of goods and services (trade and aids to trade); e-commerce is buying and selling of goods and services through the internet and other electronic networks.
(b)(i) Business to customer (B2C): a firm sells goods or services directly to individual consumers online, e.g. through its website or app.
(ii) Government to business (G2B): government agencies deal electronically with businesses, e.g. online registration, tax filing, contracts and providing information.
(c) Advantages (any two): reaches customers anywhere, at any time; lower operating costs; convenience of shopping from home; easy price comparison; quick transactions.
Disadvantages (any three): fraud and hacking/insecurity of data; buyer cannot inspect goods before payment; needs internet and devices, which may be costly or unavailable; delays or failure in delivery; lack of personal contact; difficulty with returns.
E-commerce is commerce carried out electronically.
(a) Define division of labour.
(b) State three features of capital.
(c) Explain the following occupations giving four examples of each: (i) extraction; ii manufacturing
(a) Division of labour is breaking a production process into separate tasks, with each worker or group doing one task.
(b) Any three: man-made; supply can be increased; reward is interest; depreciates (wears out) over time; mobile; used to produce other goods; results from saving.
(c)(i) Extraction: obtaining natural resources from land, water or air. Examples (any four): farming, fishing, mining, quarrying, oil drilling, hunting, lumbering.
(ii) Manufacturing: changing raw materials into finished or semi-finished goods. Examples (any four): textile making, brewing, cement making, car assembly, food processing, furniture making, soap making.
Give a definition before the examples in (c).
Plantain farmers of Falla community formed a cooperative society to provide support to its members.
(a)(i) Name the type of cooperative society formed.
(ii) State four features of the cooperative society.
(b) State five advantages of a private company.
(a)(i) Producers' (agricultural/farmers') cooperative society.
(ii) Any four: formed by producers (farmers) of similar products; voluntary and open membership; democratic control (one member, one vote); pool resources to buy inputs and market produce together; surplus shared according to patronage/produce supplied; registered with limited liability; aims at members' welfare rather than profit alone.
(b) Any five: limited liability of shareholders; continuity (separate legal entity); more capital than sole trader or partnership; can be run by family members/keeps control in few hands; affairs are more private (accounts need not be published as for public companies); can start business on incorporation; easier to form than a public company; specialised management.
A cooperative of farmers is a producers' cooperative.
(a) State five reasons hawkers continue to operate despite the existence of supermarkets.
(b) State five features of a hypermarket.
(a) Any five: they take goods to customers' doorsteps/in traffic (convenience); sell in very small quantities; low capital needed; prices can be bargained and are often lower; supermarkets are few and far from many people; hawkers serve rural areas and busy places; personal relationship with customers; unemployment pushes people into hawking; quick decisions and flexibility.
(b) Any five: very large store, usually out of town with big car park; sells a very wide range of goods (food, clothing, electronics, furniture); self-service; buys in bulk and sells at low prices; check-out points with cash/card payment; large capital; many departments under one roof; open long hours.
Hawkers survive by convenience and small quantities.
(a) List five conditions that could lead to the dissolution of a contract.
(b) Explain the following Acts: (i) Sale of Goods Act; (ii) Foods and Drugs Acts; (iii) Standard Organization Act; (iv) Factory, Shops and Offices Act; (v) Hire Purchase Act
(a) Any five: performance (both parties fulfil their obligations); agreement of both parties; breach of contract; frustration/impossibility (e.g. death, destruction of subject matter, war); lapse of time; operation of law (e.g. bankruptcy); rescission for misrepresentation or fraud.
(b)(i) Sale of Goods Act: governs contracts in which ownership of goods passes for money; goods must fit their description, be of merchantable quality and fit for purpose.
(ii) Foods and Drugs Act: controls the making and sale of food and drugs so that they are safe, clean, correctly labelled and not adulterated or expired.
(iii) Standard Organization Act: sets up the standards body that fixes and enforces quality standards for goods produced or imported.
(iv) Factory, Shops and Offices Act: protects workers' health, safety and welfare at work (ventilation, sanitation, safety of machines, first aid, working conditions).
(v) Hire Purchase Act: regulates hire purchase agreements, e.g. requires written agreements, states rights of buyer and seller, limits repossession after a large part has been paid.
For each Act, say whom it protects and how.
(a) Define business management.
(b) Explain the following terms: (i) economic environment; (ii) social environment
(c) List and explain four resources of a business.
(a) Business management is the process of planning, organising, directing (leading), coordinating and controlling the resources of a business to achieve its goals.
(b)(i) Economic environment: economic conditions that affect a business, e.g. inflation, interest rates, exchange rates, income levels, taxes and unemployment.
(ii) Social environment: the people and culture around the business, e.g. population, customs, beliefs, tastes, education and lifestyle.
(c) Any four, explained: human resources (workers and their skills); financial resources (money/capital); physical/material resources (land, buildings, machines, raw materials); information resources (data and knowledge); technology; entrepreneurship/time.
The four Ms: men, money, materials, machines.
The state of Kabada was operating a transport company that became inefficient and was running at a loss. To ensure efficiency, the government decided to stop its subvention and tasked management to make profit.
(a) Name the policy adopted by the state.
(b) State four possible causes of the inefficiency of the transport company.
(c) State two advantages and three disadvantages of deregulation.
(a) Commercialization.
(b) Any four: political interference in management; corruption and mismanagement of funds; lack of profit motive; poor maintenance of vehicles; overstaffing and unqualified staff; bureaucracy and slow decisions; inadequate funding; monopoly (no competition); poor attitude of workers.
(c) Advantages (any two): encourages competition and efficiency; attracts private investment; better quality and variety of services; market forces set prices; reduces government spending.
Disadvantages (any three): prices may rise; private monopolies may exploit consumers; essential services may be neglected in unprofitable areas; job losses; quality may fall without control; foreign dominance of the economy.
Government keeps ownership but tells management to make profit = commercialization.
Bonto Limited has the following assets and liabilities as at 01/01/2024
₦
Stock 200,000
Fixtures 350,000
Debtors 200,000
Overdraft 50,000
Motor vehicles 800,000
Cash 40,000
Creditors 20,000
Bank 70,000
Calculate the following: (i) total fixed assets; (ii) total current assets; (iii) total liabilities; (iv) working capital; (v) capital employed
(i) Fixed assets = fixtures 350,000 + motor vehicles 800,000 = ₦1,150,000
(ii) Current assets = stock 200,000 + debtors 200,000 + cash 40,000 + bank 70,000 = ₦510,000
(iii) Total liabilities = overdraft 50,000 + creditors 20,000 = ₦70,000
(iv) Working capital = 510,000 − 70,000 = ₦440,000
(v) Capital employed = fixed assets + working capital = 1,150,000 + 440,000 = ₦1,590,000 (if taken as total assets: 1,150,000 + 510,000 = ₦1,660,000)
Bank (a positive balance) is a current asset; the overdraft is a liability.