WAEC SSCE - Commerce - 2003

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The greatest risk in a business venture is borne by the entrepreneurs. An entrepreneur is a person who takes a financial risk by starting and running a new business venture to make a profit. Starting a business involves a significant amount of risk, including financial risk, market risk, operational risk, and legal risk. Entrepreneurs invest their own money or obtain funding from investors, and they are responsible for the success or failure of the business. They bear the risk of losing their investment, reputation, and personal assets in case of failure. Therefore, entrepreneurs are considered to be the ones who bear the greatest risk in a business venture.

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The General Agreement on Tariffs and Trade (GATT) is not concerned about consumer protection. GATT is a multilateral agreement regulating international trade and tariffs between member countries. Its main objective is to promote free trade by reducing trade barriers and eliminating discriminatory trade practices. On the other hand, the Foods and Drugs Act, Trade Descriptions Act, and Price Control Act are all regulations that aim to protect consumers from unsafe products, false advertising, and price gouging, respectively.

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One advantage of large scale retailing is one-stop shopping. This means that a variety of goods are available in one location, making it more convenient for customers to purchase everything they need in one trip. This can save time and money for customers who would otherwise have to visit multiple smaller stores to purchase everything they need. Additionally, large scale retailers can often negotiate better prices with suppliers due to their purchasing power, which can result in lower prices for customers.

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Quality discount is offered to persuade the buyer to buy more. Quality discount is a type of incentive or discount that is given to buyers to encourage them to purchase more of a product. It is usually offered when a buyer purchases a certain quantity of a product or spends a certain amount of money on a purchase. The purpose of quality discount is to increase the volume of sales and improve the profitability of the business. By offering quality discount, the buyer is motivated to buy more and the seller benefits from increased sales volume.

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Activities undertaken to create awareness for a product by giving out samples premium or conducting contest are known as sales promotion. Sales promotion is a type of marketing communication that aims to persuade customers to buy a product or service by offering incentives such as discounts, free samples, or contests. It is a short-term strategy designed to boost sales and generate consumer interest in a product or service.

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A public limited liability company is a legal entity and has a separate legal identity from its shareholders. This means that it can enter into contracts, sue and be sued in its own name. The liability of the shareholders is limited to the amount of their investment in the company, and the company can raise funds through the sale of shares or by taking out debentures. Therefore, the ability to enter into contracts is not dependent on the number of employees or shareholders, but rather on the legal status of the company.

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The taken over by government of enterprises formerly owned by private person is referred to as nationalization. Nationalization refers to the transfer of ownership and control of private property to the government. This can be done for various reasons such as to ensure the smooth functioning of essential services, for public welfare, and to regulate key industries in the economy. Nationalization typically involves the government taking over the assets and operations of a private company, which then becomes a state-owned enterprise.

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The option that does not belong to the group is "Hoarding of goods". The other options - Posters, Window display, and Free samples - are all examples of advertising techniques that businesses use to promote their products or services. "Hoarding of goods" does not fit into this category as it refers to the practice of storing goods for future use, rather than advertising or promotion.

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Commerce refers to the exchange of goods and services for the purpose of earning a profit. Its scope is not limited to any particular type of trade, but rather encompasses all activities related to trade, including buying and selling of goods and services, aids to trade such as transportation and warehousing, and the study of market trends and consumer behavior. Therefore, the correct option from the given choices is "trade and aids to trade."

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The document that tells the customer exactly what has been sold to him, the amount due and any discount granted is an invoice. An invoice is a commercial document that itemizes the goods or services provided, the quantity, the price, and the terms of payment for the transaction. It serves as a record of the transaction and as a request for payment from the customer. In other words, an invoice is a document sent by a seller to a buyer that specifies the amount and cost of products or services that have been provided and payment details.

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Fishing is not a commercial occupation. While it is an economic activity, it is not a commercial occupation because it involves catching fish for personal consumption or for small-scale local trade rather than for large-scale profit-making ventures. Transportation, warehousing, and banking are all commercial occupations because they involve the production and distribution of goods and services for profit.

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When all producers in an industry combine to advertise their product instead of each firm advertising its own brand, it is referred to as "mass advertising." Mass advertising is a marketing strategy in which firms in an industry pool their resources to promote their products or services collectively rather than separately. It allows producers to reach a larger audience, reduces the cost of advertising, and creates a more significant impact on consumers. Mass advertising is often used in industries where there is intense competition and where it is challenging for individual producers to stand out. It is a way for producers to work together to promote their products or services and increase consumer awareness.

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Entrepot trade refers to the importing of goods for the sole purpose of re-exporting them to other countries. In this type of trade, the imported goods are not intended for domestic consumption but are rather stored, processed, and distributed to other countries. The entrepot, or trading center, acts as an intermediary in the trade process and earns revenue from handling the goods. This type of trade is common in countries with favorable geographic locations that serve as transit points for goods being transported between different regions or countries.

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A catalogue contains the complete information on goods available for sale. A catalogue is a printed or digital document that lists and describes the goods or products offered by a company for sale. It includes details such as product names, descriptions, prices, images, and sometimes specifications. Customers can use a catalogue to browse and select products they wish to purchase. Unlike an invoice, delivery note, or consignment note, a catalogue is not a document used in the transaction or shipment of goods, but rather a marketing tool used to showcase products available for sale.

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The doctrine that "the consumer is always right" is known as consumer sovereignty. It means that in a market economy, the consumers have the power to determine which goods and services will be produced based on their preferences and demand. The producers will then compete to provide the products that meet the needs and wants of the consumers. This doctrine places the consumer in a dominant position in the market, and businesses are expected to cater to their needs and desires.

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When all producers in an industry combine to advertise their product instead of each firm advertising its own brand, this is referred to as "mass advertising". Mass advertising is a marketing technique in which companies or businesses pool their resources to promote their industry as a whole rather than their individual products. The objective is to increase overall demand for their products and create a positive image for the industry as a whole. This strategy is often used in industries where there are many small producers who do not have the resources to advertise individually, or where it is more effective to promote the industry as a whole.

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The refund made on goods re-exported after being imported is known as "customs drawback". This is a mechanism that allows for the reimbursement of the duties paid on imported goods that are later re-exported. Essentially, it is a way to incentivize and promote international trade by reducing the overall cost of importing and exporting goods. By providing a refund of import duties, it allows businesses to remain competitive and potentially earn higher profits on their exports.

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To sell a bill at less than its face value before its maturity is called discounting. Discounting is a common practice in financial transactions, especially in the banking sector, where a bank buys a bill of exchange from its holder before the maturity date at a discounted rate. The holder receives immediate payment for the bill, minus the discount, and the bank earns the full face value of the bill when it matures. The discount rate is determined by the bank's cost of funds and the perceived risk of the bill. Discounting helps businesses to improve their cash flow by converting their receivables into cash before they are due, and it also provides liquidity to the financial system.

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When goods are shipped, a bill of lading is usually issued as a document of title, which represents the ownership of the goods. However, sometimes the bill of lading is not readily available to enable the goods to be landed. In such cases, a bill of sight is required. A bill of sight is a document that allows a shipment of goods to be imported without the full set of shipping documents, and the goods can be cleared through customs based on the information available on the bill of sight. The bill of sight contains the same information as the bill of lading, but it is not considered a document of title.

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The formula for calculating gross profit percentage is [(revenue - cost of goods sold) / revenue] x 100. Using the given information, we can calculate the gross profit as N16,000 - N12,000 = N4,000. So, the gross profit percentage is [(N4,000 / N16,000) x 100] = 25%. Therefore, the answer is 25%.

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When a number of thrift societies come together and are registered, they become a credit union. A credit union is a non-profit financial cooperative that is owned and controlled by its members, who typically have a common bond such as working for the same company, living in the same community, or belonging to the same organization. Credit unions offer savings and loan products to their members, often at more favorable rates than traditional banks, and are usually governed by a volunteer board of directors elected from among the membership.

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ECOWAS has as one of its objectives the removal of obstacles to the movement of people and goods across the boundaries of member countries. ECOWAS stands for the Economic Community of West African States, and it is a regional intergovernmental organization composed of 15 member states in West Africa. One of its main goals is to promote economic integration in the region by creating a common market, free movement of people, goods, and capital, and harmonizing policies and regulations. By removing obstacles to the movement of people and goods, ECOWAS aims to enhance trade, investment, and regional cooperation, and promote economic development and integration in West Africa.

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The worker who processes garri is engaged in manufacturing. Manufacturing involves the production of goods through the use of labor, machinery, tools, and chemical or biological processing. Garri processing involves several stages such as washing, peeling, grinding, fermenting, sieving, and roasting cassava tubers to produce a dry, powdery food product. Therefore, since the worker is processing raw materials to create a finished product, they are engaged in manufacturing.

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A catalogue contains the complete information on goods available for sale. A catalogue is a document or list that contains a comprehensive description of all the goods or products that a company has available for sale. It usually includes product names, descriptions, specifications, prices, and other relevant information that a customer may need to make an informed purchasing decision. Unlike an invoice, delivery note, or consignment note, a catalogue is not a transactional document but rather an informational one that provides a detailed overview of the company's products.

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The sales promotion method referred to as "Buy-two-take-three" is a form of a premium. A premium is an extra item offered to customers as an incentive to buy a product. In this case, the customer is required to purchase two items, and as a reward, they get a third item for free. This sales promotion method is used to encourage customers to buy more and to increase sales.

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The document that tells the customer exactly what has been sold to him, the amount due and any discount granted is called an invoice. An invoice is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services that the seller has provided to the buyer. The invoice is used to request payment from the buyer, and it serves as a record of the transaction between the two parties. It is an essential document for businesses to keep track of their sales and payments, and it is often required for accounting and tax purposes.

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Recorded delivery provides a proof of posting and delivery of an item to the addressee. When an item is sent via recorded delivery, the sender receives a receipt as proof of posting, and the addressee must sign to confirm receipt of the item upon delivery. This provides evidence that the item has been delivered to the intended recipient, which can be important for legal or financial documents. Certificate of posting, registration letter, and express letter do not provide the same level of proof of delivery as recorded delivery.

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A transporter who does not reject carrying lawful goods to destination is known as a common carrier. Common carriers are transportation companies that offer their services to the general public, without discrimination, and are responsible for the safe delivery of goods or passengers to their destination. They are obligated to transport goods for any person or company that is willing to pay the established fee, as long as the goods are legal and not dangerous. Common carriers can be found in various industries, such as trucking, railroads, and airlines, and are held to a high standard of care and responsibility for the goods they transport.

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The person who sells securities in anticipation of a fall in price is called a "Bear". The term "bear" is used in the context of the stock market to refer to investors who are pessimistic about the market's future performance and expect prices to decline. They sell stocks or other securities with the hope of buying them back at a lower price, making a profit from the difference. The opposite of a bear is a "bull," which refers to investors who are optimistic about the market's future performance and expect prices to rise.

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The option that has as one of its objectives the removal of obstacles to the movement of people and goods across the boundaries of member countries is ECOWAS. ECOWAS stands for Economic Community of West African States and is a regional intergovernmental organization that was established to promote economic integration among countries in West Africa. One of its key objectives is to create a single large trade bloc through the removal of trade barriers such as tariffs and import duties, and the harmonization of trade policies among member countries. This helps to facilitate the movement of people and goods across borders, which in turn promotes economic growth and development within the region.

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A public limited liability company is a legal entity that is distinct from its shareholders and can enter into contracts in its own right. This means that the company can sue and be sued, borrow money, and engage in other business activities on behalf of its shareholders. The liability of the shareholders is limited to the amount of their investment in the company, which means that they are not personally responsible for the company's debts or obligations. Therefore, the correct answer is "is legal entity".

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The issued capital of a company refers to the total number of shares that have been sold to shareholders. In this case, the authorized capital of the company is 60,000 shares and the company has issued 36,000 shares. To calculate the issued capital, we need to multiply the number of issued shares (36,000) by the price per share (N150k): Issued capital = 36,000 x N150k Issued capital = N5,400,000 Therefore, the issued capital of the company is N5,400,000, which corresponds to option C.

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One disadvantage of rail transport is its inflexibility. Rail transport follows a fixed route and schedule, which makes it difficult to accommodate changes in demand or unexpected circumstances. This lack of flexibility can result in delays, which can be particularly problematic for time-sensitive goods. Additionally, rail transport may not be able to provide door-to-door delivery, which can add to transportation costs and make it less convenient for businesses and consumers.

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Taxes imposed on locally made goods are known as excise duties. Excise duty is a type of tax levied on goods produced within a country, such as cigarettes, alcohol, or petrol. The government imposes excise duty to increase its revenue and to discourage the consumption of harmful goods. The tax is usually included in the price of the product, so consumers do not have to pay it separately. The amount of excise duty varies depending on the type of product, and it is usually a fixed amount per unit of the product or a percentage of the price.

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To sell a bill at less than the face value before its maturity is called discounting. This means that the holder of the bill sells it to a bank or other financial institution for an amount less than its face value, and the difference between the face value and the discounted price represents the interest earned by the bank or financial institution. The holder of the bill receives immediate cash for the bill, rather than having to wait until the maturity date to receive the full face value of the bill. Discounting is a common practice used by businesses to raise funds quickly, particularly when they have outstanding bills that have not yet been paid by their customers.

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A void contract is a contract that has no legal effect, from the outset or ab initio. It is not enforceable by law, and it does not create any legal obligations or rights between the parties involved. This is because the subject matter of the contract may be illegal, against public policy or contrary to law, or the parties may lack the legal capacity to enter into the contract. In other words, a void contract is not a valid contract, and it cannot be enforced by any court of law.

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The process of dealing with a cheque once it has been paid into the creditor's bank is called clearing. Clearing is the process by which the amount of the cheque is transferred from the account of the debtor to the account of the creditor. The cheque is sent to the clearinghouse, which acts as an intermediary between the banks of the debtor and creditor. The clearinghouse verifies the authenticity of the cheque and ensures that there are sufficient funds in the debtor's account to cover the amount of the cheque. Once the cheque has been cleared, the funds are transferred to the creditor's account.

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The issued capital of a public company is the total number of shares that have been sold or issued to shareholders. In this case, the company has an authorized capital of 60,000 shares and has issued 36,000 shares. Therefore, the issued capital would be 36,000 x 150k = N5,400,000. So, the correct option is N54,000 which seems to be a typo, and the actual answer is N5,400,000.

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The option that would not be stated in Memorandum of Association is "Rights of shareholders". The Memorandum of Association is a legal document that contains the fundamental conditions upon which a company is allowed to operate. It contains clauses such as the name clause, registered office, and objective clause. The rights of shareholders, on the other hand, are contained in the Articles of Association, which is another legal document that outlines the internal regulations of a company. Therefore, the rights of shareholders are not stated in the Memorandum of Association.

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When a public company receives the certificate of incorporation, it implies that it can go ahead and start business. The certificate of incorporation is a legal document issued by the government to a company after meeting all the legal requirements for registration. It shows that the company has been registered and is now a legal entity with the capacity to do business, raise capital, own assets and sue or be sued in its own name. Therefore, the company can start operations and carry out its activities legally.

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The principle of insurance involved in the given scenario is subrogation. Subrogation is a legal principle that allows insurers, after fully indemnifying the insured, to step into the shoes of the insured and take any advantage or right that the insured may have had against a third party. This allows insurers to recover some or all of the amount they paid out in claims from the responsible third party.

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