WAEC SSCE - Commerce - 1995 (Objective)

Question 1 Report

When an insurance policy is cleared void because of a false declaration the principle involved is?

indemnity

insurable interest

proximate cause

utmost good and favour ''?

Legal Aspect Of Business

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Question 2 Report

All activities involved in the distribution and exchange of goods and services are referred to as?

Trade

Market survey

Advertising

Commerce

Sales promotion

Answer Details

The term that refers to all activities involved in the distribution and exchange of goods and services is Commerce. Commerce encompasses a range of activities such as buying, selling, and transporting goods and services from producers to consumers. It also includes activities such as market research, advertising, sales promotion, and other promotional activities aimed at creating demand for goods and services. Commerce plays a crucial role in the economy as it facilitates the exchange of goods and services, helps to create employment, and generates income and revenue for businesses and governments.

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Trade

Commerce

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Question 3 Report

When a company sells shares to existing shareholders at preferential rate, that is called?

Rights issue

Bonus issue

Private placing

Sale by auction

lssue by prospectus

Answer Details

When a company sells shares to its existing shareholders at a preferential rate, it is called a "Rights issue." A rights issue is a way for companies to raise additional capital from their existing shareholders. It is called a "rights" issue because existing shareholders have the right to purchase additional shares at a discounted price before the shares are offered to the public. This can be a cost-effective way for companies to raise capital as it avoids the fees associated with a public offering. To participate in a rights issue, existing shareholders are typically given a specific number of rights for each share they already own. These rights allow them to purchase a certain number of new shares at a discounted price. Shareholders who do not wish to purchase additional shares can sell their rights on the open market to other investors. In summary, a rights issue is a way for companies to raise additional capital from their existing shareholders by offering them the right to purchase new shares at a discounted price before they are offered to the public.

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Legal Aspect Of Business

Stock Exchange

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Question 4 Report

Called-up capital is the amount?

paid on allotment

paid ontirstcall

paid on appilication

demanded on shares issued

. paid-up on all shares

Business Capital And Profits

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Question 5 Report

Which of the following is formed primarily to promote savings and loans among members?

Consumers co-operative society

producer co-operative society

Co-operative wholesale soceity

Retail Co-operative society

Co-operative thrift and credit society

Answer Details

The Co-operative Thrift and Credit Society is formed primarily to promote savings and loans among members. A co-operative thrift and credit society is a type of financial institution that is owned and operated by its members. Its main purpose is to provide its members with a safe and secure place to save their money and to offer loans at reasonable rates. Members of a co-operative thrift and credit society pool their savings and use these funds to provide loans to other members who need them. This type of society promotes thrift among its members and encourages them to save for the future. It is also a way for members to access credit at a lower cost than they might be able to obtain from other financial institutions.

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Financing Business

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Question 6 Report

Which of the following belongs to the capital market?

Commercial bank

Savings bank

Stock exchange

Bureau de change

Clearing house

Answer Details

The capital market is a market for long-term investments, where companies and governments raise funds for their operations and projects. The stock exchange is the correct option that belongs to the capital market, as it is a marketplace where stocks, bonds, and other securities are bought and sold. Commercial banks and savings banks belong to the banking sector, bureau de change is a foreign exchange market and the clearinghouse is a financial institution that handles the settlement of financial transactions.

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Stock Exchange

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Question 7 Report

Which of the following belongs to the capital market?

Commercial bank

Savings bank

Stock exchange

Bureau de change

Clearing house

Answer Details

The stock exchange belongs to the capital market. The capital market is a market for long-term investments, such as stocks, bonds, and other securities, where individuals and institutions buy and sell financial instruments. The stock exchange provides a platform for companies to issue and sell stocks to the public, and for investors to buy and sell these stocks in a regulated and transparent manner. This helps companies raise capital to finance their growth and expansion, while providing investors with an opportunity to invest in these companies and potentially earn a return on their investment through capital gains or dividends.

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Stock Exchange

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Question 8 Report

Which of the following is used to ascertain the correct value of imports for purposes of assessing customs duty’

Certificate of origin

Open-indent

Bill of Lading

Ships manifest

Bill of entry

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Question 9 Report

Which of the following is not true of insurance?

A large number of people face the same risk

Possibility of making a profit out of an event

only a small number will actually suffer the loss in any one year

A large making makes a small contribution to common pool

Possibility of assessing the frequency of occurrence of the event

Answer Details

The option that is not true of insurance is "Possibility of making a profit out of an event." Insurance is a system in which a large number of people contribute a small amount of money into a common pool, which is used to compensate the few who suffer losses due to a specified risk. The fundamental principle of insurance is that a large number of people face the same risk, but only a small number will actually suffer a loss in any one year. The premiums collected from the many policyholders are used to compensate the few who suffer losses. Therefore, it is not possible to make a profit out of an event covered by insurance, as insurance is not intended to generate a profit but to provide financial protection against loss.

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Purchase And Sale Of Goods

Commerce

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Question 10 Report

Opening the stock plug plus purchase of less closing the stock gives?

the rate of turnover

cost of goods sold

working capital

net profit

gross profit

Answer Details

Opening the stock plug purchase of less closing the stock gives the cost of goods sold. In accounting, the cost of goods sold (COGS) is the direct cost of producing or acquiring the goods that a company sells during a particular period. It includes the cost of materials, direct labor, and overhead costs directly tied to the production process. To calculate the cost of goods sold, you need to know the value of the beginning inventory (opening stock), purchases made during the period, and the value of the ending inventory (closing stock). The calculation is as follows: Cost of Goods Sold = Opening Stock + Purchases - Closing Stock Therefore, by subtracting the value of closing stock from the sum of opening stock and purchases, we get the cost of goods sold.

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Business Units

Purchase And Sale Of Goods

Stock Exchange

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Question 11 Report

Which of the following is a declaration by the captain of a ship as to the cargo on board?

Bill of ladlng

Mates receipt

Ships manifest

Bill of sight

Dock warrant

Answer Details

The document that is a declaration by the captain of a ship as to the cargo on board is called the "Ships manifest". This is a list of all the cargo and passengers carried on board a vessel. It includes information such as the type and quantity of goods, their value, and the ports of loading and discharge. The manifest is an important document used by customs officials and other authorities to ensure that goods are properly declared and taxed.

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Purchase And Sale Of Goods

Commerce

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Question 12 Report

The total indebtedness of a business is the same as its

liabilities

liquid capital

solvency

capital employed

working capital

Answer Details

The total indebtedness of a business refers to the total amount of money that the business owes to its creditors or lenders. This includes both short-term and long-term debts. Liabilities are the financial obligations that a business owes to others, including both current and long-term debts. Therefore, the total indebtedness of a business is the same as its liabilities. It represents the amount of money that the business has borrowed and must repay in the future.

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Legal Aspects Of Business

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Question 13 Report

Goods are usually classified into?

saleable and nonisaleable good

inferior and superior goods

luxurious and essential goods

producer and consumer goods

home made and foreign made goods

Answer Details

Goods are usually classified into producer goods and consumer goods. Producer goods are those goods which are used in the production of other goods and services. For example, machinery, tools, and raw materials. Consumer goods are those goods which are used for final consumption or use by the consumers. For example, food, clothing, and household items. This classification is important because the marketing strategy and distribution channels for producer goods and consumer goods are different. Also, the demand for these goods may vary depending on economic conditions and consumer preferences.

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Commerce

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Question 14 Report

Which of the following is a non- indemnity insurance?

Marine

Life

Fire

Bad debts

Burglary

Answer Details

Non-indemnity insurance is an insurance policy where the insurer pays a fixed amount to the policyholder upon the occurrence of a specific event, regardless of the actual amount of loss or damage incurred. Based on this definition, the non-indemnity insurance among the options given would be life insurance, as the policyholder or beneficiary receives a fixed amount in the event of the death of the insured person. Marine, fire, burglary, and bad debts are examples of indemnity insurance, where the insurer compensates the policyholder for the actual amount of loss or damage incurred, up to the policy limit.

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Legal Aspect Of Business

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Question 15 Report

Another name for shares, stocks and debentures traded in the stock exchange is?

collateral

securities

wares

partcipating`preference shares

cumulative preference shares

Answer Details

The name for shares, stocks, and debentures traded in the stock exchange is securities. Securities are financial instruments that represent ownership in a company or organization and can be bought and sold in the stock market. The term "security" is used to describe any tradable financial asset, such as stocks, bonds, or other investment instruments, that has value and can be traded. Securities are a way for companies to raise money by selling ownership shares, and they are also a way for investors to invest in those companies and potentially earn a return on their investment.

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Stock Exchange

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Question 16 Report

A cheque drawn by a bank on itself is a?

credit transfer

direct debt

certified cheque

bankdraft

Answer Details

A cheque drawn by a bank on itself is called a bank draft. A bank draft is a check that is guaranteed by the bank that issues it, which means that the bank is responsible for paying the amount written on the draft. This makes bank drafts a secure form of payment, as they cannot bounce or be canceled like personal checks. Bank drafts are typically used for large transactions, such as real estate purchases or international trade, where a high degree of certainty and security is required. They can also be used by individuals who do not have a checking account or who need to make a payment quickly and securely.

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Purchase And Sale Of Goods

Commerce

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Question 17 Report

A cheque drawn by a bank on itself is a?

credit transfer

direct debt

certified cheque

bankdraft

Answer Details

A cheque drawn by a bank on itself is a bank draft. It is a payment instrument where the bank guarantees payment of the specified amount to the payee. The bank draft is paid for upfront, and the amount is deducted from the customer's account. This payment instrument is usually used for large transactions, and it provides a secure means of payment since the bank is responsible for ensuring that the payment is made.

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Commerce

Money

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Question 18 Report

Del-credere commission is an?

allowance paid to a supplier

extra allowance paid for guaranteeing recovery of debts

allowance paid to all commission agents

'allowance paid bythe agent

allowances to ensure delivery of goods by commission agent

Answer Details

Del-credere commission is an extra allowance paid by a principal to a commission agent for guaranteeing the recovery of debts from customers. In other words, it is an incentive paid to a commission agent who is willing to take on the risk of bad debts from the customers to whom they have sold goods. This commission is paid to ensure that the agent takes the necessary steps to recover the debt from the customer, even if it means going to court. The del-credere commission is usually a percentage of the total sales and is paid in addition to the normal commission paid to the agent.

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Commerce

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Question 19 Report

Which of the following is quoted when the buyer is responsible for the cost of loading the goods from the seller’s warehouse up to his own warehouse?

LOCO

F.O. R

F.A.S

C.I.F

C.F

Purchase And Sale Of Goods

Commerce

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Question 20 Report

A trade in which many countries exchange goods and services is called?

bilateral trade

entrepot trade

economic union

multilateral trade

counter trade

Answer Details

A trade in which many countries exchange goods and services is called multilateral trade. This means that there are more than two countries involved in the exchange of goods and services. Multilateral trade is conducted among members of international organizations such as the World Trade Organization (WTO) and the European Union (EU). Multilateral trade agreements are aimed at promoting free trade among countries and removing trade barriers such as tariffs and quotas. This allows countries to specialize in the production of goods and services that they have a comparative advantage in, leading to increased efficiency and economic growth.

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Read lesson note on Transport, Tourism, Communication And Warehousing (WAEC)

Trade

Transport, Tourism, Communication And Warehousing

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Question 21 Report

Are fund usually granted for goods imported and later re-exported is called?

commission

discount

customs drawback

dock due

demurrage

Answer Details

The term used to describe the fund granted for goods that are imported and later re-exported is called "customs drawback." Customs drawback is a type of refund or rebate of duties paid on imported goods that are subsequently exported. It is a way for exporters to recover some of the costs associated with importing goods, such as customs duties and fees. To be eligible for customs drawback, the goods must have been previously imported and duty paid, and must be exported within a specified time frame. The exporter must provide proof of the original import and payment of duties, as well as documentation of the subsequent export. In summary, customs drawback is a financial benefit that allows for the recovery of duties paid on imported goods that are later exported.

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Trade

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Question 22 Report

Selling a bill in less than the face of the value for immediate cash before the due date is to?

retire the bill

honour the bill

discount the bill

protest the bill

withdraw the bill

Answer Details

Selling a bill in less than the face value for immediate cash before the due date is known as "discounting the bill." Essentially, the holder of the bill sells the right to collect the full value of the bill to a third party, who pays the holder less than the full amount in cash. The third party then collects the full value of the bill when it comes due. Discounting a bill can provide the holder with immediate cash, but at the cost of receiving less than the full value of the bill.

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Commerce

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Question 23 Report

Which of the following enables production to take place ahead of demand?

Transporting

Advertising

Importing

warehousing

Exporting

Answer Details

The option that enables production to take place ahead of demand is "warehousing". Warehousing is the process of storing goods before they are sold or distributed. By having a warehouse, a company can produce goods in advance and store them until there is a demand for them. This is beneficial for the company because it allows them to take advantage of economies of scale and produce goods in larger quantities, which can result in cost savings. When the demand for the goods increases, the company can quickly access the stored goods from the warehouse and distribute them to the market. This way, the company can meet the demand without any delay in production or shipment. In summary, warehousing enables a company to produce goods ahead of demand and store them until the demand arises, allowing them to fulfill customer needs quickly and efficiently.

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Production

Commerce

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Question 24 Report

Which of the following is not true of insurance?

A large number of pecple face the same risk

A Possibility of making profit out of an event

only a small number will actually suffer the loss in any one year

A large number makes a small contribution to a common pool

Possibility of assessing the frequency of occurrence of the event

Answer Details

The option that is not true of insurance is "A Possibility of making profit out of an event". Insurance is a financial product designed to protect individuals and businesses from financial loss due to unexpected events such as accidents, theft, or natural disasters. When a person purchases an insurance policy, they pay a premium to an insurance company. In return, the insurance company agrees to compensate the insured in case of a covered loss. The other statements in the list are true of insurance. For example, insurance works based on the principle of risk pooling, where a large number of people face the same risk and make a small contribution to a common pool. Only a small number of people are expected to suffer a loss in any given year, but the pool of contributions is large enough to cover their losses. Insurance companies use actuarial science to assess the frequency of occurrence of the events they insure against, and calculate premiums based on the level of risk involved. The goal of insurance is to provide protection and financial security to individuals and businesses, rather than making a profit out of an event. Insurance companies may make a profit through their investments, but this is separate from the protection provided by insurance policies.

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Purchase And Sale Of Goods

Commerce

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Question 25 Report

Which of the following is classified as invisible item in_the balance of payments?

. Export of goods

import of machinery

1 Gifts

. Sale of assets

Salaries of expatriates

Answer Details

Salaries of expatriates is classified as an invisible item in the balance of payments. Invisible items refer to transactions that do not involve the physical movement of goods or services across borders. Salaries of expatriates are payments made by a country to its citizens who work in another country, and it is an example of a service payment that is not visible in the balance of payments. Other examples of invisible items include tourism, remittances, and intellectual property payments.

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Production

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Question 26 Report

A retailer who receives a trade discount of 33‘/3% and a cash discount of 10% on goods worth N360 would pay?

N240

N226

N216

204

120

Purchase And Sale Of Goods

Commerce

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Question 27 Report

Which of the following policies qualifies the holder to income to income tax relief?

Accident insurance

Public liability insurance

Comprehensive insurance

Endowment assurance

Fidelity guarantee insurance

Answer Details

Endowment assurance is the policy that qualifies the holder to income tax relief. Endowment assurance is a life insurance policy that pays a lump sum amount to the policyholder at the end of a specific period or upon the death of the policyholder. The premiums paid for the policy are tax-deductible, which means the policyholder can claim a deduction on the income tax payable on their income. Therefore, the policyholder is eligible for income tax relief when they hold an endowment assurance policy. The other options, such as accident insurance, public liability insurance, comprehensive insurance, and fidelity guarantee insurance, do not qualify the holder for income tax relief.

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Legal Aspect Of Business

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Question 28 Report

Which of the following is true about cumulative preference shares?

Any unpaid dividend is carried forward

The shareholders can obtain a capital refund

They are entitled to further share in profit

Any unpaid dividend is forfeited

The dividend declared is accumulated in a reserve account

Answer Details

Cumulative preference shares are a type of preference shares in which any unpaid dividend is carried forward to the next year. This means that if a company is unable to pay dividends in a particular year, the unpaid amount is accumulated and added to the next year's dividend payment. Therefore, option A is correct. Option B is incorrect because cumulative preference shareholders do not have the right to a capital refund. Option C is also incorrect because cumulative preference shareholders do not have the right to share in further profits beyond the fixed dividend rate. Option D is also incorrect because unpaid dividends are carried forward, not forfeited. Finally, option E is incorrect because the dividend declared is not accumulated in a reserve account, but paid out to shareholders.

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Occupation

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Question 29 Report

Terms of trade refers to?

agreement between two trading countries

conditions attached to specific trade transaction

the relationship between export and import prices

, the difference between the value imports and exports

all payments made-to other countries and receipts from them

Answer Details

Terms of trade refer to the relationship between the prices of a country's exports and imports. It is the ratio of the price index of a country's exports to the price index of its imports. In simpler terms, it is the value of a country's exports compared to its imports. A country's terms of trade can affect its economy and trade balance, as well as its ability to pay for imports with exports.

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Trade

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Question 30 Report

Which of the following documents is used when goods are sent on approval?

Catalogue

Delivery note

Receipt

Advice note

Pro forma invoice

Commerce

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Question 31 Report

A public limited company has the rights and duties of an individual because it?

has a board of directors

has a trading certificate

has corporate status'

has a memorandum of association

is so stated in articles of association

Answer Details

A public limited company has the rights and duties of an individual because it has "corporate status." Corporate status is a legal concept that allows a company to be treated as a separate legal entity from its owners. This means that the company can enter into contracts, own property, and sue or be sued in its own name, just like an individual. The concept of corporate status is important because it protects the personal assets of the company's owners from any legal or financial liabilities that may arise from the company's activities. For example, if a public limited company is sued for breach of contract, the company's shareholders are generally not personally liable for any damages awarded against the company. To establish corporate status, a public limited company must be registered with the relevant government authorities and have a legal framework in place, such as a memorandum and articles of association. In summary, a public limited company has the rights and duties of an individual because it has corporate status, which allows it to be treated as a separate legal entity from its owners.

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Legal Aspects Of Business

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Question 32 Report

Which of the following is not a feature of good banking security? The

asset must be easily converted into cash

value of the asset must be easily ascertained

ownership of the asset must be in doubt

value of the asset should be stable

value of the asset must less than the amount loaned

Commerce

Money

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Question 33 Report

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

Central Bank

Association of Commercial Banks

Securities and Exchange Commission (SEC)

Nigerian Association of Chambers of Commerce

Brokers and Jobbers

Answer Details

The regulatory body that oversees and controls the activities of the Nigerian Stock Exchange is the Securities and Exchange Commission (SEC). The SEC is a government agency that is responsible for regulating and supervising the Nigerian capital market, including the stock exchange. Its main function is to protect investors and maintain fair, efficient, and transparent markets. The SEC establishes rules and regulations for market participants, including issuers of securities, brokers, and other market intermediaries. It also monitors compliance with these rules and investigates any violations of securities laws. Overall, the SEC plays a vital role in ensuring the integrity and stability of the Nigerian Stock Exchange and the broader Nigerian capital market.

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Stock Exchange

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Question 34 Report

When the balance of trade is unfavourable which of the following conditions prevails?

Exports exceed imports

Imports exceed exports

Customs duty is high

lnvisible exports exceed visible imports

The value money falls

Answer Details

When the balance of trade is unfavorable, it means that a country's imports are exceeding its exports. This situation leads to a trade deficit, which means that the country is buying more goods and services from other countries than it is selling to them. As a result, the country is spending more money on imports than it is earning from exports. The options provided are: - Exports exceed imports - Imports exceed exports - Customs duty is high - Invisible exports exceed visible imports - The value of money falls Based on the definition provided, we can conclude that the correct answer is "Imports exceed exports."

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Trade

Commerce

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Question 35 Report

Mr Ojo borrowed N54,000 from a Commercial bank and deposited his life assurance certificate with the bank. The certificate deposited serves as?

a loan repayment

a current asset

an interest charged

a collateral society

a part of payment

Answer Details

The certificate deposited by Mr Ojo with the commercial bank serves as collateral. Collateral is an asset that is pledged by a borrower to a lender as security for a loan or debt. It acts as a guarantee to the lender that the borrower will repay the loan, and if the borrower fails to repay, the lender can seize and sell the collateral to recover the outstanding loan amount. In this case, Mr Ojo has deposited his life assurance certificate with the bank to secure the loan of N54,000.

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Question 36 Report

Land as a factor of production comprises?

all resources provided by nature

the earth surface only

land surface and vegetation

efforts to exploit the earth

the oceans and rivers only

Answer Details

In economics, land is a factor of production that includes all natural resources provided by nature. This encompasses not only the surface of the earth, but also the minerals, forests, water resources, oil, and gas reserves that exist within it. Land is distinct from labor and capital, which are the other two factors of production. Land as a factor of production does not refer solely to the earth's surface or vegetation, but also includes everything that is found beneath it or on it that is not created by human beings. Therefore, the answer is "all resources provided by nature."

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Production

Occupation

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Question 37 Report

When a seller decides to sell his goods at a specific price for a specific period, he is making?

a sales promotion

a bid

an auction sale

a firm offer

an implied guarantee

Answer Details

When a seller decides to sell his goods at a specific price for a specific period, he is making a firm offer. This means that the seller is promising to sell the goods at the specified price for the specified time period, and is willing to enter into a binding agreement with a buyer who accepts the offer within that time frame. It is a clear and definite statement of the seller's intention to sell, and creates a legal obligation for the seller to fulfill the terms of the offer if accepted by a buyer.

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Purchase And Sale Of Goods In Home And Foreign Trade

Purchase And Sale Of Goods

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Question 38 Report

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

Central Bank

Association of Commercial Banks

Securities and Exchange Commission (SEC)

Nigerian Association of Chambers of Commerce

Brokers and Jobbers

Answer Details

The Securities and Exchange Commission (SEC) regulates and controls the activities of the Nigerian Stock Exchange. The SEC is a government agency responsible for supervising and regulating the Nigerian capital market, including the stock exchange. It ensures compliance with securities laws, protects investors' interests, and promotes transparency and fairness in the market. The SEC sets rules and guidelines for the operations of the stock exchange, approves the listing of securities, and monitors the activities of brokers, dealers, and other market intermediaries.

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Stock Exchange

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Question 39 Report

The nominal value of share of a public limited limited company is 50k and the market value is 65k. The company's share is selling?

above per value

at per value

below per value

ex dividend

cum dividend

Elements Of Business Management

Stock Exchange

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Question 40 Report

Which of the following must be include in the Articles of Association?

Voting rights of the shareholders

The objects of the business

The address of the registered office

Statement that liability is limited

List of types of shares

Legal Aspects Of Business

Legal Aspect Of Business

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Question 41 Report

The best method of making payment to an overseas supplier is by/

bankdraft

bill of exchange

travellers cheque

letter of credit

certified cheque

Answer Details

The best method of making payment to an overseas supplier is by a letter of credit. This is a financial instrument issued by a bank on behalf of a buyer to guarantee payment to a seller. The bank acts as an intermediary between the buyer and seller, ensuring that the seller receives payment once they have fulfilled the terms of the agreement. This method is safe and secure for both the buyer and the seller as it guarantees payment for the seller and protects the buyer against non-delivery or non-performance by the seller. Other methods such as bankdraft, bill of exchange, travellers cheque, and certified cheque may also be used, but they are not as secure and reliable as a letter of credit.

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Commerce

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