WAEC Commerce Past Question 2020 - 1

Questions:

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Question 1

Commerce is defined as ______

• Buying and selling of goods and services only
• All of the activities in the distribution and exchange of goods and services
• All activities involved in the production of goods and services
• The transporting and warehousing of goods only

Explanation

EXPLANATION:The essence of commerce is to move goods from the POINT OF PRODUCTION to the point of consumption and that is exactly what exchange and distribution is all about

Question 2

The types of occupation that a broker belongs to is?

• Commercial
• Construction
• Extraction
• Manufacturing

Explanation

Who is a Broker?

A broker is an INDIVIDUAL or FIRM that acts as an intermediary between an investor and a securities exchange.

All of the other occupations have one thing in common- Tangible goods are traded

Extraction: Mineral resources (Tangible)
Manufacturing: Commodities (Tangible)
Construction: Buildings(Tangible)
Broker: Service (Inangible)

What is Commercial Occupation?

Commercial Occupation entails all activities that embraces distribution and exchange of goods produced

N.B Securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members.

Brokers provide that service and are compensated in various ways, either through commissions, fees or through being paid by the exchange itself.

Question 3

A form of money which was not used in the early days of trade is _______

• Tobacco
• Metal bars
• cowries
• Coins

Explanation

This is the Historical development of money

.Barter: The Dawn of Trading
.9,000-6,000 BC: The era of Commodity money: Salt, tea, tobacco, cattle, and seeds
.1,200 BC: The Widespread Use of Cowrie Shells
.1,000 BC: The First Metal Money and Coins
.500 BC: The Birth of Modern Silver Coins in Sardis, Ancient Lydia
.118 BC: Leather Money from China
.A.D. 800 - 900: The Nose
.Year 806: Paper Currency
.1500: Potlach
.1535: Wampum
.The Gold Standard
.End of the Gold Standard
.Present day Money
.Future money

Question 4

Which of the following activities is not an example of extractive industry?

• Weaving
• Quarrying
• Hunting
• Fishing

Explanation

Extractive industries are the businesses that take raw materials, including oil, coal, gold, iron, copper and other minerals, from the earth. The industrial processes for extracting minerals include drilling and pumping, quarrying, and mining.

Question 5

The factor of production which bears all of the risks of the business is

• Capital
• Entrepreneurship
• Labour
• Land

Explanation

Who is an Entrepreneur?
The entrpreneur is a person who sets up a business or businesses, taking on financial risks in the hope of profit.

What is Entrepreneurship?
Entrepreneurship is an act of being an entrepreneur, or the owner or manager of a business enterprise who, by risk and initiative, attempts to make profits.

Question 6

Production is completed when product reach the _____

• Warehouse
• Users
• Retailers
• Shops

Explanation

Production is only complete when the commodity produced is consumed by the final consumer

Question 7

A partner whose name is used to boost the image of the business and does not contribute capital capital is a

• Dormant partner
• General partner
• Limited partner
• nominal partner

Explanation

Who are the partners in partnership business?

Sleeping partner / Dormant

This partner contributes money but does not take active part in running the business

Nominal Partner

This partner is usually a very influential person- very popular.
This parter only contributes his/her name to the business and does not money or time.

Active partner

This partner contributes money and also takes active part in running the business. This partner is usually paid a salary.

Question 8

One advantage of sole proprietorship is that

• access to large capital is easy
• decisions are made promptly
• business risk are spread
• continuity of business is assured

Explanation

Advantages of Sole proprietorship Business

> Prompt decision is made beecause the sole proprietor is the only director of the business

Disadvantages of Sole proprietorship Business

> Sole proprietorship business can not have access to large capital because it is not a legal entity

>The business risk is not spread, it is borne by one man alone

>The continuity of the business is not assured because the death of a sole proprietor may mean the end or death of the business

Question 9

A business unit in which savings of members are lent to others is a _____

• Consumer cooperative society
• Producer cooperative society
• Credit and thrift society
• Wholesale cooperative society

Explanation

What is Credit and thrift society

Credit and thrift society are self-help organisations. They encompass a group of persons who pool their resources together on mutual basis to solve specific financial problems of members

Also known as Co-operative thrift and loan society, provides it's members with convenient loans and secured means of interest.

The essence of a credit society is to create a pull of fund. It has from it’s beginning, been charge with designing and building members owned and controlled cooperative finance system the greatest gandicap to goal attainment is fund.

This society encourages the extension of micro and other credit facilities to rural and urban to galvanize their economic activities, which will create employment and raise the statement of human existence.

Question 10

The document issued to a public company allowing it to commence business is the

• Article of association
• Certificate of incorporation
• Memorandum of association
• Certificate of trading

Explanation

What is a Certificate of Trading?

A certificate that is issued to public limited companies (PLCs). All PLC’s are required to obtain a certificate of trading before they are able to trade.

If the public company does trade before the certificate has been issued, the company and their officers may be liable to criminal penalties.

Before trading, all public companies will need to apply for trading certificate. Private companies donot need to apply for trading certificate and are therefore able to trade as soon as a Certificate of Incorporation.

Question 11

Which of the following is not a function of consumer association?

• Ensuring that consumer buys quality goods
• Educating consumers on their rights
• Penalizing importers of fake goods
• Ensuring that fair prices are charged

Explanation

What is Consumer Association?

A consumer organisation/association is a membership-based non-governmental non-profit body created to promote the interests of consumers of goods and services, by disseminating information and lobbying for laws to protect consumers against producers or sellers, who may usually be better organised or have more resources

Question 12

An association formed by computer distributors to safeguard and promote their interest is a _____

• Chamber of commerce
• Cooperative society
• Trade association
• Trade Union

Explanation

What is trade Union

Trade union, also called labor union. It is an association of workers in a particular trade, industry, or company and it is created for the purpose of securing improvements of conditions of employment of members.

10 influential trade unions in Nigeria

1. NLC: Nigeria Labour Congress(1978) It was founded in 1978 following a merger of four different organisations: Nigeria Trade Union Congress, NTUC; Labour Unity Front, LUF; United Labour Congress, ULC; and Nigeria Workers Council, NWC.

Today, the NLC has 29 affiliated unions. In total, it boasts of around four million members, according to its own figures, making the association one of the largest trade unions in Africa.

2. NUPENG: National Union of Petroleum and Natural Gas Workers It was also one of the former 42 industrial unions that emerged during the restructuring exercise between 1976 –1977.

3. PENGASSAN – Petroleum and Natural Gas Senior Staff Association of Nigeria (August 15, 1978.)

4. NMA: Nigeria Medical Association(1951)

5. ASUU: Academic Staff Union of Universities(1978)

6. NUT: Nigeria Union of Teachers(July 1931)

7. NASU: Non-Academic Staff Union of Universities(1977)

8. ASUP: Academic Staff Union of Polytechnics(CAP 437 of 1990)

9. NARD: National Association of Medical Doctors

10. TUC: Trade Union Congress(2005)

Question 13

The issue of prospectus by a company is an invitation to members of the public to

• Subscribe to the company share
• buy the company product
• attend the company board meeting
• receive dividends

Explanation

What Is a Prospectus?

A document issued by a company to invite the public and the investors for subscribing the securities is called a prospectus. The prospectus contains detailed information on the securities.

A public company can issue the prospectus to offer its shares and debentures, whereas a private company cannot issue prospectus.

A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

The prospectus can help investors make more informed investment decisions because it contains a host of relevant information about the investment or security.

Question 14

Examples of current assets are ?

• cash and trade debtors
• cash and trade creditors
• trade debtors, trade creditors and cash
• trade creditors and trade debtors

Explanation

What are current assets ?

In accounting, a current asset is any asset which can reasonably be expected to be sold, consumed, or exhausted through the normal operations of a business within the current fiscal year or operating cycle or financial year.

Examples of Current Assets

1. Accounts Receivable
2. Inventory
3. Prepaid Expenses
4. Closing stocks
5. cash in hand
6. cash in bank
7. Trade debtors
8. Accured income

Why are Current Assets -Current?

Current assets are assets that can be converted into cash within one fiscal year or one operating cycle. Current assets are used to facilitate day-to-day operational expenses and investments.

As a result, short-term assets are liquid, meaning they can be readily converted into cash and used to pay for bills and obligations due in the short-term