A retailer buys goods worth ₦150,000 and receives a trade discount of 10% and a cash discount of 5% for payment within 7 days. Calculate the amount paid with both discounts.
Trade discount = 10% of ₦150,000 = ₦15,000. Price after trade discount = ₦150,000 - ₦15,000 = ₦135,000. Cash discount = 5% of ₦135,000 = ₦6,750. Amount paid = ₦135,000 - ₦6,750 = ₦128,250.
Which of the following is a primary function of advertising?
Advertising primarily creates awareness of a product, informing potential customers and promoting sales.
A business organization formed by two or more individuals to carry out lawful business is called:
A partnership is formed by two or more individuals who agree to carry out lawful business and share profits and liabilities.
A company has sales of ₦500,000, cost of goods sold of ₦300,000, and operating expenses of ₦100,000. Calculate the net profit.
Gross profit = Sales - Cost of goods sold = ₦500,000 - ₦300,000 = ₦200,000. Net profit = Gross profit - Operating expenses = ₦200,000 - ₦100,000 = ₦100,000.
Which of the following is a characteristic of a public limited company?
A public limited company can offer shares to the general public, freely traded on the stock exchange.
The term used to describe the total value of goods and services produced in a country over a period is:
Gross Domestic Product (GDP) measures the total value of goods and services produced within a country over a period.
A retailer sells an item for ₦400, earning a profit of 25% on the cost price. Calculate the cost price.
Let cost price = C. Selling price = C + 0.25C = 1.25C. Given 1.25C = ₦400, C = ₦400 / 1.25 = ₦320.
Which of the following is NOT a function of the Central Bank?
The Central Bank does not provide loans to individuals; it focuses on monetary policy, issuing currency, and banking for commercial banks.
The process of transferring goods from the producer to the consumer is referred to as:
Distribution involves transferring goods from producers to consumers through channels like wholesalers and retailers.
Which of the following is a disadvantage of a cooperative society?
Cooperative societies often face limited access to capital due to reliance on members’ contributions.
An importer buys goods worth $10,000 at an exchange rate of ₦400/$1. If the Naira depreciates by 5%, calculate the new cost in Naira.
Original cost = $10,000 × ₦400 = ₦4,000,000. New exchange rate = ₦400 × 1.05 = ₦420. New cost = $10,000 × ₦420 = ₦4,200,000.
Which of the following documents is issued by a seller to correct an overcharge on an invoice?
A credit note corrects an overcharge on an invoice, reducing the amount owed by the buyer.
A market where securities are bought and sold is referred to as:
The capital market facilitates the buying and selling of securities, such as stocks and bonds.
Which of the following is a feature of a departmental store?
A departmental store offers a wide variety of goods under one roof, organized into departments.
A company has current assets of ₦180,000, including inventory of ₦60,000, and current liabilities of ₦90,000. Calculate the quick ratio.
Quick assets = Current assets - Inventory = ₦180,000 - ₦60,000 = ₦120,000. Quick ratio = ₦120,000 / ₦90,000 = 1.33:1.
The principle of indemnity in insurance implies that:
Indemnity ensures the insured is compensated only for the actual loss, restoring their pre-loss financial position.
Which of the following is a source of short-term finance for a business?
A bank overdraft is a short-term financing option, repayable on demand.
A business that operates without physical interaction with customers is referred to as:
E-commerce involves business transactions online without physical customer interaction.
Which of the following is a feature of a sole proprietorship?
A sole proprietorship has unlimited liability, with the owner personally responsible for business debts.
A company issues 1,000 ordinary shares at a premium of ₦10 per share, with a par value of ₦50. Calculate the total amount raised.
Issue price per share = ₦50 + ₦10 = ₦60. Total amount raised = 1,000 × ₦60 = ₦60,000.
The practice of selling goods below cost price to attract customers is known as:
A loss leader strategy sells goods below cost to attract customers, encouraging other purchases.
Which of the following is a function of a stock exchange?
A stock exchange facilitates the trading of securities, such as stocks and bonds.
The document that outlines the terms and conditions of employment in a business is called:
A contract of employment outlines employment terms, including duties and salary.
Which of the following is a characteristic of a monopoly?
A monopoly features a single firm controlling the market with significant barriers to entry.
The process of dividing a market into distinct groups of buyers with different needs is called:
Market segmentation divides a market into groups with different needs for tailored marketing.
A product costs ₦200 to produce. If a retailer applies a markup of 50% on the cost price, what is the selling price?
Markup = 0.5 × ₦200 = ₦100. Selling price = ₦200 + ₦100 = ₦300.
Which of the following is a type of marine insurance?
Hull insurance covers damage to a ship’s structure and machinery during transit.
A business organization owned and controlled by the government is called a:
A public corporation is government-owned and controlled to provide public services.
Which of the following is a disadvantage of international trade?
Over-dependence on foreign goods can undermine local industries and economic self-sufficiency.
A warehouse has an opening inventory of 2,000 units. During the month, 5,000 units are received, and 4,500 units are issued. What is the closing inventory?
Closing inventory = 2,000 + 5,000 - 4,500 = 2,500 units.
The amount a company pays to its shareholders from profits is called:
A dividend is paid to shareholders from a company’s profits.
Which of the following is a function of a warehouse?
A warehouse stores goods until needed, ensuring availability.
The term 'franchise' in business refers to:
A franchise is a license to operate using an established brand and business model.
Which of the following is a feature of a joint-stock company?
A joint-stock company features limited liability, protecting shareholders’ personal assets.
A company invests ₦50,000 at a compound interest rate of 8% per annum. Calculate the total amount after 2 years.
A = ₦50,000 × (1.08)^2 = ₦50,000 × 1.1664 = ₦58,320.
Which of the following is a characteristic of a credit union?
A credit union provides low-interest loans to members as a member-owned cooperative.
A document that authorizes the release of goods from a warehouse is called:
A warehouse warrant authorizes the release of goods from a warehouse.
Which of the following is a benefit of branding?
Branding increases customer loyalty by fostering trust and recognition.
The term 'balance of trade' refers to the difference between a country’s:
Balance of trade is the difference between a country’s exports and imports of goods.
Which of the following is a function of the Nigerian Export Promotion Council (NEPC)?
The NEPC promotes the export of Nigerian goods to boost foreign exchange earnings.
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