JAMB Commerce 2012
Questions & Answers

Option C or D could be selected if the selling price or total sum is mistaken for the profit itself. Gross profit is calculated by subtracting the cost price of ₦50,000 from the selling price of ₦75,000, which yields ₦25,000. Common mistake: reporting the selling price or the sum of both values instead of finding their difference.

Options like setting prices or regulating businesses might look tempting if you confuse a chamber of commerce with a government regulatory agency. To find the correct choice, look at how business groups operate: advocacy and networking are used to boost and protect the interests of their member businesses. Common mistake: Confusing private business associations with government regulatory bodies.

Options like ₦90,000 might appeal if you mistakenly subtract the margin percentage directly from the cost of goods sold. To arrive at the correct sales revenue (S), set up the formula where the gross profit margin is equal to [(S - ₦120,000) / S] × 100 = 25%, which simplifies to 0.75S = ₦120,000, giving a total net sales revenue of ₦160,000. Common mistake: Subtracting the percentage margin directly from the cost instead of applying the margin formula.

An option like maximizing profits for shareholders might seem plausible if you mistakenly treat a cooperative like a standard joint-stock corporation. By focusing on collective benefits, cooperatives serve members' mutual interests, such as providing affordable goods or services. Common mistake: Assuming cooperatives share the same profit-maximizing goals as standard corporations.

A distractor like ₦19,000 is attractive if you calculate the remaining invoice balance rather than the discount itself. Finding the cash discount requires multiplying the 5% rate by the ₦20,000 invoice amount, yielding 0.05 × ₦20,000, which equals ₦1,000. Common mistake: Providing the final discounted price instead of the discount amount.

Options like public or bonded warehouses might confuse you if you lump all commercial facilities together. Retail outlets sell goods to consumers, which separates them from warehouses used strictly for storage. Common mistake: Confusing retail selling points with storage facilities.

An option like 1:2 might look correct if you accidentally invert the formula components. Dividing the current assets of ₦80,000 by the current liabilities of ₦40,000 yields a ratio of 2:1. Common mistake: Inverting assets and liabilities when calculating financial ratios.

An option like low cost per unit might seem reasonable if you overlook the actual pricing structure of cargo logistics. Air transport is fast and efficient for urgent deliveries, despite high costs. Common mistake: Assuming air freight is an economical choice for all cargo types.

An option like ₦13,000 might be picked if you incorrectly add the principal to the interest instead of calculating the interest alone. Simple interest is found by multiplying ₦10,000 by the 0.10 rate and the 3 years, resulting in ₦3,000. Common mistake: Adding the principal to the final interest total.

An option stating that shares are not traded on the stock exchange might tempt you because public corporations are state-owned, but that is not their defining formative characteristic. Public corporations are formed by parliamentary acts to provide public services. Common mistake: Confusing private companies with government-backed corporate entities.

An option like recording credit sales might seem plausible if you confuse commercial documents with ledger entries. A bill of exchange facilitates short-term credit by ordering future payment. Common mistake: Confusing financial instruments with basic accounting ledger records.

An option like ₦10,000 might look right if you multiply the annual amount instead of dividing it. Because there are four quarters in a year, finding the quarterly premium requires dividing ₦2,500 by 4, which equals ₦625. Common mistake: Multiplying the annual figure instead of dividing by the number of quarters.

Options like increasing sales volume look appealing because they describe why firms advertise, but they represent benefits rather than drawbacks. Advertising’s high cost can be a drawback, especially for small businesses. Common mistake: Selecting a positive commercial outcome when asked for a disadvantage.

An option like ₦80,000 might catch your eye if you mistakenly add assets and equity together. Total liabilities are determined by subtracting equity from assets, giving ₦500,000 - ₦300,000 = ₦200,000. Common mistake: Adding asset and equity values together instead of finding the difference.

An option like setting long-term strategic goals might look correct if you confuse upper management duties with daily floor supervision. Operational management assigns tasks to ensure daily operations run smoothly. Common mistake: Mixing up strategic executive duties with frontline operational tasks.

An option like 30% might trap you if you mistake the raw profit margin for the markup percentage. Subtracting the ₦120 cost from the ₦150 selling price gives a markup of ₦30, and dividing that by the ₦120 cost then multiplying by 100 gives 25%. Common mistake: Calculating the percentage based on the selling price instead of the cost.

An option like avoiding risks at all costs sounds safe, but successful business founders must embrace calculated hazards. Entrepreneurs need strong decision-making skills to navigate risks and opportunities. Common mistake: Equating entrepreneurial success with risk avoidance.

An option like ₦55,000 is tempting if you mistakenly add operating expenses to the gross profit. Net profit is found by subtracting operating expenses of ₦15,000 from the gross profit of ₦40,000, leaving ₦25,000. Common mistake: Adding expenses to gross profit instead of subtracting them.

An option like accepting public deposits might seem right because it involves banking, but that is a commercial bank function. The central bank manages foreign exchange reserves to stabilize currency. Common mistake: Confusing commercial bank retail services with central bank macroeconomic duties.

An option like ₦95 might catch your attention if you mistakenly subtract the inflation rate instead of adding it. Future price is calculated by multiplying ₦100 by 1.05, yielding ₦105. Common mistake: Subtracting the inflation rate to calculate future costs.