The primary purpose of a company’s memorandum of association is to
The memorandum of association is a legal document that outlines a company’s objectives, scope, and powers, serving as the foundation for its operations and interactions with external parties. Option B refers to the articles of association, C is part of financial policies, and D is maintained in a separate register.
When it becomes necessary to liquidate a company, the first step to be taken is the appointment of
A liquidator is appointed to oversee the liquidation process, managing the sale of assets and settlement of liabilities to wind up the company. A receiver handles specific assets, an auditor verifies accounts, and an accountant manages financial records, none of which initiate liquidation.
In which of the following situations is a court order necessary for a company?
Reducing a company’s share capital requires a court order to ensure creditor protection and compliance with legal procedures under company law, such as the Companies and Allied Matters Act. Options A, B, and D involve administrative or internal processes not requiring court approval.
The basic distinction between cash discount and trade discount is that while trade discount is
Trade discount is a reduction in the catalogue or list price to encourage bulk purchases, often offered to retailers or distributors. Cash discount is a reduction in the invoice amount to incentivize early payment within a specified period. Option C accurately distinguishes their purposes, unlike the others.
The cost that arises from failure to load or unload a ship at a port within a stipulated period is known as
Demurrage charges are penalties imposed for delaying a ship beyond the agreed time for loading or unloading, compensating for lost time. Excess charges are vague, depreciation relates to asset value loss, and premium charges pertain to insurance, making D the correct choice.
The mode of transportation with the lowest cost per unit for goods carried is
Rail transport offers the lowest cost per unit for large quantities of goods over long distances, ideal for bulk shipments like coal or grain. Pipeline is cost-effective for liquids, air is expensive, and road is less efficient for large volumes, making rail the best choice.
A person who undertakes risks in an insurance business is known as
An underwriter assesses and assumes the financial risk of an insurance policy, determining premiums and coverage terms. A broker facilitates transactions, an insurer is the company providing coverage, and an actuary calculates risks, making B the correct answer.
The main purpose of insurance is to
Insurance spreads the financial risk of an individual across a larger group of policyholders, pooling resources to provide collective protection against losses. Options A, B, and C are secondary or incorrect, as they do not capture the core function of risk distribution.
Bank giro is a system where
A bank giro is a payment system where a bank transfers funds from one customer’s account to another based on written instructions, facilitating direct payments. Options A, B, and C describe unrelated banking functions.
An invoice of N6000 is marked ‘5% 1 month, 2.5% 3 months, 1% 5 months’. If the customer pays in the second month, how much will he remit to the seller?
Payment in the second month qualifies for a 2.5% discount. On N6000, 2.5% = 6000 × 0.025 = N150. Amount remitted = 6000 - 150 = N5850.00. Option B is correct.
Spot market goods are those which are available for
Spot market goods are available for immediate delivery, with transactions settled instantly upon agreement. Short-term, long-term, or end-of-year deliveries relate to futures or contracts, not spot markets.
The main advantage of road transport is that it is
Road transport is convenient and flexible, offering door-to-door delivery and adaptable routes. It is not always the cheapest (B), fastest (C), or safest (D) compared to rail or air for specific goods.
The practice by which an insurance company accepts a very large risk and later shares it with other insurance companies is called
Re-insurance involves an insurer transferring part of a large risk to other insurance companies to mitigate potential losses. Subrogation recovers costs, contribution splits losses, and indemnity compensates losses, but none involve risk-sharing.
The insurance policy which provides full cover against all risks at sea is known as
Marine voyage policy insurance provides comprehensive coverage for all risks during a sea voyage. Particular average covers partial losses, freight insurance covers cargo transport costs, and free of particular average excludes partial losses.
A vendor supplies newspapers from house to house and across the streets. The element of marketing mix involved is
The element involved is ‘place,’ as it pertains to the distribution and delivery of newspapers to consumers. Product is the newspaper itself, price is the cost, and promotion involves advertising, none of which apply here.
The main advantage of using cinema as an advertising medium is that it is
Cinema advertising is informative, using engaging visuals and sound to deliver impactful messages to a captive audience. It is not cheap (A), accuracy (B) is irrelevant, and accessibility (C) is less significant compared to its informative power.
When old customers stick to the old place to buy goods and services, it is known as
Patronage refers to customer loyalty, where customers consistently return to a business. Goodwill is the business’s reputation, personal factor is vague, and window shopping involves browsing without buying.
The most important piece of legislation governing business and commercial activities in Nigeria currently is the
The Companies and Allied Matters Act, 1990 (CAMA) is the primary legislation governing business formation, operation, and dissolution in Nigeria. Other options are outdated or sector-specific.
One of the criteria for differentiating consumer markets from industrial ones is the
Consumer markets are driven by final demand for personal use, while industrial markets involve derived demand for production or business purposes. Supply type, services, or price are secondary factors.
The over-riding objective of the Food and Drug Act in Nigeria is to prevent the
The Food and Drug Act aims to prevent adulteration, ensuring food and drugs are safe and uncontaminated. Import restrictions, untested consumption, or price controls are secondary or unrelated.
The activities of consumers association in Nigeria have not been effective because
Limited awareness and education about consumer rights hinder consumer associations’ effectiveness. Consumer numbers, government disposition, or lack of expression mediums are less critical factors.
The least of the advantages of indigenization is that
Indigenization promotes local control, reduces foreign influence, and improves living standards, but entrepreneurial skill development is less immediate, requiring training and experience, making it the least advantage.
The main objective of a trade association can best be described as promoting and protecting
Trade associations promote and protect the common interests of their members, such as advocating for favorable policies. Products, producers, or customers are secondary focuses.
The management function of evaluating whether objectives are being achieved is
Controlling involves monitoring performance and ensuring objectives are met through corrective actions. Planning sets goals, directing guides tasks, and organizing structures resources.
In a business organization, the annual operation plan or budget is a form of
An annual operation plan or budget covers one year, making it a short-term plan for guiding daily activities. Long-term plans span years, medium-term plans cover 2-5 years, and casual plans are not standard.
The advantage of delegation is that
Delegation assigns tasks to workers, fostering skill development and preparing them for higher roles. Reduced managerial workload, planning time, or organizational size are secondary or unrelated benefits.
A social responsibility of a business requires the organization to
Social responsibility involves addressing societal issues like sustainability or community development. Parties, local hiring, or welfare centres are specific actions, not the broad requirement.
The existing system of government and the administrative sub-divisions of a country which affect the operations of business is described as
The political environment, including government systems and administrative structures, influences business through policies and regulations. Economic, legal, and social environments affect other aspects.
A warehouse warrant is a document
A warehouse warrant confirms ownership of stored goods, enabling their use as collateral. Sale authorization, transport costs, or tax duties are handled by other documents.
The process of dividing a market into distinct groups with similar needs is known as
Market segmentation divides a market into groups with similar needs for tailored marketing. Penetration increases market share, analysis studies the market, and differentiation creates unique products.
A letter of credit in international trade is used to
A letter of credit ensures the exporter is paid by the importer’s bank once trade terms are met, reducing payment risk. Insurance, loans, or creditworthiness checks are separate processes.
The primary function of the Nigerian Deposit Insurance Corporation (NDIC) is to
The NDIC insures bank deposits, compensating depositors in case of bank failure to promote financial stability. Loans, money supply, and reserves are handled by other institutions.
Which of the following is a feature of a cooperative society?
In a cooperative society, profits are distributed based on members’ patronage, not capital contribution. Liability is limited, membership is open, and management is internal.
The document that specifies the maximum amount of capital a company can raise is the
The memorandum of association specifies the authorized share capital, the maximum capital a company can raise. Articles outline internal rules, the prospectus invites investment, and the certificate confirms incorporation.
The process of converting a cheque into cash immediately is known as
Cashing a cheque involves converting it into cash immediately at a bank, typically for the account holder. Clearing processes payments, discounting advances funds, and encashment is a synonym but less common.
A public limited company raises capital primarily through
A public limited company raises long-term capital through the capital market by issuing shares or bonds. Overdrafts and money markets are short-term, and private loans are less common.
The primary objective of a business plan is to
A business plan outlines objectives, strategies, and projections to secure funding and guide operations. Advertising, profit distribution, and compliance are secondary or unrelated.
Which of the following is a function of the Central Bank of Nigeria?
The Central Bank of Nigeria issues currency and regulates money supply to ensure economic stability. Accepting deposits, providing loans, and managing accounts are commercial bank functions.
Which of the following best describes the term ‘entrepreneur’ in a business context?
An entrepreneur takes risks to start and manage a business, innovating and organizing resources to create value. Auditing, regulating prices, or distributing goods are roles of other professionals.
The concept of ‘economies of scale’ refers to
Economies of scale occur when the average cost per unit decreases as production volume increases, due to efficiencies like bulk purchasing or specialized equipment. Other options describe unrelated or opposite concepts.
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