What is the primary focus of commercial activities?
Commercial activities primarily involve the exchange, distribution, and facilitation of trade in goods and services between producers and consumers, distinguishing commerce from production (manufacturing) or consumption.
Which feature best describes a sole trader’s business?
A sole trader, or sole proprietorship, is owned and managed by one individual who has complete control over decision-making, bears all risks and profits, unlike shared ownership in partnerships or limited liability in companies.
The document that legally establishes a company’s existence is called?
The Certificate of Incorporation is issued by the Corporate Affairs Commission (CAC) upon registration, serving as legal proof that the company exists as a separate legal entity under the Companies and Allied Matters Act (CAMA).
Which of the following is a source of finance for a small business?
Personal savings, or owner's equity, is a common internal source of finance for small businesses due to its accessibility without interest or external approvals, unlike debentures, shares, or bonds which suit larger entities.
The process of attracting customers through product promotion is called?
Advertising is a promotional tool in the marketing mix that communicates product benefits to potential customers via media to create awareness, stimulate demand, and influence purchasing decisions.
Which of the following is a service provided by commercial banks?
Commercial banks provide short-term credit facilities like overdrafts, allowing account holders to withdraw beyond their balance up to a limit, as part of their lending services; issuing currency is a central bank function.
A document listing goods supplied and their prices is known as?
An invoice is a commercial document issued by the seller to the buyer, detailing the goods or services supplied, quantities, prices, and total amount due for payment. (Option B was originally 'Proforma invoice', which is a preliminary quote, not for supplied goods; replaced for validity.)
Which market structure features differentiated products?
Monopolistic competition involves many sellers offering similar but differentiated products (e.g., via branding), allowing some price control, unlike perfect competition's homogeneous products or monopoly's single seller.
The term “CPT” in international trade stands for?
CPT is an Incoterm (International Commercial Terms) where the seller pays for carriage to the named destination, but risk transfers to the buyer once goods are handed to the carrier.
Which of the following is a function of a retailer?
Retailers break bulk from wholesalers and sell in small quantities directly to end consumers for personal use, bridging the gap in the distribution channel.
A business established to provide services to its members is called?
A cooperative society is member-owned and operated to provide goods/services at cost, promoting mutual benefit, unlike profit-driven sole proprietorships or partnerships.
Which of the following is a benefit of effective advertising?
Effective advertising fosters brand recognition and trust, encouraging repeat purchases and long-term customer loyalty, enhancing market share over time.
The body responsible for overseeing banking activities in Nigeria is?
The Central Bank of Nigeria (CBN) regulates and supervises banks to ensure financial stability, monetary policy implementation, and consumer protection in the banking sector.
Which of the following is a feature of a debit card?
A debit card links directly to the user's bank account, deducting funds immediately upon transaction, unlike credit cards which extend credit.
The process of keeping goods safe until needed is called?
Warehousing involves storing goods in safe facilities to protect them from damage, theft, or spoilage until demand requires distribution, aiding inventory management.
Which of the following is a type of property insurance?
Building insurance covers physical structures against perils like fire or collapse, as a form of property insurance; marine covers transit risks, life/health are personal.
The legal document that outlines a partnership’s terms is called?
The Deed of Partnership is a written agreement detailing partners' rights, duties, profit-sharing, and dissolution terms, legally binding under partnership law.
Which of the following is a feature of a private company?
Private companies limit share transfers to maintain control among founders/shareholders, with no public invitation to subscribe shares, unlike public companies.
Goods used in the manufacturing process are known as?
Industrial goods are raw materials, components, or machinery used by manufacturers in production, distinct from consumer goods bought for personal use.
A document that confirms the transport of goods by sea is called?
The Bill of Lading serves as a receipt, contract of carriage, and title document for sea shipments, issued by the carrier to the shipper.
The main goal of a manufacturers’ association is to?
Manufacturers' associations lobby for favorable policies, standardize practices, and advocate for industry growth, protecting collective interests against external threats.
Which of the following is a characteristic of a supermarket?
Supermarkets feature self-service where customers select goods from open shelves, reducing staff costs and enabling wide variety in large spaces.
A document that confirms payment for goods is called?
A receipt is issued by the seller upon payment, acknowledging the transaction and serving as proof for the buyer, unlike an invoice which requests payment.
Which of the following is a function of the capital market?
The capital market enables long-term financing through trading of shares, bonds, and securities on exchanges like the Nigerian Stock Exchange (NSE).
The term “after-sales service” refers to?
After-sales service includes warranties, repairs, and customer support to enhance satisfaction, build loyalty, and encourage future purchases post-transaction.
Which of the following is a type of business risk?
Natural disasters represent insurable physical risks that can disrupt operations, damage assets, or halt production, a key category in business risk management. (All options are risks, but A exemplifies a common external peril.)
A market where shares and bonds are traded is called?
The capital market deals in long-term securities like shares and bonds for investment and corporate financing, contrasting with the money market's short-term instruments.
Which of the following is a role of a customs service?
Customs services enforce border controls, collect tariffs and duties on imports/exports, and facilitate legitimate trade while preventing smuggling.
The term “carriage inwards” refers to?
Carriage inwards is the transportation cost borne by the buyer to receive purchased goods, added to the cost of goods sold in accounting.
Which of the following is a feature of a multiple shop?
Multiple shops, or chain stores, operate branches under a unified brand for consistency, economies of scale, and centralized management (e.g., Shoprite).
A document that proves goods are stored in a warehouse is?
A warehouse warrant is a document issued by the warehouseman certifying ownership and storage of goods, often used as collateral for loans.
Which of the following is an advantage of a public limited company?
Public limited companies can raise substantial capital through public share issues on stock exchanges, enabling expansion, unlike private entities with limited funding sources.
The term used to describe goods sent back to a supplier is?
Returns outward are goods returned by the buyer to the supplier due to defects or excess, reducing the buyer's purchase cost in accounting records.
Which of the following is a role of the Standards Organisation of Nigeria?
The Standards Organisation of Nigeria (SON) sets and enforces quality standards for products to protect consumers, promote fair trade, and enhance competitiveness.
A business that extracts raw materials from nature is part of the?
Primary industries involve extraction and production of raw materials (e.g., mining, agriculture), forming the base of the economic chain before processing.
Which of the following is a form of sales promotion?
Sales promotions like buy-one-get-one-free are short-term incentives to boost immediate sales and clear inventory, part of the promotional mix distinct from advertising or PR.
The term “liquid capital” refers to?
Liquid capital, or liquidity, includes cash and assets quickly convertible to cash (e.g., marketable securities) to meet short-term obligations without loss.
Which of the following is a feature of a cooperative society?
Cooperatives are democratically owned and controlled by members who share profits based on participation, focusing on service rather than profit maximization.
A document used to confirm goods dispatched is called?
An advice note (or dispatch note) informs the buyer of goods shipped, including details for verification upon receipt, preceding the invoice.
Which of the following is a function of the marketing department?
The marketing department researches consumer needs, analyzes market trends, and develops strategies to identify opportunities and target audiences effectively.
Now practice in exam mode
You've studied the answers — now test yourself under real exam conditions with the timer running.
Start WAEC Commerce 2020 Quiz