WAEC Commerce 2021
Questions & Answers

Commerce plays a pivotal role in economic development by facilitating the exchange of goods and services between producers and consumers, thereby promoting specialization, efficiency, and overall growth in the economy.

A sole proprietorship is characterized by single ownership where one individual owns and controls the business, bearing all profits and losses personally, without limited liability or separate legal entity status.

The Memorandum of Association defines the company's external scope, including its name, objectives, registered office, liability, and capital structure, serving as its charter.

Bank loans typically provide medium-term finance (1-5 years) for business expansion or equipment purchase, unlike long-term share capital, short-term trade credit, or internal retained earnings.

Marketing involves researching market needs, promoting products, and attracting customers to ensure profitable exchange, encompassing the entire process from identification to satisfaction.

Commercial banks primarily accept deposits from individuals and businesses, providing a safe place for savings and using these funds for lending, which is central to their operations.

An invoice is a commercial document issued by the seller to the buyer, listing the goods or services provided, quantities, prices, and payment terms.

A monopsony is a market structure with one buyer and many sellers, giving the buyer significant control over prices, as opposed to a monopoly which has one seller.

Under Incoterms, DDP (Delivered Duty Paid) means the seller bears all costs and risks, including duties and taxes, until the goods are delivered to the buyer's premises.

Wholesalers break bulk by purchasing large quantities from producers and selling smaller quantities to retailers, reducing distribution costs and providing storage.

Public corporations are government-owned entities established to provide essential public services like electricity or transportation, operating independently but accountable to the state.

Advertising promotes brand awareness by informing potential customers about products, features, and benefits, thereby increasing demand and market share.

The Corporate Affairs Commission (CAC) is the regulatory body responsible for the incorporation, registration, and regulation of companies and business names in Nigeria.

Current accounts are designed for businesses and frequent transactions, allowing unlimited withdrawals and deposits without interest, unlike savings accounts.

Warehousing involves storing goods in warehouses to bridge the gap between production and consumption, ensuring availability when needed.

Cargo insurance is a subset of marine insurance that covers loss or damage to goods during sea transit, protecting against perils of the sea.

The Partnership Deed is a written agreement outlining partners' rights, duties, profit-sharing ratios, and dispute resolution mechanisms.

Private limited companies restrict share transfers to maintain control among members and do not invite public subscriptions for shares.

Industrial goods are materials or equipment used by manufacturers in the production process, such as raw materials or machinery parts.

The Bill of Lading serves as a receipt for shipped goods, evidence of the contract of carriage, and document of title to the goods.

Chambers of commerce promote the interests of businesses by fostering trade, providing networking opportunities, and influencing policy to support industry growth.

Departmental stores are large retail outlets offering a wide variety of goods organized into separate departments, catering to diverse consumer needs.

A delivery note accompanies goods during delivery, listing items supplied for verification upon receipt, without payment details.

The capital market facilitates the buying and selling of long-term securities like shares and bonds, enabling companies to raise long-term capital.

Labeling involves attaching labels to products that provide essential information such as ingredients, usage instructions, and expiry dates to inform consumers.

Pure risks involve only the possibility of loss or no loss (e.g., fire outbreak), insurable unlike speculative risks which offer potential gain or loss.

The wholesale market involves buying and selling goods in large quantities to intermediaries like retailers, typically not to end consumers.

Trade associations represent and protect the collective interests of members in their industry, through lobbying, standardization, and information sharing.

Freight forward (or freight collect) indicates that the buyer is responsible for paying the transportation costs from the point of shipment onward.

Hypermarkets are massive self-service retail stores offering a wide range of products under one roof, combining supermarket and department store elements.

A warehouse warrant is a document issued by a warehouseman certifying that goods have been deposited and can be used as collateral for loans.

In a partnership, risks and responsibilities are shared among partners, pooling resources and expertise for better management and capital access.

A discount is a reduction in the listed price of a product or service offered to encourage quick payment or bulk purchase.

The Nigerian Export Promotion Council (NEPC) assists exporters by providing market information, training, and incentives to boost non-oil exports.

The tertiary industry comprises service-based sectors like banking, retail, and transportation that support the primary and secondary sectors.

Billboard advertising is a form of outdoor advertising using large posters on billboards to reach a wide audience in high-traffic areas.

Net profit is calculated as total revenue from sales minus all expenses, including operating costs, taxes, and interest, representing the bottom line.

Public limited companies offer limited liability to shareholders and can raise capital by issuing shares to the public through stock exchanges.

An inquiry (or enquiry) is a formal request for information about products, prices, terms, and availability before placing an order.

The purchasing department is responsible for sourcing, negotiating, and procuring raw materials and supplies needed for production at the best possible terms.