JAMB Commerce

B: ocean liners

Ocean liners provide regular services across oceans according to schedules. Tramp vessels seek cargo without a fixed regular timetable; coastal liners serve coastal rather than ocean-crossing routes.

A: gambling

Gambling deliberately creates a speculative chance of gain or loss. Ordinary insurance covers specified fortuitous losses rather than reimbursing a person’s gambling losses.

C: system software

An operating system is system software: it manages hardware and provides services for applications. A flowchart represents a process, and syntax describes the rules for writing a language.

A: Insurance

Insurance provides financial protection against specified uncertain events. Reinsurance is insurance obtained by an insurer, and a warranty is a promise about a product or service.

A: facilitating interaction between producers and consumers

Communication allows producers and consumers to exchange information about needs, products and orders. Physical movement is transport and safe storage is warehousing.

A: National Council on Privatization

The National Council on Privatisation makes policy decisions, while the Bureau of Public Enterprises implements the programme as its secretariat. These are distinct policy and implementation roles.

B: Burkina Faso, Guinea and Nigeria

Burkina Faso, Guinea and Nigeria are all members of the Niger basin organisation. The other options contain Ghana or The Gambia, which are not members.

C: redress

Redress means access to a remedy when consumer rights are breached, such as replacement or refund where appropriate. Consumers have no general right to free samples, credit or a share of business profits.

B: independence

ECOWAS is a community of sovereign states. Independence is the relevant statehood condition among the options; no particular population or land area is the general membership criterion.

C: land and water pollution

Dumped waste and oil can contaminate soil, while sewage and runoff pollute rivers and other water bodies. Land and water pollution together describe the principal contamination routes listed.

B: bank overdrafts

A bank overdraft provides business credit by allowing an account to go below its available balance up to an agreed limit. It is a normal short-term financing source alongside the other sources in the question.

A: bank rates

In traditional monetary terminology, the bank rate is the central bank’s lending or rediscount rate for commercial banks. Interest rate is the wider category rather than this specific named rate.

C: bills of exchange and promissory notes

A bill of exchange orders payment and a promissory note promises payment. Both can embody credit obligations, unlike vouchers and account statements, which primarily record transactions.

D: quoted shares.

Quoted shares are shares listed and priced on a stock exchange. Issued shares need not be exchange-listed, and deferred describes rights or priority rather than listing status.

A: Selling the shares and stocks of companies to be privatised

The capital market provides a mechanism for selling ownership securities to investors. In privatisation this enables government shareholdings to pass to private investors through the offering process.

B: letters of credit

A documentary credit is a letter of credit under which the bank undertakes payment against complying documents. A credit note adjusts an invoice and a bank draft is a different payment instrument.

C: registered share capital

Under traditional authorised-capital terminology, registered capital is the maximum capital recorded in the company’s constitutional documents. Issued, called-up and paid-up amounts describe different stages.

A: ultra vires

Ultra vires means beyond the powers. In the traditional objects-clause doctrine it describes an act outside the company’s stated objects, unlike caveat emptor or utmost good faith.

D: consolidation.

Consolidation can concentrate activity in fewer locations by closing inactive operations. Diversification expands into additional activities and rejuvenation attempts to revive an operation.

A: Conglomerate merger

Textiles, cement and leather tanning are different industries. Combining businesses across those unrelated lines is a conglomerate merger rather than joining competitors at one stage or successive stages of one chain.

D: construction

Branch i groups industrial occupations, including extraction and the other production branches. Construction is an industrial activity; commerce, exchange and finance belong elsewhere in this classification.

A: Aids to trade

Branch ii is commerce, whose two major divisions are trade and aids to trade. Therefore v is aids to trade, the services such as transport and banking that facilitate exchange.

C: Public company limited by shares

PLC denotes a public limited company. The public designation distinguishes it from a private company limited by shares; a company limited by guarantee is a different form.

D: distribution

Commerce concerns getting goods and services from producers to users through trade and its supporting activities. Distribution is the broad category here, including exchange, transport and storage.

A: resources required for the provision of goods and services

Factors of production are the resources used to produce goods and services, traditionally land, labour, capital and enterprise. They are not simply government monetary instruments or policy-making steps.

C: Warehouse services

Warehousing stores goods when supply is plentiful and releases them when needed. This can smooth availability over time, although it cannot guarantee elimination of every shortage.

C: Mutual schemes

Thrift societies pool members’ savings and lend from those common funds under agreed rules. The members support one another through that shared arrangement, making it mutual.

B: a requisition

A requisition is an internal request for goods to be bought or issued from stock. A quotation states a proposed price, while a tender is a formal offer to supply.

C: an indent

An indent is an order specifying goods an importer wants from an overseas supplier. A manifest lists cargo carried by a ship, and a bill of lading records receipt and shipment of cargo.

B: Unequal distribution of natural resources

Countries have different resource endowments, which create opportunities to specialise and exchange goods. Differences, rather than uniform production conditions, help explain international trade.

A: Trade discounts

A trade discount reduces the list price for intermediaries such as wholesalers or retailers. It differs from a cash discount for prompt payment and a seasonal discount tied to the time of year.

A: Nigerian Bar Association

The Nigerian Bar Association represents lawyers, who provide professional legal services. The other named associations represent mining, agricultural production or manufacturing activities.

C: title

Title is the legal ownership right over goods or property. A proxy concerns authority to act for someone else, while a certificate is a document that may provide evidence of a particular right.

D: protect and promote the interests of members

These associations collectively represent their members and promote their business interests. They are not formed primarily to earn profits for themselves or act as consumer organisations.

A: ₦42,500

The list total is 200×₦1,000 + 150×₦500 + 50×₦3,000 = ₦425,000. The trade discount alone is 10% of this total, which is ₦42,500.

D: Coordinate the activities of all the seaports in the country

The Nigerian Ports Authority’s remit centres on Nigeria’s ports and their facilities and operations. Control of all goods and services entering or leaving the country is much broader than its port remit.

B: Trade

Trade is the exchange, purchase or sale of goods and services. Industry concerns production, a tariff is a charge on trade, and marketing includes wider activities around customers and products.

C: Premium

A premium is the payment the policyholder makes for insurance cover. Commission remunerates an intermediary, and surrender value is an amount potentially paid when certain policies end early.

A: Hull insurance

Hull insurance protects the vessel and machinery and may include collision liability under its terms. Cargo insurance protects the goods carried, while freight insurance concerns freight earnings.

C: Motivation

Motivation concerns what energises and sustains effort, including its intensity. Planning sets objectives and controlling compares results, while coordination aligns activities.

D: Organizing

Organising divides work into jobs and departments and allocates authority. Staffing supplies people for those roles; leading and directing guide people as they carry out the work.

A: Receiver

In the sender-channel-receiver model, the receiver is the destination of the message. The sender originates it and the encoder converts it into symbols for transmission.

A: Debenture holders

Debenture holders are creditors, so their debt claims rank ahead of shareholders’ capital claims. This comparison is among the listed groups; it does not mean debenture holders outrank every other possible claim.

A: Joint venture

A joint venture brings parties together for a defined undertaking or project. Its limited purpose distinguishes it from an organisation established to conduct an ongoing general business.

D: Natural resources

Natural resources are supplied by nature and are relatively fixed in the basic factor-of-production model. Capital can be produced and the supply of skills and enterprise can be developed.

D: Agency

Agency is the relationship in which an authorised agent acts for a principal, including entering contracts on the principal’s behalf. The term identifies the representative role itself.

A: Faster and more accurate manner

Correctly programmed computers perform repetitive calculations quickly and consistently, reducing manual arithmetic errors. They still depend on correct input and instructions and can reproduce errors if either is wrong.

B: Micro-processor

The microprocessor executes program instructions and performs the required processing operations. Software supplies the instructions, while a mouse is an input device and a hard disk provides storage.

A: Economic environment

Markets, business conditions and financial systems form part of the economic environment. Political, cultural and technological factors are other environmental categories.

A: FORTRAN

FORTRAN was developed for formula-based scientific and engineering computation. COBOL is associated with business data processing, while BASIC was designed as an accessible general-purpose language.

A: Securities and exchange commission

Nigeria’s Securities and Exchange Commission registers securities offered to investors. Stock-exchange listing is a related but different process, and deposit insurance is the NDIC’s role.

A: ₦250,000

Owner’s equity is paid-up capital plus retained earnings: ₦200,000 + ₦50,000 = ₦250,000. It also equals assets ₦420,000 less the ₦170,000 owed to creditors and other payees.

B: 1.85:1

Current assets are debtors ₦50,000 + stocks ₦145,000 + bank ₦120,000 = ₦315,000. Current liabilities total ₦170,000, so the ratio is 315,000/170,000 = 1.85:1 to two decimal places.

B: Central bank

A central bank can act as banker and fiscal agent to government, including public-debt operations. This is a central-banking function among the listed bank types, without implying exclusive control of all debt management.

D: bureau of public enterprises

The Bureau of Public Enterprises implements the government’s privatisation programme and serves the National Council on Privatisation. The earlier technical committee had been replaced before the 2002 examination.

A: Nigeria

Nigeria is a member of the Lake Chad Basin Commission. Benin and Mali are not members, so every offered pair containing either of those countries is incorrect.

A: Standards Organisation of Nigeria

The Standards Organisation of Nigeria prepares and promotes standards and certifies products. The other organisations are trade or consumer associations rather than the national standardisation agency.

A: increasing efficiency and making the enterprises self-sufficient

Commercialisation applies business principles to public enterprises so they operate efficiently and cover their costs. It does not simply mean advertising or selling more products.

D: copyright

Copyright is the established term for the rights protecting an author’s original literary and other creative works. A patent protects inventions rather than the expression in a written work.

C: lump sum benefit

An endowment policy pays its agreed benefit at maturity or on earlier death, according to the policy. This is a lump-sum benefit; a premium is money paid for cover and surrender value concerns early termination.

D: teleprinter

A teleprinter sends and receives typed messages over a telex connection. A fax sends document images, a Dictaphone records speech, and radar detects objects using radio waves.

B: proximate cause

Proximate cause identifies the effective cause of the loss and whether it is an insured peril. Contribution divides liability among insurers; subrogation concerns recovery rights after payment.

D: Slip

A collection slip notifies the addressee that an item is waiting at the post office. A counterfoil is the retained portion of a document, while an express label identifies a service rather than collection readiness.

A: cover note

A cover note provides temporary evidence of insurance while the full policy is being prepared. A proposal form is the application for cover, so it does not itself confirm that insurance has begun.

A: long-term securities are sold

In the traditional money-market and capital-market distinction, a stock exchange trades long-term securities such as shares and bonds. Short-term borrowing instruments belong primarily to the money market.

B: III, V, VI and VIII

Transport, insurance, banking and communication facilitate buying and selling, so they are aids to trade. Retail, wholesale, import and export are forms of trade itself.

C: line and staff structure

A line-and-staff structure combines line managers with specialist advisers who support them. Pure line structure lacks that separate advisory staff relationship.

C: nominal capital

Under the authorised-capital terminology used in this question, nominal capital is the maximum stated share capital the company is permitted to issue. Issued, called-up and paid-up capital describe later stages.

A: staffing

Staffing covers obtaining, placing and retaining the people an organisation needs. Recruitment and selection are narrower steps within that wider management function.

B: jobbers

In traditional stock-exchange terminology, jobbers deal in securities on their own account. Brokers act for clients, while bulls are identified by expectations of rising prices rather than that market-making role.

B: cement factory

Cement production uses large amounts of bulky limestone and other mineral inputs. Locating near the quarry reduces the cost of moving these inputs, making cement a classic raw-material-oriented industry.

B: inscribed securities

In the traditional distinction, inscribed stock records ownership in a register without issuing a negotiable certificate. Bearer securities instead rely on possession of the instrument.

B: errors and omissions excepted

E&OE expands to errors and omissions excepted. It indicates that an accidental error or omission may be corrected; it is not a calculation instruction or a guarantee of accuracy.

D: planning and development of the product

Product planning and development concern the product element itself. Advertising belongs to promotion, distribution channels to place, and the amount charged to price.

B: Possession of goods before full payment

Hire purchase lets a customer possess and use goods while paying instalments, before the whole price has been paid. Ownership normally follows completion of the agreed conditions; low interest is not guaranteed.

B: trade

Trade is the buying and selling at the centre of commerce. Other commercial activities such as transport, banking and insurance support the exchange of goods and services.

A: quantity

In the basic economic model, the total supply of land is treated as fixed. Individual locations can differ in quality, nature and cost, so those characteristics are not assumed constant.

B: direct services,

A lawyer advising or representing a client provides a direct professional service to that client. This differs from the traditional indirect-service category of public administration.

C: a liquidator

A liquidator is appointed to wind up a company, realise its assets and distribute the available funds according to the applicable priorities. A broker or auctioneer may assist with sales but does not hold that overall role.

C: mortgage bond

A mortgage bond is backed by specified property as security. The collateral provides protection for the lender; a warrant instead gives a right to acquire securities and is not a mortgage-backed borrowing instrument.

C: II & III

Retained earnings originate within the company, and unpaid accrued taxes temporarily leave cash available within it. A shareholder’s personal savings enter from outside the separate company.

C: Working capital

Working capital is current assets minus current liabilities. It measures the net resources available for short-term operations, whereas quick and liquidity ratios compare amounts rather than subtract them.

B: ₦7,500

The list value is 1,500 × ₦100 = ₦150,000. The trade discount alone is 5% of that amount, or ₦7,500; quantity and prompt-payment discounts are separate reductions.

C: Another customer

A bank giro transfers money from one customer’s account to another customer’s account. The banks execute the payment, while the underlying debt is settled between the customers.

B: utility of goods

Storage creates time utility by preserving goods until they are needed. It does not necessarily increase their physical quantity, improve their quality or raise their selling price.

A: Compensations are paid out of a common fund

Premiums from many policyholders form a common fund from which covered claims can be paid. Pooling spreads the financial burden of individual losses across the insured group.

D: RAM

RAM temporarily holds the programs and data being used during processing. It is working memory; ROM contains persistent instructions and a CD-ROM is an optical storage medium.

C: Adamu and Musa

Musa rented the room to Adamu, so those two are the original contracting parties. Audu and Jacob later contributed money, but paying part of the price does not by itself substitute them as the tenants.

B: organising

Organising groups activities and assigns responsibilities and authority. Creating departments is part of that arrangement, whereas directing guides people and controlling checks results.

A: The lines of authority are vertical

Line authority follows a vertical chain from a superior to subordinates. Each person reports through that chain; horizontal relationships do not define the line-authority structure.

C: trust and cartel

A cartel coordinates selected policies while its member firms retain their separate identity. A trust combines control more closely, so the degree of independence is a key distinction in the traditional classification.

B: ₦575,000

Fixed capital is land ₦200,000, buildings ₦150,000, machinery ₦200,000, implements ₦20,000 and fittings ₦5,000. These long-term assets total ₦575,000.

C: ₦235,000

Circulating capital here is current assets: ₦100,000 materials + ₦50,000 finished goods + ₦20,000 debtors + ₦15,000 bills receivable + ₦45,000 bank + ₦5,000 cash = ₦235,000.

D: ordinary share holders

Ordinary shareholders hold the residual ownership claim. They receive only what remains after creditors and any preferential capital entitlements have been satisfied in liquidation.

D: Uberrimae fidei

Uberrimae fidei means utmost good faith. In the traditional insurance principle, material information affecting the risk must be disclosed so the insurer can assess the proposed cover.

D: Analogue computer

An analogue computer represents quantities through continuously varying physical signals. A digital computer instead processes discrete values, while a hybrid combines analogue and digital techniques.

C: passenger liners and cargo liners

Ocean liners follow scheduled services and can be classified by their main cargo as passenger or cargo liners. Tramp shipping instead operates without the same regular liner schedule.

D: ₦320

The average clause reduces the claim in the proportion insured to actual value. The property is insured for 800/1,000 = 80%, so payment on a ₦400 loss is ₦320.

C: issues currencies

In Nigeria, issuing legal-tender currency is a central-bank function. Commercial banks provide payments, foreign-exchange services and bill discounting, but do not issue the national currency.

A: Poste restante

Poste restante holds mail at a post office for collection by the addressee. It serves travellers or others without a fixed local address, rather than providing a home-delivery address.

C: document specifying quantity, description, prices and total value of purchases

An invoice itemises the goods or services supplied, quantities, unit prices and total amount payable. It requests or records a charge and does not by itself prove payment as a receipt does.

A: marketing mix relationship

Product, price, place and promotion are the four marketing-mix elements. Arranging them around the customer shows that each should work together to meet the target customer’s needs.

C: Sales promotion

Sales promotion uses short-term incentives such as gifts with purchases to encourage buying. The free caps and bags are the incentive, so sales promotion is the specific technique within the wider marketing strategy.

C: Persuasive advertising

Persuasive advertising attempts to convince customers to buy. Informative advertising primarily provides facts; the stated aim of persuasion directly identifies the persuasive category.

A: Allows sellers to perceive buyers’ needs

Direct conversation lets a salesperson discover the buyer’s needs and adapt the presentation. Personal selling does not guarantee immediate sales or remove the need to obey applicable rules.

B: a treaty

The participating states established ECOWAS through the Treaty of Lagos in 1975. A treaty is an agreement between states, unlike a domestic decree or act of parliament.

A: Exchange information and negotiate as a pressure group

Trade associations bring members together to exchange information and represent their common interests. Collective negotiation is the broad representative purpose; research and government contacts support it.

D: shareholding

Nationalisation transfers ownership to the state, whereas indigenisation transfers ownership or participation to local citizens. Their direct distinction is therefore the identity and pattern of shareholding.

C: form utility

Form utility is created by changing materials into a more useful product, such as turning timber into furniture. Transport creates place utility and storage can create time utility.

A: Complex and organized society

Trade allows people and businesses to specialise and exchange the resulting goods and services. This supports a complex organised society without requiring each household to produce everything it needs.

C: shareholders

Shareholders are the residual owners. Once all creditors and winding-up expenses have been settled, any surplus is distributed to shareholders rather than retained by the person administering the liquidation.

B: ₦53.5 million

Profit before tax subtracts trading costs and operating expenses but not tax. Thus ₦286.5 million − ₦147.5 million − ₦85.5 million = ₦53.5 million.

B: creditor

Okon is the named person entitled to receive the payment, making him the creditor in the payment relationship shown. The document does not establish that he is specifically an exporter or importer.

A: bill of exchange

The wording orders payment of a specified sum to a named person at a future date, which identifies a bill of exchange. A promissory note instead contains the maker’s promise to pay.

C: The materials should be supplied by Benson

Ade’s price after discount is ₦80. Benson’s is ₦100 × 0.70 × 0.90 = ₦63 when the cash-discount conditions are met, making Benson the cheaper supplier.

C: bank rate

In traditional central-bank terminology, bank rate is the rate charged for discounting eligible first-class bills. It is a specific central-bank rate rather than any commercial interest rate.

B: an insurance company can stand in place of the insured in dealing with third party

After compensating an insured loss, an insurer may exercise the insured’s recovery rights against a responsible third party. This is subrogation and helps prevent recovery twice for the same loss.

B: a bonded warehouse

Bonded warehouses hold goods under customs control while duties remain unpaid. Requiring duty payment before release therefore points to bonded storage rather than an ordinary commercial warehouse.

A: the input, the processor and the output units

The input–processing–output model describes receiving data, working on it and presenting results. BASIC, COBOL and Pascal are programming languages, not the three functional units in that model.

B: Debugging

Debugging identifies and removes faults in a program. A loop repeats instructions, a console is an interface and a dump records stored data for inspection rather than itself removing faults.

B: is entitled to the next dividend accruing from the shares

Cum dividend means the share is sold with entitlement to the forthcoming dividend. It contrasts with ex dividend, when that entitlement remains with the seller.

B: customer satisfaction

A customer-oriented business philosophy evaluates success through meeting customers’ needs and satisfaction. Product quality, sales volume and public relations support that aim rather than replace it.

A: simplification

Simplification reduces unnecessary variety in a product line while retaining usefulness and durability. Standardisation instead establishes common specifications or uniform standards.

D: buyer.

Customer-oriented marketing starts with buyers’ needs and preferences. Products and selling activities are organised around serving those buyers, so the buyer is the focal point.

A: invitation to treat

Ordinary display of goods on shop shelves invites customers to make an offer to buy. It is generally an invitation to treat; the sale is formed when the resulting offer is accepted.

A: nationalization

Nationalisation brings a business into state ownership and control. Commercialisation changes operating principles, while privatisation transfers ownership in the opposite direction to private investors.

C: indemnify Q

A principal indemnifies an agent for lawful and reasonable expenses incurred in carrying out authorised duties. This reimbursement protects the agent from bearing those costs personally; remuneration is payment for the service itself.

C: consideration

Consideration is the value exchanged for a contractual promise. It may be money, an act or another promise; the offeree is the recipient of an offer, not the value exchanged.

B: advice

A staff role supplies specialist advice and support to line managers. Its defining relationship is advisory, unlike the direct command exercised through line authority.

C: marketing department

Marketing directly contributes to the manufacturing business’s central activity of selling its output. Legal, property and public-relations departments generally provide specialist supporting staff services.

D: Directing.

Directing includes leading, communicating with and motivating employees to work towards objectives. Staffing concerns obtaining personnel, while controlling evaluates actual performance against targets.

A: The Republic of Guinea, Burkina Faso and Nigeria

Guinea, Burkina Faso and Nigeria all belong to the Niger basin organisation. The other groups each include Ghana or Liberia, which are not members of that organisation.

C: primary industries

Extractive activities obtain resources directly from nature, such as minerals or timber. They belong to primary industry, supplying materials that secondary manufacturing can transform.

C: limited partnership

The business combines general partners with a partner whose liability is limited to his investment. That combination is characteristic of a limited partnership rather than an ordinary general partnership.

B: United Africa Company Nigeria Plc

UAC combines businesses across different product and service sectors, making it a diversified group or conglomerate. The other examples are identified with electricity, rail transport or banking respectively.

A: 4:1

Current assets total stock ₦1,250 + debtors ₦480 + bank ₦3,000 + cash ₦20 = ₦4,750. Current liabilities are ₦1,187.50, giving ₦4,750 ÷ ₦1,187.50 = 4:1.

B: liquid capital

Liquid capital is readily available in money or a form easily converted for another use. It differs from capital tied up in machinery or other assets that cannot quickly be redirected.

B: 33.3%

Gross profit is ₦15,000 − ₦10,000 = ₦5,000. Divide by sales, not cost: ₦5,000 ÷ ₦15,000 × 100 = 33.3% to one decimal place.

C: imported and then re-exported

Entrepot trade involves importing goods and subsequently exporting them again. Merely holding goods while duties are pending is customs storage, not by itself re-export trade.

B: Trade discount

The retailer receives a reduction from the listed retail price because he buys for resale. This is a trade discount; the question gives no early-payment, seasonal or quantity condition.

D: free on board service.

Free on board is a commercial shipping term about delivery responsibilities. It is not a postal delivery service category like express or recorded delivery.

C: total loss and partial loss

Marine losses are broadly classified as total or partial. Total loss may be actual or constructive, while particular and general average concern classifications within marine-loss treatment.

D: damage claims equal to the loss suffered.

Indemnity aims to restore the insured to the financial position before the covered loss, rather than create a profit. Actual payment remains subject to the policy’s cover, limits and excess.

C: Nigerian Deposit Insurance Corporation

NDIC has bank-resolution responsibilities and can participate in intervention in distressed insured institutions. The other listed bodies are development-finance institutions rather than Nigeria’s deposit insurer.

D: stocks, shares, bonds and warrants.

Stocks, shares, bonds and warrants are capital-market securities traded on exchanges. Currency notes, money orders and ordinary payment instruments are not the comparable set of exchange investments.

B: be consumer oriented

The marketing concept begins with understanding and meeting customer needs. Advertising, staff training and outlets can support this purpose, but consumer orientation is the underlying principle.

B: Market penetration

The launch price of ₦4 is below competing products at ₦4.50 and only slightly above cost. This low introductory pricing is consistent with penetration pricing to attract buyers and build market share.

B: personal selling

Personal selling uses direct conversation with prospective buyers to explain the offer, answer questions and seek a sale. Branding and packaging identify or present a product rather than conduct that conversation.

C: public relations

Public relations manages an organisation’s reputation and relationships with its publics. Activities promoting its general image therefore fit public relations rather than a short-term sales incentive.

A: getting things done through people

As a process, management means accomplishing objectives through people and coordinated resources. The term may also name a group of managers, but that is a different use of the word.

A: by products, function or territories

Products, functions and geographic territories are recognised bases for grouping business activities. Each aligns responsibilities with work or markets rather than merely with individual personalities.

D: Material → production → product

Materials enter from the external environment, production transforms them inside the organisation and products leave for external users. This is the input–transformation–output sequence.

A: civil servants

Civil servants provide public services through government institutions, traditionally classified as indirect services. A family doctor, household servant or entertainer supplies a service directly to an individual client.

D: promoters.

Promoters establish a business and define its initial purpose and objectives. Workers, society and government can influence those choices but do not normally act as the founders setting them.

B: Professionals are involved

Professional partnerships allow practitioners to combine expertise, responsibilities and resources. This is why professions are a common setting for partnerships; friendship alone does not establish business suitability.

C: co-operative

Primary cooperatives use democratic member control, commonly one member, one vote. Voting power is therefore not simply proportional to share ownership as in an ordinary share company.

D: ordinary shares.

Ordinary-share dividends depend on profits and the dividend decision, so their amount can vary. The standard comparison is with fixed-interest debt and fixed-rate preference dividends.

D: rents.

A lease grants use of an asset for an agreed period in return for rental payments. The lessee pays for use rather than earning wages or receiving a share of the owner’s profit.

B: authorized capital

Authorised capital is the historical constitutional ceiling on share capital a company may issue. Issued, called-up and paid-up capital describe later stages of shares actually offered and paid for.

D: carriage outward.

Carriage outward is the cost of sending sold goods to customers. Carriage inward instead brings purchased goods into the business and may form part of their acquisition cost.

A: bill of lading,

A bill of lading acknowledges cargo received by a carrier and can function as a document of title. A certificate of origin states where goods originate and does not confer title.

D: Load and unload ships

Stevedores handle cargo at ports, loading it onto ships and unloading it on arrival. They are cargo-handling workers rather than customs-duty collectors or import purchasers.

C: A reduction in the catalogue price of an article, cash discount is a reduction in the invoice value

Trade discount reduces the list or catalogue price before invoicing. Cash discount rewards settlement within agreed terms and reduces the invoiced amount the buyer must pay.

B: demurrage charges

Demurrage is the charge for exceeding the agreed time allowed for loading or unloading. It compensates for additional detention of the vessel beyond the permitted laytime.

D: spread individual losses over all covered participants.

Insurance pools contributions from many covered participants to meet losses suffered by some. This spreads the financial burden of individual insured events rather than promising that no loss will occur.

D: offer many types of services.

The comparison with a department store refers to variety: commercial banks provide deposits, payments, lending and other services. It does not simply refer to their branch count or city locations.

D: place

Place in the marketing mix concerns distribution and availability. Delivering newspapers to homes and streets determines how the product reaches buyers rather than changing its price or features.

A: type of demand

Industrial demand is often derived from demand for the products firms make, while consumer demand relates to final use. This difference in the nature of demand helps distinguish the two markets.

B: common interest

A trade association represents businesses in the same trade or industry and protects their shared interests. It is distinct from a consumer association, whose central role is representing buyers.

D: controlling.

Controlling compares actual results with objectives or standards and identifies corrective action. Planning sets the objectives, while organising and directing arrange and guide the work.

D: short-term plan.

An annual operating budget covers the coming year, so it is normally a short-term plan. It translates broader strategy into near-term targets, activities and resource allocations.

C: address themselves to issues relating to the society.

Social responsibility concerns how a business responds to society and the effects of its operations. It is broader than a particular welfare centre or party and does not require hiring only local workers.

C: Political environment

The political environment includes the system of government and administrative arrangements affecting businesses. The legal environment focuses more specifically on laws and their enforcement.

D: Manufacturing, extraction and construction.

Manufacturing makes products, extraction obtains natural resources and construction builds structures. All three are industrial activities; banking, insurance and commerce provide services supporting economic exchange.

A: bricklaying

Bricklaying creates walls and other parts of buildings, making it a construction activity. Shoemaking, blacksmithing and car assembly instead manufacture or work on movable products.

C: in an equal proportion, irrespective of partners’ capital contributions

Under the default Partnership Act rule, partners share profits equally unless they agree otherwise. Unequal capital contributions do not by themselves replace that equal-sharing rule.

A: Rights and obligations of directors

Articles set rules for the company’s internal governance, including directors’ responsibilities and procedures. The traditional memorandum describes its constitutional objects, capital and liability framework.

B: horizontal integration

Combining companies making the same type of product at the same stage is horizontal integration. A vertical merger instead links different stages such as manufacturing and distribution.

C: the company’s property becomes distinguished from that of its member

Incorporation establishes a legal entity distinct from its members. Company property belongs to that entity rather than directly to the shareholders, and the company can both sue and be sued.

C: take quick decisions

A sole trader does not need partner or board agreement for routine business choices. That concentrated control allows quick decisions, although the owner must also bear responsibility for them.

C: highly geared

Gearing compares debt finance with owners’ equity. Heavy reliance on loans gives high gearing and greater debt-service commitments, but it does not automatically mean the business is bankrupt.

C: ratio

The current ratio is current assets divided by current liabilities. It compares short-term resources with short-term obligations; it is a ratio rather than a money balance.

D: issue of shares to shareholders on favourable terms.

A rights issue offers existing shareholders the opportunity to buy additional shares, commonly at a favourable subscription price. It concerns new capital, not merely voting rights or an offer only to directors.

B: ₦95,000

Goods available cost opening stock ₦40,000 plus purchases ₦115,000 = ₦155,000. Deduct closing stock ₦60,000 to obtain cost of goods sold of ₦95,000.

A: Wholesalers, retailers and agents.

Wholesalers, retailers and agents act between producers and final buyers in distribution. Manufacturers create the goods and consumers use them, so those two groups are not middlemen.

A: customs draw back

Customs drawback is repayment of qualifying import duties when the relevant goods are subsequently exported. It is a duty-refund mechanism rather than an export royalty paid for resource rights.

C: Refinancing and Rediscounting Facility

RRF expands to Refinancing and Rediscounting Facility. The name describes financing support through refinancing and rediscounting, rather than bookkeeping, recording or reinvestment.

B: issued by a shipping company giving details of charges

A freight note sets out the carrier’s transport charges. It concerns payment for carriage, rather than the purchase price of the goods or a promise by the importer to pay the supplier later.

B: ₦585.00

Payment in month two falls after the one-month 5% deadline but within the three-month 2½% period. Discount is ₦600 × 0.025 = ₦15, leaving ₦585 payable.

A: immediate delivery

A spot transaction concerns goods available for immediate or prompt delivery. A forward transaction instead agrees delivery at a future date, so long-term or year-end delivery is not the defining feature.

A: convenient and flexible

Road transport can change routes and reach individual premises, giving flexible door-to-door service. Its cost, speed and safety depend on the journey, so those are not universal advantages.

C: re-insurance

Reinsurance transfers part of an insurer’s accepted risk to another insurer. It helps spread exposure to large claims; contribution instead concerns overlapping policies covering the same loss.

C: International Union of Credit and Investment Insurers

The Berne Union is the International Union of Credit and Investment Insurers. Its members work in export-credit and investment insurance, rather than forming a consumer credit union.

B: Segmentation

Market segmentation divides potential customers into identifiable groups with different needs or characteristics. This enables products and marketing efforts to be tailored to each group.

B: Commercialization

Commercialisation makes a public enterprise operate on commercial principles, emphasising efficiency and revenue. It differs from privatisation, which transfers ownership to private investors.

B: Nigeria Employers’ Consultative Association

NECA represents employers and their interests in labour and employment matters. Labour congresses and employee unions represent workers, while a manufacturers’ association has a narrower industry focus.

B: line authority

Line authority follows the direct chain of command from a superior to a subordinate. Staff authority instead concerns specialist advice or support rather than that direct supervisory relationship.

C: man buys, sells and distributes goods and services

Commerce concerns buying, selling and distributing goods and services, including activities that support exchange. Production and consumption together describe a wider field of economic activity.

B: manufacturing

Manufacturing transforms processed materials into finished goods for consumers or industry. Extraction obtains natural resources, while construction assembles structures such as roads and buildings.

B: Vertical integration

Vertical integration joins businesses at different stages of the same supply chain, such as a producer and its distributor. Horizontal integration combines businesses at the same stage.

B: Debenture holders

Debenture holders lend money to the company and have creditor claims. These claims rank ahead of distributions to owners, including preference and ordinary shareholders.

B: A declaration by a court of law

Compulsory winding up is imposed through a court order. An agreement by the owners is voluntary, while poor economic conditions alone do not constitute a legal dissolution order.

D: ₦51,680

Circulating capital means current assets here. Add stock ₦8,800, debtors ₦15,500, bank ₦21,000 and cash ₦6,380 to obtain ₦51,680; fixed fittings and vehicles are excluded.

C: Fixed assets

Fixtures and fittings are kept for continuing use in running the business. They are therefore fixed assets, rather than inventory, liquid funds or the net working-capital balance.

C: To discourage the redistribution of income at home

Import duties can raise public revenue, protect domestic producers or respond to another country’s trade restrictions. Discouraging domestic income redistribution is not a standard purpose of such duties.

B: a retailing business

A small retail business can be managed directly by one owner and commonly needs less capital than mining, oil exploration or vehicle assembly. This makes retailing the most suitable listed example.

B: retailing

A vending machine sells goods directly to the final consumer. That is retailing, even though the transaction uses a machine rather than a shop assistant or personal sales visit.

B: Buying in bulk and selling in small quantities

Wholesalers buy large quantities and divide them into smaller lots for retailers. Credit and market information may support this role, but bulk buying and breaking bulk are its central trading function.

D: terms of trade.

Terms of trade compare export prices with import prices. They describe how much imports a country can obtain for its exports, rather than the monetary trade balance.

B: balance of trade

The balance of trade compares export receipts with import expenditure. The balance of payments is broader, also recording international income, transfers and financial transactions.

A: Posts and Telecommunications

Before the 1985 reorganisation, Posts and Telecommunications combined postal and telecommunications functions. Its postal division became NIPOST while the telecommunications operations were reorganised separately.

D: bonded warehouse.

A bonded warehouse holds imported goods under customs control while duties remain unpaid. Storage there postpones duty payment until the goods are released under the applicable customs procedure.

D: imports that can be bought with the Naira have become costlier.

Devaluation lowers the domestic currency’s value relative to foreign currencies. With foreign prices unchanged, more naira are needed for the same imported goods, making imports costlier in naira.

D: Nigerian Export-Import Bank

NEXIM is Nigeria’s export-import bank. Its export financing and risk-bearing services support Nigerian trade, unlike deposit insurance or institutions focused primarily on industrial development.

A: product, promotion, place and price.

The traditional marketing mix consists of product, price, place and promotion. These cover what is offered, what customers pay, how it reaches them and how it is communicated.

C: Fad

A fad rises and fades quickly, so its influence on consumers is short-lived. Fashion generally lasts longer, while an innovation may create a durable change in products or behaviour.

B: Offering free samples.

Free samples are a sales-promotion incentive that lets consumers try a product. Radio and television advertising communicate a message but do not themselves give the customer a trial sample.

A: it can provide instant feedback

Personal selling allows two-way conversation. The seller can hear objections or questions immediately and respond on the spot, giving faster direct feedback than one-way advertising.

C: deferred.

An agreement to sell postpones the transfer of ownership until a future time or condition. A completed sale transfers ownership, although physical delivery may occur at a different time.

D: an offer but no acceptance.

The offer is to sell for ₦30. Replying with ₦29 proposes a different price, so it is a counter-offer rather than acceptance of the original terms. The exchange has not formed an agreed bargain.

A: government.

Nationalisation transfers an industry or enterprise into government ownership. It differs from indigenisation, which concerns ownership by nationals rather than necessarily by the state.

D: Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture

NACCIMA brings together chambers representing commerce, industry, mining and agriculture. Its name identifies this business-chamber association, rather than a cultural agency or government investment body.

A: co-ordination

Coordination links the work of different departments so their actions support shared objectives. It helps prevent conflicting schedules, duplicated effort and gaps between organisational units.

D: the number of employees reporting to one superior should be kept to a workable maximum.

Span of control is the number of subordinates directly supervised by one manager. Keeping that number manageable supports effective supervision; reporting to one boss is unity of command.

D: technological development

Computers apply technical inventions to process information and deliver banking services. Their use therefore directly illustrates technological development, even though it can also affect competition and the economy.

C: Fulfilling part of its social responsibility

Providing a health centre benefits the community in which the business operates. It is an example of corporate social responsibility because it supports community welfare beyond the company’s core production activity.

D: Coordinate their efforts in managing the use of the lake’s resources

The commission provides a framework for member countries to cooperate in managing shared lake and basin resources. Its purpose is broader than increasing navigation or building a particular dam.