JAMB Commerce 1995

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.