JAMB Commerce 1999

24 reviewed questions with answers and explanations.

Practice selection: full-paper coverage has not been confirmed.

Question 1

The conversion of raw materials into finished products creates

  1. marginal utility
  2. place utility
  3. form utility
  4. time utility
Answer and explanation

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.

AI-reviewed · calculation checked

Question 2

Commerce makes it possible for man to live in a

  1. Complex and organized society
  2. Society characterized by subsistence
  3. Society characterized by dependency
  4. Simple and organized society
Answer and explanation

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.

AI-reviewed · calculation checked

Question 3

Aboki Plc winds up and Babalawee manages the dissolution. After all debts and winding-up costs are paid, to whom does any remaining surplus belong?

  1. Aboki Plc
  2. Babalawee
  3. shareholders
  4. creditors.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 9

Income statement, ₦million: turnover 286.5; cost of goods sold 147.5; overhead and other expenses 85.5; tax 26.9. Find profit before tax.

  1. ₦26.9 million
  2. ₦53.5 million
  3. ₦139.2 million
  4. ₦286.5 million
Answer and explanation

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.

AI-reviewed · calculation checked

Question 12

Document dated Liverpool, UK, 2 June 1995, amount ₦200,000: “Three months after date, pay to or to the order of Mr Okon Etim Esin, two hundred thousand naira.” Payable at First Bank Plc, Lagos; due 2 September 1995; signed Imo Edit Enoh, Liverpool. Which listed role describes Okon Etim Esin?

  1. debtor
  2. creditor
  3. exporter
  4. importer
Answer and explanation

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.

AI-reviewed · calculation checked

Question 13

Document dated Liverpool, UK, 2 June 1995, amount ₦200,000: “Three months after date, pay to or to the order of Mr Okon Etim Esin, two hundred thousand naira.” Payable at First Bank Plc, Lagos; due 2 September 1995; signed Imo Edit Enoh, Liverpool. Which type of document does this represent?

  1. bill of exchange
  2. cheque
  3. money order
  4. promissory note
Answer and explanation

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.

AI-reviewed · calculation checked

Question 15

Ade quotes ₦100 less 20% trade discount. Benson quotes ₦100 less 30% trade discount and then 10% cash discount. Kabir qualifies for both discounts. Which statement identifies the cheaper supplier?

  1. The materials should be supplied by Ade
  2. The materials should be supplied by both of them
  3. The materials should be supplied by Benson
  4. Benson should be asked to reduce his trade discount
Answer and explanation

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.

AI-reviewed · calculation checked

Question 23

The rate at which a central bank discounts first class bills is called the

  1. fixed rate
  2. bill rate
  3. bank rate
  4. interest rate
Answer and explanation

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.

AI-reviewed · calculation checked

Question 24

The principle of subrogation states that

  1. an insured person should be indemnified to the tune of the amount insured
  2. an insurance company can stand in place of the insured in dealing with third party
  3. only a person who likely to suffer loss should take out an insurance cover
  4. there must be a close connection between the actual loss suffered and risk insured.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 25

Tolu purchased goods from Yemisi and is to pay custom duties before collection. The goods are likely to be collected from

  1. a manufacturer’s warehouse
  2. a bonded warehouse
  3. an importer’s warehouse
  4. a wholesaler’s warehouse.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 26

Which set gives the three stages in a computer’s basic input–processing–output model?

  1. the input, the processor and the output units
  2. the black box, output and input units
  3. BASIC, COBOL and output units.
  4. BASIC, the processor and PASCAL.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 28

The process of finding and removing faults in a computer program is called what?

  1. Console
  2. Debugging
  3. Dump
  4. Loop
Answer and explanation

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.

AI-reviewed · calculation checked

Question 29

Aliyu bought 100 share at the stock market through a stockbroker. He was told the price of each share was N3 cum. div . This means that Aliyu

  1. is entitled always to a cummulative dividend on the shares
  2. is entitled to the next dividend accruing from the shares
  3. will not be entitled to the next dividend due to the shares
  4. still owes N3 on the shares which will be subtracted from the dividends.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 32

A customer-oriented business philosophy primarily emphasises which outcome?

  1. quality products
  2. customer satisfaction
  3. sales volume
  4. public relations.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 34

The concept of limiting the types, sizes and other characteristics of a product line without sacrificing utility or durability is called

  1. simplification
  2. standardization
  3. specialization
  4. satisfiying.
Answer and explanation

A: simplification

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

AI-reviewed · calculation checked

Question 35

In customer-oriented marketing, who is the focal point of marketing efforts?

  1. seller
  2. profit
  3. product
  4. buyer.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 36

Under the usual invitation-to-treat rule, displaying goods of different makes on supermarket shelves is what?

  1. invitation to treat
  2. offer to sell
  3. offer to purchase
  4. invitation to sell.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 37

The process of bringing a company under exclusive state ownership and control is known as

  1. nationalization
  2. commercialization
  3. indigenization
  4. privatization.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 38

Q lawfully and reasonably incurs ₦350 expenses while acting for principal P. Which named agency duty requires P to reimburse Q?

  1. remunerate Q
  2. repay Q
  3. indemnify Q
  4. settle Q
Answer and explanation

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.

AI-reviewed · calculation checked

Question 40

In the terminology of simple contracts, the value exchanged for a promise is called what?

  1. offeree
  2. acceptance
  3. consideration
  4. representation
Answer and explanation

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.

AI-reviewed · calculation checked

Question 42

Staff position in an organization borders on

  1. authority
  2. advice
  3. responsibility
  4. control.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 43

The line function in a typical manufacturing enterprise is normally performed by the

  1. public relations department
  2. estate or properties department
  3. marketing department
  4. legal department.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 45

Under what management function would the motivation of employees fall?

  1. Staffing
  2. Controlling
  3. Organizing
  4. Directing.
Answer and explanation

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.

AI-reviewed · calculation checked

Question 49

Which of the following group of countries are members of the Niger Basin Commission?

  1. The Republic of Guinea, Burkina Faso and Nigeria
  2. Ghana, Liberia and the Republic of Benin.
  3. Mali, Liberia and Nigeria.
  4. Ghana, Burkina Faso and Chad.
Answer and explanation

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.

AI-reviewed · calculation checked

Plan your study weekAll Commerce years