JAMB Commerce 2003

23 reviewed questions with answers and explanations.

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

Question 1

An example of service rendering trade association is

  1. Nigerian Bar Association
  2. Association of Nigerian Miners
  3. Cocoa Farmers Association
  4. Manufacturers Association of Nigerian
Answer and explanation

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.

AI-reviewed · calculation checked

Question 3

The right of ownership with respect to goods or property is

  1. right of occupancy
  2. proxy
  3. title
  4. certificate of occupancy
Answer and explanation

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.

AI-reviewed · calculation checked

Question 4

The main motive of chambers of commerce and trade association is to

  1. assist the government in achieving its objectives
  2. protect the interest of consumers
  3. maximize profit
  4. protect and promote the interests of members
Answer and explanation

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.

AI-reviewed · calculation checked

Question 8

Ojo purchased on credit 200 cartons of milk at ₦1,000 each, 150 bags of sugar at ₦500 each, and 50 bags of rice at ₦3,000 each from Sani. Sani allowed 10% trade discount and a cash discount of 50% for payment within the agreed period. Ojo paid within that period. How much is the trade discount alone?

  1. ₦42,500
  2. ₦27,500
  3. ₦22,500
  4. ₦20,000
Answer and explanation

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.

AI-reviewed · calculation checked

Question 9

The basic function of the Nigerian Ports Authority is to

  1. Ensure that the right calibre of personnel is employed at the ports
  2. Coordinate and regulate the activities of shipping lines
  3. Facilitate and control the movement of goods and services into and out of the country
  4. Coordinate the activities of all the seaports in the country
Answer and explanation

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.

AI-reviewed · calculation checked

Question 10

The concept that refers to the sale, transfer or exchange of goods and services is

  1. Industry
  2. Trade
  3. Tariff
  4. Marketing
Answer and explanation

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.

AI-reviewed · calculation checked

Question 13

The payment made periodically in respect of an insurance policy entered into is known as

  1. Bond
  2. Commission
  3. Premium
  4. Surrender value
Answer and explanation

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.

AI-reviewed · calculation checked

Question 16

Which marine insurance covers the vessel itself and can include liability for collision damage to another vessel?

  1. Hull insurance
  2. Time insurance
  3. Freight insurance
  4. Cargo insurance
Answer and explanation

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.

AI-reviewed · calculation checked

Question 17

The management function that makes the difference in intensity of behaviour is

  1. Coordinating
  2. Controlling
  3. Motivation
  4. Planning
Answer and explanation

C: Motivation

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

AI-reviewed · calculation checked

Question 19

The process of dividing task into jobs and departments and of delegating authority is know as

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

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.

AI-reviewed · calculation checked

Question 20

In the sender-channel-receiver communication model, which named role receives the message transmitted through the channel?

  1. Receiver
  2. Audience
  3. Sender
  4. Encoder
Answer and explanation

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.

AI-reviewed · calculation checked

Question 24

Among these groups in their stated capacity, whose creditor claim ranks ahead of shareholders’ capital claims when a company is liquidated?

  1. Debenture holders
  2. Members of the board
  3. Preference shareholders
  4. Ordinary shareholders
Answer and explanation

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.

AI-reviewed · calculation checked

Question 25

The business organization established mainly for the purpose of carrying out specific assignments for a specific duration is a

  1. Joint venture
  2. Cooperative society
  3. Partnership
  4. Company
Answer and explanation

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.

AI-reviewed · calculation checked

Question 26

Which of these factors of production is relatively fixed in supply?

  1. Capital
  2. Entrepreneur
  3. Human resources
  4. Natural resources
Answer and explanation

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.

AI-reviewed · calculation checked

Question 33

The act of a person employing another to enter into a contract on his behalf is known as

  1. Business
  2. Sale of goods
  3. Bilateral agreement
  4. Agency
Answer and explanation

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.

AI-reviewed · calculation checked

Question 36

With correct input and instructions, computers perform repetitive data-processing calculations compared with manual work in which manner?

  1. Faster and more accurate manner
  2. More organized manner
  3. Faster but less accurate manner
  4. Slower but more accurate manner
Answer and explanation

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.

AI-reviewed · calculation checked

Question 38

The device which interprets and carries out the instructions presented to it by the computer program is known as

  1. Software
  2. Micro-processor
  3. Mouse
  4. Hard-disk
Answer and explanation

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.

AI-reviewed · calculation checked

Question 39

The market structure, business conditions and financial systems in Nigeria constitute the

  1. Economic environment
  2. Political environment
  3. Cultural environment
  4. Technological environment
Answer and explanation

A: Economic environment

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

AI-reviewed · calculation checked

Question 41

Which of these languages is traditionally associated with formula-based scientific and engineering computation?

  1. FORTRAN
  2. BASIC
  3. ADA
  4. COBOL
Answer and explanation

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.

AI-reviewed · calculation checked

Question 44

The body charged with the responsibility to register shares for subscription on the stock market in Nigeria is the

  1. Securities and exchange commission
  2. Nigerian stock-exchange
  3. Nigerian deposit insurance corporation
  4. Central bank of Nigeria
Answer and explanation

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.

AI-reviewed · calculation checked

Question 46

Balances: paid-up capital ₦200,000; retained earnings ₦50,000; creditors ₦50,000; bills payable ₦50,000; dividends payable ₦70,000. Assets: buildings ₦50,000; plant and machinery ₦35,000; debtors ₦50,000; fixtures ₦20,000; stocks ₦145,000; bank ₦120,000. Both sides total ₦420,000. Find owner’s equity.

  1. ₦250,000
  2. ₦300,000
  3. ₦420,000
  4. ₦200,000
Answer and explanation

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.

AI-reviewed · calculation checked

Question 47

Balances: paid-up capital ₦200,000; retained earnings ₦50,000; creditors ₦50,000; bills payable ₦50,000; dividends payable ₦70,000. Assets: buildings ₦50,000; plant and machinery ₦35,000; debtors ₦50,000; fixtures ₦20,000; stocks ₦145,000; bank ₦120,000. Both sides total ₦420,000. Find the current ratio to two decimal places.

  1. 1.53:1
  2. 1.85:1
  3. 0.87:1
  4. 0.50:1
Answer and explanation

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.

AI-reviewed · calculation checked

Question 50

In the traditional classification of banking functions, public-debt operations for government are associated with which bank?

  1. Merchant bank
  2. Central bank
  3. Commercial bank
  4. Development bank
Answer and explanation

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.

AI-reviewed · calculation checked

Plan your study weekAll Commerce years