2016 JAMB COMMERCE
Question 1
A lawyer that defrauds his client may be disbarred by the Nigerian Bar Association in order to
A. Protect other lawyers
B. Protect the integrity of the association
C. Prevent the client from suing the association
D. Compensate the affected client
Answer: B. Protect the integrity of the association
Explanation: Disciplinary standards safeguard a profession’s integrity and public trust in its practitioners. Members who engage in misconduct may face penalties through the relevant disciplinary procedure.
Question 2
The sole legal right held by the author to publish his book is a
A. Trademark
B. Copyright
C. Bookmark
D. Patent right
Answer: B. Copyright
Explanation: Copyright grants a writer exclusive protection for intellectual property, including the right to publish the book.
Question 3
A country is said to be experiencing an unfavourable balance of trade if
A. Visible exports exceed imports
B. Visible imports exceed visible exports
C. Visible exports exceed visible imports
D. Imports and exports are equal
Answer: B. Visible imports exceed visible exports
Explanation: A country has an unfavourable balance of trade when its visible imports exceed its visible exports.
Question 4
The slogan, “A Wonderful World”, used by a communication network is a form of
A. Packaging
B. Publicity
C. Product differentiation
D. Persuasive advertising
Answer: D. Persuasive advertising
Explanation: Slogans aim to persuade audiences to purchase or use a product.
Question 5
A major factor that affects business operations is
A. Technology
B. Supply
C. Rivalry
D. Product
Answer: A. Technology
Explanation: Technology influences business operations, and technological changes bring changes in consumer tastes.
Question 6
A business partner who provides capital but abstains from participation in administration of a firm is a
A. General partner
B. Nominal partner
C. Dormant partner
D. Secret partner
Answer: C. Dormant partner
Explanation: A dormant or sleeping partner provides finance for the business but does not participate in its daily management.
Question 7
Money can simply be referred to as
A. Measure
B. Standard of value
C. Durable asset for doing business
D. Means of settlement
Answer: D. Means of settlement
Explanation: Money’s functions are based on its capacity to settle debts and other obligations.
Question 8
The physical components of a computer system are
A. Software
B. Hardware
C. Floppy disc
D. Hard disc
Answer: B. Hardware
Explanation: Hardware consists of the tangible parts of a computer system.
Question 9
Buying, selling and distribution of goods and services are components of
A. Retail trade
B. Commerce
C. Wholesale trade
D. Marketing
Answer: D. Marketing
Explanation: Marketing includes purchasing, selling and distributing goods and services to meet customers’ needs. Its scope goes beyond wholesalers’ activities.
Question 10
A company has an authorized share capital of ₦15,000. It offered applicants ₦10,000 share capital, out of which the company collected ₦7,500. What is the paid-up capital?
A. ₦5,000
B. ₦25,000
C. ₦7,500
D. ₦17,500
Answer: C. ₦7,500
Explanation: Paid-up capital is the portion of issued shares for which payment has been received when due. The firm’s paid-up capital is therefore ₦7,500.
Question 11
A suitable advertising medium for a producer of jeans is
A. Informative advertising
B. Indirect advertising
C. Competitive advertising
D. Direct advertising
Answer: C. Competitive advertising
Explanation: A jeans manufacturer faces competition from other jeans brands and substitute products. Competitive advertising is consequently the most suitable approach.
Question 12
The role of customs and excise authority includes the
A. Provision of a good transport system to facilitate imports and exports
B. Provision of dockyards for ship repairs
C. Provision of security at the port
D. Control of the flow of goods in and out of the country
Answer: D. Control of the flow of goods in and out of the country
Explanation: A country’s customs authority has the key responsibility of controlling goods entering and leaving its borders.
Question 13
The rate of turnover of a firm in a given year is 5 times while the average stock is ₦12,500. What is the turnover of the firm?
A. ₦24,000
B. ₦46,500
C. ₦65,000
D. ₦62,500
Answer: D. ₦62,500
Explanation: Stock turnover is calculated by dividing cost of goods sold by average stock:
5 = Cost of goods sold ÷ 12,500
Turnover = 5 × ₦12,500
= ₦62,500
Question 14
Commercial activities in Nigeria have greatly been enhanced due to improvement in
A. Transportation system
B. Insurance activities
C. Communication network
D. Warehousing activities
Answer: C. Communication network
Explanation: Better communication networks allow buyers and sellers to share information, submit orders and organize transactions faster. They are among the factors that encourage commerce.
Question 15
The difference between indemnity insurance and non-indemnity insurance is that, the latter provides
A. Cover for exporters against risks
B. Cover for importers against risks
C. Consolation payment to the insured
D. Full payment to the insured
Answer: C. Consolation payment to the insured
Explanation: Non-indemnity insurance provides a consolation payment rather than full reimbursement for the loss suffered.
Question 16
An auxiliary to trade that easily links suppliers with consumers is
A. Tourism
B. Banking
C. Transportation
D. Communication
Answer: D. Communication
Explanation: Communication supports trade by enabling suppliers and consumers to connect smoothly.
Question 17
A shop with many stores trading under a single roof which stocks varieties of goods with separate unit heads is a
A. Supermarket
B. Departmental store
C. Superstore
D. Multiple shop
Answer: B. Departmental store
Explanation: A departmental store divides one shop into separately supervised sections, each offering a different range of goods.
Question 18
One of the services rendered by NITEL is
A. Courier services
B. Photo-telegram service
C. Banking service
D. Business reply service
Answer: B. Photo-telegram service
Explanation: Photo-telegram service.
Question 19
The two main forms of communication are
A. Oral and written
B. Verbal and non-verbal
C. Traditional and modern media
D. E-mail and fax
Answer: B. Verbal and non-verbal
Explanation: Communication has two broad forms: verbal and non-verbal.
Question 20
The process of transferring data from one computer to another is referred to as
A. Downloading
B. Faxing
C. Decoding
D. Browsing
Answer: A. Downloading
Explanation: Downloading enables the same file or document to be shared across several computers.
Question 21
When a cheque is crossed, it holds that
A. The culprit is traceable in the event of theft
B. It can be cashed over counter
C. Whoever presents it gets paid
D. Creditors without current accounts can be paid
Answer: A. The culprit is traceable in the event of theft
Explanation: A crossed cheque must be deposited into an account. If theft occurs, the account provides a means of tracing the recipient.
Question 22
The coming together of consumers to protect their rights is referred to as
A. Consumerism
B. Consumer sovereignty
C. Estoppels
D. Caveat emptor
Answer: A. Consumerism
Explanation: Consumerism involves consumers joining forces to defend their shared rights.
Question 23
The final link in the chain of distribution is
A. Middlemen
B. Retailing
C. Wholesaling
D. Consumer
Answer: D. Consumer
Explanation: The final consumer completes the distribution chain that begins with the manufacturer or producer.
Question 24
The sub-division of a market into homogeneous subsets of consumers with relatively similar product needs is
A. Marketing concept
B. Marketing mix
C. Market segmentation
D. Market research
Answer: C. Market segmentation
Explanation: Market segmentation divides a market into distinct sections according to consumer categories.
Question 25
A contract can be terminated through
A. Physical combat
B. Family intervention
C. Consultation
D. Frustration
Answer: D. Frustration
Explanation: A contracting party may seek termination through frustration when circumstances beyond their control prevent them from fulfilling their obligations.
Question 26
An organisation that issues a cheque to cover the salaries of its employees is using
A. A credit transfer system of payment
B. A standing order of payment
C. An overdraft system of payment
D. Bank order of crediting account
Answer: A. A credit transfer system of payment
Explanation: Credit transfer lets an employer direct a bank to pay employees’ accounts, supported by a cheque or debit authorization covering the total payroll.
Question 27
Management of business involves the development of ideas for the
A. Distribution of goods and services that man wants
B. Transportation of goods and services that man wants
C. Production of goods and services that satisfy human needs
D. Transfer of title of ownership of goods and services to individuals
Answer: C. Production of goods and services that satisfy human needs
Explanation: Developing ideas that meet human wants is a central responsibility of business management.
Question 28
A software application which enables a user to display and interact with text and video is the
A. Web server
B. Web browser
C. File transfer protocol
D. Internet protocol
Answer: B. Web browser
Explanation: A web browser presents web pages and enables interaction with text, pictures and videos. Communication between devices follows internet protocols.
Question 29
Trading position of Nigeria is the same as her
A. Desire to trade with many countries
B. Terms of trade
C. Willingness to grant credit to foreigners
D. Balance of trade
Answer: B. Terms of trade
Explanation: Terms of trade express the rate at which exports are exchanged for imports. Calculate the index by dividing export prices by import prices and multiplying by 100.
Question 30
Gilt-edged securities are issued mainly by
A. Individuals
B. Non-governmental organisations
C. Multi-national companies
D. Government
Answer: D. Government
Explanation: Gilt-edged securities are issued by governments and have traditionally been considered relatively low in default risk.
Question 31
Which of the following is a quality of money?
A. Availability
B. Scarcity
C. Convertibility
D. Indivisibility
Answer: B. Scarcity
Explanation: Scarcity is an important quality of money because an unrestricted abundance would reduce its value.
Question 32
An important factor that influences the location of cement industry in an area is
A. Attitude of individuals
B. Skill and training
C. Political interest
D. Natural resources
Answer: D. Natural resources
Explanation: Limestone is cement’s main raw material and guides factory location. Cement factories therefore locate where limestone is available.
Question 33
Setting of objectives and determining how they can be accomplished is
A. Organising
B. Directing
C. Coordinating
D. Planning
Answer: D. Planning
Explanation: Planning sets an organization’s operational goals and determines how to achieve them.
Question 34
The type of labour that makes use of physical effort in production processes is the
A. Unskilled labour
B. White-collar job
C. Skilled labour
D. Blue-collar job
Answer: D. Blue-collar job
Explanation: Blue-collar jobs involve physical or manual production tasks. Such work may demand extensive skills and training and is not necessarily unskilled.
Question 35
Microprocessor is an electronic circuit that functions as the
A. Random access memory
B. Transmission protocol
C. File transfer protocol
D. Central processing unit
Answer: D. Central processing unit
Explanation: A microprocessor is an integrated circuit that carries out CPU operations, such as instruction execution and data processing.
Question 36
The breaking down of a market into separate and identifiable elements is known as
A. Differentiation
B. Segmentation
C. Penetration
D. Skimming
Answer: B. Segmentation
Explanation: Market segmentation groups a market into sections based on consumers’ characteristics.
Question 37
A country’s terms of trade are said to improve when the ratio of her export
A. Decreases
B. Equals import
C. Remains constant
D. Increases
Answer: D. Increases
Explanation: Terms of trade describe the rate at which exports pay for imports. They improve when export prices rise relative to import prices.
Question 38
Money is generally acceptable for transactions due to
A. The legal backing
B. The rule of law
C. The Central Bank Governor’s signature
D. Its acceptability in the global market
Answer: A. The legal backing
Explanation: Legal recognition underpins money’s general acceptance.
Question 39
Which of the following advertising media appeals to only the literate in the society?
A. Radio advertising
B. Cinema advertising
C. Print media advertising
D. Television advertising
Answer: C. Print media advertising
Explanation: Since reading requires literacy, printed advertisements appeal to the literate members of society.
Question 40
The essential utility derived from the use of a product is known as
A. Augmented benefit
B. Formal benefit
C. Core benefit
D. Branded
Answer: C. Core benefit
Explanation: A product’s core benefit is the basic satisfaction or essential usefulness the customer wants from it.
Question 41
The three functional units of a modern computer are
A. Black box, output and input units COBOL and output units
B. Processor, FORTRAN and output units
C. BASIC, units
D. Input, processor and output
Answer: D. Input, processor and output
Explanation: A computer comprises an input unit that receives data, a processing unit that handles the data and an output unit that presents the processed results.
Question 42
The most suitable organisational structure for small or medium-sized enterprises is
A. Line structure
B. Staff structure
C. Functional structure
D. Committee structure
Answer: A. Line structure
Explanation: In a line structure, one manager or supervisor oversees nearly all employees. This arrangement is particularly suitable for small organizations.
Question 43
A motor dealer agreed to sell a car to Mr X but sold and delivered it to Mr Y on the delivery date agreed with Mr X. He has discharged the contract by
A. Performance
B. Frustration
C. Breach
D. An agreement
Answer: C. Breach
Explanation: Not meeting an obligation.
Question 44
International trade is different from internal trade as the former
A. Involves people of different tribes
B. Involves the use of different currencies
C. Is based on the principle of comparative cost
D. Is usually involved in manufactured products
Answer: B. Involves the use of different currencies
Explanation: International trade takes place across national borders and often uses different currencies. Comparative advantage helps explain specialization in domestic as well as international trade.
Question 45
The main source of pollution in Nigeria is
A. Industrial waste
B. Organic waste
C. Domestic waste
D. Gas flaring
Answer: D. Gas flaring
Explanation: Gas flaring is a major source of Nigerian pollution, particularly in the South-South region.
Question 46
A worker who processes rice is engaged in
A. Constructive activity
B. Commercial activity
C. Extractive activity
D. Manufacturing activity
Answer: D. Manufacturing activity
Explanation: Rice processing is manufacturing because it transforms materials into a different form.
Question 47
In order to increase the capital owned, a sole trader may
A. Seek for bank loan
B. Issue debentures
C. Draw less of his profit for personal use
D. Acquire extra shop fittings on credit
Answer: C. Draw less of his profit for personal use
Explanation: When a sole trader withdraws less profit, more is reinvested in the business, increasing the trader’s capital.
Question 48
Trade Fairs in Nigeria are organized by
A. The Federal Government
B. Manufacturers’ Association of Nigeria
C. Chambers of Commerce
D. Ministry of Commerce and Industry
Answer: C. Chambers of Commerce
Explanation: Organizing trade fairs is one of the principal roles of chambers of commerce.
Question 49
Which of the following is used as pricing policy?
A. Packaging
B. Market selection
C. Market skimming
D. Labelling
Answer: C. Market skimming
Explanation: Market skimming starts with a high price aimed at buyers who strongly want the product and can afford it. The producer then lowers the price in stages to reach further groups of buyers.
Question 50
In a staff-authority relationship, the opinion of a specialist in one department to another is
A. A directive
B. An advice
C. A delegation
D. A command
Answer: B. An advice
Explanation: Staff authority involves specialists advising line managers. Direct control of subordinates remains with the line managers.