2019 JAMB COMMERCE
Question 1
One of the factors which critically determine the choice of occupation is
A. Training
B. Skill
C. Aptitude
D. Interest
Answer: B. Skill
Explanation: The skills a worker has influence the kinds of jobs they are willing to accept.
Question 2
Extractive industries may also be designated as
A. Direct industries
B. Raw materials
C. Primary industries
D. Indirect industries
Answer: C. Primary industries
Explanation: Extractive industries are primary industries because both obtain raw materials from their natural sources.
Question 3
The document with which a manufacturing enterprise releases stock of raw materials to the factory for production is called
A. Stock release form
B. Goods received note
C. Store issues voucher
D. Material release note
Answer: D. Material release note
Explanation: A material release form authorizes raw materials to move from the store to the production department.
Question 4
Insurance companies operate on the principle of indemnity. This means
A. An insured person or firm collects double the value of loss suffered
B. Total sum of the premiums paid prior to the loss
C. Damage claims equal to the loss suffered
D. None of the above
Answer: C. Damage claims equal to the loss suffered
Explanation: Indemnity returns the insured to their financial position before a loss, within the policy’s conditions and limits. The insured cannot profit from the loss.
Question 5
One major disadvantage of a cartel is that it
A. Maximizes productive efficiency
B. Brings the merging firms under control
C. Maximizes profits from operation
D. Eliminates competition and waste
Answer: D. Eliminates competition and waste
Explanation: A cartel enables output and price controls while reducing waste.
Question 6
The proposed monetary integration within ECOWAS sub-region has the overriding benefit of
A. Improved exchange
B. Enhanced trade
C. Enhanced development
D. Improved relations
Answer: B. Enhanced trade
Explanation: ECOWAS’s monetisation policy is intended to strengthen trade between member countries.
Question 7
The line function of a typical manufacturing enterprise is normally performed by the
A. Public relations department
B. Estate or properties department
C. Marketing department
D. Legal department
Answer: C. Marketing department
Explanation: A line function is a department’s routine operational activity. In a manufacturing business, the marketing department therefore carries out a line function.
Question 8
The share capital value that forms part of the balance sheet total is the
A. Issued share capital
B. Called-up share capital
C. Authorized share capital
D. Paid-up share capital
Answer: A. Issued share capital
Explanation: Issued capital represents capital subscribed and paid for by the public. It serves as the equivalent of capital in an unincorporated business and appears on the balance sheet.
Question 9
The major factors that facilitate merchandising are
A. Communication, advertising and banking
B. Trading, warehousing and production
C. Banking, insurance and transportation
D. Management, insurance and advertising
Answer: A. Communication, advertising and banking
Explanation: Merchandising centres on exchanging goods through buying and selling. Communication, advertising and banking are its main supporting activities. Merchants communicate with suppliers and customers, advertising encourages sales, and banks provide loans and facilitate payments between buyers, intermediaries and sellers.
Question 10
Bank overdraft as a short-term source of funds is
A. A current liability
B. Granted to a newly opened account
C. Repayable after more than a year
D. An overdrawn account
Answer: A. A current liability
Explanation: Like a credit purchase, a bank overdraft creates a current liability.
Question 11
The term PLC implies that the shares are available
A. Publicly on the Stock Exchange
B. Privately on the Stock Exchange
C. To the public at the company
D. Publicly in commercial banks
Answer: A. Publicly on the Stock Exchange
Explanation: PLC stands for public limited company. Such a company must be listed on the stock exchange for the public to subscribe to its shares.
Question 12
A printer that burns the print image into the photosensitive drum is called
A. Dot matrix printer
B. Laser printer
C. Daisy wheel printer
D. Thermal printer
Answer: B. Laser printer
Explanation: Laser printers create an electrostatic image on a photosensitive drum with a laser. Thermal printers use heat-sensitive paper or ribbons instead.
Question 13
On liquidation of a public limited liability company, the residual owners are the
A. Creditors
B. Debenture shareholders
C. Preference shareholders
D. Ordinary shareholders
Answer: D. Ordinary shareholders
Explanation: Ordinary shareholders receive the remaining balance last when a public limited company is liquidated.
Question 14
A bank form used to transfer money from personal to creditor’s account is called
A. Credit transfer form
B. Debit transfer form
C. Customer transfer form
D. Bank transfer form
Answer: A. Credit transfer form
Explanation: A credit transfer form moves money from a personal account into a creditor’s account.
Question 15
One of the obstacles to achieving the objectives of ECOWAS is
A. Lack of common currency
B. Colonial linkages
C. Sovereignty of states
D. Language differences
Answer: B. Colonial linkages
Explanation: Continued loyalty to former colonial rulers is a major barrier to achieving ECOWAS’s goals.
Question 16
Departmentalization is an aspect of
A. Planning
B. Organizing
C. Directing
D. Controlling
Answer: B. Organizing
Explanation: Dividing a store into departments is one method of making its management easier.
Question 17
One way by which government reduces the repatriation of capital is through
A. Nationalization
B. Divestiture
C. Indigenization
D. Naturalization
Answer: C. Indigenization
Explanation: Indigenization encourages local citizens to take an active role in business. Government uses the policy to limit capital leaving the economy.
Question 18
The agency that currently oversees the privatization and commercialization processes in Nigeria is the
A. Securities and Exchange Commission
B. Technical Committee on Privatization
C. Nigerian Stock Exchange
D. Bureau of Public Enterprises
Answer: D. Bureau of Public Enterprises
Explanation: The Bureau of Public Enterprises is the government agency responsible for overseeing public enterprises.
Question 19
The agency in Nigeria which ensures that products conform to government quality specifications is the
A. Standards Organisation of Nigeria
B. Nigeria Consumers’ Association
C. Manufacturers’ Association of Nigeria
D. Nigerian Chambers of Commerce
Answer: A. Standards Organisation of Nigeria
Explanation: The Standards Organisation of Nigeria (SON) ensures goods meet the minimum standards prescribed by government.
Question 20
A bill of exchange accepted can be discounted by the holder in
A. The Central Bank
B. At least two banks
C. His bank
D. Any bank
Answer: D. Any bank
Explanation: Once a bill of exchange is accepted, the holder’s bank may discount it on the holder’s behalf.
Question 21
An important principle of a good organisational structure is
A. Ideal standard
B. Span of control
C. Clarity of mission
D. Adequacy of resources
Answer: B. Span of control
Explanation: An effective organizational structure defines the span of control and makes each person’s responsibilities clear.
Question 22
The process of mobilizing, engaging and maintaining workers to work for an organisation is referred to as
A. Staffing
B. Selection
C. Recruitment
D. Employment
Answer: A. Staffing
Explanation: Staffing involves acquiring, assigning and retaining employees. Recruitment is only the part that attracts potential applicants.
Question 23
Use the information below to answer Questions 23 and 24:
BALANCE SHEET AS AT 31ST DEC, 2018
Liabilities:
Paid-up capital — ₦200,000
Retained earnings — ₦50,000
Creditors — ₦50,000
Bills payable — ₦70,000
Dividend payable — ₦50,000
Total — ₦420,000
Assets:
Building — ₦50,000
Plant & machinery — ₦35,000
Fixtures — ₦20,000
Debtors — ₦50,000
Stocks — ₦145,000
Banks — ₦120,000
Total — ₦420,000
Find the current ratio.
A. 0.50 : 1
B. 0.87 : 1
C. 1.5 : 1
D. 1.85 : 1
Answer: D. 1.85 : 1
Explanation: To find the current ratio, divide current assets by current liabilities:
Current assets = ₦50,000 + ₦145,000 + ₦120,000
= ₦315,000
Current liabilities = ₦50,000 + ₦70,000 + ₦50,000
= ₦170,000
Current ratio = ₦315,000 ÷ ₦170,000
= 1.85 : 1
Question 24
Use the balance sheet above. What is the owner’s equity?
A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦420,000
Answer: B. ₦250,000
Explanation: Subtract total liabilities from total assets to find owner’s equity:
₦420,000 − ₦170,000 = ₦250,000
Question 25
An obstacle to international trade is
A. Cost of finance
B. Quantity and quality of labour
C. Availability of local market
D. Trade imbalance between countries
Answer: A. Cost of finance
Explanation: International trade often requires substantial funding, making financing costs a significant obstacle.
Question 26
The right of ownership with respect to goods or property is
A. Certificate of occupancy
B. Title
C. Right of occupancy
D. Proxy
Answer: B. Title
Explanation: Title establishes a person’s legal right to something.
Question 27
Coverage against unexpected events is called
A. Assurance
B. Re-insurance
C. Insurance
D. Warranty
Answer: C. Insurance
Explanation: An insurance policy provides protection against an unexpected contingency.
Question 28
Ships that sail across the ocean and operate on scheduled time-tables are
A. Tramp steamers
B. Coastal liners
C. Ocean liners
D. Ferries
Answer: C. Ocean liners
Explanation: An ocean liner mainly carries passengers across seas or oceans and may also transport freight or mail.
Question 29
The excess of the assets over the liabilities of a business is called
A. Working capital
B. Net worth
C. Capital employed
D. Initial capital
Answer: B. Net worth
Explanation: Deducting external liabilities from total assets gives net worth, the owners’ remaining interest in the business.
Question 30
A good financial instrument which serves as a hedge against inflation is
A. A bond
B. A share
C. An option
D. A warrant
Answer: B. A share
Explanation: Changes in share values over time can provide protection against inflation.
Question 31
The abbreviation CSF indicates that the
A. Cost of price includes the cost of carriage
B. Cost of production includes delivery charges
C. Selling price includes the cost of carriage
D. Production cost excludes the cost of carriage
Answer: C. Selling price includes the cost of carriage
Explanation: C & F stands for Cost and Freight, indicating that the goods’ price includes transportation costs.
Question 32
An activity that involves the extraction of raw materials from land and sea is
A. Construction
B. Farming
C. Agriculture
D. Extraction
Answer: D. Extraction
Explanation: Extraction obtains raw materials from their original natural sources.
Question 33
Resources harnessed in certain proportion to create goods and services are
A. Factors of production
B. Technology and labour
C. Land and entrepreneur
D. Raw materials
Answer: A. Factors of production
Explanation: Factors of production are the resources combined to produce goods and services.
Question 34
A cheque which a bank draws on its own funds is a
A. Bank draft
B. Cashier’s cheque
C. Bank cheque
D. Crossed cheque
Answer: A. Bank draft
Explanation: A bank draft is a cheque a bank draws on itself, payable to the named beneficiary.
Question 35
Billboards and posters are forms of
A. Electronic media
B. Print media
C. Outdoor media
D. Window display media
Answer: C. Outdoor media
Explanation: Billboards and posters are forms of outdoor advertising displayed in public places for people passing by.
Question 36
A firm that disposes its waste properly is discharging its
A. Community responsibility
B. Environmental responsibility
C. Civic responsibility
D. Social responsibility
Answer: B. Environmental responsibility
Explanation: Disposing of waste properly reduces pollution and safeguards the natural environment. It fulfils environmental responsibility within the broader scope of social responsibility.
Question 37
Market skimming is an example of
A. Market penetration
B. Sales promotion
C. Pricing policy
D. Advertising
Answer: C. Pricing policy
Explanation: Market skimming initially charges a high price to buyers with a strong desire and sufficient money for the product. The price is gradually lowered to attract successive market groups.
Question 38
Unresolved disputes between the employer and employees are usually referred to the
A. Code of Conduct Bureau
B. Personnel unit
C. Disciplinary committee
D. Industrial Arbitration Tribunal
Answer: D. Industrial Arbitration Tribunal
Explanation: If negotiation fails, an industrial court or industrial arbitration tribunal settles disputes between an employer and an employee.
Question 39
The process of eliminating a virus from a computer program is
A. Programming
B. Debugging
C. Formatting
D. Looping
Answer: B. Debugging
Explanation: Debugging finds and removes existing or potential software errors, known as bugs, that may cause crashes or unexpected behaviour.
Question 40
Intranet differs from extranet in that the former
A. Can generally be accessed by the public
B. Requires a modem before it could be used
C. Is restricted to employees of an organization
D. Requires internet protocols
Answer: C. Is restricted to employees of an organization
Explanation: An intranet is an organization’s private network. It supports secure staff communication, information storage and collaboration.