2025 JAMB COMMERCE
Question 1
A balance sheet shows
A. Assets & Liabilities only
B. Income & Expenditure
C. Only Liabilities
D. Only Assets
Answer: A. Assets & Liabilities only
Explanation: Assets & Liabilities only. A balance sheet shows financial position at a particular date by setting out assets and liabilities.
Question 2
Human wants are
A. Limited
B. Unlimited
C. Few
D. Fixed
Answer: B. Unlimited
Explanation: Unlimited. Economics treats human wants as unlimited, while the resources to meet them are limited.
Question 3
Which is a function of commercial banks?
A. Issuing currency
B. Accepting deposits
C. Levying taxes
D. Enforcing law
Answer: B. Accepting deposits
Explanation: Accepting deposits. Commercial banks receive deposits and provide loans.
Question 4
A distinguishing characteristic of a limited liability company is that it
A. Is a collection of many sole proprietors
B. Is a multiple partnership
C. Can sue and be sued
D. Has limited resources
Answer: C. Can sue and be sued
Explanation: A limited liability company is an artificial legal person able to sue and be sued.
Question 5
A bill of exchange includes
A. An order to pay
B. A request to pay
C. A promise to pay
D. All the above
Answer: A. An order to pay
Explanation: A bill of exchange instructs payment of a specified amount to its bearer on the due date.
Question 6
Which bill is drawn and accepted in the same country?
A. Trade Bill
B. Foreign Bill
C. Inland Bill
D. Accommodation Bill
Answer: C. Inland Bill
Explanation: An inland bill is drawn by a person for another person within the same geographical area.
Question 7
Who draws a bill of exchange?
A. Creditor
B. Debtor
C. Drawer
D. None of the above
Answer: C. Drawer
Explanation: A drawer with international standing and accounts issues a bill of exchange.
Question 8
Which of the following is owned by a single person?
A. Private Company
B. Public Company
C. Joint Family
D. Sole Proprietorship
Answer: D. Sole Proprietorship
Explanation: A sole proprietorship belongs to one individual.
Question 9
Partnership business can be started by
A. At least seven persons
B. Any one person
C. At least two persons
D. At least three persons
Answer: C. At least two persons
Explanation: At least two people must establish a business for it to qualify as a partnership.
Question 10
A company is formed by
A. Government
B. Directors
C. Promoters
D. Owners
Answer: C. Promoters
Explanation: The individuals who join together to establish a company are its promoters.
Question 11
The word limited should appear after the name of
A. Partnership
B. Registered company
C. Statutory company
D. Chartered company
Answer: B. Registered company
Explanation: Registration with the appropriate authority, the Corporate Affairs Commission (CAC) in Nigeria, gives the company limited status and requires that designation at the end of its name.
Question 12
Deferred shares are generally issued to
A. Promoters
B. Government
C. General Public
D. Managing agents
Answer: A. Promoters
Explanation: Promoters traditionally receive deferred or founders’ shares. Dividends on these shares wait until shareholders with higher priority have received their entitlements.
Question 13
The members of a Co-operative Society have
A. Unlimited liability
B. Limited liability
C. Joint and Several liability
D. Joint liability
Answer: B. Limited liability
Explanation: Cooperative members have limited liability, as do members of a PLC.
Question 14
The principle followed in a co-operative society is
A. No vote
B. One man, one vote
C. Multiple votes
D. One share one vote
Answer: B. One man, one vote
Explanation: Cooperatives operate democratically on a one-member, one-vote basis. In a PLC, voting power instead depends on the number of shares held.
Question 15
To start a sole proprietorship business, what should be the minimum number of owners?
A. 2
B. 10
C. 4
D. 1
Answer: D. 1
Explanation: Only one person is needed to establish a sole proprietorship.
Question 16
What type of agreement is used to form a partnership business?
A. Written agreement
B. Oral agreement
C. Written or oral agreement
D. None of them
Answer: C. Written or oral agreement
Explanation: Partners may establish their business through either a verbal or written agreement.
Question 17
In partnership, partners liabilities are
A. Unlimited
B. Limited to the capital of the business
C. Limited
D. Both A and C
Answer: A. Unlimited
Explanation: Partners normally have unlimited liability unless the business is registered with limited status, moving it towards a limited liability company.
Question 18
Debenture holders are
A. Debtors of the Company
B. Creditors of the Company
C. External users
D. Owners of the Company
Answer: B. Creditors of the Company
Explanation: The company’s creditors.
Question 19
Debentures indicate the
A. Short-term Borrowings of a Company
B. Directors’ shares in a company
C. The Investment of Equity-Shareholders
D. Long-term Borrowings of a Company
Answer: D. Long-term Borrowings of a Company
Explanation: A debenture provides a business with a long-term loan on which interest is paid at intervals.
Question 20
Which of the following is not an economic activity?
A. Production
B. Social service
C. Professional
D. Trading in goods
Answer: B. Social service
Explanation: In this classification, voluntary social service with no income-earning purpose is non-economic. Social-service work performed for pay can be an economic activity.
Question 21
Which option is not a business activity?
A. Production of goods
B. Transportation
C. Exchange of goods
D. Work in a factory for wages
Answer: D. Work in a factory for wages
Explanation: Employment means working for wages. It differs from independently running a business that produces, moves or exchanges goods and services.
Question 22
Which of the following is the characteristic of a business?
A. Production
B. Exchange or sale
C. Risk element
D. All the above
Answer: D. All the above
Explanation: Business activities include buying and selling items with economic value.
Question 23
Oil refineries and sugar mills are classified under which industries?
A. Primary
B. Secondary
C. Tertiary
D. None of the above
Answer: B. Secondary
Explanation: Transforming raw materials into finished products is a secondary activity.
Question 24
Identify the activity which does not support trade.
A. Banking
B. Warehousing
C. Insurance
D. Mining
Answer: D. Mining
Explanation: Mining is an extractive activity rather than an aid to trade.
Question 25
Which of the following is not one of the 7Ps of the marketing mix?
A. Promotion
B. Price
C. People
D. Purpose
Answer: D. Purpose
Explanation: Purpose is excluded from the marketing Ps.
Question 26
Marketing of product and service in which the offer itself is not intended to make any monetary profit is called
A. Profit marketing
B. Virtual marketing
C. Digital marketing
D. Non profit marketing
Answer: D. Non profit marketing
Explanation: Marketing carried out without a profit objective is called non-profit marketing.
Question 27
A reduction in price on purchase during a stated period of time is known as
A. Sale
B. Discount
C. Allowance
D. None of these
Answer: B. Discount
Explanation: A discount reduces a good’s price when specified conditions apply.
Question 28
Liberalization means
A. Free determination of interest rates
B. Removing unwanted restrictions from the industry, trade and economy
C. Opening up of economy to the world by attaining international competitiveness
D. Reducing number of reserved industries from 17 to 8
Answer: B. Removing unwanted restrictions from the industry, trade and economy
Explanation: Liberalization relaxes or removes restrictions on industry, trade and economic activities, broadening opportunities to participate in markets.
Question 29
When a company takes over another one and clearly becomes the new owner, the action is called
A. Acquisition
B. Merger
C. Strategic Alliance
D. None of the above
Answer: A. Acquisition
Explanation: An acquisition occurs when one company takes over another.
Question 30
Which among the following is not opened for private sector participation in Nigeria as at today?
A. Railways
B. Telecommunication sector
C. Education sector
D. Power sector
Answer: A. Railways
Explanation: Every sector listed currently allows private participation apart from railways.
Question 31
Which among these can be the condition for the success of privatisation?
A. Measurability of performance
B. Alternative institutional arrangements
C. Barriers to enter the market
D. All of the above
Answer: A. Measurability of performance
Explanation: Measurable performance enables monitoring of a privatized enterprise’s output, efficiency and service quality. Entry barriers generally reduce competition.
Question 32
Which among these is a monopolistic trade practice?
A. Manufacturing only one product
B. Selling only one product
C. Limiting technical Development
D. Unreasonably limiting competition
Answer: D. Unreasonably limiting competition
Explanation: Restricting competition constitutes a monopolistic practice.
Question 33
Globalisation is the term used to describe the process of removing restrictions on
A. Investment
B. Foreign Trade
C. Both A and B
D. None of the above
Answer: C. Both A and B
Explanation: Globalization increases international integration through investment and trade. It therefore relates to restrictions on both foreign investment and trade.
Question 34
Credit can be created by
A. CBN
B. Foreign banks
C. Commercial banks
D. Private banks
Answer: C. Commercial banks
Explanation: Commercial banks create most credit because they are the main banks receiving deposits and issuing loans.
Question 35
Repo Rate means?
A. Rate offered by banks to their premium customers.
B. Rate at which CBN offers loan facilities to commercial banks against government securities, with the condition that banks need to repurchase the securities in a short period.
C. Banks having excess cash can buy securities from CBN with a condition of reselling securities to CBN on a prefixed day and price.
D. Banks can discount bills of exchange and avail loan from CBN at times when cash is needed.
Answer: B. Rate at which CBN offers loan facilities to commercial banks against government securities, with the condition that banks need to repurchase the securities in a short period.
Explanation: The repo rate applies to short-term funding in which a commercial bank sells eligible securities to the central bank and commits to buying them back later at an agreed price.
Question 36
Which of the following rules do not apply to commercial banks?
A. Companies Act
B. Banking Regulation Act
C. CBN Act
D. All of the above
Answer: C. CBN Act
Explanation: The CBN Act governs the CBN alone. Nigerian banks are subject to companies legislation and banking regulation laws.
Question 37
Increase in cash reserve ratio (CRR) by the CBN will result in
A. Initially increase the supply but later on decrease automatically.
B. No impact on the supply of money in the economy
C. Decrease the supply of money in the economy
D. Increase the supply of money in the economy
Answer: C. Decrease the supply of money in the economy
Explanation: A higher CRR leaves commercial banks with less cash available for lending, reducing their capacity to create credit.
Question 38
The financial market where stocks and debt securities with maturities of more than a year are traded is known as
A. Long-term market
B. Counter market
C. Capital market
D. Shorter term market
Answer: C. Capital market
Explanation: The capital market supplies long-term loans.
Question 39
The regulatory body for the securities market in Nigeria is
A. Stock exchanges
B. Securities and Exchange Commission
C. CBN
D. None of the above
Answer: B. Securities and Exchange Commission
Explanation: The Securities and Exchange Commission (SEC) oversees Nigeria’s securities market activities.
Question 40
Transportation is part of
A. Trade
B. Aids of trade
C. Production
D. None of the above
Answer: B. Aids of trade
Explanation: Transport supports trade by making trading operations easier.