2021 JAMB COMMERCE
Question 1
Use the following details to answer Questions 1 and 2: Land and building ₦70,000, machinery ₦20,000, stock ₦32,000, debtor ₦2,000, cash ₦4,000, creditor ₦4,500. The capital employed is
A. ₦128,000
B. ₦90,000
C. ₦38,000
D. ₦123,500
Answer: D. ₦123,500
Explanation: To calculate capital employed, deduct current liabilities from total assets.
Total assets = ₦70,000 + ₦20,000 + ₦32,000 + ₦2,000 + ₦4,000 = ₦128,000.
Capital employed = ₦128,000 − ₦4,500 = ₦123,500.
Question 2
Use the following details to answer Questions 1 and 2: Land and building ₦70,000, machinery ₦20,000, stock ₦32,000, debtor ₦2,000, cash ₦4,000, creditor ₦4,500. Calculate working capital.
A. ₦123,500
B. ₦128,000
C. ₦33,500
D. None of the above
Answer: C. ₦33,500
Explanation: Working capital is calculated by subtracting current liabilities from current assets:
₦32,000 + ₦2,000 + ₦4,000 − ₦4,500 = ₦33,500.
Question 3
The total amount of shares an organisation can issue for offer is
A. Issued capital
B. Total capital
C. Offer for sale
D. Authorised capital
Answer: D. Authorised capital
Explanation: Authorized capital is the total share amount an organization may offer for sale under its memorandum of association.
Question 4
In a partnership business, a person whose name only is used in the business is referred to as
A. Dormant partner
B. Nominal partner
C. Active partner
D. General partner
Answer: B. Nominal partner
Explanation: A nominal partner contributes only their name to the partnership.
Question 5
Which of the following formulas is used to compute rate of stock turnover?
A. Cost of goods sold ÷ Average stock
B. Cost of goods sold ÷ Average stock
C. Sales ÷ Stock
D. Stock ÷ Sales
Answer: A. Cost of goods sold ÷ Average stock
Explanation: Divide cost of goods sold by average stock to obtain the stock-turnover rate, expressed in times.
Question 6
Dumping is the act of selling at a ____________ price abroad.
A. Higher
B. Cheaper
C. Equal
D. Zero
Answer: B. Cheaper
Explanation: Dumping sells products overseas below their normal value, often below a comparable home-market price. It does not depend on the goods being inferior.
Question 7
One of the advantages of sole proprietorship is
A. Capital
B. Easy loan
C. Cheap labour
D. Quick decision making
Answer: D. Quick decision making
Explanation: Since the sole proprietor alone makes business decisions, decisions can be taken quickly.
Question 8
Which of the following is not an aid to trade?
A. Fund
B. Transportation
C. Communication
D. Warehousing
Answer: A. Fund
Explanation: Aids to trade make trading easier. They include banking and finance, advertising, transport, warehousing and communication.
Question 9
Which of the following agencies ensures conformity with government specifications?
A. Chambers of Commerce
B. NAFDAC
C. Standard Organisation
D. Consumer Association
Answer: C. Standard Organisation
Explanation: Each country’s standards authority ensures compliance with prescribed standards. In Nigeria, this role belongs to the Standards Organisation of Nigeria.
Question 10
A group of companies is made up of
A. Firms
B. Industries
C. Factory
D. Partnership
Answer: A. Firms
Explanation: Tools brought together form a firm, while firms grouped together form an industry, described as a group of companies.
Question 11
A computer output can be
A. Softcopy only
B. Hardcopy only
C. Paper print out
D. Softcopy and hardcopy
Answer: D. Softcopy and hardcopy
Explanation: Computer output may be soft copy, such as an untouchable screen display, or hard copy, such as a physical paper printout.
Question 12
One of the following is not a function of a wholesaler.
A. Warehouse facility
B. Financing
C. Breaking bulk
D. Linkage
Answer: C. Breaking bulk
Explanation: Breaking bulk is described as the retailer’s responsibility rather than the wholesaler’s.
Question 13
The working memory is known as
A. CD-ROM
B. CD-RAM
C. ROM
D. RAM
Answer: D. RAM
Explanation: Random access memory (RAM) temporarily stores the information a computer needs to carry out tasks.
Question 14
ROM means
A. Random Operation Memory
B. Read Only Memory
C. Read On Memory
D. None of the above
Answer: B. Read Only Memory
Explanation: ROM stands for Read Only Memory.
Question 15
Which of the following is not an African institution?
A. WHO
B. AU
C. ECOWAS
D. Niger-Basin Commission
Answer: A. WHO
Explanation: WHO is the World Health Organization, a worldwide UN agency. The AU, ECOWAS and Niger Basin organization are African bodies.
Question 16
Consideration in law of contract means
A. Pity
B. Decision
C. Price
D. None of the above
Answer: C. Price
Explanation: In contract law, consideration is what one party is prepared to give in exchange for value from the other.
Question 17
The principle of subrogation in insurance business means
A. Indemnifying the loss
B. Substitution
C. Transfer of rights
D. Marginalisation
Answer: C. Transfer of rights
Explanation: Subrogation in insurance accompanies a claim with the transfer of the related rights and obligations.
Question 18
Central banks buy at ____________.
A. Bank credit
B. Bank rate
C. Open market rate
D. Cash reserve ratio
Answer: C. Open market rate
Explanation: Demand and supply in the open market influence the rate at which the Central Bank purchases securities.
Question 19
Companies distinguish their products with
A. Patent right
B. Symbols
C. Copyright
D. Trademark
Answer: D. Trademark
Explanation: Companies use trademarks to differentiate their products.
Question 20
Commercialisation is the act of
A. Selling public enterprises to private bodies
B. Making public enterprises profitable
C. Subscribing for shares
D. All of the above
Answer: B. Making public enterprises profitable
Explanation: Commercialisation involves making public enterprises profitable.
Question 21
The last shareholders to be considered in distribution of dividends are
A. Ordinary shareholders
B. Founder shareholders
C. Preference shareholders
D. Redeemable shareholders
Answer: B. Founder shareholders
Explanation: Founders’ shareholders rank last for dividend payments and usually receive the largest portion.
Question 22
The process of selling a public enterprise to shareholders is known as
A. Conversion
B. Commercialisation
C. Handling over
D. Privatisation
Answer: D. Privatisation
Explanation: Privatization transfers a public enterprise into private ownership through sale.
Question 23
The act of changing from one type of occupation to another is called
A. Mobility of labour
B. Freelancing
C. Job-bing
D. Flexibility
Answer: A. Mobility of labour
Explanation: Labour mobility refers to how easily a worker can move between types of employment.
Question 24
CAC is
A. Christ Apostolic Church
B. Corporate Chambers and Commerce
C. Corporate Affairs Commission
D. None of the above
Answer: C. Corporate Affairs Commission
Explanation: CAC stands for Corporate Affairs Commission. It oversees matters relating to the establishment and termination of artificial legal bodies.
Question 25
Use the following information to answer Questions 25 and 26: Closing stock ₦5,000 and purchases ₦30,000. What is cost of goods available for sale?
A. ₦5,000
B. ₦25,000
C. ₦35,000
D. ₦30,000
Answer: D. ₦30,000
Explanation: Cost of goods available for sale represents the value of the goods on hand for sale. Here it equals total purchases: 30,000 + 5,000 = 35,000.
Question 26
Use the following information to answer Questions 25 and 26: Closing stock ₦5,000 and purchases ₦30,000. Calculate the rate of stock turnover.
A. 10 times
B. 6 times
C. 10 times
D. Insufficient details
Answer: D. Insufficient details
Explanation: Calculating stock turnover needs cost of goods sold and average stock. Without opening stock, purchases and closing stock alone cannot determine either figure.
Question 27
Which of the following forms of business has no limitation to the number of owners?
A. Co-operative society
B. Partnership
C. Private limited company
D. Public limited company
Answer: D. Public limited company
Explanation: Unlike other ownership forms, a public limited company has no upper limit on its number of owners.
Question 28
In foreign trade, FOB means
A. Free on-board
B. Free on boat
C. Forward on bills
D. Fire on boat
Answer: A. Free on-board
Explanation: FOB stands for Free On Board.
Question 29
The body that regulates Nigerian Stock Exchange is
A. CBN
B. BOI
C. SEC
D. BPE
Answer: C. SEC
Explanation: The Securities and Exchange Commission (SEC) regulates activities on the Nigerian Stock Exchange.
Question 30
Which of the following is short term?
A. Treasury bill
B. Mortgage loan
C. Bond
D. Debentures
Answer: A. Treasury bill
Explanation: A short-term loan falls due for repayment within twelve calendar months.
Question 31
In marine insurance we have ____________ and ____________.
A. Total loss and general loss
B. Total loss and actual loss
C. Actual loss and general loss
D. Particular loss and general loss
Answer: B. Total loss and actual loss
Explanation: A treasury bill normally matures after 90 days.
Question 32
The advantage of public limited liability companies over all other forms of business ownership is
A. Access to unlimited loans
B. It is transparent
C. Anybody can be member
D. It is usually the biggest
Answer: A. Access to unlimited loans
Explanation: Marine-insurance losses fall into two main categories: total and partial loss. A public limited company’s main advantage over other business forms is access to borrowing from a wide range of sources.
Question 33
Which of the following cannot be categorised under primary industry?
A. Mining
B. Hunting
C. Farming
D. Constructing
Answer: D. Constructing
Explanation: Primary industry extracts raw materials from their sources, so every form of farming belongs to primary industry.
Question 34
In hire purchase, ownership is transferred
A. When first instalment is paid
B. When last instalment is paid
C. When half of the value is paid
D. When good is handed over to buyer
Answer: B. When last instalment is paid
Explanation: A hire purchaser takes possession of the goods, but ownership stays with the seller until the final instalment is paid.
Question 35
One of the following can cause a cheque to be dishonoured.
A. Amount on the cheque
B. Date on the cheque
C. Names on the cheque
D. Inconsistency on the cheque
Answer: D. Inconsistency on the cheque
Explanation: Inconsistencies on a cheque are a major reason it may be dishonoured.
Question 36
Commerce is ____________.
A. Buying and selling
B. Trade and aids to trade
C. Advertising and marketing
D. Production and distribution
Answer: B. Trade and aids to trade
Explanation: Commercial activities fall into the two categories of trade and aids to trade.
Question 37
Which of the following is not a member of ECOWAS?
A. Cameroun
B. Togo
C. Burkina Faso
D. Niger
Answer: A. Cameroun
Explanation: For the 2021 examination, Cameroon was outside ECOWAS, while Togo, Burkina Faso and Niger belonged to it.
Question 38
Loan for industrial development is best sourced from
A. Commercial bank
B. Mortgage bank
C. Development bank
D. BOI
Answer: D. BOI
Explanation: BOI, the Bank of Industry, specializes in lending for industrial development.
Question 39
The act of generating publicity for a product is a function of
A. Finance
B. Advertising
C. Transportation
D. Warehousing
Answer: B. Advertising
Explanation: Advertising makes goods or products known through available methods, including marketing and promotional activities.