2024 JAMB COMMERCE
Question 1
The production activity that turns processed raw materials into consumer and industrial goods is described as
A. Extractive
B. Manufacturing
C. Constructive
D. Processing
Answer: B. Manufacturing
Explanation: Manufacturing transforms inputs into outputs.
Question 2
Demonstration of social responsibility by a business includes
A. Taxes to government
B. Payment of insurance premium
C. Interests on loans
D. Scholarship to students
Answer: D. Scholarship to students
Explanation: A company demonstrates social responsibility by funding student scholarships.
Question 3
The major characteristic of a limited liability company that differentiates it from others is
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 may sue and be sued under its own name.
Question 4
Span of control stipulates that
A. An employee should report to only one superior
B. Manager must demand accountability from their subordinates
C. Resources have to be economized within the various division
D. The number of employee reporting to one superior
Answer: D. The number of employee reporting to one superior
Explanation: Span of control describes the subordinates who report to a superior.
Question 5
Use of computer in modern industry indicates
A. Competitive development
B. Scientific development
C. Economic development
D. Technological development
Answer: D. Technological development
Explanation: Technological progress has enabled computers to be used across today’s businesses.
Question 6
NACCIMA stands for
A. Nigerian-American Center for Culture, Civic, Industries, Minerals and Arts
B. Nigerian Association for Culture, Civic, Industries, Minerals and Arts
C. National Agency for Culture, Civilization, Investment, Manufacturing, and Agriculture
D. Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture
Answer: D. Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture
Explanation: NACCIMA is the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture.
Question 7
Which of the following is the most important business resource?
A. Money
B. Management
C. Materials
D. Manpower
Answer: D. Manpower
Explanation: Manpower enables work to be accomplished. Without it, even abundant supplies of every other resource cannot achieve results.
Question 8
If Mr A says to Mr B, “I will sell you this hat for ₦30,” and Mr B replies, “I will pay ₦29,” the contract is
A. An offer and acceptance
B. An implied contract
C. A complete simple contract
D. An offer but no acceptance
Answer: D. An offer but no acceptance
Explanation: Mr A offers to sell at ₦30, but Mr B proposes ₦29. This is a counteroffer rather than an acceptance, so a contract has not yet been formed.
Question 9
Marketing mix comprises
A. Product, promotion, place and price
B. Personal selling, advertising and research
C. Promotion, production, place and price
D. Procurement, price, product and place
Answer: A. Product, promotion, place and price
Explanation: The four elements of the marketing mix are product, promotion, place and price.
Question 10
Which of the following is a form of sales promotion?
A. Advertising on radio
B. Offering free sample
C. Distributing printed materials
D. Advertising on television
Answer: B. Offering free sample
Explanation: Sales promotion uses activities that draw prospective customers to a product. Free samples are one way to attract them.
Question 11
The parallel lines drawn across a cheque mean that it has to be paid into the account of the
A. Payee
B. Drawer
C. Drawee
D. Payer
Answer: A. Payee
Explanation: The payee is the person named on a cheque. A crossed cheque requires the amount to be paid into the bearer’s account.
Question 12
The business in the stock exchange is characterized essentially by
A. Dealing
B. Brokerage
C. Speculations
D. Transactions
Answer: B. Brokerage
Explanation: Brokerage involves buying and selling stocks, the principal activity of the stock exchange.
Question 13
A pro forma invoice occurs
A. Before supply of goods
B. After supply of goods
C. When goods are received
D. After payment for goods
Answer: A. Before supply of goods
Explanation: A seller sends a pro forma invoice before confirming the sale.
Question 14
Goods discharged from ships on which import duties have not been paid are kept in the
A. Ordinary warehouse
B. Public warehouse
C. Private warehouse
D. Bonded warehouse
Answer: D. Bonded warehouse
Explanation: A bonded warehouse stores goods on which duty is payable.
Question 15
Sole enterprise may flourish best in
A. A mining business
B. A retailing business
C. An oil exploration business
D. A car assembly business
Answer: B. A retailing business
Explanation: Retail businesses commonly operate as sole proprietorships, whereas a large corporation may need more than one person.
Question 16
What is the major function of the wholesaler?
A. Buying from small-scale producers and selling to exporters
B. Buying in bulk and selling in small quantities
C. Granting of credit facilities to retailers
D. Providing information to manufacturers on market situation
Answer: B. Buying in bulk and selling in small quantities
Explanation: Wholesalers meet producers’ need for buyers who purchase in large quantities.
Question 17
The difference between the total payments for visible imports and the receipts from visible exports within a given period is referred to as
A. Balance of payments
B. Balance of trade
C. Comparative cost advantage
D. Comparative advantage
Answer: B. Balance of trade
Explanation: The balance of trade measures the monetary difference between visible imports and visible exports.
Question 18
Which of the following takes place when firms producing at different stages in the same industry combine?
A. Conglomeration
B. Vertical integration
C. Horizontal integration
D. Cartel
Answer: B. Vertical integration
Explanation: Vertical integration combines firms working at different production stages.
Question 19
It will be compulsory to dissolve a business when
A. The owners agree to do so
B. There is a declaration by a court of law
C. The termination of its life
D. An unfavourable economic climate
Answer: B. There is a declaration by a court of law
Explanation: Businesses are created under the law, and legal requirements provide the strongest compulsory basis for their dissolution.
Question 20
Retailing and wholesaling industries rely heavily on
A. Banking
B. Insurance
C. Manufacturing
D. Railway
Answer: C. Manufacturing
Explanation: Manufacturers produce the goods distributed and sold by wholesalers and retailers. Those traders consequently depend heavily on manufacturing.
Question 21
An example of indirect service is
A. Civil service
B. Family nurse
C. Household service
D. Entertainment
Answer: A. Civil service
Explanation: Civil servants serve people who do not pay them directly, making their work an indirect service.
Question 22
The person who undertakes any risk in insurance business is known as
A. A broker
B. An underwriter
C. An insurer
D. An actuary
Answer: B. An underwriter
Explanation: An underwriter is an individual or company that agrees to share the insurance risk of an object.
Question 23
The object of the business is determined by the
A. Workers
B. Government
C. Society
D. Promoters
Answer: D. Promoters
Explanation: Promoters arrange a company’s registration and determine its objectives.
Question 24
The business organization in which shareholders have equal votes is
A. Sole praetorship
B. Partnership
C. Co-operative
D. Limited liability company
Answer: C. Co-operative
Explanation: Every member of a cooperative society holds one vote.
Question 25
When it became necessary to liquidate a company, the first step to be taken is the appointment of
A. A receiver
B. An auditor
C. An accountant
D. Liquidator
Answer: D. Liquidator
Explanation: When liquidation becomes necessary, a liquidator is appointed first, followed by a receiver.
Question 26
One type of investment that has a variable income is
A. Debentures
B. Preferred shares
C. Government bonds
D. Ordinary shares
Answer: D. Ordinary shares
Explanation: Ordinary shares have variable returns because no fixed return is specified.
Question 27
Use the following information to answer Questions 27–30:
Opening stock: ₦12,000
Sales: ₦90,000
Purchases: ₦95,000
Gross profit: ₦20,000
Expenses: ₦8,000
What is the cost of goods available for sale?
A. ₦95,000
B. ₦90,000
C. ₦12,000
D. ₦102,000
Answer: D. ₦102,000
Explanation: D.
Question 28
Use the following information to answer Questions 27–30:
Opening stock: ₦12,000
Sales: ₦90,000
Purchases: ₦95,000
Gross profit: ₦20,000
Expenses: ₦8,000
What is closing stock?
A. ₦5,000
B. ₦32,000
C. ₦17,000
D. ₦12,000
Answer: B. ₦32,000
Explanation: B.
Question 29
Use the following information to answer Questions 27–30:
Opening stock: ₦12,000
Sales: ₦90,000
Purchases: ₦95,000
Gross profit: ₦20,000
Expenses: ₦8,000
A term which indicates that share is temporarily suspended is
A. Ex-dividend
B. Cum-dividend
C. Bond
D. Stock
Answer: A. Ex-dividend
Explanation: Ex-dividend means without dividend entitlement, so the share does not qualify for that dividend.
Question 30
The form of business financing which involves pledging of a specific asset is
A. Debenture
B. Mortgage
C. Loan
D. Bond
Answer: B. Mortgage
Explanation: A mortgage uses an asset as security for borrowing.
Question 31
The total amount that a company is allowed to raise according to its memorandum of association is known as
A. Issued capital
B. Authorized capital
C. Called-up capital
D. Paid-up capital
Answer: B. Authorized capital
Explanation: Authorized share capital is the total amount a company is permitted to raise.
Question 32
Goods sold directly to consumers by manufacturers are
A. Light goods
B. Consumers’ goods
C. Capital goods
D. None of the above
Answer: C. Capital goods
Explanation: Capital goods are industrial products that cannot be distributed through middlemen.
Question 33
Excise duties are charged on goods that are
A. Targeted for export
B. Targeted for import
C. Domestically consumed
D. Demurrage
Answer: A. Targeted for export
Explanation: Excise duties are described as taxes on goods produced for export. (Note from the workbook: Standard economics and commerce define excise as a duty on goods produced for domestic consumption, but the statement reflects the textbook’s supplied solution.)
Question 34
Cash discount differs from trade discount in that
A. Cash discount is to encourage bulk buying
B. Quantity discount encourages quick payment
C. Cash discount encourages quick payment
D. Quantity discount is not different from cash discount
Answer: C. Cash discount encourages quick payment
Explanation: Cash discounts encourage buyers to pay promptly for goods.
Question 35
When importer and exporter failed to load or unload goods from ship, they pay
A. Excess charges
B. Demurrage
C. Premium charge
D. Trade charges
Answer: B. Demurrage
Explanation: Demurrage is the charge incurred for delays in clearing goods at a port.
Question 36
A market where short-term securities are traded is known as
A. Primary market
B. Stock exchange
C. Secondary market
D. Money market
Answer: D. Money market
Explanation: Short-term financial securities are traded in the money market, while long-term securities belong to the capital market.
Question 37
When a vendor supplies newspapers from house to house and across the streets, the element of marketing mix involved is
A. Product
B. Price
C. Promotion
D. Place
Answer: D. Place
Explanation: Place adds value to sales, so taking goods around to sell can encourage customers to buy.
Question 38
One of the criteria for differentiating consumer markets from industrial ones is
A. Type of demand
B. Type of supply
C. Nature of the services rendered
D. Price of the goods
Answer: A. Type of demand
Explanation: These markets differ in the nature of demand. Consumer demand directly satisfies wants, whereas industrial demand arises from demand for the finished goods or services produced.
Question 39
Which of the following is not an aid to trade?
A. Promotion
B. Insurance
C. Transportation
D. Communication
Answer: A. Promotion
Explanation: It is an element of the marketing mix associated with advertising, rather than an aid to trade in its own right.
Question 40
Buying and selling of goods and services is the factor that led to the development of
A. Technology
B. Commerce
C. Accounting
D. Banking
Answer: B. Commerce
Explanation: Commerce involves the purchase and sale of goods and services.