WAEC SSCE - Commerce - 2011

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The reward received by a party in a contract agreement is known as "consideration". Consideration is the exchange of something of value, such as money or services, between parties in a contract. It is an essential element of a contract as it indicates that both parties have something to gain from the agreement and that they are entering into it willingly. The consideration must be sufficient but need not be of equal value to what is being offered by the other party. In other words, each party must give something of value to the other in order for the contract to be valid.

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The cost of goods sold can be calculated using the formula: Cost of Goods Sold = Opening Stock + Purchases - Closing Stock Substituting the given values into the formula, we get: Cost of Goods Sold = 2,000 + 28,000 - 3,000 Cost of Goods Sold = 27,000 Therefore, the cost of goods sold is D27,000.

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To calculate the average stock, we can use the formula: Average Stock = (Opening Stock + Closing Stock) / 2 Given: Turnover = D36,000 Purchases = D28,000 Opening Stock = D2,000 Closing Stock = D3,000 We can calculate the Cost of Goods Sold (COGS) using the formula: COGS = Turnover - Purchases COGS = D36,000 - D28,000 COGS = D8,000 We can calculate the Average Stock using the formula above: Average Stock = (Opening Stock + Closing Stock) / 2 Average Stock = (D2,000 + D3,000) / 2 Average Stock = D2,500 Therefore, the average stock is D2,500.

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When the government gives up its ownership and control of a business to individuals, this is known as privatization. Privatization is the process of transferring ownership and control of government-owned enterprises to private individuals or organizations. This means that the government sells all or part of its stake in a business to private individuals or organizations, who then become the new owners and are responsible for managing the business. The goal of privatization is to increase efficiency and profitability in the business, reduce the government's financial burden, and promote competition in the economy.

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The cost of goods sold is the cost of the merchandise that a retailer sells to its customers during a particular period. To calculate the cost of goods sold, we use the following formula: Cost of Goods Sold = Opening Stock + Purchases - Closing Stock Using the figures given in the question: Opening Stock = D2,000 Purchases = D28,000 Closing Stock = D3,000 Therefore, the cost of goods sold is: Cost of Goods Sold = D2,000 + D28,000 - D3,000 Cost of Goods Sold = D27,000 Hence, the cost of goods sold is D27,000.

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The principle of Surrender value is not a principle of insurance. Surrender value is the amount of money paid to the policyholder when they voluntarily terminate their life insurance policy before its maturity or death. The principles of insurance are guidelines that ensure that the insurance policy is valid, enforceable, and meets the needs of both the policyholder and the insurer. The other principles of insurance include insurable interest, subrogation, and proximate cause. The insurable interest principle states that the policyholder must have a legitimate interest in the insured property, and in the case of life insurance, the policyholder must have an insurable interest in the person whose life is insured. The principle of subrogation means that the insurer can take over the rights of the policyholder to recover from a third party that caused the loss. The principle of proximate cause requires that an insured event must be the result of an insured peril and not an excluded peril.

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Two elements of a valid contract are offer and acceptance. An offer is a proposal made by one party to another, indicating a willingness to enter into a contract on certain terms. Acceptance occurs when the other party agrees to the terms of the offer. Age and maturity are not elements of a valid contract, as they refer to personal characteristics of the parties involved rather than contractual requirements. Performance and discharge, on the other hand, are related to the fulfillment of contractual obligations and the completion of the contract, rather than its formation. While important aspects of contract law, they are not elements of a valid contract. Promise and capacity are related to the ability of the parties to enter into a contract and their intention to be legally bound, respectively. While important concepts in contract law, they are not elements of a valid contract on their own.

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The portion of the share capital which the company has asked the shareholders to pay for is known as called-up capital. This means that the company has called upon its shareholders to pay a certain amount of the total authorized capital. For example, if a company has authorized capital of 1,000 shares, and it calls upon shareholders to pay for 500 shares, then the called-up capital will be 500. It is the actual amount of money paid by shareholders to the company and is sometimes also referred to as the "contributed capital".

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A cheque is considered stale when it is not presented for payment within a certain period after the date it was written. In general, this period varies by jurisdiction, but it is usually six months in most countries. Therefore, a cheque dated 15th March 2012, will become stale after six months, which is on 15th September 2012. Thus, the correct option is "16th September 2012".

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Before the advent of legal tender and credit instruments such as currency notes, cheques, and bank drafts, cowries were used as a medium of exchange. Cowries are a type of sea shell that was widely used as currency in many parts of the world, including Africa and Asia. They were valued for their rarity, durability, and aesthetic qualities. Cowries were often strung together in long strands or sewn onto clothing as a form of decoration and were also used for trade transactions, payment of taxes, and as a means of storing wealth.

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The completion of the production process by grading and branding of goods is a function of the wholesaler. A wholesaler is a business entity that purchases goods in large quantities from the manufacturer or producer and sells them in smaller quantities to retailers or other businesses. As part of their activities, wholesalers usually sort, grade, and brand the goods they purchase from the manufacturers before selling them to retailers or other customers. Therefore, it is the responsibility of the wholesaler to ensure that the goods are of the right quality, properly graded, and branded to meet the needs of their customers.

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The function of encouraging a high quality of members' products through the circulation of research information is typically performed by a Manufacturers Association. This association is a group of manufacturers who come together to represent their interests in the industry. By sharing research information and promoting high-quality products, the association helps to improve the overall reputation of the industry and benefits its members. This function can also help to increase consumer confidence in the products produced by the association's members, leading to increased sales and profits.

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The item used to inform the addressee that they have a registered parcel for collection is a slip. A slip is a small piece of paper that contains information about the registered parcel and how to retrieve it. It is usually left in the addressee's mailbox or delivered to their doorstep by a postal worker. The slip typically contains details such as the name and address of the sender, the date the parcel was registered, the tracking number, and the location where the parcel can be picked up. The addressee is required to present the slip to the post office or delivery center in order to retrieve the registered parcel.

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The par value of a share is also known as its nominal price. It is the face value of the share, or the value assigned to it at the time of issuance. It represents the minimum price at which a share can be issued or sold. The par value has little significance in modern stock markets, as the market price of a share is usually determined by the forces of supply and demand. In some countries, however, the par value is still used as a basis for calculating certain fees and taxes.

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The main divisions of production are extraction, manufacturing, and construction. Extraction refers to the process of obtaining natural resources such as minerals, oil, and gas from the earth. Manufacturing involves using raw materials to produce finished goods, such as assembling car parts to make a car. Construction refers to the process of building structures, such as buildings and roads. These three divisions are important because they represent the different stages of the production process, from obtaining raw materials to creating finished products. By understanding these divisions, individuals and businesses can identify their role in the production process and how they contribute to the economy.

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Among the given options, Postal order is a means of payment. A postal order is a financial instrument issued by the post office for the transfer of a specific sum of money from one person to another. It is a type of payment method that allows individuals to send money through the postal service. The sender purchases the postal order from the post office and fills in the name of the recipient, who can then cash it in at their own post office. This method is commonly used for small transactions, such as sending money to family and friends, or for online purchases where other forms of payment may not be accepted.

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Liquid capital in a business refers to the assets that can easily be converted to cash without significant loss of value. These are assets that are readily available to a business for use in meeting its financial obligations, such as paying bills or investing in new opportunities. Examples of liquid assets include cash, short-term investments, and accounts receivable. Having a strong amount of liquid capital is important for a business, as it allows them to quickly respond to financial needs or opportunities as they arise.

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The term used to describe the actions taken by consumers to express dissatisfaction with the quantity, price, and quality of goods available is "consumerism." Consumerism refers to the social movement that aims to protect and promote the interests of consumers by pushing for fair trade practices, improved product safety, and access to accurate information about products and services. Consumerism seeks to ensure that businesses are held accountable for their actions and that consumers are able to make informed decisions about the products they buy.

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The last link in the channel of distribution is the "consumer". The channel of distribution refers to the path or route through which goods and services move from the producer to the final consumer. The consumer is the ultimate destination of the goods or services, and therefore, represents the final link in the distribution channel. The producer or manufacturer produces the goods, then sells to the wholesaler who then sells to the retailer, and the retailer sells to the consumer. Thus, the consumer is the end user who buys the product or service for personal consumption or use.

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Shipping services rendered by Nigeria to The Gambia would be classified by The Gambia as invisible exports. Invisible exports refer to services sold by one country to another, which are not tangible goods, and therefore are not physically visible when they cross the border. Examples of invisible exports include shipping services, tourism, banking, insurance, and consultancy services. In this case, Nigeria is exporting shipping services to The Gambia, and since shipping services are not tangible goods, they are classified as invisible exports by The Gambia.

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The option that is not a function of Ports Authority is "Providing enough ships for the country". This is because Ports Authority is responsible for managing and maintaining the ports and harbours of a country, ensuring that they are safe, efficient, and capable of handling the movement of goods and people. Providing enough ships for the country, on the other hand, is the responsibility of ship owners and operators, who purchase or lease ships to transport goods and people to and from the ports.

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Gabon is not a member of the Lake Chad Basin Commission. The Lake Chad Basin Commission is a regional intergovernmental organization that includes four member countries: Nigeria, Chad, Cameroun, and Niger. The commission was established to promote cooperation and sustainable development in the Lake Chad Basin region, which is located in West and Central Africa. Gabon is not part of the Lake Chad Basin region and therefore is not a member of the commission.

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A multipurpose cooperative is a cooperative society that performs a combination of the functions of other types of cooperatives. In other words, it is a cooperative that engages in more than one type of activity such as production, marketing, and credit activities. Therefore, the answer to the question is multipurpose cooperative.

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A voluntary association of business executives within a locality is known as a "Chamber of Commerce". Chambers of Commerce are organizations made up of local businesses that work to promote and protect the interests of the business community. They provide a platform for businesses to network, share information and resources, and collectively advocate for policies that benefit their members. Chambers of Commerce also offer services such as training, mentorship, and business advice to their members. They may also engage in activities such as organizing trade shows, conferences, and other events that help to promote the growth and development of businesses in the local area.

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Karamo is engaged in entrepot trade. Entrepot trade involves importing goods from one country and then re-exporting them to another country. In this case, Karamo imports goods from Senegal and sells them in Guinea Bissau. This type of trade is common in countries with free trade zones or areas with low tariffs, where goods can be imported and exported with minimal hindrance. The intermediary between the importing and exporting countries, in this case, Karamo, earns a profit by buying goods at a lower price in one country and selling them at a higher price in another country.

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When a particular cargo is thrown into the sea to save the ship, it is considered as a "general average loss" in marine insurance. This type of loss occurs when some cargo is jettisoned (thrown overboard) to save the vessel and other cargo. In general average, the loss suffered is shared by all the parties who have an interest in the voyage, i.e., the ship owner, cargo owner, and insurer. The contribution of each party is determined based on the value of their respective interests in the voyage. The purpose of the general average loss is to ensure that all parties bear a proportionate share of the risk in case of a maritime emergency.

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A document issued by a company to the public for advertising its shares is called a prospectus. It is a formal legal document that provides information to potential investors about the company and the investment opportunity being offered. The prospectus includes details about the company's financial performance, management, risk factors, and other relevant information that an investor should know before deciding to invest in the company's shares. The prospectus is a key tool for companies to raise capital from the public and for investors to make informed investment decisions.

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The term that refers to using symbols, letters, name or combination of these by a company to distinguish its products is "trade mark". A trademark is a legally registered symbol, name, or logo that is used to identify and distinguish a company's products or services from those of others. It can be a word, phrase, symbol, design, or a combination of these elements. A trademark helps customers recognize a company's products and builds brand recognition and loyalty. It also protects a company's intellectual property rights by preventing others from using the same or similar mark to sell their products.

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Manufacturers may sell goods directly to consumers when the goods are perishable, made to customer's specification, highly technical, or widely demanded. When goods are perishable, it is necessary to sell them directly to the consumer in order to reduce the risk of spoilage. When goods are made to customer's specification or highly technical, it may be necessary to sell them directly to the consumer in order to ensure that the customer's needs are met. Finally, when goods are widely demanded, it may be more profitable for the manufacturer to sell them directly to the consumer rather than through intermediaries such as wholesalers and retailers. Therefore, the correct option is (i), (iii), and (iv) only.

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Air transport is advantageous over other forms of transport because of its speed. Airplanes are the fastest means of transport, enabling passengers and cargo to reach their destination quickly. This speed advantage is particularly useful for urgent shipments, emergencies, and time-sensitive goods, as air transport saves time compared to other modes of transport, such as road, rail, or sea transport. Additionally, air transport is not affected by traffic congestion on roads or bottlenecks in ports, making it a more reliable option for delivering goods on time.

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Banks settle their indebtedness in the clearing house. A clearing house is a financial institution that facilitates the exchange of payments, securities, or derivatives between participating banks or financial institutions. It acts as a middleman between banks to facilitate the settlement of financial transactions. When a bank receives a check or other payment instrument from a customer of another bank, it sends the item to the clearing house for processing. The clearing house then verifies and settles the transaction by debiting the account of the bank that received the payment and crediting the account of the bank that made the payment. This system ensures that payments are settled efficiently and securely between banks.

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Payment to a ship owner for carrying one's cargo is known as freight. Freight is the price paid to the owner of the vessel for the transportation of goods from one location to another. The freight charges depend on various factors such as the type of goods being transported, distance, mode of transportation, and the weight or volume of the cargo.

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"Setting up facilities for storing the product to be bought" is not a pre-sale service. Pre-sale services are the services provided by the seller before the sale of the product to attract customers and facilitate the sale. The services that are provided before the sale are called pre-sale services. The other options are pre-sale services: - Repair and maintenance work: Some products may require maintenance or repair services even before they are sold. Offering these services to the potential buyer can attract them to make the purchase. - Providing detailed information about the goods to be purchased: Providing detailed information about the goods to be purchased helps customers understand the product, its features, and benefits, which can help them make an informed purchase decision. - Demonstrating the use and performance of the products to be sold: Demonstrating how the product works and its performance can help the buyer understand how the product can be useful to them. This can help build trust and confidence in the buyer, leading to a sale. Therefore, the correct answer is "Setting up facilities for storing the product to be bought."

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A rights issue is a method used by companies to raise capital by offering existing shareholders the right to purchase additional shares at a discounted price. It is also known as a rights offering or subscription right. The purpose of a rights issue is to raise additional funds for the company while giving existing shareholders the opportunity to maintain their percentage ownership in the company or increase it by subscribing to the new shares. So, the correct option from the given choices is "shares offered to existing shareholders at a cheaper price".

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The essence of adopting the marketing concept by a firm is the recognition that goods and services have no value unless they are desirable to customers. In other words, the marketing concept involves focusing on the needs and wants of customers, and creating products or services that satisfy those needs and wants. By doing so, a firm can build long-term relationships with its customers, increase customer satisfaction, and ultimately, drive profits. This approach is in contrast to a company-oriented or profit-oriented approach, where the focus is solely on the company's goals and profits, rather than on the needs and wants of customers.

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An overdraft is a financial arrangement between a bank and a customer, where the bank allows the customer to withdraw more money than they have in their account, up to a certain limit. In other words, it is a form of short-term loan where the customer can withdraw money they don't currently have, as long as they agree to pay interest on the overdraft amount. Therefore, is the correct answer: "amount permitted to be withdrawn in excess of one's deposit".

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The relationship which subsists between two or more persons carrying on a business with a view to profit is called a partnership. In a partnership, the individuals combine their skills, resources, and expertise to run a business together and share the profits and losses according to a pre-agreed ratio. A partnership is a form of business ownership that allows individuals to pool resources and share risks, making it an attractive option for small businesses or those starting out with limited capital. Partnerships can be general, where all partners share equal responsibility and liability, or limited, where one or more partners have limited liability for the business's debts and obligations.

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The correct answer is "misrepresentation." Misrepresentation occurs when one party makes a false statement with the intention of inducing the other party to enter into a contract. The false statement may be about a material fact, a past event, or a future promise. If the innocent party relies on the false statement and suffers a loss, they may have a right to rescind the contract or claim damages. Misrepresentation can be innocent, negligent, or fraudulent, depending on the state of mind of the party making the false statement.

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Taxes on imported foreign goods are known as "tariffs." Tariffs are taxes imposed by a government on imported goods, making them more expensive to purchase and, therefore, less attractive to buyers. Tariffs can be specific, meaning a fixed charge per unit of the imported item, or ad valorem, meaning a percentage of the item's value. Tariffs can be used by governments to raise revenue, protect domestic industries, or regulate trade.

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