WAEC SSCE - Commerce - 2017

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The extractive occupations involve removing or extracting natural resources from the earth or other sources. Out of the options listed, agriculture does not belong to the extractive occupation. Agriculture involves cultivating crops or raising livestock for food, fiber, or other products. It is not about extracting natural resources from the earth, but rather about nurturing and growing them. On the other hand, quarrying involves extracting rocks and minerals from quarries or pits; carving involves cutting or shaping materials like wood or stone; and mining involves extracting valuable minerals or other geological materials from the earth. All of these occupations involve removing natural resources from the earth or other sources and therefore fall under the category of extractive occupations.

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The process of placing the right people in the right position in an organization is called staffing. Staffing involves identifying the necessary positions within an organization and finding qualified candidates to fill those positions. The goal of staffing is to ensure that the organization has the right people in the right roles to achieve its objectives. This process includes recruiting, selecting, training, and developing employees to meet the needs of the organization. By staffing effectively, an organization can increase its efficiency, productivity, and profitability.

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The business that relies on government subvention for its operation is a public corporation. A public corporation is a business entity that is owned and operated by the government. As such, it relies on government funding to finance its operations. This funding can come in the form of direct subsidies, grants, or other forms of financial support. Public limited liability companies and private limited liability companies are both privately owned businesses and do not typically rely on government subventions for their operation. Co-operative societies are also owned by their members and do not necessarily rely on government funding, although they may be eligible for certain types of government assistance or support programs.

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In a hire purchase agreement, the buyer is referred to as the "hirer." The hirer is the person who enters into an agreement to pay for the use of an item, usually over a period of time, with the option to purchase the item at the end of the agreement. In other words, the hirer rents the item with the intention of eventually owning it.

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A "right issue" is when a company offers existing shareholders the opportunity to purchase additional shares at a preferential rate. This is usually done as a way to raise capital, and existing shareholders are given the first opportunity to invest in the company before the shares are made available to the general public. The preferential rate means that the price of the shares is lower for existing shareholders than it would be for new investors. This is a way for the company to reward its existing shareholders and give them an opportunity to increase their investment in the company.

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The advertising medium that makes only an audio impression is radio. Radio advertising is a form of advertising that uses audio messages to promote products, services, or brands on the radio. Radio commercials are typically short, usually ranging from 15 to 60 seconds, and are broadcasted between regular programming. They are a cost-effective way to reach a large audience and can target specific demographics based on the type of radio station and programming. Radio advertising allows businesses to convey their message to listeners through sound, music, and voiceovers, creating an auditory experience for the audience.

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The activity aimed at closing sales is advertising. Advertising involves promoting a product or service to potential customers with the aim of encouraging them to make a purchase. Advertising can be done through various channels such as TV, radio, billboards, social media, and print media. The purpose of advertising is to create awareness about a product or service, highlight its unique features and benefits, and persuade potential customers to buy it. By doing so, advertising helps to drive sales and generate revenue for the business. While insurance, banking, and warehousing are important business activities, they are not directly aimed at closing sales. Insurance is focused on providing financial protection against risks, banking involves managing financial transactions, and warehousing is concerned with storing and managing inventory.

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An example of an invisible item of trade is shipping. Invisible items of trade refer to goods or services that cannot be seen or touched, and are not physically transported across borders. Shipping, as an invisible item of trade, refers to the movement of goods by sea, air, or land transportation. Although the ships, planes, and trucks used to transport goods can be seen, the actual transportation service itself is intangible and cannot be touched. Despite being invisible, shipping plays a vital role in international trade, as it enables the movement of physical goods between countries.

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The factors of production are the resources used in the production of goods and services. They include land, labor, capital, and entrepreneurship. Land refers to natural resources such as forests, minerals, and water, which are used in production. Labor refers to the human effort used in the production process, while capital refers to the machinery, equipment, and other man-made resources used in production. Entrepreneurship refers to the individuals who take risks to start and manage businesses. Therefore, the factor of production that is not listed in the options is "exchange." Exchange is not a factor of production as it refers to the trading of goods and services between buyers and sellers. It is not a resource used in the production of goods and services.

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A speculator in the stock exchange market who sells securities in anticipation of a fall in their prices is called a "bear". The term "bear" is used to describe someone who believes that the market or a particular stock is going to go down in price, and who takes action to profit from that belief by selling their securities. For example, if a person thinks that a particular company's stock is overvalued and due for a correction, they may sell their shares in that company in the hope of buying them back at a lower price later on. This would be considered a bearish position. The opposite of a bear is a "bull", which describes someone who believes that the market or a particular stock is going to go up in price, and who takes action to profit from that belief by buying securities. A "stag" is someone who buys shares in an IPO (Initial Public Offering) with the intention of selling them immediately after the stock starts trading in the secondary market, hoping to make a quick profit. And a "broker" is a person or a company that acts as an intermediary between buyers and sellers of securities.

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The duty payable on goods produced locally is usually referred to as an "excise duty". Excise duty is a type of tax that is levied on certain goods that are produced or manufactured within a country. The purpose of this tax is to generate revenue for the government and to regulate the production and consumption of certain goods, such as alcohol, tobacco, and gasoline. The amount of excise duty that is payable on a particular good will depend on several factors, such as the type of product, its price, and the specific laws and regulations in place in the country where it is produced. In simple terms, excise duty is a tax on locally made goods, and it helps the government to earn money and regulate the production and use of certain items.

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The marketing mix element that ensures that goods are available where and when needed is "place". Place refers to the distribution channels and locations where products or services are made available to customers. It includes decisions such as the choice of retail stores, online platforms, or direct sales channels that are used to distribute the product or service. In simpler terms, place involves making sure that the product is available to the customer in the right place, at the right time and in the right quantity. For instance, if a customer wants to buy a particular product, they should be able to find it easily in a nearby store or online platform, and it should be available in the right quantity. A business needs to ensure that its distribution channels are efficient and effective to make sure that the product is available to customers when and where they need it. Therefore, place is an essential marketing mix element that helps to ensure customer satisfaction and ultimately drives sales. By making sure that the product is available in the right place and at the right time, a business can increase its chances of success and gain a competitive advantage in the market.

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Hull insurance is a type of marine insurance. Marine insurance covers losses or damages incurred during shipping and transportation of goods by sea, air, or land. Hull insurance specifically covers losses or damages to the vessel or ship itself, including its machinery and equipment. This type of insurance protects the owner of the ship in case of losses or damages to the ship, including those caused by accidents, natural disasters, or other unforeseen events.

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The facility that is not provided by the port authority is a tarmac. A tarmac is a paved area, typically used for landing and takeoff of aircrafts. On the other hand, a port authority is responsible for managing and operating port facilities, such as berths for ships to dock, warehouses for storage of goods, and cranes for loading and unloading cargo. So, a tarmac is not typically part of the responsibilities of a port authority.

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A memorandum of association is a document that outlines the basic details of a company, such as its name, its registered office address, and the nature of its business. It also states the company's objectives, which can include inviting the public to buy its shares. This document is important because it sets out the company's relationship with the public and sets the framework for how the company will operate and be governed. In other words, it lays out the basic rules for how the company will conduct its affairs and interact with others.

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The main purpose of branding is to differentiate goods from other similar goods. Branding creates a unique identity and image for a product or service in the minds of consumers. This helps to establish trust and loyalty, and sets the product apart from its competitors. Effective branding can also increase the quantity of goods demanded, and may enable a seller to command a higher selling price, ultimately leading to an enhanced turnover of goods.

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Ocean liners are large ships designed for transportation of people and goods across long distances by sea. They typically sail on fixed schedules and routes, with predetermined stops at various ports. While they may carry cargo, they are primarily intended for the transportation of passengers, often offering luxurious amenities and accommodations. They do not exclusively carry liquid, but may transport a variety of goods and materials.

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The coming together of people who engage in trade and industry in a particular area is called a chamber of commerce. It's an organization that represents the interests of local businesses and works to promote economic growth and development in the community. A chamber of commerce may offer various services to its members, such as networking opportunities, business education and training, marketing and advertising assistance, and advocacy on behalf of the business community.

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The law that protects a musician's work from piracy is copyright law. This law gives the creators of original works, such as music, the exclusive right to control how their work is used, reproduced, and distributed. This means that others cannot use the work without the permission of the copyright owner. If someone does use a musician's work without permission, this is considered copyright infringement and the musician may be able to take legal action to stop the infringement and receive compensation for damages.

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The central bank carries out its monetary policy through "bank rates". Bank rate is the interest rate at which the central bank lends money to commercial banks. By changing the bank rate, the central bank can influence the cost of borrowing for commercial banks, which in turn affects the interest rates that banks charge their customers. For example, if the central bank lowers the bank rate, commercial banks can borrow money from the central bank at a lower cost, which allows them to reduce the interest rates they charge on loans to customers. This encourages businesses and individuals to borrow more money, which can stimulate economic growth. On the other hand, if the central bank raises the bank rate, it becomes more expensive for commercial banks to borrow money, which can lead to higher interest rates for borrowers. This can discourage borrowing and spending, which can help to control inflation. In summary, the central bank carries out its monetary policy through bank rates, which are used to influence the cost of borrowing and lending in the economy. By adjusting the bank rate, the central bank can help to stimulate or control economic growth and inflation.

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The transfer of government businesses to individuals is known as "privatization." This means that a business or industry that was previously owned and operated by the government is sold to private individuals or companies. The goal of privatization is often to increase efficiency and competitiveness, as well as to generate revenue for the government. In a privatized system, the private owners are responsible for making business decisions and managing the company, rather than the government. This can result in improved services and products, but it can also lead to higher prices for consumers.

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The term that enjoins a buyer to examine goods thoroughly before making payment is "caveat emptor". Caveat emptor is a Latin term that means "let the buyer beware". This legal principle places the responsibility on the buyer to examine the goods or services they intend to purchase before completing the transaction. This means that the buyer must take care to ensure that the goods or services meet their requirements and are in good condition before making payment. This principle is important because it places the burden of risk on the buyer, rather than the seller. It also encourages buyers to be more cautious when making purchases and to carefully examine goods and services to avoid being taken advantage of by unscrupulous sellers. In summary, caveat emptor reminds buyers that they have a responsibility to protect their own interests by thoroughly examining goods or services before making payment.

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Under the principle of subrogation, the insurance company has the right to "take over any legal rights of the insured". This means that if the insurance company pays for a loss that was caused by a third party, the insurance company has the right to step into the shoes of the policyholder and pursue the third party for reimbursement. The idea behind subrogation is that the insurance company should not have to bear the loss if someone else is responsible for it. By exercising their right of subrogation, the insurance company can try to recover the money they paid out to the policyholder from the party that caused the loss.

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An overdraft is usually granted to holders of "current accounts." A current account is a type of bank account that allows individuals or businesses to deposit and withdraw funds on a frequent basis. An overdraft is a short-term loan that is linked to a current account, and it allows account holders to withdraw more funds than they have in their account, up to a pre-agreed limit. This can be a convenient way for individuals or businesses to manage their cash flow, especially when unexpected expenses arise. The bank will typically charge interest on the overdraft amount and may also charge fees for using this service.

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The conversion of raw materials into finished goods is performed by the manufacturing industry. The manufacturing industry involves the use of machines, tools, and labor to transform raw materials into finished products. This can include everything from textiles to electronics, furniture to automobiles. The manufacturing process may involve a series of steps, such as design, assembly, testing, and packaging, to ensure that the finished product meets quality standards. The manufacturing industry is essential to the economy, as it creates jobs, drives innovation, and provides consumers with the goods they need and want.

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An example of a computer output device is a monitor. A monitor is a device that displays information, images, and videos on a screen. It receives data from the computer's central processing unit (CPU) and converts it into a visual form that can be easily interpreted by the user. The monitor allows the user to see what the computer is doing, such as displaying the results of a search, showing a video, or allowing the user to navigate through the computer's interface. Therefore, the monitor is an essential output device for any computer system.

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The expert responsible for calculating the probability of risk in insurance is called an actuary. Actuaries use mathematical and statistical models to analyze data and calculate the probability of risk associated with insuring a particular individual or organization. They take into account various factors such as age, gender, occupation, health, and past insurance claims to determine the likelihood of future claims and losses. Actuaries play a critical role in the insurance industry as they help insurance companies determine the appropriate premiums to charge for their policies, based on the level of risk involved. They also advise insurance companies on how to manage their risks and ensure their financial stability. In summary, an actuary is an expert in risk assessment and helps insurance companies make informed decisions about their policies and pricing.

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The cost of goods sold is the cost of the goods that were sold during the period. It is calculated by subtracting the value of the closing stock from the total cost of goods available for sale. In this case, Adama's opening stock was D5,000 and he purchased goods worth D30,000, giving him a total cost of goods available for sale of D35,000 (D5,000 + D30,000). His closing stock was valued at D7,000. Therefore, the cost of goods sold is: Cost of goods sold = Total cost of goods available for sale - Value of closing stock Cost of goods sold = D35,000 - D7,000 Cost of goods sold = D28,000 Therefore, the cost of goods sold is D28,000.

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One of the aims of the Economic Community of West African States (ECOWAS) is to promote trade within the region. This means that ECOWAS wants to encourage and support the buying and selling of goods and services between countries within West Africa. The goal is to increase economic cooperation and growth in the region by making it easier for countries to do business with each other.

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The responsibility of organizing local and international trade fairs is typically with the Chamber of Commerce. A Chamber of Commerce is an organization made up of businesses and individuals in a local area. They work together to promote and support local businesses, as well as improve the local economy. One of the ways they do this is by organizing trade fairs, which are events where businesses can showcase and sell their products or services to potential customers and buyers. These trade fairs can be local events or international events, attracting businesses and attendees from all over the world. In summary, the Chamber of Commerce is responsible for organizing trade fairs because it is part of their mission to promote and support local businesses and improve the local economy.

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The term "E. & O.E" is not used in a price quotation for goods. "E. & O.E" stands for "errors and omissions excepted." It is a legal disclaimer that is often used in contracts and other business documents to indicate that the information contained in the document is subject to change and that the author of the document is not responsible for any errors or omissions. The other three terms are commonly used in price quotations for goods: - C.I.F stands for "cost, insurance, and freight." It is a type of pricing that includes the cost of the goods, the cost of shipping, and the cost of insurance to protect the goods during shipping. - EX Works means that the price quoted only includes the cost of the goods at the factory or warehouse, and does not include any other expenses such as shipping, customs, or insurance. - F.A.S stands for "free alongside ship." It is a type of pricing that includes the cost of the goods, plus the cost of shipping the goods to the port of destination.

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The major division of commerce are "trade" and "auxiliaries to trade". "Trade" refers to the exchange of goods and services between buyers and sellers. It involves activities such as buying, selling, and exchanging of goods and services. "Auxiliaries to trade" refers to activities that support or facilitate trade, such as transportation, communication, warehousing, banking, insurance, advertising, and marketing. These activities help to make trade more efficient, safe, and effective. Therefore, the major division of commerce includes both the actual exchange of goods and services (trade) and the supporting activities that make trade possible (auxiliaries to trade).

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To calculate the average stock, we need to use the following formula: Average Stock = (Opening Stock + Closing Stock) / 2 We are given that Adama's opening stock was D5,000 and his closing stock was D7,000. Plugging these values into the formula, we get: Average Stock = (5,000 + 7,000) / 2 Average Stock = 12,000 / 2 Average Stock = D6,000 Therefore, the average stock of Adama's business is D6,000. This means that on average, Adama had D6,000 worth of goods in stock during the given period.

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When a business becomes insolvent, it means that it cannot pay its debts as they become due. This can result in several outcomes, but the most likely outcome is liquidation, which means the business will be closed down and its assets will be sold to pay off its debts. Continuity may not be possible if the business is unable to pay its debts, and it may not be able to continue operating. Expansion is also unlikely as the business will not have the resources to invest in growth. Re-incorporation may be possible, but it would depend on the circumstances of the insolvency and whether the business is able to restructure its finances and operations in a way that makes it viable again. In summary, insolvency can lead to the closure of a business and the sale of its assets to pay off its debts. It is unlikely to result in continuity or expansion, and re-incorporation may only be possible in certain circumstances.

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The machine that a post office provides to an organization to imprint stamps on their letters is called a franking machine. It is used to print postage on mail items such as envelopes, packages, and labels. It can calculate the correct amount of postage required based on the weight, size, and destination of the mail. The franking machine can also track the postage expenses of the organization and provide reports for accounting purposes. Using a franking machine can save time and money by avoiding the need to purchase and affix stamps manually.

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One disadvantage of rail transport is that it is not flexible. This means that trains cannot easily change their route or destination, and they must stick to a set schedule. This can make it difficult to quickly respond to changes in demand or to transport goods to unexpected locations. Additionally, trains are limited to running on tracks, so they cannot reach every location.

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Trade credit is a source of short-term capital. This means that a company can borrow money from its suppliers for a short period of time, usually to purchase goods or materials for its business operations. The company agrees to pay the supplier back, typically within 30 to 60 days, after it has sold the goods or received payment from its own customers. This type of financing allows a company to bridge its cash flow gap, ensuring it has the funds it needs to keep operating smoothly.

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The element of contract that is lacking in this scenario is "formality", specifically the signing of a deed of sale. A contract is a legally binding agreement between two or more parties that is enforceable by law. In order for a contract to be valid, it must have certain elements, including an offer and acceptance, valuable consideration, capacity, and formality. Formality refers to the requirement that certain contracts must be in writing and signed by the parties involved. A deed of sale is a legal document that outlines the details of the sale of property, including the names of the parties involved, the description of the property, and the purchase price. It must be signed by both parties in order to be legally binding. In this scenario, Mr. Ojo paid Noak N3,000 for a piece of land, but they did not sign a deed of sale. As a result, the agreement is not formalized, and there is no written record of the transaction. This lack of formality makes the agreement unenforceable in a court of law. Therefore, in order for this agreement to be considered a valid contract, a deed of sale must be signed by both parties to formalize the transaction and make it legally binding.

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Working capital refers to the amount of money that a company uses in its daily operations. It is the amount of funds used to cover short-term expenses such as paying employees, buying raw materials, and paying bills. In other words, working capital is the money a company has available to meet its short-term obligations and keep its operations running smoothly. It is an important indicator of a company's financial health, as it shows whether it has enough resources to pay its debts and continue operating in the future.

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The most suitable channel for the sale of an aircraft is directly from the manufacturer to the consumer. This is because aircraft are high-value and complex products that require a significant amount of technical knowledge and expertise to operate and maintain. As a result, consumers who are interested in purchasing an aircraft are typically very knowledgeable and have specific requirements that may not be fully understood by intermediaries such as wholesalers or retailers. Furthermore, the high cost of aircraft means that there are typically relatively few buyers, and these buyers often have very specific needs and preferences. By selling directly to the consumer, the manufacturer can build a relationship with the buyer and better understand their needs, which can lead to more customized and profitable sales. Overall, while there may be some advantages to selling through intermediaries in certain circumstances, the high value and complexity of aircraft makes direct sales from the manufacturer to the consumer the most suitable channel for the sale of an aircraft.

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The right of an unpaid seller includes several remedies in case the buyer fails to pay the price of the goods. These remedies are intended to protect the seller's interest in the goods and to compensate them for any losses they may suffer due to the buyer's default. However, there is one right that an unpaid seller does not have, and that is declaring the buyer bankrupt. This is because only a court can declare a person bankrupt, and the seller does not have the authority to do so. On the other hand, an unpaid seller has the right to retain the possession of the goods until the buyer pays the price, stop the goods while in transit, and resell the goods to recover the price. These rights are outlined in the Sale of Goods Act, which is a legal framework that governs the sale of goods in most countries.

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Commercial activities in West Africa received a great boost due to contact with Europeans. When Europeans arrived in West Africa, they brought with them new technologies, goods, and ideas. They established trade relationships with local rulers and merchants, exchanging European products such as textiles, firearms, and alcohol for African products such as gold, ivory, and slaves. This trade brought wealth to both European and West African traders and contributed to the growth of West African economies. However, it also had negative consequences such as the enslavement and forced migration of millions of Africans.

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Cameroon is a member of the Lake Chad Basin Commission. The Lake Chad Basin Commission (LCBC) is a regional intergovernmental organization that was established in 1964 by four countries, including Cameroon, Chad, Niger, and Nigeria, with the goal of promoting cooperation and sustainable development in the region surrounding Lake Chad. The LCBC has since expanded to include the Central African Republic, Libya, and Sudan as member countries. Therefore, out of the options given, only Cameroon is a member of the Lake Chad Basin Commission.

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(a) Four elements of the external environment of business

1. Economic environment (level of income, inflation, interest rates, taxation and general economic conditions).
2. Political and legal environment (government policies, laws, regulations and political stability).
3. Social and cultural environment (people's values, customs, tastes, beliefs and population).
4. Technological environment (state of technology, machinery, tools and methods of production).

(Also acceptable: the natural/physical environment, competitors, suppliers, and international environment.)

(b) Two responsibilities each that a business owes to the following:

Customers

1. To supply good-quality, safe and genuine goods and services at fair prices.
2. To give honest information and after-sales service, and to honour guarantees.

Employees

1. To pay fair and prompt wages and provide good working conditions.
2. To ensure safety at work, job security and opportunities for training and promotion.

Investors

1. To use their capital wisely and pay reasonable returns (dividends/interest).
2. To keep accurate accounts and give truthful, regular information about the business.

Society

1. To avoid pollution and protect the environment.
2. To provide employment and contribute to community welfare, and pay taxes honestly.

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(a) What is transportation by pipeline?

Transportation by pipeline is the movement of liquids and gases, such as crude oil, refined petroleum products, natural gas and water, through a network of connected pipes from the point of production or supply to where they are needed. It is a continuous, largely automatic means of transport used mainly for fluids over long distances.

(b) Five benefits of transport by air

1. Speed. Air transport is the fastest means of transport, ideal for moving goods and people over long distances quickly.
2. Suitable for perishable and urgent goods. It is best for carrying perishables (flowers, fish, fruits) and urgent items such as medicine and mail.
3. Reaches distant and inaccessible areas. Aircraft can cross oceans, mountains and deserts that are difficult for road or rail.
4. Carries valuable and light goods economically. It is well suited to high-value, low-bulk goods such as jewellery, documents and electronics.
5. Reduced handling and quicker delivery. Fast transit lowers the risk of damage, deterioration and pilferage and speeds up trade.

(Also acceptable: it saves time and reduces the need for large warehouse stocks.)

(c) Four factors in choosing an effective channel of distribution

1. Nature of the product. Perishable, fragile or technical goods need short, direct channels, while durable goods can use longer channels.
2. The market. A widely scattered market needs longer channels with many middlemen, while a concentrated market can use direct selling.
3. Cost of distribution. The producer chooses the channel that delivers goods at the lowest reasonable cost.
4. Nature and size of the firm. A large firm with enough resources may sell directly, while a small firm relies on wholesalers and retailers.

(Also acceptable: degree of control desired, and the volume of goods to be sold.)

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(a) Define communication

Communication is the process of transmitting or exchanging information, ideas, messages, feelings or instructions from one person (the sender) to another (the receiver) through a channel, in a way that is understood, and obtaining feedback. In business it is the passing of information within the organisation and between the organisation and the outside world.

(b) Six means of communication in business

1. Letters and memoranda (written correspondence).
2. Telephone (including mobile phones).
3. Email and the internet.
4. Fax (facsimile).
5. Telex and telegrams.
6. Face-to-face meetings and notices/circulars.

(Also acceptable: radio, television, courier and dispatch riders.)

(c) Four ways communication is important to business

1. Passing instructions and information. It enables management to pass orders, policies and instructions to staff and to receive reports back.
2. Aids decision-making. Accurate and timely information helps managers make sound decisions.
3. Promotes coordination. It links the various departments and staff so that their activities work together smoothly toward common goals.
4. Facilitates trade and customer relations. It enables the firm to receive orders, quote prices, place and confirm orders, and maintain good relations with customers and suppliers.

(Also acceptable: it improves efficiency, boosts staff morale and helps advertising/promotion.)

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(a) Five services a commercial bank renders to customers

1. Accepting deposits. It keeps customers' money safe in current, savings and fixed deposit accounts.
2. Granting loans and overdrafts. It lends money to customers to meet business and personal needs.
3. Providing means of payment. It offers cheques, standing orders, bank drafts and electronic transfers for settling debts.
4. Safe-keeping of valuables. It provides safe custody for documents, jewellery and other valuables.
5. Foreign exchange and money transfer. It buys and sells foreign currency and transfers money within and outside the country.

(Also acceptable: giving financial advice, acting as a referee, and issuing statements of account.)

(b) Five duties of a customs authority

1. Collection of import and export duties. It assesses and collects duties and taxes on goods entering and leaving the country.
2. Prevention of smuggling. It guards the borders and ports to stop the illegal movement of goods in and out of the country.
3. Inspection and examination of goods. It inspects imported and exported goods and their documents to ensure they comply with the law.
4. Enforcement of import and export prohibitions. It prevents the entry of banned or dangerous goods (such as hard drugs and contraband) and controls restricted exports.
5. Compilation of trade statistics. It keeps records of goods imported and exported, providing data for the country's trade statistics.

(Also acceptable: operating bonded warehouses and collecting excise duties.)

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(a) Commercial abbreviations in full

• C.O.D = Cash On Delivery (payment is made when the goods are delivered).
• C.I.F = Cost, Insurance and Freight (the price quoted covers the cost of the goods, insurance and freight to the buyer's port).
• E & O.E = Errors and Omissions Excepted (the seller reserves the right to correct any mistakes made on the invoice).

(b) Discount calculations

Cost of goods = Le100,000. Trade discount = 5%, cash discount = 5%.

(i) Trade discount value

Trade discount is calculated on the cost price.

\[ \text{Trade discount} = \frac{5}{100} \times 100{,}000 = Le5{,}000 \]

(ii) Cash discount value

Cash discount is calculated on the amount remaining after deducting trade discount.

\[ \text{Invoice price} = 100{,}000 - 5{,}000 = Le95{,}000 \]

\[ \text{Cash discount} = \frac{5}{100} \times 95{,}000 = Le4{,}750 \]

(iii) Net amount payable by the buyer

\[ \text{Net amount} = 95{,}000 - 4{,}750 = Le90{,}250 \]

The buyer therefore pays Le90,250.

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(a) Define advertising

Advertising is any paid, non-personal form of communication used by an identified sponsor to inform, persuade and remind the public about goods, services or ideas, through media such as television, radio, newspapers, posters and the internet, in order to promote sales.

(b) Four demerits of advertising

1. It increases the price of goods. The heavy cost of advertising is added to the selling price and passed on to consumers.
2. It can deceive and mislead. Exaggerated or false claims may persuade people to buy inferior or harmful products.
3. It encourages wasteful spending. Persuasive adverts create artificial wants, making people buy things they do not really need.
4. It can promote unhealthy competition. Rival firms may spend excessively on adverts, and some adverts corrupt morals or exploit fear and vanity.

(c) Five ways producers can create awareness for their goods and services

1. Advertising through television, radio, newspapers, magazines, posters and billboards.
2. Personal selling by employing sales representatives to reach customers directly.
3. Sales promotion such as free samples, discounts, coupons, gifts and prize competitions.
4. Publicity and public relations through news coverage, sponsorship of events and community programmes.
5. Exhibitions and trade fairs where products are displayed and demonstrated to the public.

(Also acceptable: use of the internet and social media, and word of mouth.)

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(a) Four ways a contract can be terminated

1. By performance. The contract ends when both parties completely carry out (perform) their obligations as agreed.
2. By agreement. The parties may mutually agree to bring the contract to an end before it is fully performed.
3. By breach. When one party fails to perform his part or refuses to honour the terms, the injured party may treat the contract as discharged and sue for damages.
4. By frustration (impossibility of performance). The contract ends where an unforeseen event beyond the parties' control (such as destruction of the subject matter, death, or a change in the law) makes performance impossible or illegal.

(Also acceptable: by lapse of time, and by operation of law such as bankruptcy.)

(b) Six duties of an agent to his principal

1. To carry out the principal's lawful instructions faithfully and with due care and skill.
2. To act in good faith and in the best interest of the principal.
3. To render proper accounts of all money and transactions handled on the principal's behalf.
4. Not to make secret profit or take bribes from the transaction.
5. To avoid conflict of interest and not to disclose confidential information about the principal.
6. To perform the work personally and not delegate it without authority.

(Also acceptable: to hand over to the principal all money and property received on his behalf, and to keep the principal informed.)

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(a) Five merits of co-operative societies

1. Easy formation. A co-operative is simple and cheap to form, needing only a small number of members and little legal formality.
2. Democratic control. It is run on the principle of one-member-one-vote, so every member has an equal say regardless of shareholding.
3. Limited liability. Members' liability is limited to their capital contribution, protecting personal property.
4. Payment of dividend/bonus. Surpluses are shared among members as dividends, usually in proportion to their patronage.
5. Elimination of middlemen. Members buy and sell collectively, cutting out middlemen so goods are cheaper and better prices are obtained.

(Also acceptable: continuity of existence, access to loans/credit, and encouragement of thrift and savings.)

(b) Five steps in forming a Private Limited Company

1. Choose a name and check its availability. The promoters select a suitable company name and apply to the Corporate Affairs Commission (Registrar of Companies) to confirm it is not already in use.
2. Prepare the necessary documents. They draw up the Memorandum of Association, Articles of Association and other required documents.
3. File the documents and pay fees. The documents, together with a statement of share capital, particulars of directors and the registration fees and stamp duty, are filed with the Registrar.
4. Registration and issue of Certificate of Incorporation. The Registrar examines the documents and, if satisfied, registers the company and issues a Certificate of Incorporation.
5. Commencement of business. On receiving the Certificate of Incorporation, a private company may begin business immediately (it need not obtain a certificate of trading).

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(a) Two differences between Articles of Association and Memorandum of Association

(A further difference: the memorandum is the supreme/superior document, so where the two conflict the memorandum prevails.)

(b) Four advantages of a public limited company

1. Large capital. It can raise huge amounts of capital by selling shares and debentures to the general public.
2. Limited liability. Members' liability is limited to the amount unpaid on their shares, protecting personal property.
3. Continuity of existence. It has perpetual succession; it continues to exist despite the death, retirement or insolvency of members.
4. Transfer of shares. Shares are freely transferable, so members can sell their shares easily.

(Also acceptable: economies of large-scale operation; employment of skilled specialists.)

Four disadvantages of a public limited company

1. Difficult and costly to form. Its formation involves many legal formalities and expenses.
2. Lack of secrecy. It must publish audited accounts and file returns, so its affairs are open to the public and competitors.
3. Separation of ownership from control. Shareholders (owners) do not manage the company; salaried directors may not always act in the owners' best interest.
4. Slow decision-making. Its large size and formal procedures make decision-making slow and bureaucratic.

(Also acceptable: subject to heavy government regulation and double taxation.)

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(a) Five benefits enjoyed by countries engaging in foreign trade

1. Access to goods not produced at home. Countries can import goods they cannot produce because of climate, resources or technology.
2. Wider market for exports. Producers can sell surplus output abroad, earning more income and encouraging large-scale production.
3. Earning of foreign exchange. Exports bring in foreign currency needed to pay for imports and to finance development.
4. International specialisation. Each country produces what it can make most efficiently (comparative advantage), raising world output and lowering costs.
5. Promotion of international relations. Trade fosters friendship, cooperation and understanding among nations.

(Also acceptable: transfer of technology and skills, and higher standard of living through greater variety of goods.)

(b) Five measures to correct an unfavourable balance of payments

1. Devaluation of the currency. Lowering the value of the local currency makes exports cheaper and imports dearer, improving the balance.
2. Import restrictions. Imposing tariffs, quotas, or outright bans on non-essential imports reduces the value of imports.
3. Export promotion. Encouraging exports through subsidies, incentives and export drives increases foreign earnings.
4. Exchange control. Restricting the amount of foreign currency available for imports and foreign spending curbs the outflow of funds.
5. Deflationary policy. Reducing domestic demand (through higher taxes and reduced government spending) cuts spending on imports.

(Also acceptable: promoting local production/import substitution, and encouraging tourism and foreign investment.)

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(a) Standing order

A standing order is a written instruction given by a customer to his bank to pay a fixed sum of money to a named person or organisation at regular, stated intervals (for example, monthly rent or subscriptions) until the instruction is cancelled. The amount stays the same until the customer changes it.

(b) Bank draft

A bank draft is a cheque drawn by a bank on itself (or on another bank) at the request of a customer who has paid for it. Because payment is guaranteed by the bank, it is a very safe means of settling large debts, especially where the two parties do not know each other.

(c) Legal tender

Legal tender is money that must, by law, be accepted in settlement of a debt within a country. A creditor cannot refuse it. In practice notes are legal tender up to any amount, while coins are legal tender only up to limited amounts.

(d) Money order

A money order is a document bought from a post office or bank for a specific sum of money, which the sender posts to a named payee who then cashes it at a post office or bank. It is a safe way of sending relatively large amounts of money by post.

(e) I.O.U

I.O.U stands for "I Owe You." It is a simple written and signed acknowledgement by a debtor that he owes a stated sum of money to a named creditor. It is evidence of a debt but is not a legally negotiable instrument and does not itself promise a date of payment.

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(a) Six member countries of ECOWAS

1. Nigeria
2. Ghana
3. Sierra Leone
4. The Gambia
5. Senegal
6. Cote d'Ivoire (Ivory Coast)

(Other members include Liberia, Guinea, Mali, Niger, Togo, Benin, Burkina Faso, Guinea-Bissau and Cape Verde.)

(b) Three factors that hinder the achievement of ECOWAS objectives

1. Language and colonial differences. The mix of English, French and Portuguese speaking states creates communication and policy barriers.
2. Political instability. Coups, wars and unstable governments in member states disrupt cooperation and agreed programmes.
3. Differences in currency and level of development. The lack of a common currency and wide gaps in economic strength make integration and free trade difficult.

(Also acceptable: smuggling and heavy dependence on similar primary exports (competition rather than complementarity), poor transport links, and inadequate funding.)

(c) Four objectives of the Niger Basin Authority (Commission)

1. To promote cooperation among member states in developing the resources of the River Niger basin.
2. To develop and control the use of the water resources of the basin for irrigation, water supply and hydro-electric power.
3. To promote and improve navigation and transport along the river.
4. To coordinate agricultural, fishery, forestry and industrial development in the basin.

(Also acceptable: to control flooding and protect the environment of the basin.)

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None

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(a) Four features of a warehouse

1. It is a building or place used for storing goods safely until they are needed.
2. It has adequate space, shelving and equipment for handling, arranging and moving goods.
3. It provides security against theft, fire, pests and weather, sometimes with cold-storage or special facilities for perishables.
4. It is usually sited in a convenient location with good access to transport for easy receipt and dispatch of goods.

(Also acceptable: it keeps records of goods stored (stock control); it may be owned by a producer, wholesaler or the government/bonded authority.)

(b) Six reasons why warehousing is important to a business

1. Storage of goods. It provides a safe place to keep goods from the time they are produced or bought until they are sold or needed.
2. Creation of time utility. It holds goods until they are demanded, bridging the gap between production and consumption.
3. Ensures steady supply. It makes goods available all year round, including seasonal and out-of-season goods, ensuring regular supply and stable prices.
4. Protection of goods. It protects goods from damage, theft, pests and bad weather, preserving their quality.
5. Enables bulk buying. It allows a business to buy in large quantities and store them, enjoying quantity discounts and economies of scale.
6. Preparation for sale. Goods can be sorted, graded, blended, packed and branded in the warehouse before distribution.

(Also acceptable: it allows goods to be stored under bond until duty is paid; it aids price stabilisation by holding surplus.)

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(i) Department store

A department store is a large retail shop, usually in a town centre, divided into several sections or departments, each selling a different class of goods (clothing, furniture, electronics, groceries and so on) under one roof and one overall management. Each department is run almost like a separate shop, and customers can buy a wide variety of goods in one visit.

(ii) Mobile shop

A mobile shop is a moving retail outlet, usually a specially fitted van or vehicle stocked with goods, which travels from place to place taking the goods directly to customers. It is especially useful in rural and scattered areas where fixed shops are few.

(iii) Chain store

A chain store (multiple shop) is one of a group of similar retail shops owned by the same organisation, selling the same range of goods at the same prices, using the same name and layout, and controlled from a central head office. Examples include branches of the same supermarket found in different towns.

(iv) Mail order business

A mail order business sells goods to customers through the post. Customers select goods from a catalogue, price list or advertisement, send their orders and payment by post (or online), and the goods are delivered to them by post or courier without the customer visiting a shop.

(v) Supermarket

A supermarket is a large self-service retail store selling a wide variety of foodstuffs and household goods under one roof. Goods are displayed on open shelves, pre-packed and price-tagged; customers pick what they want and pay at a central checkout. It depends on large turnover and low profit margins.

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(a) What is E-Commerce?

E-commerce (electronic commerce) is the buying and selling of goods and services, and the transfer of money and data, carried out electronically over the internet and other computer networks. It allows businesses and consumers to trade online through websites, mobile apps and electronic payment systems without meeting physically (for example, online shopping and internet banking).

(b) Four advantages of privatization

1. Improved efficiency. Privately-owned firms are run for profit, so they tend to be managed more efficiently than loss-making government enterprises.
2. Reduced burden on government. Selling off enterprises relieves the government of the cost of financing and subsidising them, freeing funds for other projects.
3. Revenue for government. The sale of public enterprises brings in money that boosts government revenue.
4. Encourages competition and investment. Private ownership promotes competition, wider share ownership and inflow of capital, leading to better goods and services.

Four disadvantages of privatization

1. Higher prices. Private owners seeking profit may raise prices of essential goods and services, hurting the poor.
2. Job losses. New private owners often retrench workers to cut costs, increasing unemployment.
3. Concentration of wealth. Enterprises may be bought by a few wealthy individuals, widening inequality.
4. Neglect of unprofitable but essential services. Private firms may abandon services that are socially useful but not profitable, especially in rural areas.