WAEC SSCE - Commerce - 1993

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The element that is not part of the marketing mix is "Purchases". The marketing mix is made up of four P's: product, price, promotion, and place. These elements are essential for the development and implementation of a successful marketing strategy. The product refers to the goods or services offered by the company, while pricing involves setting the right price for the product. Promotion involves advertising and promoting the product to potential customers. Place refers to the location where the product is made available to customers, such as a physical store or an online platform. Purchases are made by the customers, but it is not an element of the marketing mix.

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The correct answer is "marketing". Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. It involves identifying and understanding the needs and wants of customers, and then creating and delivering products and services that satisfy those needs and wants. The goal of marketing is to create and maintain a mutually beneficial relationship between the producer and the consumer, and to ensure that products and services are delivered efficiently and effectively from the producer to the consumer.

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The term of price quotation that includes the cost of transportation to the buyer's premises is C & F. C & F stands for "Cost and Freight", and it is a type of Incoterm used in international trade where the seller is responsible for the cost of transporting the goods to the destination port and also for the payment of freight charges. The C & F price quotation includes the cost of the goods, the cost of transportation to the destination port, and the freight charges. Once the goods arrive at the port, the buyer takes responsibility for any further transportation and costs associated with it.

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In general, the principal is liable for the contract entered into by the agent on behalf of the principal. This means that the principal is responsible for fulfilling the terms of the contract and paying any damages or penalties that may arise from the contract. The agent may also be held liable in certain circumstances, such as if the agent acted outside the scope of their authority or committed fraud. However, the primary responsibility lies with the principal, as the agent is acting on their behalf.

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The correct answer is branding. Branding is the process of creating a name, design, symbol, or other feature that identifies and differentiates a product from other products in the market. It helps to establish the product's identity and reputation, and creates a connection with the consumers. Branding involves developing a unique name and image for a product in the consumer's mind, which helps to promote the product and increase its sales.

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Doctors, teachers, and entertainers would be grouped under the "Direct Service" class of occupation. This class of occupation involves individuals who provide services directly to consumers, such as health care, education, entertainment, and hospitality services. The Direct Service class is distinguished from other classes such as Industrial, which includes jobs involved in producing goods, and Commercial, which includes jobs in buying and selling goods and services.

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The machine used in sending telex message is known as a "teleprinter". It is an electromechanical device that can both send and receive typed messages over a telecommunications system. The teleprinter has a keyboard for typing messages, and a printing mechanism that prints the message onto a roll of paper or a continuous strip of tape. The messages are sent via a wire or radio link to another teleprinter at the receiving end, where the message is printed out. Telex was a popular means of long-distance communication before the advent of email and the internet.

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A crossed postal order is a financial instrument used for making payments that is drawn by a post office. It is similar to a money order, but it can only be cashed through a post office. The term "crossed" refers to the fact that two parallel lines are drawn on the face of the order, indicating that it cannot be cashed directly but has to be credited to a bank account. This makes it more secure than an uncrossed postal order, as it reduces the risk of theft or loss during transmission or delivery.

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The consumer comes last in the chain of distribution. After the manufacturer produces the goods, the goods are sold to a wholesaler who then sells to a retailer. The retailer then sells the goods to the final consumer. Therefore, the final consumer is the last in the chain of distribution as they purchase the goods for their own use or consumption.

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The 4M's of business resources are material, men, money and machine. These are the basic resources that a business needs to carry out its operations. The methods of operations are not part of the 4M's, but are instead part of the overall business strategy. Therefore, the correct answer is "Method".

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When choosing a means of transport for goods, speed is an important consideration when the goods are perishable, which means they can quickly spoil or go bad if not transported quickly. For example, fresh fruits and vegetables need to be transported quickly to avoid spoiling. Fragile goods such as glassware or electronics can also be damaged during transport, so a fast and secure means of transport is preferred. In contrast, bulky and durable goods may not require fast transportation as they are less susceptible to damage or spoilage during transport.

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Trade can be described as the exchange of goods and services between parties, involving the buying and selling of goods or services. It involves the transfer of ownership of goods or services from one person or entity to another. Trade can take place locally or internationally, and it can involve individuals, businesses, or governments. The main aim of trade is to satisfy the needs and wants of both parties involved in the exchange.

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The option that is not a source of capital to a sole proprietor is borrowing through debentures. Debentures are long-term financial instruments used by companies to raise capital by borrowing from the public. They are essentially loans that a company borrows from investors, promising to repay the principal amount along with interest at a specified rate. Sole proprietors, who run businesses on their own, are not allowed to issue debentures as a means of raising capital. Therefore, borrowing through debentures is not a source of capital available to sole proprietors.

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When an industry is nationalized, ownership is transferred from private owners to the government. This means that the government takes control of the industry, and it becomes a state-owned enterprise. Therefore, the correct option is the government.

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The answer is "production". Production refers to the process of creating goods and services, and while it is a crucial aspect of many businesses, it is not considered an aid to trade. The other options listed - transport, banking, insurance, and warehouse - are all aids to trade, as they facilitate the movement, financing, protection, and storage of goods and services.

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A company that acquires a majority of the shares of another company with voting rights is regarded as a "holding company." A holding company is a type of business organization that owns a controlling interest in one or more companies or corporations. Holding companies usually do not engage in any business activities themselves but hold ownership stakes in other companies. The main purpose of a holding company is to control the management and policies of the subsidiary companies, which allows for centralized control and economies of scale. Holding companies can also provide tax and legal advantages for the parent company.

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The service whereby NIPOST undertakes to collect money due to the sender of a parcel is called C.O.D (Cash On Delivery). This means that the recipient of the parcel pays for it upon delivery, and NIPOST then collects the payment on behalf of the sender. This service is commonly used in e-commerce and mail order businesses, as it allows customers to pay for goods only after they have received and inspected them.

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Department stores are typically located in city centers or high-traffic areas. This is because these locations provide easy accessibility to customers and high visibility to the store. Suburban towns may also have department stores, but they are typically smaller in size and may not have as wide a variety of products. Low-income areas may not be the ideal location for department stores due to the target market having limited purchasing power. Additionally, department stores require a large amount of space for merchandise display and storage, which may not be feasible in low-rental areas. Therefore, city centers or high-traffic areas are the most preferred location for department stores.

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The correct option is "sovereignty". Consumer sovereignty is the idea that consumers have the power to determine what goods and services are produced and sold in a market economy. It means that the consumer is the ultimate decision-maker in what is produced because they ultimately determine what is in demand. The producer will only create products and services that consumers are willing to buy, and will make changes based on consumer feedback. Consumer sovereignty is a key principle in a market economy, where businesses compete to provide the best products and services to meet consumer demands.

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The Standards Organization of Nigeria (SON) protects consumers against poor quality goods. SON is a government agency responsible for the development of standards for products and services, as well as ensuring compliance with these standards. It conducts inspections, tests and certification of products, and takes measures to enforce product quality standards. Therefore, if a consumer finds a product to be of poor quality, they can contact SON to make a complaint and seek redress.

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Cash is said to be legal tender because it can be offered and accepted for payment of goods and services. This means that the person who accepts cash in a transaction cannot refuse it as payment, as long as the amount is sufficient to cover the cost of the goods or services. Legal tender is recognized by law as a means of payment and is widely accepted in transactions. Unlike money orders or bank drafts, cash is physical currency that can be carried around and used immediately. Its portability makes it a convenient means of payment in many situations.

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The reward of shareholding in a company is dividend. Dividend is the portion of the company's profits that is distributed to its shareholders as a return on their investment. When a company makes a profit, it can choose to either retain the profit for reinvestment or distribute a portion of it as dividends to its shareholders. Shareholders receive their dividends in proportion to their shareholding in the company. Dividends can be paid in cash, stock, or property.

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Net Profit is the excess of income over expenses. In other words, it is the amount of money a company earns after deducting all the expenses incurred to generate that income. It takes into account all the revenue earned by a business and all the expenses incurred to generate that revenue. Net profit is an important indicator of a company's financial health and profitability. It is often used to measure a company's performance over a given period, and it is the basis for calculating taxes, dividends, and retained earnings.

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A group of persons that agrees to pool its resources to achieve a particular objective is known as a "consortium." This is a group of companies or individuals who come together to achieve a common goal by pooling their resources, expertise, and/or finances. The members of a consortium work together to achieve a specific objective, such as developing a new product or service, bidding for a large contract, or conducting research. The members of a consortium typically retain their independence, but work together in a coordinated and collaborative way to achieve the shared goal.

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The telephone service through which one can dial any number, whether local, trunk, or overseas is known as the "subscriber's trunk dialling system". It allows subscribers to directly dial long-distance calls without the assistance of an operator. The system was introduced to simplify and speed up the process of dialling long-distance calls. Instead of having to go through an operator, subscribers can simply dial the telephone number they wish to reach, and the call will be connected automatically through the appropriate trunk line. This system is widely used all over the world to make long-distance calls.

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An increase in turnover refers to an increase in the total value of goods or services sold by a business during a given period of time, usually a year. This means that the volume of sales has increased. Therefore, an increase in turnover is an increase in the amount of money the business has generated through its sales activities. It does not necessarily mean an increase in liquid capital, current assets, fixed assets or owners equity, although it may indirectly affect these financial aspects of the business.

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When choosing a means of transport for goods, speed is an important factor to consider because different types of goods have different characteristics. For example, if the goods are perishable (meaning they can spoil or go bad quickly), then they need to be transported quickly to ensure they arrive at their destination before they go bad. Similarly, if the goods are fragile, they may need to be transported quickly to prevent damage. On the other hand, if the goods are bulky or durable, they may not need to be transported as quickly since they are less likely to be damaged or spoiled during transportation. Therefore, the choice of means of transport should depend on the characteristics of the goods being transported and the speed required to ensure they arrive at their destination in the best possible condition.

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A bank may dishonour a cheque if the amount on the cheque is more than the amount in the account. This means that there are not enough funds in the account to cover the amount written on the cheque. Banks are required to ensure that there are sufficient funds in an account before honouring a cheque. If a cheque is dishonoured, the bank will return the cheque to the account holder with an explanation of why it was not honoured. This could be due to insufficient funds, a stop payment order, a closed account, or other reasons. Dishonoured cheques can result in additional fees, legal action, and damage to the account holder's credit rating.

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Communication is the transmission of information or exchange of ideas, thoughts or messages between two or more people. It involves sending and receiving messages through various channels like speaking, writing, gestures, or electronic means. The information communicated could be about anything, such as personal opinions, business-related matters, or conveying emotions. Thus, the correct option that defines communication is "Transmission of information."

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The correct term for any action taken by a company outside its stated objective is "ultra vires." In simple terms, this means that the company is acting beyond its legal authority or power. Ultra vires actions are generally considered void and unenforceable by law.

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The branch of "consumption" is not a branch of production. Consumption refers to the act of using or consuming goods and services to satisfy human needs and wants. On the other hand, production refers to the creation or provision of goods and services to meet human needs and wants. The other options, namely extraction, manufacturing, distribution, and direct services, are all branches of production. Extraction involves the gathering or mining of natural resources, manufacturing involves the transformation of raw materials into finished goods, distribution involves the movement of goods from producers to consumers, and direct services involve the provision of intangible services directly to consumers.

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Advertising is used to stimulate sales. It involves creating awareness, promoting or informing potential customers about a product or service with the aim of encouraging them to make a purchase. By showcasing the benefits and features of a product or service, advertising can influence consumer behavior and ultimately lead to increased sales.

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Third party insurance covers damages caused by the vehicle insured to other parties involved in an accident or incident. This means that if the insured vehicle causes damage to another person's vehicle, property or causes injury to other people, the insurance company will pay for the damages or compensation owed to the affected party. Third party insurance does not cover damages to the insured vehicle or the policyholder.

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Goods discharged from a ship on which import duties have not been paid are kept in the bonded warehouse. A bonded warehouse is a building or a secured area in a port, airport or at the border, where imported goods that are subject to customs duty and taxes are stored until the duties and taxes are paid or the goods are released for export. Bonded warehouses are managed by the government or by private entities that are authorized by the government to operate such warehouses. The purpose of bonded warehouses is to provide a secure storage area for goods that have not yet cleared customs, to prevent loss or theft of the goods, and to provide an opportunity for the payment of customs duties and taxes before the goods are released for consumption in the local market.

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The statement that is not true is "Government does not nationalize businesses owned by its citizens." In some cases, governments may nationalize businesses owned by their citizens for various reasons, such as to address a national crisis or to take over a business that is not being managed effectively by its owners. However, this is not a common practice and is generally viewed as a last resort.

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The cost of advertising a product is ultimately borne by the consumer. This is because the cost of advertising is typically included in the price of the product. The manufacturer or producer will factor in the cost of advertising when determining the price of the product, and then the retailer will mark up the price to cover their own costs and make a profit. Ultimately, it is the consumer who pays the final price, which includes the cost of advertising.

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Advertising is used to stimulate sales. Advertising is a marketing tool that businesses use to communicate with their customers about their products or services. It involves creating and spreading messages through various media channels to promote a product or service to potential customers. By using advertising, businesses can reach a wider audience and create brand awareness, which can lead to increased sales. Therefore, of the options listed, advertising is the most appropriate one used to stimulate sales.

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The form of sales promotion from the given options is "Offering free samples to customers". Sales promotion refers to the marketing activities other than advertising, personal selling, and public relations, aimed at stimulating consumer purchases and dealer effectiveness. Offering free samples to customers is a common form of sales promotion where companies distribute free samples of their products to customers. This allows customers to try out the product without any obligation to buy and can help to increase sales by generating interest and familiarity with the product.

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Air transport is of considerable importance today mainly because it is faster than other means of transport. Airplanes can travel at high speeds and cover long distances in a shorter time compared to other modes of transportation, such as road, rail, or sea transport. This makes air transport the preferred choice for people who need to travel long distances within a short period of time, or for businesses that need to transport goods quickly and efficiently. Additionally, air transport has the advantage of being able to fly to remote and inaccessible areas, making it ideal for emergency relief operations or scientific expeditions. However, air transport can be relatively more expensive than other modes of transport, especially for bulky goods.

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The capital that is needed to meet the day-to-day running of a business is called circulating capital. It is also known as working capital, and it includes cash, inventory, accounts receivable, and other short-term assets that are used to pay for the day-to-day expenses of a business, such as salaries, rent, utilities, and raw materials. Circulating capital is important for the smooth operation of a business and is considered a short-term investment as it is continually being used and replenished in the course of business operations.

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Incorporation refers to the legal process of creating a company or corporation. It involves the registration of a company with the relevant government body and the filing of its articles of incorporation or memorandum of association. Once the company is incorporated, it becomes a separate legal entity that can own property, enter into contracts, and conduct business activities. Therefore, the correct answer is "birth of a company".

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The handling of telephone and telex services is done by NITEL (Nigerian Telecommunications Limited). NITEL is a Nigerian telecommunication company that was formerly owned by the Nigerian government. It was responsible for providing telephone and telex services to the public before it was privatized in 2006.

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New shares are typically offered to the public through an issuing house. An issuing house is a type of financial institution that specializes in helping companies raise capital by issuing new securities, such as stocks and bonds, to investors. The issuing house plays a key role in underwriting the new securities, which means that it agrees to buy a certain number of shares or bonds from the company at a predetermined price, and then sells them to the public. The stock exchange is a marketplace where securities are bought and sold, but it is not typically involved in the initial offering of new shares.

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The process of selling government business to the public is known as privatization. This involves the transfer of ownership and control of public assets and enterprises to private individuals or organizations. The aim of privatization is usually to increase efficiency, reduce government involvement in business activities, and raise funds for the government. Privatization can take different forms, such as selling shares of a public company to the public, selling assets to private companies, or contracting out public services to private companies.

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The post office service which provides an alternative to delivery of mails by a postman is the "Post Office Box". A Post Office Box is a locked mailbox located at a post office station. This service enables individuals or businesses to rent a mailbox to receive mail and parcels. It provides a secure and convenient way to receive mail, particularly for those who do not have a permanent mailing address or do not want to disclose their home address. The post office box can be accessed at any time during the post office's business hours.

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The term used to describe a person who sells goods belonging to another person in his own name and receives a commission is a "factor". Essentially, the factor is acting as an intermediary between the owner of the goods and the buyer, facilitating the sale and taking a commission for their services. This arrangement is often used when the owner of the goods does not have the means or desire to sell the goods themselves, and the factor is able to use their network and expertise to find buyers and close deals.

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The option that is not an important reason for government ownership of industries is "Making high profit." The primary reasons for government ownership of industries include the provision of essential services, the need for large capital requirements, avoiding duplication of services, and preventing private monopoly. Making a high profit is not a primary objective of government ownership, as government-owned industries are usually operated for the benefit of the public, rather than for generating profits.

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In a limited partnership, the liability of most of the partners is limited. This means that the liability of these partners is restricted to the amount of capital they have invested in the business. They are not personally liable for the debts and obligations of the partnership beyond their investment. However, there is usually one partner who has unlimited liability, known as the general partner. The general partner is personally liable for all the debts and obligations of the partnership. Limited partnership is a type of partnership where there are both limited partners and general partners.

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A system in which people provide their own needs directly is known as a subsistence economy. In this type of economy, people produce goods and services mainly for their own consumption and survival rather than for sale or trade. They rely on natural resources and their own skills and labor to meet their basic needs such as food, shelter, and clothing. The subsistence economy is often found in rural and remote areas where people have limited access to markets and modern infrastructure. It is characterized by low levels of productivity and living standards, and often lacks the specialization and division of labor found in more developed economies.

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The bank whose name is printed on a cheque leaf is known as the drawee. When a cheque is issued, it is the drawer (the person who writes the cheque) instructing the drawee bank to pay a specified amount of money to the payee (the person or organization to whom the cheque is made payable). The drawee is the bank on which the cheque is drawn and the bank is responsible for honoring the payment instructions of the drawer.

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The true statement of the manufacturing industry is: "It is involved in changing raw materials to finished goods." The manufacturing industry is involved in the production of goods using raw materials, labor, and machinery. It transforms raw materials into finished goods that are ready for sale to consumers. Manufacturing requires skilled labor, specialized machinery, and facilities, making it different from other industries. The finished products are then distributed to consumers through various channels such as wholesalers, retailers, and e-commerce platforms.

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The term that describes a group of persons that agree to pool their resources to achieve a particular objective is "consortium." A consortium is usually formed when a group of individuals, companies, or organizations come together to pool their resources, expertise, and experience to achieve a common goal that they might not have been able to accomplish on their own. A consortium can be formed for a variety of purposes, including research and development, joint ventures, and investment.

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The charge paid for failing to off-load a vehicle within a stipulated time is called "demurrage". Demurrage is a fee charged by the carrier of goods or cargo for the delay in unloading or loading the cargo beyond the stipulated time. It is usually calculated on a per-day or per-hour basis and the amount charged varies depending on the terms of the contract. The purpose of demurrage is to compensate the carrier for the extra costs incurred as a result of the delay and to encourage the timely off-loading of cargo.

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(a) Five problems of using rail transport in Nigeria

1. Old and poorly maintained facilities: Many of the rail lines, engines and coaches are old, worn out and inadequately maintained, leading to frequent breakdowns.
2. Limited coverage (narrow network): The rail lines do not reach many parts of the country, so many towns and villages are not served.
3. Slow and unreliable service: Trains are often slow and do not keep strictly to timetable, causing delays for passengers and goods.
4. Inflexibility: Trains can move only along fixed tracks and cannot offer door-to-door delivery, so goods must still be moved by road to and from stations.
5. Inadequate funding and management: Poor funding, mismanagement and shortage of skilled staff have weakened the operation and maintenance of the railway.

Other problems include insecurity/vandalism of tracks and the use of an outdated narrow gauge.

(b) Short notes

• (i) Tramp liners: Tramp ships (tramp liners) are vessels that have no fixed route and no fixed timetable. They sail to any port where cargo is available and carry mainly bulky, full-load cargoes such as timber, grain or coal. Their charges (freight) are not fixed but are negotiated between the shipowner and the shipper.
• (ii) Ocean liners: Ocean liners are ships that ply fixed, regular routes according to a published timetable, whether or not they have a full load. They carry general cargo and passengers between named ports, and their freight charges are fixed and advertised in advance.

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Four environments under which a business operates

A business does not operate in isolation; it is influenced by forces around it known as the business environment. Four of these are explained below.

1. Economic environment: This refers to the economic factors that affect the business, such as the level of income, prices, inflation, interest rates, taxation, government economic policies and the general state of the economy. These determine the demand for the firm's goods and its costs of doing business.
2. Social (socio-cultural) environment: This is made up of the customs, beliefs, values, tastes, religion, language and way of life of the people. It affects the type of goods that will sell, consumer preferences and how the firm relates with the community.
3. Political and legal environment: This consists of the government, its laws, regulations and political stability. Laws on company registration, taxation, employment, prices and trade, as well as the degree of peace or unrest in the country, affect how the business is run.
4. Technological environment: This refers to the level of technology, machinery, tools and methods available. Advances in technology such as computers, the internet and modern machines affect production methods, efficiency, costs and the ability of the firm to compete.

Other environments include the physical (natural) environment and the competitive environment.

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(a) Five examples of trade associations

1. Chamber of Commerce (and Industry).
2. Manufacturers Association of Nigeria (Employers' / Manufacturers' Association).
3. Trade (Labour) Unions such as the Nigeria Labour Congress.
4. Professional associations such as the Institute of Chartered Accountants.
5. Consumer protection associations.

Other examples include road transport owners' associations and market traders' associations.

(b) Three functions of the Employers' Association

1. It negotiates with trade unions on behalf of its member employers on matters of wages and conditions of service.
2. It protects and promotes the common interests of employers and presents their views to government.
3. It settles disputes and advises members on labour relations and industrial matters.

(c) Objectives of the Lake Chad Basin Commission

1. To regulate and control the use of the water and other natural resources of the Lake Chad basin among member states for their common benefit.
2. To promote and coordinate development projects such as agriculture, fishing, irrigation and livestock in the basin.
3. To settle disputes and promote cooperation among the member countries (Nigeria, Niger, Chad and Cameroon, with the Central African Republic joining later) in the shared use of the basin.

It also aims to prevent pollution and conserve the environment of the basin.

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Short notes on foreign-trade documents

• (a) Shipping note: This is a document prepared by the exporter (or his agent) and given to the dock or port authority. It gives details of the goods to be shipped and requests space on the ship. It authorises the docks to receive the goods for loading and serves as a delivery note to the port.
• (b) Ship's manifest: This is a complete list of all the cargo carried on a ship. It is prepared by the shipping company from the various bills of lading and shows details of all goods on board, their consignees and destinations. It is used by the customs authorities and by the captain as a summary of the whole cargo.
• (c) Bill of sight: This is a document used by an importer when he does not have full details of the goods he is importing and cannot make a proper customs entry. It allows the customs to permit the goods to be landed and inspected so that the importer can then complete the correct entry and pay the duty.
• (d) Dock warrant: This is a document of title issued by the dock authority to the owner of goods stored in the dock warehouse. It certifies that the named person is the owner of the goods and can be transferred by endorsement, so it can be used to sell or pledge the goods while they are still in the warehouse.
• (e) Bill of entry: This is a document completed by the importer (or exporter) and presented to the customs authority giving full details of the goods being imported or exported, their value and quantity. It is used by customs to assess and collect the duty payable and to keep trade records.

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(a) What is Public Relations?

Public relations is the deliberate and planned effort by a firm to create, build and maintain a good image and mutual understanding between the firm and its various publics, such as customers, employees, shareholders, government and the general community. Its aim is to win and keep the goodwill and confidence of the public.

(b) Five methods a firm can use to promote its public relations

1. Publicity and press releases: Sending favourable news and stories about the firm to newspapers, radio and television to create a good public image.
2. Sponsorship of events: Supporting sporting, cultural, educational and community events to bring the firm to public notice in a positive way.
3. Corporate social responsibility: Undertaking community projects such as building schools, hospitals, boreholes and giving scholarships to show that the firm cares for society.
4. Exhibitions, open days and factory visits: Inviting the public to visit the firm and see its operations, which builds trust and understanding.
5. Good staff and customer relations: Treating employees and customers well, handling complaints promptly and courteously, and publishing house journals and newsletters to keep the public informed.

Other methods include donations to charity and prompt, honest response to public complaints.

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(a) Four features of a multiple shop

1. Chain of similar shops: It is a group of many branch shops, owned by the same organisation, spread over different towns and streets, all selling the same range of goods.
2. Uniform appearance and price: The shops have a similar layout, design and shop front, and goods are sold at the same fixed prices in all branches.
3. Central control and buying: Buying is done centrally in bulk by the head office, which gives large discounts, while the branches concentrate on selling.
4. Specialisation in a line of goods: Each multiple shop organisation usually specialises in one type of product, for example shoes, chemists' goods or provisions.

Other features include cash sales (little or no credit) and standardised management policies from the head office.

(b) Four reasons why small scale retailing is common in Nigeria

1. Small capital requirement: Little money is needed to start, so many people with limited funds can go into it.
2. Low level of education and skill: It does not require special training or high education, so it is open to almost everyone.
3. Low and irregular incomes of consumers: Many customers buy in small quantities and on credit, which small retailers are able to provide.
4. High level of unemployment: Many people take to petty trading as a means of self-employment and survival.

Other reasons include the ease of entry and exit and the demand for goods in small, affordable units.

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(a) Four sources of capital for a public limited company

1. Sale of shares: Issuing ordinary and preference shares to the public who then become part-owners.
2. Issue of debentures: Borrowing long-term funds from the public through debentures on which fixed interest is paid.
3. Ploughed-back (retained) profits: Undistributed profits kept in the business and used to finance expansion.
4. Bank loans and overdrafts: Borrowing from commercial and development banks.

Other sources include trade credit from suppliers and mortgages on property.

(b) Four advantages of converting a business into a public limited company

1. It can raise very large amounts of capital by selling shares to the general public.
2. Shareholders enjoy limited liability, so their loss is limited to the amount they invested.
3. It has continuity (perpetual succession) and is not affected by the death or withdrawal of any member.
4. Its large size allows it to enjoy economies of scale and employ specialist managers.

Four disadvantages

1. Formation is expensive and involves many legal formalities and documents.
2. Its accounts must be published and audited, so it loses privacy in its affairs.
3. Decision making is slow because of its large size and the many people involved.
4. There is separation of ownership from control, which may lead to conflict of interest and less personal attention.

Akọwa Nkọwa

(a) What is a contract of sale of goods?

A contract of sale of goods is an agreement by which the seller transfers, or agrees to transfer, the ownership (property) in goods to the buyer for a money consideration called the price. It is a legally binding agreement between a seller and a buyer for the exchange of goods for money.

(b) Three provisions of a contract of sale of goods

1. There must be goods which form the subject matter of the sale.
2. There must be a price in money to be paid for the goods.
3. There must be two competent parties, a seller and a buyer, who agree to the transfer of ownership.

Other provisions include an offer and acceptance, and the intention to transfer ownership from the seller to the buyer.

(c) Two conditions that constitute acceptance in the contract of sale of goods

1. When the buyer intimates his acceptance: Acceptance takes place where the buyer, after examining the goods, tells the seller (expressly) that he has accepted them.
2. When the buyer does an act inconsistent with the seller's ownership: Acceptance is implied where the buyer keeps, uses, resells or otherwise treats the goods as his own, or where he retains the goods beyond a reasonable time without rejecting them.

Akọwa Nkọwa

(a) Functions of the Stock Exchange

1. Provides a ready market for securities: It is an organised market where existing shares, stocks and bonds can be bought and sold.
2. Provides liquidity to investors: It enables holders of securities to convert their investments into cash quickly by selling to other investors.
3. Aids capital formation: It channels the savings of the public into productive investment by making it easy to buy new securities.
4. Values securities and fixes prices: Through the forces of demand and supply, it determines and publishes the current prices of securities.
5. Protects investors: By regulating its members and dealings, it guards against fraud and ensures fair dealing.
6. Provides investment information: It supplies information on prices and performance of companies, guiding investors in their decisions and acting as a barometer of the economy.

It also helps government and companies to raise long-term capital.

(b) Types of securities traded in the Stock Exchange

• Ordinary shares (equities).
• Preference shares.
• Debentures.
• Government stocks and bonds (for example development stocks and treasury bonds).
• Industrial loans and corporate bonds.

Akọwa Nkọwa

(a) What are Thrift Societies?

Thrift societies are voluntary associations of people who come together to save money regularly out of their incomes so as to accumulate funds from which members can borrow, or which they can withdraw to meet future needs. They encourage the habit of saving and provide members with easy access to credit at low cost. Examples include cooperative thrift and credit societies and the informal 'esusu' or 'ajo' savings clubs.

(b) Five services rendered by Thrift Societies to their members

1. Encourage savings: They promote the habit of regular saving among members, helping them to set money aside from their incomes.
2. Grant loans: They give loans to members at low rates of interest to meet personal, family or business needs.
3. Safe keeping of funds: They provide a safe place where members' savings are kept until needed.
4. Financial advice and education: They advise and educate members on wise spending, saving and investment of their money.
5. Payment of dividends and welfare help: Surplus is shared among members as dividends, and some societies give welfare assistance in times of need such as sickness or bereavement.