JAMB UTME - Commerce - 2022

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A feature of supermarkets that distinguishes it from other large scale retail outlets is that items sold are mainly household goods. Supermarkets are large retail stores that specialize in selling a wide range of consumer goods, including food, beverages, household items, personal care products, and more. Unlike other retail outlets, such as industrial supply stores or specialty shops, the primary focus of a supermarket is on selling goods for everyday household use. Supermarkets are designed to offer consumers a convenient, one-stop shopping experience, where they can purchase a variety of items in a single location. This sets them apart from other retail outlets, which may specialize in selling a narrower range of products or focus on a specific market segment.

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An agreement that is enforceable in law is called a "contract." A contract is a legally binding agreement between two or more parties. It is created when one party makes an offer, and the other party accepts that offer, which leads to an agreement. The parties to a contract are legally bound to fulfill the terms of the contract, and failure to do so may result in legal action. For a contract to be legally enforceable, it must meet certain requirements. First, there must be an offer made by one party to another. The offer must be clear and unambiguous, and it must be communicated to the other party. Second, there must be an acceptance of the offer by the other party. The acceptance must be clear and unambiguous, and it must be communicated to the party making the offer. Third, there must be consideration, which is something of value that is exchanged between the parties. Consideration can take the form of money, goods, services, or a promise to do something. Finally, the parties must have the legal capacity to enter into the contract. This means that they must be of legal age, sound mind, and not under duress or undue influence. In summary, a contract is an agreement that is enforceable in law. It is created when one party makes an offer, the other party accepts that offer, there is consideration, and the parties have the legal capacity to enter into the contract.

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When a share with a nominal value of #50 is quoted at #70, it is being sold at a premium. A share is quoted at a premium when its market price is higher than its nominal or face value. In the case of a share with a nominal value of #50 that is quoted at #70, the share is being sold for a higher price than its face value, meaning that it is being sold at a premium. This can indicate that the company is performing well, and that investors are willing to pay a higher price for the share due to its perceived future potential. On the other hand, a share that is quoted below its nominal value is said to be sold at a discount.

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Dealers in the stock exchange such as bulls, bears, and stags are categorized as "speculators." Speculators are individuals or entities who buy or sell financial assets, such as stocks, bonds, or commodities, in the hope of making a profit from price fluctuations. They are often motivated by the potential for high returns, but they also face significant risk due to the volatility of financial markets. In the context of the stock exchange, bulls are speculators who believe that stock prices will rise, and therefore buy stocks in the hope of selling them later at a higher price. Bears, on the other hand, are speculators who believe that stock prices will fall, and therefore sell stocks in the hope of buying them back at a lower price. Stags are speculators who buy stocks at the time of the initial public offering (IPO), hoping to sell them later at a profit when the price goes up due to high demand. In contrast, an actuary is a professional who uses mathematical and statistical methods to analyze and assess financial risk, usually in the context of insurance or pension plans. Promoters are individuals or companies who promote and market a particular product, service, or idea to the public. An underwriter is a financial institution or individual who assumes the risk of buying new securities from a company and reselling them to the public. They are not typically involved in the buying and selling of securities on the stock exchange.

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An internal source of finance to an entrepreneur is retained earnings. This refers to the profit that a business keeps and re-invests into the business, rather than distributing it as dividends to shareholders. Retained earnings can be used to finance a variety of business expenses, such as expanding operations, acquiring new assets, or developing new products. This type of financing is considered internal because it comes from within the business, rather than from external sources like loans or investments. Retained earnings are a flexible source of financing that do not have to be repaid and do not come with any interest or repayment obligations.

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The characteristic of a commercial bank that is not correct is "Established to issue bank notes." A commercial bank is a financial institution that is established as a limited liability company, which means that the owners or shareholders are not personally responsible for the bank's debts or losses. It is usually established by individuals or organizations to provide a range of financial services such as accepting deposits, granting loans, and offering various investment products. One of the primary objectives of a commercial bank is to make a profit through the various services it provides. However, commercial banks do not have the authority to issue bank notes. The authority to issue bank notes is given to the central bank of a country, which is responsible for regulating the country's money supply and ensuring the stability of the financial system. Therefore, the correct option is "Established to issue bank notes."

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An open cheque is a type of cheque that can be cashed over the counter by the payee. This means that the payee can take the cheque to the bank that it is drawn on and receive the funds in cash, without having to deposit the cheque into their own account. Open cheques are also sometimes referred to as bearer cheques because they can be transferred to someone else simply by endorsing the back of the cheque. However, this also means that if an open cheque is lost or stolen, anyone who has possession of it can cash it, which can be a security risk. In contrast, crossed cheques are marked with two parallel lines, which means that they can only be deposited into a bank account, not cashed over the counter. Certified cheques and bank drafts are also types of cheques, but they are issued by a bank and are generally considered to be more secure forms of payment.

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A group of sellers who pool their resources to buy goods in large quantities and sell to its members is called a "wholesaler cooperative society". A wholesaler cooperative society is a type of organization formed by a group of sellers to purchase goods in large quantities and sell them to their members. Members of a wholesaler cooperative society are usually retailers or other small business owners who need to purchase goods in large quantities to sell in their own businesses. By pooling their resources, members of a wholesaler cooperative society can negotiate better prices and purchase goods that might not be available to them individually. The cooperative then sells the goods to its members at a markup, but still at a lower price than they would pay if they bought the goods individually. In summary, a "wholesaler cooperative society" is a group of sellers who work together to buy goods in bulk and sell them to their members, usually retailers or small business owners, at a lower price than they would be able to obtain individually.

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The safe keeping of goods produced until they are needed is called warehousing. Warehousing involves the storage of goods and materials in a secure and controlled environment, typically a warehouse or distribution center, until they are ready to be sold, distributed, or used in production. The purpose of warehousing is to provide a safe and secure location for goods and materials, as well as to manage inventory levels and ensure that the right products are available when they are needed. Warehouses may also provide additional services, such as packaging, labeling, and assembly, to prepare products for distribution. Overall, warehousing is an important component of the supply chain and plays a critical role in ensuring that goods are available to meet customer demand.

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The incentive given to a buyer to encourage prompt payment is called a "cash discount." A cash discount is a reduction in the price of a product or service that a seller offers to a buyer as an incentive for paying their invoice within a certain period of time. The discount amount and the time period for payment are typically specified in the terms of the sale. For example, a seller may offer a 2% discount if the buyer pays the invoice within 10 days, rather than the standard 30 days. This incentivizes the buyer to pay the invoice early, which improves the seller's cash flow and reduces the risk of late or unpaid invoices. A cash discount is also known as a prompt payment discount, because it rewards buyers who pay their bills promptly. It can be a win-win situation for both the seller and the buyer, as the seller benefits from improved cash flow and the buyer benefits from a lower cost of goods or services. In contrast, a seasonal discount is a reduction in price that is offered to buyers during a specific season, such as a sale on winter clothing during the summer. A quantity discount is a reduction in price that is offered to buyers who purchase a large quantity of a product, while a trade discount is a reduction in price that is offered to resellers, such as wholesalers or retailers.

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The marketing concept emphasizes that a business should focus on meeting the needs and wants of its customers while also achieving its own business goals. This means that a business should strive to create products or services that are desired by its target customers and then promote and sell those products in a way that meets the customers' needs and also generates a profit for the business. In other words, the marketing concept is based on the idea that the customer is the most important part of the business, and that the business should be oriented around creating value for the customer in order to build long-term relationships and loyalty. This may involve researching customer needs and preferences, developing innovative products, creating effective marketing campaigns, and providing high-quality customer service and support. By focusing on customer satisfaction, a business can build a strong reputation, increase customer loyalty and repeat business, and ultimately achieve long-term success and profitability. This is in contrast to other approaches that may prioritize sales, production, or promotion, but may not necessarily lead to the same level of customer satisfaction and loyalty.

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The activity that improves the appearance of a product and aims to protect it is "packaging." Packaging refers to the process of enclosing a product in a container, wrapper, or other material for the purposes of protection, storage, distribution, and display. Packaging can take many forms, from simple plastic bags to elaborate boxes and displays. One of the primary functions of packaging is to protect the product from damage or contamination during storage and transportation. This can include protection from moisture, dust, and other environmental factors that could damage the product. Additionally, packaging can also protect the product from tampering or theft. Another important function of packaging is to improve the appearance of the product. Packaging can be designed to attract attention, communicate information about the product, and create a favorable impression on the customer. This can include the use of graphics, colors, and other design elements to create a distinctive and appealing visual identity for the product. The other options listed - advertising, grading, and labelling - are all important activities in the marketing and distribution of products, but they do not specifically relate to the physical protection and appearance of the product, which is the main focus of packaging.

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One of the functions of commercial banks that cannot be performed by central banks is the collection of deposits from the public. Commercial banks are financial institutions that accept deposits from individuals and businesses and use those funds to make loans to others. Central banks, on the other hand, are responsible for implementing monetary policy and maintaining financial stability. While central banks do play a role in regulating commercial banks, they do not accept deposits from the public like commercial banks do. Therefore, the collection of deposits from the public is a function that is unique to commercial banks and cannot be performed by central banks.

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Working capital = Current assets - Current liabilities
= (debtors + cash in hand + closing stock ) - ( overdraft + creditors)
= (10,000 + 5,000 + 10,000 ) - (8,000 + 12,000)
= 25,000 - 20,000
= 5,000

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A person engaged for the purpose of bringing his principal and a third party into a contractual relation is an "agent." An agent is a person who is authorized to act on behalf of another person or entity, known as the principal. The agent's role is to negotiate and enter into contracts with third parties on behalf of the principal, while representing the interests of the principal. In other words, an agent acts as a middleman between the principal and a third party. The agent has a fiduciary duty to act in the best interests of the principal, which means that they must act honestly and with reasonable care and skill. Examples of agents include real estate agents, who act on behalf of property owners to sell or lease their property to interested buyers or tenants. Another example is a travel agent, who acts on behalf of travelers to book flights, hotels, and other travel services. In contrast, an arbiter is a person who is appointed to settle disputes between parties, such as a mediator or an arbitrator. An auctioneer is a person who conducts auctions and facilitates the sale of goods or services to the highest bidder. A middleman is a general term that refers to a person or business that acts as an intermediary between two parties in a transaction.

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The result of dividing the cost of sales by the average stock is the rate of turnover. This calculation measures how efficiently a company is using its inventory to generate sales. The cost of sales is the direct cost of producing or purchasing the goods that are sold by the company, while the average stock is the average value of inventory held by the company over a given period of time. By dividing the cost of sales by the average stock, we can determine how many times the company's inventory was sold and replaced during that time period. This is the rate of turnover. A high rate of turnover indicates that the company is efficiently selling and replenishing its inventory, which can lead to higher profits and better cash flow. On the other hand, a low rate of turnover may indicate that the company is struggling to sell its inventory or is holding onto it for too long, which can lead to higher costs and lower profits. Therefore, it's important for companies to monitor their rate of turnover and aim for an optimal level based on their industry and business model.

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A paid presentation about a product with a view to encouraging purchases by an identifiable sponsor is called an "advertisement." An advertisement is a form of marketing communication that is designed to promote a product or service. It is typically a paid message that is communicated through various channels such as television, radio, print media, online media, billboards, and other forms of outdoor advertising. Advertisements are usually created and placed by an identifiable sponsor, such as a company, organization, or government agency. The main goal of an advertisement is to persuade potential customers to buy a product or service. Advertisements are an important part of the marketing mix, as they help to create awareness of products and services and communicate their features and benefits to potential customers. They can also help to build brand recognition and loyalty over time.

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The last link in a channel of distribution is the consumer. A channel of distribution refers to the series of intermediaries that a product or service goes through before it reaches the final customer. The last link in this chain is the consumer, who is the end user of the product or service. All the other intermediaries in the channel, such as wholesalers, retailers, and agents, play a role in getting the product to the consumer, but the consumer is the ultimate recipient. The goal of the channel of distribution is to get the product into the hands of the consumer in an efficient and effective manner.

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An undertaking to repair a customer's vehicle for a certain period after it has been sold is called after-sales service. After-sales service refers to the support and assistance provided to customers after they have purchased a product, such as a vehicle. This can include repair and maintenance services, as well as customer support and troubleshooting. The goal of after-sales service is to ensure customer satisfaction and to retain customer loyalty by providing ongoing support and assistance. The other options - marketing mix, market segmentation, and sales promotion - are all related to marketing and sales, but they do not specifically refer to after-sales service. The marketing mix refers to the various elements of a marketing plan, such as product, price, place, and promotion. Market segmentation refers to the process of dividing a market into smaller groups of consumers with similar needs or characteristics. Sales promotion refers to short-term incentives to encourage the purchase of a product or service.

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The share value stated on a share certificate is called the nominal value. Nominal value, also known as face value or par value, is the minimum amount at which a company's shares can be issued and is typically stated on the share certificate. The nominal value is a fixed value assigned to the shares when they are first issued and it serves as the legal capital of the company. It is used to calculate the company's share capital and to determine the amount of dividends to be paid to shareholders. The market value of a share, on the other hand, is the current value of the share in the stock market, which can be higher or lower than the nominal value. The market value is determined by the forces of supply and demand, and can change frequently based on a variety of factors such as the company's financial performance, economic conditions, and investor sentiment.

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Among the options given, the term that refers to the part of the share capital that the company has asked its shareholders to pay for is "called-up capital." When a company wants to raise funds, it can issue shares to investors in exchange for money. The share capital represents the total amount of money that the company can raise from issuing shares. However, the company may not require all of that money upfront. It may ask its shareholders to pay for the shares they have subscribed to in installments, as and when the company needs the funds. The amount of money that the company has called upon its shareholders to pay is called the called-up capital. For example, if a company has issued 1,000 shares of $10 each, its share capital would be $10,000. However, if the company has only asked its shareholders to pay for 500 shares, then the called-up capital would be $5,000. The remaining $5,000 is the uncalled capital, which the company can ask for at a later date. So, to summarise, the called-up capital is the portion of the share capital that the company has asked its shareholders to pay for, while the uncalled capital is the amount that the company may ask for at a later date.

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The correct answer is "cash and trade debtors." Current assets are resources that a company expects to convert into cash or use up within one year or a normal operating cycle. These assets are important for a company's day-to-day operations and can be easily converted into cash. Examples of current assets include cash, accounts receivable (trade debtors), inventory, and prepaid expenses. Out of the options provided, "cash and trade debtors" are current assets because they can be easily converted into cash within a year or a normal operating cycle. Cash is the most liquid current asset as it can be used to pay for immediate expenses or investments. Trade debtors, also known as accounts receivable, are the amounts owed to the company by its customers for goods or services sold on credit. The company expects to receive payment within a year or normal operating cycle, making it a current asset. On the other hand, trade creditors and trade debtors are both examples of accounts payable and accounts receivable, respectively, which are types of current liabilities and current assets, respectively, in accounting. Therefore, "trade creditors and trade debtors" cannot be considered as examples of current assets.

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Cowries are a form of money which were not used in the early days of trade. Cowries are the shells of sea snails and were used as a medium of exchange in some societies in Africa and Asia in the past. However, in the early days of trade, when people first started exchanging goods and services, cowries were not commonly used. Instead, other forms of currency, such as barter or the exchange of goods for goods, were used. Later on, other forms of money such as metal bars, coins and paper money were developed and used in various parts of the world.

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One of the functions of a trade association is to promote members' welfare. A trade association is a group of companies in a specific industry who come together to address common issues and goals. One of the main functions of a trade association is to promote the welfare of its members. This can include advocating for favorable laws and regulations, providing networking opportunities, offering educational resources and training, and working to improve the overall reputation of the industry. By working together, members of a trade association can have a greater impact on the industry and improve their own businesses.

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The bank that acts as the lender of last resort is the central bank. The central bank is the authority responsible for overseeing the monetary system of a country. One of its important functions is to act as a lender of last resort, which means it provides loans to other banks or financial institutions that are experiencing financial difficulties and cannot obtain funding from other sources. The central bank provides this emergency lending to prevent a crisis in the banking system that could lead to a broader economic downturn. By providing loans to troubled banks, the central bank helps maintain confidence in the financial system and ensures that banks can continue to provide services to their customers. Commercial banks, merchant banks, and mortgage banks are not typically authorized to act as lenders of last resort. Instead, they rely on access to funding from the central bank and other sources to meet their liquidity needs.

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The average stock is derived by adding the opening stock to the closing stock and then dividing the sum by two. The opening stock is the value of inventory at the beginning of an accounting period, while the closing stock is the value of inventory at the end of the accounting period. The average stock is the value of inventory that a business holds on average during the accounting period. By adding the opening and closing stock and then dividing by two, a business can calculate the average stock value. This calculation is used in various accounting and financial ratios, such as inventory turnover ratio and gross profit ratio. These ratios help a business to analyze its inventory management and profitability. The other options provided in the question are not correct methods to calculate the average stock value. The first option is the average of closing stock and purchases, which does not include the opening stock. The second option is the ratio of closing stock to opening stock, which does not provide an average value. The fourth option is the difference between opening stock and purchases, which also does not include the closing stock value.

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The growth of commerce is not enhanced by low per capita income. Per capita income refers to the average income earned per person in a given area or population. Low per capita income can be a hindrance to the growth of commerce, as it means that people have less disposable income to spend on goods and services. When people have less money to spend, demand for goods and services decreases, which can negatively impact the growth of commerce. On the other hand, factors such as the development of modern forms of production, government participation in business, and high population growth can positively impact the growth of commerce.

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Sea vessels that do not operate on regular times and routes are called tramps. Tramp ships are essentially freighters that do not have a fixed schedule or specific ports of call. Instead, they are hired by cargo owners or shipping companies to transport goods to various destinations around the world. Tramp ships are often used to transport bulk cargo, such as coal, grain, or ore, and are known for their flexibility and cost-effectiveness. Because they do not have fixed schedules, tramp ships can be hired at short notice and can be rerouted to different destinations as needed. In contrast, ocean liners, container ships, and ferries all operate on regular routes and schedules. Ocean liners are large passenger ships that transport passengers and cargo on fixed routes, while container ships are used to transport standardized shipping containers on specific routes. Ferries, on the other hand, are typically used to transport passengers and vehicles across shorter distances, such as between nearby ports or islands. Overall, tramp ships provide a valuable service for companies that need to transport goods around the world, but do not require the regular schedules or specific routes of other types of ships.

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A business unit in which savings of members are lent to others is called a "credit and thrift society". A credit and thrift society is a type of financial institution where individuals pool their savings to provide loans to other members of the society. Members of the society may include individuals, small businesses, or even large corporations. The primary objective of a credit and thrift society is to provide its members with access to credit at a reasonable cost. Members can borrow funds from the society to finance their businesses or personal expenses, and the loans are typically repaid with interest over a predetermined period of time. Credit and thrift societies are often formed by individuals or small groups who are unable to obtain loans from traditional banks due to a lack of collateral or a poor credit history. By pooling their resources and lending to one another, members of a credit and thrift society can obtain the funds they need to start or expand their businesses, or to meet their personal financial needs. In summary, a "credit and thrift society" is a business unit where members pool their savings to provide loans to one another, with the primary objective of providing access to credit at a reasonable cost.

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The commission on a postal order is called "poundage." A postal order is a financial instrument that is issued by postal services in many countries. It is similar to a check or money order, but is generally considered to be a safer and more secure method of payment. When purchasing a postal order, the buyer typically pays an additional fee or commission to cover the cost of issuing and processing the order. This fee is known as "poundage." Poundage is generally a percentage of the total value of the order, and can vary depending on the country and the specific postal service. The other options listed - tariff, brokerage, and fee - all refer to different types of charges or fees that may be associated with financial transactions, but they are not specifically related to postal orders. For example, a tariff is a tax or duty that is imposed on imported or exported goods, while brokerage refers to the fee charged by a broker for arranging a financial transaction.

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The marketing term which regards the consumer as king that must be satisfied is the "marketing concept." The marketing concept is a philosophy that emphasizes the importance of understanding and meeting the needs and wants of customers, with the goal of maximizing profits and achieving long-term success. It is based on the idea that by putting the customer first and providing them with products and services that meet their needs, a business will naturally attract and retain a large and loyal customer base. In essence, the marketing concept treats the consumer as king, recognizing that they are at the center of all marketing efforts and decisions.

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The objective of ECOWAS that is not listed among the options is the "promotion of a common language." ECOWAS stands for the Economic Community of West African States, and it is a regional intergovernmental organization of countries in West Africa. The organization was established to promote economic integration and cooperation among its member countries, which currently number 15. The other three options listed - improvement of infrastructural facilities, encouragement of free movement of people, and encouragement of trade among member countries - are all key objectives of ECOWAS. Improving infrastructure such as roads, power supply, and communication networks helps to create a more conducive environment for trade and economic growth. Encouraging free movement of people allows citizens of member states to travel, work, and do business more easily across borders. And promoting trade among member countries helps to increase economic activity, create jobs, and reduce poverty in the region. While promoting a common language could be seen as a useful means of improving communication and cooperation among member countries, it is not listed as an official objective of ECOWAS.

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A cheque is specially crossed if the name of the bank is written between two parallel lines drawn across it. This type of crossing is called a "special crossing" and it indicates that the cheque can only be deposited into an account at the bank whose name is written on the cheque. In other words, the cheque cannot be cashed over the counter, and it must be deposited into a specific bank account. The purpose of a special crossing is to provide an extra layer of security to the payee, as it ensures that the cheque can only be deposited into a specific account and cannot be cashed by anyone who happens to be in possession of it.

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The type of retail business that sells goods by post using a catalogue is called a "mail order firm." A mail order firm is a company that allows customers to purchase goods from a catalogue without visiting a physical store. Customers can browse through a catalogue or an online store, select the items they want to buy, and place an order. The goods are then delivered to the customer's address by post or courier. The catalogue typically contains pictures and descriptions of the products that the company offers for sale. Customers can choose to pay for the goods using a variety of payment options, such as credit card, debit card, or bank transfer. Mail order firms are popular because they offer convenience to customers who may not have the time or ability to visit a physical store. They also offer a wider range of products than a physical store because they can source products from all over the world. In summary, a mail order firm is a retail business that sells goods by post using a catalogue or online store, allowing customers to purchase products without visiting a physical store.

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An advantage of rail transport is that it carries bulky and heavy goods. Rail transport is a mode of transportation that uses railroads to move goods and people. It is particularly advantageous for transporting heavy and bulky goods such as raw materials, coal, lumber, and heavy equipment. Rail transport has the capacity to move large volumes of goods over long distances, and it is often more cost-effective than other modes of transport, such as road or air transport. This is because trains can carry more cargo per trip, and the cost of fuel and maintenance is generally lower than other transportation modes. Moreover, rail transport can be a safer and more reliable mode of transportation for heavy and bulky goods. Trains are not affected by traffic congestion and can operate on a fixed schedule, which can reduce delays and improve delivery times. Additionally, rail transport can be integrated with other transportation modes to provide door-to-door delivery services for customers, enhancing its usefulness. While the other options provided in the question are not necessarily incorrect, they do not represent the main advantage of rail transport. Rail transport can require significant maintenance costs, and it can be subject to delays due to weather, mechanical failures, or other factors. Additionally, while rail transport can facilitate door-to-door delivery, it may not be as efficient as other modes of transport for smaller or lighter shipments.

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A broker belongs to the commercial occupation. A broker is a professional who acts as an intermediary between buyers and sellers to facilitate transactions. They may specialize in a specific type of product or service, such as real estate, insurance, or financial products. Brokers typically earn a commission for their services, which may include negotiating deals, finding buyers or sellers, and facilitating the transfer of ownership or payment. The commercial occupation involves buying, selling, and exchanging goods and services. This can encompass a wide range of activities, including retail sales, wholesale trade, and import/export businesses. A broker is considered to be part of the commercial sector because they are involved in facilitating transactions between buyers and sellers.

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A retail store that sells only one product from a particular manufacturer is called a tied shop. This means that the store has an exclusive agreement with the manufacturer to sell only that specific product. Tied shops are commonly found in industries such as electronics, where manufacturers may have flagship products that they want to showcase in dedicated stores. By having a tied shop, the manufacturer can have more control over the presentation of the product and ensure that customers have a consistent experience. Customers who are interested in purchasing that particular product can visit the tied shop with the assurance that they will find the product they are looking for. Therefore, the correct option is tied shop.