JAMB UTME - Commerce - 2022

Maelezo ya Majibu

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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Central banks sell treasury bills to the public to reduce cash in circulation. Treasury bills are short-term government securities that are issued by the central bank and sold to the public in exchange for cash. When individuals or institutions buy these securities, they are essentially loaning money to the government for a fixed period of time, usually ranging from a few days to a few months. By selling treasury bills to the public, the central bank is able to withdraw money from circulation and reduce the amount of cash in the banking system. This helps to control inflation and maintain the stability of the currency. When the central bank sells treasury bills, it effectively takes money out of the economy, which can help to reduce the supply of money and prevent the value of the currency from decreasing. In addition, central banks may also use the revenue generated from the sale of treasury bills to fund government operations or to pay off existing debt. However, the primary purpose of selling treasury bills is to control the money supply and ensure that the economy remains stable and healthy.

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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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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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One advantage of small scale retail outlets is personal attention to customers. Small scale retail outlets are businesses that are typically locally-owned and operated, and have a smaller physical footprint than larger retailers. Because small scale retail outlets are often run by the owner or a small staff, they are able to provide more personal attention to their customers. This can include offering customized recommendations, remembering customers' preferences and purchase history, and providing a more personalized shopping experience. Personal attention can also lead to stronger relationships between the retailer and the customer, which can result in increased loyalty and repeat business. This is an advantage that larger retailers, who may have more impersonal shopping experiences, may not be able to offer.

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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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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 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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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 difference between a country's imports and exports of goods in a particular year is known as the "balance of trade." It represents the net value of a country's international trade in goods, which includes tangible products like cars, machinery, and food. If a country exports more than it imports, it has a positive balance of trade, also known as a trade surplus. On the other hand, if a country imports more than it exports, it has a negative balance of trade, also known as a trade deficit. It's important to note that the balance of trade is just one part of a country's overall balance of payments, which includes not just goods but also services, capital, and other financial transactions. The balance of payments is a more comprehensive measure of a country's international economic activity and can give a more accurate picture of its overall economic health.

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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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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.

Maelezo ya Majibu

Maelezo ya Majibu

Goods that are brought into a country for sale are the country's visible imports. This is because visible imports refer to physical goods that are brought into a country from another country for consumption or resale. Examples of visible imports include raw materials, finished goods, and capital goods. These imports are visible because they can be physically seen and are recorded in the country's balance of payments, which is a record of all the economic transactions between that country and the rest of the world. In contrast, invisible imports refer to non-physical services that are provided by foreign entities, such as tourism or foreign investment. Similarly, visible exports are physical goods that are produced domestically and sold to foreign countries, while invisible exports are non-physical services that are provided domestically to foreign entities. Therefore, the correct option is visible imports.

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The document issued by a public company allowing it to commence business is called the "Certificate of Incorporation." When a group of people decides to form a company, they must register it with the government. The process of registering a company involves submitting documents to the government, including the company's Memorandum of Association and Articles of Association. These documents outline the company's purpose, structure, and internal regulations. Once the government approves the registration and verifies that all necessary documents have been submitted, it issues a "Certificate of Incorporation" to the company. This certificate officially recognizes the company as a legal entity and grants it the authority to commence business operations. In summary, the "Certificate of Incorporation" is a crucial document that allows a public company to legally operate and conduct business.

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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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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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The document you are referring to is a Delivery Note. A Delivery Note is a document that confirms that goods have been received by the customer from the seller. It is issued by the seller's own courier and signed by the customer as proof of receipt. The Delivery Note contains details about the goods, such as the quantity, type, and description, as well as the date and location of delivery. This document is important for both the seller and the customer as it serves as a record of the transaction and helps to ensure that the goods were delivered as expected. In the event of a dispute, the Delivery Note can be used as evidence to support either party's claim.

Maelezo ya Majibu

Gross profit = Sales - Cost of goods sold

Note that cost of goods sold = Opening stock + purchase - closing stock
= 30,000 + 16,000 - 10,000
= 36,000

GP = 50,000 - 36,000
= 14,000

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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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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.

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A shareholder would inspect the "Articles of Association" to know his/her voting rights. The articles of association are a legal document that outlines the rules and regulations that govern the internal management of a company. This document specifies the voting rights of each class of shareholders, the procedures for holding meetings, and the voting procedures for each meeting. Therefore, if a shareholder wants to know his/her voting rights, they should refer to the articles of association of the company in which they hold shares.

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Maelezo ya Majibu

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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The group that would advocate for the supply of constant electricity to households is the "Consumer's association". A consumer's association is an organization that represents the interests of consumers in a particular market or industry. The main objective of a consumer's association is to ensure that the goods and services provided by the industry meet the needs and expectations of consumers. In the case of the supply of constant electricity to households, a consumer's association would advocate for the needs of households and their requirements for electricity. The association would seek to ensure that electricity suppliers provide a consistent and reliable supply of electricity to households, with minimal disruptions or outages. The advocacy efforts of a consumer's association may include lobbying for government policies that support the provision of constant electricity to households, working with electricity suppliers to improve their services, and educating consumers about their rights and responsibilities in relation to electricity supply. In summary, a "Consumer's association" is the group that would advocate for the supply of constant electricity to households, with the objective of ensuring that electricity suppliers provide a consistent and reliable supply of electricity to households.

Maelezo ya Majibu

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

Maelezo ya Majibu

Maelezo ya Majibu

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 issue of a prospectus by a company is an invitation to members of the public to subscribe to the company's shares. A prospectus is a legal document that a company must produce and distribute to potential investors when it is issuing new shares to the public. The prospectus contains important information about the company, its business, its financial performance, and the terms and conditions of the share offering. It is intended to provide potential investors with all the information they need to make an informed decision about whether or not to invest in the company's shares. Therefore, when a company issues a prospectus, it is inviting members of the public to subscribe to its shares by buying them. By doing so, investors become part-owners of the company and are entitled to a share of the company's profits and voting rights at shareholder meetings.

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The law by which a seller transfers the property in goods to a buyer at an agreed price is the "Sale of Goods Act." The Sale of Goods Act is a law that governs the sale of goods in many countries around the world. It sets out the rules for transferring ownership of goods from a seller to a buyer in a commercial transaction. The law applies to both tangible goods, such as cars and furniture, and intangible goods, such as software and intellectual property. Under the Sale of Goods Act, a seller is required to transfer ownership of the goods to the buyer at an agreed price. This means that the buyer has the right to own and possess the goods, and the seller must transfer the goods to the buyer in exchange for payment. The law also sets out rules for the quality and condition of the goods, and provides legal remedies for buyers who receive defective or faulty goods. The other options listed - Weights and Measures Act, Trade Description Act, and Foods and Drugs Act - are laws that relate to different aspects of commercial transactions, such as measurement standards, consumer protection, and food safety. However, they do not specifically address the transfer of ownership of goods from a seller to a buyer, which is the main focus of the Sale of Goods Act.

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The provision of services is classified under "tertiary production." In economics, production refers to the creation of goods and services. While goods are physical products that we can touch and see, services are intangible products that are offered by businesses to meet the needs of consumers. Tertiary production is also known as the service sector and includes businesses that provide services to consumers and other businesses. This includes services such as healthcare, education, transportation, hospitality, financial services, and consulting. The provision of services, therefore, falls under tertiary production because it involves the delivery of intangible products to customers. Unlike goods, services cannot be stored or transported, and they are produced and consumed at the same time. In contrast, batch production and flow production are terms used to describe the production of goods in a manufacturing context. Batch production involves the production of a specific quantity of a product at one time, while flow production involves continuous production of goods on an assembly line. Secondary production refers to the manufacturing of goods from raw materials, which is typically associated with the primary production sector of the economy.

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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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The service of a retailer is part of production because it "enables finished goods to reach consumers." Retailers are businesses that sell finished goods directly to consumers, usually in small quantities. They purchase goods from manufacturers or wholesalers and then sell them in their stores or online. The service of a retailer is important because it provides a way for finished goods to reach the end consumer, which is the ultimate goal of production. Without retailers, manufacturers would not be able to sell their finished goods directly to consumers, and consumers would have limited access to the goods they need and want. Retailers serve as a crucial link between producers and consumers, by making finished goods available to consumers in convenient locations. Therefore, the service of a retailer is an integral part of the production process because it enables manufacturers to sell their finished goods and allows consumers to access and purchase those goods. While retailers may not directly create the finished goods, they play a vital role in bringing them to market and making them available to consumers. In contrast, a commercial occupation refers to any occupation or business activity that is engaged in for the purpose of making a profit. While retailing is a commercial occupation, it is also an important part of the production process because it enables finished goods to reach consumers.

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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.

Maelezo ya Majibu

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.

Maelezo ya Majibu

The quality of money that makes it possible to buy goods in small quantities is divisibility. Divisibility means the ability of money to be divided into smaller units. This is important because it allows people to buy goods that cost less than one unit of money. For example, if a candy bar costs 50 cents and you only have a one dollar bill, you can divide that dollar into smaller units (quarters, in this case) to pay for the candy bar. If money was not divisible, you would have to pay for the candy bar with a one dollar bill, even if you only wanted to buy 50 cents worth of goods.

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The right of a consumer that is not listed among the options is the "right to buy on credit." Consumer rights are the legal protections and entitlements afforded to individuals who purchase goods and services. These rights vary depending on the country or region, but they generally include protections against fraud, misrepresentation, and defective products. The other three options listed - the right to a fair hearing, the right to obtain a replacement, and the right to a safe product - are all recognized as fundamental consumer rights in many countries around the world. The right to a fair hearing means that consumers have the right to be heard and have their complaints addressed in a fair and impartial manner. The right to obtain a replacement means that consumers have the right to seek a replacement or refund for a product that is defective or does not meet their expectations. The right to a safe product means that consumers have the right to expect that the products they purchase will not pose a risk to their health or safety. The right to buy on credit, on the other hand, is not generally considered a fundamental consumer right. While many consumers have access to credit as a means of financing their purchases, there is no legal entitlement to buy on credit. Consumers may be required to meet certain criteria, such as a good credit score or a steady income, in order to qualify for credit.

Maelezo ya Majibu

Maelezo ya Majibu

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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A specially-designed mode of transport for conveying liquid and gas is a "tanker". A tanker is a type of ship or vehicle designed to carry large quantities of liquid or gas cargo, such as oil, natural gas, or chemicals. Tankers are designed to safely transport their cargo, which is often hazardous or flammable, over long distances across the sea or land. Tankers are designed with special features to prevent leakage or spillage of their cargo. For example, oil tankers have double hulls to prevent oil spills in the event of an accident or collision. Tankers also have special pumps and pipelines for loading and unloading their cargo. In summary, a "tanker" is a type of specialized transport designed to safely transport large quantities of liquid and gas cargo, such as oil and natural gas, over long distances.