UTME CBT FREE Practice Test – Commerce (Questions with Answers and Explanations)

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A cheque dated 15th March, 2012 will become stale on ______

A. 16th June, 2012    B. 16th July, 2012.    C. 16th August, 2012.    D. 16th September, 2012.

Commercial activities in Nigeria have greatly been enhanced due to improvement in _______

(a) transportation system   (b) insurance activities   (c) communication network   (d) warehousing activities

Which of the following is not a principle of insurance?

A. Insurabe interest.    B. Subrogation.    C. Surrender value.    D. Proximate cause.

The bank on which a cheque is drawn is known as the _____

A. drawer.    B. drawee.    C. cashier.    D payee.

Commerce includes all the occupations concerned with ______

A. marketing   B. sales   C. distribution   D. production.

International trade is different from internal trade as the former _______

(a) involves people of different tribes
(b) involves the use of different currencies
(c) is based on the principles of comparative cost
(d) is usually involved in manufactured products

A type of long-term loan granted to companies with fixed interest as well as with redeemable and irredeemable features is referred to as ______

A. a bond   B. an overdraft   C. a debenture   D. a term loan.

Throwing cargo over board in order to save a ship from sinking is ______

A. jettison.    B. abandonment.    C. piracy.    D. flotsam.

Capital as a factor of production can be used as ________

A. money that is regarded as asset
B. goods that are useful in business
C. input for further production
D. services that provides satisfaction.

A guarantee given by one person or party to another in which the integrity of the person is assured is ______

A. term assurance   B. indemnity   C. fidelity   D. subrogation.

A contract for the sale of goods involves the ______

A. producer, the seller and the buyer of goods
B. offering of goods to customers
C. transfer of title to goods for money
D. exchange of goods.

The final link in the chain of distribution is ______

(a) middleman   (b) retailing   (c) wholesaling   (d) consumer

The difference between indemnity insurances and non-indemnity insurance is that the latter provides

(a) cover for exporters against risk
(b) cover for importers against risk
(c) consolation payment to the insured
(d) full payment to the insured

Which of the following is classified as invisible item in balance of payment?

A. Import of goods     B. Salaries of expatriates     C. Export of groundnuts     D. Sale of equipment

Goods are of merchantable quality if they ______

A. are of equal weight   B. conform to description   C. conform to buyers’ purpose   D. are of the same quality.

The shares of a company listed on the stock exchange for sales are referred to as

A. deferred shares   B. quoted shares   C. registered shares   D. issued shares.

In Nigeria, the body that ensures that its members operate according to their professional ethics is the _______


The main divisions of production are ______

A. industry, direct and indirect services.
B. extraction, manufacturing and construction.
C. industry, commerce and direct services.
D. industry, commerce and trading.

A tariff refers to ______

A. fees imposed on contraband goods
B. fees paid on exports
C. taxes imposed on imported goods
D. taxes paid on home made goods.

Money can simply be referred to as a _______

A. standard of value
B. medium of exchange
C. means for the settlement of debts
D. durable asset for doing business.


I. Retail   II. Export   Ill. Transport   IV. import   V. Insurance   VI. Banking and finance   VII. Whole sale   VIII. Communication.

Which of the above are aids to trade?

A. I, II, Ill and VIII
B. III, V, VI and VIII
C. I, II, Ill and VI

A group of companies is a collection of ______

A. subsidiaries and their holding company
B. firms
C. associates and their holding company
D. industries.

Recognized members of the Stock Exchange are ______

A. bulls   B. jobbers   C. brokers   D. stages.

When consumers engage in actions that express dissatisfaction with the quantity, price and quality of goods available, such action is termed ______

A. Consumer behaviour.     B. Consumerism.     C. Consumer education.     D. Consumer orientation

The agency that currently oversees the privatization and commercialization processes in Nigeria is the _________

A. Securities and Exchange Commission
B. Technical Committee on privatization
C. Nigerian Stock Exchange
D. Bureau of Public Enterprises.

Right issue is the ______

A. individual’s right to be issued shares on subscription.
B. right of shareholders to vote on issue.
C. Preferential right to return on shares.
D. Shares offered to existing shareholders at a cheaper price.

An order sent by an importer to an overseas supplier stating the details of goods required is known as ______

A. ship’s manifest   B. an indent   C. bill of lading   D. export invoice.

The government’s policy thrust on the business environment is to ______

A. increase production    B. promotion exports    C. attract investors   D. be self-sufficient.

The letters E and OE stands for _____

A. errors of exception
B. errors and omission exception
C. estimated and order error
D. end of error.

The document issued by the registrar of companies to permit a public limited company to commence business is ______

A. Memorandum of Association.
B. Certificate of Incorporation.
C. Article of Association.
D. Trading Certificate.

The process of winding up a public limited company by a court order is known as ______

A. termination     B. dissolution     C. voluntary liquidation     D. compulsory liquidation.

An efficient transport system enables a trader to _______

A. widen the market for his products.
B. avoid customs examination of goods.
C. adopt better price policy.
D. reduce cost of production.

The box marked X stands for _______

A. Indirect services.    B. Industry.    C. Occupation.    D. Aids to trade.

Advertising efforts geared towards a particular audience is known as ________

A. mass advertising     B. direct advertising     C. persuasive advertising     D. indirect advertising.

Which of the following involves foreign trade?

A. Supermarkets   B. Chain stores   C. Departmental stores   D. Commodity market.

If Karamo who lives in The Gambia imports goods from Senegal and later sells in Guinea Bissau; Karamo is engaged in ______

A. multi-lateral trade.    B. counter trade.    C. barter trade.    D. entrepot trade.

A trader’s turnover was D36,000. Purchases was D28,000. The opening stock was D2,000 and the closing stock D3,000

What is the rate of turnover?

A. 13.5 times.    B. 10.8 times.    C. 9 times.    D. 5.4 times.

The 'relationship which subsists between two or more persons carrying on a business with a view to profit’ is ______

A. cooperative society.    B. partnership.    C. public limited company.    D. credit union.

Mr Biu has been paying the premium of a straight Life Assurance policy for several years. The surrender value of the policy if the amount that ______

A. would be paid to Mr. Biu if he should discontinue with the policy.
B. would be paid to Mr. Biu’s beneficiaries if he dies
C. is paid annually to Mr. Biu to the insurance company
D. the amount Mr Biu has paid plus interest

In marine insurance when a particular cargo is thrown into the sea in order to prevent the ship from sinking, the type of marine loss is ________

A. particular average loss.
B. general average loss.
C. total average loss.
D. constructive average loss.

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