Commerce Questions and Answers

C and F stand for cost and freight, used in contracts for international trade that specify that the seller of the goods is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the items from the carrier.

A capital reserve is created out of capital profits such as cash received by selling current assets, the premium earned on the issue of share and debentures, excess on revaluation of assets and liabilities. It is an account on a balance sheet reserved for contingencies or to offset capital losses.

Dividends are paid in proportion to the number of securities that an investor holds in a particular company. For instance, an investor with 1,000,000 worth of securities will most definitely get paid more dividends than someone with 800,000 worth of investments.

A crossed cheque is a cheque that has been marked specifying an instruction on the way it is to be redeemed. It cannot be cashed at a bank counter but must be paid into an account in exactly the same name as that which appears on the 'payee' line of the cheque (i.e. the person who has received the cheque, who is legally the “payee” and “holder” of the cheque).

Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. This has been a  major problem in foreign trade. When this happens, traders are unable to transact business and at the mercy of the government till the sanctions are lifted.

For instance, in August 2019, President Muhammadu Buhari had ordered a ban on dollars for food imports, forcing importers to source for dollars at parallel markets. This singular move skyrocketed the prices of consumables in the local economy.