WAEC Commerce Past Questions & Answers - Page 25

121.

The size of of profit of a business is measured by the

A.

closing stock

B.

opening stock

C.

total purchases

D.

rate of turnover

Correct answer is D

Rate of turnover: Is the number of times a firm sells out its merchandise or finished goods inventory

122.

Mr Lou who assured his life with XYZ Assurance Company, was involved in an accident and had a broken leg; the sum of #80,000 was paid to Mr Lou for his broken leg. The money received is known as

A.

compensation

B.

commission

C.

premium

D.

indemnity

Correct answer is D

Indemnity insurance is a contractual agreement in which one party guarantees compensation for actual or potential losses or damages sustained by another party. Mr Lou was indemnify at the tone of N80,000

123.

Which of the following arrangement of documents is the correct sequence as used in the retail trade? i. Quotation ii. Enquiry iii.Order iv Invoice

A.

i,ii,iii,iv

B.

ii,i,iii,iv

C.

i,iv,iii only

D.

i,iii,iv only

Correct answer is B

The sequence goes thus; enquiry => quotation => order => invoice 

A buyer sends an enquiry to the seller asking about the goods he wants to purchase

The seller send the buyer a quotation containing products description, prices etc

The buyer then places an order

The seller sends an invoice to the buyer as prove of a business transaction

124.

An activity involving buying, selling, distribution of goods and services is known as

A.

trade

B.

marketing mix

C.

exchange

D.

commerce

Correct answer is D

Generally, commerce refers to the exchange and distribution of goods, services or something of value, between businesses or entities.

125.

The document which is used when a country imposes ad valorem duties is

A.

bill of lading

B.

consular invoice

C.

certificate of origin

D.

open indent

Correct answer is B

Ad valorem; (is the levying of tax or customs duties) proportionate to the estimated value of the goods or transaction concerned. They extend to taxes such as import duty taxes on goods from abroad. 

The main purpose of a consular invoice is to provide a complete and detailed description of the goods to the foreign customs authority, so as to ensure that the correct import duty is levied on the goods.