WAEC Commerce Past Questions & Answers - Page 38

186.

Which of the following is not a principle of insurance

A.

Insurable interest

B.

Subrogation

C.

Surrender value

D.

Proximate cause

Correct answer is C

There are seven basic principles that create an insurance contract between the insured and the insurer:

  1. Utmost Good Faith
  2. Insurable Interest
  3. Proximate Cause
  4. Indemnity
  5. Subrogation
  6. Contribution
  7. Loss Minimization

187.

An overdraft is

A.

amount permitted to be withdrawn in excess of one's deposit

B.

excessive cash withdrawn by commercial banks from the Central Bank

C.

credit balance standing in the name of a customer

D.

special deposits made by commercial banks

Correct answer is A

The term bank overdraft refers to a withdrawal of money that is greater than the available balance in an account.

188.

A document issued to the public by a company to advertise its share is known as

A.

prospectus

B.

tender

C.

share certificate

D.

trading certificate

Correct answer is A

A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public.

189.

The total assets of a business less its total liability is known as

A.

capital owned

B.

share capital

C.

issued capital

D.

working capital

Correct answer is A

Capital owned: This is the excess of value of asset of a business over its liability. It is the net worth of a business. 
Capital owned = assets - liabilities

190.

The turnover of a trade is the

A.

number of times the stock is sold

B.

total sales made during a period

C.

profit made during the period

D.

total purchases made during the period

Correct answer is A

Turnover is an accounting concept that calculates how quickly a business conducts its operations. Most often, turnover is used to understand how quickly a company collects cash from accounts receivable or how fast the company sells its inventory.