WAEC Past Questions and Answers - Page 98

486.

A bank's undertaking to pay an exporter on behalf of an importer is a

A.

documentary credit

B.

letter of credit

C.

letter of hypothecation

D.

bill of exchange

Correct answer is B

No explanation has been provided for this answer.

487.

An organization formed mainly by traders on the same line of business is known as

A.

trade union

B.

cooperative society

C.

trade association

D.

chamber of commerce

Correct answer is B

No explanation has been provided for this answer.

488.

The net profit of a business is determined by

A.

deducting cost of goods sold from sales

B.

deducting purchases from sales

C.

adding commissions recieved to gross profit

D.

deducting all expenses from gross profit and other income

Correct answer is D

No explanation has been provided for this answer.

489.

Which of the following is an intangible asset of a firm

A.

Goodwill

B.

Reserve

C.

Skilled personnel

D.

Rights issue

Correct answer is C

No explanation has been provided for this answer.

490.

The nominal value of a share is same as its

A.

market value

B.

below par value

C.

above par value

D.

face value

Correct answer is D

The nominal value, or book value, of a share is usually assigned when the stock is issued. Market value reflects what the market is willing to pay for it. These two values may differ tremendously as a result of different market conditions as well as supply and demand.

Nominal value is also known as face value or par value. It is the stated worth of an asset. Most likely, this was the value of the asset at the time it was issued, such as cash, bonds and stocks.