Waec Model Questions Vol1 2020 Commerce Question 1

Practice essay / theory question 1 from the 2020 Waec Model Questions Vol1 Commerce examination. This question covers Functions of Money, Credit Transactions .

Waec Model Questions Vol1 2020 Commerce Essay / Theory

Topics: Functions of Money Credit Transactions

Question 1 WAEC_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • essay

The Nigerian economy relies heavily on commerce activities. Money performs three essential functions – as a medium of exchange, a unit of account and a store of value – which facilitate commercial transactions. A small retailer purchased inventory worth ₦120,000 on 30‑day credit and sold the goods for ₦180,000 cash within 20 days. The retailer is charged a 5 % monthly interest on credit purchases.

Question Parts

( a )

Explain how each function of money (medium of exchange, unit of account, store of value) contributes to the smooth operation of commerce.

( b )

Calculate the total interest payable on the credit purchase.

( c )

Determine the net profit earned by the retailer after accounting for interest.

( d )

Evaluate how the availability of credit influences the retailer’s cash flow and business decisions.

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About This Question

This is Waec Model Questions Vol1 2020 Commerce Question 1. It is one of the essay questions from the 2020 Waec Model Questions Vol1 Commerce examination.

The question covers Functions of Money, Credit Transactions .

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