POST UTME BABCOCK UNIVERSITY 2023 Commerce | Objective

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Question 1
A sole trader's business is registered under which of the following?
A. Partnership
B. Company
Correct C. Sole Trader
D. Limited Liability Partnership

Correct Answer: C

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Question 2
A company's articles of association is a document that outlines the rules and regulations of the company. Which of the following is NOT a part of the articles of association?
A. Objectives of the company
B. Management structure
C. Share capital
Correct D. Directors' remuneration

Correct Answer: D

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Question 3
A sole trader's business is exposed to a risk of loss due to a fire in the premises. Which of the following types of insurance would be most suitable to mitigate this risk?
Correct A. Fire insurance
B. Liability insurance
C. Business interruption insurance
D. Professional indemnity insurance

Correct Answer: A

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Question 4
A company is considering entering into a contract with a supplier. Which of the following clauses in the contract would be most relevant to the company's risk management?
A. Payment terms
B. Delivery terms
Correct C. Warranty and liability
D. Termination clause

Correct Answer: C

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Question 5
A sole trader's business is registered under which of the following?
A. Partnership
B. Company
Correct C. Sole Trader
D. Limited Liability Partnership

Correct Answer: C

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Question 6
A company is considering a new marketing strategy that involves partnering with a popular social media influencer. The influencer has a large following and is known for promoting products that align with the company's brand values. However, the influencer's fees are high, and the company is unsure if the partnership will generate sufficient returns on investment. What type of risk is the company facing?
A. Financial risk
B. Reputational risk
C. Operational risk
Correct D. Strategic risk

Correct Answer: D

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Question 7
A sole trader is considering expanding their business by hiring employees. What type of business unit will the sole trader be operating if they hire employees?
A. Sole trader
B. Partnership
Correct C. Limited company
D. Public company

Correct Answer: C

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Question 8
A company is considering a new production process that involves using a new machine. The machine has a higher upfront cost but will reduce production time and increase efficiency. What type of production process is the company considering?
A. Job production
B. Batch production
C. Mass production
Correct D. Flexible production

Correct Answer: D

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Question 9
A consumer is considering purchasing a product that has a 1-year warranty. The product has a high failure rate, and the consumer is concerned about the cost of repairs. What type of risk is the consumer facing?
A. Financial risk
B. Reputational risk
C. Operational risk
Correct D. Product liability risk

Correct Answer: D

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Question 10
A company is considering a new insurance policy that covers business interruption. The policy has a high premium but will provide financial protection in the event of a disaster. What type of risk is the company facing?
A. Financial risk
B. Reputational risk
C. Operational risk
Correct D. Business interruption risk

Correct Answer: D

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Question 11
A sole trader's business is registered under which of the following?
A. Partnership
B. Company
Correct C. Sole Trader
D. Cooperative

Correct Answer: C

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Question 12
A company's financial statements are audited by an auditor. What is the primary purpose of the audit?
A. To verify the company's financial position
B. To ensure compliance with tax laws
Correct C. To provide an opinion on the company's financial statements
D. To identify areas for cost reduction

Correct Answer: C

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Question 13
A foreign trade agreement between two countries involves the exchange of goods and services. What is the primary benefit of such an agreement?
A. Increased competition among domestic businesses
B. Improved access to new markets and customers
Correct C. Reduced tariffs and trade barriers
D. Increased government revenue through taxes

Correct Answer: C

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Question 14
A warehouse manager is responsible for maintaining inventory levels and ensuring timely delivery of goods to customers. What is the primary tool used to manage inventory levels?
Correct A. Inventory management software
B. Barcoding system
C. Just-in-time inventory system
D. First-in-first-out inventory system

Correct Answer: A

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Question 15
A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the primary benefit of this function?
A. Increased liquidity for borrowers
B. Improved access to new markets and customers
Correct C. Reduced risk for savers
D. Increased government revenue through taxes

Correct Answer: C

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Question 16
A risk management strategy involves identifying, assessing, and mitigating potential risks to an organization. What is the primary benefit of this strategy?
A. Increased revenue through risk-taking
B. Improved access to new markets and customers
Correct C. Reduced risk and increased stability
D. Increased government revenue through taxes

Correct Answer: C

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Question 17
A company's financial statements are audited by an auditor. What is the primary purpose of the audit?
A. To verify the company's financial position
B. To ensure compliance with tax laws
Correct C. To provide an opinion on the company's financial statements
D. To identify areas for cost reduction

Correct Answer: C

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Question 18
A foreign trade agreement between two countries involves the exchange of goods and services. What is the primary benefit of such an agreement?
A. Increased competition among domestic businesses
B. Improved access to new markets and customers
Correct C. Reduced tariffs and trade barriers
D. Increased government revenue through taxes

Correct Answer: C

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Question 19
A warehouse manager is responsible for maintaining inventory levels and ensuring timely delivery of goods to customers. What is the primary tool used to manage inventory levels?
Correct A. Inventory management software
B. Barcoding system
C. Just-in-time inventory system
D. First-in-first-out inventory system

Correct Answer: A

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Question 20
A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the primary benefit of this function?
A. Increased liquidity for borrowers
B. Improved access to new markets and customers
Correct C. Reduced risk for savers
D. Increased government revenue through taxes

Correct Answer: C

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Question 21
The concept of 'Gross Domestic Product' (GDP) is a measure of a country's total output of goods and services. Which of the following is NOT a component of GDP?
Correct A. Imports
B. Exports
C. Government Consumption
D. Investment

Correct Answer: A

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Question 22
A company's 'Break-Even Point' (BEP) is the point at which its total revenue equals its total fixed and variable costs. What is the formula for calculating the BEP?
Correct A. \frac{F}{P - V}
B. \frac{F + V}{P}
C. \frac{F}{P + V}
D. \frac{F + V}{P - V}

Correct Answer: A

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Question 23
A consumer protection law requires that all goods sold in a country must meet certain safety standards. Which of the following is an example of a 'Product Liability' law?
A. A law requiring all goods to be labeled with their country of origin
Correct B. A law requiring all goods to meet certain safety standards
C. A law requiring all goods to be sold at a minimum price
D. A law requiring all goods to be sold at a maximum price

Correct Answer: B

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Question 24
A company is considering exporting its products to a foreign country. Which of the following is an example of a 'Trade Barrier'?
Correct A. A tariff imposed on imported goods
B. A quota imposed on imported goods
C. A subsidy provided to domestic producers
D. A tax imposed on domestic producers

Correct Answer: A

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Question 25
A company is considering investing in a new project. Which of the following is an example of a 'Risk Assessment'?
A. A calculation of the expected return on investment
Correct B. A calculation of the expected risk of the investment
C. A calculation of the expected cost of the investment
D. A calculation of the expected benefit of the investment

Correct Answer: B

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