POST UTME ELIZADE UNIVERSITY 2019 Commerce | Objective

Are you preparing for POST UTME ELIZADE UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2019 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
In a sole trade business, the owner's personal and business finances are not separated. What is the primary advantage of this arrangement?
Correct A. Separation of personal and business finances
B. Increased tax liability
C. Reduced administrative costs
D. Improved business credit rating

Correct Answer: A

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Question 2
A company has a capital structure consisting of 60% equity and 40% debt. If the company's cost of equity is 12% and the cost of debt is 6%, what is the weighted average cost of capital (WACC)?
Correct A. 8.4%
B. 9.6%
C. 10.8%
D. 11.2%

Correct Answer: A

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Question 3
A country's trade balance is in deficit due to a high demand for imported goods. What is the primary cause of this trade imbalance?
Correct A. High demand for imported goods
B. Low domestic production
C. High interest rates
D. Depreciation of the local currency

Correct Answer: A

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Question 4
A company purchases a machine for ₦1,500,000 and depreciates it using the straight-line method over a 5-year period. What is the annual depreciation expense?
Correct A. ₦300,000
B. ₦250,000
C. ₦200,000
D. ₦150,000

Correct Answer: A

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Question 5
A company's insurance policy has a deductible of ₦50,000 and a maximum payout of ₦200,000. If the company suffers a loss of ₦300,000, what is the insurance company's liability?
A. ₦150,000
Correct B. ₦200,000
C. ₦250,000
D. ₦300,000

Correct Answer: B

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Question 6
A company's sole trader is considering expanding its operations into foreign markets. Which of the following is a key advantage of exporting goods to a foreign market?
Correct A. Increased revenue
B. Reduced competition
C. Improved brand recognition
D. Enhanced supply chain efficiency

Correct Answer: A

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Question 7
A firm's marketing strategy involves using social media platforms to reach its target audience. What type of marketing is this firm employing?
Correct A. Digital marketing
B. Experiential marketing
C. Event marketing
D. Public relations

Correct Answer: A

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Question 8
A company's warehouse is experiencing stockouts due to inadequate inventory management. Which of the following is a key cause of stockouts?
A. Inadequate forecasting
B. Insufficient storage capacity
Correct C. Poor inventory control
D. Inefficient supply chain management

Correct Answer: C

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Question 9
A firm's insurance policy covers losses due to natural disasters. What type of insurance is this firm purchasing?
A. Liability insurance
Correct B. Property insurance
C. Business interruption insurance
D. Workers' compensation insurance

Correct Answer: B

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Question 10
A company's sole trader is considering outsourcing its logistics operations to a third-party provider. Which of the following is a key benefit of outsourcing?
A. Reduced costs
Correct B. Improved efficiency
C. Enhanced customer service
D. Increased flexibility

Correct Answer: B

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Question 11
A company's financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP). Which of the following is a characteristic of GAAP?
Correct A. GAAP is a set of rules and guidelines that are mandatory for all companies.
B. GAAP is a set of rules and guidelines that are voluntary for all companies.
C. GAAP is a set of rules and guidelines that are applicable only to publicly traded companies.
D. GAAP is a set of rules and guidelines that are applicable only to non-profit organizations.

Correct Answer: A

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Question 12
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). Which of the following is a consequence of this?
A. The sole trader is not required to file tax returns.
B. The sole trader is not required to pay Value Added Tax (VAT).
C. The sole trader is not entitled to claim business expenses on tax returns.
Correct D. The sole trader is not protected from personal liability.

Correct Answer: D

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Question 13
A company's marketing strategy involves creating a new product line. Which of the following is a characteristic of this strategy?
A. It involves creating a new product line that is similar to an existing product.
Correct B. It involves creating a new product line that is different from an existing product.
C. It involves creating a new product line that is a variation of an existing product.
D. It involves creating a new product line that is a replacement for an existing product.

Correct Answer: B

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Question 14
A consumer protection agency is responsible for enforcing consumer rights. Which of the following is a right that consumers have?
A. The right to return a product that is defective.
Correct B. The right to cancel a contract within a specified period.
C. The right to claim compensation for damages caused by a product.
D. The right to access information about a product before purchasing it.

Correct Answer: B

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Question 15
A business law principle states that a contract is valid if it is made between two parties who are legally competent to enter into a contract. Which of the following is a characteristic of a legally competent party?
A. The party must be an adult.
B. The party must be a citizen of the country.
C. The party must have the capacity to understand the terms of the contract.
Correct D. The party must have the capacity to enter into a contract.

Correct Answer: D

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Question 16
In a sole proprietorship, the owner's personal assets are protected from business liabilities through a legal concept known as _______.
A. Separate Entity
Correct B. Limited Liability
C. Joint Venture
D. Partnership

Correct Answer: B

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Question 17
A company's articles of association may be amended by a _______ vote of the shareholders.
A. Simple Majority
B. Two-Thirds Majority
C. Special Resolution
Correct D. Ordinary Resolution

Correct Answer: D

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Question 18
A warehouse receipt is a document issued by a warehouseman to a customer upon receipt of goods for storage. It serves as _______ of the goods.
A. Proof of Ownership
Correct B. Evidence of Storage
C. Receipt of Payment
D. Invoice for Goods

Correct Answer: B

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Question 19
The Consumer Protection Act of 1999 provides that a consumer has the right to _______ a defective product.
A. Return
B. Exchange
Correct C. Refund
D. Repair

Correct Answer: C

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Question 20
A company's production process involves the manufacture of a product using a combination of labor and capital. This is an example of _______ production.
A. Specialization
Correct B. Division of Labor
C. Mass Production
D. Assembly Line Production

Correct Answer: B

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Question 21
A bank's primary function is to act as a _______ between borrowers and lenders.
A. Agent
B. Broker
C. Depository
Correct D. Intermediary

Correct Answer: D

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Question 22
A financial institution's ability to create new money through the extension of credit is known as the _______ multiplier.
Correct A. Money Multiplier
B. Credit Multiplier
C. Deposit Multiplier
D. Loan Multiplier

Correct Answer: A

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Question 23
A bank's reserve requirement is the minimum percentage of deposits that it must hold in reserve rather than lending out. This is known as the _______ ratio.
Correct A. Cash Reserve Ratio
B. Liquidity Ratio
C. Capital Adequacy Ratio
D. Asset Quality Ratio

Correct Answer: A

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Question 24
A financial institution's ability to manage risk is known as _______ management.
Correct A. Risk Management
B. Asset Management
C. Liability Management
D. Capital Management

Correct Answer: A

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Question 25
A financial institution's ability to generate profits through the sale of financial products is known as _______ income.
A. Net Interest Income
Correct B. Non-Interest Income
C. Trading Income
D. Investment Income

Correct Answer: B

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