POST UTME JOSEPH AYO BABALOLA UNIVERSITY 2024 Commerce | Objective

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Question 1
A sole trader's business is considered a separate legal entity from its owner. What is the primary reason for this separation?
A. Limited liability
B. Separate taxation
C. Separate accounting
Correct D. Separate management

Correct Answer: D

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Question 2
A company's financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP). What is the primary purpose of GAAP?
Correct A. To ensure accurate financial reporting
B. To provide a framework for financial analysis
C. To facilitate tax planning
D. To promote corporate governance

Correct Answer: A

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Question 3
A foreign trade agreement between two countries involves the exchange of goods and services. What is the primary type of foreign trade agreement?
A. Export agreement
B. Import agreement
Correct C. Reciprocal trade agreement
D. Multilateral trade agreement

Correct Answer: C

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Question 4
A company's production process involves the transformation of raw materials into finished goods. What is the primary type of production process?
A. Batch production
Correct B. Mass production
C. Continuous production
D. Job production

Correct Answer: B

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Question 5
A bank's primary function is to act as a financial intermediary between savers and borrowers. What is the primary type of financial intermediary?
Correct A. Commercial bank
B. Investment bank
C. Central bank
D. Savings bank

Correct Answer: A

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Question 6
Determine the optimal storage capacity for a warehouse with a maximum floor area of 5000 square meters, a ceiling height of 6 meters, and a desired storage density of 5 pallets per square meter. Assume a standard pallet size of 1.2 meters by 0.8 meters.
A. 2000 pallets
Correct B. 3000 pallets
C. 4000 pallets
D. 5000 pallets

Correct Answer: B

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Question 7
A company is considering two marketing strategies: a social media campaign targeting 100,000 users with a 5% conversion rate, or a paid advertising campaign targeting 50,000 users with a 10% conversion rate. Which strategy is more cost-effective, assuming a cost per click of 0.50?
Correct A. Social media campaign
B. Paid advertising campaign
C. Both strategies are equally cost-effective
D. Neither strategy is cost-effective

Correct Answer: A

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Question 8
A manufacturer produces two products: A and B. Product A requires 2 hours of labor and 1 hour of machine time, while product B requires 1 hour of labor and 2 hours of machine time. If the manufacturer has 8 hours of labor and 6 hours of machine time available, how many units of product A and product B should be produced to maximize profit, assuming a profit of 10 per unit of product A and 15 per unit of product B?
Correct A. 10 units of product A and 6 units of product B
B. 8 units of product A and 4 units of product B
C. 6 units of product A and 2 units of product B
D. 4 units of product A and 8 units of product B

Correct Answer: A

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Question 9
A sole proprietorship has the following balance sheet: Assets = 100,000, Liabilities = 50,000, and Equity = 50,000. If the proprietor withdraws 20,000 from the business, what is the new balance of the proprietor's equity?
A. 30,000
Correct B. 40,000
C. 50,000
D. 60,000

Correct Answer: B

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Question 10
A bank offers a 5-year certificate of deposit with a 6% annual interest rate compounded quarterly. If the initial deposit is 10,000, what is the future value of the investment after 5 years?
Correct A. 13,218.19
B. 13,321.89
C. 13,425.59
D. 13,529.29

Correct Answer: A

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Question 11
In a perfectly competitive market, the supply curve is upward-sloping because of the law of increasing
Correct A. diminishing returns
B. increasing costs
C. decreasing demand
D. increasing supply

Correct Answer: A

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Question 12
A company's financial leverage ratio is 2.5. If its total debt is ₦250,000,000, what is its total assets?
A. ₦125,000,000
Correct B. ₦500,000,000
C. ₦1,000,000,000
D. ₦2,500,000,000

Correct Answer: B

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Question 13
A consumer protection agency is considering a complaint against a company that has been accused of
Correct A. false advertising
B. unfair competition
C. breach of contract
D. negligence

Correct Answer: A

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Question 14
A country's balance of payments account shows a trade deficit of 100,000,000. If its foreign exchange reserves are 500,000,000, what is its net foreign assets?
A. 400,000,000
Correct B. 600,000,000
C. 700,000,000
D. 800,000,000

Correct Answer: B

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Question 15
A firm's production function is given by Q = 2L^(1/2)K^(1/2). If L = 4 and K = 9, what is the marginal product of labor?
A. 0.5
Correct B. 1
C. 2
D. 4

Correct Answer: B

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Question 16
A company's financial statements show a significant increase in revenue, but a decrease in profit. What could be the reason for this discrepancy?
A. Inflation has led to a decrease in the purchasing power of the company's revenue.
B. The company has increased its expenses to maintain its market share.
C. The company has invested in new projects that have not yet generated profits.
Correct D. The company has changed its accounting methods, leading to a decrease in reported profits.

Correct Answer: D

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Question 17
A firm is considering two investment options: Option A has a 20% chance of returning ₦100,000 and a 80% chance of returning ₦0, while Option B has a 50% chance of returning ₦50,000 and a 50% chance of returning ₦0. Which option has a higher expected return?
Correct A. Option A has a higher expected return.
B. Option B has a higher expected return.
C. Both options have the same expected return.
D. Neither option has a higher expected return.

Correct Answer: A

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Question 18
A marketing campaign for a new product involves a 20% discount for the first 100 customers. The product's original price is ₦10,000. How much will a customer pay if they are the 101st customer?
A. ₦8,000
B. ₦9,000
Correct C. ₦10,000
D. ₦12,000

Correct Answer: C

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Question 19
A company's marketing strategy involves a 10% increase in advertising expenditure. If the original advertising expenditure was ₦500,000, what is the new advertising expenditure?
Correct A. ₦550,000
B. ₦500,000
C. ₦450,000
D. ₦400,000

Correct Answer: A

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Question 20
A firm is considering two transportation options: Option A involves a fixed cost of ₦10,000 and a variable cost of ₦5 per unit, while Option B involves a fixed cost of ₦5,000 and a variable cost of ₦10 per unit. If the firm expects to transport 1,000 units, which option has a lower total cost?
Correct A. Option A has a lower total cost.
B. Option B has a lower total cost.
C. Both options have the same total cost.
D. Neither option has a lower total cost.

Correct Answer: A

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Question 21
In a production system, what is the primary goal of the specialization process?
A. To increase the variety of products offered
B. To reduce the complexity of production processes
Correct C. To achieve economies of scale
D. To improve product quality

Correct Answer: C

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Question 22
A company has a warehouse with a capacity of 10,000 units. If it receives 8,000 units of goods, what is the percentage of the warehouse's capacity that is utilized?
A. 50%
B. 60%
Correct C. 80%
D. 90%

Correct Answer: C

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Question 23
A consumer purchases a product with a price of ₦5,000. If the sales tax rate is 10%, how much tax is paid?
A. ₦500
Correct B. ₦1,000
C. ₦1,500
D. ₦2,000

Correct Answer: B

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Question 24
A company has a policy of paying its employees a 10% bonus on their annual salaries. If an employee's salary is ₦120,000, what is the bonus amount?
A. ₦10,000
Correct B. ₦12,000
C. ₦15,000
D. ₦20,000

Correct Answer: B

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Question 25
A bank offers a loan of ₦500,000 at an interest rate of 15% per annum. If the loan is repaid after 2 years, what is the total interest paid?
A. ₦75,000
B. ₦90,000
Correct C. ₦120,000
D. ₦150,000

Correct Answer: C

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