POST UTME MADONNA UNIVERSITY 2023 Commerce | Objective

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Question 1
A sole trader's business is registered under the Companies and Allied Matters Act (CAMA). Which of the following is a characteristic of a sole trader's business?
Correct A. The business is owned by one person
B. The business is owned by two or more people
C. The business is owned by a group of people
D. The business is owned by a company

Correct Answer: A

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Question 2
A company has a share capital of ₦1,000,000 divided into 100,000 ordinary shares of ₦10 each. If the company issues 20,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
A. ₦200,000
B. ₦250,000
C. ₦300,000
Correct D. ₦350,000

Correct Answer: D

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Question 3
A consumer purchases a product for ₦10,000 and pays a deposit of ₦2,000. The remaining balance is paid in 12 equal installments of ₦500 each. What is the total amount paid by the consumer?
A. ₦10,000
B. ₦12,000
C. ₦14,000
Correct D. ₦16,000

Correct Answer: D

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Question 4
A company's warehouse has a capacity of 10,000 units. The company receives a shipment of 5,000 units and already has 3,000 units in stock. What is the total capacity of the warehouse after the shipment is received?
A. 10,000
B. 12,000
C. 13,000
Correct D. 15,000

Correct Answer: D

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Question 5
A company purchases a liability insurance policy for ₦50,000. The policy covers a maximum of ₦200,000 in case of a loss. If the company suffers a loss of ₦150,000, what is the amount paid by the insurance company?
A. ₦0
B. ₦50,000
C. ₦100,000
Correct D. ₦150,000

Correct Answer: D

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Question 6
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will
A. decrease
Correct B. increase
C. remain constant
D. fluctuate

Correct Answer: B

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Question 7
A firm's revenue is calculated by multiplying the price per unit by the number of units sold. If a firm sells 100 units at 20 each, its total revenue is
A. 1,500
Correct B. 2,000
C. 2,500
D. 3,000

Correct Answer: B

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Question 8
A consumer's indifference curve is a graphical representation of the different combinations of two goods that the consumer is willing to buy at a given price level. Which of the following is NOT a characteristic of an indifference curve?
A. It slopes upward from left to right
B. It is convex to the origin
Correct C. It is a straight line
D. It is downward sloping

Correct Answer: C

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Question 9
A firm's cost of production is the sum of its fixed costs and its variable costs. If a firm has fixed costs of 1,000 and variable costs of 500 per unit, and it produces 200 units, its total cost of production is
A. 150,000
Correct B. 120,000
C. 100,000
D. 80,000

Correct Answer: B

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Question 10
A firm's profit is calculated by subtracting its total cost of production from its total revenue. If a firm has a total revenue of 10,000 and a total cost of production of 6,000, its profit is
Correct A. 4,000
B. 3,000
C. 2,000
D. 1,000

Correct Answer: A

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Question 11
A company's marketing strategy involves creating a product line extension by introducing a new product that is similar to its existing product. This is an example of which of the following marketing strategies?
Correct A. Product Line Extension
B. Market Segmentation
C. Product Differentiation
D. Market Development

Correct Answer: A

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Question 12
A bank's cash reserve ratio is 20%. If the bank has a total deposit of ₦1,000,000, how much cash must it reserve?
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦400,000

Correct Answer: A

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Question 13
A company's production process involves the following steps: raw material extraction, processing, and packaging. Which of the following is an example of a production cost?
A. Raw Material Cost
B. Labor Cost
Correct C. Packaging Cost
D. Overhead Cost

Correct Answer: C

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Question 14
A company uses the following transportation modes: road, rail, and air. Which of the following is an example of a transportation cost?
Correct A. Fuel Cost
B. Labor Cost
C. Maintenance Cost
D. Insurance Cost

Correct Answer: A

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Question 15
A company's marketing strategy involves creating a new product that is designed to appeal to a specific age group. This is an example of which of the following marketing strategies?
A. Product Line Extension
Correct B. Market Segmentation
C. Product Differentiation
D. Market Development

Correct Answer: B

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Question 16
In a perfectly competitive market, the law of diminishing marginal utility is most relevant to the production of which of the following goods?
A. Giffen goods
B. Normal goods
Correct C. Inferior goods
D. Veblen goods

Correct Answer: C

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Question 17
A company's cost of capital is 10% per annum. If it invests in a project with a net present value (NPV) of ₦1,500,000, what is the expected rate of return on investment (ROI)?
A. 12%
Correct B. 15%
C. 18%
D. 20%

Correct Answer: B

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Question 18
A sole trader, Mr. A, has a business income of ₦500,000 and expenses of ₦200,000. What is his taxable profit?
Correct A. ₦300,000
B. ₦250,000
C. ₦200,000
D. ₦150,000

Correct Answer: A

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Question 19
A company's marketing mix includes product, price, place, and promotion. Which of the following is NOT a part of the marketing mix?
A. Product
B. Price
C. Place
Correct D. Research and Development

Correct Answer: D

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Question 20
A bank's reserve requirement is 10%. If it has a cash reserve of ₦1,000,000, what is the maximum amount of loans it can give out?
A. ₦9,000,000
Correct B. ₦10,000,000
C. ₦11,000,000
D. ₦12,000,000

Correct Answer: B

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Question 21
A sole trader's business is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a characteristic of a sole trader?
A. Limited liability
Correct B. Unlimited liability
C. Separate legal entity
D. No partnership

Correct Answer: B

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Question 22
A company is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a characteristic of a company?
A. Limited liability
B. Unlimited liability
Correct C. Separate legal entity
D. No partnership

Correct Answer: C

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Question 23
A sole trader's business is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a characteristic of a sole trader?
A. Limited liability
Correct B. Unlimited liability
C. Separate legal entity
D. No partnership

Correct Answer: B

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Question 24
A company is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a characteristic of a company?
A. Limited liability
B. Unlimited liability
Correct C. Separate legal entity
D. No partnership

Correct Answer: C

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Question 25
A sole trader's business is registered under the Companies and Allied Matters Act (CAMA) 2020. Which of the following is a characteristic of a sole trader?
A. Limited liability
Correct B. Unlimited liability
C. Separate legal entity
D. No partnership

Correct Answer: B

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