POST UTME AAUA 2018 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 Proprietorship
D. Limited Liability Partnership

Correct Answer: C

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Question 2
A company's articles of association are filed with which of the following?
Correct A. Registrar of Companies
B. Inland Revenue Service
C. Federal Ministry of Commerce
D. National Industrial Court

Correct Answer: A

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Question 3
A warehouse's inventory turnover ratio is calculated as follows: Cost of Goods Sold / Average Inventory. What is the numerator in this ratio?
Correct A. Cost of Goods Sold
B. Average Inventory
C. Total Assets
D. Total Liabilities

Correct Answer: A

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Question 4
A bank's reserve requirement is 10%. If the bank has a deposit of ₦100,000, how much must it reserve?
Correct A. ₦10,000
B. ₦15,000
C. ₦20,000
D. ₦25,000

Correct Answer: A

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Question 5
A company's production function is given by Q = 2L + 3K. If the company produces 100 units of output and the wage rate is ₦50 per hour, what is the marginal product of labor?
A. 20
Correct B. 30
C. 40
D. 50

Correct Answer: B

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Question 6
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the legal implication of this?
A. The sole trader is exempt from paying taxes.
B. The sole trader is not liable for any business debts.
Correct C. The sole trader is not entitled to limited liability.
D. The sole trader is not required to file annual returns.

Correct Answer: C

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Question 7
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 to the public, what is the amount of money received from the public?
A. ₦200,000
Correct B. ₦400,000
C. ₦600,000
D. ₦800,000

Correct Answer: B

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Question 8
A business owner purchases a life insurance policy for ₦500,000. The policy has a premium payment term of 5 years. What is the annual premium payment?
A. ₦100,000
B. ₦125,000
C. ₦150,000
Correct D. ₦175,000

Correct Answer: D

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Question 9
A company produces two products, X and Y. The production process for X requires 2 hours of labor and 1 hour of machine time, while the production process for Y requires 1 hour of labor and 2 hours of machine time. If the company has 8 hours of labor and 6 hours of machine time available, how many units of X and Y should the company produce to maximize profits?
A. X = 4, Y = 2
B. X = 2, Y = 4
Correct C. X = 3, Y = 3
D. X = 1, Y = 5

Correct Answer: C

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Question 10
A consumer purchases a product for ₦5,000. The product has a warranty period of 2 years. If the consumer returns the product after 1 year, what is the amount of money the consumer is entitled to receive?
A. ₦2,500
Correct B. ₦3,000
C. ₦3,500
D. ₦4,000

Correct Answer: B

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Question 11
A sole trader's business is registered under the Companies and Allied Matters Act 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 12
A company is registered under the Companies and Allied Matters Act 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 13
A sole trader's business is registered under the Companies and Allied Matters Act 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 14
A company is registered under the Companies and Allied Matters Act 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 15
A sole trader's business is registered under the Companies and Allied Matters Act 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 16
The concept of 'Entrepreneurship' is closely related to which of the following business units?
A. Sole Trade
B. Partnership
Correct C. Company
D. Cooperative

Correct Answer: C

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Question 17
A company's 'Break-Even Point' is the point at which its total revenue equals its total cost. What is the formula for calculating the break-even point?
Correct A. ( ext{BEQ} = rac{ ext{FC}}{ ext{SP} - ext{VC}} )
B. ( ext{BEQ} = rac{ ext{FC}}{ ext{SP} + ext{VC}} )
C. ( ext{BEQ} = rac{ ext{FC}}{ ext{SP} - ext{FC}} )
D. ( ext{BEQ} = rac{ ext{FC}}{ ext{SP} + ext{FC}} )

Correct Answer: A

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Question 18
A company is considering exporting its products to a foreign market. What is the primary advantage of exporting?
A. Increased market share
B. Reduced competition
Correct C. Access to new markets and customers
D. Lower production costs

Correct Answer: C

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Question 19
A company's 'Inventory Turnover Ratio' is a measure of its ability to sell and replace its inventory. What is the formula for calculating the inventory turnover ratio?
Correct A. ( ext{ITR} = rac{ ext{COGS}}{ ext{Average Inventory}} )
B. ( ext{ITR} = rac{ ext{Average Inventory}}{ ext{COGS}} )
C. ( ext{ITR} = rac{ ext{Sales}}{ ext{COGS}} )
D. ( ext{ITR} = rac{ ext{COGS}}{ ext{Sales}} )

Correct Answer: A

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Question 20
A company is considering launching a new product. What is the primary benefit of conducting market research before launching the product?
A. Reduced production costs
B. Increased market share
C. Improved product design
Correct D. Reduced risk of product failure

Correct Answer: D

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Question 21
In a compound insurance policy, the probability of a claim occurring is 0.05. If the insurance company pays out an average of ₦100,000 per claim, what is the expected value of the claims paid out in a year?
A. ₦500
B. ₦5,000
C. ₦50,000
Correct D. ₦500,000

Correct Answer: D

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Question 22
A company has a warehouse with a capacity of 10,000 units. If the warehouse is currently 70% full, how many units can be added to the warehouse before it reaches its capacity?
A. 1,000
B. 5,000
Correct C. 7,000
D. 10,000

Correct Answer: C

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Question 23
A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If a customer deposits ₦100,000 at the beginning of the first year, how much will the customer have at the end of the fifth year?
A. ₦163,922
B. ₦164,000
Correct C. ₦164,081
D. ₦164,163

Correct Answer: C

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Question 24
A company is considering launching a new product. The company's marketing manager estimates that the product will sell 10,000 units in the first year, with a growth rate of 15% per annum for the next three years. What is the total number of units sold over the four-year period?
A. 40,000
B. 50,000
C. 60,000
Correct D. 70,000

Correct Answer: D

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Question 25
A consumer protection agency receives a complaint from a customer who was sold a defective product. The agency's investigation reveals that the product was sold with a 2-year warranty. If the customer purchased the product 18 months ago, is the customer entitled to a replacement or a refund?
A. Yes, the customer is entitled to a replacement.
Correct B. Yes, the customer is entitled to a refund.
C. No, the customer is not entitled to a replacement or a refund.
D. The customer's entitlement depends on the terms of the warranty.

Correct Answer: B

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