POST UTME AL-HIKMAH 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 advantage of this separation?
A. Limited liability
B. Separate taxation
C. Easy transfer of ownership
Correct D. No requirement for formalities

Correct Answer: D

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Question 2
A company's articles of association may provide for the appointment of a managing director. What is the primary responsibility of the managing director?
A. To manage the company's day-to-day operations
Correct B. To make strategic decisions on behalf of the company
C. To represent the company in legal matters
D. To prepare the company's financial statements

Correct Answer: B

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Question 3
A business may choose to insure against risks such as fire, theft, or employee injury. What is the primary benefit of insurance?
Correct A. To reduce the financial impact of a loss
B. To transfer the risk to a third party
C. To increase the business's cash flow
D. To improve the business's credit rating

Correct Answer: A

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Question 4
A business may choose to specialize in a particular product or service. What is the primary advantage of specialization?
A. To increase the business's market share
B. To reduce the business's production costs
C. To improve the business's quality control
Correct D. To increase the business's efficiency

Correct Answer: D

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Question 5
A business may choose to use a just-in-time (JIT) inventory system. What is the primary benefit of JIT?
A. To reduce the business's inventory costs
B. To improve the business's quality control
C. To increase the business's production efficiency
Correct D. To reduce the business's lead time

Correct Answer: D

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Question 6
A company is considering exporting its products to a foreign market. Which of the following is a key consideration in determining the feasibility of this decision?
A. Political stability of the foreign market
Correct B. Economic conditions of the foreign market
C. Cultural differences between the home and foreign markets
D. Availability of raw materials in the foreign market

Correct Answer: B

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Question 7
A firm is considering implementing a new marketing strategy. Which of the following is a key benefit of using social media advertising?
A. Increased brand awareness
B. Improved customer engagement
C. Enhanced customer loyalty
Correct D. All of the above

Correct Answer: D

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Question 8
A company is experiencing stockouts due to inadequate inventory management. Which of the following is a key factor contributing to this problem?
A. Insufficient forecasting
B. Inadequate inventory levels
C. Poor supply chain management
Correct D. All of the above

Correct Answer: D

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Question 9
A firm is considering outsourcing its logistics operations. Which of the following is a key benefit of this decision?
A. Reduced transportation costs
B. Improved delivery times
C. Enhanced customer service
Correct D. All of the above

Correct Answer: D

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Question 10
A company is considering forming a joint venture with a foreign partner. Which of the following is a key consideration in determining the feasibility of this decision?
Correct A. Cultural differences between the home and foreign partners
B. Economic conditions of the foreign market
C. Political stability of the foreign market
D. Availability of raw materials in the foreign market

Correct Answer: A

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Question 11
In a sole trade business, what is the primary advantage of using a sole trader structure?
A. Limited liability
B. Tax benefits
Correct C. Flexibility in decision-making
D. Easy to set up

Correct Answer: C

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Question 12
A company has a market share of 30% in the industry. If the company wants to increase its market share by 10%, what is the new market share?
Correct A. 40%
B. 35%
C. 30%
D. 25%

Correct Answer: A

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Question 13
A production manager wants to produce a product with a high level of specialization. Which of the following production methods would be most suitable?
A. Mass production
B. Batch production
Correct C. Job production
D. Project production

Correct Answer: C

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Question 14
A company has a policy of paying a 10% dividend to its shareholders. If the company's profit is ₦1,000,000, what is the amount of dividend paid?
A. ₦100,000
Correct B. ₦110,000
C. ₦120,000
D. ₦130,000

Correct Answer: B

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Question 15
A marketing manager wants to increase the sales of a product by 20%. If the current sales are ₦500,000, what is the new sales target?
Correct A. ₦600,000
B. ₦550,000
C. ₦500,000
D. ₦450,000

Correct Answer: A

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Question 16
A sole trader's business is considered a separate legal entity from its owner. However, in the event of a lawsuit, the owner's personal assets may be at risk. What is the name of this risk?
Correct A. Unlimited Liability
B. Limited Liability
C. Joint Liability
D. Single Liability

Correct Answer: A

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Question 17
A company's Memorandum of Association outlines its primary objectives. What is the primary purpose of this document?
A. To outline the company's business operations
B. To define the company's ownership structure
Correct C. To specify the company's primary objectives
D. To detail the company's financial transactions

Correct Answer: C

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Question 18
A company's Articles of Association outlines its internal management structure. What is the primary purpose of this document?
A. To specify the company's ownership structure
B. To outline the company's business operations
C. To detail the company's financial transactions
Correct D. To outline the company's internal management structure

Correct Answer: D

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Question 19
A company's Memorandum of Association and Articles of Association are two primary documents that outline its structure and operations. What is the primary purpose of these documents?
A. To specify the company's ownership structure
B. To outline the company's business operations
C. To detail the company's financial transactions
Correct D. To outline the company's internal management structure and primary objectives

Correct Answer: D

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Question 20
A company's Memorandum of Association and Articles of Association are two primary documents that outline its structure and operations. What is the primary purpose of these documents?
A. To specify the company's ownership structure
B. To outline the company's business operations
C. To detail the company's financial transactions
Correct D. To outline the company's internal management structure and primary objectives

Correct Answer: D

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Question 21
A company is sued for violating the Consumer Protection Act. The company's defense is that the consumer did not read the fine print on the contract. However, the consumer claims that the company failed to provide clear and concise information about the product's features and benefits. Which of the following is the most likely outcome?
A. The court will rule in favor of the company.
Correct B. The court will rule in favor of the consumer.
C. The case will be dismissed due to lack of evidence.
D. The company will be required to pay a fine, but the consumer will not receive any compensation.

Correct Answer: B

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Question 22
A company uses a transportation management system to optimize its logistics. The system uses a combination of algorithms and machine learning to predict demand and adjust delivery routes accordingly. What type of system is this?
A. Enterprise Resource Planning (ERP) system
B. Supply Chain Management (SCM) system
Correct C. Transportation Management System (TMS)
D. Warehouse Management System (WMS)

Correct Answer: C

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Question 23
A company is considering launching a new product. The product is a premium version of an existing product, with additional features and a higher price point. What type of marketing strategy is this?
A. Product differentiation
B. Product positioning
Correct C. Product line extension
D. Product cannibalization

Correct Answer: C

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Question 24
A company purchases an insurance policy to protect against losses due to natural disasters. The policy has a deductible of ₦100,000 and a maximum payout of ₦500,000. If the company suffers a loss of ₦750,000, how much will it receive from the insurance company?
A. ₦250,000
Correct B. ₦350,000
C. ₦450,000
D. ₦550,000

Correct Answer: B

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Question 25
A company produces a product using a specialized manufacturing process. The process involves a series of complex steps, including cutting, shaping, and assembling. What type of production process is this?
Correct A. Job production
B. Batch production
C. Mass production
D. Continuous production

Correct Answer: A

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