POST UTME COVENANT UNIVERSITY 2025 Commerce | Objective

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Question 1
A sole trader's business is considered a separate legal entity from its owner. Which of the following is a characteristic of a sole trader's business?
A. Unlimited liability
Correct B. Separate legal entity
C. Partnership
D. Limited liability

Correct Answer: B

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Question 2
A company's articles of association can be amended by a
A. Simple majority vote
Correct B. Special resolution
C. Ordinary resolution
D. Two-thirds majority vote

Correct Answer: B

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Question 3
A company's memorandum of association is a document that
A. Sets out the company's objectives
B. Provides details of the company's shareholders
Correct C. Specifies the company's name and registered office
D. Contains the company's articles of association

Correct Answer: C

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Question 4
A sole trader's business is considered a
A. Limited liability company
B. Partnership
Correct C. Sole proprietorship
D. Public limited company

Correct Answer: C

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Question 5
A company's directors are responsible for
A. Managing the company's day-to-day operations
B. Making strategic decisions for the company
C. Ensuring the company complies with all relevant laws and regulations
Correct D. All of the above

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 of that commodity will
A. decrease
Correct B. increase
C. remain constant
D. move in the opposite direction

Correct Answer: B

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Question 7
A firm's revenue is calculated by multiplying the price per unit of a product by the number of units sold. If a firm sells 100 units of a product at ₦50 per unit, what is its total revenue?
A. ₦4000
Correct B. ₦5000
C. ₦6000
D. ₦7000

Correct Answer: B

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Question 8
A company has a warehouse with a capacity to store 1000 units of a product. If the company has already stored 500 units and wants to store 200 more units, what is the remaining capacity of the warehouse?
A. 300
B. 400
Correct C. 500
D. 600

Correct Answer: C

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Question 9
A firm's cost of production can be calculated using the formula: Total Cost = Fixed Cost + Variable Cost. If a firm has a fixed cost of ₦1000 and a variable cost of ₦5 per unit, and it produces 100 units, what is its total cost?
A. ₦600
B. ₦700
C. ₦800
Correct D. ₦900

Correct Answer: D

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Question 10
A company has a transportation cost of ₦10 per unit for a product. If the company transports 500 units of the product, what is its total transportation cost?
A. ₦4000
B. ₦5000
Correct C. ₦6000
D. ₦7000

Correct Answer: C

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Question 11
A company's sole trader has a warehouse with a capacity to store 5000 units of goods. The company uses the First-In-First-Out (FIFO) inventory method. If the warehouse is currently 75% full, and 1500 units of goods are received, what is the new percentage of the warehouse's capacity that is occupied?
Correct A. 62.5%
B. 65%
C. 67.5%
D. 70%

Correct Answer: A

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Question 12
A bank offers a 5-year fixed deposit account with an interest rate of 8% 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?
Correct A. ₦163,922
B. ₦164,922
C. ₦165,922
D. ₦166,922

Correct Answer: A

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Question 13
A company's sole trader has a warehouse with a capacity to store 5000 units of goods. The company uses the First-In-First-Out (FIFO) inventory method. If the warehouse is currently 75% full, and 1500 units of goods are received, what is the new percentage of the warehouse's capacity that is occupied?
Correct A. 62.5%
B. 65%
C. 67.5%
D. 70%

Correct Answer: A

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Question 14
A bank offers a 5-year fixed deposit account with an interest rate of 8% 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?
Correct A. ₦163,922
B. ₦164,922
C. ₦165,922
D. ₦166,922

Correct Answer: A

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Question 15
A company's sole trader has a warehouse with a capacity to store 5000 units of goods. The company uses the First-In-First-Out (FIFO) inventory method. If the warehouse is currently 75% full, and 1500 units of goods are received, what is the new percentage of the warehouse's capacity that is occupied?
Correct A. 62.5%
B. 65%
C. 67.5%
D. 70%

Correct Answer: A

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Question 16
In a perfectly competitive market, the supply curve is typically represented by the marginal cost curve. What is the implication of this relationship on the firm's production decision?
A. The firm will produce at the minimum point of the average total cost curve.
Correct B. The firm will produce at the point where the marginal revenue equals the marginal cost.
C. The firm will produce at the point where the average revenue equals the average cost.
D. The firm will produce at the point where the marginal revenue equals the average cost.

Correct Answer: B

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Question 17
A company's marketing strategy involves a 20% discount on all products for the first 100 customers. What is the expected revenue from the first 100 customers if the original price of each product is ₦500?
A. ₦40,000
Correct B. ₦45,000
C. ₦50,000
D. ₦55,000

Correct Answer: B

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Question 18
A sole trader, Mr. A, has a business income of ₦1,500,000 and a business expenditure of ₦1,200,000. What is Mr. A's business profit?
Correct A. ₦300,000
B. ₦200,000
C. ₦150,000
D. ₦100,000

Correct Answer: A

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Question 19
A company has a 10% dividend yield on its shares. If the current market price of the shares is ₦100, what is the expected dividend per share?
Correct A. ₦10
B. ₦9
C. ₦8
D. ₦7

Correct Answer: A

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Question 20
A bank has a reserve requirement of 10% on its deposits. If the bank has ₦1,000,000 in deposits, what is the minimum amount of cash it must hold in reserve?
Correct A. ₦100,000
B. ₦90,000
C. ₦80,000
D. ₦70,000

Correct Answer: A

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Question 21
A company has a sole trader business structure. What is the primary advantage of this structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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Question 22
A consumer purchases a product with a 12% annual interest rate and a 5-year loan term. What is the total interest paid over the loan term?
A. ₦12,000
Correct B. ₦15,000
C. ₦18,000
D. ₦20,000

Correct Answer: B

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Question 23
A company has a sole trader business structure. What is the primary disadvantage of this structure?
A. Limited liability
B. Easy to set up
C. Flexibility in decision-making
Correct D. Unlimited personal liability

Correct Answer: D

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Question 24
A consumer purchases a product with a 12% annual interest rate and a 5-year loan term. What is the total amount paid over the loan term?
A. ₦125,000
Correct B. ₦150,000
C. ₦175,000
D. ₦200,000

Correct Answer: B

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Question 25
A company has a sole trader business structure. What is the primary advantage of this structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. No tax benefits

Correct Answer: C

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