POST UTME MADONNA UNIVERSITY 2017 Commerce | Objective

Are you preparing for POST UTME MADONNA UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2017 Commerce (Objective) questions designed to simulate the real exam environment.

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Question 1
In a sole trade business, what is the primary advantage of using a cash basis of accounting?
Correct A. Accurate representation of cash flows
B. Easier tax compliance
C. Improved financial reporting
D. Enhanced management decision-making

Correct Answer: A

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Question 2
A company has the following transactions: Purchased goods on credit for ₦50,000; Sold goods on credit for ₦75,000; Paid cash for rent of ₦10,000. What is the net cash flow from these transactions?
A. ₦25,000
Correct B. ₦30,000
C. ₦35,000
D. ₦40,000

Correct Answer: B

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Question 3
A firm imports goods worth ₦1,000,000 and exports goods worth ₦800,000. What is the balance of trade?
Correct A. ₦200,000 surplus
B. ₦200,000 deficit
C. ₦100,000 surplus
D. ₦100,000 deficit

Correct Answer: A

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Question 4
A bank has the following balance sheet: ₦1,000,000 in cash, ₦500,000 in loans, ₦200,000 in investments, and ₦300,000 in deposits. What is the bank's liquidity ratio?
A. 0.5
Correct B. 0.6
C. 0.7
D. 0.8

Correct Answer: B

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Question 5
A company has the following financial ratios: Current ratio = 2, Quick ratio = 1.5, Debt-to-equity ratio = 0.5. What is the company's liquidity position?
Correct A. High liquidity
B. Moderate liquidity
C. Low liquidity
D. Very low liquidity

Correct Answer: A

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Question 6
The concept of specialization in production refers to the process of producing a specific product or service in a specific location, using a specific technology, and with a specific set of skills. What is the primary advantage of specialization in production?
Correct A. Increased efficiency
B. Reduced costs
C. Improved quality
D. Increased competition

Correct Answer: A

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Question 7
A company is considering the introduction of a new product line. The product requires a significant investment in new equipment and training for employees. What type of risk is the company facing?
A. Financial risk
Correct B. Operational risk
C. Strategic risk
D. Reputational risk

Correct Answer: B

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Question 8
A consumer purchases a product online and receives a defective item. The consumer contacts the company's customer service department and is told that the product is not covered under warranty. What type of law is applicable in this situation?
A. Contract law
B. Tort law
C. Property law
Correct D. Consumer protection law

Correct Answer: D

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Question 9
A company is considering the use of just-in-time inventory management. What is the primary benefit of this approach?
Correct A. Reduced inventory costs
B. Improved product quality
C. Increased efficiency
D. Enhanced customer service

Correct Answer: A

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Question 10
A company is considering the use of a warehouse management system. What is the primary benefit of this approach?
A. Improved inventory accuracy
Correct B. Enhanced supply chain visibility
C. Increased efficiency
D. Reduced labor costs

Correct Answer: B

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Question 11
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied will
A. increase
Correct B. decrease
C. remain constant
D. move in the opposite direction

Correct Answer: B

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Question 12
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm wants to produce 16 units of output, and the price of labor is ₦100 per unit, and the price of capital is ₦200 per unit, how much will it cost the firm to produce 16 units of output?
A. ₦1600
Correct B. ₦3200
C. ₦6400
D. ₦12800

Correct Answer: B

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Question 13
A consumer has a budget constraint of ₦1000 and a preference for two goods: X and Y. The prices of X and Y are ₦200 and ₦300 respectively. If the consumer spends all of their budget on X and Y, what is the maximum amount of X that the consumer can buy?
A. 2 units
Correct B. 3 units
C. 4 units
D. 5 units

Correct Answer: B

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Question 14
A firm's cost function is given by C = 2L + 3K. If the firm hires 4 units of labor and 2 units of capital, what is the total cost of production?
A. ₦14
Correct B. ₦16
C. ₦18
D. ₦20

Correct Answer: B

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Question 15
A consumer has a utility function given by U = 2X + 3Y. If the prices of X and Y are ₦200 and ₦300 respectively, and the consumer has a budget of ₦1000, what is the maximum utility that the consumer can achieve?
A. 10
B. 12
Correct C. 14
D. 16

Correct Answer: C

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Question 16
The concept of 'Just-in-Time' inventory system is most closely related to which of the following?
A. Economic Order Quantity (EOQ)
Correct B. Just-in-Time (JIT) inventory system
C. Materials Requirements Planning (MRP)
D. Total Quality Management (TQM)

Correct Answer: B

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Question 17
A firm's ability to adapt to changing market conditions is best described by which of the following?
A. Market structure
B. Market segmentation
C. Market targeting
Correct D. Market responsiveness

Correct Answer: D

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Question 18
The diagram below represents a typical example of a _______ in a supply chain.
Correct A. Distribution Centre
B. Warehouse
C. Transportation Hub
D. Logistics Centre

Correct Answer: A

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Question 19
A firm's ability to adapt to changing market conditions is best described by which of the following?
A. Market structure
B. Market segmentation
C. Market targeting
Correct D. Market responsiveness

Correct Answer: D

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Question 20
The diagram below represents a typical example of a _______ in a supply chain.
Correct A. Transportation Hub
B. Logistics Centre
C. Distribution Centre
D. Warehouse

Correct Answer: A

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Question 21
A company is considering two marketing strategies: one that targets high-income consumers and another that targets low-income consumers. If the company expects to sell 1000 units of a product at 100 each to high-income consumers and 2000 units at 50 each to low-income consumers, what is the total revenue from both strategies?
A. 150000
Correct B. 250000
C. 300000
D. 350000

Correct Answer: B

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Question 22
A firm has a warehouse with a capacity of 1000 units. If the firm receives 1200 units of a product, what is the maximum number of units that can be stored in the warehouse?
Correct A. 1000
B. 1200
C. 800
D. 600

Correct Answer: A

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Question 23
A company uses a transportation system that involves a truck and a train. The truck travels at an average speed of 60 km/h and the train travels at an average speed of 80 km/h. If the distance between the two locations is 240 km, how long will it take for the truck to travel to the location?
A. 4
Correct B. 6
C. 8
D. 10

Correct Answer: B

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Question 24
A bank offers a loan of ₦100,000 at an interest rate of 10% per annum compounded annually. If the loan is repaid after 2 years, what is the total amount to be repaid?
A. 121000
B. 122000
Correct C. 123000
D. 124000

Correct Answer: C

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Question 25
A firm produces two products: A and B. The production costs for product A are ₦50 per unit and ₦30 per unit for product B. If the firm produces 100 units of product A and 200 units of product B, what is the total production cost?
A. 10000
B. 12000
Correct C. 14000
D. 16000

Correct Answer: C

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