POST UTME MOUNTAIN TOP UNIVERSITY 2019 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
The concept of comparative advantage suggests that a country should specialize in producing goods for which it has a
A. absolute advantage
B. comparative advantage
C. opportunity cost
D. law of diminishing returns
Question 2
A sole trader's business is considered a separate legal entity from its owner. What is the primary reason for this separation?
A. To protect the owner's personal assets from business liabilities
B. To enable the business to enter into contracts independently
C. To facilitate the transfer of ownership to another individual
D. To simplify tax compliance for the business
Question 3
A company has a production capacity of 10,000 units per month. If it produces 8,000 units in the first month and 9,000 units in the second month, what is the total production capacity used?
A. 80%
B. 90%
C. 100%
D. 110%
Question 4
A consumer has a budget constraint of 100, and the prices of two goods are 5 and 10 respectively. If the consumer spends all their budget on the two goods, what is the maximum amount of good 2 that can be purchased?
A. 5 units
B. 10 units
C. 15 units
D. 20 units
Question 5
The following diagram shows a simple circuit with a battery, a resistor, and a switch. If the switch is closed, the circuit will be
A. open
B. closed
C. short-circuited
D. overloaded
Question 6
A company is considering the implementation of a just-in-time (JIT) inventory system. What are the primary benefits of JIT?
A. Reduced inventory costs and improved cash flow
B. Increased storage capacity and reduced warehouse costs
C. Improved product quality and reduced waste
D. Enhanced customer satisfaction and loyalty
Question 7
A company has a warehouse with a capacity of 10,000 units. The company receives a shipment of 5,000 units and then sells 2,000 units. What is the new stock level?
A. 3,000 units
B. 5,000 units
C. 7,000 units
D. 10,000 units
Question 8
A company has the following inventory levels: 100 units of product A, 50 units of product B, and 200 units of product C. If the company uses the First-In-First-Out (FIFO) method of inventory valuation, what is the total value of the inventory?
A. ₦150,000
B. ₦200,000
C. ₦250,000
D. ₦300,000
Question 9
A company is considering the introduction of a new product line. The product line has a fixed cost of ₦1,500,000 and a variable cost of ₦500 per unit. If the selling price is ₦750 per unit, what is the break-even point in units?
A. 1,000 units
B. 1,500 units
C. 2,000 units
D. 2,500 units
Question 10
A company's articles of association are a legal document that outlines the
A. powers and duties of the directors
B. rights and interests of the shareholders
C. objects and purposes of the company
D. all of the above
Question 11
A bank has the following financial statements: income statement and balance sheet. Which of the following is a correct statement about the bank's financial position?
A. The bank's net worth is equal to the total assets minus total liabilities.
B. The bank's net worth is equal to the total equity plus total liabilities.
C. The bank's net worth is equal to the total assets minus total equity.
D. The bank's net worth is equal to the total liabilities minus total assets.
Question 12
A company is considering two different production methods for its new product. Method A involves a high initial investment but low ongoing costs, while Method B involves low initial investment but high ongoing costs. If the company expects to produce 10,000 units in the first year and 20,000 units in the second year, which production method should it choose if it wants to minimize its total cost?
A. Method A
B. Method B
C. Method C
D. Method D
Question 13
A company is considering the implementation of a new transportation management system. What are the primary benefits of this system?
A. Improved route optimization and reduced fuel consumption
B. Enhanced customer satisfaction and loyalty
C. Increased storage capacity and reduced warehouse costs
D. Reduced inventory costs and improved cash flow
Question 14
A company's financial statements are audited annually by an independent auditor. This is an example of
A. internal control
B. external control
C. internal audit
D. external audit
Question 15
A company's assets are valued at ₦10 million, liabilities are ₦3 million, and equity is ₦7 million. The return on equity (ROE) is
A. 10%
B. 15%
C. 20%
D. 25%

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