POST UTME NILE UNIVERSITY 2022 Commerce | Objective

Are you preparing for POST UTME NILE UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2022 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a sole trade business, what is the primary advantage of using a cash register?
A. Improved inventory management
B. Enhanced customer service
Correct C. Increased cash security
D. Reduced accounting complexity

Correct Answer: C

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Question 2
A company has a warehouse with a capacity of 10,000 units. If it receives a shipment of 5,000 units, what is the new storage capacity?
A. 10,000 units
Correct B. 15,000 units
C. 20,000 units
D. 25,000 units

Correct Answer: B

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Question 3
A firm is considering two different modes of transportation: road and rail. If the cost of transporting goods by road is ₦1,500 per unit and the cost of transporting goods by rail is ₦1,200 per unit, what is the break-even point?
A. 1,000 units
Correct B. 2,000 units
C. 3,000 units
D. 4,000 units

Correct Answer: B

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Question 4
A company has a stock of 500 units of a product. If it sells 200 units in a month, what is the new stock level?
Correct A. 300 units
B. 400 units
C. 500 units
D. 600 units

Correct Answer: A

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Question 5
A firm is considering exporting its products to a foreign market. What is the primary advantage of exporting?
Correct A. Increased revenue
B. Improved market share
C. Enhanced brand reputation
D. Reduced production costs

Correct Answer: A

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Question 6
A sole trader's business is considered a separate legal entity from its owner. However, in the event of the owner's death, the business will be wound up and the assets distributed according to the owner's will. This is an example of which type of business organization?
Correct A. Sole Trader
B. Partnership
C. Limited Liability Company
D. Cooperative

Correct Answer: A

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Question 7
A company has a production process that involves the transformation of raw materials into finished goods. The company uses a specialized machine to perform this transformation. Which of the following is an example of production specialization?
A. Vertical Integration
B. Horizontal Integration
Correct C. Production Specialization
D. Economies of Scale

Correct Answer: C

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Question 8
A company uses a third-party logistics provider to manage its transportation and storage needs. This is an example of which type of business function?
A. Marketing
B. Finance
C. Human Resources
Correct D. Logistics

Correct Answer: D

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Question 9
A company has a risk management strategy that involves the use of insurance to mitigate potential losses. Which of the following is an example of a type of insurance that a company might use?
Correct A. Liability Insurance
B. Property Insurance
C. Business Interruption Insurance
D. Worker's Compensation Insurance

Correct Answer: A

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Question 10
A company's financial statements show that it has a high level of debt and a low level of equity. Which of the following is a potential risk associated with this financial situation?
A. High Interest Rates
B. Low Profit Margins
Correct C. High Risk of Bankruptcy
D. Low Return on Investment

Correct Answer: C

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Question 11
A company is considering the introduction of a new product line. The product line has a high fixed cost of ₦1,500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 10,000 units, what is the minimum price at which the company must sell the product to break even?
A. ₦2,500
B. ₦2,800
Correct C. ₦3,000
D. ₦3,200

Correct Answer: C

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Question 12
A firm is considering the introduction of a new product. The product has a high fixed cost of ₦1,000,000 and a variable cost of ₦150 per unit. The selling price of the product is ₦250 per unit. If the firm expects to sell 8,000 units, what is the minimum price at which the firm must sell the product to break even?
A. ₦2,000
Correct B. ₦2,250
C. ₦2,500
D. ₦2,750

Correct Answer: B

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Question 13
A company has a production cost of ₦500 per unit and a selling price of ₦700 per unit. If the company expects to sell 12,000 units, what is the profit per unit?
A. ₦100
B. ₦150
Correct C. ₦200
D. ₦250

Correct Answer: C

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Question 14
A firm has a production cost of ₦300 per unit and a selling price of ₦450 per unit. If the firm expects to sell 10,000 units, what is the profit per unit?
A. ₦100
B. ₦150
Correct C. ₦200
D. ₦250

Correct Answer: C

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Question 15
A company has a production cost of ₦400 per unit and a selling price of ₦600 per unit. If the company expects to sell 15,000 units, what is the profit per unit?
A. ₦100
B. ₦150
Correct C. ₦200
D. ₦250

Correct Answer: C

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Question 16
A sole trader's business is considered a separate legal entity from its owner. Discuss the implications of this separation on the owner's personal liability.
A. The owner's personal assets are protected from business debts.
Correct B. The owner's personal liability is increased due to the business's separate legal entity.
C. The owner's personal assets are not protected from business debts.
D. The business's separate legal entity has no impact on the owner's personal liability.

Correct Answer: B

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Question 17
A company's articles of association specify that the company's profits will be distributed among its shareholders in the ratio 3:2:1. If the company's total profit is ₦120,000, and there are three shareholders, calculate the amount each shareholder will receive.
A. ₦18,000
Correct B. ₦24,000
C. ₦30,000
D. ₦36,000

Correct Answer: B

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Question 18
A consumer purchases a product from a retailer for ₦10,000. The product is defective and the consumer returns it to the retailer, who offers a refund of ₦8,000. The consumer is also entitled to a compensation of ₦2,000 for the inconvenience caused. Calculate the total amount the consumer will receive.
A. ₦10,000
B. ₦8,000
C. ₦10,000 + ₦2,000
Correct D. ₦8,000 + ₦2,000

Correct Answer: D

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Question 19
A company's memorandum of association specifies that the company's business will be carried on in Nigeria. The company's directors decide to establish a branch in Ghana. Is this decision in compliance with the company's memorandum of association?
A. Yes, the company's directors have the authority to make this decision.
Correct B. No, the company's directors do not have the authority to make this decision.
C. Maybe, it depends on the company's articles of association.
D. It's not relevant, the company's memorandum of association only specifies the company's business location.

Correct Answer: B

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Question 20
A consumer purchases a product from a retailer for ₦15,000. The product is defective and the consumer returns it to the retailer, who offers a refund of ₦12,000. The consumer is also entitled to a compensation of ₦3,000 for the inconvenience caused. Calculate the total amount the consumer will receive.
A. ₦15,000
B. ₦12,000
C. ₦15,000 + ₦3,000
Correct D. ₦12,000 + ₦3,000

Correct Answer: D

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Question 21
A company's sole trader is considering the purchase of a new warehouse. The warehouse has a capacity of 10,000 units and costs ₦5 million to purchase. The company expects to sell 8,000 units in the first year, 9,000 units in the second year, and 10,000 units in the third year. The company's accountant estimates that the warehouse will depreciate by 20% per annum. What is the present value of the warehouse using the net present value (NPV) method, assuming a discount rate of 10%?
A. ₦3,500,000
Correct B. ₦4,200,000
C. ₦5,000,000
D. ₦6,300,000

Correct Answer: B

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Question 22
A consumer protection agency has received a complaint from a customer who purchased a product online. The customer alleges that the product was not as described and was defective. The agency has collected evidence that the product was indeed defective and that the seller had made false claims about the product's features. What is the most appropriate course of action for the agency?
A. Issue a warning to the seller
B. Order the seller to refund the customer's money
C. Ban the seller from selling online
Correct D. Prosecute the seller for false advertising

Correct Answer: D

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Question 23
A company has a sole trader business structure. The company's accountant has prepared a balance sheet that shows the company's assets, liabilities, and equity. The balance sheet is as follows: Assets: ₦100,000, Liabilities: ₦50,000, Equity: ₦50,000 What is the company's return on equity (ROE) for the year?
A. 100%
Correct B. 50%
C. 25%
D. 0%

Correct Answer: B

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Question 24
A company has a warehouse that stores goods worth ₦1 million. The company's insurance policy covers the goods against theft and damage. The policy has a deductible of ₦50,000. If the goods are stolen, what is the amount that the insurance company will pay out?
Correct A. ₦950,000
B. ₦1,000,000
C. ₦1,050,000
D. ₦1,100,000

Correct Answer: A

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Question 25
A company has a sole trader business structure. The company's accountant has prepared a profit and loss account that shows the company's revenue and expenses for the year. The profit and loss account is as follows: Revenue: ₦200,000, Cost of Goods Sold: ₦150,000, Gross Profit: ₦50,000, Operating Expenses: ₦20,000, Net Profit: ₦30,000 What is the company's gross profit margin for the year?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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