Quiz 6 of 16

2016 Commerce WAEC Theory Past Questions

Responses

Your email address will not be published. Required fields are marked *

Powered By MemberPress WooCommerce Plus Integration

a. Explain five ways in which commerce is important is in the life of a nation

Answer

Ways in which commerce is important in the life of a nation are:

  • Creation of Wealth for Nations: commerce helps to create wealth for nations, as duties are charged on goods and services either exported or imported.
  • Linkage of Buyers to Sellers: Commerce through communication links buyers and sellers together to do business without physical contact.
  • Mass Production of Goods and Services: commerce facilitates mass production and these people all over the world can enjoy goods and services produced both within and outside their countries.
  • Raising of Capital: It facilitates the raising of capital for individual needs and investment through the services of banks and other financial institutions.
  • Employment Opportunities: It offers employment opportunities to a large number of people such as traders, bankers, and insurance brokers.
  • Transport: It assists in moving people, raw materials, and finished goods from production points to consumption points through transport.
  • Warehousing Function: It facilitates thus bridging the gap between demand and supply in the market.
  • Unity Among Nations: It fosters unity among nations. These nations become interdependent as they engage in trading activities.
  • Improvement in Standard of Living: The availability of a variety of goods and services leads to improvement in the standard of living and quality of life of people.
  • Risk bearing: The availability of insurance companies encourages entrepreneurs to venture into various business activities.
  • Exchange of Goods and Services: It facilitates the exchange of goods and services. Commerce facilitates the exchange of goods and services through transportation (road, rail, sea, air) and telecommunication services.
  • Creation of Public Awareness: It makes the public aware of the availability of goods and services through advertising.

a.  List four features of a self-service shop.

Answer

Features of self–service shops are:

  • Provision of security
  • Provision of price tags
  • There are entry and exit points
  • Provision of trolleys and baskets
  • Provision of pay points at the point of exit
  • Large space to aid movement
  • Stocking of pre-packaged branded goods
  • Availability of few sales’ assistance
  • Attractive display of goods

 

b. State four disadvantages of a self-service shop.

Answer

Disadvantages of self-service are:

  • Because goods are pre-packed, buyers are denied the opportunity of inspecting what they want to buy.
  • It is not suitable for the sale of source products e.g. pharmaceutical goods
  • It is possible for the shopper to steal items during shopping. High level of pilfering/shoplifting.
  • There is no provision for bargaining as a result many customers don’t go to a shop where there is self-service.
  • It requires a lot of space, trolleys, security gadgets, and baskets which increase the price of goods due to the extra costs.
  • There is less personal attention
  • It encourages people to buy what they do not need

 

c.  State four importance of working capital to a business.

Answer

The importance of working capital to a business are:

  • Working capital helps to determine the funds that will be available for the running of the business on a daily basis.
  • It is a sign of healthiness i.e. good financial state of the business.
  • It provides the basis for future planning for the business.
  • It provides the basis for profit-making by the business since it is used to buy stocks for more profit
  • It helps to check against tying down too much money on current assets.
  • It shows if a business is overtrading

a. State four functions of wholesaler to a retailer.

Answer

Functions of wholesalers to retailers are:

  • Provides the retailers with a variety of goods
  • Provides credit facilities
  • Advises the retailers on new trends in the market
  • Breaks bulk for the retailer
  • Grades and packages goods
  • Advertises goods on behalf of the retailers
  • Provision of warehouse facilities

 

b. Explain five advantages of a small-scale retail business over a large-scale business.

Answer

Advantages of small-scale business over a large-scale business are:

  • Quick decision: Small scale traders can make decisions on matters that affect their business faster than large-scale retailers.
  • The capital required to start and run a small-scale business is smaller and will be easier to raise than large-scale retail business.
  • The small retailer can draft in his/her family to assist, but the large-scale retailer has to employ competent hands which will be costly.
  • Small scale retailers offer personal attention which attracts more customers to the small retailer than the large-scale retailers.
  • The possibility of credit facilities attracts more customers to the small-scale retailers because small-scale retailers know the customers more than large-scale traders do.
  • The ability to sell in the smallest unit (say a wrap of salt) also attracts more customers to the small-scale retailers
  • Operation period is an added advantage to the small trader, he/she can open seven days a week and even till late hours, unlike the large-scale outlet.

a. Explanation of the classes of insurances:

  • Marine Insurance: This is the type of insurance that covers possible losses in respect of ships and goods against the perils of the sea e.g. Hull, time, voyage, cargo.
  • Accident Insurance: This makes provision for compensation against injuries or hazards which may occur to a person or group of people which may include personal accident, employers liability, accident to property.
  • Group Insurance: This is the type of policy that is taken to cover a number of people (students on excursion football teams, employees) instead of issuing each person with a separate policy
  • Fidelity Guarantee Insurance: This is a policy taken by an employer to cover losses resulting from employees’ dishonesty and fraudulent practices.
  • Consequential Loss Insurance: This is taken to cover loss of revenue to a firm as a result of being out of business after a fire incident.

a. Explain four functions rendered by a courier firm.

Functions rendered by a courier firm are:

Answer

  • Delivers mail and parcel safely and faster
  • Undertakes cargo and bulk shipment of commodities
  • Offers more personal and cordial services
  • Provides proof of delivery

 

b. Explain six functions rendered by a Telecommunication firm

Functions rendered by a Telecommunication firm are:

Answer

  • Provides radio and telephone services to the public
  • Printed messages can be quickly sent from one place to another through telex services
  • It also provides telegram services
  • Live telecast of events can be provided e.g. Olympic games/world cup etc
  • The company can lease out telegraph and telex facilities to other companies
  • Provision of fax services to the public
  • It provides maritime mobile services needed for emergency cases.

a. List five media of public relations.

Answer

Media of public relations are:

  • Print media journal, newspaper, magazine
  • Electronic media- radio, television, cinemas
  • Poster/handbills
  • Internet
  • Seminars / workshop / conferences
  • Interviews
  • Events/sponsored programme
  • Gifts/free samples

 

b. Enumerate five types of after-sales services.

Answer

Types of sales services are:

  • Advice on product usage
  • Home delivery
  • Installation of industrial equipment
  • Demonstration
  • Replacement of entire product under warranty
  • Maintenance and repair service
  • Free replacement of a faulty part under guarantee

 

c. State five benefits of after-sales services.

Answer

Benefits of after-sales services are:

  • It is used to retain customers who patronize a particular seller
  • It offers a guarantee in the form of repair work or routine maintenance which creates goodwill and confidence in the buyer.
  • It is used as a competitive tool by sellers
  • It is used to cope with the greater complicity of goods being manufactured.
  • It is sometimes used to demonstrate the use of the product
  • It gives assurance to the consumer that the seller will support the product he is selling
  • It allows the consumer the opportunity of asking all the questions he was not able to ask at the time of purchase

 

a. Distinguish between a broker and a factor.

Differences between a broker and a factor are:

Answer

Broker Factor
An agent that does not take possession of goods An agent that takes possession of goods
He does not sell in his own name He sells in his own name and issue receipts
He has no right of lien over the goods. He merely brings buyers and sellers together He has lien/legal claims over the goods of his principal.
A broker is not liable if the buyer defaults in payment A factor is reliable if the buyer defaults in payment 
A broke receives a commission known as brokerage  A factor is receiving a commission known as factorage
A broker operates on the stock exchange as an agent A factor is a merchant who sells goods on behalf of his principal.

 

b. State three duties of an employer to an employee.

Duties of an employer to an employee are:

Answer

  • Adequate and safe tools for the performance of duties assigned to the employee must be produced.
  • A Safe work placed suited to the particular work must be produced.
  • Vital instructions and training should be provided for new and old employees.
  • The employer must compensate the employee adequately for any loss or accident incurred in the courses of performing his legitimate duties
  • The employer is expected to pay the agreed wages and salaries to his employees promptly
  • He has the duty to provide sufficient employees both in number and skill to match the nature of the job to be done.
  • An employer is liable for wrongs committed by his employee in the course of performing his rightful duties.

 

c. State four duties of an employee to an employer

Duties of the employee to the employer are:

Answer

  • He must be honest, dedicated, and loyal to his employer
  • Must be punctual and regular at work
  • Must not reveal any trade or confidential information regarding his employer
  • The employee must perform the tasks in his job with the required skill.
  • Must be willing to put extra effort into the progress and success of the business
  • To perform duties according to the terms of their contract
  • To obey legitimate orders and instructions of the employer
  • He is accountable to the employer
  • He must not make a secret profit
  • The employee cannot delegate his duty to another person

a.What is turnover in commerce?

Answer

Turnover is the total net sales of a trader during a given period of time or turnover is the total sales less goods returned for a particular period.

 

b. List and explain six factors that determine the turnover of a product.

Answer

Factors that determine the turnover of a product are:

  • The price of the product determines its turnover if the prices are very high, less of it will be sold, but if the price is low more of the product will be sold resulting in high turnover
  • If the product has a lot of competitors e.g. detergent, the turnover on the product will depend on the competing product.
  • The nature of the product will determine the turnover of the product. If the product is a necessity e.g. foodstuff them the turnover will be high, but if the product is a luxury e.g. electronics, cars then the turnover will be low.
  • Advertising, publicity, and sales promotion also determine the turnover of a particular product. The turnover of a product is usually increased by extensive advertising, publicity, and sales promotion.
  • The forces of demand and supply also determine the turnover of a product when there is an increase in the demand of a product, the turnover of that product will increase, but it falls if the demand for it also falls.
  • The goodwill and reputation of the seller of the product also determine the turnover for that product. Generally, customers will run away from a seller that does not have good customer approach or manners.
  • Variety of goods offered by the seller: The turnover of the product will be high if the seller has a lot of variety of product that is likely to attract customers to them.
  • Location of the business: It is more likely for a shop that is strategically located or in a highly populated area
  • Terms of sale: Shop that offers credit sales, discounts or hire purchase facilities to customers can induce them to buy more firm a particular shop than from others that do not
  • The product must be readily available to meet customers’ demands.