JAMB Commerce 2024 Past Questions & Answers

Pre-sales services are activities done to help a customer *before* a sale is made. Providing information, price lists, and assistance are all done before the customer agrees to buy. Granting credit or hire purchase is a payment method or a term of sale that is agreed upon *during* or at the point of sale, not before.

Common mistake: Students may mistakenly believe that offering credit is a pre-sales service because it can attract customers, but it is actually a term of sale agreed upon during the transaction.

When a potential buyer sends a letter of inquiry to a seller asking for information about goods or services, the seller's appropriate response is a quotation. A quotation provides details like prices, terms of sale, and delivery conditions, allowing the buyer to make an informed decision. This document is crucial in the initial stages of a business transaction.

Common mistake: Students might mistakenly choose other documents like credit or debit notes, which are used for adjustments or corrections after a transaction has already begun, not as an initial response to an inquiry.

The sum of money that an insured person or entity pays regularly to an insurance company for coverage is known as a premium. This payment is essential to keep the insurance policy active and ensure that the insured is protected against specified risks. Without the premium, the insurance company would not be obligated to provide coverage.

Common mistake: Students might mistakenly choose 'a policy' (C), thinking it refers to the payment, but a policy is the contract document itself, not the payment made.

Nationalization is the process where the government takes control of a private industry or company. The main goal is to transfer the ownership and management of that industry to the state (the government). Therefore, bringing an industry under state ownership and control is the primary objective of nationalization.

Common mistake: Students often mistakenly choose option B, thinking the government's main goal is to make profit, but the primary objective of nationalization is usually strategic control and public welfare, not profit maximization.

Closing stock refers to the value of goods that a business has not sold by the end of an accounting period. This is also known as 'stock at close' because it is the inventory remaining when the business closes its books for that period. This figure is important for calculating the cost of goods sold and the gross profit for the period.

Common mistake: Students often confuse 'closing stock' with 'opening inventory' or 'stock at beginning', which refers to the goods available at the start of the trading period, not the end.

The Nigerian Enterprises Promotion Decree (often called the Indigenisation Decree) was a significant government policy that reshaped the business landscape by promoting indigenous ownership and control of enterprises. This decree is a prime example of how government policies influence the overall business environment within a country. Understanding such policies is crucial for comprehending the dynamics of the business environment.

Common mistake: Students might confuse the initial decree with its subsequent amendments or other related economic policies, leading them to pick later years like 1977, which saw a revised version of the decree.

A contract is a formal agreement between two or more people or groups that the law recognizes and can enforce in a court. This means if someone does not do what they promised in the contract, they can be taken to court. The question is asking for the specific name of this type of legally enforceable agreement, which is a contract.

Common mistake: Students might mistakenly choose 'an offer' because an offer is the first step in creating a contract, but it is not the complete, legally enforceable agreement itself.

Excise duty is a tax specifically levied on goods manufactured and consumed within a country. This type of tax directly impacts a business's financial operations, as it is a cost incurred during production and sale. Understanding such taxes is crucial for businesses when planning their finances, pricing products, and managing cash flow.

Common mistake: Students often confuse excise duty with custom duty, but custom duty is a tax on imported or exported goods, not those produced and consumed domestically.

Advertising aims to attract attention, arouse interest, and build public confidence in goods to encourage sales. While increased sales due to advertising might indirectly lead to economies of scale and potentially lower per-unit production costs, reducing the cost of goods produced is not a direct aim of advertising itself. In fact, advertising is a cost incurred by businesses.

Common mistake: Students might mistakenly think that successful advertising directly reduces production costs, confusing the indirect effect of increased sales with the primary goals of promotion.

A prospectus is a formal legal document that a public limited liability company (PLC) must issue when it wants to raise capital from the general public. Its main purpose is to serve as an official invitation, asking people to buy the company's shares or debentures. The document contains detailed information about the company's finances, operations, and future plans to help potential investors make an informed decision.

Common mistake: Students may mistakenly choose option A because a prospectus does state the types of shares, but this is only part of the information provided; its primary purpose is the invitation to buy.