NECO 2020 Commerce Answer (Obj & Essay) – June/July Expo

NECO Commerce Questions
NECO Commerce answer 2020 Expo

NECO Commerce Questions Answers 2020 Objective and Theory Update.

NECO Commerce OBJ:

1-10: CCAADCBBED
11-20: DBEAACCCDC
21-30: BDDACDEAAD
31-40: ABEDDACBCB
41-50: DAAEBABBBA
51-60: DCCEBBEEEA

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Commerce Theory:

(1)
(i)Banker to the government
(ii) Insurance and control of currency
(iii) Lender of last resort
(iv) Foreign exchange transaction
(v) Responsible for monetary policy
(vi) Banker’s bank

EXPLANATION:

(i) Banker to the government: Central Bank is an agent and banker to the government. It control public account, receives revenue on behalf of the government and make payment from this account. Central Bank also obtains loan on behalf of the government.

(ii) Insurance and control of currency: The central bank has the right to order the printing of the currency and the issuance of it. It control the circulation of currency, exchange of bad notes for new ones and see to the destruction of the bad notes.

(iii) Lender of last resort: The central bank has a duty to assist the banking system when the banks are in financial difficulties so that they can withstand the strain of excessive demands. In some countries, the banks can borrow directly from the central bank.

(iv) Foreign exchange transaction: The central bank holds the foreign reserve of a country, and this helps in enforcing foreign exchange control regulation. It operates the exchange control which is set up to purchase and sell foreign currencies.

(v) Responsible for monetary policy: The central bank is responsible for the monetary policies of the country. It can use both the expansionist and restrictionist policies to control the quantity and value of money in circulation so as to influence the level of production and distribution of the national income.

(vi) Banker’s bank: Th central bank acts as banker to the banks by ensuring that the banks open account with it in order to facilitate clearing of cheques. This helps the commercial banks to have similar facilities to offer to their customers.

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(2a)
Multilateral trade can be defined as a type of international trade in which a country trade with many other countries. It is also a type of trade in which countries exchange goods and services eg Nigeria trade with the USA, Britain and Russia

(2b)
(Choose Any Four)

(i) Differences in climate condition
(ii) Differences in Technology
(iii) Differences in skills
(iv) Uneven distribution of natural resources
(v) Expansion of market for products

EXPLANATION :

(i) Differences in climate condition: The climatic condition of the earth varies from one region to another. This variation gives rise to growth of different crops hence the need for exchange.

(ii) Differences in Technology: The level of technology differs from one nations of the world to another. Some countries with advanced technology can produce some industrial products at reduced cost and sell to the less developed countries.

(iii) Differences in skills: The inhabitants of a region may develop special skills in the production of a commodity such that it acquires special reputation for its skill. This can necessitate foreign trade.

(iv) Uneven distribution of natural resources: Natural resources are unevenly distributed. While some countries are naturally blessed, others have little or no natural. This necessitates international trade.

(v) Expansion of market for products:Foreign trade came into existence because of the need to widen the market for goods produced by a country.

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(3a)
Entrepreneur: An entrepreneur can be defined as the factor of production that co ordinates and organises other factors of production(land, labour and capital) in order to produce goods and services. The entrepreneur bears the risks and take major decision of the business. He risks his capital in setting up the business with the aim of obtaining maximum profit.

(3b)
Production: Production can simply be defined as the creation of utility or creation of goods and services which satisfy human want. All goods and services produced must possess utility, which means that they must be capable of satisfying certain human wants. Production also means the various economic activities aimed at the creation of goods and services and the distribution of these to the final consumers for the satisfaction of human wants.

(3c)
Fixed capital : These are assets which are not used up in the course of production. Fixed assets include those durable assets of a business that can last for a very long time. These assets or capital do not change their form in the process of production. Examples of fixed capital are land, buildings, tools, motor vehicles, plants and machinery

(3d)
Exchange : Exchange is the process of giving out value in order to have something of value in return. In olden days, barter was the main system of exchange ie goods for goods. But nowadays one can exchange money for goods. Exchange arises because of excess production of goods and services. Exchange is often regarded as an outcome of specialisation and production

(3e)
Specialisation : Specialisation is defined as the concentration of the productive efforts of an individual, a firm or a country in a given aspect of economic activity or on a particular line of production in which it has the greatest advantage over others. Specialisation is the performance of a single job or economic activity in which an individual, firm or a country has comparative advantage.

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(5a)
Limited liability company can be define as a form of business organization with the liability-shield advantages of a corporation and the flexibility and tax pass-through advantages of a partnership.It is a separate and distinct legal entity

(5b)
(Choose Any four)

(i) Ownership
(ii) It is a legal entity
(iii) Perpetual existence
(iv) Formation
(v) It has limited liability

EXPLANATION :

(i) Ownership: The number of shareholders range from seven to infinity, ie owners must be at least seven but there is no maximum number

(ii) It has a legal entity : The public limited liability company has a distinct personality from that of the owner. It can sue and be sued in its own name

(iii) Perpetual existence: The death or withdrawal of some shareholders will not affect the existence of the company. It enjoy continuous existence

(iv) Formation : A public limited liability company must follow some special formalities before registration. They secure incorporation by filling the article of association and memorandum of association with the registrar of companies

(v) It has limited liability : The liability shareholders is limited to the amount contributed to the company. The private properties of the shareholders will not be touched in the event of liquidation.

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(6)
(Choose Any Five)

(i)Promotion of Commercial activities
(ii) Enhance settlement of international indebtedness
(iii) Reduction in cost an Risk of traveling
(iv) Facilitates contact between businessmen
(v) Communication enhance international trade
(vi) Enhance Air and sea Transport

EXPLANATION:

(i)Promotion of Commercial activities: Communication promotes commercial activities as the whole world is connected together as a global village.

(ii) Enhance settlement of international:The use of telecommunication has enhanced the settlement of debts through telegraphic money transfers eg Western union money Transfer

(iii) Reduction in cost an Risk of traveling: Through communication the cost and risks involved in travelling long distance for business transactions can be greatly reduced.

(iv) Facilitates contact between businessmen: Communication provide and facilitates good and efficient means of maintaining close contact between businessmen

(v) Communication enhance international trade: Foreign trade transactions an be facilitated through modern means of communication as various markets are linked together

(vi) Enhance Air and sea Transport: Transportation by air and sea are made possible by communication. The use of radio, telegram and other means of communication have made contact between a ship off shore and the port possible

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(7a)
Catalogue : Catalogue is a pictorial presentation of goods and articles available for sale, especially in Mail order business. It is a medium of advertising. It is used to inform the buyers of the details of the goods, as to size, colours, prices and delivery terms. It is also be used as a quotation or reply to enquiry.

(7b)
Order: An order is a statement sent by the buyer to the seller, stating the full description and quantity of goods required. After buyer has gone through Catalogue,he will then place an order. The order will show the goods required, type conditions of payment, purchase and method of delivery

(7c)
Proforma invoice: A proforma invoice is an invoice that is usually submitted before goods are despatched as a polite request for payment to be made in advance when a seller is not willing to sell on credit and to show the goods. If the goods are retained, it become an ordinary invoice. It is also used to serve as a quotation

(7d)
Quotation :Quotation is a statement prepared by a supplier of goods or services for a particular order which shows the current price and terms of trade. Quotation is applicable to a particular transaction only. The supplier will send it to show the price to be charged, terms of payment and period of delivery. It is usually sent as a reply to an enquires

(7e)
Receipts: Receipt is a document which acknowledges that payment has been received from the buyer. When a customer receives the goods and he sends the money to the seller who in return issues the receipt as evidence of the payment. It must be written and signed by the seller and sent to the buyer, stating the actual amount received.

 


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