Commerce Exam Questions for SS1 First Term

You’re welcome to our school exams series where we provide you with termly examination questions in different subjects. In today’s post, we will cover Commerce exam questions for SS 1 first term with answers. This means that we’ll be providing you with answers to the questions at the end. Also, you will get a few success tips on how to pass commerce examinations with flying colors. Remember to use the comments sections if you have questions.

Introduction to Commerce

Commerce, as a secondary school subject, refers to the study of trade, business activities, and the processes involved in the exchange of goods and services. It introduces students to concepts such as buying and selling, banking, insurance, advertising, transportation, and entrepreneurship. The subject helps students understand how businesses operate and equips them with foundational knowledge for careers in business, finance, and economics.

Commerce Exam Questions for SS1 First Term

Commerce Exam Questions for SS1 First Term are divided into two sections:

• Section A
• Section B

The first section, namely, Section A is the objective test, and students are expected to attempt all questions in the section. Section B is the theory part, and students are expected to answer only five (5) questions out of seven (7).

SECTION A: OBJECTIVE TEST

1. The process of buying, selling, and distribution of goods and services is known as……
(a) retail trade
(b) commerce
(c) wholesale trade
(d) marketing concept

2. The practice of employing specialists in relevant occupations is a feature of
(a) mobility of labor
(b) exchange economy
(c) mixed economy
(d) division of labor

3. Which of the following converts raw materials into finished goods
(a) extractive industry
(b) manufacturing industry
(c) constructive industry
(d) tertiary industry

4. Which of the following supports the view that there was commerce in Nigeria many years ago
(a) communities were interdependent
(b) the economy was subsistent
(c) specialization was minimal
(d) cowries were used as money

5. Production ends when goods
(a) and services are used by the producer
(b) are packed and labeled
(c) are sold in the market
(d) and services reach the final user

6. If a businessman imports stockfish with a view to exporting them to other countries, this form of trade is known as
(a) invisible trade
(b) entrepot
(c) export trade
(d) import trade

7. The part of business capital that does not change its form in the process of production is known as
(a) nominal capital
(b) liquid capital
(c) fixed capital
(d) working capital

8. The factor of production which is described as wealth set aside for the production of further wealth is called
(a) land
(b) capital
(c) goodwill
(d) labor

9. The main disadvantage of rail transport to the trader is that
(a) it carries bulky goods only
(b) its cost of carriage is high
(c) it is slow and inflexible
(d) it causes road congestion

10. The major divisions of commerce are
(a) import, export, and transport
(b) trade and auxiliaries to trade
(c) exchange consumption and production
(d) import trade and production

11. The three main divisions of production include industrial, …………
(a) commercial and banking
(b) commercial and services
(c) manufacturing and services
(d) banking and services

12. Which of the following is one of the functions of commerce
(a) manufacturing
(b) storage of goods
(c) construction of roads
(d) car assembly

13. Which of the following does not belong to the extractive industry
(a) farming     (b) mining
(c) insuring    (d) fishing

14. Which of the following is not a factor of production
(a) capital        (b) land
(c) labor          (d) staffing

15. In which class of occupation would you place a taxi driver?
(a) extractive
(b) personal services
(c) primary production
(d) commercial services

16. Which of the following is the most suitable means of transporting bulky goods from Lagos to Kaduna
(a) train        (b) ship
(c) lorry        (d) aeroplane

17. Charges paid by a ship for staying on a port beyond the agreed sailing time are called
(a) profit          (b) demurrage
(c) carriage      (d) interest

18. An individual who makes the final use of goods and services provided by a firm is the
(a) wholesaler     (b) consumer
(c) retailer           (d) trader

19. The reward for capital is
(a) dividend        (b) profit
(c) interest          (d) rent

20. The tendency for firms and individuals to concentrate on the activity which is of the most advantage to them is known as
(a) decentralization
(b) diversification
(c) commercialization
(d) specialization

21. Commerce developed as a result of ………
(a) speculation
(b) competition
(c) specialization
(d) importation

22. Which of the following is concerned with obtaining raw materials from their natural locations
(a) extractive industry
(b) construction industry
(c) manufacturing industry
(d) transport industry

23. Workers involved in mining, quarrying, or fishing are engaged in
(a) secondary production
(b) primary production
(c) tertiary production
(d) construction industry

24. An application form that is filled out by anyone taking out an insurance policy is called
(a) a policy form
(b) a claims form
(c) a proposal form
(d) an entry form

25. Which of the following was the chief means of transport during the Trans-Sahara trade
(a) motor lorries
(b) camels
(c) airplanes
(d) barges

26. The reward of land as a factor of production is known as
(a) interest        (b) rent
(c) profit            (d) wages

27. Division of labor is limited by ………..
(a) the non-availability of special skills
(b) the problem of mass production
(c) the extent of supply
(d) the extent of the market

28. Into which of the following two broad areas can trade be divided
(a) home and foreign trade
(b) house and retail trade
(c) wholesale and retail trade
(d) import and export

29. The provision of all kinds of services is related to
(a) primary production
(b) secondary production
(c) construction
(d) tertiary production

30. Which of the following cannot be used as a means of transport between Kano and Lagos
(a) airplane      (b) ship
(c) train            (d) bus

31. Which of the following is not a basic want of man
(a) transport     (b) food
(c) shelter         (d) clothing

32. Which of the following is not aid to trade
(a) transport    (b) production
(c) banking      (d) Insurance

33. Trade can be described as
(a) purchase of goods and services
(b) production of goods
(c) buying and selling
(d) storage of goods

34. A system in which people provide their own needs directly is known as
(a) subsistence economy
(b) mixed economy
(c) monetized economy
(d) specialized economy

35. Speed is an important consideration for the choice of a means of transport where goods are
(a) bulky             (b) inferior
(c) perishable     (d) durable

36. The main disadvantage of water transport is that it
(a) is safe
(b) is slow
(c) can go long distances
(d) can carry heavy goods

37. Air transport is of considerable importance today because it
(a) is faster than other means of transport
(b) is relatively cheaper
(c) can carry bulky goods
(d) travel on schedule

38. Which of the following should be considered when transporting fragile and perishable goods?
(i) speed (ii) cost (iii) safety (iv) flexibility (v) convenience
(a) i and ii only
(b) iii, iv and v only
(c) i, iii and iv only
(d) ii and iv only

39. Which of the following carries the bulk of goods involved in foreign trade
(a) cargo planes
(b) cargo liners
(c) tramp vessels
(d) steamship

40. Which of the following gives temporary protection to the insured while the policy is being drawn up
(a) proposal form
(b) cover note
(c) endorsement
(d) certificate

41. Which of the following forms of transport moves crude oil to the port for export
(a) rail        (b) pipeline
(c) road      (d) sea

42. Which of the following is not a branch of commerce
(a) warehousing
(b) transport
(c) trade
(d) computerization

43. Land as a factor of production comprises
(a) all resources provided by nature
(b) the earth’s surface only
(c) efforts to exploit the earth
(d) the oceans and rivers only

44. Who bears the greatest risk in a business
(a) employees
(b) entrepreneurs
(c) debenture holders
(d) trade creditor

45. Which of the following is not the duty of an entrepreneur
(a) bearing of risks
(b) organization of other factors of production
(c) decision on what to produce
(d) decision on the amount of tax to pay

46. Industrial, commercial, and direct services are branches of
(a) occupation
(b) exchange
(c) distribution
(d) specialization

47. The price charged for leasing a ship is known as
(a) waybill       (b) haulage
(c) freight        (d) demurrage

48. Another name for a sea taxi is
(a) tramp
(b) special freighter
(c) voyage charter
(d) flying boat

49. A contract made between a ship owner and a merchant for the carriage of cargo is
(a) ship’s manifest
(b) charter party
(c) freight forward
(d) cargo service

50. The development of trade in West Africa was aided by the
(a) emergence of traditional rulers
(b) arrival of the Portuguese
(c) introduction of tax payment
(d) introduction of money

Section B: (Theory)

Instruction: Answer only five questions in this section.

1a. Distinguish between commercial and industrial occupation.
b. Explain five activities involved in commerce.

2a. Define commerce.
b. With the aid of a diagram, state the division of commerce.

3. What is production?
b. Mention and explain three factors of production.

4. Define division of labor
b. Explain three factors that determine the choice of occupation.

5. Write short notes on the following:
(i) Ocean liners
(ii) tramp liners
(iii) charter party
(iv) carrier

b. Explain three factors that determine the choice of means of transport.

6. State two advantages and two disadvantages of water transport.
b. What is containerization?
c. State two uses of containers.

7. Explain the following
(i) consignment note
(ii) manifest
(iii) bill of lading
(iv) freight
(v) demurrage

b. State two factors that encouraged the development of commerce in Nigeria.

Answers to Commerce Exam Questions for SS1 First Term

Answers to Section A (Objective Test)

The following table gives the correct answers to the objective section of commerce exam questions for SS1 first term. If you are using a mobile device, hold the table and scroll to the right or left for a complete view.

Answers to Section B (Theory)

Question 1

1a. Distinction between Commercial and Industrial Occupation: Commercial occupations involve buying, selling, and the distribution of goods and services, while industrial occupations focus on the production or manufacturing of goods.

1b. Five Activities Involved in Commerce:

1. Buying and selling of goods.
2. Transportation of goods to markets.
3. Warehousing products.
4. Advertising and marketing goods.
5. Financial services to facilitate transactions.

Question 2

2a. Definition of Commerce: Commerce is the exchange of goods and services, aimed at satisfying human needs and facilitating economic activities.

2b. Division of Commerce (with diagram): Commerce is divided into two main branches:

• Trade: Involves the buying and selling of goods.
• Auxiliary to Trade: Includes activities like banking, insurance, transport, and communication that help facilitate trade.

Question 3

3a. What is Production? Production is the process of creating goods and services that are used to satisfy human wants and needs.

3b. Three Factors of Production:

1. Land: Natural resources used in production.
2. Labor: Human effort involved in production.
3. Capital: Tools, machinery, and financial resources used in the production process.

Question 4

4a. Definition of Division of Labor: Division of labor is the process where work is split into different tasks to increase efficiency in production.

4b. Three Factors that Determine the Choice of Occupation:

1. Skills and interests: What an individual enjoys and is good at.
2. Income potential: The earning possibilities in a particular occupation.
3. Education and training required: The level of education and training needed for a job.

Question 5

5a. Short Notes on the Following:
(i) Ocean Liners: Large ships used for transporting passengers and goods across oceans.
(ii) Tramp Liners: Ships that do not have a fixed route but operate on demand.
(iii) Charter Party: A contract between the owner of a ship and the charterer for the use of the vessel.
(iv) Carrier: A company or individual that transports goods or passengers.

5b. Three Factors Determining the Choice of Means of Transport:

1. Cost: The expense involved in transporting goods or people.
2. Speed: The time required to move goods or passengers.
3. Distance: The length of the journey to be undertaken.

Question 6

6a. Advantages and Disadvantages of Water Transport:

Advantages:

• Low cost for bulky goods.
• Suitable for large quantities of goods.

Disadvantages:

• Slow speed.
• Limited to specific water routes.

6b. What is Containerization? Containerization is the use of large standardized containers for transporting goods, which can be easily transferred between ships, trucks, and trains.

6c. Two Uses of Containers:

1. Transporting goods over long distances.
2. Facilitating efficient loading and unloading processes.

Question 7

7a. Explanation of Terms:

(i) Consignment Note: A document confirming the shipment of goods for transportation.
(ii) Manifest: A list of all goods being transported on a ship or aircraft.
(iii) Bill of Lading: A legal document that serves as a receipt and proof of ownership of goods during transit.
(iv) Freight: The cost of transporting goods.
(v) Demurrage: A charge for exceeding the agreed-upon time for loading or unloading goods.

7b. Two Factors that Encouraged the Development of Commerce in Nigeria:

1. Availability of natural resources: Rich mineral and agricultural resources attracted trade.
2. Improved infrastructure: Development in transport and communication boosted business activities.

How to Pass Commerce Exam Questions for SS1 First Term

Here are some motivational tips on how to pass your SS1 First Term Commerce exam:

1. Understand the Syllabus:

The first step to success is knowing what you’re being tested on! Take time to study your syllabus and ensure you understand each topic. This will give you confidence because you know exactly what to expect in the exam.

2. Master the Key Terms and Concepts:

Commerce is full of essential terms and concepts—make sure you are familiar with them. Terms like “commerce,” “trade,” “division of labor,” “production,” and “marketing” are crucial. Practice using them in sentences and examples, so you can recall them easily during the exam.

3. Break Your Study Into Topics:

Don’t overwhelm yourself! Break down your study sessions into manageable topics. Focus on one topic at a time. Whether it’s “types of commerce” or “factors of production,” mastering each topic will help you build a solid foundation.

4. Use Diagrams and Charts:

Visual aids can make complex topics easier to understand. Practice drawing diagrams like the division of commerce, or the factors of production. This not only helps in memorizing but also boosts your confidence in presenting answers during the exam.

5. Practice Past Questions:

A major key to success is practicing past questions. This allows you to understand the exam format, and the type of questions asked. It also helps you refine your answering skills, ensuring that you don’t miss any crucial details.

6. Write Clear and Concise Answers:

In Commerce exams, clarity is important. Your answers should be direct and to the point. Avoid unnecessary explanations, and focus on answering the question before you. Always start with the definition or main concept, then follow up with examples or details.

7. Stay Organized with Your Study Materials:

Keep your notes, textbooks, and any other materials well-organized. When you can quickly access your study resources, you save time and effort. An organized study environment also reduces stress and enhances concentration.

8. Revise Regularly:

Don’t cram! Regular revision is more effective. Go over your notes frequently, focusing on weak areas. A little time every day to review can make a huge difference in your understanding and performance.