Commerce Exam Questions for SS2 First Term with Answers

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 focus on Commerce exam questions. We will cover Commerce exam questions for SS2 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, and don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Introduction to Commerce as a School Subject

Before we venture into Past Commerce Exam Questions for SS2 First term, here’s a brief introduction to the subject:

Commerce is a school subject that deals with the study of trade and other business activities that help in the distribution and exchange of goods and services. It introduces students to how goods move from producers to consumers and the roles played by various commercial agents such as wholesalers, retailers, banks, insurance companies, and transporters.

Through the study of Commerce, students gain a clear understanding of how the business world operates and how different sectors of the economy—like trade, banking, transportation, and communication—work together to promote economic growth. It also helps learners develop entrepreneurial skills and prepares them for careers in business, finance, and management.

In summary, Commerce bridges the gap between production and consumption, helping students appreciate the importance of trade and services in everyday life.

Commerce Exam Questions for SS2 First Term

Commerce Exam Questions for SS2 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 follow specific instruction and answer the required number of questions.

Note that what you have below are SS2 Commerce First Term Exam Past Questions made available to assist students in their revision for 1st term examinations and also teachers in structuring standard examinations.

SECTION A: Objectives

Instruction: Answer all questions in this section by choosing from the options lettered A—D. Each question carries equal marks.

1. The exchange of goods in the international market without the use of money is called
A. barter trade
B. bilateral trade
C. counter trade
D. entrepôt trade

2. A person who sells goods belonging to another in his own name and receives a commission is known as a
A. retailer
B. factor
C. sole trader
D. wholesaler

3. A group of firms producing similar goods or services is referred to as
A. an industry
B. a cartel
C. a trade association
D. a holding company

4. Which of the following is not an argument in support of public ownership of industries?
A. Profit benefits the whole nation
B. It ensures the provision of essential services
C. It assists the government in economic planning
D. The support of shareholders is more reliable

5. Which of the following correctly describes limited liability?
A. Shareholders are only liable for the money they invested
B. The business cannot make a loss
C. All employees are insured against accidents
D. The firm must be a public company

6. A multi-purpose cooperative society is one that
A. engages in more than one type of business
B. sells a wide variety of goods
C. has multiple owners
D. belongs to several cooperative chains

7. The function of a wholesalers’ cooperative society is to
A. sell to retailers’ cooperatives
B. sell only to producer cooperatives
C. grow food for retailers
D. sell only specialist goods in bulk

8. The best definition of a nationalized industry is
A. a business taken into state ownership
B. a municipal undertaking
C. a public company
D. a government agency

9. Which of the following is not included in the Articles of Association?
A. The rights of shareholders
B. Division of profits
C. Method of electing directors
D. Whether the company is public or private

10. Nigeria is regarded as a mixed economy because it
A. has both private and public sector enterprises
B. imports and exports goods
C. produces both goods and services
D. operates industrial and commercial firms

11. The ownership of a public limited company rests with the
A. shareholders
B. government
C. local council
D. community

12. The document that gives a company a legal identity separate from its owners is the
A. certificate of incorporation
B. memorandum of association
C. articles of association
D. insurance certificate

13. A business that restricts the transfer of its shares is known as a
A. private company
B. public company
C. public corporation
D. cooperative society

14. The highest financial institution in Nigeria that implements government monetary policy is the
A. Central Bank of Nigeria
B. Development Bank
C. Merchant Bank
D. Commercial Bank

15. A person who contributes capital but does not take part in the day-to-day running of a business is called a
A. dormant partner
B. active partner
C. nominal partner
D. general partner

16. The document given to acknowledge payment for goods is called a
A. receipt
B. invoice
C. credit note
D. debit note

17. The movement of goods from the manufacturer to the final consumer is called a
A. channel of distribution
B. line of production
C. means of transportation
D. route of marketing

18. Which of the following is not a means of making payment in business transactions?
A. Bank draft
B. Statement
C. Cheque
D. Cash

19. Which of the following is a means of payment through the NIPOST?
A. Money order
B. Promissory note
C. Standing order
D. Cheque

20. One factor that determines the method of payment for goods is the
A. urgency of payment
B. durability of goods
C. colour of the goods
D. distance between parties

21. Which of the following goods would most likely be sold by sample?
A. Wool      B. Rubber
C. Tin          D. Copper

22. Which of these cannot be accurately graded?
A. Tea             B. Wheat
C. Cotton       D. Sugar

23. A consumers’ cooperative society differs from other businesses because it
A. shares profits among members who are customers
B. sells a wide variety of goods
C. offers goods at cheap rates
D. produces its own products

24. A credit and thrift cooperative society is mainly formed to
A. promote savings and provide loans to members
B. sell goods at cheaper prices
C. produce goods for export
D. distribute farm inputs

25. One advantage of cooperative societies is that
A. members believe in cooperative ideals
B. they cannot go bankrupt
C. they make more profit than competitors
D. they are not controlled by government

26. Which of the following documents is sent as a reply to an inquiry?
A. Quotation     B. Tender
C. Statement     D. Estimate

27. A cheap means of transporting bulky goods over a long distance is
A. rail transport
B. road transport
C. air transport
D. pipeline

28. The function of the Central Bank includes
A. implementing monetary policies
B. granting long-term loans to farmers
C. producing industrial goods
D. promoting retail trade

29. Which of the following is an example of an extractive industry?
A. Digging for precious stones
B. Baking bread
C. Constructing bridges
D. Sewing clothes

30. One of the products of the construction industry is
A. a building
B. a chair
C. a bag
D. a piece of cloth

31. Activities that facilitate commerce include
A. improving road networks
B. funding political campaigns
C. organizing cultural festivals
D. building schools

32. The sale and purchase of goods over electronic systems is called
A. e-commerce
B. e-transfer
C. e-payment
D. e-mail

33. Which of the following is a source of short-term finance?
A. Bank overdraft
B. Lease
C. Debenture
D. Hire purchase

34. One major disadvantage of a sole trader is
A. unlimited liability
B. quick decision making
C. pride of ownership
D. adequate sources of capital

35. Which of the following is true about debentures?
A. Holders receive fixed interest
B. Holders are co-owners of the company
C. They are part of the authorized capital
D. They control the company

36. A person authorized to sell the property of a company during liquidation is called a
A. liquidator
B. auctioneer
C. agent
D. broker

37. The path through which goods move from producers to consumers is known as
A. channel of distribution
B. route of commerce
C. means of exchange
D. supply chain

38. The document that gives a business the right to operate is a
A. certificate of trading
B. certificate of incorporation
C. memorandum of association
D. license of operation

39. A group of business people engaged in trade and industry is called a
A. chamber of commerce
B. trade union
C. cooperative society
D. trust fund

40. When goods and services reach the final consumer, production is said to be
A. complete
B. terminated
C. suspended
D. advanced

41. Which of the following is not a function of money?
A. Medium of exchange
B. Store of value
C. Double coincidence of wants
D. Measure of value

42. Which of these is not a constructive occupation?
A. Mining
B. Plumbing
C. Bricklaying
D. Furniture making

43. The document that acknowledges goods returned to the seller is a
A. credit note
B. invoice
C. statement
D. receipt

44. A public corporation is established by
A. an Act of Parliament
B. private investors
C. a cooperative body
D. a business merger

45. The factor that differentiates public limited companies from private ones is
A. ownership and transferability of shares
B. production of goods and services
C. amount of profit declared
D. number of employees

46. Raw materials are also known as
A. producers’ goods
B. consumers’ goods
C. finished goods
D. dealers’ goods

47. Multilateral trade is trade carried out
A. among many countries
B. between two countries
C. within one country
D. between neighbouring countries only

48. The functions of a commercial bank include
A. accepting deposits and granting loans
B. printing currency notes
C. controlling inflation
D. collecting taxes

49. When goods are in the form preferred by consumers, they are sold in the
A. consumer market
B. futures market
C. commodity exchange
D. foreign market

50. Mr. Enemali can become a part-owner of a public limited company by
A. buying its shares
B. promoting the company
C. marketing its products
D. advertising its services

SECTION B: Essay

INSTRUCTION – Answer all five (5) questions in this section.

1. (a) What is commerce?
(b) Write short notes on the following:
i. stock
ii. shares
iii. debentures
iv. overdraft
v. retained profit

2. (a) Define a cooperative society.
(b) List and explain the types of cooperative societies.
(c) Define incorporation.

3. (a) What is a public enterprise?
(b) State three problems of cooperative societies.

4. (a) Explain the requirements for trading.
(b) Mention the constraints of commodity trading.

5. (a) Write short notes on the following:
i. trade discount
ii. cash on delivery
iii. free on board
iv. credit note
v. invoice
(b) Explain the banking system as a means of payment.

6. (a) Define production.
(b) State the functions of commercial banks.
(c) List the documents used in foreign trade.

7. (a) What is partnership?
(b) State the functions of the Central Bank.
(c) State the contents of the Articles of Association.

8. (a) What is a company?
(b) State the features of a cooperative society.
(c) Mention the factors that determine types of occupation.

Remember to use the comments sections if you have questions, and don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Answers to Commerce Exam Questions for SS2 First Term

Answers to Section A (Objective Test)

The following table gives the correct answers to the objective section of Commerce exam questions for SS2 First term. If you are using a mobile device, hold the table and scroll to the right or left for a complete view.

So here you have the answers to the objective section of Commerce Exam Questions for SS2 First term. Use the comments section to let me know if you have any questions you would want me to clarify or discuss further.

Answers to Section B (Theory)

1.

(a) Commerce is the process of buying, selling, and distributing goods and services to satisfy human wants. It includes all the activities that aid trade such as banking, insurance, transportation, communication, and warehousing.

(b) Short notes on the following:

i. Stock: A stock represents a unit of ownership in a company. Holders of stocks are known as shareholders and are entitled to dividends when profits are declared.

ii. Shares: These are units of capital of a company. They represent the individual portions into which the capital of a company is divided.

iii. Debentures: These are long-term loans raised by a company from the public. Debenture holders are creditors and receive fixed interest whether the company makes a profit or not.

iv. Overdraft: This is a short-term loan granted by a bank to a customer, allowing the customer to withdraw more money than is available in their account up to an agreed limit.

v. Retained Profit: This refers to the portion of a company’s profit that is kept back or reinvested in the business rather than being distributed to shareholders as dividends.

2.

(a) A cooperative society is a voluntary association of individuals who come together to meet their common economic, social, and cultural needs through a jointly owned and democratically controlled enterprise.

(b) Types of cooperative societies:
i. Consumer Cooperative Society: Formed by consumers to buy goods in bulk and sell to members at fair prices.
ii. Producer Cooperative Society: Formed by producers who join resources together to produce and market their products collectively.
iii. Credit Cooperative Society: Formed to provide financial assistance and soft loans to members at low interest rates.
iv. Marketing Cooperative Society: Formed to help members market their products efficiently and eliminate middlemen.
v. Multipurpose Cooperative Society: Combines the activities of production, marketing, and credit provision within one organization.

(c) Incorporation: This is the process by which a business is legally registered as a corporate body, giving it a distinct legal identity separate from its owners.

3.

(a) A public enterprise is a business organization owned, managed, and financed by the government to provide essential goods and services for the welfare of the public.

(b) Problems of cooperative societies:
i. Poor management due to lack of skilled personnel.
ii. Inadequate capital to run operations effectively.
iii. Lack of commitment and cooperation among members.

4.

(a) Requirements for trading include capital, market, communication, transportation, and good management.

(b) Constraints of commodity trading include inadequate infrastructure, price fluctuations, government regulations, and lack of storage facilities.

5.

(a) Short notes on the following:
i. Trade Discount: A reduction in price given by a wholesaler to a retailer for buying goods in large quantities.
ii. Cash on Delivery (C.O.D.): A system where payment is made when goods are delivered to the buyer.
iii. Free on Board (F.O.B.): A trade term indicating that the seller’s responsibility ends when goods are loaded onto the ship for delivery.
iv. Credit Note: A document sent by a seller to a buyer to correct an overcharge or to acknowledge goods returned.
v. Invoice: A document sent by a seller to a buyer showing details of goods sold, prices, and total amount due.

(b) Banking System as a Means of Payment: The banking system facilitates payment through instruments such as cheques, bank drafts, standing orders, and electronic transfers. It enables safe and efficient money transactions within and outside the country.

6.

(a) Production: This is the creation of goods and services to satisfy human wants. It involves converting raw materials into finished products.

(b) Functions of Commercial Banks:
i. Accepting deposits from customers.
ii. Granting loans and overdrafts.
iii. Providing facilities for safe-keeping of valuables.
iv. Facilitating foreign trade through letters of credit.
v. Acting as agents for customers in financial matters.

(c) Documents Used in Foreign Trade: Bill of lading, invoice, certificate of origin, consular invoice, insurance.

Read Also: Commerce Exam Questions for SS2 Third Term

How to Pass Commerce Exam Questions for SS2 First Term

Passing your Commerce exam questions for SS2 First term requires a combination of preparation, understanding, and strategy. Here are actionable tips to help you excel:

1. Make a realistic study timetable.Break your time into short sessions. Give more time to weak areas like trade terms or bank functions. Rest between sessions.
2. Know the syllabus and exam format.List the topics set for the term. Mark objective and theory areas. Focus on commonly tested topics: trade, banking, cooperatives, types of companies, and documents in trade.
3. Master key definitions and terms.Learn short, exact definitions for words like commerce, production, debenture, overdraft, and memorandum. Simple, correct answers win marks.
4. Learn and practise trade terms and documents.Be sure you can explain terms like FOB, C.O.D., invoice, credit note, and bill of lading. Use examples to show you understand.
5. Answer past questions and multiple-choice tests.Do many past papers under timed conditions. For objective questions, read every option before choosing. Eliminate wrong choices fast.
6. Use short plans for essay answers.Before you write, list 3–5 points. Write clear paragraphs. Start with a definition, give points, and end with a short conclusion.
7. Practice calculations and application questions.Work on simple problems about profit, shares, or bank calculations. Show steps clearly in theory answers where required.
8. Create quick revision notes.Make one-page notes for each topic. Use bullet points and short phrases. Review them each day before sleep.
9. Study with a friend or group.Teach each other short topics. Ask quick questions. Teaching helps you remember better.
10. Exam-day routine.Sleep well the night before. Eat a light breakfast. Read the questions carefully. Start with questions you know well. Manage your time and leave a few minutes to check your answers.
11. Keep calm and stay positive.Confidence matters. If you get stuck, move to the next question and return later. Small steady steps lead to success.

Work hard. Practice more. You will pass.

It’s a wrap!

If you need more clarification on SS2 First Term Questions on Commerce, you can use the comments box below. We’ll be there to answer you asap. Don’t forget to join our Free Online Tutorial Classes on YouTube. (Subscribe to the Channel)

Best wishes…