Commerce Exam Questions for SS2 Second 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 Second 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

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

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 SS2 Second Term

Commerce Exam Questions for SS2 Second 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 eight (8).

Note that what you have below are SS2 Commerce Second Term Exam Past Questions made available to assist students in their revision for 2nd term examinations and also teachers in structuring standard examinations.

SECTION A: OBJECTIVE TEST

1. The safekeeping of goods from the point of production to the time they are needed is
(a) standardizing
(b) warehousing
(c) hoarding
(d) stock controlling

2. Which of the following document is used to advertise shares to the public
(a) Articles of Association
(b) Letter of allotment
(c) Memorandum of Association
(d) Prospectus

3. Which of the following is a contract of carriage and a document of title
(a) indent
(b) bill of lading
(c) proforma invoice
(d) bill of exchange

4. Trade discount is given to a buyer for
(a) prompt payment
(b) credit purchase
(c) cash purchase
(d) retailer’s mark-up

5. Insurance is necessary because of the need to
(a) pool resources together
(b) meet uncertainties in future
(c) make profit
(d) lend money to individual

6. One advantage of communication by telephone is that
(a) the conversation can be very short
(b) it is less expensive
(c) feedback is instantaneous
(d) the conversation is strictly private

7. Which of the following is the fastest means of sending a document from one place to another
(a) courier service
(b) facsimile
(c) express mail
(d) registered mail

8. Which of the following implies that the price quoted includes the cost of insurance and carriage
(a) F.O.B         (b) C.O.D
(c) F.A.S          (d) C.I.F

9. Bonded warehouses are controlled by
(a) Exporting promotion council
(b) ports Authority
(c) customs and Excise Authority
(d) Clearing and forwarding Agent

10. A line purchase transaction becomes a sale when the
(a) hirer accepts the hire purchase terms
(b) finance company agrees to pay
(c) hirer takes possession of goods
(d) hirer pays full cost of the goods

11. A consignment note is used when
(a) goods are wrapped and labeled for easy identification
(b) goods are dispatched to agents through transporters
(c) damaged goods are being returned
(d) there is over-invoicing

12. Which of the following is not contained in an advice note
(a) type of goods
(c) price of goods
(c) date of dispatch
(d) means of dispatch

13. A refund of the duty collected on goods imported and processed for re-export is
(a) excise draw back
(b) excise duty
(c) preferential duty
(d) value added tax

14. Which of the following is not a function of the retailer
(a) supplying goods to find consumers
(b) bulk breaking
(c) giving information to the wholesaler
(c) branding and packaging of goods

15. A merchant who wishes to order goods from a foreign country sends
(a) an invoice
(b) an indent
(c) an advice note
(d) a credit note

16. The production of goods in anticipation of demand is possible because of the existence of
(a) packaging          (b) advertising
(c) warehousing       (d) branding

17. Which of the following is sent in reply to a letter of enquiry
(a) quotation
(b) order
(c) consular invoice
(d) advice note

18. The abbreviation phrase E. & O.E is usually printed on
(a) an invoice
(b) a cheque
(c) a delivery note
(d) a debit note

19. Which of the following is a means of payment through the post office
(a) standing order
(b) promissory note
(c) money order
(d) telegraphic transfer

20. Which of the following encourages people to save towards owning a house
(a) merchant bank
(b) development bank
(c) mortgage bank
(d) commercial bank

21. A contract of sale where ownership passes to the buyer on the payment of the first instalment is known as
(a) hire purchase
(b) cash on delivery
(c) lease
(d) credit sale

22. Which of the following is most appropriate for a cash with order terms of sale
(a) proforma invoice
(b) credit note
(c) debit note
(d) consignment note

23. A business firm which controls more than half of another firm’s equity is a
(a) holding company
(b) consortium
(c) cartel
(d) syndicate

24. A person who decides what to produce and combines the other factors of production is the
(a) entrepreneur
(b) distributor
(c) engineer
(d) retailer

25. The authority given to a bank to make regular payments on behalf of customer for a specific purpose is known as
(a) bank draft
(c) standing order
(c) credit transfer
(d) certified cheque

26. Agricultural cooperative banks are best classified under
(a) commercial banks
(b) specialized banks
(c) saving banks
(d) merchant banks

27. A document from a seller which corrects an under-charge on a buyer’s account is known as
(a) debit note
(b) statement of account
(c) credit note
(d) proforma invoice

28. A price quotation that covers the cost of goods and all other expenses incurred in delivering the goods to the buyer is called
(a) FAS           (b) Franco
(c) CIF            (d) i-oco

29. Which of the following is not used to correct an adverse balance of payment
(a) increasing exports
(b) decreasing imports
(c) devaluation
(d) increasing import

30. The term “2 1/2% 30 days” refers to
(a) mark up
(b) trade discount
(c) value added tax
(d) cash discount

31. An association of businessmen including manufacturers, traders, bankers and people engaged in business in an area is known as
(a) trade association
(b) chamber of commerce
(c) trade union
(d) co-operative society

32. A chain store is also known as
(a) department store
(b) multiple shop
(c) supermarket
(d) hypermarket

33. Which of the following is sent by a customer who wishes to know the price quality and terms of sale of a product
(a) quotation
(b) proforma invoice
(c) letter of enquiry
(d) advice note

34. The trade document signed by a representative of the country to which goods being sent is known as
(a) consular invoice
(b) certificate of origin
(c) consignment note
(d) proforma invoice

35. What is the lifespan of a cheque which is drawn but not presented immediately for payment
(a) 30 days          (b) 2 months
(c) 6 months       (d) 12 months

36. Which of the following is not a function of money? it
(a) is a medium of exchange
(b) serves as a store of value
(c) is easily recognizable
(d) makes deferred payments possible

37. Which of the following is an advantage of large-scale retailing
(a) one-stop shopping
(b) pilfering
(c) decline in personal service
(d) high overhead cost

38. Entrepot trade means
(a) exchange of goods between two countries
(b) exchange of goods among countries
(c) exporting goods to be re-exported
(d) importing goods to be re-exported

39. Which of the following tells the customer exactly what has been sold to him, the amount due and any discount granted
(a) bill of exchange
(b) advice note
(c) invoice
(d) statement

40. Which of the following documents is required when a bill of lading is not readily available to enable certificate of origin?
(a) Shipping note
(b) Dock warrant
(c) Consular invoice
(d) Bill of sight

41. A public limited liability company can enter into contracts because it
(a) has many employers
(b) has shareholders
(c) is a legal entity
(d) is allowed to take out debentures

42. Taxes imposed on locally made goods are known as
(a) ad valorem duties
(c) import duties
(b) export drawback
(d) excise duties

43. Which of the following contains the complete information on goods available for sale
(a) invoice
(b) delivery note
(c) consignment note
(d) catalogue

44. Which of the following is used to inform the buyer that goods ordered is on the way
(a) invoice
(b) advice note
(c) dispatch book
(d) quotation

45. Quantity discount is offered to persuade the buyer to
(a) buy more
(b) pay promptly
(c) defer payment
(d) pay a deposit

46. Which of the following does not belong to the group
(a) posters
(b) window display
(c) free sample
(d) hoarding of goods

47. When all producers in an industry combine to advertise their product instead of each firm advertising its own brand, this is referred to as
(a) mass advertising
(b) competitive advertising
(c) persuasion advertising
(d) direct advertising

48. The divisions of production are
(a) industry, banking and service
(b) industry, manufacturing and service
(c) industry, commerce and service
(d) industry, transportation and service

49. Risk in business are borne by the
(a) consumer
(b) entrepreneur
(c) marketing manager
(d) personnel manager

50. The amalgamation of firms engaged in cotton processing and manufacturing and textiles is
(a) horizontal integration
(b) vertical integration
(c) lateral integration
(d) joint venture

51. Which of the following makes sales possible without a sales attendant
(a) vending machine
(b) telex machine
(c) fax machine
(d) franking machine

52. Manufacturers sell directly to consumers when they
(a) want to make profit
(b) wish to eliminate all transport costs
(c) live far aways from them
(d) deal in perishable goods

53. When consumers are not aware of the quality of product, the best advertising technique to use is
(a) informative advertising
(b) competitive advertising
(c) direct advertising
(d) indirect advertising

54. The choice of medium used in advertising is not determined by the
(a) cost of using a particular medium
(b) age group to which the medium appeals
(c) nationality of people using the medium
(d) number of people reached by the medium

55. An organization formed mainly by traders on the same line of business is known as
(a) trade union
(b) cooperative society
(c) trade association
(d) chamber of commerce

56. Which of the following is not suitable for line purchase
(a) textiles
(b) furniture
(c) refrigerator
(d) printing machine

57. A seller quoting his goods loco price means that
(a) all charges are borne by the seller
(b) all charges are borne by the buyer
(c) the seller pays carriage as far as the buyer’s warehouse
(d) the price includes cost, insurance and freight

58. C.O.D transactions are associated with
(a) mail order firms
(b) mobile shops
(c) supermarket
(d) multiple shops

59. When a quotation is marked ‘ewo’, it means
(a) no credit facility is allowed
(b) no discount is allowed
(c) the buyer should beware
(d) the seller should beware

60. The practice whereby a firm prepays the postage for the response of its customers is known as
(a) express delivery
(b) poste restante
(c) recorded delivery service
(d) business reply service

SECTION B: (Theory)

Instruction: Answer only five questions in this section.

1a. State four reasons why tariffs are imposed on imports.
b. State two functions performed by the customs authority.

2a. Differentiate between hire purchase and credit sale.
b. Give two advantages of hire purchase to each of the following
(i) a seller (ii) a buyer

3. Write short notes on the following:
(a) persuasive advertising
(b) informative advertising
(c) competitive advertising
(d) mass advertising

4a. what is chamber of commerce?
b. explain four functions of chamber of commerce

5a. What is an advertising medium?
b. Explain five advertising media

6. Explain two functions of each of the following communication agents
(i) post office
(ii) Telecommunication
(iii) courier companies

7. Write explanatory notes on the following.
(i) Holding company (ii) cartel (iii) consortium
b. The sale of consumer goods costing ₦300,000 attracts a cash discount of 7 1/2% and a quantity discount of 5%
Calculate the:
(i) Value of the quantity discount
(ii) value of the cash discount
(iii) net amount of money payable by the buyer

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 Second Term

Answers to Section A (Objective Test)

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

There you have the answers to the objective section of Commerce Exam Questions for SS2 Second 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)

1a. Four reasons why tariffs are imposed on imports:

i. To protect local industries from foreign competition.
ii. To generate revenue for the government.
iii. To discourage the importation of certain goods.
iv. To correct an adverse balance of trade or balance of payments.

1b. Two functions of the customs authority:

i. Collection of import and export duties.
ii. Prevention of smuggling and enforcement of trade regulations.

2a. Difference between hire purchase and credit sale:

Hire purchase is a system where the buyer pays for goods in instalments and ownership remains with the seller until the final payment is made. In contrast, credit sale involves the buyer taking ownership of goods immediately, even though payment is made later, either in full or in instalments.

2b. Advantages of hire purchase:

(i) To the seller:
i. Increases sales and turnover.
ii. Earns additional income through interest charges.

(ii) To the buyer:
i. Enables purchase of expensive goods without full payment at once.
ii. Allows immediate use of goods while paying gradually.

3. Short notes:

(a) Persuasive advertising:
This type of advertising is used to influence consumers to prefer a particular brand over others. It aims at convincing buyers to make a purchase.

(b) Informative advertising:
This provides information about a product such as its uses, features, price, and availability, especially when the product is new.

(c) Competitive advertising:
This is used to highlight the superiority of one product over others in the market, often comparing brands.

(d) Mass advertising:
This involves advertising to a large audience at the same time using media like television, radio, and newspapers.

4a. What is a chamber of commerce?

A chamber of commerce is an association of businessmen, traders, and industrialists formed to promote and protect their business interests in a particular area.

4b. Four functions of a chamber of commerce:

i. Promotes trade and commerce in the area.
ii. Represents the interests of members to the government.
iii. Provides information on trade opportunities.
iv. Settles trade disputes among members.

5a. What is an advertising medium?

An advertising medium is a channel or method used to convey advertising messages to the target audience.

5b. Five advertising media:

i. Television – reaches a wide audience through audio-visual means.
ii. Radio – uses sound to reach listeners across different locations.
iii. Newspapers – provide detailed written information to readers.
iv. Magazines – target specific groups with quality print advertisements.
v. Billboards – large outdoor displays placed in strategic locations.

6. Functions of communication agents:

(i) Post Office:
i. Delivery of letters and parcels.
ii. Provision of financial services like money orders.

(ii) Telecommunication:
i. Facilitates instant communication over long distances.
ii. Supports business transactions through calls and internet services.

(iii) Courier Companies:
i. Fast delivery of documents and parcels.
ii. Provides secure and reliable delivery services.

7a. Explanatory notes:

(i) Holding company:
A company that controls another company by owning more than half of its shares.

(ii) Cartel:
An association of firms in the same industry that agree to control prices or output to reduce competition.

(iii) Consortium:
A temporary association of firms formed to undertake a large project or business venture.

7b. Calculation:

Cost of goods = ₦300,000
Quantity discount = 5% of ₦300,000 = ₦15,000
Price after quantity discount = ₦300,000 − ₦15,000 = ₦285,000
Cash discount = 7½% of ₦285,000 = ₦21,375
Net amount payable = ₦285,000 − ₦21,375 = ₦263,625

(i) Value of quantity discount = ₦15,000
(ii) Value of cash discount = ₦21,375
(iii) Net amount payable = ₦263,625

How to Pass Commerce Exam Questions for SS2 Second Term

Passing Commerce in SS2 is not about cramming alone. It is about understanding key concepts, practicing regularly, and answering questions the right way. If you follow the steps below carefully, you will see improvement.

1. Understand the Key Topics

Focus on important areas such as trade, banking, insurance, advertising, transportation, communication, and business organizations. Do not just read—make sure you understand how each concept works in real life.

2. Study with Past Questions

Past questions will guide you on how exam questions are set. Practice both objective and theory questions. Many questions are often repeated or slightly modified, so this gives you an advantage.

3. Master Commerce Terms and Definitions

Commerce involves many terms like tariff, warehousing, hire purchase, credit sale, and balance of trade. Learn clear and simple definitions because they are often tested directly.

4. Practice Calculations

Topics like discount, profit and loss, and simple business calculations are important. Practice step-by-step solutions so you don’t get confused in the exam hall.

5. Learn How to Answer Theory Questions

When answering essay questions:

• Be direct and clear.
• Use simple sentences.
• List points where necessary.
• Explain your points briefly.

Avoid writing long, irrelevant stories.

6. Use Correct Commerce Language

Always use proper commercial terms. For example, say “buyer” and “seller,” not “person that buys.” This shows the examiner that you understand the subject well.

7. Revise Regularly

Do not wait until exam period before you start reading. Daily revision helps you remember what you have learned and builds confidence.

8. Attend Classes and Ask Questions

Pay attention in class and ask your teacher questions when you don’t understand a topic. What looks difficult today will become simple when explained well.

9. Manage Your Time in the Exam

Do not spend too much time on one question. Attempt all questions and come back to difficult ones later. This increases your chances of scoring higher marks.

10. Believe in Yourself

Confidence matters a lot. Go into the exam hall with a positive mindset. Remind yourself that you have prepared well and you can succeed.

It’s a wrap!

If you need more clarification on SS2 Second 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 from yours sincerely, HD.