Commerce Mock Exam Questions for SS3 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 mock exam questions for SS3 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 Mock Exam Questions for SS3 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 SS3 Second Term

Commerce Mock Exam Questions for SS3 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 six (6) questions out of nine (9).

Note that what you have below are SS3 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

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

1. Which of the following is a commercial service
(a) transporting
(b) garri processing
(c) oil drilling
(d) tailoring

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

3. The major divisions of commerce are
(a) import export and banking
(b) home trade and foreign trade
(c) trade and aids to trade
(d) trade and banking

4. Turnover may be increased by
(a) refusing credit and customer services
(b) increasing the mark up
(c) stocking very expensive goods
(d) advertising and cutting prices

5. In winding up a company, the assets of the company are rested in the hands of the
(a) receive
(b) liquidator
(c) director of companies
(d) the government

6. If a seller discovers that he has undercharged a buyer, which of the following documents will he use to correct the error
(a) promissory note
(b) credit note
(c) advice note
(d) debit note

7. The ship owner’s receipt for the goods accepted for carriage in a ship is called
(a) ship manifest
(b) charter party
(c) mate’s receipt
(d) bill of lading

8. Demurrage is a change for
(a) utilized lay days
(b) unused lay days
(c) exceeding lay days
(d) damaged charge

9. Activities aimed at creating an image for organization are known as
(a) advertising
(b) market research
(c) public relation
(d) exhibition

10. Patent right gives the owner the exclusive right to
(a) produce any type of goods
(b) his invention
(c) form a new business
(d) sell to other manufacturers

11. The method by which insurance companies spread their risks to other insurance companies is called
(a) double insurance
(b) under insurance
(c) re-insurance
(d) under writing

12. When a number of insurers are liable under one given policy, the principle of insurance that applies is
(a) indemnity
(b) subrogation
(c) contribution
(d) proximate cause

13. The interplay of such variables as product, price, and distribution is known as
(a) product mix
(b) marketing mix
(c) marketing concept
(d) product line

14. A house insured against damage by flood was burnt down and the owner had no claims Which of the following prevented him from making any claim The principle of
(a) subrogation
(b) indemnity
(c) proximate cause
(d) insurable interest

15. The practice of selling goods in foreign markets at less than the cost price is known as
(a) fair trading
(b) smuggling
(c) hedging
(d) dumping

16. The technique of controlling money supply through the purchase and sale of government bonds is called
(a) bond control technique
(b) exchange control technique
(c) open market operations
(d) price control mechanism

17. Debentures are part of a company’s
(a) issued share capital
(b) paid-up capital
(c) loan capital
(d) called-up capital.

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

19. A ‘bear’ on the stock exchange sells shares in anticipation of
(a) a fall in price
(b) a rise in price
(c) a change in price
(d) new shares

20. When a share is bought at a rate below the par value, it is said to have been sold
(a) at a discount
(c) cum div
(a) at a premium
(d) ex-div

21. Which of the following accompanies goods supplied and forms a receipt when signed by the consignee
(a) invoice
(b) delivery note
(c) order
(d) advice note

22. In nationalized industries, losses are borne by the
(a) tax payers
(b) debenture holders
(c) shareholders
(d) board of directors

23. The consumer is always right This describes the doctrine of
(a) social responsibility
(b) consumer movement
(c) consumer protection
(d) consumer sovereignty

24. An organization chart shows the
(a) relative position of employees in a firm
(b) customers positions in a firm
(c) order in which tasks should be tackled
(d) the profit position of the firm

25. A facility used for impressing pre-paid postage rate on letter is called
(a) rending machine
(b) speed post
(c) cas register
(d) franking machine

26. Which of the following is not a function of money
(a) unit of account
(b) store of value
(c) medium of exchange
(d) determinant of exchange rate

27. Who among the following is not a middleman?
(a) retailer              (b) consumer
(c) wholesaler        (d) broker

28. The system of parting with authority but not responsibility is known as
(a) controlling        (b) planning
(c) delegating        (d) motivating

29. That part of the money in circulation not backed by gold is known as
(a) fiduciary issue
(b) notes and coins
(c) ordinary note issue
(d) fictitious assets

30. Who is liable for the contracts entered into by the agent on behalf of his principal? The
(a) agent
(b) principal
(c) agent and principal
(d) third party

31. An agreement whereby the seller transfers the title to goods at a price is called
(a) contract of sale
(b) a hire purchase agreement
(c) haggling
(d) an agency agreement

32. The outright purchase of one company by another is called
(a) absorption         (b) merger
(c) acquisition         (d) cartel

33. The form of advertising which aims at winning the market for one particular brand is known as
(a) informative advertising
(b) persuasive advertising
(c) competitive advertising
(d) direct advertising

34. The marketing concept which begins and ends with satisfying the needs and wants of the consumer is called
(a) caveat venditor
(b) consumer orientation
(c) consumer protection
(d) consumer association

35. The relationship between a country is total receipts and payments in international trade in a given year is called
(a) balance of payment
(b) balance of trade
(c) terms of trade
(d) balance on current account

36. Which of the following investors profit on the basis of his patronage
(a) debenture holder
(b) partner
(c) shareholder
(d) co-operative member

37. A group of retailing shops under one management and selling the same products is known as
(a) multiple shop
(b) supermarket
(c) department store
(d) variety store

38. When payment is required for goods at the time the order is placed, the term of payment quoted is
(a) C.O.D           (b) C.W.O
(c) F.O.R            (d) F.O.B

39. When a motor dealer undertakes routine maintenance of customer’s vehicle, he is offering
(a) self service
(b) pre-sale service
(c) after-sales service
(d) free service

40. Which of the following has the main objective to differentiate between similar products from different manufacturers
(a) branding     (b) packing aging
(c) mark up       (d) display

41. Which of the following abbreviations permits the drawer of a document to correct any errors therein
(a) V.A.T             (b) C.I.F
(c) E & O.E         (d) I.O.U.

42. A speculator who buys shares and stocks in anticipation of a rise in their prices at the stock Exchanges is
(a) bull             (b) bear
(c) broker         (d) jobber

43. Which of the following is common to both large and small firms?
(a) lower running cost
(b) personal attention
(c) profit motive
(d) specialization

44. Organizations licensed and authorized to deliver fast mails and parcels are engaged in
(a) courier services
(b) career services
(c) haulage services
(d) transport services

45. The system of collecting information with a view to determining the extent of demand for a product is known as
(a) advertising
(b) marketing research
(c) marketing
(d) communication

46. A modern method of retailing whereby customers can make them purchase without the help of an assistant or cashier is called
(a) impulse buying
(b) one-stop shopping
(c) automatic vending
(d) auction sales

47. A deduction made by a wholesaler from the catalogue price and which represents a retailers profit margin is called
(a) cash discount
(b) trade discount
(c) quantity discount
(d) deferred payment

48. A cheque dated 5/8/21 but presented for payment on 2/8/21 was dishonored because it was a
(a) certified cheque
(b) marked cheque
(c) post-dated cheque
(d) sale cheque

49. An order stating the goods required but not the manufacturer from whom the foreign buyer intends to buy his goods is called
(a) indent
(b) open indent
(c) closed indent
(d) export order

50. Group of firms cooperating to carry out a giant project too large for a single firm to undertake is called
(a) merger
(b) consortium
(c) cartel
(d) chamber of commerce

51. The giving of free samples to stimulate consumers’ demand for a company’s product is called
(a) advertising
(b) consumer protection
(c) marketing concept
(d) sale promotion

52. Which of the following is a non-insurable risk.
(a) accident         (b) fire
(c) marine            (d) speculation

53. The money used for payment of raw materials salaries and wages is the ______ capital
(a) loan             (b) authorized
(c) working       (d) fixed

54. A situation where there are no restrictions imposed on goods and services coming in and out of a country is called ______ trade
(a) free              (b) direct
(c) export          (d) internal

55. A business enterprise is said to be involved in social responsibility when it does the following except
(a) pollution control
(b) tax evasion
(c) award of scholarship
(d) offer of employment

56. The policy which is aimed at making state owned enterprises to become more efficient and profit oriented is known as
(a) privatization
(b) commercialization
(c) indigenization
(d) nationalization

Use the information below to answer questions 57 to 59.

The financial position of Badmus Company as at 31st December, 2009 is as follows:
* Motor van: ₦40,000
* Furniture and fittings: ₦20,000
* Stock as at 31st December: ₦90,000
* Cash at bank: ₦20,000
* Creditors: ₦10,000
* Capital: ₦100,000
* Profit for the year: ₦60,000

57. Calculate capital owned
(a) ₦160,000           (b) ₦100,000
(c) ₦80,000             (d) ₦60,000

58. Calculate fixed assets
(a) ₦50,000        (b) ₦60,000
(c) ₦40,000         (d) ₦30,000

59. Calculate working capital
(a) ₦160,000         (b) ₦155,000
(c) ₦100,000          (d) ₦130,000

60. The pricing policy commonly used by government in awarding contracts through tender is ______ pricing
(a) market penetration
(b) market skimming
(c) target return
(d) bid

61. The relationship between profit and the cost of goods sold is called
(a) gross profit
(b) mark-up
(c) net profit
(d) turnover

62. The business organization formed by a group of individuals with common interest to promote their economic activities and provide welfare to their members is known as
(a) co-operative society
(b) sole proprietorship
(c) partnership
(d) public enterprise

63. Which of the following is not a function of the Nigerian stock Exchange
(a) regulating the buying and selling of securities
(b) spreading financial losses on investors
(c) ensuring transfer of investment
(d) ensuring confidence in investors

64. In which of the following types of warehouses must a warrant be shown before the goods stored in it are released to the bearer
(a) state            (b) wholesale
(c) bonded       (d) public

65. The following are reasons for government ownership of business except to
(a) ensure constant supply of goods and services
(b) present exploitation
(c) maintain national security
(d) enjoy monopoly

66. The take-over of private businesses by the government of a nation is known as
(a) indigenization
(b) commercialization
(c) nationalization
(d) privatization

67. An auctioneer is a typical example of a/an
(a) agent          (b) broker
(c) factor          (d) jobber

68. The aims and objectives of ECOWAS were laid at the treaty of
(a) Abidjan        (b) Lagos
(c) Lome            (d) Dakar

69. A financial institution that buys up at least 51% equity shares of another company is known as a
(a) cartel
(b) consortium
(c) holding company
(d) trust

70. How many countries make up the River Niger Basin commission
(a) 16          (b) 12
(c) 10          (d) 9

71. A study to discover consumer’s preferences and needs is called
(a) market segmentation
(b) consumer orientation
(c) marketing mix
(d) market research

72. A tax charged in proportion to the value of imported goods is
(a) specific duty
(b) custom duty
(c) advalorem duty
(d) excise duty

73. Fidelity guarantee insurance is a cover against loss arising from
(a) trade debt
(b) fire disaster
(c) dishonest staff
(d) personal accident

74. The worth of a life assurance policy before its maturity date is
(a) residual value
(b) surrender value
(c) accrued value
(d) assured value

75. The water corporation is an example of
(a) co-operative society
(b) public enterprise
(c) private enterprise
(d) limited company

76. The value at when one country obtains another country’s currency is
(a) terms of trade
(b) exchange rate
(c) bank rate
(d) terms of payment

77. The co-operative society that performs a combination of the functions of other types of co-operations is called
(a) consumer co-operative
(b) multipurpose co-operative
(c) producer co-operative
(d) thrift and credit co-operative

78. That portion of the share capital which the company has asked the shareholder to pay for is known as
(a) authorized capital
(b) paid-up capital
(c) issued capital
(d) called-up capital

Use the information below to answer questions 79 and 80

Byx enterprise has the following balances at the end of march 2010.
* opening stock: D6,000
* Purchases: D23,000
* Salaries and wages: D12,000
* Closing stock: D8,000
* Sales: D30,000

79. Calculate the gross profit of Byx Enterprise
(a) D13,000          (b) D9,000
(c) D5,000            (d) D1,000

80. What is the rate of turnover of Byx Enterprise
(a) 5.0 times          (b) 3.5 times
(c) 3.0 times          (d) 1.5 times

SECTION B: (Theory)

Instruction: Answer only six (6) questions in this section.

1. a. What is occupation?
b. With the aid of a diagram, show the different classes of occupation
c. Explain with one example each, three classes of occupation shown in (1b) above

2. a. Outline five functions of commercial bank.
b. Explain five ways the central bank controls the commercial banks

3. a. Explain five reasons for which manufacturers advertise their product
b. State five reasons for the continued criticism of advertising

4. a. what is contract?
b. List and explain four ways by which a contract can be discharged.

5. a. State five reasons for governments’ participation in business
b. Explain five problems encountered by government businesses

6. a. Explain each of the following classes of insurance
(a) marine insurance
(b) accident Insurance
(c) Group insurance
(d) Fidelity Guarantee insurance
(e) consequential loss Insurance

7. a. State four characteristics of co-operative society
b. Mention and explain three types of co-operative society

8. a. Sate four functions of a wholesaler to a retailer
b. Explain six advantages of small scale business over a large scale business

9. The following figures were extracted from the books of mallama sefinatu a pure water:
* Seller: ₦
* Opening stock: 16,000
* Purchases: 36,000
* Rent: 1,500
* Sales: 50,000
* Salaries and wages: 2,400
* Closing stock: 24,000

You are required to calculate:
(a) average stock (b) rate of turnover (c) gross profit

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 Mock Exam Questions for SS3 Second Term

Answers to Section A (Objective Test)

The following table gives the correct answers to the objective section of Commerce exam questions for SS3 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 SS3 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. What is occupation?

Occupation is any legal economic activity in which a person engages in order to earn a living or income.

1b. Classes of occupation (Diagram)
Occupation
├── Primary
├── Secondary
└── Tertiary

1c. Explanation of the classes of occupation
(i) Primary occupation: This involves extraction of natural resources from the earth. Example: Fishing.
(ii) Secondary occupation: This involves processing raw materials into finished or semi-finished goods. Example: Manufacturing of shoes.
(iii) Tertiary occupation: This involves providing services to people and businesses. Example: Banking.

2a. Five functions of commercial banks

(i) Acceptance of deposits from customers.
(ii) Granting of loans and advances.
(iii) Safe custody of valuables.
(iv) Facilitation of payments through cheques and transfers.
(v) Provision of foreign exchange services.

2b. Five ways the central bank controls commercial banks
(i) Bank rate policy: Adjusting interest rates to control lending.
(ii) Open market operations: Buying and selling government securities.
(iii) Cash reserve ratio: Fixing the minimum reserve banks must keep.
(iv) Liquidity ratio: Regulating the proportion of liquid assets.
(v) Credit ceiling: Placing limits on the amount of loans banks can give.

3a. Five reasons manufacturers advertise their products

(i) To create awareness of their products.
(ii) To increase sales and profit.
(iii) To face competition in the market.
(iv) To introduce new products.
(v) To build brand loyalty.

3b. Five criticisms of advertising
(i) It increases the cost of products.
(ii) It can mislead consumers.
(iii) It encourages unnecessary wants.
(iv) It leads to waste of resources.
(v) It can create unfair competition.

4a. What is a contract?

A contract is a legally binding agreement between two or more parties which is enforceable by law.

4b. Ways by which a contract can be discharged
(i) By performance: When all parties fulfill their obligations.
(ii) By agreement: When parties mutually agree to end the contract.
(iii) By breach: When one party fails to perform their duty.
(iv) By frustration: When unforeseen events make performance impossible.

5a. Five reasons for government participation in business

(i) To provide essential services.
(ii) To prevent exploitation of consumers.
(iii) To create employment opportunities.
(iv) To ensure national security.
(v) To control strategic industries.

5b. Five problems of government businesses
(i) Inefficiency in management.
(ii) Political interference.
(iii) Lack of profit motive.
(iv) Bureaucratic delays.
(v) Corruption and mismanagement.

6a. Classes of insurance

(i) Marine insurance: Covers loss or damage of goods during sea transportation.
(ii) Accident insurance: Provides compensation for injuries or death due to accidents.
(iii) Group insurance: Covers a group of people under one policy, usually employees.
(iv) Fidelity guarantee insurance: Covers losses caused by dishonest employees.
(v) Consequential loss insurance: Covers loss of profit due to business interruption.

7a. Four characteristics of co-operative society

(i) Voluntary membership.
(ii) Democratic control.
(iii) Equal distribution of surplus.
(iv) Limited interest on capital.

7b. Types of co-operative society
(i) Consumer co-operative: Formed to buy goods in bulk for members at low prices.
(ii) Producer co-operative: Formed by producers to market their products.
(iii) Thrift and credit co-operative: Formed to encourage savings and provide loans.

8a. Four functions of a wholesaler to a retailer

(i) Supplies goods in small quantities.
(ii) Grants credit facilities.
(iii) Provides market information.
(iv) Helps in storage of goods.

8b. Six advantages of small scale business
(i) Requires small capital.
(ii) Easy to manage.
(iii) Quick decision-making.
(iv) Close relationship with customers.
(v) Flexibility in operation.
(vi) Less risk compared to large firms.

9. Calculations

(a) Average Stock = (Opening Stock + Closing Stock) / 2
= (16,000 + 24,000) / 2 = 40,000 / 2 = ₦20,000

(b) Rate of Turnover = Cost of Goods Sold / Average Stock
Cost of Goods Sold = Opening Stock + Purchases – Closing Stock
= 16,000 + 36,000 – 24,000 = ₦28,000
Rate of Turnover = 28,000 / 20,000 = 1.4 times

(c) Gross Profit = Sales – Cost of Goods Sold
= 50,000 – 28,000 = ₦22,000

How to Pass Commerce Exam Questions for SS3 Second Term

Passing Commerce in SS3 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 SS3 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.