SS1 Second Term Exam Questions on Commerce [From SSIA]

You’re welcome to our school exams series where we provide you with termly examination questions in different subjects, from different schools. In today’s post, we will focus on Commerce exam questions and our source will be Sure Success International Academy [SSIC]. We will cover SS1 second term exam questions on Commerce and provide their answers at the end. Remember to use the comments sections if you have questions, and don’t forget to join our Free Online Tutorial Classes on Facebook. (Like and Follow Page)

SS1 Second Term Exam Questions on Commerce [SSIC]

In Sure Success International Academy [SSIC], SS1 Second Term Examination Questions on Commerce are normally divided into two broad 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 the given instructions and answer the specified number of questions.

Note that what you have below are SS1 Commerce Second Term Examination Past Questions made available to assist students in their revision for 2nd term examinations and also teachers in structuring standard termly examinations.

SURE SUCCESS INTERNATIONAL ACADEMY (SSIA), PORT HARCOURT.
Term: 2nd Term Examination
Class: SS 1
Subject: Commerce
Duration: 2 hrs

Any form of examination malpractice may lead to a repeat of the subject or suspension. Don’t get involved.

SECTION A: Objectives

Attempt All the Questions in this Section by choosing from the options lettered A—D.

1. A partnership formed for banking business is made up of
(a) 2-10 members
(b) 2-20 members
(c) 2-30 members
(d) 2-40 members

2. The amount of capital with which a new company proposes to be registered is called
(a) nominal capital
(b) liquid capital
(c) issued capital
(d) circulating capital

3. Which of the following is not a quality of money
(a) divisibility            (b) portability
(c) accessibility         (d) durability

4. Which of the following is drawn up as a guide to running of a partnership
(a) Partnership Act
(b) Deed of Agreement
(c) Memorandum of Association
(d) Prospectus

5. The oldest and commonest form of business in Nigeria is
(a) partnership
(b) joint stock venture
(c) sole proprietorship
(d) public corporation

6. Which of the following is a function of money
(a) durability
(b) standard for deferred payment
(c) portability
(d) divisibility

7. A private limited liability company differs from a public limited liability company because
(a) it has a separate entity
(b) it has many shareholders
(c) it pays salaries to its managers
(d) of its inability to offer shares to the public

8. The main source of capital for a limited liability company is
(a) bank overdraft
(b) undistributable profits
(c) bank loan
(d) share subscription

9. The authorized capital of a company is also referred to as its
(a) called-up capital
(b) issued capital
(c) subscribed capital
(d) nominal capital

10. A document that regulates the internal operations of a company is known as
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
(d) Certificate of Incorporation

11. The assets of a company, the assets of money are vested in the hands of the
(a) liquidator
(b) receiver
(c) the government
(d) Director of Companies

12. Demurrage is a charge for
(a) unused lay days
(b) exceeding lay days
(c) damaged cargo
(d) jettisoned cargo

13. The naira is a legal tender because it is
(a) recognizable
(b) homogeneous
(c) backed by law
(d) portable

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

15. Equity interest in a company is represented by
(a) ordinary shares
(b) preference shares
(c) debentures
(d) retained earnings

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

17. Which of the following is mostly used in Nigeria for settling business transactions
(a) credit transfer
(b) standing order
(c) bank notes and coins
(d) cheques

18. The part of money in circulation not backed by gold is known as
(a) rates and coins
(b) ordinary note issue
(c) fictitious assets
(d) fiduciary issue

19. Which of the following is not true of a sole proprietorship
(a) It has a separate legal entity
(b) It has unlimited liability
(c) It has slim chances of expansion
(d) The capital is small

20. The minimum number of membership for a public limited company is
(a) seven
(b) two
(c) twenty
(d) fifty

21. A document issued to a lender under a company’s seal acknowledging debt is called
(a) stock          (b) debenture
(c) share          (d) mortgage

22. Which of the following is a non-insurable risk
(a) loss from fire accident
(b) fidelity guarantee
(c) loss from staking in lotteries
(d) burglary

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

24. Which of the following is not an aid to trade
(a) production         (b) insurance
(c) banking              (d) transport

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

26. In which class of occupation would doctors, teachers, and entertainers be grouped
(a) extractive
(b) industrial
(c) direct service
(d) commercial

27. What document is issued by a public limited company when offering shares for sale
(a) proposal forms
(b) memorandum
(c) policy certificate
(d) prospectus

28. A business unit whose membership ranges from 2-50 is a
(a) private company
(b) public company
(c) partnership
(d) public corporation

29. The reward of shareholding in a company is
(a) profit            (b) divided
(c) interest         (d) premium

30. In a limited partnership, the liability of most of the partners is
(a) pegged          (b) unlimited
(c) limited           (d) restricted

31. Which of the following is an example of a commercial occupation
(a) welding         (b) brick laying
(c) tailoring        (d) shipping

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

33. Which of the following is an example of an extractive industry
(a) sewing dressing
(b) digging for precious stone
(c) baking bread
(d) constructing bridges

34. The raising of new capital by allowing existing shareholders the privilege to buy shares at a preferential rate is called
(a) bonus issue
(b) offer for sale
(c) right issue
(d) private placing

35. Which of the following must any form of money possess in order to be generally acceptable
(a) durability         (b) scarcity
(c) divisibility        (d) legality

36. Which of the following is not a factor of production
(a) profit          (b) labour
(c) capital        (d) land

37. Which of the following categories of workers does not provide direct service
(a) teachers               (b) wholesalers
(c) housemaids         (d) doctors

38. Which of the following is not a source of capital to a public limited company
(a) equipment leasing
(b) debt factoring
(c) dividend
(d) debentures

39. Which of the following ensures regular transportation of gas and liquid productions in all weather
(a) train           (b) aeroplane
(c) tanker         (d) pipeline

40. The law governing the operations of companies and partnerships in Nigeria is the
(a) Companies and Allied Matters Decree
(b) Nigerian Companies Decree
(c) Nigerian Partnership Act
(d) Sale of Goods Act

41. Which of the following is a non-indemnity insurance
(a) burglary insurance
(b) life assurance
(c) fire insurance
(d) insurance

42. The document issued to a newly formed public company to commence business is called
(a) certificate of incorporation
(b) articles of association
(c) trading certificate
(d) insurance certificate

43. Which of the following has a fixed rate of dividend
(a) founder’s share
(b) equity
(c) ordinary share
(d) preference share

44. Another name for sea taxi is
(a) tramp
(b) liner
(c) reggae charter
(d) flying boat

45. A partner who does not play an active role in a business but contributes capital is
(a) secret partner
(b) document partner
(c) nominal partner
(d) limited partner

46. One of the demerits of sole trading is
(a) quick decision taking
(b) flexibility in operation
(c) unlimited liability
(d) ease of commencement

47. Which of the following is not a source of capital to a partnership
(a) buying on credit
(b) ploughing back profit
(c) borrowing
(d) shares

48. Division of labour often results in
(a) an increase in production
(b) a decrease in production
(c) waste of time
(d) uneconomic use of tools

49. Which of the following is a disadvantage of air transport
(a) high cost
(b) high speed
(c) less risk
(d) moves on schedule

50. Which of the following conditions may not lead to the dissolution of a partnership
(a) expiry of agreed time
(b) one partner becoming dormant
(c) mutual consent of the partners
(d) bankruptcy

SECTION B: Essay

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

1. a. What is a public limited company?
1. b. State any eight differences between a private limited company and a public limited company.
1. c. Explain four sources of capital for a sole proprietorship.

2. a. List and explain four documents required for the formation of a limited liability company.
2. b. State three features of a partnership.

3. a. Write short notes on the following:
i. Promoter
ii. Authorized capital
iii. Cumulative preference share
iv. Ordinary share
v. Separate legal entity
3. b. State two advantages of sole proprietorship to a limited liability company.

4. a. Define debentures.
4. b. Explain three types of debentures.
4. c. Explain three sources of capital to a limited liability company.

5. a. Explain four problems of the barter system.
5. b. Explain three qualities of money.

6. a. State six reasons that could lead to the dissolution of a limited liability company.
6. b. Explain four methods of raising capital.

7. a. Explain three types of partners.
7. b. State four items contained in the partnership deed.
7. c. Explain four advantages of a private limited company.

Answers to SS1 Second Term Exam Questions on Commerce (From SSIA)

Answers to Section A (Objective Test)

The following table gives the correct answers to the objective section of SS1 second term exam questions on Commerce. 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 SS1 second term exam questions on Commerce. 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

1. a. What is a public limited company?

A public limited company (PLC) is a business organization that is owned by shareholders who can freely buy and sell shares to the public through the stock exchange. It has a separate legal existence from its owners and must have at least seven members.

1. b. State any eight differences between a private limited company and a public limited company.

1. A private company restricts the transfer of shares, while a public company allows free transfer.
2. A private company requires at least 2 members; a public company requires at least 7.
3. A private company has a maximum of 50 members; a public company has no limit.
4. A private company is not required to publish accounts; a public company must publish accounts.
5. A private company cannot invite the public to subscribe to shares; a public company can.
6. A private company needs no trading certificate to start business; a public company does.
7. A private company usually has fewer regulations; a public company is heavily regulated.
8. Shares of a private company are not listed on the stock exchange; public company shares are listed.

1. c. Explain four sources of capital for a sole proprietorship.

1. Personal savings: The owner uses personal funds to finance the business.
2. Loans from friends and family: Borrowing from close relations.
3. Bank loans: Obtaining credit facilities from banks.
4. Trade credit: Purchasing goods and paying later.

2. a. List and explain four documents required for the formation of a limited liability company.

1. Memorandum of Association: Defines the company’s relationship with the outside world.
2. Articles of Association: Contains the rules for the internal management of the company.
3. Certificate of Incorporation: Official document confirming company registration.
4. Prospectus: Invitation to the public to subscribe to shares or debentures.

2. b. State three features of a partnership.

1. It is owned by 2 to 20 persons (2 to 10 for banking).
2. Partners share profits and losses.
3. There is mutual agency; each partner can bind the others by actions.

3. a. Write short notes on the following:

• Promoter: A person or group who initiates the formation of a company.
• Authorized capital: The maximum capital a company is authorized to raise.
• Cumulative preference share: Shares that accumulate unpaid dividends.
• Ordinary share: Shares with no fixed dividend; holders receive profits after others.
• Separate legal entity: The company exists independently of its owners.

3. b. State two advantages of sole proprietorship to a limited liability company.

1. Quick decision-making without much bureaucracy.
2. All profits go to the owner.

4. a. Define debentures.

Debentures are long-term debt instruments issued by companies to borrow money from the public with a promise to pay back with interest at a future date.

4. b. Explain three types of debentures.

1. Secured debentures: Backed by company assets.
2. Unsecured debentures: Not backed by assets, based on trust.
3. Convertible debentures: Can be converted into shares at a later date.

4. c. Explain three sources of capital to a limited liability company.

1. Share subscription: Selling shares to investors.
2. Retained earnings: Reinvested profits.
3. Loans and debentures: Borrowing from financial institutions and the public.

5. a. Explain four problems of the barter system.

1. Double coincidence of wants: Both parties must want what the other offers.
2. Lack of a common measure of value: No uniformity in valuing goods.
3. Indivisibility of goods: Difficult to split goods like cattle or tools.
4. Difficulty in storing wealth: Perishable goods cannot be saved easily.

5. b. Explain three qualities of money.

1. Durability: Must withstand wear and tear.
2. Portability: Easy to carry around.
3. Divisibility: Can be divided into smaller units.

6. a. State six reasons that could lead to the dissolution of a limited liability company.

1. Insolvency or bankruptcy.
2. Mutual agreement of shareholders.
3. Expiration of the company’s term.
4. Order from a court of law.
5. Failure to commence business within a stipulated time.
6. Persistent loss making and inability to recover.

6. b. Explain four methods of raising capital.

1. Issuing shares to investors.
2. Retaining profits.
3. Borrowing loans from banks.
4. Issuing debentures to the public.

7. a. Explain three types of partners.

1. Active partner: Participates fully in business management.
2. Sleeping partner: Invests capital but does not participate in daily operations.
3. Nominal partner: Lends their name without contributing capital or managing.

7. b. State four items contained in the partnership deed.

1. Name of the partnership and partners.
2. Capital contributions of each partner.
3. Profit and loss sharing ratio.
4. Rules for admitting new partners.

7. c. Explain four advantages of a private limited company.

1. Limited liability protection for owners.
2. Continuity even if a shareholder dies.
3. Ease of raising capital from few trusted investors.
4. Privacy in business operations, unlike public companies.

It’s a wrap!

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