New Curriculum Second Term Commerce examination for SS 1

Class: SSS 1
Term: Second Term
Subject: Commerce
Time: 2 Hours
Total Marks: 70

SECTION A — OBJECTIVES (40 MARKS)
Instruction: Answer all 40 questions. Choose the most appropriate option. Each question carries 1 mark.

1. Which combination of factors provides a defensible basis for choosing freight transport?
   (a) only the colour of vehicles    (b) the driver's personal preferences alone    (c) warehouse size without regard to freight    (d) cost, speed, cargo characteristics and reliability
2. A shop reports current assets of ₦300,000 and short-term liabilities of ₦180,000. Determine net working capital.
   (a) ₦120,000    (b) ₦480,000    (c) ₦180,000    (d) ₦300,000
3. Explain the role of standard commodity grades by selecting their principal commercial value.
   (a) guarantee every harvest has the same size    (b) make traded lots more comparable    (c) end the need for inspection everywhere    (d) replace the transport of physical goods
4. A student earns ₦80,000, spends ₦56,000 and saves the remainder. Compute monthly saving.
   (a) ₦56,000    (b) ₦136,000    (c) ₦24,000    (d) ₦14,000
5. A buyer receives an instruction to deliver by “Friday” without a clear date. Identify the communication defect.
   (a) too many transport vehicles    (b) ambiguity in the message    (c) excess warehouse space    (d) an exchange-rate movement
6. Identify the main advantage of a properly organised partnership over a sole proprietorship.
   (a) freedom from all disagreements    (b) automatic limited liability for every partner    (c) wider combined skills and capital    (d) no need for written records
7. In a bakery, workers use ovens to convert flour to bread. Classify the ovens as a factor of production.
   (a) labour    (b) land    (c) capital    (d) enterprise alone
8. Which control is NOT suitable for perishable goods in storage?
   (a) Recording batch dates    (b) Following stock-rotation procedures    (c) Monitoring environmental conditions    (d) Ignoring temperature logs once stock is received
9. The main reason a new business sets measurable financial goals is to _____.
   (a) monitor performance and guide decisions    (b) eliminate competition permanently    (c) guarantee instant profit    (d) avoid estimating cash needs
10. Assess the principal personal risk faced by a sole trader with unlimited liability.
    (a) all profits must be shared with shareholders    (b) personal assets may be exposed to business claims    (c) management must be chosen by government    (d) the business cannot employ workers
11. A bulky commodity can be moved by rail where available. One potential advantage is _____.
    (a) door-to-door reach on every road    (b) no dependence on schedules    (c) freedom from loading costs    (d) lower unit cost for substantial loads
12. A trading platform publishes quality grades and prices for cocoa. Identify the main market benefit.
    (a) guarantee farmers identical harvests    (b) eliminate storage of commodities    (c) support transparent commodity trading    (d) prevent all changes in demand
13. Projected cash receipts are ₦500,000 and payments ₦560,000. Determine the cash position.
    (a) ₦60,000 cash shortfall    (b) ₦60,000 cash surplus    (c) ₦1,060,000 profit    (d) ₦560,000 free reserve
14. Identify the main advantage of a cooperative warehouse to small traders.
    (a) shared storage costs and facilities    (b) automatic cancellation of spoilage    (c) removal of transport between towns    (d) guaranteed identical sales
15. All these improve a personal budget EXCEPT _____.
    (a) separating necessities from discretionary spending    (b) monitoring actual spending    (c) adjusting targets after changes in income    (d) recording hoped-for income as already received
16. A business owner wants full control but accepts liability for the firm’s debts. Which ownership form fits?
    (a) public limited company    (b) statutory corporation    (c) general partnership    (d) sole proprietorship
17. A partner contributes only capital while another runs operations. Why should their duties be stated explicitly?
    (a) To abolish the need for accounts    (b) To reduce disputes about responsibilities and returns    (c) To guarantee no partner can withdraw    (d) To give the partnership unlimited life
18. The ________ coordinates other resources and bears business risk in production.
    (a) warehouse space    (b) factory machine    (c) delivery driver alone    (d) entrepreneur
19. A trader buys a delivery van just when operating cash is scarce. Identify the main financing risk.
    (a) tying up funds needed for immediate obligations    (b) increasing every payable automatically    (c) removing the need for transport    (d) guaranteeing future cash inflows
20. The main reason businesses keep written communication records is _____.
    (a) to remove all need for oral discussion    (b) to guarantee messages are always understood    (c) to prevent every pricing dispute    (d) to verify commitments and resolve disagreements
21. A bakery raises output with the same ovens by organising work differently. Select the best interpretation.
    (a) improved use of productive resources    (b) an elimination of all costs    (c) a fall in production efficiency    (d) a reduction in total goods produced
22. A learner overspends on mobile data every month. A useful budgeting correction is to _____.
    (a) set a realistic data limit and review usage    (b) omit data purchases from records    (c) count borrowed money as savings    (d) increase spending without review
23. ________ is a long-lasting business asset rather than cash available for daily expenses.
    (a) working capital in cash    (b) liquid capital in the bank    (c) fixed capital in shop equipment    (d) circulating capital in inventory
24. Two partners disagree over profit sharing after making unequal capital contributions. Name the document that should settle the matter.
    (a) partnership agreement    (b) retail price label    (c) warehouse consignment note    (d) customs import declaration
25. When urgent delivery instructions are emailed, the correct step is to _____.
    (a) assume every recipient read them    (b) request acknowledgement and clarify the deadline    (c) send conflicting updates to different teams    (d) omit the order reference
26. A consignment of fresh tomatoes must reach a nearby market before spoilage. Identify the overriding transport criterion.
    (a) the lowest speed regardless of spoilage    (b) maximum transhipment delays    (c) reliable short delivery time    (d) the heaviest available vessel
27. Which of the following is NOT a characteristic of an organised commodity exchange?
    (a) Standardised grades support comparison.    (b) Prices are privately fixed by one unknown buyer.    (c) Buyers and sellers can reference market prices.    (d) Trading rules make transactions more orderly.
28. All these usually describe sole proprietorship EXCEPT _____.
    (a) the owner ordinarily makes central decisions    (b) capital may come from personal savings    (c) ownership is divided among numerous shareholders    (d) business continuity can depend on the owner
29. A smart warehouse is distinguished chiefly by _____.
    (a) a complete absence of employees    (b) stock that never needs counting    (c) the elimination of safety procedures    (d) digital tracking and automated stock processes
30. Which difference best distinguishes a household financial plan from an entrepreneurial one?
    (a) use of numbers and records    (b) financial goals, risks and accountability    (c) need to plan future spending    (d) relationship to available funds
31. All these are direct productive factors EXCEPT _____.
    (a) labour supplied by staff    (b) an already completed advertising poster    (c) capital invested in machinery    (d) land used for premises
32. A manager chooses video conferencing over a printed circular for a difficult negotiation. Identify why.
    (a) retain only a permanent silent copy    (b) reach people without connectivity    (c) avoid any interaction    (d) clarify complex issues immediately
33. If a sole trader dies without succession arrangements, the likely business risk is _____.
    (a) automatic transfer to a stock exchange    (b) compulsory conversion to a cooperative    (c) disruption of continuity and management    (d) a legal guarantee of unchanged operations
34. The correct first step when assessing a loan for business expansion is to _____.
    (a) compare repayment capacity with expected cash flows    (b) assume sales forecasts cannot be wrong    (c) borrow the largest sum offered    (d) ignore interest and maturity dates
35. An importer stores goods under customs control pending payment of duty. Identify the warehouse required.
    (a) private retail shelf    (b) bonded warehouse    (c) domestic classroom store    (d) consumer's cupboard
36. Which of these is NOT normally addressed by a partnership deed?
    (a) The personal school grades of customers    (b) Profit-and-loss sharing arrangement    (c) Admission and retirement of partners    (d) Roles of active partners
37. A farmer's revenue falls despite a large crop because the market price drops. Which exchange information would help plan sales?
    (a) Only a list of farm tools    (b) A student's subject timetable    (c) Current and historical commodity quotations    (d) An unrelated banking advertisement
38. A family faces an unexpected hospital bill. State the main financial purpose of an emergency reserve.
    (a) guarantees no other expenses    (b) provides a financial buffer without immediate borrowing    (c) turns spending into earned income    (d) removes the need for any budget
39. The correct step before a business takes a short-term loan is to _____.
    (a) assume all customer invoices are paid promptly    (b) treat loan proceeds as operating profit    (c) prepare cash-flow forecasts and assess repayment    (d) ignore alternative funding sources
40. A transport document recording goods consigned and their destination is a ________.
    (a) credit note    (b) share certificate    (c) cash budget    (d) consignment note

SECTION B — THEORY (30 MARKS)
Instruction: Answer Question 1 and any other TWO questions. Each question carries 10 marks. Show all workings where calculations are required.

Question 1 (10 marks)
(a) A merchant has current assets ₦520,000 and current liabilities ₦340,000. Calculate net working capital, stating why it matters. (4 marks)
(b) Explain three criteria a small cocoa business should examine before using a commodity exchange. (6 marks)

Question 2 (10 marks)
(a) Explain two ways a partnership differs from a sole proprietorship. (4 marks)
(b) Draft the contents of a partnership agreement for a proposed transport business, identifying three provisions and why each matters. (6 marks)

Question 3 (10 marks)
(a) Using the factors of production, identify the resources supplied by landowners, workers, equipment owners and entrepreneurs. (4 marks)
(b) Compare private, cooperative and bonded warehouses and describe a realistic commercial advantage of each. (6 marks)

Question 4 (10 marks)
(a) A household receives ₦140,000 in a month, spends ₦108,000 and sets aside the balance. Compute saving and its share of income. (4 marks)
(b) A start-up expecting ₦600,000 cash receipts and ₦670,000 payments considers a loan. Explain three questions it should answer before borrowing. (6 marks)

Objective Marking Scheme
Question 1 – ✅ (d) cost, speed, cargo characteristics and reliability
Question 2 – ✅ (a) ₦120,000
Question 3 – ✅ (b) make traded lots more comparable
Question 4 – ✅ (c) ₦24,000
Question 5 – ✅ (b) ambiguity in the message
Question 6 – ✅ (c) wider combined skills and capital
Question 7 – ✅ (c) capital
Question 8 – ✅ (d) Ignoring temperature logs once stock is received
Question 9 – ✅ (a) monitor performance and guide decisions
Question 10 – ✅ (b) personal assets may be exposed to business claims
Question 11 – ✅ (d) lower unit cost for substantial loads
Question 12 – ✅ (c) support transparent commodity trading
Question 13 – ✅ (a) ₦60,000 cash shortfall
Question 14 – ✅ (a) shared storage costs and facilities
Question 15 – ✅ (d) recording hoped-for income as already received
Question 16 – ✅ (d) sole proprietorship
Question 17 – ✅ (b) To reduce disputes about responsibilities and returns
Question 18 – ✅ (d) entrepreneur
Question 19 – ✅ (a) tying up funds needed for immediate obligations
Question 20 – ✅ (d) to verify commitments and resolve disagreements
Question 21 – ✅ (a) improved use of productive resources
Question 22 – ✅ (a) set a realistic data limit and review usage
Question 23 – ✅ (c) fixed capital in shop equipment
Question 24 – ✅ (a) partnership agreement
Question 25 – ✅ (b) request acknowledgement and clarify the deadline
Question 26 – ✅ (c) reliable short delivery time
Question 27 – ✅ (b) Prices are privately fixed by one unknown buyer.
Question 28 – ✅ (c) ownership is divided among numerous shareholders
Question 29 – ✅ (d) digital tracking and automated stock processes
Question 30 – ✅ (b) financial goals, risks and accountability
Question 31 – ✅ (b) an already completed advertising poster
Question 32 – ✅ (d) clarify complex issues immediately
Question 33 – ✅ (c) disruption of continuity and management
Question 34 – ✅ (a) compare repayment capacity with expected cash flows
Question 35 – ✅ (b) bonded warehouse
Question 36 – ✅ (a) The personal school grades of customers
Question 37 – ✅ (c) Current and historical commodity quotations
Question 38 – ✅ (b) provides a financial buffer without immediate borrowing
Question 39 – ✅ (c) prepare cash-flow forecasts and assess repayment
Question 40 – ✅ (d) consignment note

Theory Marking Scheme

Question 1:
(a) ₦180,000 net working capital (2); supports short-term bills and day-to-day operations (2). (4 marks)
(b) Quality grading requirements (2); published prices/market participation (2); transaction/delivery/fee risks (2). (6 marks)

Question 2:
(a) Two developed comparisons about control, capital, liability or continuity (2 each). (4 marks)
(b) Any three matched provisions and purposes such as profit-sharing, capital, roles, admission/exit, dispute resolution (2 each). (6 marks)

Question 3:
(a) Land, labour, capital and enterprise each 1 mark. (4 marks)
(b) Each warehouse accurately described with its distinctive benefit (2 each). (6 marks)

Question 4:
(a) Saving ₦32,000 (2); savings rate 32,000/140,000 ×100 ≈22.9% (2). (4 marks)
(b) Evaluate ₦70,000 cash deficit (1); affordability of principal/interest and due dates (2); reliability of cash receipts (1); financing alternatives/risks (2). (6 marks)
Accept logically valid equivalents within the taught curriculum. Credit correct workings and justifications; do not award the same point twice.