New Curriculum Third Term Commerce examination for SS 1

Class: SSS 1
Term: Third 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. A student compares demand, costs and risks for two proposed enterprises. Name this evaluation.
   (a) financial crime report    (b) feasibility assessment    (c) customs declaration    (d) partnership dissolution
2. A trader reports a profit but cannot settle supplier invoices immediately. Identify the financial difficulty.
   (a) proof that all sales were fictitious    (b) cash-flow timing rather than profit alone    (c) a guarantee of future insolvency    (d) the absence of any income
3. The main reason to compute break-even quantity before launch is to _____.
   (a) prove competitors' prices will rise    (b) guarantee customers will purchase    (c) remove the need to record expenses    (d) estimate sales needed to cover total costs
4. Which change would most directly reduce abandoned online orders?
   (a) Extra compulsory hidden charges    (b) A clear checkout process with transparent delivery costs    (c) Unclear refund terms    (d) A slower payment page
5. All these describe sensible fintech practice EXCEPT _____.
   (a) checking recipient details before transfer    (b) using strong unique authentication    (c) keeping the device operating system updated    (d) installing apps through unsolicited unknown links
6. A retailer is unsure whether a new packaged product meets legal labelling requirements. Choose the appropriate first response.
   (a) copy a competitor's unverified label    (b) assume online sales are exempt    (c) check applicable regulatory requirements before selling    (d) remove all ingredient information
7. Students repeatedly queue for inexpensive local printing services. Identify the potential business opportunity.
   (a) automatic proof of unlimited profits    (b) an unmet demand worth testing    (c) a reason to ignore start-up costs    (d) that no rival can open nearby
8. The ________ is a debt security through which an issuer borrows funds from investors.
   (a) ordinary share    (b) bond    (c) retail invoice    (d) warehouse receipt
9. Why should approval of invoices be separated from execution of payments?
   (a) guarantee every supplier is honest    (b) avoid reconciling bank statements    (c) make every payment irreversible    (d) reduce opportunities for concealed fraud
10. Which commercial action is NOT ethical?
    (a) Recording a fictitious refund to remove cash    (b) Explaining warranty limitations clearly    (c) Offering accurate product descriptions    (d) Correcting billing errors promptly
11. A start-up improves its ordering process to shorten customers’ waiting time. Classify this entrepreneurial behaviour.
    (a) redesigning an ordering process to reduce customer waiting time    (b) repeating a failed procedure without feedback    (c) copying prices without checking costs    (d) refusing to change an inefficient service
12. A service idea may have many interested users but no practical revenue model. The principal viability concern is _____.
    (a) whether any customers exist at all    (b) whether the logo uses bright colours    (c) whether revenue can cover operating costs    (d) whether every rival has closed
13. Which is NOT a prudent investor responsibility?
    (a) Understanding the product purchased    (b) Keeping transaction records    (c) Giving account passwords to an unverified broker    (d) Checking whether intermediaries are authorised
14. A venture sells 200 units for ₦1,500 each; unit variable cost is ₦900 and fixed costs ₦80,000. Calculate profit.
    (a) ₦120,000    (b) ₦220,000    (c) ₦80,000    (d) ₦40,000
15. The correct step when a daily cashbook total differs from cash counted is to _____.
    (a) alter opening balance without explanation    (b) delete duplicate invoices at random    (c) reconcile receipts and payments and investigate the variance    (d) conceal the discrepancy from reviewers
16. An unknown person requests an OTP from a digital-finance user. Choose the safest response.
    (a) share it only if the sender sounds urgent    (b) send it after posting account number    (c) refuse and verify through the official application    (d) save the OTP publicly for future use
17. A retailer conceals known defects in a product. Identify the commercial standard breached.
    (a) honesty and fair dealing    (b) standard inventory classification    (c) legitimate product differentiation    (d) lawful quantity discounting
18. A merchant promotes products on social media and directs interested customers to its online catalogue. Classify the activity.
    (a) bond underwriting    (b) digital marketing supporting e-commerce    (c) physical customs clearance    (d) commodity grading
19. All these may indicate financial crime EXCEPT _____.
    (a) documented approval supported by genuine invoices    (b) unrecorded transfers to private accounts    (c) fabricated payment vouchers    (d) concealment of business proceeds
20. All these are purposes of commercial regulation EXCEPT _____.
    (a) guaranteeing every business unlimited profit    (b) protecting consumer interests    (c) supporting fair competition    (d) reducing misleading practices
21. An investor purchases ordinary shares in a company. Explain the investor’s claim by selecting its correct nature.
    (a) a guaranteed fixed-rate bank deposit    (b) an ownership interest in a company    (c) a physical stock of goods for resale    (d) a government import permit
22. A buyer reports receiving goods below the advertised grade. The correct response is to _____.
    (a) investigate and offer the appropriate remedy    (b) delete the complaint without review    (c) blame the buyer before inspection    (d) conceal inspection findings
23. The ________ measures the proportion of online visitors who make a purchase.
    (a) gross domestic product    (b) import quota    (c) fixed capital ratio    (d) conversion rate
24. Equipment costs ₦90,000, supplies ₦30,000 and licensing ₦15,000. Determine the identified start-up outlay.
    (a) ₦120,000    (b) ₦105,000    (c) ₦150,000    (d) ₦135,000
25. An employee discovers suspected embezzlement. Which response best protects evidence?
    (a) Delete the transaction trail    (b) Follow reporting procedures and preserve records    (c) Publicly accuse every colleague immediately    (d) Change account balances without authority
26. Opening cash is ₦35,000; receipts total ₦120,000 and payments ₦145,000. Calculate closing cash.
    (a) ₦110,000    (b) ₦300,000    (c) ₦10,000    (d) ₦25,000
27. The ________ helps protect buyers by setting and enforcing product quality requirements.
    (a) retail display cabinet    (b) private wholesaler's slogan    (c) business's advertising logo    (d) relevant standards regulator
28. Select the most useful feature for comparing spending across multiple bank transfers.
    (a) an unverified online advertisement    (b) a password-sharing group    (c) a categorised transaction-history report    (d) an unrelated promotional coupon
29. Which is NOT a quality that supports responsible entrepreneurship?
    (a) Concealing losses from business partners    (b) Planning and resilience    (c) Ethical decision-making    (d) Willingness to learn from feedback
30. Using the break-even figures in the table, calculate the minimum output that covers total costs.
    (a) 100 units    (b) 60 units    (c) 250 units    (d) 150 units
31. A learner is considering purchasing securities for the first time. Choose the prudent preliminary action.
    (a) rely solely on a promise of high returns    (b) assume past gains are guaranteed    (c) review risks, issuer information and suitability    (d) ignore transaction charges
32. The correct step after observing a business opportunity but before borrowing is to _____.
    (a) take the largest available loan immediately    (b) buy inventory without a sales plan    (c) assume interest charges can be ignored    (d) test demand and estimate costs and cash needs
33. Which of these is NOT a record of an actual business transaction?
    (a) A numbered sales invoice    (b) A cash receipt    (c) An unsupported guess of tomorrow's sales    (d) A supplier's credit note
34. A customer reports faulty goods. Explain why the merchant’s invoices and warranty records matter.
    (a) provide evidence for resolving responsibility    (b) prove all customers are mistaken    (c) make consumer rights unnecessary    (d) remove any need for inspection
35. Before investing, the main reason to test a business idea with prospective customers is to _____.
    (a) ensure every forecast becomes certain    (b) avoid defining the target market    (c) check whether the proposed solution matches demand    (d) replace all start-up cost estimates
36. ________ is the main advantage of a digital record-keeping system with access controls.
    (a) Automatic elimination of fraud    (b) Traceable, timely transaction records    (c) No requirement for checking data    (d) Guaranteed increase in customer demand
37. A cashier diverts payment by presenting a fabricated supplier invoice. Classify the misconduct.
    (a) financial fraud    (b) legitimate trade credit    (c) profit distribution    (d) inventory depreciation
38. The main reason for enabling transaction alerts is to _____.
    (a) make passwords unnecessary    (b) detect unexpected account activity quickly    (c) ensure funds cannot be stolen    (d) replace all record keeping
39. How does honest disclosure of product characteristics strengthen long-term trading relationships?
    (a) guarantees that no competitor can enter    (b) prevents all product defects    (c) replaces quality inspection    (d) builds trust and repeat customer relationships
40. A digital campaign attracts 1,000 visitors and records 50 purchases. Compute conversion rate.
    (a) 5%    (b) 20%    (c) 50%    (d) 0.5%

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 venture charges ₦2,500 per item, has variable cost ₦1,500 and fixed costs ₦150,000. Calculate contribution per item and break-even output. (4 marks)
(b) Sales receipts total ₦210,000 while payments amount to ₦245,000 and opening cash is ₦50,000. Calculate closing cash and explain two ways the owner can manage shortfalls. (6 marks)

Question 2 (10 marks)
(a) Identify two financial crimes and distinguish each from a legitimate commercial transaction. (4 marks)
(b) A firm suspects false supplier payments. Recommend three distinct internal-control steps and justify their value. (6 marks)

Question 3 (10 marks)
(a) Distinguish shares from bonds in their claims on the issuing company and returns to the investor. (4 marks)
(b) A new online shop collects payments and customer addresses. Explain three ethical, regulatory or cybersecurity safeguards it should implement. (6 marks)

Question 4 (10 marks)
(a) A web campaign produces 2,400 site visits and 96 completed purchases. Calculate the conversion rate. (4 marks)
(b) Evaluate three criteria for choosing between an online printing service and a small retail kiosk as a new business opportunity. (6 marks)

Objective Marking Scheme
Question 1 – ✅ (b) feasibility assessment
Question 2 – ✅ (b) cash-flow timing rather than profit alone
Question 3 – ✅ (d) estimate sales needed to cover total costs
Question 4 – ✅ (b) A clear checkout process with transparent delivery costs
Question 5 – ✅ (d) installing apps through unsolicited unknown links
Question 6 – ✅ (c) check applicable regulatory requirements before selling
Question 7 – ✅ (b) an unmet demand worth testing
Question 8 – ✅ (b) bond
Question 9 – ✅ (d) reduce opportunities for concealed fraud
Question 10 – ✅ (a) Recording a fictitious refund to remove cash
Question 11 – ✅ (a) redesigning an ordering process to reduce customer waiting time
Question 12 – ✅ (c) whether revenue can cover operating costs
Question 13 – ✅ (c) Giving account passwords to an unverified broker
Question 14 – ✅ (d) ₦40,000
Question 15 – ✅ (c) reconcile receipts and payments and investigate the variance
Question 16 – ✅ (c) refuse and verify through the official application
Question 17 – ✅ (a) honesty and fair dealing
Question 18 – ✅ (b) digital marketing supporting e-commerce
Question 19 – ✅ (a) documented approval supported by genuine invoices
Question 20 – ✅ (a) guaranteeing every business unlimited profit
Question 21 – ✅ (b) an ownership interest in a company
Question 22 – ✅ (a) investigate and offer the appropriate remedy
Question 23 – ✅ (d) conversion rate
Question 24 – ✅ (d) ₦135,000
Question 25 – ✅ (b) Follow reporting procedures and preserve records
Question 26 – ✅ (c) ₦10,000
Question 27 – ✅ (d) relevant standards regulator
Question 28 – ✅ (c) a categorised transaction-history report
Question 29 – ✅ (a) Concealing losses from business partners
Question 30 – ✅ (d) 150 units
Question 31 – ✅ (c) review risks, issuer information and suitability
Question 32 – ✅ (d) test demand and estimate costs and cash needs
Question 33 – ✅ (c) An unsupported guess of tomorrow's sales
Question 34 – ✅ (a) provide evidence for resolving responsibility
Question 35 – ✅ (c) check whether the proposed solution matches demand
Question 36 – ✅ (b) Traceable, timely transaction records
Question 37 – ✅ (a) financial fraud
Question 38 – ✅ (b) detect unexpected account activity quickly
Question 39 – ✅ (d) builds trust and repeat customer relationships
Question 40 – ✅ (a) 5%

Theory Marking Scheme

Question 1:
(a) Contribution ₦1,000 (2); BEP 150 items (2). (4 marks)
(b) Closing cash ₦15,000 (2); two prudent measures and explanation (2 marks each). (6 marks)

Question 2:
(a) Two clear paired distinctions, e.g. fictitious invoice fraud vs properly recorded invoice, embezzlement vs authorised spending (2 each). (4 marks)
(b) Segregate duties (2); reconcile bank statements/support documents (2); maintain authorisation and audit trail (2). (6 marks)

Question 3:
(a) Ownership vs lender status (2); dividends/variable outcomes vs contractual interest (2). (4 marks)
(b) Three specific safeguards and explanations: transparent terms and consumer protection, secure payment and strong authentication, personal-data safeguards/records (2 each). (6 marks)

Question 4:
(a) 96/2400×100 =4% with working (4). (4 marks)
(b) Three justified criteria such as expected demand, startup/operating costs, access to customers, skills, cash-flow and regulatory risk (2 each). (6 marks)
Accept logically valid equivalents within the taught curriculum. Credit correct workings and justifications; do not award the same point twice.