Second Term Examination Commerce SS 2 – Exam Questions








Objectives: Answer all questions.


1. Which of the has no limit to its membership?

(a) Ordinary partnership

(b) Private limited company

(c) Limited partnership

(d) Co-operative society


2. An offer by one company to buy up all or greater part of another company’s shares is known as ____________________.

(a) merger

(b) take over bid

(c) absorption

(d) liquidation


3. When two or more companies agree to work on a project too large for one of them, this is called ____________________.

(a) consortium

(b) merger

(c) combination

(d) cartel


4. An arrangement by which a buyer pays instalmentally, but does not own the goods until final settlement is made is ____________________.

(a) hire purchase

(b) deferred payment

(c) conditional sale

(d) features trading


5. 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



6. The transfer of risks already undertaken from one insurance company to another is …..

(a) over-insurance

(b) re-insurance

(c) under-insurance

(d) group insurance


7. The principle of subrogation imposes an obligation on the insured to ____________________.

(a) disclose all material information

(b) have financial risks in the object insured

(c) collect compensation from only one insurer

(d) surrender legal rights after compensation


8. The process by which government takes over the ownership and control of an existing private business is called ____________________.

(a) industrialization

(b) privatization

(c) nationalization

(d) commercialization


Relevant link – Second Term Examination Commerce SS 1


9. A voluntary body formed by people in the same line of business is known as ____________________.

(a) trade union

(b) trade association

(c) cartel

(d) employers’ association


10. A worker who processes garri is engaged in ____________________.

(a) extracting

(b) manufacturing

(c) exchange

(d) constructing


11. The mainfeature of a holding company is ____________________.

(a) that resources are used for the interests of the community.



(b) accepting responsibilities beyond the aims of private enterprises.

(c) that it has financial control over the companies.

(d) that it has profit sharing scheme for employees.


12. A partner with an unlimited liability is known as a ____________________ partner.

(a) dormant

(b) nominal

(c) general

(d) active


13. Taxes imposed on locally made goods are known as ____________________.

(a) ad valorem duties

(b) import duties

(c) export draw

(d) excise duties


14. Quantity discount is offered to persuade the buyer to ____________________.

(a) pay promptly

(b) defer payment

(c) pay a deposit

(d) buy more


15. Which of the following types of insurance is taken against claims made by staff who get injured while at work?

(a) Fidelity guarantee insurance

(b) Consequential loss insurance

(c) Products liability insurance

(d) Employer’s liability insurance


16. One disadvantage of rail transport is ____________________.

(a) suitability for fragile goods

(b) absence of pilferage

(c) vulnerability to severe weather

(d) inflexibility


17. Activities undertaken to create awareness for a product by giving out samples, premium or conducting contests are known as ____________________.

(a) marketing mix

(b) marketing concepts

(c) consumerism

(d) sales promotion


18. Transforming raw materials into finished products is an example of …………………………….

(a) primary production

(b) secondary production

(c) tertiary production

(d) direct service


19. The trade document signed by a representative of the country to which goods are being sent is known as ____________________.

(a) consular invoice



(b) certificate of oorigin

(c) consignment note

(d) proforma invoice


20. The main principle of insurance is the ____________________.

(a) grouping of people

(b) meeting people’s needs

(c) pooling of risks

(d) pushing of interests



Section B: THEORY

Answer four (4) questions only.



a. What is meant by the term, Insurable risk?


b. Explain the term non-insurable risk.


c. Give three examples of insurable risk and three examples of non-insurable risk.





a. In a tabular form, state three differences between insurance and assurance.


b. Distinguish, with examples, between indemnity and non-indemnity insurance.



a. Explain each of the following;

(I) Chamber of commerce

(ii) Trade association


b. Give any four functions each of chamber of commerce and a trade association.



a. What is a business merger?


b. Explain the reasons (4 points) why some business merge.


c. Give three disadvantages of business merger.



a. What is credit?


b. Give two disadvantages of credit sales.


c. Give two advantages of credit sales.


d. Explain the following types of credit sales:

(i) Monthly account

(ii) Club trading



(iii) Mortgage

(iv) Loan and overdraft

(v) Book – me – down


Best of Luck