NECO 2020 COMMERCE ANSWERS – EXPO RUNS
Paper III & II: Objective & Essay – Commerce
2:00pm – 4:40pm
Catalogue: Catalogue is a pictorial presentation of goods and articles available for sale, especially in Mail order business. It is a medium of advertising. It is used to inform the buyers of the details of the goods, as to size, colours, prices, and delivery terms. It is also be used as a quotation or reply to inquiry.
Order: An order is a statement sent by the buyer to the seller, stating the full description and quantity of goods required. After buyer has gone through Catalogue, he will then place an order. The order will show the goods required, type conditions of payment, purchase, and method of delivery
Proforma invoice: A proforma invoice is an invoice that is usually submitted before goods are despatched as a polite request for payment to be made in advance when a seller is not willing to sell on credit and to show the goods. If the goods are retained, it becomes an ordinary invoice. It is also used to serve as a quotation
Quotation: Quotation is a statement prepared by a supplier of goods or services for a particular order which shows the current price and terms of trade. Quotation is applicable to a particular transaction only. The supplier will send it to show the price to be charged, terms of payment, and period of delivery. It is usually sent as a reply to an enquires
Receipts: A receipt is a document which acknowledges that payment has been received from the buyer. When a customer receives the goods and he sends the money to the seller who in return issues the receipt as evidence of the payment. It must be written and signed by the seller and sent to the buyer, stating the actual amount received.
(Choose Any Five)
(i)Promotion of Commercial activities
(ii) Enhance settlement of international indebtedness
(iii) Reduction in cost and Risk of traveling
(iv) Facilitates contact between businessmen
(v) Communication enhance international trade
(vi) Enhance Air and sea Transport
(i)Promotion of Commercial activities: Communication promotes commercial activities as the whole world is connected together as a global village.
(ii) Enhance settlement of international: The use of telecommunication has enhanced the settlement of debts through telegraphic money transfers eg Western union money Transfer
(iii) Reduction in cost and Risk of traveling: Through communication, the cost and risks involved in traveling long distances for business transactions can be greatly reduced.
(iv) Facilitates contact between businessmen: Communication provides and facilitates good and efficient means of maintaining close contact between businessmen
(v) Communication enhance international trade: Foreign trade transactions can be facilitated through modern means of communication as various markets are linked together
(vi) Enhance Air and sea Transport: Transportation by air and sea are made possible by communication. The use of radio, telegraph, and other means of communication have made contact between a ship offshore and the port possible
Limited liability company can be defined as a form of business organization with the liability-shield advantages of a corporation and the flexibility and tax pass-through advantages of a partnership. It is a separate and distinct legal entity.
(Choose Any four)
(ii) It is a legal entity
(iii) Perpetual existence
(v) It has limited liability
(i) Ownership: The number of shareholders ranges from seven to infinity, i.e owners must be at least seven but there is no maximum number
(ii) It has a legal entity: The public limited liability company has a distinct personality from that of the owner. It can sue and be sued in its own name
(iii) Perpetual existence: The death or withdrawal of some shareholders will not affect the existence of the company. It enjoys continuous existence
(iv) Formation: A public limited liability company must follow some special formalities before registration. They secure incorporation by filling the article of association and memorandum of association with the registrar of companies
(v) It has limited liability: The liability of shareholders is limited to the amount contributed to the company. The private properties of the shareholders will not be touched in the event of liquidation.
Multilateral trade can be defined as a type of international trade in which a country trade with many other countries. It is also a type of trade in which countries exchange goods and services eg Nigeria trade with the USA, Britain, and Russia
(Choose Any Four)
(i) Differences in climate condition
(ii) Differences in Technology
(iii) Differences in skills
(iv) Uneven distribution of natural resources
(v) Expansion of market for products
(i) Differences in climate condition: The climatic condition of the earth varies from one region to another. This variation gives rise to the growth of different crops hence the need for exchange.
(ii) Differences in Technology: The level of technology differs from one nation of the world to another. Some countries with advanced technology can produce some industrial products at reduced cost and sell to the less developed countries.
(iii) Differences in skills: The inhabitants of a region may develop special skills in the production of a commodity such that it acquires a special reputation for its skill. This can necessitate foreign trade.
(iv) Uneven distribution of natural resources: Natural resources are unevenly distributed. While some countries are naturally blessed, others have little or no natural. This necessitates international trade.
(v) Expansion of market for products: Foreign trade came into existence because of the need to widen the market for goods produced by a country.
(Choose Any Five)
(i)Banker to the government
(ii) Insurance and control of currency
(iii) Lender of last resort
(iv) Foreign exchange transaction
(v) Responsible for monetary policy
(vi) Banker’s bank
(i) Banker to the government: Central Bank is an agent and banker to the government. It controls public account, receives revenue on behalf of the government, and make payment from this account. Central Bank also obtains loans on behalf of the government.
(ii) Insurance and control of currency: The central bank has the right to order the printing of the currency and the issuance of it. It controls the circulation of currency, exchange of bad notes for new ones, and see to the destruction of the bad notes.
(iii) Lender of last resort: The central bank has a duty to assist the banking system when the banks are in financial difficulties so that they can withstand the strain of excessive demands. In some countries, the banks can borrow directly from the central bank.
(iv) Foreign exchange transaction: The central bank holds the foreign reserve of a country, and this helps in enforcing foreign exchange control regulation. It operates the exchange control which is set up to purchase and sell foreign currencies.
(v) Responsible for monetary policy: The central bank is responsible for the monetary policies of the country. It can use both the expansionist and restrictionist policies to control the quantity and value of money in circulation so as to influence the level of production and distribution of the national income.
(vi) Banker’s bank: Th central bank acts as banker to the banks by ensuring that the banks open account with it in order to facilitate clearing of cheques. This helps the commercial banks to have similar facilities to offer to their customers.