2021 NECO COMMERCE AND ANSWERS

COMMERCE OBJ (MORE SOLUTIONS)

1-10: BDBCEADDBA

11-20: BCDCEBEABD

21-30: BEBCAABDEB

31-40: EBBCCDBADC

41-50: DEEACDDECA

51-60: BCAECBBEDD

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COMMERCE THEORY (MORE SOLUTIONS)

(1a)
A crossed cheque is one that has two parallel transverse lines drawn across its face with or without the word (Co and Ltd) Not negotiable. WHILE Stale cheque is a cheque which has been in circulation for an unreasonably long time, hence the date of presentation for payment has expired .

(1b)
(Pick Any Four)
(i) Bank drafts
(ii) Bank certified cheque
(iii)Automated teller Machine(ATM)
(iv)money gram
(v)Western union.

EXPLANATION:
(Pick Any Four)

(i) Bank drafts: This is a cheque which a bank official draws on the banks deposits in another bank. The bank draft is sold on commission to members of the public not minding whether such a person has a current account with the bank or not. It is a safe means of transferring money(huge amount) From one person to another.

(ii) Bank certified cheque: A cheque on which the bank had written its guarantee that the cheque will be paid . yo ensure that the amount written on the cheque is paid , the bank immediately draws out the amount from the depositors account.

(iii)Automated teller Machine(ATM): This us computerised machine that enables or permit back customers to gain access to their accounts with a magnetically encoded plastic card and a code number. It enables the customer to transact business anytime and perform several banking operations without the help of a teller.

(iv)money gram: Money gram International Inc. Is a money transfer company based in the United State of America.Money gram businesses are divided into two categories (a) Global fund transfer (b)financial paper products. The company services individuals and businesses through a network of agents and financial institutions who aided customers either in sending or receiving fund throughout the world.

(v)Western union: The Western Union money transfer is a financial eservices and communication company based in the united state of America. Western union is best known in the business of exchanging telegram . it also specialises in transferring certain amount of money usually in dollars from one country to another through the help of commercial bank

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(2ai)
Cartel: A cartel is a collaboration between two or more companies or producers of the same commodity to regulate the production and sale of the product with a view to obtain dominance in the market . An example of cartel is the Organization of Petroleum Exporting Countries (OPEC).

(2aii)
consortium: A consortium is an alliance of companies, individuals, or other entities that got together to achieve a specific objective. An example of consortium is several banks banding together.

(2aiii)
Trust: A trust is a structure where a trustee carries out the business on behalf of the trusts members (or beneficiaries). A trust is not a separate legal entity. A trustee may be an individual or a company. The trustee is legally liable for the debts of the trust and may use its assets to meet those debts.

(2b)
(i) Value creation: Two companies may undertake a merger to increase the wealth of their shareholders. Generally, the consolidation of two businesses results in synergies that increase the value of a newly created business entity. Essentially, synergy means that the value of a merged company exceeds the sum of the values of two individual companies

(ii) Diversification: Mergers are frequently undertaken for diversification reasons. For example, a company may use a merger to diversify its business operations by entering into new markets or offering new products or services. Additionally, it is common that the managers of a company may arrange a merger deal to diversify risks relating to the companys operations.

(iii) Increase in financial capacity: Every company faces a maximum financial capacity to finance its operations through either debt or equity markets. Lacking adequate financial capacity, a company may merge with another. As a result, a consolidated entity will secure a higher financial capacity that can be employed in further business development processes.

(iv) Tax purposes: If a company generates significant taxable income, it can merge with a company with substantial carry forward tax losses. After the merger, the total tax liability of the consolidated company will be much lower than the tax liability of the independent company.

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(3a)
[Pick any THREE]
(i) Buying and selling
(ii) Pricing
(iii) Transporting
(iv) Financing
(v) Risk bearing
(vi) Warehousing
(vii) Promotion

[Pick any THREE]
(i) Buying and selling: This includes purchases of raw materials and goods from source and transfer of ownership of such goods to the consumer at the right quality and price.
(ii) Pricing: Marketing helps in fixing prices of goods at a reasonable level to give profit to the company.
(iii) Transporting: Goods produced must be moved to the final consumers. Middlemen and producers must choose the most suitable means of moving their goods to the point where they are required.
(iv) Financing: Marketing finances the operations of the manufacturer through deposits and prepayments made by customers.
(v) Risk bearing: Anticipating business risk and taking appropriate measures to reduce their impacts through insurance cover.
(vi) Warehousing: This makes it possible for goods to be produced ahead of demand when needed.
(vii) Promotion: It involves activities such as advertising, sales promotion, personal selling and public relations that aim at attracting buyers attention.

(3bi)
Form utility: This is the value a consumer sees in a finished product. It is process that increases the value of a product to the consumer by making changes and altering its physical appearance. The method involves taking a product and making it ready to meet the needs of the end consumer for consumption. This is because it is more useful to serve the finished product than selling raw materials.

(3bii)
Possession utility: This is the value consumers put on purchasing a product and having the freedom to use the product as it was intended or finding a new use for the product. For example, many people use flower pots for planting, but these pots have other uses such as storage for small objects found around the house or as a centerpiece for the dining room table.

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(4a)
Entrepot is an intermediary storage facility where goods are kept temporarily for distribution within a country or for re-export.

(4b)
(i) To protect infant industries: Countries impose restrictions on internation trade to encourage growth of domestic industries. It is necessary to protect infant industries inorder that the economy can become self-reliant and to encourage consumption of locally produced goods
(ii) To generate revenue for the countries: By imposing import tariffs, the government obtains a source of income other than individuals taxes or business taxes.
(iii) For employment generation: Import restrictions helps to create local jobs for citizens. When importation is limited, more domestic industries are created, thereby increasing employment or job creation locally.
(iv) To improve the balance of payments deficit: Imposing tariffs on imports helps to correct balance of payment, When tariffs are imposed, the prices of imports would increase to the extent of tariff. The increased prices will reduced the demand for imported goods and at the same time induce domestic producers to produce more of import substitutes. Non-essential imports can be drastically reduced by imposing a very high rate of tariff.

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(9a)
Breach of contract: This is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach could be anything from a late payment to a more serious violation such as the failure to deliver a promised asset.

(9b)
Contract: This is an agreement between two or more parties to perform a service, provide a product or commit to an act and is enforceable by law.

(9c)
Contract under seal: This is a formal contract which does not require any consideration and has the seal of the signer attached. A contract under seal must be in writing or printed on paper. It is conclusive between the parties when signed, sealed, and delivered.

(9d)
A void contract: This is a formal agreement that is effectively illegitimate and unenforceable from the moment it is created. A contract may be deemed void if it is not enforceable as it was originally written.

(9e)
Termination of contract: This means legally ending the contract before both parties have fulfilled their obligations under the terms of the contract.