COMMERCE ESSAY
NECO GCE 2024 COMMERCE QUESTIONS AND ANSWERS
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NUMBER 1
(1a)
Commerce is the activity of buying and selling goods and services, especially on a large scale. It involves all the steps that help in moving goods from producers to consumers, including transportation, advertising, banking, insurance, and more. Commerce makes it possible for products to reach the market and be available to people who need them.
(1b)
(PICK ANY FOUR)
(i) Buying and Selling: Commerce involves the exchange of goods and services. Buying and selling are the core activities, allowing consumers to get what they need and producers to earn money.
(ii) Transportation: This function involves moving goods from where they are produced to where they are needed. It ensures that products are available in different places, making them accessible to consumers.
(iii) Storage: Goods often need to be stored before they are sold. Storage helps in maintaining a steady supply of products and prevents shortages, ensuring that goods are available when needed.
(iv) Advertising and Promotion: Commerce includes activities that inform and persuade people to buy products. Advertising and promotion help create awareness about goods and services and encourage people to purchase them.
(v) Banking and Finance: Banks and financial institutions provide the necessary funds for businesses to operate. They offer loans, credit, and other financial services that help in the smooth functioning of commerce.
(vi) Insurance: Insurance protects businesses from potential losses due to unforeseen events like theft, fire, or accidents. It provides a safety net, ensuring that businesses can continue operating even after a loss.
(vii) Communication: Effective communication is essential in commerce. It involves exchanging information between buyers, sellers, and other stakeholders. Good communication ensures that all parties are well-informed and can make timely decisions.
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NUMBER 2
(2a)
International trade is the exchange of goods and services between countries. It involves importing (buying) goods and services from other countries and exporting (selling) goods and services to other countries. International trade allows countries to access products they do not produce themselves and sell their own products to a global market.
(2b)
Home Trade:
(i) Retail Trade
(ii) Wholesale Trade
Foreign Trade:
(i) Import Trade
(ii) Export Trade
(2c)
(PICK ANY SIX)
(i) Home trade occurs within a country’s borders while foreign trade occurs between countries.
(ii) Home trade uses local currency while foreign trade uses foreign currency.
(iii) Home trade is subject to domestic regulations while foreign trade is subject to international laws and regulations.
(iv) Home trade typically involves shorter transportation distances while foreign trade involves longer distances and international shipping.
(v) Home trade is conducted in the local language while foreign trade may involve multiple languages.
(vi) Home trade uses local payment methods while foreign trade uses international payment methods like letters of credit.
(vii) Home trade generally involves lower risks while foreign trade involves higher risks due to factors like exchange rate fluctuations, political instability, and cultural differences.
(viii) Home trade requires less documentation while foreign trade requires more extensive documentation, such as customs forms and certificates of origin.
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NUMBER 3
(3)
(PICK ANY FIVE)
(i) Business Idea and Purpose: Define your business concept, mission, and goals. Identify your target market, products/services, and unique selling proposition (USP).
(ii) Market Research and Analysis: Understand your industry, target audience, and competitors. Gather data on market trends, customer needs, and potential barriers to entry.
(iii) Business Plan and Strategy: Develop a comprehensive business plan outlining your business model, marketing and sales strategies, financial projections, and operational plan.
(iv) Financial Resources and Funding: Determine your startup costs, funding requirements, and potential sources of capital (e.g., loans, grants, investors). Create a budget and cash flow projections.
(v) Location and Infrastructure: Choose a suitable business location, considering factors like accessibility, zoning regulations, and proximity to suppliers and customers. Ensure you have the necessary infrastructure (e.g., equipment, technology, utilities).
(vi) Regulatory Compliance and Licenses: Familiarize yourself with relevant laws, regulations, and permits required to operate your business. Obtain necessary licenses and registrations.
(vii) Management and Organization: Define your business structure (e.g., sole proprietorship, partnership, corporation). Identify key roles and responsibilities, and recruit skilled employees or partners as needed.
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NUMBER 4
(4a)
(PICK ANY ONE)
An entrepreneur is a person who creates, organizes, and manages a business or enterprise, often with the goal of earning a profit, and is willing to take on greater than normal financial risks in order to do so.
OR
An entrepreneur is an individual who creates, organizes, and manages a business or businesses, taking on greater than normal financial risks to do so. Entrepreneurs are often seen as innovators, generating new ideas, goods, services, and business procedures.
(4b)
(PICK ANY FOUR)
(i) Innovation: Entrepreneurs introduce new products, services, and technologies to the market. They innovate by creating novel solutions to existing problems, which can improve efficiency and drive progress.
(ii) Risk-Taking: Entrepreneurs assume financial risks by investing their resources into new business ventures. They manage uncertainties and make decisions that can lead to significant rewards or losses.
(iii) Resource Allocation: Entrepreneurs organize and allocate resources such as capital, labor, and materials efficiently to maximize productivity and profitability. They ensure that resources are used in the most effective way to achieve business goals.
(iv) Decision Making: Entrepreneurs make critical decisions regarding the direction of their businesses. This includes strategic planning, setting objectives, and determining the best courses of action to achieve desired outcomes.
(v) Management: Entrepreneurs manage the day-to-day operations of their businesses. They oversee staff, handle finances, and ensure that business activities are aligned with strategic goals.
(vi) Opportunity Identification: Entrepreneurs identify and exploit opportunities in the market. They analyze market trends, customer needs, and competitive landscapes to find niches where they can create value.
(vii) Business Development: Entrepreneurs focus on growing their businesses by expanding their market reach, increasing sales, and enhancing product or service offerings. They develop strategies to scale their operations and enter new markets.
(viii) Leadership: Entrepreneurs provide vision and direction for their businesses. They inspire and motivate their teams, fostering a culture of innovation, collaboration, and high performance.
(ix) Networking: Entrepreneurs build relationships with stakeholders, including customers, suppliers, investors, and other business leaders. Networking helps them gain access to resources, knowledge, and opportunities that can support business growth.
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NUMBER 5
(5)
(i) Capital: The financial resources that a business uses to fund its operations and growth. It can include funds from equity investors, retained earnings, and debt. Capital is essential for purchasing assets, covering operational expenses, and investing in future projects to expand the business.
(ii) Profit: The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining those activities. It is calculated as revenue minus expenses. Profit is a key indicator of a company’s financial health and its ability to generate value for its owners and investors.
(iii) Authorised Capital: The maximum amount of share capital that a company is authorized to issue to shareholders as stated in its constitutional documents. It sets the limit for the shares a company can issue. Authorised capital provides a framework within which the company can raise funds by issuing shares, ensuring that the company does not exceed a predetermined financial structure.
(iv) Issued Capital: The portion of the authorized capital that has actually been issued to shareholders. It represents the total value of shares that have been sold to investors. Issued capital reflects the amount of funding that the company has raised from its shareholders and is a part of the company’s equity structure.
(v) Called-up Capital: The amount of issued capital that shareholders are required to pay on demand. It is a portion of the subscribed capital that the company has requested shareholders to pay. Called-up capital represents the amount that the company can call upon to be paid by shareholders, ensuring that it has the necessary funds to meet its financial obligations and operational needs.
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NUMBER 6
(6a)
A central bank is the principal monetary authority of a country responsible for overseeing the monetary system, regulating the supply of money, controlling interest rates, and ensuring financial stability. It often acts as a lender of last resort and oversees the commercial banking system.
(6b)
(PICK ANY FOUR)
(i) First Bank of Nigeria
(ii) Guaranty Trust Bank (GTBank)
(iii) United Bank for Africa (UBA)
(iv) Zenith Bank
(v) Access Bank
(vi) Ecobank Nigeria
(vii) Stanbic IBTC Bank
(6c)
*[YOU MUST TABULATE PLS]*
(PICK ANY SIX)
(i)
-Central Bank: Regulates the monetary system, manages the country’s currency, money supply, and interest rates.
-Commercial Banks: Provides banking services such as accepting deposits, lending money, and offering financial products to the public and businesses.
(ii)
-Central Bank: Acts as the principal monetary authority of the country.
-Commercial Banks: Operate under the regulations and policies set by the central bank.
(iii)
-Central Bank: Not profit-oriented; focuses on maintaining economic stability and controlling inflation.
-Commercial Banks: Profit-oriented; aims to maximize profits for shareholders.
(iv)
-Central Bank: Has the sole authority to issue and regulate the currency.
-Commercial Banks: Cannot issue currency; they distribute currency provided by the central bank.
(v)
-Central Bank: Provides emergency funds to banks and financial institutions during financial crises.
-Commercial Banks: Cannot provide funds to other banks; they may seek assistance from the central bank in crises.
(vi)
-Central Bank: Primarily serves the government, commercial banks, and other financial institutions.
-Commercial Banks: Serves the general public, businesses, and individual customers.
(vii)
-Central Bank: Sets and regulates benchmark interest rates to influence the economy.
-Commercial Banks: Set interest rates for loans and deposits based on the rates and guidelines provided by the central bank.
(viii)
-Central Bank: Regulates and supervises the entire banking system to ensure stability and compliance with monetary policy.
-Commercial Banks: Subject to regulation and supervision by the central bank and other regulatory bodies.
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NUMBER 7
(7a)
The business environment refers to the combination of internal and external factors that influence a company’s operating situation. It encompasses all the conditions, events, and influences that affect a business’s performance and decision-making process.
(7b)
(PICK ANY FOUR)
(i) Economic environment
(ii) Political and legal environment
(iii) Sociocultural environment
(iv) Technological environment
(v) Competitive environment
(vi) Global environment
EXPLANATIONS:
(PICK THE FOUR YOU PICKED ABOVE)
(i) Economic Environment: This involves the overall economic conditions affecting businesses, such as inflation, unemployment rates, economic growth, and interest rates. Economic factors can influence consumer purchasing power and business profitability.
(ii) Political and Legal Environment: This includes government policies, regulations, and legal issues that affect how businesses operate. This environment covers aspects like labor laws, trade regulations, and taxation policies.
(iii) Sociocultural Environment: This pertains to the societal and cultural factors that impact business practices, such as demographic changes, cultural norms, and social values. Understanding these factors helps businesses cater to the preferences and needs of their target market.
(iv) Technological Environment: This encompasses advancements in technology that can affect business operations and innovation. Technological changes can lead to new product developments, improve efficiency, and alter market dynamics.
(v) Competitive Environment: This refers to the nature of competition within the industry, including the number and strength of competitors, the threat of new entrants, and the bargaining power of suppliers and customers. It affects strategic planning and market positioning.
(vi) Global Environment: This involves international factors such as global trade policies, economic conditions in other countries, and global market trends. Businesses operating internationally must navigate diverse regulatory landscapes and cultural differences.
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NUMBER 8
(8a)
A Certificate of Incorporation is a legal document issued by a government agency, typically the Registrar of Companies, to confirm the formation and registration of a new company. It serves as proof that the company exists and has been duly incorporated under the laws of the jurisdiction.
(8b)
(PICK ANY FOUR)
(i) In both types of companies, the shareholders’ liability is limited to their investment in the company.
(ii) Both public and private limited liability companies are considered separate legal entities from their owners.
(iii) Both types of companies have a formal structure that includes a board of directors responsible for managing the company’s affairs and making strategic decisions.
(iv) Both types of companies continue to exist independently of changes in ownership or the death of shareholders.
(v) Both public and private limited liability companies raise capital by issuing shares to shareholders.
(vi) Both types of companies must adhere to statutory and regulatory requirements, including maintaining proper accounting records, filing annual returns, and holding regular meetings.
(8c)
(PICK ANY SIX)
(i) Owners (members) are not personally liable for the company’s debts and liabilities beyond their investment in the company.
(ii) The LLC is a distinct legal entity from its owners, capable of entering into contracts, owning property, and being sued in its own name.
(iii) limited liability companies can be managed by members (owners) or by appointed managers, providing flexibility in how the company is run.
(iv) Profits and losses can pass through to the members’ personal tax returns, avoiding double taxation that affects corporations.
(v) Unlike corporations, LLCs do not issue stock; ownership is represented by membership interests.
(vi) LLCs often have an operating agreement outlining the management structure and operating procedures, although it is not always legally required.
(vii) LLCs can continue to exist independently of changes in ownership or the death of members, unless otherwise stated in the operating agreement.
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NUMBER 9
(9)
(i) Marketing: Marketing involves activities and strategies used to identify, create, and satisfy customer needs. It encompasses market research, product development, distribution, advertising, and sales. The goal is to build strong customer relationships and create value for both the customer and the company.
(ii) Price: Price is the amount of money customers must pay to acquire a product or service. It plays a crucial role in the marketing mix, affecting demand, sales, and profitability. Pricing strategies consider factors such as production costs, market conditions, competition, and perceived value.
(iii) Promotion: Promotion refers to the various methods used to communicate with customers and persuade them to purchase a product or service. It includes advertising, sales promotions, public relations, and personal selling. The aim is to inform, persuade, and remind potential buyers about the product.
(iv) Product: A product is any good, service, or idea offered to the market to satisfy a need or want. It encompasses the physical item or intangible service, along with its features, quality, design, brand, and packaging. Product decisions include innovation, modifications, and product line extensions.
(v) Transportation: Transportation involves the movement of goods from one location to another. It is a critical component of the supply chain, affecting delivery times, costs, and the overall efficiency of distributing products. Modes of transportation include road, rail, air, sea, and pipelines, each with its own advantages and limitations.
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