NECO Commerce past questions and answers

Checked by the Skolra question team · Last updated 23 October 2026

NECO Commerce: 129 objective past questions from 3 papers between 2004 and 2007, each with the answer and an explanation. Newer NECO papers are not in our bank yet. Here are ten.

1. 1.A Speculator in the stock exchange who buys shares hope that prices will rise is called
   1. A
      Bear
   2. B
      Lame duck
   3. C
      Bull
      Correct
   4. D
      Stag
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   Answer: C

   In the stock exchange, speculators are named according to the position they take and what they expect to happen to prices.

   Bull is correct: a bull buys shares because he expects prices to rise, so that he can later sell them at a higher price and pocket the difference. This matches the question exactly, "a speculator who buys shares in hope that prices will rise."

2. 2.Which of the following is NOT true of a cheque as a means of payment? It
   1. A
      is a negotiable instrument that can be transferred to another party
   2. B
      serves as legal tender for settling any debt
      Correct
   3. C
      is drawn against a current account held with a bank
   4. D
      is payable on demand to the person named on it
   Show answerHide answer

   Answer: B

   A cheque is a written order addressed to a bank, instructing it to pay a stated sum of money from the drawer's current account to a named person or bearer, either immediately (on demand) or to be transferred to another holder.

   So the statement that is NOT true of a cheque is that it "serves as legal tender for settling any debt."

3. 3.An industry whose major actors consists of those engaged in sourcing raw materials from the earth surface is known as .... industry.
   1. A
      Extractive industry
      Correct
   2. B
      Constructive industry
   3. C
      Genetic industry
   4. D
      Manufacturing industry
   Show answerHide answer

   Answer: A

   Extractive industry is correct. In Commerce, industries are grouped by what their workers actually do. An extractive industry is made up of people whose job is to take raw materials straight from the earth's surface (or from beneath it, or from the sea) in their natural state — miners digging for coal, tin or crude oil, quarry workers cutting stone, and fishermen or lumbermen harvesting what nature has already provided. Nothing is bred, grown or transformed; it is simply removed from the earth.

4. 4.The most suitable mode of transporting very bulky goods from Lagos to Kaduna is the
   1. A
      Air transport
   2. B
      Road transport
   3. C
      Water transport
   4. D
      Railway transport
      Correct
   Show answerHide answer

   Answer: D

   Railway transport is the most suitable mode for moving very bulky goods over a long inland route such as Lagos to Kaduna. Rail wagons can carry very large, heavy loads in one trip, and the cost per unit of weight carried over a long distance is much lower than other modes. This is exactly why railways were built in Nigeria in the first place: to move bulky produce and goods (groundnuts, cotton, cement, grains) between the north and the ports in the south.

5. 5.A financial document stating the reasons for making a payment and details of the payment is
   1. A
      Invoice
   2. B
      Payment voucher
      Correct
   3. C
      Receipt
   4. D
      Cheque
   Show answerHide answer

   Answer: B

   The payment voucher is the internal financial document prepared before a payment is made. It states the reason for the payment (for example, "payment for office stationery supplied") and the details of the payment — the amount, the date, the payee's name, and the authorizing signature. It is kept as evidence to support the business's accounting records.

   The tempting wrong answers describe other, different documents:

   A receipt is issued after a payment has already been made; it only acknowledges that money was received — it does not state the reason for the payment in advance.

6. 6.Which of the following relies on subvention as the main source of capital?
   1. A
      Co-operative society
   2. B
      Public corporation
      Correct
   3. C
      Joint stock (public limited liability) company
   4. D
      Partnership
   Show answerHide answer

   Answer: B

   Correct answer: Public corporation.

   Since only the public corporation is financed mainly through government subvention, that is the correct option.

7. 7.The services offered by the following people .could be grouped under direct services. EXCEPT
   1. A
      Teacher
   2. B
      Lawyer
   3. C
      Doctor
   4. D
      Banker
      Correct
   Show answerHide answer

   Answer: D

   Direct services (also called personal services) are services rendered directly to members of the public by a professional in exchange for a fee, with no goods changing hands — the lawyer, the doctor and the teacher all fall into this group.

8. 8.The payment made by government to producers to enable them reduce price is known as
   1. A
      Quota
   2. B
      Grant-in-aid
   3. C
      Subsidy
      Correct
   4. D
      Tariff
   Show answerHide answer

   Answer: C

   Subsidy is correct. A subsidy is money government pays directly to producers so that they can sell their goods or services at a lower price than it would otherwise cost to produce them. Government absorbs part of the production cost, and the saving is passed on to consumers as a reduced price — this is common in Nigeria with items like fertiliser and, historically, petroleum products.

9. 9.Who among the following engages in extractive activities?
   1. A
      A teacher
   2. B
      A miner
      Correct
   3. C
      A wholesaler
   4. D
      A tailor
   Show answerHide answer

   Answer: B

   Extractive activities/occupations are those in which people obtain raw materials directly from nature or the earth, such as mining, fishing, farming, lumbering and quarrying.

   A miner digs mineral resources (such as tin, coal or crude oil) directly out of the ground, so mining is a classic extractive occupation.

10. 10.One of the easiest means of transporting petroleum product is by
    1. A
       Pipeline
       Correct
    2. B
       Railway
    3. C
       Road transport
    4. D
       Water transport
    Show answerHide answer

    Answer: A

    Petroleum products (crude oil, refined fuel, and natural gas) are liquids and gases, so they do not need to be packed, loaded or offloaded the way solid goods do. Pipeline is built specifically to carry these products directly and continuously from the oil field or refinery to storage depots, ports or marketing stations.

The questions come from past JAMB, WAEC and NECO papers. We use software to help write the answer options and explanations, and every answer is checked twice before it goes on the site. How we check

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