WAEC Commerce 1995 past questions

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

Ten questions from the 1995 WAEC Commerce paper, with answers and explanations. We hold 76 questions from this paper, and the Skolra app has all of them.

WAEC Commerce 1995 questions and answers

1. 1.Those who are engaged in the distribution of goods belong to?
   1. A
      Trade
   2. B
      Direct services
   3. C
      Industry
   4. D
      Commerce
      Correct
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   Answer: D

   Commerce is correct. In the WAEC/JAMB classification of human economic activities, occupations are grouped into industry (producing goods), commerce (distributing goods and services from producers to consumers), and direct services (personal services rendered directly, such as teaching or medicine).

2. 2.Which of the following is an intangible asset of a firm?
   1. A
      Goodwill
      Correct
   2. B
      Stock-in-trade
   3. C
      Land and buildings
   4. D
      Plant and machinery
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   Answer: A

   Goodwill is the intangible asset. It has no physical form — it represents the extra value a firm has built up through its reputation, customer loyalty, location advantage and trading history, which allows it to earn more profit than a similar new firm. You cannot touch or see goodwill, but it adds real worth to the business and appears on the balance sheet as a fixed asset.

3. 3.A public limited company has the rights and duties of an individual because it?
   1. A
      it is owned by many shareholders who contribute capital
   2. B
      it enjoys limited liability for its shareholders' debts
   3. C
      it is a legal entity separate and distinct from its owners
      Correct
   4. D
      it has perpetual succession that outlives its members
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   Answer: C

   A public limited company has the rights and duties of an individual because it is a legal entity separate and distinct from its owners. When a company is incorporated under the Companies and Allied Matters Act, the law treats it as an artificial legal person. This "corporate personality" is exactly what gives it the rights and duties of a natural individual: it can own property in its own name, sue and be sued in court, enter into contracts, and be taxed — all independently of its shareholders or directors.

4. 4.The fee which the bank charges for services rendered to their current account customers is?
   1. A
      Brokerage
   2. B
      Interest
   3. C
      Discount
   4. D
      Commission
      Correct
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   Answer: D

   Commission is the fee a bank charges a current account customer for the services it renders in operating that account — clearing cheques, handling standing orders, issuing cheque books, and processing transactions on the customer's behalf.

5. 5.Which of the following is quoted when the buyer is responsible for the cost of loading the goods from the seller's warehouse up to his own warehouse?
   1. A
      Cost, Insurance and Freight (C.I.F.) price, where the seller pays freight and insurance to the port of destination
   2. B
      Loco price, where the goods are priced at the seller's warehouse and the buyer bears all costs from there onward
      Correct
   3. C
      Free on Board (F.O.B.) price, where the seller's cost ends once the goods are loaded onto the ship at the port
   4. D
      Franco price, where the seller bears every cost of moving the goods to the buyer's warehouse
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   Answer: B

   Loco price is the correct quotation here. "Loco" means the price quoted is for the goods as they stand at the seller's warehouse (place of production/storage). Once that price is quoted, every further cost — loading the goods out of the seller's warehouse, transporting them, and bringing them into the buyer's own warehouse — becomes the buyer's responsibility.

6. 6.When the balance of trade is unfavourable which of the following conditions prevails?
   1. A
      The value of a country's exports exceeds the value of its imports
   2. B
      The value of a country's invisible exports exceeds the value of its visible exports
   3. C
      The value of a country's exports is exactly equal to the value of its imports
   4. D
      The value of a country's imports exceeds the value of its exports
      Correct
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   Answer: D

   The balance of trade compares the value of a country's visible exports (goods sent out) with the value of its visible imports (goods brought in) over a period.

7. 7.An issuing house is an outlet for?
   1. A
      Government treasury bills and bonds
   2. B
      Short-term loans to small-scale traders
   3. C
      Second-hand shares already quoted on the stock exchange
   4. D
      New shares and debentures issued by companies to raise capital
      Correct
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   Answer: D

   An issuing house is an outlet for new shares and debentures issued by companies to raise capital. It is a specialist financial institution that helps a public limited company "go to the capital market" — it advises the company on how many shares to issue and at what price, underwrites the issue (guarantees to buy up any unsold shares), and handles the applications from the public.

8. 8.An efficient transport system enables a trader to?
   1. A
      widen the market for his goods
      Correct
   2. B
      eliminate the need for insurance on his goods
   3. C
      increase the quality of his goods
   4. D
      reduce the cost of storing his goods
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   Answer: A

   Transport is one of the aids to trade, and its main job in commerce is to move goods from where they are produced to where they are needed, overcoming the problem of distance between producers and consumers.

   So, the correct effect of an efficient transport system is that it widens the market available to the trader.

9. 9.Which of the following is not a function of commerce?
   1. A
      Transportation of goods from producer to consumer
   2. B
      Buying and selling of goods
   3. C
      Manufacturing of goods from raw materials
      Correct
   4. D
      Warehousing and storage of goods
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   Answer: C

   Commerce covers trade (buying and selling) and the aids to trade that help goods move smoothly from the producer to the final consumer. These aids remove specific hindrances:

   Transportation of goods removes the hindrance of place — it moves goods from where they are produced to where they are needed. This IS a function of commerce.
   Warehousing and storage of goods removes the hindrance of time — it holds goods until they are needed. This too IS a function of commerce.
   Buying and selling of goods is trade itself, the core of commerce.

   So the correct answer is that manufacturing of goods from raw materials is NOT a function of commerce.

10. 10.When a company sells shares to existing shareholders at preferential rate, that is called?
    1. A
       Private placement
    2. B
       Rights issue
       Correct
    3. C
       Bonus issue
    4. D
       Public issue
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    Answer: B

    When a company wants to raise more capital, one method is to offer the new shares first to its existing shareholders, in proportion to what they already hold, at a discounted (preferential) price below the market value. This is known as a rights issue — shareholders have the "right" to buy more shares cheaply before outsiders get the chance.

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

Spotted a wrong answer? Tell us from the app or on the contact page and we check it.

Practise all 76 questions we hold from the 1995 paper, on a timed CBT screen

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