WAEC Commerce 2006 past questions

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

Ten questions from the 2006 WAEC Commerce paper, with answers and explanations. We hold 45 questions from this paper, and the Skolra app has all of them.

WAEC Commerce 2006 questions and answers

1. 1.The process of taking over the management and control of a privately owned business by government is
   1. A
      Privatization
   2. B
      Commercialization
   3. C
      Indigenization
   4. D
      Nationalization
      Correct
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   Answer: D

   Nationalization is the correct answer. It is the process by which government takes over the ownership, management and control of a business that was formerly owned and run by private individuals or companies. Government does this to control key sectors of the economy, protect strategic industries, or correct the excesses of private monopolies.

   The distractors describe the opposite or different processes:

   Privatization is the reverse process — government transfers ownership and control of a business it owns to private individuals or companies, so it does not fit a question about government taking over a privately owned business.

2. 2.Who among the following is a middlemen?
   1. A
      Consumer
   2. B
      Wholesaler
      Correct
   3. C
      Manufacturer
   4. D
      Producer
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   Answer: B

   A middleman is any business person who stands between the producer of goods and the final consumer in the chain of distribution, helping to move goods from where they are made to where they are needed. Common examples are the wholesaler, the retailer, the agent and the broker.

   So remember: producer/manufacturer makes it, middlemen (like the wholesaler) move it along, and the consumer uses it.

3. 3.The beneficiary of a cheque is called
   1. A
      Endorser
   2. B
      Drawer
   3. C
      Drawee
   4. D
      Payee
      Correct
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   Answer: D

   A cheque involves three parties: the drawer (the account holder who writes and signs the cheque, instructing the bank to pay), the drawee (the bank on which the cheque is drawn, i.e. the bank that holds the account and is ordered to pay), and the payee — the person or organisation named on the cheque to receive the money. The payee is the beneficiary, since the whole essence of a cheque is to transfer value to that named party.

   So the correct term for the beneficiary of a cheque is the payee.

4. 4.Which of the following is not a duty of a credit union?
   1. A
      Advising members on the wise management of their personal funds
   2. B
      Encouraging members to develop the habit of thrift and regular savings
   3. C
      Discounting bills of exchange on behalf of members
      Correct
   4. D
      Granting loans to members at low rates of interest
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   Answer: C

   Discounting bills of exchange on behalf of members is not a duty of a credit union.

5. 5.The difference between the cost of goods sold and the sales value is known as
   1. A
      Net profit
   2. B
      Gross profit
      Correct
   3. C
      Mark-up
   4. D
      Margin
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   Answer: B

   Gross profit is defined as the difference between the sales value (turnover) and the cost of goods sold: Sales − Cost of Goods Sold = Gross Profit. It is the profit made purely from trading, before any other business expenses (rent, salaries, advertising, etc.) are deducted.

   So when a trader simply subtracts what the goods cost him from what he sold them for, the figure he gets is his gross profit.

6. 6.The speculator who applies for a new issue of shares without the intention of keeping them is
   1. A
      Bear
   2. B
      Stag
      Correct
   3. C
      Lame duck
   4. D
      Bull
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   Answer: B

   A stag is the stock exchange speculator who applies for a new issue of shares (an IPO/flotation) not because he wants to hold them as an investment, but purely to sell the allotted shares quickly at a profit once dealing opens and the price (hopefully) rises above the issue price.

   The other terms describe different speculators and must not be confused with this one:

   A bull buys shares he already expects to rise in price, hoping to resell later at a profit — but he is dealing in existing quoted shares on the market, not applying for a fresh issue.

7. 7.The principle where many insurance companies join to compensate one policy holder is called?
   1. A
      Reinsurance
   2. B
      Underwriting
   3. C
      Co-insurance
      Correct
   4. D
      Double insurance
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   Answer: C

   Co-insurance is correct. It is the arrangement where two or more insurance companies jointly underwrite a single risk for one policy holder, each one accepting an agreed share (percentage) of the risk and premium. If the insured event occurs, every company involved pays its own share of the compensation, so the policy holder is paid from the combined contributions of the several insurers.

8. 8.Which of the following is not reason for nationalization
   1. A
      To prevent wasteful duplication of resources by competing firms
   2. B
      To ensure equitable distribution of essential goods and services
   3. C
      To create employment opportunities for the citizens
   4. D
      To maximize profit for private shareholders
      Correct
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   Answer: D

   Nationalization is the act of government taking over the ownership and control of private enterprises, usually to serve the public interest, not private interest.

9. 9.Which of the following assesses duties payable on imports and exports?
   1. A
      Central Bank of Nigeria
   2. B
      Nigerian Ports Authority
   3. C
      The Customs and Excise Department
      Correct
   4. D
      Nigerian Export Promotion Council
   Show answerHide answer

   Answer: C

   The Customs and Excise Department (today the Nigeria Customs Service) is the body charged with assessing and collecting duties payable on goods brought into the country (import duty) and, where applicable, goods sent out of the country (export duty). It also values goods at the ports, checks for prohibited items, and prevents smuggling.

10. 10.The price quotation where the buyer uses his own means to collect goods from the producer's warehouse is
    1. A
       Loco price
       Correct
    2. B
       Free on rail
    3. C
       Free on board
    4. D
       Franco price
    Show answerHide answer

    Answer: A

    Loco price is the correct answer. A loco price quotation covers only the cost of the goods at the producer's (seller's) warehouse or factory. It does not include any cost of transporting the goods away from that point, so the buyer must use his own means (or arrange and pay for transport) to collect the goods from the producer's warehouse.

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 45 questions we hold from the 2006 paper, on a timed CBT screen

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