JAMB and WAEC Commerce questions: Financing a business

32 questions with answers and explanations. Tap an option to check yourself.

1. Question 21· Financing a business· WAEC

   Which of these is NOT a short-term source of finance for a business?

   • Aaccrued expenses
   • Bbank overdraft
   • Ctrade credit
   • Dissue of ordinary shares

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   Explanation and discussion

2. Question 22· Financing a business· JAMB

   Venture capital is provided mainly to

   • Agovernment ministries
   • Bnew or risky businesses with growth potential
   • Cpensioners
   • Dthe Central Bank

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   Explanation and discussion

3. Question 23· Financing a business· WAEC

   A business has current assets of ₦80,000 and current liabilities of ₦50,000. Its working capital is

   • A₦80,000
   • B₦130,000
   • C₦50,000
   • D₦30,000

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   Explanation and discussion

4. Question 24· Financing a business· WAEC

   Capital that a business uses for its day-to-day operations is

   • Aauthorised capital
   • Bfixed capital
   • Cworking capital
   • Dcalled-up capital

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   Explanation and discussion

5. Question 25· Financing a business· JAMB

   Which of the following is a source of long-term finance for a company?

   • ABank overdraft
   • BIssue of debentures
   • CTrade credit
   • DHire purchase of stationery

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   Explanation and discussion

6. Question 26· Financing a business· WAEC

   Ploughing back profit means

   • Aborrowing from banks
   • Bpaying all profit as dividends
   • Cusing retained profit to finance the business
   • Dselling shares

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   Explanation and discussion

7. Question 27· Financing a business· WAEC

   A firm has current assets of ₦800,000 and current liabilities of ₦500,000. Its working capital is

   • A₦800,000
   • B₦1,300,000
   • C₦500,000
   • D₦300,000

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   Explanation and discussion

8. Question 28· Financing a business· WAEC

   A trader's capital is ₦500,000, and he earns a net profit of ₦75,000. His return on capital is

   • A75%
   • B7.5%
   • C20%
   • D15%

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   Explanation and discussion

9. Question 29· Financing a business· JAMB

   Debenture holders differ from shareholders because debenture holders

   • Aown the company
   • Bshare in the profit as dividend
   • Cvote at general meetings
   • Dare creditors who receive a fixed rate of interest

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10. Question 30· Financing a business· WAEC

    The turnover of a business is its

    • Atotal capital
    • Btotal profit
    • Ctotal sales over a period
    • Dfixed assets

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11. Question 31· Financing a business· WAEC

    Working capital is

    • Atotal liabilities
    • Bfixed assets plus current assets
    • Cthe owner's capital
    • Dcurrent assets minus current liabilities

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    Explanation and discussion

12. Question 32· Financing a business· JAMB

    Capital used for the day-to-day running of a business is

    • Afixed capital
    • Bloan capital
    • Cworking capital
    • Dcalled-up capital

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    Explanation and discussion