OBAFEMI AWOLOWO UNIVERSITY,ILE IFE 2OO9 POST UME TEST

                                                   Explanations to the Answers
1. The essence of sales promotion is to induce customer to buy the product and offering the customer opportunity to nave a feel of what they want to buy Right choice – Option B

2. Consumers always follow the latest craze and as soon as a new style or trend is out the former fizzles out immediately while, the craze for the latter follows Right choice – Option C

3. Speculations makes the security to be more liquid which is what most investors are interested in Right choice – Option B

4. Marine voyage policy insurance policy covers or insures the journeying of the ship Right choice – Option D

5. The commercial banks accept deposits from the public for safekeeping and as such are liable if the deposits are not remitted or provided as at when needed Right choice – Option A

6. Middlemen are the link between the manufacturers and consumers. They are the wholesalers and retailers also
called the agents Right choice – Option A

7. Bank draft is a cheque drawn on a bank by itself or its agent. The debtor pays the bank for the draft at the time of issue Right choice – Option B

8. Horizontal integration means two firms producing same types of product come together to be a single firm Right choice – Option B

9.opening stock add purchase less closing stock results at
cost of goods sold N
Opening stock 40,000
Add purchases 115’000
Cost of goods available for sale
155,000
Less closing stock (60’000)
Cost of goods sold 95’000 Right choice – Option B

10.In a cooperative venture, members are entitled to one role’irrespective of the total shares held by members Right choice – Option C

11. Government bonds pays a particular fixed interest to investigate and investors gets the amount invested at the expiration of the time-lag of the bond Right choice – Option C

12. Capital market is a market where long-term securities are traded Right choice – Option A

13. An agent who factorize is a factor’ He is held liable for the good”s and has power to pledge the goods’ He purchase the trade debts of his client Right choice – Option D

14. It is a term used by sailors for men who load and unload ships Right choice – Option D

15. A close, indent specifies the manufacturer from whom the goods are to be Purchased Right choice – Option A

16. Mark-up is the relationship that exists between the profit and the cost of goods sold Right choice – Option B

17. The sole trader is very free to take quick decisions because he needs not consulting anybody compared to other business organization Right choice – Option C

18. Since the shareholders are the ones who resolve to liquidate voluntarily, they appoints the receiver Right choice – Option D

19. When a company is highly funded by debt (loan)’ it is said to be highly geared Right choice – Option C

20. Right issue is an issue of shares to existing shareholders to subscribe for shares on the same company Right choice – Option D

21. Ex-dividend literally means ‘without dividend” This implies that the shares are temporary suspended until it get to the date that it is entitled to recover dividend Right choice – Option A

22. Excise duties are tariffs levied on products exported to other countries Right choice – Option C

23. Re-insurance is insurance purchased by insurers from other insurers to limit the total loss an insurer would experience in case of a disaster Right choice – Option C

24. Customers drawback Right choice – Option A

25. Par value is an arbitrary amount that is determined when a company is incorporated Right choice – Option D

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