Commerce questions and answers

Commerce Questions and Answers

Test and improve your knowledge of the fundamentals of buying and selling with these Commerce past questions and answers.

56.

The main objective of corporate mergers is to?

A.

minimize the effect of taxation

B.

increase financial advantage

C.

facilitate profit maximization

D.

enhance economies of scale

Correct answer is D

The main benefit of a merger is to gain more market share. This increases a firms monopoly power and enables higher prices (this is why mergers are often regulated by government.)

57.

When does production ends?

A.

When the goods are distributed to the wholesalers

B.

When the goods reaches the retailer

C.

When the goods reaches the final consumers

D.

When the goods are fully packaged

Correct answer is C

production ends when it reaches the final consumer

production doesn’t end until the goods reaches its final consumers

58.

An arrangement by independent firms to share the market of their products on quota basics Is referred to as

A.

Cartel

B.

Syndicate

C.

Trust

D.

Integration

Correct answer is A

A cartel is a group of apparently independent producers whose goal is to increase their collective profits by means of price fixing, limiting supply, or other restrictive practices

59.

What is the difference between current assets and current liabilities?

A.

Working capital

B.

nominal capital

C.

capital employed

D.

issued capital

Correct answer is A

The difference between current asset and current liability is known as working capital which represents operating liquidity available to business. Working capital is the capital of a business which is used in its day-to-day trading operations, calculated as the current assets - the current liabilities.

Working capital, also known as net working capital, is the difference between a company's current assets, like cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, like accounts payable.

60.

What’s the first form an applicant must complete before taking an insurance policy?

A.

Cover note

B.

advice note

C.

proposal form

D.

certificate of insurance

Correct answer is C

A proposal form is the form completed by the proposer when applying for insurance, proposal forms are completed online or over the phone.

this is the first form to be filled by intending insured