Below is an original WAEC GCE-style Commerce practice examination designed for 2026 revision. It is not the actual WAEC examination, a leaked paper, or a prediction of questions that will appear.
WAEC’s 2026 timetable for Nigeria lists Commerce 1 (Objective), paper code SC1031, for 50 minutes, followed by Commerce 2 (Essay), paper code SC1032, for 2 hours for the school-candidate examination. (West Africa Examinations Council Nigeria) Commerce is also listed among the business subjects available under WASSCE entry regulations. (West Africa Examinations Council Nigeria)
WAEC’s Commerce examiner reports indicate that candidates need broad syllabus coverage and stronger preparation for applied questions, calculations, business documents, consumer protection, international trade, business resources, organisational structures and distinctions between related terms.
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PART A: OBJECTIVE QUESTIONS
Choose the option that best answers each question.
1.
Commerce is primarily concerned with activities involved in:
A. production only
B. distribution and exchange of goods and services
C. consumption only
D. extraction of minerals
Answer: B
2.
Which of the following is an aid to trade?
A. Mining
B. Farming
C. Banking
D. Fishing
Answer: C
3.
The extraction of raw materials from the soil is classified as:
A. primary production
B. secondary production
C. tertiary production
D. commercial production
Answer: A
4.
Which of the following is an example of secondary production?
A. Fishing
B. Banking
C. Manufacturing
D. Insurance
Answer: C
5.
The reward for an entrepreneur is:
A. rent
B. wages
C. interest
D. profit
Answer: D
6.
The reward for the use of capital is:
A. rent
B. interest
C. salary
D. profit
Answer: B
7.
The reward for labour is:
A. wages
B. rent
C. interest
D. dividend
Answer: A
8.
The reward for land is:
A. commission
B. wages
C. rent
D. profit
Answer: C
9.
Which of the following is a commercial occupation?
A. Farming
B. Banking
C. Fishing
D. Mining
Answer: B
10.
A person who buys goods in large quantities and sells them to retailers is a:
A. consumer
B. wholesaler
C. retailer
D. broker
Answer: B
Trade and Distribution
11.
A retailer sells goods mainly:
A. to manufacturers
B. to wholesalers
C. to final consumers
D. to exporters
Answer: C
12.
Which of the following is a function of a wholesaler?
A. Selling directly to final consumers only
B. Breaking bulk
C. Manufacturing goods
D. Providing insurance only
Answer: B
13.
Breaking bulk means:
A. destroying goods
B. dividing large quantities into smaller quantities
C. importing goods
D. increasing prices
Answer: B
14.
A retailer who travels from place to place selling goods is known as a:
A. hawker
B. wholesaler
C. broker
D. factor
Answer: A
15.
One major advantage of a supermarket is that:
A. it sells only one type of product
B. customers can select goods from a wide range
C. it does not require capital
D. it sells only to wholesalers
Answer: B
16.
A department store is characterised by:
A. the sale of one product only
B. several departments operating under one roof
C. selling exclusively online
D. absence of employees
Answer: B
17.
One major disadvantage of itinerant traders is:
A. high mobility
B. inability to provide fixed business premises
C. low operating costs
D. direct contact with consumers
Answer: B
18.
The shortest channel of distribution is:
A. Producer → Wholesaler → Retailer → Consumer
B. Producer → Agent → Wholesaler → Consumer
C. Producer → Consumer
D. Producer → Wholesaler → Agent → Retailer
Answer: C
19.
An agent sells goods:
A. on behalf of another person or organisation
B. only for personal consumption
C. without authority
D. only to manufacturers
Answer: A
20.
E-commerce involves:
A. exchange of goods only in physical markets
B. buying and selling through electronic networks
C. production of agricultural goods
D. transportation by sea
Answer: B
PART B: BUSINESS ORGANISATION
21.
A sole proprietorship is owned by:
A. one person
B. two persons only
C. shareholders
D. the government
Answer: A
22.
One major advantage of sole proprietorship is:
A. unlimited capital
B. quick decision-making
C. perpetual succession
D. limited liability
Answer: B
23.
A major disadvantage of sole proprietorship is:
A. quick decision-making
B. close supervision
C. unlimited liability
D. personal control
Answer: C
24.
A partnership is normally formed by:
A. one person
B. two or more persons agreeing to carry on business together
C. government officials only
D. shareholders only
Answer: B
25.
The document containing the terms of agreement among partners is the:
A. memorandum of association
B. partnership deed
C. prospectus
D. invoice
Answer: B
26.
A company whose shares can be offered to the general public is a:
A. sole proprietorship
B. private company
C. public limited company
D. partnership
Answer: C
27.
The owners of a company are known as:
A. creditors
B. shareholders
C. debtors
D. managers
Answer: B
28.
The liability of shareholders in a limited liability company is generally:
A. unlimited
B. limited to the amount unpaid on their shares
C. equal to the company’s total debt
D. determined by customers
Answer: B
29.
A cooperative society is established mainly to:
A. exploit members
B. promote the economic interests of its members
C. eliminate consumers
D. prevent trade
Answer: B
30.
A business organisation owned and controlled by the government is a:
A. public corporation
B. partnership
C. cooperative society
D. sole trader
Answer: A
PART C: BANKING, INSURANCE AND FINANCE
31.
The central bank in Nigeria is:
A. First Bank
B. Central Bank of Nigeria
C. Bank of Industry
D. Union Bank
Answer: B
32.
One major function of commercial banks is to:
A. manufacture goods
B. accept deposits from customers
C. produce crops
D. construct roads
Answer: B
33.
A cheque is:
A. a document instructing a bank to pay a specified amount
B. a receipt for goods purchased
C. an insurance policy
D. a shipping document
Answer: A
34.
The person who writes a cheque is called the:
A. drawee
B. drawer
C. payee
D. endorser
Answer: B
35.
The bank on which a cheque is drawn is called the:
A. drawer
B. drawee
C. payee
D. creditor
Answer: B
36.
The person to whom a cheque is payable is the:
A. payee
B. drawer
C. drawee
D. cashier
Answer: A
37.
Insurance is based on the principle of:
A. speculation
B. risk sharing and indemnity
C. production
D. advertising
Answer: B
38.
The amount paid periodically by an insured person to an insurance company is called:
A. compensation
B. premium
C. dividend
D. commission
Answer: B
39.
The document that provides evidence of an insurance contract is the:
A. invoice
B. insurance policy
C. bill of lading
D. receipt
Answer: B
40.
The person who receives compensation under an insurance contract is generally the:
A. insured
B. carrier
C. wholesaler
D. broker
Answer: A
PART D: TRANSPORT, COMMUNICATION AND WAREHOUSING
41.
Which mode of transport is most suitable for bulky goods over long distances by sea?
A. Road
B. Rail
C. Water
D. Air
Answer: C
42.
The fastest means of transporting goods over long distances is generally:
A. air transport
B. road transport
C. rail transport
D. inland water transport
Answer: A
43.
A major advantage of road transport is:
A. door-to-door service
B. inability to reach rural areas
C. very low flexibility
D. dependence on waterways
Answer: A
44.
A warehouse is primarily used for:
A. producing goods
B. storing goods
C. advertising goods
D. insuring goods
Answer: B
45.
A warehouse receipt is evidence that:
A. goods have been deposited in a warehouse
B. goods have been consumed
C. goods have been manufactured
D. an insurance claim has been settled
Answer: A
46.
Communication involves:
A. movement of goods only
B. transmission of information from one person to another
C. production of goods
D. storage of goods
Answer: B
47.
Which of the following is an electronic means of communication?
A. Telegram
B. Email
C. Letter only
D. Newspaper only
Answer: B
48.
A major advantage of modern electronic communication is:
A. delay
B. speed
C. high physical storage requirements
D. limited reach
Answer: B
PART E: INTERNATIONAL TRADE
49.
Trade between two or more countries is called:
A. home trade
B. foreign trade
C. retail trade
D. wholesale trade
Answer: B
50.
The purchase of goods from another country is called:
A. export
B. import
C. entrepôt
D. barter
Answer: B
51.
The sale of goods to another country is called:
A. import
B. export
C. retailing
D. wholesaling
Answer: B
52.
A document issued by a shipping company acknowledging receipt of goods for shipment is the:
A. bill of lading
B. invoice
C. cheque
D. debit note
Answer: A
53.
A document that shows the details and prices of goods sold is the:
A. invoice
B. bill of lading
C. certificate of origin
D. insurance policy
Answer: A
54.
Balance of trade refers to the difference between:
A. visible exports and visible imports
B. income and expenditure
C. assets and liabilities
D. production and consumption
Answer: A
55.
When the value of visible exports exceeds visible imports, the country has:
A. an unfavourable balance of trade
B. a favourable balance of trade
C. no balance of trade
D. a trade embargo
Answer: B
PART F: CONSUMER PROTECTION AND BUSINESS ENVIRONMENT
56.
Consumer protection aims primarily to:
A. protect producers from competition
B. protect consumers against unfair business practices
C. prevent all imports
D. eliminate retailers
Answer: B
57.
Which of the following is a consumer right?
A. Right to be deceived
B. Right to safety
C. Right to sell counterfeit goods
D. Right to exploit producers
Answer: B
58.
A false statement made to persuade consumers to buy a product is:
A. fair trading
B. misleading advertising
C. warehousing
D. branding
Answer: B
59.
A business environment includes:
A. only internal factors
B. factors inside and outside the business that affect its operations
C. customers only
D. employees only
Answer: B
60.
Which of the following is an external factor affecting business?
A. Employee attitude
B. Management structure
C. Government policy
D. Office furniture
Answer: C
OBJECTIVE ANSWER KEY
| No. | Answer | No. | Answer | No. | Answer |
|---|---|---|---|---|---|
| 1 | B | 21 | A | 41 | C |
| 2 | C | 22 | B | 42 | A |
| 3 | A | 23 | C | 43 | A |
| 4 | C | 24 | B | 44 | B |
| 5 | D | 25 | B | 45 | A |
| 6 | B | 26 | C | 46 | B |
| 7 | A | 27 | B | 47 | B |
| 8 | C | 28 | B | 48 | B |
| 9 | B | 29 | B | 49 | B |
| 10 | B | 30 | A | 50 | B |
| 11 | C | 31 | B | 51 | B |
| 12 | B | 32 | B | 52 | A |
| 13 | B | 33 | A | 53 | A |
| 14 | A | 34 | B | 54 | A |
| 15 | B | 35 | B | 55 | B |
| 16 | B | 36 | A | 56 | B |
| 17 | B | 37 | B | 57 | B |
| 18 | C | 38 | B | 58 | B |
| 19 | A | 39 | B | 59 | B |
| 20 | B | 40 | A | 60 | C |
PART G: ESSAY QUESTIONS
Question 1: Division of Labour
(a) Define division of labour.
(b) Explain five advantages of division of labour.
(c) State three disadvantages of division of labour.
Model Answer Points
Division of labour is the process whereby production is divided into specialised operations, with different workers performing particular tasks.
- Increased productivity.
- Development of workers’ skills.
- Saving of production time.
- Greater efficiency.
- Easier use of specialised machinery.
- Reduction in production costs.
- Large-scale production.
Disadvantages include:
- Monotony of work.
- Overdependence on other workers.
- Workers may lose some traditional skills.
- Production can be disrupted if one stage fails.
- Repetition can reduce worker satisfaction.
Question 2: Forms of Business Ownership
(a) Explain the meaning of sole proprietorship.
(b) State five advantages of sole proprietorship.
(c) State five disadvantages.
(d) Differentiate between a private limited company and a public limited company.
Key Answer Points
A sole proprietorship is a business owned and controlled by one person.
Advantages:
- Easy to establish.
- Quick decision-making.
- Close supervision.
- Business secrecy.
- Owner receives the profit.
- Flexible operations.
Disadvantages:
- Limited capital.
- Unlimited liability.
- Limited managerial expertise.
- Lack of continuity.
- Heavy workload on the owner.
Question 3: Trade
(a) Distinguish between home trade and foreign trade.
(b) Explain the following:
- Import trade
- Export trade
- Entrepôt trade
(c) State five reasons why countries engage in international trade.
Model Answers
Home trade involves buying and selling within a country, while foreign trade involves trade between different countries.
Import trade: Purchase of goods and services from another country.
Export trade: Sale of goods and services to another country.
Entrepôt trade: Importing goods into a country and subsequently re-exporting them to another country.
Reasons for international trade include:
- Differences in natural resources.
- Differences in climate.
- Specialisation.
- Differences in technology.
- Differences in production costs.
- Availability of foreign goods.
- Expansion of markets.
- Earning foreign exchange.
Question 4: Banking
(a) What is a commercial bank?
(b) Explain six functions of commercial banks.
(c) State four differences between a current account and a savings account.
Key Answer Points
Functions of commercial banks include:
- Accepting deposits.
- Granting loans.
- Providing overdraft facilities.
- Transferring money.
- Providing safe custody.
- Providing payment services.
- Advising customers on financial matters.
A current account is generally designed for frequent transactions and may permit cheque facilities, while a savings account is primarily designed to encourage saving and usually has different withdrawal and interest arrangements.
Question 5: Insurance
(a) Define insurance.
(b) Explain five principles of insurance.
(c) State five classes of insurance.
Model Answer Points
Insurance is an arrangement whereby an insurer agrees, in return for a premium, to provide financial protection against specified risks.
Principles include:
- Utmost good faith: Both parties should disclose material facts.
- Insurable interest: The insured must have a recognised financial interest in the subject matter.
- Indemnity: Compensation generally aims to restore the insured to the financial position immediately before the loss.
- Subrogation: After paying a claim, the insurer may acquire certain rights relating to recovery from a responsible third party.
- Contribution: Where the same risk is insured with more than one insurer, the insurers may share the liability according to applicable rules.
Classes include:
- Life assurance
- Fire insurance
- Marine insurance
- Motor insurance
- Accident insurance
- Burglary insurance
Question 6: Consumer Protection
(a) Who is a consumer?
(b) Explain six ways consumers can be protected.
(c) State five problems faced by consumers.
Model Answer Points
A consumer is a person who purchases or uses goods and services to satisfy personal or household needs.
Protection can include:
- Consumer education.
- Product standards.
- Accurate labelling.
- Regulation of advertising.
- Product inspection.
- Consumer protection laws.
- Price information.
- Availability of complaint and redress mechanisms.
Problems can include:
- Counterfeit goods.
- False advertising.
- Poor-quality products.
- Short-weighting.
- Excessive prices.
- Inadequate product information.
WAEC’s Commerce examiner report specifically noted weak performance in questions concerning consumer protection and relevant enabling laws, making this an important area for revision.
Question 7: Business Documents
(a) Explain the following documents:
- Invoice
- Receipt
- Quotation
- Debit note
- Credit note
- Bill of lading
- Consignment note
(b) State two uses of each.
Key Points
Invoice: A document showing details of goods supplied, including quantities, prices and terms of sale.
Receipt: Evidence that payment has been received.
Quotation: A statement showing the price and terms at which goods or services may be supplied.
Debit note: A document used to notify a buyer of an amount being debited to the buyer’s account.
Credit note: A document used to notify a buyer that the buyer’s account has been credited, often because of returned or overcharged goods.
Bill of lading: A document associated with the carriage of goods by sea that acknowledges receipt of the goods and sets out carriage terms.
Consignment note: A document accompanying goods transported by a carrier and containing details about the consignment.
WAEC examiner materials have repeatedly tested candidates’ knowledge of business documents and applied commercial situations.
Question 8: Calculation and Application
A trader purchased goods for ₦250,000 and incurred the following expenses:
- Transport: ₦20,000
- Insurance: ₦10,000
- Storage: ₦5,000
The trader sold the goods for ₦360,000.
Calculate:
(a) Total cost of the goods.
(b) Gross profit.
(c) Rate of gross profit on cost.
Solution
Total Cost
₦250,000 + ₦20,000 + ₦10,000 + ₦5,000
= ₦285,000
Gross Profit
₦360,000 – ₦285,000
= ₦75,000
Rate of Gross Profit on Cost
₦75,000 ÷ ₦285,000 × 100
= 26.32% approximately
Answers
(a) ₦285,000
(b) ₦75,000
(c) 26.32% approximately
WAEC’s Commerce reports specifically identify calculation and applied questions as areas where some candidates struggle, including calculations involving profit, turnover and assets.
IMPORTANT COMMERCE TOPICS TO REVISE
Based on WAEC examiner observations from recent Commerce examinations, candidates should prepare across the syllabus rather than concentrating on a few topics.
1. Introduction to Commerce
- Meaning of commerce
- Occupations
- Production
- Division of labour
- Factors of production
- Business resources
2. Trade
- Home trade
- Foreign trade
- Wholesale trade
- Retail trade
- Channels of distribution
- E-commerce
3. Business Organisations
- Sole proprietorship
- Partnership
- Companies
- Cooperative societies
- Public corporations
4. Aids to Trade
- Banking
- Insurance
- Transportation
- Communication
- Warehousing
- Advertising
5. International Trade
- Import and export
- Balance of trade
- Balance of payments
- International trade documents
- Trade restrictions
- Foreign exchange
6. Consumer Protection
- Consumer rights
- Consumer responsibilities
- Consumer protection agencies
- Misleading advertising
- Counterfeit goods
- Product standards
7. Business Calculations
Practise:
- Profit and loss
- Mark-up
- Discount
- Commission
- Turnover
- Gross profit
- Net profit
- Percentage calculations
- Simple business ratios
8. Business Documents
Be able to identify and explain:
- Invoice
- Receipt
- Quotation
- Order
- Delivery note
- Debit note
- Credit note
- Cheque
- Bill of lading
- Consignment note
- Insurance policy
EXAMINATION TIPS
- Cover the entire syllabus. WAEC examiner reports repeatedly recommend broad syllabus coverage rather than studying only selected topics.
- Practise application questions. Do not simply memorise definitions. Learn how commercial principles apply to real business situations.
- Practise calculations regularly. Show your workings clearly and include the appropriate currency symbols and units where required. WAEC reports have identified weaknesses in calculation and presentation.
- Learn the differences between related terms. For example:
- wholesaler vs retailer
- current account vs savings account
- debit note vs credit note
- import vs export
- sole proprietorship vs partnership
- private company vs public company
- Use standard Commerce textbooks and comprehensive revision materials. WAEC examiner reports specifically recommend this approach.
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