WASSCE: COMMERCE-THEORY-2009-Q1-Q4
Industry refers to all the activities involved in the production of goods and services. It includes activities like mining, construction, and manufacturing.
Commerce refers to all the activities that help in the distribution of goods and services from the producer to the final consumer. It includes trade and aids to trade like transportation, banking, advertising, etc.
Difference:
Industry is about making goods, while commerce is about moving and selling the goods.
1b. List and explain four activities of those engaged in commercial occupation
1. Trading – Buying and selling of goods either in large quantities (wholesale) or small quantities (retail).
2. Transportation – Moving goods from the place of production to the place of consumption.
3. Banking – Providing financial services like saving money, giving loans, and making payments.
4. Advertising – Creating awareness about goods and services to encourage people to buy them.
2a. Explain five benefits that would be derived and five losses that would be suffered when a sole trader admits other partners
Benefits:
1. More capital – New partners bring in money, which helps the business grow.
2. Shared responsibility – Work and decisions are shared among partners.
3. More ideas and skills – Each partner brings in different experiences and knowledge.
4. Less pressure – The burden of running the business alone is reduced.
5. Business growth – With more hands and funds, the business can expand faster.
Losses:
1. Less control – The original owner can no longer make decisions alone.
2. Sharing profits – Profits must be shared among all partners.
3. Possible disagreement – Partners may not always agree on decisions.
4. Slower decision-making – More people involved means more time to decide things.
5. Risk of dishonesty – A dishonest partner can affect the reputation or finances of the business.
3a. What is personal selling?
Personal selling is the process where a salesperson talks directly to a customer to persuade them to buy a product or service.
It usually happens face-to-face and allows the seller to answer questions and convince the buyer.
3b. List and explain six media available to an advertiser of goods and services
1. Newspapers – Printed papers with news and adverts that reach many people daily.
2. Television – Shows both pictures and sound to advertise products to a large audience.
3. Radio – Uses sound to pass adverts to listeners across different locations.
4. Billboards – Large posters placed along roadsides to attract people’s attention.
5. Magazines – Colourful printed materials that give more detailed adverts.
6. Internet (Social Media) – Advertisements on websites like Facebook, Instagram, and Google that reach millions online.
4a. Explain the following terms:
i. Fixed Asset
Fixed assets are items owned by a business that are used for a long time, like land, buildings, and vehicles.
ii. Certificate of Trading
This is a legal document that allows a public company to start full operations and trading after registration.
iii. Dividend
Dividend is the part of the profit of a company that is given to its shareholders.
iv. Authorized Capital
Authorized capital is the maximum amount of money a company is allowed to raise by selling shares.
v. Promoters
Promoters are the people who plan, organize, and register a new company before it starts operations.
5a. Describe each of the following documents and state their use
i. Consular Invoice
A consular invoice is a document signed by a consul (official representative) of the importing country. It shows the value of goods being exported and helps the importing country to collect correct duties.
ii. Bill of Lading
A bill of lading is a document issued by a shipping company to the exporter. It shows that goods have been received for transport and acts as proof of ownership.
iii. Certificate of Origin
This document shows the country where the goods were made. It helps in determining if the goods are allowed into the importing country and the correct duty to charge.
iv. Bill of Sight
A bill of sight is used when the importer is not sure of the contents of the goods. It allows the importer to inspect the goods before paying full customs duties.
