Define cost price, profit, and loss. Explain two importance of commerce in business.

Section A: Multiple Choice Questions 27. The price at which goods are bought or produced is called (b) cost price. Explanation*: The cost price is the initial expense incurred to acquire or produce a good. 28. When selling price > cost price is called (b) profit. Explanation*: Profit occurs when the revenue from selling an item exceeds its cost. 29. (c) loss brings financial setback. Explanation*: A loss signifies a reduction in financial value or an expense that exceeds income, leading to a setback. 30. When cost price > selling price is will be called (a) loss. Explanation*: A loss occurs when the cost of an item is greater than the price at which it is sold. SECTION B: THEORY QUESTIONS 1a. Define commerce. Commerce refers to the entire system that facilitates the exchange of goods and services between producers and consumers. It encompasses trade (buying and selling) and all the activities that support trade, such as banking, insurance, transportation, warehousing, and advertising. 1b. State two importance of commerce in business. • Facilitates exchange: Commerce bridges the gap between producers and consumers, ensuring that goods and services reach those who need them. • Creates employment: It generates numerous job opportunities in various sectors like retail, logistics, finance, and marketing. 2a. Explain internal and external trade. Internal trade (also known as home trade) involves the exchange of goods and services within the geographical boundaries of a single country. External trade (also known as international trade) involves the exchange of goods and services between two or more countries. 2b. Give one example of each. Internal trade example: A farmer in Kano selling tomatoes to a market vendor in Lagos, both within Nigeria. External trade example: Nigeria exporting crude oil to the United States. 3a. Define buying by cash and buying by credit. Buying by cash means purchasing goods or services by paying the full amount immediately using physical currency or an instant electronic transfer. Buying by credit means purchasing goods or services with an agreement to pay for them at a later date, often with interest or additional charges. 3b. State two advantage of each. Advantages of buying by cash: • Avoids debt and interest payments. • Often allows for better negotiation on price. Advantages of buying by credit: • Allows consumers to acquire goods immediately even without sufficient funds. • Can help build a credit history, which is useful for future loans or mortgages. 4. Write two difference between money market and capital market. • Maturity period: The money market deals with short-term funds (typically less than one year), while the capital market deals with long-term funds (more than one year). • Instruments: The money market uses instruments like treasury bills, commercial papers, and certificates of deposit. The capital market uses instruments like stocks (shares) and bonds. 5a. What is an office? An office is a designated space or location, typically within an organization, where administrative, clerical, and managerial tasks are performed to support the operations and objectives of the business. 5b. State four functions of an office. • Information processing: Collecting, recording, analyzing, and disseminating information. • Communication: Facilitating internal and external communication through various channels. • Record keeping: Storing and maintaining important documents and records. • Administrative support: Providing general administrative services such as managing appointments, handling correspondence, and organizing meetings.