Business Studies Paper 1 KCSE 2020/2021

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Kenya Certificate Of Secondary Education

 

 

INSTRUCTIONS TO CANDIDATES

  • Answer all questions in the spaces provided.

 

 

  1. Outline four ways in which the business is expected to be socially responsible to the employees.                                                                                                            (4 marks)

 

a)………………………………………………………………………………………………………………………………………………………………………………………..………..

b)……………………………………………………………………………………………………………………………………………………………………………………….…………

c)…………………………………………………………………………………………………………………………………………………………………………………………………

d)…………………………………………………………………………………………………………………………………………………………………………………….…………..




  1. What do you understand by the following terms?

 

  1. a) Free goods……………………………………………………………………………………

………………………………………………………………………….…………..(1 mark)

  1. b) Producer goods………………………………………………………………..…………….

………………………………………………………………………………………(1 mark)

  1. c) Public goods…………………………………………………………………………….…..

……………………………………………………………………………………….(1 mark)

  1. d) Non-material goods ……………………………………………………………………………………………………………………………………………………………………………………………(1 mark)

 

  1. State four functions of management.                                                                      (4 marks)

(a)………………………………………………………………………………………………………………………………………………………………………………….………………

b)………………………………………………………………………………………………………………………………………………………………………………………………… c)………………………………………………………………………………..………………………………………………………………………………………………..………………… d)…………………………………………………………………………………..………………………………………………………………………………………………..……………

 

 

  1. Outline four demerits of Entrepreneurship. (4 marks)
  2. ………………………………………………………………………………………………………………………………………………………………………………………………
  3. …………………………………………………………………………………………………………………………………………………….…………………………………………
  4. ………………………………………………………………………………………………………………………………………………………………………………………………
  5. ………………………………………………………………………………………………………………………………………………………………………………………………
  6. Outline four ways in which filling of documents facilitates smooth running of an office.

(4 marks)

  1. …………………………………………………………………………………………………………………………………………………………………….…………………………
  2. ………………………………………………………………………………………………………………………………………………………………………………………………
  3. ………………………………………………………………………………………………………………………………………………………………………………………………
  4. ……………………………………………………………………………………………………………………………………………………………..……………………………….
  5. Outline four circumstances under which a pro forma invoice may be used. (4 marks) a)……………………………………………………………………………………………………………………………………………………………………………………………………………

b)…………………………………………………………………………………………………………………………………………………………………………………………………………..

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)………………………………………………………………………………………………………………………………………………………………………………………..…………………

 

 

 

 




 

  1. Draw four differences between a quasi partner and a general partner. (4 marks)
Quasi Partner General Partner
a) a)
b) b)
c) c)
d) d)

 

  1. State four advantages of cart transport. (4 marks)

a)…………………………………………………………………………………………………………………………………………………………………………………………………

b)…………………………………………………………………………………………………………………………………………………………………………………………………

c)……………………………………………………………………………………………………………………………………….…………………………………………………………

d)………………………………………………………………………………………………………………………………………………………………………………………………….

 



  1. Highlight four causes of breakdown in communication. (4 marks)

a)……………………………………………………………………………………………………………………………………………………….………………………………………..

b)………………………………………………………………………………………………………………………………………………………………………………………………..

c)………………………………………………………………………………………………………………………………………………………………………………………………..

d)…………………………………………………………………………………………………………………………………………………………………..…………………………….

 

  1. Outline four features of a bonded warehouse. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………….…………………………………

b)………………………………………………………………………………………………………………………………………………………………….………………………………

c)………………………………………………………………………………………………………………………………………………………………….……………………………..

d)………………………………………………………………………………………………………………………………………………………………………………………………..

  1. Name the factor that each of the following resources relate to. (4 marks)
Resource Factor of production
a) Manager a)
b) Vehicle b)
c) Owner c)
d) Water d)

 

  1. Highlight four circumstances under which a co-operative society may be dissolved.

(4 marks)

 



a)…………………………………………………………………………………………………………………………………………………………………………………………………………

b)……………………………………………………………………………………………………………………………………………………………………………………………………………

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)…………………………………………………………………………………………………………………………………………………………………………………………………………..

  1. The figure below shows an increase in supply for a commodity from SS to S1S1.

 

S                  S1

 

Po

 

S                    S1

Qo                 Q                Quantity

State four possible causes that have led to this situation. (4 marks)

a)…………………………………………………………………………………………………………………………………………………………………………………………………………..

b)………………………………………………………………………………………………………………………………………………………………………………………………………….

c)…………………………………………………………………………………………………………………………………………………………………………………………………………..

d)…………………………………………………………………………………………………………………………………………………………………………………………………………..

  1. Highlight four problems associated with the output approach in the measurement of national income. (4 marks)

 

a)…………………………………………………………………………………………………………………………………………………………………………………………………………..

b)……………………………………………………………………………………………………………………………………………………………………………………………………………

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)……………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State four role played by intermediaries in the distribution channel. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………………………………………………………b)…………………………………………………………………………………………………………………………………………………………………………………………………………..

c)…………………………………………………………………………………………………………………………………………………………………………………………………………..

d)……………………………………………………………………………………………………………………………………………………………………………………………………………

 



  1. State four factors that determine fertility rate in a country. (4 marks)

a)…………………………………………………………………………………………………………………………………………………………………………………………………………..

b)……………………………………………………………………………………………………………………………………………………………………………………………………………

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)……………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Mention four types of unemployment. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………………………………………………………

b)……………………………………………………………………………………………………………………………………………………………………………………………………………

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)……………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Journalise the following transactions, which took place in the business of J. Maalim during

the month of January 2006.                                                                                  (4 marks)

Jan 5      Purchased office furniture on credit for shs.25,000 from Miugiza furniture limited.

Jan 10   Sold old duplicating machine for shs.15,000 to Simba academy on credit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

  1. Outline four types of errors that may cause a trial balance not to balance. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………………………………………………………

b)…………………………………………………………………………………………………………………………………………………………………………………………………………..

c)…………………………………………………………………………………………………………………………………………………………………………………………………………..

d)…………………………………………………………………………………………………………………………………………………………………………………………………………..

  1. Outline four features of a monopoly. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………………………………………………………

b)……………………………………………………………………………………………………………………………………………………………………………………………………………

c)…………………………………………………………………………………………………………………………………………………………………………………………………………..

d)…………………………………………………………………………………………………………………………………………………………………………………………………………..

  1. State the importance of the following financial ratios.
  2. Rate of stock turnover (1 mark)

………………………………………………………………………………………………………………………………………………………………………………………………………….

  1. Return on capital (1 mark)

…………………………………………………………………………………………………………………………………………………………………………………………………………

  1. c) Mark up (1 mk)

…………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Working capital ratio (1 mark)

………………………………………………………………………………………………………………………………………………………………………………………………………..

 

 

  1. State four current trends in banking. (4 marks)

a)…………………………………………………………………………………………………

b)………………………………………………………………………………………………….

c)…………………………………………………………………………………………………..

d)…………………………………………………………………………………………………..



  1. Indicate whether the following taxes are either direct taxes or indirect taxes. (4 marks)
Tax Type of tax
a) Corporation tax
b) Value added tax
c) Income tax
d) Capital gains tax
  1. The following information was extracted from the books of Rose Muthoni for the month of

July 2004.

Kshs.
Opening stock 22,000
Closing stock 26,000
Purchases 100,000
Mark up 10%

 

Prepare trading account for the month of 31st July 2004. (4 marks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

  1. State 4 methods of trade restrictions. (4 marks)

a)……………………………………………………………………………………………………………………………………………………………………………………………………………

b)…………………………………………………………………………………………………………………………………………………………………………………………………………..

c)……………………………………………………………………………………………………………………………………………………………………………………………………………

d)……………………………………………………………………………………………………………………………………………………………………………………………………………

 

 

 

 

 

 

BUSINESS STUDIES

PAPER 1

 

Kenya Certificate Of Secondary Education

 

 

 

INSTRUCTIONS:

 

Answer all questions in the spaces provided

  1. State the role of intermediaries to a producer.                                  (4mks)

i)………………………………………………………………………………………………………

ii)………………………………………………………………………………………………………

iii)……………………………………………………………………………………………………….

iv)……………………………………………………………………………………………………….

  1. Kenya is expanding its oil pipeline. Give four benefits of this activity to the Kenyan economy.                                                                                                                                           (4mks)

i)………………………………………………………………………………………………………..

ii)……………………………………………………………………………………………………….

iii)………………………………………………………………………………………………………

iv)………………………………………………………………………………………………………

  1. The following balances were extracted from the books of Longo as at 1st Jan 2000.

Drawings            shs.50, 000

Added investment shs.90, 000

Capital as at 31st Dec 2000   shs 800,000

Capital as at 1st Jan 2000     shs 450,000.

Calculate the profit or loss for the year ended 31st Dec 2000.                                                   (4mks).

 

 

 

 

 




 

  1. State whether the following Ledger accounts are Nominal, Personal or Real accounts.
  2. a) Sales ________________
  3. b) Commission paid    _________________
  4. c) Creditors          _________________
  5. d) Fixtures and fittings          _________________                                                 (4mks).
  6. Outline four factors which affect the circular flow of income. (4mks).

i)………………………………………………………………………………………………………

ii)……………………………………………………………………………………………………..

iii)…………………………………………………………………………………………………….

iv)……………………………………………………………………………………………………

 

 

  1. Highlight 4 ethical practices that should be observed by a business. (4mks).

i)……………………………………………………………………………………………………….

ii)………………………………………………………………………………………………………

iii)………………………………………………………………………………………………………

iv)……………………………………………………………………………………………………..

  1. State the type of error represented by each of the following sentences.

i). Entries are made in the wrong accounts.                          __________________

ii). A transaction is not recorded completely in the ledgers.__________________

iii). Entries are made but in the wrong accounts.                  __________________

iv). Both debt and credit entries are made using similar but incorrect accounts.

_____________________                                                                                                   (4mks).

 

 

 

  1. The following transactions relates to Mukuna traders for the month of Jan 2009.

Jan.   1. Started a business with shs 40,000 cash.

Jan.    3. Deposited shs 20,000 into the bank account.

  1. Bought a weighing machine shs. 5,000 in cash.
  2. Bought stock by cheque 12,000.
  3. Withdrew 5,000 from the bank for office use.

Enter the transactions in ledger accounts.                                                                                 (5mks).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

  1. Outline 4 common goals that a country may aim at in order to achieve economic     development.                                                         (4mks).

i)………………………………………………………………………………………………………..

ii)………………………………………………………………………………………………………..

iii)………………………………………………………………………………………………………

iv)………………………………………………………………………………………………………

  1. State the books of original entry prepared using the following source documents.

a). Cash sale receipts.                              ___________________

b). Invoice received.                                ___________________

c). Credit notes..                                      ___________________

  1. d)                                           ___________________                                          (4mks).

 

 

 

  1. The following data was collected for product X, Y and Z for calculating the consumer        price index for the period 2004 and 2006.
PERIOD                                         2004 2006
PRODUCT PRICE (shs) QUANTITY(units) PRICE(shs) QUANTITY(units)
X 10 600 30 400
Y 40 800 50 300
Z 30 1,200 40 800

i).You are required to calculate the consumer price index for the period.                              (4mks).

 

 

 

 

 

 

 

 




 

ii).interpret your answer in (i) above.                                                                                       (1mk).

……………………………………………………………………………………………………………

……………………………………………………………………………………………………………

 

  1. Distinguish between a statement of affairs and a balance sheet. (4mks).

i)……………………………………………………………………………………………………..

ii)…………………………………………………………………………………………………….

iii)…………………………………………………………………………………………………..

iv)…………………………………………………………………………………………………..

  1. Give 4 gaps which exist in the market that an entrepreneur can use to identify a viable business opportunity. (4mks).

i)……………………………………………………………………………………………………..

ii)……………………………………………………………………………………………………

iii)……………………………………………………………………………………………………

iv)……………………………………………………………………………………………………

  1. Outline the relationship between scarcity, choice and opportunity cost. (2mks).

…………………………………………………………………………………………………………………….……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………

 

  1. State 4 indicators that show workers are not properly motivated. (4mks).

i)…………………………………………………………………………………………………….

ii)……………………………………………………………………………………………………

iii)…………………………………………………………………………………………………….

iv)…………………………………………………………………………………………………….

  1. Identify four reasons why a business may require a business plan. (4mks).

 

i)…………………………………………………………………………………………………….

ii)…………………………………………………………………………………………………..

iii)………………………………………………………………………………………………….

iv)……………………………………………………………………………………………………

  1. You are provided with the following information.

Shs.

Sales                       400,000

Expenses                20,000

Mark up                  25%

Calculate:

  1. i) Cost of goods sold                                                                                                             (3mks).

……………………………………………………………………………………………………………

……………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………………………………………………………………………

………………………………………………………………………………………………………

 




  1. ii) Net profit.             (1mk)

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

 

  1. Apart from demand and supply forces outline four other methods of price determination.                                                                                                                                           (4mks).

i)……………………………………………………………………………………………………

ii)……………………………………………………………………………………………………

iii)………………………………………………………………………………………………….

iv)…………………………………………………………………………………………………….

  1. State four advantages of mail order service to the customer. (4mks).

i)……………………………………………………………………………………………………

ii)…………………………………………………………………………………………………….

iii)……………………………………………………………………………………………………

iv)……………………………………………………………………………………………………

  1. Karanja bought goods worth shs 40,000 from Menjo wholesalers on 1/5/2009.

He was offered 5% trade discount and 3% cash discounts if he paid for the goods within 7 days and 2% cash discount if he paid within 15 days. If he paid for the goods on 16/5/2009, how much money did he pay?                                                                                                                                 (4mks).

 

 

 

 

 

 




 

  1. Give 4 reasons why a person may prefer to run a business as a sole proprietor. (4mks).

i)………………………………………………………………………………………………………

ii)…………………………………………………………………………………………………….

iii)……………………………………………………………………………………………………

iv)…………………………………………………………………………………………………….

  1. The following diagram represents a market structure.

 

 

  1. a) Label the curves marked: i.                                 (3mks).

ii.

iii.

  1. b) State the market structure. ___________________________ (1mk).
  2. c) On the diagram mark the equilibrium output of the firm. (1mk).
  3. Give 3 advantages of using retained earnings to finance a business. (3mks)

i)……………………………………………………………………………………………………

ii)……………………………………………………………………………………………………..

iii)…………………………………………………………………………………………………….

 

 

 

  1. State how Catherine a mobile seller can overcome the stiff competition in the market.                                                                                                                                                        (4mks).

i)………………………………………………………………………………………………………

ii)………………………………………………………………………………………………………

iii)……………………………………………………………………………………………………..

iv)……………………………………………………………………………………………………

  1. Identify 4 benefits Kenya will accrue from the adoption of renewable source of energy in the country. (4mks).

i)……………………………………………………………………………………………………

ii)……………………………………………………………………………………………………

iii)…………………………………………………………………………………………………….

iv)……………………………………………………………………………………………………

 

BUSINESS STUDIES

PAPER 1

 

                            

Kenya Certificate Of Secondary Education

 

 

  1. Highlight four characteristics of free resources (4mks)
  2. a) _____________________________________________________________________________
  3. b) _____________________________________________________________________________
  4. c) _____________________________________________________________________________
  5. d) _____________________________________________________________________________
  6. Give four features of incorporated business organizations (4mks)
  7. a) _____________________________________________________________________________
  8. b) _____________________________________________________________________________
  9. c) _____________________________________________________________________________
  10. d) _____________________________________________________________________________
  11. Give four emerging developments in the banking industry (4mks)
  12. a) _____________________________________________________________________________
  13. b) _____________________________________________________________________________
  14. c) _____________________________________________________________________________
  15. d) _____________________________________________________________________________
  16. For each of the following transactions, indicate with a tick (√) whether it will increase,

decrease or have no effect on the balance sheet totals                                               (4mks)

 

Transaction                                Effect on the balance total
Increase Decrease No effect
(i) Borrowing sh       20,000 from bank for paying creditors
(ii) Used sh 10,000 cash pay for loan arrears
(iii) Sale of part of business premises
(iv) Sale of goods worth sh 5,000 for sh 4,500

 

 

  1. State any four causes of balance of payment deficit (4mks)
  2. a) _____________________________________________________________________________
  3. b) _____________________________________________________________________________
  4. c) _____________________________________________________________________________
  5. d) ___________________________________________________________________________

 

 




 

  1. For each of the following statements, state whether it’s true or false as regards circular flow of

income in a four sector closed economy.

(i) Firms and households do not pay tax to the government__________________________

 

(ii) Households save part of their income in banks and other institutions________________

 

(iii)Firms receive payments from exports abroad_________________________________

 

(iv) Business firms reverts to commercial banks to raise capital _____________________

(4mks)

  1. List four properties of a well drawn cheque (4mks)
  2. a) _____________________________________________________________________________
  3. b) _____________________________________________________________________________
  4. c) _____________________________________________________________________________
  5. d) _____________________________________________________________________________
  6. State four disadvantages of localization to a developing country (4mks)
  7. a) _____________________________________________________________________________
  8. b) _____________________________________________________________________________
  9. c) _____________________________________________________________________________
  10. d) _____________________________________________________________________________
  11. The following information relates to Kivai Traders

Purchases                    sh 2,700,000

Return outwards         sh 600,000

Closing stock              sh 500,000

Opening stock             sh 1,200,000

Margin                         2/9

Calculate (i) Cost of sales                                                                               (2mks)

 

 

 

 

 

 

 

 

(ii) Gross profit                                                                                   (2mks)

 

 

 

 

 

 

 

 

 




 

  1. State four advantages of self employment (4mks)
  2. a) _____________________________________________________________________________
  3. b) _____________________________________________________________________________
  4. c) _____________________________________________________________________________
  5. d) _____________________________________________________________________________
  6. State four characteristics of subsistence production in Kenya (4mks)
  7. a) _____________________________________________________________________________
  8. b) _____________________________________________________________________________
  9. c) _____________________________________________________________________________
  10. d) _____________________________________________________________________________
  11. Match the following statements with the correct description of the aspect as

regards population                                                                                          (4mks)

(i) Population that is adequate for full utilization                   Young population

of available resources                                                  Declining population

(ii) Situation of insufficient labour compared

to other factors                                                            Optimum population

(iii) Population where majority are above 55 years                Ageing population

(iv) Higher death rate than birth rate cause population

to decrease                                                                  Under population

 

  1. On 31st December 2006, Boresha had paid rent in advance of sh 25 000. On 31st December

2007 the rent prepaid was sh 34,000 while accrued rates amounted to sh 10,000. During

the year 2007, rent paid amounted to sh 110,000.

Prepare the rent and rates account for the year                                               (4mks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Outline four advantages of a business using E-mail in communication (4mks)
  2. a) _____________________________________________________________________________
  3. b) _____________________________________________________________________________
  4. c) _____________________________________________________________________________
  5. d) _____________________________________________________________________________
  6. The diagram below shows the supply curve of maize in the last two seasons. Give the

attributes causing the shift                                                                                          (4mks)

 

 

So

S1

 

 

Price

 

 

 

So

S1

 

 

Quantity

  1. a) _____________________________________________________________________________
  2. b) _____________________________________________________________________________
  3. c) _____________________________________________________________________________
  4. d) _____________________________________________________________________________
  5. Outline four economic conditions that would prevail in a country undergoing inflation (4mks)
  6. a) _____________________________________________________________________________
  7. b) _____________________________________________________________________________
  8. c) _____________________________________________________________________________
  9. d) _____________________________________________________________________________
  10. With Kenya targeting Millenium Development Goals and Vision 2030, planning has become

key component in their realization. Outline four qualities of a good development

plan                                                                                                                             (4mks)

  1. a) _____________________________________________________________________________
  2. b) _____________________________________________________________________________
  3. c) _____________________________________________________________________________
  4. d) ___________________________________________________________________________
  5. Indicate in the spaces provided whether the following taxes are either direct taxes or

indirect taxes.                                                                                                              (4mks)

Tax                                                      Types of tax

Corporation tax                                   _________________________________

Capital gain tax                                   _________________________________

Value added tax                                  _________________________________

Income tax                                          _________________________________




  1. Piracy along Somali coastline continue to hurt seaborne trade and transport. Give four

adverse effects of the above trend.                                                                 (4mks)

  1. a) _____________________________________________________________________________
  2. b) _____________________________________________________________________________
  3. c) _____________________________________________________________________________
  4. d) _____________________________________________________________________________
  5. The following balances were obtained from the books of Jansen Traders on
  6. 06. 2010

shs

Plant and Machinery               1,400,000

Turnover                                  1,540,000

Interest on loan                          200,000

Prepaid rent                                  70,000

Accrued salaries                         353,340

Furniture and fixtures                500,200

Gross profit                                427,260

Repairs on motor vehicle           150,000

 

Prepare trial balance of Jansen traders for the month ended 30.6.2010                     (4mks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

  1. The following is a demand curve XYZ of a firm

 

 

Y                     x

 

 

P                                  y

Price

Z

 

0                                  Q                                 x

Output

 

(a) State the elasticity of demand portrayed by the two portions of the demand curve

XY: _______________________________________________________________

 

YZ: _______________________________________________________________

(2mks)

(b)What is the name given to point y                                                                         (1mk)

_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(c) Identify the market structure depicted                                                                  (1mk)

_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

  1. Mutune is the owner of Jambo enterprises worth 2 million, insurance cover worth 1.5 million

has been placed on the property. If the property was damaged to the tone of sh 300,000.

Determine how much will Mutune get from insurance as compensation and reason.                                                                                                                                                          (4mks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

  1. The following features relate to warehousing. Indicate the most suitable type of warehouse

described.

(i) Used to store locally produced goods until excise duty is paid____________________

(ii) Mostly situated in entry points and are available at a fee ________________________

(iii) Warehouse used to store non-dutiable goods originating from within or outside the

Country____________________________

(iv) Warehouse can be designed to suit one’s particular needs _______________________

(4mks)

  1. Indicate in the spaces provided, the account to be debited and account to be credited (4mks)
Transaction Account Debited Account Credited
(a) Started business by depositing sh 80,000 in the bank account of the business.
(b) Bought stock of goods worth sh 20,000 from XYZ retailers on credit.
(c) Returned goods worth sh 4,000 to XYZ retailers
(d) Paid XYZ retailers’ sh 15,000 cheque

 

  1. The recent disaster of death in both aquatic and marine life at Lake Naivasha could have been

avoided. Suggest four ways of averting such in future.                                            (4mks)

  1. a) _____________________________________________________________________________
  2. b) _____________________________________________________________________________
  3. c) _____________________________________________________________________________
  4. d) _____________________________________________________________________________

 

 

 

 

 

 

 

 

BUSINESS STUDIES

Kenya Certificate Of Secondary Education

 

INSTRUCTIONS TO CANDIDATES

Answer all the questions in spaces provided.

 

Candidates should check to ensure that all pages are printed as indicated and no questions are missing

 

  1. Outline four features of public limited company

 

 

ii.

 

iii.

 

4 Marks

 

  1. Highlight four characteristics of monopoly market structure

 

 

ii.

 

iii.

 

4 Marks

 

  1. Highlight four limitations of consumer initiated methods in consumer protection

 

 

ii.

 

iii.

 

 

4 Marks

  1. Outline four reasons why a trader would prefer transporting goods from Nairobi to Mombasa by rail rather than by road transport

 

 

ii.

 

iii.

 

4 Marks

 

  1. The following information relate to Kyangoma Trades for the year ended 31st Dec 2008.

 

Purchases                                                  390, 000

Opening stock                                             30,000

Closing stock                                              43, 000

Carriage on sale                                          15, 000

Sales                                                           450, 000

Other expenses were 10% on gross profit. Required prepare a Trading profit and loss account for the year ended 31st Dec 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

5 Marks

  1. For each of the following transactions in the table, indicate in the space provided the source document that relate to the translation.

 

Transaction                                                                           Source document 

 

  1. Sales of goods on credit                                                          ______________________________

 

  1. Correction of an under charge                                                ______________________________

 

iii. Goods returned                                                                       ______________________________

 

  1. Purchase on credit ______________________________                                                                                                                                                     4 Marks

 

  1. State four circumstances under which verbal communication will be preferred to written communication

 

ii.

 

iii.

 

4 Marks

  1. Outline four factors that may limit the development of Kenya

 

 

ii.

 

iii.

 

4 Marks

  1. Give four methods used in transferring money by commercial banks

 

 

ii.

 

iii.

 

4 Marks

 

  1. Complete the following table by indicating the account to be debited and the one to be credited

 

Transaction A/C debited A/C credited
a. Bought a delivery van from Masaku trader on credit
b. Withdrew cash from bank for office one  

 

c. Received load from KCB  

 

d. Mwangi the proprietor converted a private car into business asset

4 Marks

  1. State four conditions that make labour more efficient

 

 

ii.

 

iii.

 

4 Marks

 

  1. The balance given below were extracted from the books of Grace traders as at 30th June 2006

 

Furniture                                                               20, 000

Debtors                                                                 30, 000

Creditors                                                               42, 000

Cash in hand                                                         25, 000

Delivery van                                                       280, 000

Capital                                                                 348, 000

Stock                                                                     50, 000

Cash at bank                                                         60, 000

Net loss                                                                 45, 000

Bank loan                                                            120, 000

 

Required: Prepare a balance sheet as at 30th June 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

5 Marks

  1. Give four difficulties faced by human beings in satisfying of human wants

 

 

ii.

 

iii.

 

4 Marks

 

  1. Prepare three column cash book and balance it of from the following information

May 1st     Bal b/d            Bank sh. 3000 (Cr)

Cash sh. 2000

2nd    Received Ksh. 49, 000 from Kazi Njema trades after deducting 2 % cash discount

5th     Deposited 20, 000 from cash box to the bank account

12th   Paid rent Ksh. 2000 by cheque

20th   Paid Malimali Ksh. 10, 000 less 5%

Cash discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 Marks

  1. Name four disadvantages of using computers in a business.

 

 

ii.

 

iii.

 

4 Marks

 

  1. Outline four factors which a trader should consider when making a choice of a medium for product promotion

 

 

ii.

 

iii.

 

4 Marks

  1. “Hello Money bank in your mobile phone” Barclays Bank continues advertising inspite of its popularity in the country.

State four reasons for continued advertising by the Barclays bank

 

 

ii.

 

iii.

 

4 Marks

  1. Highlight three benefits of mobile phone banking

 

 

ii.

 

iii.

 

3 Marks

  1. State four external diseconomies of scale that a firm may experience

 

 

ii.

 

iii.

 

4 Marks

 

  1. The following diagram represents a type of elasticity of demand for a product

 

 

 

 

 

 

 

 

 

 

 

 

With reference to the diagram above

 

  1. Name the type of elasticity represented                                                             1 Mark

 

 

  1. Name two classes of products whose demand is associated with this type of elasticity

 

 

 

ii.

2 Marks

 

  1. Give four social responsibility of a business to the community

 

 

ii.

 

iii.

 

4 Marks

 

  1. Give three factors that may account for the limited use of cheques in Kenya’s rural society

 

 

ii.

 

iii.

 

3 Marks

  1. State the shortest channels of distribution of imported goods

 

 

 

 




 

1 Mark

  1. Give three circumstances under which this channel may be preferred

 

 

ii.

 

iii.

3 Marks

 

  1. State four conditions which may improve the effectiveness of a ware house

 

 

 

ii.

 

 

iii.

 

 

 

4 Marks

  1. Outline three forms of economic integration

 

 

ii.

 

iii.

 

3 Marks

 

 

 

BUSINESS STUDIES

PAPER1

 

                          

Kenya Certificate Of Secondary Education

 

INSTRUCTIONS TO CANDIDATES

 

  • Answer all questions in the spaces provided below each question.

 

  1. State four reasons that can lead to the dissolution of a partnership. (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Name four public utilities provided by the government (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Classify the following as either primary or secondary wants (4mks)
  2. a) Furniture ……………………………………………………
  3. b) Hut …………………………………………………………
  4. c) Education …………………………………………………..
  5. d) Garments …………………………………………………..

 

  1. Highlight four merits of sending money through M-Pesa (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Outline four qualities of an effective sales person (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State four components of a business idea (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State in the table below the insurance principle which matches with explanation provided (4mks)
Explanation Insurance principle
a. Upon fire burning down Kokonya’s shop the insurance company refused to compensate on discovery that the shop belonged to a cousin
b. Papa had insured his vehicle against fire but deliberately organizes to have it burnt in order to be compensated
c. Jane had insured his car worth Ksh. 680,000 for Ksh. 900,000 against theft when it was stolen he was given only Ksh. 680,000
d. Atoli’s vehicle which had been insured with a comprehensive insurance policy got an accident and was written off on compensation the insurance took a away the mangled wreck of the car

 

 

 

  1. Highlight four features of a bonded warehouse (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. In what four ways does privatization of state owned enterprises promote efficiency (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Outline four limitations of using Mkokoteni (Cartage)in urban centres (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

 

 

 

 

 

  1. The figure shows equilibrium determination of a firm in a monopolistic competition market

 

0
Revenue

Name the curves                                                                                                            (4mks)

a)

b)

  1. c)

d)

 

  1. The table shows the production costs of a firm at different levels of output over the same period of time. Fill in the missing figures.
Output  (units) Fixed costs Variable cost Total cost Average  variable cost
1 800 1800
2 X 2,300 W
3 Y Z 600

 

Find the values of

X ………………………………….

Y …………………………………

Z …………………………………

W …………………………………..                                                                            (5mks)

 

 

 

 

  1. Outline four sources of funds to local authorities

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Outline four characteristics of a firm enjoying economies of scale (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. The table below shows the trend of supply of millet in Amoni market for the last four years.

 

Year Quantity supplied (Kg)
2006 7820
2007 9250
2008 12380
2009 14400

Give four possible reasons that may have contributed to the trend in the table above.            (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. The information below was extracted from the books of Oduya traders for the year ended 31st December 2009.

Kshs

Opening stock                         45,000

Closing stock                          15,000

Turn over                                340, 000

Margin                                    25%

 

Required: Determine

(i)         Gross profit                                                                                         (3mks)

 

 

 

 

 

 

 

 

(ii)        Purchases                                                                                            (3mks)

 

 

 

 

 

 

 

 

  1. State four reasons that can make a country to devalue its currency (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four features of a fixed deposit account (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

 

Outline four circumstances that may have led to the above curve                            (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

 

 

  1. Information below was obtained from the books of Tata traders                         Kshs

Return on capital employed 25%

Fixed assets                                                     680, 200

Current assets                                                  100, 500

Current liabilities                                            48,200

Determine:

  1. a) The working capital                                                                                        (2mks)

 

 

 

 

 

  1. b) Net profit                                                                                                        (3mks)

 

 

 

 

  1. State four adverse effects citizen of a country may have as result of high taxation (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. Identify the document used in foreign trade which matches with explanation given in the table below. (4mks)

 

Explanation Documents
I Indicates the country from which the goods imported were manufactured
ii Used by importers to identify and select the goods he/she wishes to import
iii Certified document by commercial atachee of the importers country to confirm the prices charged
Iv Serve as a document of title and contract of carriage in water transport

 

  1. Outline four factors that have contributed to the failure of measures being taken by the government to control rapid population growth. (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State four benefits of a good development plan to a country. (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. List four problems related to using product approach in national income measurement. (4mks)

(a)………………………………………………………………………………………………………………………………………………………………………………………………………………….

(b)……………………………………………………………………………………………………………………………………………………………………………………………………………………

(c)…………………………………………………………………………………………………………………………………………………………………………………………………………………

(d)……………………………………………………………………………………………………………………………………………………………………………………………………………………

 

 

BUSINESS STUDIES

PAPER 1

 

Kenya Certificate Of Secondary Education

 

  1. State four reasons why people engage in business. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State four disadvantages of division of labour. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Outline four roles of management in the success of a business (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State four features of Hire Purchase. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State the major use of each of these documents
  2. Certificate of trading (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Certificate of Incorporation                                                                            (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Memorandum of association.                                                                          (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Articles of association.                                                                                    (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Outline four circumstances under which verbal communication may be used. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State four essentials for a warehouse. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State four types of economies of scale to a firm. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Highlight four factors that determine the level of National Income. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Tazama Traders Had the following list of Balance as at On 31 December 2009.

Capital                                     100,000

Prepaid rent                                4,000

Debtors                                    67,000

Accrued Wages                       26,000

Furniture                                 70,000

Commission in advance          15,000

Prepare the balance sheet as at 31st  December 2009.                                                (4 marks)

 

 

 

 

 

 

 

 

 

 

  1. The following entries were found to have been entered incorrectly in the ledger accounts.

Dr.                                          Sales A/C                                           Cr.

Shs.

June 26            Debtors                    15,000

 

Dr.                                          Debtors A/C                                       Cr.

                                       Shs.

June 26            Sales    15,000

Dr.                                          Creditors A/C                        Cr.

Shs.

June 14            Cash at Bank              5,000

 

Dr.                                          Cash at Bank  A/C                Cr.

Shs.

June 14            Creditors                   5,000

 

(a)        State the correct transaction that took place on:                                             (2marks)

  1. i) June 14 …………………………………………………………………………………………

………………………………………………………………………………………………

  1. ii) June 26

……………………………………………………………………………………………

………………………………………………………………………………………………

(c)        State the name for error committed in recording transaction on:                   (2marks)

  1. i) June 14 ……………………………………………………………………………………………..

………………………………………………………………………………………………

  1. ii) June 26

……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Mito Traders had the following about their business as on the given dates.
1/1/2009 31/12/2009
Debtors 60,000 80,000
Discount allowed – 10,000
Return inwards – 30,000
Bad debts – 20,000

In the year 2009, customers paid shs. 120,000 while cash sales was shs. 260,000

Calculate the value of credit sales for the year.                                                          (4marks)

 

 

 

 

 

 

 

 

  1. Highlight four factors that need to be managed when controlling cost — push inflation

(4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Outline four goals of development. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Outline four difficulties faced in the satisfaction of human wants. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. State four ways that the government can use to service its public debts. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Apart from the use of computers in offices, outline other four current trends in office

management.                                                                                                               (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Highlight four causes of balance of payment disequilibrium. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. The following information was extracted from the books of accounts of Jumba Traders for the year ended 31st December, 2009
Shs
Opening stock 25,000

 

Carriage on sales 13,000

 

Purchases 490,000

 

Sales 552,000

 

Closing Stock 60,000

 

Other expenses 10% on gross profit

 

Determine Net profit for the year ended 31st December, 2009.                                (4marks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Advance four reasons why it’s necessary for the government to carry out population

census.                                                                                                                        (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. Most Parastatals in Kenya Have underperformed. Advance four measures that can be

taken to improve their efficiency.                                                                               (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

  1. On 1st January, 2010 Twiga traders had Kshs. 85, 000 cash in hand and a bank credit

balance of Kshs. 88,000. During the month, the following transactions took place.

January 2nd : Cash sales Kshs. 209,400

Jan. 6th: a debtor settled his account of Kshs 500, 000 by cheque less 5% cash discount..

January 16th : Paid salaries Kshs 30,000 in cash.

Jan. 21st  : settled a creditor account of Kshs. 20,000 by cheque less 2% cash discount.

January 31st  Banked all the cash except Kshs 25, 000

Enter the above transactions in the three column cash book below.                                      (4mks)

 

 

 

 

 

 

 

DR                  TWIGA TRADERS THREE- COLUMNS CASH BOOK           CR

Date Particulars Disc All. Cash Bank Date Particulars Disc Rec. Cash Bank

 

  1. Indicate the account to be debited and credited in the following transactions. (4marks)

 

Transaction

 

Debit

 

Credit

 

a)   Bought beans on credit

 

b)  Converted a personal car into business use

 

c)   Paid creditor by cheque

 

d)  Took goods for personal use.

 

  1. Outline four measures to be taken by a businessman to improve internal business environment.                                                                                                                                     (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

 

 

 

  1. The diagram below shows the current demand for a certain product.
  2. a) Name two category of products whose demand curve is illustrated above giving an

example.                                                                                                                      (2mks)

(i)

………………………………………………………………………………………………

 

………………………………………………………………………………………………

 

(ii)

………………………………………………………………………………………………

 

………………………………………………………………………………………………

  1. b) What is the effect of increase in price of the above commodity on its demand? (2mks)

 

………………………………………………………………………………………………

 

………………………………………………………………………………………………

 

 

BUSINESS STUDIES

Paper 1

 

Kenya Certificate Of Secondary Education

 

 

Answer ALL questions in the spaces provided.

 

  1. Identify four difficulties that may make an individual not to satisfy most of his needs. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. In the table below, classify the accounts given as personal normal, real, private. (4mks)

 

Account Account type
a)    Furniture

b)    Owino (a debtor)

c)     Salaries

d)   Rent Income

 

 

  1. Highlight four advantages of using Posta Pay as a means of remitting money through the post office. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

 

 

 

  1. Give four factors that may account for the wage differences among workers with similar qualifications in factory. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. Outline four measures that can be taken to improve the efficiency of parastatals in Kenya. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. State four factors that would influence the amount of money held by an individual for transaction purposes. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. State four measures that the government may employ to regulate and control business activities.                                                                                                                                                 (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. Identify four reasons why a producer would not need a lot of ware housing space facilities. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. Outline four differences between statement of affairs and balance sheet. (4mks)

 

                 STATEMENT OF AFFAIRS                         BALANCE SHEET
a)   _______________________________________

_______________________________________

a) _______________________________________

_______________________________________

b) _______________________________________

_______________________________________

b) _______________________________________

_______________________________________

c) _______________________________________

_______________________________________

c) _______________________________________

_______________________________________

d) _______________________________________

_______________________________________

d) _______________________________________

_______________________________________

  1. Outline four circumstances under which downwards communication may be beneficial in an organization. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. Classify the partners in the partnership business using the following headings (4mks)

 

Headings Partners
Role a)
b)
Liability a)
b)

 

  1. State four things that a retail trader would consider before giving credit to his customers. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

…………………………………………………………………………………………………

  1. Post the following transactions to the relevant ledger accounts.
  2. a) Started business by depositing in the bank a cheque of shs. 100,000.
  3. b) Withdrew Kshs. 20,000 cash from the bank for business use.
  4. c) Bingwa a debtor paid shs. 40,000 cash.
  5. d) Took shs.10, 000. from cash till for personal use.                                                      (4mks)

 

 

  1. Identify four ways through which manufacturers protect the consumers against exploitation.                                                                                                                                                             (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. State four ways in which a business may negatively affect the physical environment. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. Outline any four benefits of “pooling of risks” to insurance company (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. The diagram below shows a supply curve soso and sisi

 

Highlight four factors that account for the above phenomena.                                              (4mks)

  1. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. On 31st Dec. 2008 details extracted from chumo’s records showed commission received for the year as Kshs. 60,000, commission was 12,000 whereas commission received in advance as at 31st dec. 2008 was Kshs. 24,000. Determine the commission for the year 2008. (4mks)

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State four reasons that have contributed to the popularity of motorcycles as a mode of transport in Kenya. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

  1. Highlight four roles played by inter mediaries in the chain of distribution. (4mks)
  2. a) ……………………………………………………………………………………………….

……………………………………………………………………………………………….

  1. b) ……………………………………………………………………………………………….

……………………………………………………………………………………………….

  1. c) ……………………………………………………………………………………………….

………………………………………………………………………………………………..

  1. d) …………………………………………………………………………………………………

………………………………………………………………………………………………….

 

 

 

 

  1. State four circumstances under which a firm may be located near a raw material source (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

 

  1. State four factors that may account for predominant direct production in a country. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

 

  1. The following balances of assets and liabilities were provided by Tana Trades as on 31st Dec, 2008.

Bank overdraft                        80,000

Land                                        200,000

Accrued electricity                  50,000

Stock                                       10,000

Debtors                                   20,000

The business had drawing amounting to shs. 20,000 during the year, Prepare a balance sheet to determine the net worth of the business at the start of the trading year.                                (4mks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. A business enterprises had cash balance of kshs. 50,000 and an overdraft of shs. 15,000 on 1st February 2008, Transactions conducted were as follows:-

Feb. 2: A debtor paid shs. 40,000 b/f  cheque.

Feb 10: The creditors were paid shs. 5,000 by cheque.

Feb 13: Sold goods shs. 30,000 in cash.

Prepare a two – column cash book to record the above transactions. Balance the cash book. (4mks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Outline four positive implications of high population growth rate in a country. (4mks)
  2. a) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. b) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. c) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

  1. d) ……………………………………………………………………………………………………

……………………………………………………………………………………………………

 

 

BUSINESS STUDIES

PAPER 1

2 HOURS

 

Kenya Certificate Of Secondary Education

 

  1. Outline four duties of an office manager                                                        (4 mks)
  • ……………………………………………………………………………………………….
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………….
  • ………………………………………………………………………………………………Highlight four benefits an individual gets from buying shares in a company such as safaricom            (4mks)
  • ……………………………………………………………………………………………….
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. In the table below classify the accounts given as personal, nominal, real or private                                                                                                                                              (4 mks)

Account                                              Account type

Machinery                                           …………………………………..

Kamau (a creditor)                              …………………………………..

Electricity bill                                     …………………………………..

Rent income                                        …………………………………..

  1. Highlight four ways in which commercial attaches promote trade                          (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………Highlight four measures the government would undertake to provide investors with enabling business environment (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • Identify four documents used in the delivery process in home trade (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………

 

  1. Outline four conditions which favour the use of personal selling as a strategy of product promotion                                                                                                            (4 mks)
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………
  • ……………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. The supply schedule for Mr. Cheruiyot is as shown below

Price sh                                   Quantity

5                                               50

7                                               150

(a) Calculate the price elasticity of supply                                                                        (2 mks)

 

 

 

(b) Interpret the meaning for this elasticity of supply                                                        (1 mk)

 

 

 

 

 

 

  1. The following information relates to Matui traders for the month of July 2003

Opening sock                          ksh.40, 000

Purchases                                            ksh 90, 000

Sales                                                    ksh.150, 000

Margin                                           20%

Required: Prepare a trading account of Matui traders for the month ended 31st July 2003.

 

 

 

 

 

 

 

 

  1. A farmer in Eldoret North District wishes to hire transport for his tomatoes to the market. Outline four essential factors that he should consider in choosing the means of transport                                                                                                                                        (4 mks)
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………(iii)………………………………………………………………………………………………

(iv)………………………………………………………………………………………………

  1. Explain four ways in which warehousing facilitates trade                                         (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………………………………………………………………………………………………………
  • ……………………………………………………………………………………………….
  1. Distinguish between the following insurance policies; Whole life and endowment policy                                                                                                                              (4 mks)
Whole life Endowment policy

 

  1. State four positive implications of a rapidly growing population                            (4 mks)
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. (a) What is a consumer price index?                                                                          (1 mk)

…………………………………………………………………………………………………

(b) Outline three factors influencing price elasticity of demand.                               (3mks)

  • ……………………………………………………………………………………………
  • ……………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1.  State four characteristics of a goof filing system                                                      (4 mks)
  • ……………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. (a) Define public debt                                                                                                 (1 mk)

…………………………………………………………………………………………………

(b) Distinguish between debt weight and productive debt                                          (3 mks)

  • ………………………………………………………………………………………………..
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………

 

  1. On 1st of October 2009 Sambu bought goods on credit quoted at ksh.240, 000. Terms of sales were 20% trade discount, and 10% cash discount. if payment was made on 29th October 2009, calculate the amount paid if payment was made on 26th October 2009                  (4 mks)

 

 

 

 

 

 

 

 

  1. The following information was obtained from the books of Kimenju Traders who do not keep complete records

11/1/2005                                31/12/2005

Stock                           sh. 50, 000                               sh.40, 000

Trade debtors              21, 000                                    sh.48, 000

Bank A/C                    8, 400 (CR)                             sh.243, 100

Trade creditors            28, 000                                    sh.53, 000

Premier                        240, 000                                  sh.240, 000

cash in hand                15, 000                                    sh.38, 000

Required: Prepare a statement of affairs as at 31/12/2005                                   (4 mks)

 

 

 

 

 

 

 

 

  1. State four advantages of using credit card                                                                 (4 mks)
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………….
  1. State four differences between monopolistic market and an oligopolistic market

(4 mks)

  • ………………………………………………………………………………………………
  • ……………………………………………………………………………………………….
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. The diagram below represents the circular flow of income in a two – sector economy

 

 

 

 

 

 

 

 

 

State what is represented by the arrows A, B, C, D                                       (4 mks)

  1. ………………………………………………………………………………………………
  2. ………………………………………………………………………………………………
  3. ………………………………………………………………………………………………
  4. ………………………………………………………………………………………………
  1. Highlight four circumstances under which a firm could be located near the market for its products                                                                                                                        (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………

 

 

 

 

  1. For each of the following source documents name the relevant day book    (4 mks)
Source document Daybook
Invoice issued

Credit note received

Cheque received

Invoice received

……………………………………………………………

……………………………………………………………

……………………………………………………………

……………………………………………………………

 

  1. Highlight four situations in which the opportunity cost concept may be used.  (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  1. Highlight any four services by commercial banks                                         (4 mks)
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………
  • ………………………………………………………………………………………………

 

BUSINESS STUDIES

Paper 1

 

Kenya Certificate Of Secondary Education

 

  1. Outline four objectives of studying business studies in schools (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………

 

  1. State four factors to be considered when evaluating a business opportunity (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Aruasa superstores lowered the price of one of its products with an intention of promoting sales. However demand for the product did not increase proportionately to the change in price. Give four possible reasons for what happened (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………

4          Highlight four limitations of modern technology to a growing economy like Kenya    (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………

5          Give four factors Mogusii a retailer should consider before extending credit to her customers

(4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Diana, Peter and James have been running a business as a partnership without a written agreement. Advice them on the following matters as per the partnership Act (4 marks)
  5. a) Profit and loss sharing …………………………………………………………………………

………………………………………………………………………………………………

  1. b) Salary to partners …………………………………………………………………………….

…………………………………………………………………………………………………

 

  1. c) Loans given to the business by the partner ……………………………………………………

…………………………………………………………………………………………………

  1. d) Admission of a new partner ……………………………………………………………………

…………………………………………………………………………………………………

7          State four Acts of parliament used by the government to protect consumers from scrupulous traders                                                                                                                              (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. For each of the following transactions state the account to be debited and the account to be credited (4 marks)

 

Transaction Account to be debited Account to be credited
a) Took goods worth sh 10,000

for own use

b) Returned goods worth

sh 2,000 to a supplier

c) Used business cash to pay

school fees

d) Sold goods on credit

 

  1. The table below shows the total costs of a certain product at given output levels (4 marks)
Output (Units) 0 10 20 30 40 50 60 70 80
Total costs sh 500 880 920 1020 1200 1320 1440 1620 1700

At output of  60 units,determine

  1. a) Average fixed costs
  2. b) Average variable costs
  3. c) Average total cost
  4. d) Marginal costs
  5. Highlight four reasons why a produce of goods may use intermediaries to distribute his goods

(4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Give four characteristics of money                                                                      (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. State whether each of the following transactions increased, decreased or had no effect on the balance sheet totals (4 marks)

 

   Transactions Effect on balance sheet totals
a) Bought office equipment in cash
b) Paid a creditor by cheque
c) Used business cash to pay dowry
d) Converted private room for business use

 

  1. State four structural changes that may take place in a country experiencing economic development (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Highlight four uses of proper Journal/General journal (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Outline four ways how a budget is used as a tool of planning (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. The following information was obtained from the records of mokaya as at 31-12-2008

(4 marks)

Motor vehicle                                                  90,000

Prepaid insurance                                            20,000

Bank loan                                                        40,000

Accrued wages                                                  6,000

Accrued rent                                                     5,000

Plant and machinery                                        60,000

Creditors                                                         30,000

Prepare Mokaya’s balance sheet as at 31st December 2008

  1. Give four uses of a bonded warehouse to the government (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. Post the following transactions in the ledger (5 marks)

2009

April    1 Started a business with cash at Bank sh 80,000

3 Paid Makore a creditor sh 20,000 by cheque after deducting 5% cash discount

4 Receive sh 40,000 by heque from Moraa less 10% cash discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. State four factors an organization will consider when deciding the type an office layout to adopt (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………

 

 

  1. The following information was extracted from original invoices of WasiWasi Traders

2009

Jan       1 Received invoice from wawili traders for sh 10,000, Jane sh 8,000, Amani sh 20,000

5 Received invoice from Maracha sh5,000, Kamau sh 8,000, Rotich sh 12,000,Makau

Sh 5,000, & Onyango sh 3,000.

Enter the above transactions in the appropriate book of original entry                           (4 marks)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. State four negative effects of inflation the Kenyan economy (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………
  4. State four reasons why people make choices every time they want to satisfy their wants

(3 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. The following information was extracted from the books of Sungura traders for the year ended 30th June 2009

Rate of stock turnover 3 times

Margin 20%

Expenses 10% of sales

Opening stock sh 90,000

Closing stock sh 150,000

Capital            sh 900,000

Calculate

  1. a) Gross profit (1 mark)
  2. b) Purchases (1 mark)
  3. c) Sales (1 mark)
  4. d) Rate of return on capital (1 mark)

24        Give four differences between direct and indirect production                                  (4 marks)

 

Direct production Indirect production
a)

 

b)

 

c)

 

d)

 

a)

 

b)

 

c)

 

d)

 

  1. List four errors which may make the trial balance fail to balance                          (4 marks)

a)………………………………………………………………………………………………….

  1. b) …………………………………………………………………………………………………
  2. c) …………………………………………………………………………………………………
  3. d) …………………………………………………………………………………………………

 

 

BUSINESS STUDIES

PAPER 1

 

Kenya Certificate Of Secondary Education

 

  1. Highlight four limitations of direct production                                       (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four factors that limit the satisfaction of human wants.               (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Highlight four features of a mobile phone that are important to a business man. (4mks

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four factors that can enable a business expand its activities.      (4mks)

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. The following information was available for the year 2005

2005                         Accrued rent          Prepaid rent

Jan 1                          Sh 20,000                   Sh 40,000

Dec 31                          Sh 36,000                    Sh 8,900

Rent expense paid in the course of the year amounted to Sh 120,000. Prepare a rent expense A/C and show amount charged to profit and loss account.        (3mks).

 

 

 

 

 

 

 

  1. State four roles a government plays in promoting a healthy business environment                                                                                                                                           (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. From the following transactions indicate the account to be debited or credited in the ledgers (3mks).
  2. a) The owner commenced business with cash at hand 100,000 and at bank Ksh 250,000
 Transaction DR CR
(a) The owner commenced business with cash at hand Ksh.100,000 and at bank Ksh.250,000

 

(b) Purchased piece of land at Ksh.150,000 from Cherono paying cash Sh.50,000 and balance to be paid later

  1. b) Purchased a piece of land at ksh 150,000 from Cherono paying cash sh.50,000 in cash and the balance to be paid later.
  2. The following diagram represents the equilibrium of a firm in the long run. Study and label the parts indicated. (4mks).

(a) ………………………………………………………………………

(b) ………………………………………………………………………

(c) ………………………………………………………………………

(d) ………………………………………………………………………

 

  1. Africa is richly endowed with natural resources yet many Africans live in poverty. Highlight four possible reasons why?                                                                  (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four reasons why many African countries are privatizing their state corporations                             (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four differences between a private company and a public company (4mks)
Private company Public company
a) a)

 

 

 

b) b)

 

 

 

c)

 

 

 

c)
d) d)

 

 

 

 

  1. The following information relates to the business of Malebo Traders in Ksh.

Stock 1.1.2009                   45,000

Stock 31.12.2009               35,000

Purchases                          150,000

Mark up                                20%

Prepare the trading account for the period ended 31.12.2009           (5mks).

 

 

 

 

 

 

 

 

  1. State four advantages of a rapidly expanding population structure (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Highlight four restrictions imposed by many countries in international trade                                                                                                                         (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State four reasons that account for the popularity of motor bikes as a mode of transport (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Highlight four solutions to a country that suffers from a persistent deficit in balance of payment position in international trade    (4mks).

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Highlight four reasons why an insurance company may refuse to honour a claim. (4mks).

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

 

  1. State four characteristics of under development (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Kenyans all over appreciate the way constituency development funds is changing their lives. Highlight any four                     (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. State any four modern trends in banking (4mks).

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. Highlight four reasons why the state imposes tax. (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

  1. The following balance sheet was incorrectly prepared. Prepare a corrected balance sheet:

Kameme stores

Balance sheet in Ksh as at 31.12.2006.

Capital 200,000 Cash at bank 80,000
Bank loan 97,000
Stock  58,000 Creditors 30,000
Cash in hand 32,000
Motor vehicles 90,000
Computers  37,000 Debtors 42,000
Accrued expense 12,000
                        424,000                                 254,000

(5mks).

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Highlight four ways in which the central bank controls credit in a country facing high inflationary rates. (4mks).

(a) ………………………………………………………………………………………………

(b)..…………………………………………………………………..…………………….……

(c)……………………………………………………………………..…………………………

(d) ………………………………………………………………………………………………

 

 

 

 

  1. State the purpose of the following documents as used in home trade
Document Purpose
Invoice  

 

 

Delivery note  

 

 

A receipt  

 

 

A credit note  

 

 

 

  1. Highlight four assumptions associated with perfect competition (4mks)

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

 

 

BUSINESS STUDIES

PAPER 1

 

Kenya Certificate Of Secondary Education

 

 

  1. State four reasons why choice is important in the satisfaction of human wants.                                                                                                                                 (4mks)

i.………………………………………………………………………………………………………

ii………………………………………………………………………………………………………

iii……………………………………………………………………………………………………..

iv……………………………………………………………………………………………………..

 

  1. Highlight four reasons why it may be necessary for Kenyan to control her imports.                                                                                                                                (4mks)

i.………………………………………………………………………………………………………

ii……………………………………………………………………………………………………..

iii…………………………………………………………………………………………………….

iv…………………………………………………………………………………………………….

 

  1. Identify the source documents used to record the following books of original entry.                                                                                                                     (4mks)
Books of original entry Source document
i).   Purchase journal
ii).  Returns inwards journal
iii). Sales journal
Iv) Petty cashbook

 

  1. Highlight four reasons for levying taxes.                                                                 (4mks)

i.……………………………………………………………………………………………………

ii………………………………………………………………………………………………………

iii…………………………………………………………………………………………………….

iv…………………………………………………………………………………………………….

 

  1. Highlight four features of life insurance cover.                                                   (4mks)

i.……………………………………………………………………………………………………

ii………………………………………………………………………………………………………

iii……………………………………………………………………………………………………

iv……………………………………………………………………………………………………..

 

  1. Outline four ways in which land influences the location of industries.           (4mks)

i.…………………………………………………………………………………………………… ii………………………………………………………………………………………………………iii……………………………………………………………………………………………………

iv……………………………………………………………………………………………………

 

  1. Highlight four reasons why there is need for ethical practices in business.  (4mks)

i.…………………………………………………………………………………………………….

ii………………………………………………………………………………………………………

iii…………………………………………………………………………………………………….

iv……………………………………………………………………………………………………..

 

  1. Outline four merits of micro- filming.                                                                  (4mks)

i.……………………………………………………………………………………………………

ii………………………………………………………………………………………………………

iii……………………………………………………………………………………………………

iv……………………………………………………………………………………………………

 

  1. The table below represents units of output and their cost of production. Find the value of cost A, B, c and D.                                                                          (4mks)

 

Units of output Total fixed cost Total variable cost Total cost Average fixed cost Average variable cost Average cost Marginal cost.
3 3,000 2,400 A 1,000 800 1,800 ––
4 3,000 3,200 6,200 950 B 1,550 800
5 3,000 5,000 8,000 C 1000 1,600 D
6 3,000 7,200 10,200 500 1,200 1,700 2,200

 

  1. Outline four ways of improving the efficiency of a warehouse.                       (4mks)

i.………………………………………………………………………………………………………

ii………………………………………………………………………………………………………

iii…………………………………………………………………………………………………….

iv…………………………………………………………………………………………………….

  1. The following information relates to rock Ice Ltd. For the period ended 31.12.2006

Sales                             1,000,000

Opening stock               100,000

Closing stock 25% on cost of sales.

Gross profit margin    20%

Calculate :

  1. Gross profit                                                                                                (1mk)

 

 

 

ii.Cost of sales                                                                                                 (1mk)

 

 

 

 

iii. Purchases