Business Studies Paper 1 KCSE 2020/2021

BUSINESS STUDIES KCSE paper for free. Do revision and share this content with other student. Catch up with KCSE Business paper 1 all in one pack. Enjoy studying here at HomeHub Study

Kenya Certificate Of Secondary Education

INSTRUCTIONS TO CANDIDATES

Answer all questions in the spaces provided.

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

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

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

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

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

What do you understand by the following terms?

a) Free goods……………………………………………………………………………………

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

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

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

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

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

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

State four functions of management. (4 marks)

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

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

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

(4 marks)

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

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

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

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

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)

State four advantages of cart transport. (4 marks)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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)

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

(4 marks)

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

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

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

The figure below shows an increase in supply for a commodity from SS to S₁S_1.

S S₁

Qo Q Quantity

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

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

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

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

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

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

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

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

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

Mention four types of unemployment. (4 marks)

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

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.

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

Outline four features of a monopoly. (4 marks)

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

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

Return on capital (1 mark)

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

c) Mark up (1 mk)

Working capital ratio (1 mark)

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

State four current trends in banking. (4 marks)

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

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

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

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

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

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 31^st July 2004. (4 marks)

State 4 methods of trade restrictions. (4 marks)

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

INSTRUCTIONS:

Answer all questions in the spaces provided

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

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

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

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

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

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

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

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

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

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

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

Drawings shs.50, 000

Added investment shs.90, 000

Capital as at 31^st Dec 2000 shs 800,000

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

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

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

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

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

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

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

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

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

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

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

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

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).

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.

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

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

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

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

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

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

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

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

a). Cash sale receipts. ___________________

b). Invoice received. ___________________

c). Credit notes.. ___________________

d) ___________________ (4mks).

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).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You are provided with the following information.

Shs.

Sales 400,000

Expenses 20,000

Mark up 25%

Calculate:

i) Cost of goods sold (3mks).

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

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

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

ii) Net profit. (1mk)

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

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

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

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

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

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

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

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

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

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

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

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).

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

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

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

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

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

The following diagram represents a market structure.

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

ii.

iii.

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

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

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

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

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

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

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

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

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

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

Highlight four characteristics of free resources (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
Give four features of incorporated business organizations (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
Give four emerging developments in the banking industry (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
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
Transaction	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

State any four causes of balance of payment deficit (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) ___________________________________________________________________________

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)

List four properties of a well drawn cheque (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
State four disadvantages of localization to a developing country (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
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)

State four advantages of self employment (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
State four characteristics of subsistence production in Kenya (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
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

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

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

attributes causing the shift (4mks)

Price

Quantity

a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
Outline four economic conditions that would prevail in a country undergoing inflation (4mks)
a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
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)

a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) ___________________________________________________________________________
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 _________________________________

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

adverse effects of the above trend. (4mks)

a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
d) _____________________________________________________________________________
The following balances were obtained from the books of Jansen Traders on
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)

The following is a demand curve XYZ of a firm

Y x

P y

Price

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)

_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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)

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)

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

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)

a) _____________________________________________________________________________
b) _____________________________________________________________________________
c) _____________________________________________________________________________
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

Outline four features of public limited company

ii.

iii.

4 Marks

Highlight four characteristics of monopoly market structure

ii.

iii.

4 Marks

Highlight four limitations of consumer initiated methods in consumer protection

ii.

iii.

4 Marks

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

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

5 Marks

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

Sales of goods on credit ______________________________

Correction of an under charge ______________________________

iii. Goods returned ______________________________

Purchase on credit ______________________________ 4 Marks

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

ii.

iii.

4 Marks

Outline four factors that may limit the development of Kenya

ii.

iii.

4 Marks

Give four methods used in transferring money by commercial banks

ii.

iii.

4 Marks

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

State four conditions that make labour more efficient

ii.

iii.

4 Marks

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

5 Marks

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

ii.

iii.

4 Marks

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

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

Cash sh. 2000

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

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

12^th Paid rent Ksh. 2000 by cheque

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

Cash discount

6 Marks

Name four disadvantages of using computers in a business.

ii.

iii.

4 Marks

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

ii.

iii.

4 Marks

“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

Highlight three benefits of mobile phone banking

ii.

iii.

3 Marks

State four external diseconomies of scale that a firm may experience

ii.

iii.

4 Marks

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

With reference to the diagram above

Name the type of elasticity represented 1 Mark

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

ii.

2 Marks

Give four social responsibility of a business to the community

ii.

iii.

4 Marks

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

ii.

iii.

3 Marks

State the shortest channels of distribution of imported goods

1 Mark

Give three circumstances under which this channel may be preferred

ii.

iii.

3 Marks

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

ii.

iii.

4 Marks

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.

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

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

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

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

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

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

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

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

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

State four components of a business idea (4mks)

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

Highlight four features of a bonded warehouse (4mks)

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

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

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

Revenue

Name the curves (4mks)

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)

Outline four sources of funds to local authorities

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

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)

The information below was extracted from the books of Oduya traders for the year ended 31^st 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)

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

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

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

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:

a) The working capital (2mks)

b) Net profit (3mks)

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

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

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

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

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

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four features of Hire Purchase. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

……………………………………………………………………………………………

………………………………………………………………………………………………

Certificate of Incorporation (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

Memorandum of association. (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

Articles of association. (1mark)

……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four essentials for a warehouse. (4 marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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 31^st December 2009. (4 marks)

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)

i) June 14 …………………………………………………………………………………………

………………………………………………………………………………………………

ii) June 26

……………………………………………………………………………………………

………………………………………………………………………………………………

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

………………………………………………………………………………………………

ii) June 26

……………………………………………………………………………………………

………………………………………………………………………………………………

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)

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

(4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four goals of development. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

management. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following information was extracted from the books of accounts of Jumba Traders for the year ended 31^st 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)

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

census. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

taken to improve their efficiency. (4marks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

On 1^st 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 2^nd : Cash sales Kshs. 209,400

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

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

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

January 31^st 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

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.

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

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

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

example. (2mks)

(i)

………………………………………………………………………………………………

(ii)

………………………………………………………………………………………………

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

STATEMENT OF AFFAIRS

BALANCE SHEET

a) _______________________________________

_______________________________________

a) _______________________________________

_______________________________________

b) _______________________________________

_______________________________________

b) _______________________________________

_______________________________________

c) _______________________________________

_______________________________________

c) _______________________________________

_______________________________________

d) _______________________________________

_______________________________________

d) _______________________________________

_______________________________________

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

…………………………………………………………………………………………………

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The diagram below shows a supply curve s_os_o and s_is_i

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

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

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

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

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

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

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

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

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

On 31^st 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 31^st dec. 2008 was Kshs. 24,000. Determine the commission for the year 2008. (4mks)

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

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

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

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

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

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

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

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

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

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

……………………………………………………………………………………………….

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

……………………………………………………………………………………………….

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The following balances of assets and liabilities were provided by Tana Trades as on 31^st 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)

A business enterprises had cash balance of kshs. 50,000 and an overdraft of shs. 15,000 on 1^st 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)

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

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

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

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

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

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

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

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

BUSINESS STUDIES

PAPER 1

2 HOURS

Kenya Certificate Of Secondary Education

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)
……………………………………………………………………………………………….
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

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 …………………………………..

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)
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

Outline four conditions which favour the use of personal selling as a strategy of product promotion (4 mks)

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

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)

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 31^st July 2003.

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)………………………………………………………………………………………………

Explain four ways in which warehousing facilitates trade (4 mks)

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

Distinguish between the following insurance policies; Whole life and endowment policy (4 mks)

Whole life	Endowment policy

State four positive implications of a rapidly growing population (4 mks)

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

(a) What is a consumer price index? (1 mk)

…………………………………………………………………………………………………

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

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

State four characteristics of a goof filing system (4 mks)

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

(a) Define public debt (1 mk)

…………………………………………………………………………………………………

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

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

On 1^st 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 29^th October 2009, calculate the amount paid if payment was made on 26^th October 2009 (4 mks)

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)

State four advantages of using credit card (4 mks)

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

State four differences between monopolistic market and an oligopolistic market

(4 mks)

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

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)

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

Highlight four circumstances under which a firm could be located near the market for its products (4 mks)

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

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

……………………………………………………………

Highlight four situations in which the opportunity cost concept may be used. (4 mks)

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

Highlight any four services by commercial banks (4 mks)

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

BUSINESS STUDIES

Paper 1

Kenya Certificate Of Secondary Education

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

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

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

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

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

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

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

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

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

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

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

(4 marks)

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

b) …………………………………………………………………………………………………
c) …………………………………………………………………………………………………
d) …………………………………………………………………………………………………
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)
a) Profit and loss sharing …………………………………………………………………………

………………………………………………………………………………………………

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

…………………………………………………………………………………………………

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

…………………………………………………………………………………………………

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)………………………………………………………………………………………………….

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

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

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

(4 marks)

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

b) …………………………………………………………………………………………………
c) …………………………………………………………………………………………………
d) …………………………………………………………………………………………………
Give four characteristics of money (4 marks)

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

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

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

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

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

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

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

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

b) …………………………………………………………………………………………………
c) …………………………………………………………………………………………………
d) …………………………………………………………………………………………………
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 31^st December 2008

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

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

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

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

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

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

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)

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

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

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

(3 marks)

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

b) …………………………………………………………………………………………………
c) …………………………………………………………………………………………………
The following information was extracted from the books of Sungura traders for the year ended 30^th 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

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

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

Direct production

Indirect production

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

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

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

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

Highlight four limitations of direct production (4mks)

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

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

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

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).

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

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

Transaction

(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

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.
The following diagram represents the equilibrium of a firm in the long run. Study and label the parts indicated. (4mks).

(a) ………………………………………………………………………

(b) ………………………………………………………………………

(d) ………………………………………………………………………

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

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

State four differences between a private company and a public company (4mks)

Private company	Public company
a)	a)
b)	b)
c)	c)
d)	d)

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).

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

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

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

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

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

State four characteristics of under development (4mks).

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

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

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

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).

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

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

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

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

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

State the purpose of the following documents as used in home trade

Document	Purpose
Invoice
Delivery note
A receipt
A credit note

Highlight four assumptions associated with perfect competition (4mks)

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

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

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

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

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

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

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

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

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

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

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

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

Highlight four reasons for levying taxes. (4mks)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 :

Gross profit (1mk)

ii.Cost of sales (1mk)

iii. Purchases (2mk)

Outline four functions of a profoma invoice. (4mks)

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

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

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

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

State four reasons why credit cards are popular in Kenya today. (4mks)

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

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

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

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

Highlight four features of ordinary shares. (4mks)

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

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

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

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

State four ways in which a business may be affected negatively by inflation.(4mks)

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

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

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

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

Identify four reasons which may lead to a shift in supply curve as shown below. (4mks)

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

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

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

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

The following information relates to business A, B, C and D. Determine the missing figure W, X, Y, and Z. (4mks)

Business	Capital (shs)	Assets (shs)	Liabilites (shs)
A	150,000	W	300,000
B	X	2,600,009	1,400,000
C	330,000	419,509	Y
d	Z	6,499,999	2,840,121

State four factors that determine the supply of money in an economy. (4mks)

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

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

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

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

The following balance sheet was incorrectly prepared by Kericho wholesalers.

Kericho W/salers

Balance sheet as at 31.12.2006

A ksh C + L Ksh.

Capital 200,000 Cash at bank 4000

Stock 56,000 Bank overdraft 30,000

Cash in hand 4,000 Motor vehicles 140,000

Fixtures 4,000 Debtors 72,000

Creditors 50,000

26400 26400

Required :

Prepare a corrected balance sheet. (5mks)

Highlight four benefits Kenya gets from joining a regional economic block like COMESA (4mks)

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

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

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

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

State four reasons why the short message services (SMS) is replacing letters as a way of communication (4mks)

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

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

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

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

Highlight three ways in which an oligopolist may fix its prices. (3mks)

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

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

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

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

Highlight four reasons why motorbikes are quickly replacing bicycles as a choice for clients. (4mks)

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

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

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

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

The per capita income in a country was $ 650 in January 2004. At the end of the end year the per capita had increased to $ 840. State four reasons why the standard of living of the people in the country may not have risen during the year (4mks)

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

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

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

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

the following information was extracted from the books of James traders for the year ended 31.12.2005

Rent owing 1.1.2005 shs 12,500
Rent paid for the year was shs.136,000

Rent owing 31^st Dec 2005 shs 24,000

Prepare the rent A/c for the year. (4mks)

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

State FOUR disadvantages of division of labour and specialization (4mks)

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

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

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

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

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

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

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

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

Outline FOUR problems associated with Co-operatives in Kenya (4mks)

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

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

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

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

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

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

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

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

State FOUR merits of a bonded warehouse to the importer (4mks)

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

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

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

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

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

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

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

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

State FOUR measures the government is using to protect consumers from exploitation by

Businessmen (4mks)

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

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

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

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

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

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

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

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

The following information relates to coast restaurant

Shs.

Sales 300,000

Sales returns 3,000

Purchases returns 2,000

Stock 1^st October 2007 30,000

Purchases 180,000

Stock 30^th September 2008 40,000

Calculate;

a) Net sales (1mk)

b) Cost of goods sold (1mk)

c) Gross profit (2mks)

State FOUR factors that may determine the amount of premium charged in life Assurance (4mks)

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

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

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

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

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

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

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

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

List FOUR merits of motocycles in transport (4mks)

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

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

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

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

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

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

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

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

The diagram below shows a shift of the supply curve. Study it and answer the following

questions

State FOUR factors that led to this shift of the supply curve. (4mks)

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

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

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

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

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

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

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

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

The conditions given below describe the various market structures. Write the correct market

structure against each of the conditions in the spaces provided (4mks)

	Conditions	Type of market structure
a)	Market structure determines the price for the market
b)	There is free entry and exit of firms
c)	Market structure with many sellers of differentiated products
d)	Product involved is homogenous

Outline FOUR sources of public finance (4mks)

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

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

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

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

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

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

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

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

The following information was extracted from the books of Wawili Traders for the year ended

31^st December 2009

Shs.

Machinery 460,000

Cash in hand 80,000

Debtors 130,000

Creditors 60,000

Prepaid salaries 20,000

4 year loan 280,000

Accrued rent 30,000

Required

Prepare a balance sheet of Wawili Traders as at 31^st December 2009 (4mks)

State FOUR factors which influence choice of a product promotion method (4mks)

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

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

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

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

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

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

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

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

State FOUR ways how mobile phone services are important in promoting business

activities (4mks)

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

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

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

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

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

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

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

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

Outline FOUR elements that may comprise the external environment of a business (4mks)

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

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

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

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

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

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

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

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

It is the objective of the government to decentralize industries throughout the country. Outline

FOUR measures the government has taken to realize this objective (4mks)

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

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

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

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

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

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

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

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

List FIVE qualities of a good filing system (4mks)

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

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

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

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

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

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

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

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

State FOUR benefits that may accrue to a manufacturing firm that uses modern technology

in its operations (4mks)

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

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

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

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

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

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

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

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

Outline FOUR advantages of a declining population to a country (4mks)

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

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

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

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

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

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

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

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

State FOUR factors leading to low level of national income in developing countries (4mks)

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

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

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

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

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

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

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

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

State FOUR undesirable effects of Inflation to a developing country (4mks)

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

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

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

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

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

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

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

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

Outline FOUR circumstances under which a bank can dishonour a cheque (4mks)

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

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

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

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

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

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

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

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

Highlight FOUR roles of an entrepreneur in economic growth and development of a

Country (4mks)

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

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

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

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

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

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

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

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

State FOUR advantages of M – Banking in the business sector (4mks)

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

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

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

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

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

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

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

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

The following balances were extracted from the books of Chebii Traders for the month ended

31^st March 2005

Shs

Sales 420,000

Purchases 240,000

Motor Van 300,000

Equipment 120,000

Debtors 80,000

Creditors 40,000

Expenses 160,000

Capital 440,000

Require:

Prepare a trial balance of Chebii traders for the month ended 31^st March. (4mks)

State FOUR measures that may be taken by the government to reduce imports (4mks)

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

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

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

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

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

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

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

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

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

State four reasons why countries are languishing in poverty despite being endured with a lot of economic resources (4mks)

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

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

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

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

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

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

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

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

Highlight four ways how the post election violence impacted negatively on many business enterprises (4mks)

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

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

………………………………………………………………………………………………

A consumer demands for a commodity is 50 units when his income is sh.500. After promotion his income increased to 800 and the demand for commodity changed to 60 units. Calculate his income elasticity of demand

Give four components used in measuring national income using expenditure approach (4mks)

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

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

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

…………………………………………………………………………………………………

State four circumstances under which profoma invoice can be used (4mks)

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

…………………………………………………………………………………………………

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

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

BoraBora traders had the following record for the year ending 30^th June 2006. Ksh

Capital as at 30^th June 2006 640 000

Net profit for the year 140 000

Capital as at 1^st July 2005 420 000

Drawing for the year 180 000

Required the additional capital during the year

On 1^st January 2008 traders has Ksh.65, 000 cash in hand and bank credit balance of Ksh.67, 000. During the month the following transactions took place

January 2^nd: Cash sales 107, 500

January 5^th: A debtor settled his sh.400, 000 by cheque less 5% cash discount.

January 15^th: Paid salaries sh.20, 000in cash

January 20^th: settled a creditor of sh.40, 000by cheque less 2% cash discount

January 22^nd: Debtor paid cheque his account of Ksh.45, 000 les 6% cash discount

January 24^th: Deposited sh.50, 000 into bank from office cash

January 31^st: banked all cash except sh.25, 000

Required

Complete the three column cash book below (5mks)

Date

Particulars

DIS allowed

Cash

Bank

Date

Particular

DIS rec

Cash

Bal

The following information was extracted from the books of Nyangweta traders for the year ended 31^st December 1995

sh.

1. Rent owing 1^st January 1995 12, 500
2. Rent paid for the year was 136, 000
3. Rent owing 31^st December 1995 24, 000

Prepare the rent account for the year (4mks)

State four steps that can be undertaken to solve the problem of increasing level of unemployment (4mks)

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

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

The following information relates to Kawamu traders for the year ended 30^th June 2008

Ksh.

Sales 150, 000

Opening stock 25, 000

Purchases 130, 000

Profit margin 20%

Prepare a trading account for the year ended 30^th June 2008 (4mks)

The per capita income in country X was ₤1350 in January 1999. At the end of that year the per capita income had increased to ₤1420. State four reasons why the standard of living for the people in the country may not have risen during the year (4mks)

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

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

State four activities which indicate that the government is a key player in encouraging both local and foreign investments (4mks)

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

Highlight four reasons for the increasing popularity of macro finance institutions (4mks)

Highlight four reasons why the motorbikes are quickly replacing bicycles as the choice for clients (4mks)

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

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

…………………………………………………………………………………………………

State four functions of customer care desk in much organization. (4mks)

Highlight four measures that a firm can take to improve the efficiency of its workers (4mks)

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

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

Highlight four factors that gives rise to monopoly in a market situation (4mks)

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

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

Classify each of the following as either personal, normal or rent accounts and indicate with (ü) whether the balance should be debited or credited (4mks)

Items	Types of account	Dr	Cr
a) Capital
b) Creditors
c) prepaid wages
d) cash in hand

Indicate the sources document (for each of the book of original entry below (4mks)

Books of original entry	Source document
a) Sales returns day book
b) Cash book
c) Purchase day book
d) Purchase returns day book

State four trade promotion tools used by producers (4mks)

Highlight four internal weaknesses that may affect business performance (4 mks)

…………………………………………………………………………………………………

vi)………………………………………………………………………………………………………………………………………………………………………………………………………

Outline four merits of a long chain of distribution (4 mks)

The following balance relates to Dasani enterprise. Prepare their total debtor accounts and determine their total sales.

Ksh.

Debtors balance on 1/1/2008 54, 000

Debtors balance 31/1/2008 56, 000

Cheques received from debtors 834, 000

Discount allowed 22, 000

Purchases returns 33, 000

Dishonoured cheques 72, 000

Cash sales 420, 000

Sales returns 12, 000

Required

Prepare the debtor accounts and determine their total sales

State four ways in which ware housing facilitate trade (4 mks)

Match each of the following classes of business activities with the correct statement in the table below (4 mks)

Statement	Activities
i) Combining different raw materials and converting them into finished goods
ii) Collecting goals from various produces and sharing them for onward sales
iii) Growing wheat, coffee, tea
iv) Flour milling

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

Highlight four social responsibilities of a business to its customers.

(4 Mks)

(i)

(ii)

(iii)

(iv)

Given below are books of original entry. State the source documents

used to prepare each of the books. (4 Mks)

	Book	Source document
i	Sales returns journal
ii	Purchase journal
iii	Cash book
iv	Sales journal

State four factors that may determine the amount of premium in

life assurance. (4 Mks)

(i)

(ii)

(iii)

(iv)

The following balances were extracted from the books of Njoroge Traders

On 31^st May 2004

Sh.

Creditors 62,500

Stock 2,000

2 year bank loan 40,000

Bank 160,000

Cash 20,000

Premises 800,000

Prepare Njoroge Traders balance sheet. (4 Mks)

Outline four advantages of using mobile phones to conduct

business activities. (4 Mks)

(i)

(ii)

(iii)

(iv)

The supply schedule of Mr. Okutonyi is shown below

Price Quantity

Ksh.

2 40

5 200

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

(b) Interpret the meaning of this elasticity of supply. (1 Mk)

Outline four circumstances under which a producer would not

require a lot of warehousing space. (4 Mks)

(i)

(ii)

(iii)

(iv)

The following balances were extracted from the books of

Pineapple Traders for the period ended 30^th June 2010.

Balance of creditors 1:7:2009 Sh. 30,000

Balance of creditors 30:6:2010 4,000

Payment to creditors 120,000

Discounts received from creditors 5,000

Carriage inwards 6,000

Required:

Determine the credit purchases of Pineapple traders. (4 Mks)

Outline four conditions which favour the use of personal selling

as a strategy of product promotion. (4 Mks)

(i)

(ii)

(iii)

(iv)

Highlight four ways in which the productivity of workers can

be improved (4 Mks)

(i)

(ii)

(iii)

(iv)

Complete the following table by indicating the account to be debited

and the account to be credited. (4 Mks)

	Transaction	A/c to be debited	A/c to be credited
(a)	Started business with Sh. 30,000 in cash
(b)	Purchased goods worth 45,000 on credit from Thika Traders
(c)	Withdrew Sh.2,000 cash for own use.
(d)	Deposited Sh. 10,000 into business bank account from private sources.

Mention four principles of a good tax system. (4 Mks)

(i)

(ii)

(iii)

(iv)

Highlight four causes of demand pull inflation. (4 Mks)

(i)

(ii)

(iii)

(iv)

Outline four ways in which manufacturers can enhance

consumer protection efforts. (4 Mks)

(i)

(ii)

(iii)

(iv)

Highlight four negative implications of a rapid population growth

in developing countries. (4 Mks)

(i)

(ii)

(iii)

(iv)

Highlight four errors that cannot be revealed by the agreement

of a trial balance. (4 Mks)

(i)

(ii)

(iii)

(iv)

The following information relates to Mugumo Traders for the year

ended 30^th Sept 2009.

Sh.

Sales 150,000

Opening stocks 25,000

Purchases 130,000

Mark up 25%

Prepare a Trading account for the year ended 30^th September 2009.(5 Mks)

Highlight four documents filed with the registrar of companies when

a company is being formed. (4 Mks)

(i)

(ii)

(iii)

(iv)

Outline four factors to consider when deciding on an ideal office

layout. (4 Mks)

(i)

(ii)

(iii)

(iv)

Identify four documents used in the delivery process in home trade.

(4 Mks)

(i)

(ii)

(iii)

(iv)

Outline four possible causes of business failure. (4 Mks)

(i)

(ii)

(iii)

(iv)

Highlight four problems encountered in the satisfaction of

human wants. (4 Mks)

(i)

(ii)

(iii)

(iv)

State four negative effects of production on environment and

community health. (4 Mks)

(i)

(ii)

(iii)

(iv)

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

1.Outline four reasons why people engage in business activities. (4 mks)

_____________________________________________________________________

State four gaps that may exist in a market to present an entrepreneur with a business idea. (4 mks)

_____________________________________________________________________

In each of the following cases, state the type of office department described. (4 marks)

Description	Type of department
Dealing with complaints from customers
Recruitment, employment and placement of staff.
Maintaining a record of all suppliers of goods and services.
Processing, manufacturing and assembling of products

Highlight four features of perfectly competitive market. (4 mks)

_____________________________________________________________________

Draw four channels of distribution for imported maize. (4 marks)

_____________________________________________________________________

In Kenya, there is a wide gap between the rich and the poor. Highlight four factors that contribute to this disparity in income distribution. (4 mks)

_____________________________________________________________________

The information below relates to the business of jua kali traders between 2^nd and 8^th June 2007.

Started business with shs. 10,000
Bought goods worth 14,000 paying shs 8,000 cash and the balance to be paid later.
Sold some goods worth shs 6,000 for 9,000 cash.
Paid for the goods bought on credit shs 3,000 cash.
Banked shs 1,000 cash into the business bank account.

Prepare a balance sheet. (4 marks)

Highlight four principles of taxation. ( 4 mks)

_____________________________________________________________________

Give four reasons why most firms are preferring open office layout. (4 mks)

_____________________________________________________________________

Outline four features of a cooperative society. (4 mks)

_____________________________________________________________________

State four ways in which the government of Kenya creates an enabling business environment. (4 mks)

_____________________________________________________________________

Outline four limitations of railway transport in Kenya. (4 mks)

_____________________________________________________________________

For each of the following transactions given, indicate in the appropriate columns the source document and the book of original entry in which the transaction should be recorded.

Transaction	Source document	Books of original entry
Purchase of goods on credit
Sale of desks on credit
Payment to a creditor
Goods returned by a client

Identify four special mail delivery services offered by the post office. (4 mks)

_____________________________________________________________________

Give the term used in insurance that fits the descriptions below.

Description	Term
Periodic payment made by the client
Method of calculating compensation incase of under insurance.
Life assurance lasting for a specified period
Temporary insurance certificate

The following information was extracted from the books of Jane’s Duka as at 31^st December 2004.

Opening stock 40,000

Gross profit 80,000

Margin 16%

Return inwards 30,000

Rate of stock turnover 6 times

Required: Determine

sales for the year (2 ½ mks)

closing stock (2 ½ mks)

State four disadvantages of direct mail as a method of sales promotion. (4 mks)

_____________________________________________________________________

State four circumstances under which a fall in price of a commodity would not lead to a fall in the quantity demanded of the same commodity. (4 mks)

_____________________________________________________________________

The following account balances were obtained from the books of Karibu Traders on 30^th April 2008.

Motor vehicle 240,000

Current liabilities 440,000

Land and building 200,000

Current assets 420,000

Furniture 60,000

Capital 480,000

Prepare a trial balance for Karibu traders as at 30^th April 2008. 4 mks)

For each of the following transactions, name the account to be debited and one to be credited. (4 mks)

Transactions	Account to debit	Account to credit
Cash introduced to expand the business
Tenants pay rent by cheque
A cheque drawn to buy a son’s toy
Shillings 500 cash deposited into the bank account

Outline three motives that people have for holding money. (3 mks)

_____________________________________________________________________

Outline four circumstances when cash payment would be preferred. (4 mks)

_____________________________________________________________________

Recently, the government of Kenya raised the retirement age from 55 to 60 years. Outline four merits associated with this move. (4 msk)

_____________________________________________________________________

Highlight five negative effects of inflation. (5 mks)

_____________________________________________________________________

State four factors that may limit the exploitation of natural resources in a country. (4 mks)

_____________________________________________________________________

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

1 Outline four social responsibilities of a business to its customers (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four basic characteristics of basic human wants (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four circumstances under which one will choose to transport goods by air despite

the high cost involved (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four limitations of using billboards in advertising products (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Highlight four problems encountered in measuring the national income of a country(4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following are types of office equipment pager, fax machines, telex and telephone. In the table

below match each equipment with appropriate function (4mks)

Function

Equipment

a) Sending and receiving written messages

b) Sending and receiving verbal messages

c) Sending and receiving copies of messages

d) Sending message one way only

State four principles of public expenditure (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Ouline four purposes of a cashbook (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four reasons that have contributed to the survival of small firm in the economy despite

economies of large scale (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following balance sheet relate to Kaptich Wholesalers

Kaptich Wholesalers

Balance Sheet

As at 1^st October 2009

Shs. Shs.

Furniture 90,000 Capital 100,000

Debtors 40,000 Creditors 20,000

Cash 70,000 AFC Loan 80,000

200,000 200,000

The following transaction took place during the month

a) Received cash Shs.30,000 from debtors
b) Paid creditors Shs.20,000 cash
c) Banked all the cash except Shs.10,000
d) Withdrew cash Shs.5,000 for personal use

Prepare a balance sheet for Kaptich Wholesalers as at 31^st October 2009.

Outline four essential features of any market (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four benefits that a country may enjoy by being a member of a trading bloc (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Identify the type of utility created by each of the following activities (4mks)
a) A shopkeeper selling bread to a customer…………………………………………..

……………………………………………………………………………………….

b) Transportation of firewood to a school……………………………………………..

……………………………………………………………………………………….

c) Baking of bricks…………………………………………………………………….

……………………………………………………………………………………….

d) Keeping of meat in a freezer………………………………………………………..

……………………………………………………………………………………….

The following balances were extracted from the books of Highgate Traders for the month

Ended 31^st March 2009.

Shs.

Sales 420,000

Purchases 240,000

Motor Van 300,000

Equipment 120,000

Debtors 80,000

Creditors 40,000

Expenses 160,000

Capital 440,000

Prepare a trial balance of High gate Traders for the month ended 31^st March 2009 (4mks)

State four advantages of non-verbal communication (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following information was available from scanty records of Kentoo electronics

business for the year ended 31^st July 2009 (4mks)

Shs

Return inwards 12,800

Discount allowed 9,200

Debtor balance (1/8/2008) 80,800

Debtors balance (31/7/2009) 47,000

Cash Receipt from debtors 58,600

Determine the credit sales for the period (4mks)

An entrepreneur may spot a gap in the market which may be converted into a business

Idea. Name such gaps (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four benefits of a bonded warehouse to importers (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four risks against which a shopkeeper may insure (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Highlight four determinants of economic growth (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Determine the missing figures represented by Q, R, S, T (4mks)

Business	Capital	Assets	Liabilities
A	5,500	16,000	Q
B	9,300	R	15,000
C	S	27,600	16,000
D	1,940	T	2,850

a) Q……………………………………………………
b) R……………………………………………………
c) S……………………………………………………
d) T……………………………………………………

Each of the following factor will either lead to a shift in or movement along the demand curve.

Indicate the correct effect by writing either ‘shift’ or ‘movement’ in the spaces provided(4mks)

Factor	Effect
a) Change in real income
b) Change in price of a product
c) Increase in sales tax of the product
d) Increase in population

Outline four negative effects of inflation (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four factors that influence transactionary motive for holding money (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Saving and credit co-operative societies are increasingly becoming popular. State four

Reasons that have contributed to this trend (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

BUSINESS STUDIES

Paper 1

Kenya Certificate Of Secondary Education

State four advantages of using the internet as a means of communication. (4mks)

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

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

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

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

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

Identify four reasons why hawking is very popular among the Kenyan youth. (4mks)

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

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

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

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

State four unethical practices in product promotion. (4mks)

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

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

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

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

Many Kenyans think that it is prestigious to import consumer items especially from developed countries. State four reasons why the government may restrict import despite this notion. (4mks)

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

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

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

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

State the structural changes that may take place in a country experiencing economic development. (4mks)

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

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

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

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

The following information relates to Beta Traders.

Shs.

Capital on 1^st Jan. 2009 700,000

Drawings during the year 80,000

Investments during the year 460,000

Capital on 31^st Dec. 2009 900,000

Required:

Determine net profit/net loss during the year. (4mks)

State four characteristics of economic resources. (4mks)

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

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

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

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

Insurance business has become very unpopular among investors. Highlight four challenges that have resulted to this. (4mks)

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

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

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

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

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

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

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

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

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

Highlight four negative implications of a rapidly growing population in a country. (4mks)

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

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

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

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

The following balances were extracted from the books of Binamu Traders for the year ended 31^st Dec. 2009.

Shs.

Land 110,000

Debtors 64,000

Capital 156,000

Sales 95,000

Purchases 58,000

Stock 35,400

Creditors 47,700

General expenses 41,800

Bank overdraft. 10,500

Prepare a trial balance as at 31^st Dec. 2009. (5mks)

Highlight three disadvantages of external borrowing as a source of government revenue. (3mks)

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

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

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

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

The following information relates to Malipo Traders as at 30^th Sept. 2009.

Shs.

Opening stock 100,000

Sales 720,000

Gross profit 25% of sales

Closing stock 140,000

Calculate

i) Cost of sales (2mks)

ii) Rate of stock turn over. (3mks)

State the meaning of the following terms, (3mks)
i) Price elasticity of demand

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

ii) Cross elasticity of demand.

iii) Income elasticity of demand.

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

Highlight four benefits that a community should derive from a manufacturing firm. (4mks)

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

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

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

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

Highlight four factors that contribute to inability of consumer organizations to execute their functions. (4mks)

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

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

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

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

The following balances were extracted from Mandaraka Traders for year ended 30^th June 2009.

Shs.

Debtors 160,000

Land 600,000

Creditors 360,000

Salary owing 80,000

Cash at bank 240,000

Stock 80,000

Prepaid rent 120,000

Required:

Prepare a balance sheet for Mandaraka Traders as at 30^th June 2009. (4mks)

Outline four reasons why planning is essential to a business organization. (4mks)

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

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

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

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

Record the following transactions in general journal (journal proper). (4mks)

Bought motor vehicle Shs.90,000 on credit from Waya Motors.
Sold a file cabinet to Mokaya Traders on credit for Shs. 36,000.
Donated maize flour worth Shs.12,000 to a home for the elderly from the business stock.
Converted his personal lawn mower to business property Shs.32,000.

State four negative consequences of inflation to an economy. (4mks)

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

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

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

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

Identify four items that constitute injections in the circular flow of income. (4mks)

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

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

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

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

State four uses of letter of credit as used in international trade. (4mks)

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

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

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

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

The following descriptions relate to various departments in an organization. Give the relevant departments that corresponds to the given description. (4mks)
i) Coordinates all activities in a firm

ii) Recruits new staff

iii) Buys all items in a firm

iv) Converts raw materials into finished goods

Identify the trader described by each of the statement given below.

i) A wholesaler who specializes in selling goods to other specialized wholesalers

…………………………………………………………………………………………………

ii) A wholesaler who moves from place to place selling her goods

…………………………………………………………………………………………………

iii) Usually sells goods to the final consumer

…………………………………………………………………………………………………

iv) Sells goods along busy highways.

…………………………………………………………………………………………………

State four ways in which HIV/AIDS prevalence has negatively affected business activities.4mks)

(a)…………………………………………………………………………………………

………………………………………………………………………………………………

(b)…………………………………………………………………………………………

………………………………………………………………………………………………

BUSINESS STUDIES

PAPER 1

Kenya Certificate Of Secondary Education

State four circumstances under which an entrepreneur may want to change his or her business.

(4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

List down four circumstances where downward communication would be appropriate. (2mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Name four causes of changes in capital of a joint stock limited Company. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four factor to be considered when purchasing an office machine. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four use of national income statistics.

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Identify four ways in which the nature of a product influences the choice of a means of transport.

(4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

State four reasons why it would be important for Kenya to participate in East African co- operation intergration. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline four measures which can be taken by Betty, a consumer to protect herself against malpractices by businessmen. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Identify four circumstances that make a producer to opt for intermediaries in the distribution process. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following information relates to Sauti kubwa Traders for the year ended 31^st December, 2009

Opening stock	65,000
Purchases	240,000
Sales	320,000
Profit margin	15 %
Closing stock	?

Prepare a trading account for the year Ended 31^st December, 2009. (5mks)

List four factors that may enhance a healthy business environment in a country. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Identify the accounts kept in each of the following types of Ledgers. (3mks)

Types of Ledgers	Types of Accounts
a) Nominal Ledger
b) General Ledger
c) Sales Ledger

The price of beans rose from Ksh.1000 to Kshs 1,200 per bag. This led to a full in demand

from 1,000 to 800 bags. Calculate the price elasticity of demand and interpret the result.

(4mks)

Give four factors that may be considered by an insurance firm before determining premiums to be charged for life assurance policy. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

List Four sources of government revenue. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline Four advantages of a bonded warehouse to the importer. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

The following balance sheet was incorrectly prepared:

Mascon Trader

Balance sheet

Cr For the Year Ended 31/12/2009 Dr

Capital	200,000	Cash at bank	10,000
Stock	56,000	Motor vehicles	100,000
Cash in hand	110,000	Creditors	50,000
Fixtures	4000	Accrued wages	30,000
	370,000		190,000

Required:

Prepare a correct Balance sheet, in order of permanency to show .Fixed assets, current assets, Liabilities and capital. (4mks)

Identify Four factors that limit use of credit cards in commercials transactions. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline Four characteristic of under development. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline Four disadvantages of advertisement to the consumers. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline any Four ways of improving the productivity of workers. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Outline Four negative effects of inflation . (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

………………………………………………………………………………………………

d)……………………………………………………………………………………………

………………………………………………………………………………………………

Indicate the effects of the following transactions on the balance sheet items by ( +) for increase, (-) for decrease and (NC) for no change.

Transaction	Assets	Capital	Liabilities
a) Bought furniture on credit for Kshs. 170,000 from Kiti Ltd
b) Purchased goods for Ksh 10,000 in cash
c) Borrowed Kshs. 170,000 from a bank and paid Kiti Ltd.
d) Received kshs 32,000 Cash from a debtor

State Four factors that would influence the amount of money held by an individual for the transaction purpose. (4mks)

a)……………………………………………………………………………………………

………………………………………………………………………………………………

b)……………………………………………………………………………………………

………………………………………………………………………………………………

c)……………………………………………………………………………………………

d)……………………………………………………………………………………………

……………………………………………………………………………………………

Outline any four uses of the general journal. (4mks)

a)……………………………………………………………………………………………

b)……………………………………………………………………………………………

c)……………………………………………………………………………………………

d)……………………………………………………………………………………………

BUSINESS STUDIES

Paper 1

Kenya Certificate Of Secondary Education

Name four disciplines that constitute business studies as a subject (4 mks)

i)……………………………………………………………………………….

ii) ………………………………………………………………………………

iii)……………………………………………………………………………….

iv)……………………………………………………………………………….

State four features of tramps as used in sea transport (4 mks)

i)……………………………………………………………………………….

ii) ………………………………………………………………………………

iii)……………………………………………………………………………….

iv)……………………………………………………………………………….

3 The following represents a traditional business cycle as portrayed by cyclical

unemployment

Name the parts marked

…………………………………………………………………

………………………………………………………………

c ……………………………………………………………….

……………………………………………………………… (4mks)

Taxes constitutes a very crucial component of any country’s source of revenue,

outline four reasons why the government levies taxes (4mks)

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)……………………………………………………………………………………

iv)…………………………………………………………………………………..

State the effects of the following independent transactions on owner’s

capital(4mks)

TRANSACTION EFFECT

(a) Purchasing of stock for shs.150,000 on credit ………………………

(b) Converted a personal car worth shs

600,000 into business use. ………………………

(d) Sold goods worth shs.100,000 at shs.120,000 ………………………

(4mks)

6 An entrepreneur may spot a gap in the market which may be converted into a

business idea. Name four such gaps. (4mks)

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)…………………………………………………………………………………

Highlight four benefits of communicating effectively in a business organization.

(4mks)

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)……………………………………………………………………………………

iv)…………………………………………………………………………………..

8 Johanna’s income increased from shs.16,000 to shs.20,000 causing his demand

for a commodity to increase from 1000 units to 1,200 units. Calculate his income

elasticity of demand (4mks)

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

………………………………………………………………………………………

9 Name the insurance policy that a school can take to cover the following risks

Losses arising from debtors failure to pay their debts

………………………………………………………………………………

Injury caused by the school dog to a passerby

…………………………………………………………………………..

Loss of cash when being taken to the bank

……………………………………………………………………………

Loss of goods through dishonesty of an employee,

…………………………………………………………………………..(4mks)

10 Given below are ledger accounts of Mwangi Traders. Balance off the accounts

as at 31/1/94

Capital 1/1/94 Bal b/d 50,000

Cash 1/1/94 Bal b/d 70,000 15/1/94 Creditors 35,000

20/1/94 Equipments 25,000

Creditors a/c

15/1/94 cash 35,000 1/4/94 Bal b/d 60,000

10/1/94 Purchases 20,000

Equipment 1/1/94 Bal b/d 40,000

20/1/94 cash 35,00

Outline Four ways in which a savings and credit co-operative society can raise

capital (4mks)

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)……………………………………………………………………………………

iv)…………………………………………………………………………………..

12 The following are types of wholesalers; General line, cash and carry, specialized

and Rack, jobbers. In the table below, match each description with the

appropriate wholesaler

a) Operates on a self-service basis
b) Sell particular products to specialized wholesalers
c) deal in a wide variety of one product
d) deal in particular goods from a given line

(4mks)

13 Identify the appeal created by each of the following advertisements

“Easy coach, sleeping coach! The most advanced in Kenya”

……………………………………………………………………………

“Vaseline petroleum Jelly makes your skin sapple and soft”

………………………………………………………………………………

“Visa card! You can pay for your hotel travel ticket or hire a car all over”.

…………………………………………………………………………

“Always the best way to keep all ladies feeling dry all day long

………………………………………………………………….

(4mks)

The diagram below represents short run equilibrium of a firm. Use it to answer the

questions below.

Identify the market structure shown in the diagram above (1mk)

………………………………………………………..

What do you call the part shaded in the diagram (1mk)

…………………………………………………………..

identified will remain the same. (2mks)

i)…………………………………………………………………………………….

ii) ………………………………………………………………………………….

15 The following cashbook was obtained from the books of Haraka traders on

31/12/2008

Cashbook

Date

Details

Cash

Bank

Date

Details

Cash

Bank

Jan 1

Bal b/d

Debtors

Furniture

Sales

5000

8000

15,000

2000

10,000

Jan 4

Drawings

Rent

Purchases

1000

5000

8000

Identify the transactions of (4mks)

Jan 3^rd

Jan 4^th

^{…………………………………………………………………………………………………………………………………}

^{………………………………………………………………………………………………………………………………….}

^{…………………………………………………………………………………………………………………………………..}

Identify the motive of holding money described by each of the following

statement as either speculative, precautionary, or transactionary.

Mrs Mutugi keeps money for her daily transport to work

……………………………………………………………..

Rumour has it that the Minister of finance will reduce the price of sugar in the next budget

…………………………………………………………………..

Panda keeps money for his son who is always sickly

…………………………………………………………………….

(3mks)

17 Highlight four ways in which the government can control the volume of Mitumba

into the country

i)…………………………………………………………………………

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)…………………………………………………………………………………

(4 mks)

Outline four conditions necessary for effective delegation to take place in an

organization

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)………………………………………………………………………… (4mks)

19 State four features of public warehouses

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)…………………………………………………………………………………

(4mks)

20 State the source document for each of the following day books

Daybooks	Source document
i) Sales Journal
ii) Sales return journal
iii) Purchases journal
iv) Cash receipt journal

(4 mks)

21 In planning the economy the country has to establish policy objectives to be

achieved. Identify FOUR policy objectives that the government of Kenya has established to be achieved by 2030.

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)…………………………………………………………………………………

(4 mks)

22 A business has an obligation to take care of the society in which it operates.

Identify FOUR ways in which the business should be socially responsible to the customers

i)…………………………………………………………………………………….

ii) …………………………………………………………………………………..

iii)…………………………………………………………………………………

iv)…………………………………………………………………………………

(4mks)

23 From the following information you are required to prepare a balance sheet of

Kanini traders as at 31/12/2005.

Item Kshs.

Stock 80,000

Debtors due from Kanini traders 50,000

Land 120,000

Network 130,000

Furniture 75,000

Cash in hand 15,000

Debts due to Kanini traders 35,000

Long –term loan 65,000

Bank overdraft 80,000

24 State four features of land as a factor of production (4mks)

(i)

(ii)

(iii)

(iv)

25 Nakuru stores sells the goods at a margin of 20%. For the year ended 30^th June

2009 its trading activities were as follows:

Purchases 500,000

Sales 750,000

Opening stock 150,000

Calculate

Gross Profit

(b) Closing stock

( c) Rate of stock turn-over (4mks)

Cookie	Duration	Description
cookielawinfo-checkbox-analytics	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional	11 months	The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy	11 months	The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Business Studies Paper 1 KCSE 2020/2021

Kenya Certificate Of Secondary Education

INSTRUCTIONS TO CANDIDATES

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Quick Links

Resources

Registrations

Kenya Certificate Of Secondary Education

INSTRUCTIONS TO CANDIDATES

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Kenya Certificate Of Secondary Education

Quick Links

Resources

Registrations

Cookie Notice