565/1
NAME…………………………………ADM .NO………………INDEX NO.………..………
SIGNATURE…………………………………………..……DATE……………………………..
KENYA CERTIFICATE OF SECONDARY EDUCATION
MOCKS 1 2023
BUSINESS STUDIES
Paper 1
TIME: 2 HOURS
Instructions to Candidates
- Write your name and index number in the spaces provided above.
- Sign and write the date of the examination in the spaces provided above.
- This paper consists of 25
- Answer ALL questions in the spaces provided
- This paper consists of 9printed pages. Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing
- Candidates should answer the questions in English
For Examiner’s Use Only
Question | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 |
Marks |
Questions | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 |
Marks |
TOTAL MARKS
- State four benefits of learning business studies to a Kenyan student (4mks)
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- Highlight four measures a business may take to ensure that its environment is conducive to its business activities (4mks)
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- State four factors to consider when evaluating a viable business opportunity (4mks)
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- ………………………………………………………………………………………
- Most organizations have come up with customer care desks. outlinethree functions that they play . (3mks)
- ………………………………………………………………………………………
- ………………………………………………………………………………………
iii. ………………………………………………………………………………………
- ……………………………………………………………………………………
- Identify the documents that each of the following descriptions refer to (4mks)
Description | Document |
i. Used to inform buyer that seller has received the order | |
ii. Used to ask about the availability of goods. | |
iii. Used to organize for transportation of goods between seller and buyer | |
iv. Used to show goods sold on credit |
- State four factors affecting the circular flow of income (4mks
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- The following balances were extracted from the books of WINNICO Limited on 31stDecember 2020.
Item | Ksh. |
Capital | 150,000 |
Furniture | 110,000 |
Purchases | 285,000 |
Hawi (supplier) | 180,000 |
Sales | 230,000 |
Wages paid | 41,000 |
Return inwards | 5,000 |
Return outwards | 15,000 |
Cash | 139,000 |
Rent received | 5,000 |
Prepare the trial balance of the business as of 31st December 2020 (5mks)
- The information given below relates to Jomo Traders for the year ended 31stAugust 2021
Rate of stock turn over 3 times
Mark -up 20%
Opening stock ksh. 90,000
Closing stock ksh. 150,000
Required
- Gross profit (2mks)
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
- Sales (2mks)
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………
- Highlight four features of services . (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four causes of seasonal unemployment in Kenya (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- Highlight four circumstances under which the capital of a business may change (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- On 1 January 2006, Romano Traders started sh. 180,000 in cash and sh. 170,000 at bank. During the month, the following transactions took place:
2006
January 10 paid ABM Traders sh. 25,000 by cheque less sh. 1000 cash discount
16 sold goods for sh. 14,000 cash.
31 Banked all the cash except sh. 5,200
Enter the above transactions in the relevant cash book and balance it off. (4mks)
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………
- List four clauses of memorandum of association for joint stock companies (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four causes of demand- pull inflation (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four activities carried out in the process of distribution (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- Outline four structural changes that may take place when a country is experiencing economic development (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four reasons why it is suitable to locate a bonded warehouse at the point of entry of a country (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- Highlight four reasons why business still use radios to promote their products despite other highly advanced media (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four factors that may lead to an increase in market supply of a product (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State reward of each factor of production (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- Highlight four methods used by a monopolistic firm to differentiate its products (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- Juma wholesalers owned a motor vehicle at ksh. 2,000,000 which they comprehensively insured for ksh. 1,600,000. The vehicle was involved in an accident and written off. determine the amount of money Jumawholesalers should expect to get from their insurer
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
- State four ways in which the government is involved in business activities. (4marks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four ways in which the nature of goods would influence the choice of transport
(4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- State four advantages of locating a firm near the source of raw materials (4mks)
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
- ………………………………………………………………………………
565/2
NAME……………………………………..………………ADM .NO………………………..………
SIGNATURE…………………………………………..……….DATE………………….………….
.
KENYA CERTIFICATE OF SECONDARY EDUCATION
MOCKS 1 2023
BUSINESS STUDIES
Paper 2
TIME: 21/2 hours
Instructions to Candidates
- Write your name and index number in the spaces provided above.
- Sign and write the date of the examination in the spaces provided above.
- This paper consists of 6
- Answer ANY FIVE questions in the spaces provided
- This paper consists of 3printed pages. Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing
- Candidates should answer the questions in English
Question |
Maximum
score |
Candidates
score |
20 | ||
20 | ||
20 | ||
20 | ||
20 | ||
- (a) ExplainfivemeasuresthatKenyamaytaketocontrolunemploymentproblem (10 marks)
(b) Highlightfivedifferencesbetweendirecttaxandindirecttax . (10 marks)
- (a) Explain the meaning and significance in each of the following terms as used in foreign trade.
(10 marks)
- Terms of trade.
- Balance of payment.
- Exchange rate.
- Balance trade.
- Common market.
(b)Explainfivefunctionsofthenationalbudgetasatoolofplanning. (10 marks)
- (a)Discuss five factors that have led to survival of small-scale retailers despite competition from
Supermarkets. (10 marks)
(b)ThefollowingbalanceswereextractedfromthebooksofMuteitraderson31stDecember,2017.
Shs
Gross profit 800,000
General expenses 180,000
Buildings 1,250,000
Equipment 380,000
Capital 1,400,000
Furniture 117,000
Insurance 48,000
Stock 25,000
Commission income 125,800
Discount allowed 55,000
Discount received 56,200
Bank Overdraft 79,000
Salaries and wages 320,000
Creditors 90,000
Carriage outwards 60,000
Debtors 65,500
Carriage inwards 34,500
Cash 51,000
Prepare:
- Profitandlossaccountfortheperiodended31st
- Balance sheet as at 31stDecember,2017. (10marks)
- (a) Highlightfivebenefitsaccruingtoasellerwhousesthepersonalsellingmethod
to promote herproducts. (10marks)
(b)The following transactions relate to Furaha traders for the month of July,2008
July 1 : Balance brought down cash sh.16,250 and Bank Shs.19,847
July2 : Sold goods worth Shs.1,348 to Patel and received a calculator in exchange
July 5 : Paid transport by cheque Shs.2,000
July 6 : Issued a cheque to Kerio Traders setting an invoice for Shs.10,000 deducting 2%
cash discount
July 10: Transfer Shs.15 000 from cash till to bank
July 12: Sold goods for cash Shs.12,000 less 2% cash discount
July 13: Sold goods to Onyango on credit worth Shs.15, 000
July 14: The owner of the business withdrew Shs.3000 in cash to buy a present for his
daughter
July 16 : Received a cheque from Kuria Shs.2,500 less 5 % cash discount
July 22 : Bought furniture from Babu Traders on credit worth Shs.16,500 and cash
discount of 10% if payment is made within 2 weeks
July 24: Withdrew cash from bank for office use Shs8,000
July 26: The owner brought into the business Shs.9,000 cash
July 27: Issued a cheque to Babu Traders for amount due
July 28: Sold goods to Kuria worth Shs.5,000 for Shs.3,800 and received payment by
cheque
July 30: Banked all cash and remained with Shs.100 in the cash till
Required; Prepare Furaha Traders three column cash book for the month of July 2008.
(10 marks)
- a)Explainfivemeansofwrittencommunication. (10marks)
- b) Explainfivemeasuresthatareadoptedbythegovernmenttoprotectconsumers
againstexploitation. (10marks)
- (a) Explainfive(10marks)
( b) Commodity A and B are subtitute products. Using well label diagrams explain
how increase in supply of commodity A would affect the equilibrium price and quantity
demanded of commodity B. (10mks)
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
MOCKS 1 2023
BUSINESS PP1 MS
-
- Torelateknowledge,skills,andattitudestodaytoday.
- Self-
- Highlight four measuresa bustoensurethatitsenvironmentisconduciveto its businessactivities.
- Ensuringthebusinessoperatesinsurroundingthatarecleanandattractiveto
- e.,relevant permitsandlicenseshavebeenobtained.
- Thatallgovernmenttaxesarepaidpromptly
- Statefourfactors to
- Potentialprofits
- Availability ofmarket
- Availability of rawmaterials
- Amount of capitalrequired
- Level ofcompetition
- Security
- Governmentpolicy
- Futuregrowth
- Acceptance by thecommunity
- Cost ofcapital
- Ability tomanage
- Mostorganizations havecomeupwithcustomercareOutline functions that theyplay.
- Advisemanagementonissuesandcomplaints
- Attend to anyenquiry
- Buildconfidenceinclients (efficientservice)
- Attend tocomplaints
- Ensurethatclientsareattendedtofastenough
- (
Description | Document |
i)Used to inform buyer that seller has
received the order |
Acknowledgements note |
i) Usedtoaskabouttheavailabilityof
goods |
Letter of inquiry |
ii)Usedtoorganizefortransportation
of goods between seller and buyer |
Consignment notes |
iii) Used to show goods sold on credit | Invoice |
- Namefour factorsaffectingthecircularflowofincome
- Savings-leakages
- Taxes-leakages
- Governmentexpenditure
- Investments
- Foreigntrade
- WINNICO Limited
Trial Balance
As at 31st December 2020.
Item | Dr.
Ksh. |
Cr.
Ksh. |
Capital | 150,000 | |
Furniture | 110,000 | |
Purchases | 285,000 | |
Hawi (supplier) | 180,000 | |
Sales | 230,000 | |
Wages paid | 41,000 | |
Return inwards | 5,000 | |
Return outwards | 15,000 | |
Cash | 139,000 | |
Rent received | 5,000 | |
580,000 | 580,000 |
Cost of sales =KSH. 360,000
20=
=KSH.72,000
- G.P =72,000 + 360,000
=KSH. 432,000
- Characteristics of services
- They are intangible and invisible as they are not in material form.
- They can’t be stored for future use-perishable.
- Quality can’t be standardized.
- They are inseparable from the provider.
- Statefour causesofseasonalunemploymentinKenya
- Declineinthesupplyofcertainrawmaterials
- Temporary employment/contractworkers
- Economicdepression/declineineconomicactivities
- Voluntaryresignationduetogreenerpastures
- e.temporarystoppageorterminationofemployment
- Highlight four circumstances under which the capital of a business may change
(4marks)
- Profit increases capital
- Losses reduces capital
- Additional investment increases capital
- Drawings reduces capital
- Romano Traders
Two column cash Book
- List four clauses of memorandum of association for joint stock companies
- Nameclause
- Objectiveclause
- Liabilityclause
- Capitalclause
- Declarationclause
- State four causes of demand-pull inflation
- Increase in government expenditure
- Effects of credit creation by the commercial banks
- Increase in money incomes
- General shortage of goods and services
- Increase in consumer’s expenditure
- Statefouractivitiescarried o u t intheprocessofdistribution (4mks)
- Handling
- Storage
- Packing/packaging
- Transportation
- Grading
- Blending
- Sorting
- Breaking thebulk
- Outlinefourstructuralchangesthatmaytakeplacewhenacountryisexperiencing economicdevelopment
- Shiftfromagriculturetomanufacture
- Reduction in illiteracylevels
- Increase in skilledmanpower
- Improvement in healthfacilities
- Improvement intechnology
- Improvedinfrastructure
- Improved balance ofpayment
- Statefourreasonswhyitissuitabletolocateabondedwarehouseatthepointof entry of acountry
- For easyre-exporting.
- Topreventtheentryofharmfulgoods /dangerousgoods.
- Highlightfourreasonswhybusinessesstilluseradiostopromotetheirproducts despite other highly advancedmedia
- Wider geographicalcover
- Differentradiochannelscancastindifferentlanguages
- Blindcangetthemessage
- Abletoreachmanypeopleatthesametime
- Radioisaccessibleevenintheremoteareas
- Allows repetition ofmessage
- Affordable /cheaper toadvertise.
- Statefourfactorsthatmayleadtoanincreaseinmarketsupplyofaproduct.
(4 marks)
- Increaseinthepriceoftheproduct
- Failinthecostofproduction
- Availability of cheapcredit
- Decrease inprices
- Whenthedemandishigh
- Futureexpectedfallinprice
- State reward for each factor of production. (4marks)
- Capital -interest
- Land-rent /rates/royalties/lease fees
- Entrepreneurship -profit
- Labour-wages/salaries /professional fees/commission
- Highlight4methodsusedbyamonopolisticfirmtodifferentiateitsproducts
- Branding
- Packaging in differentsizes
- Pricing
- Blending into differentcolours
- Persuasiveadvertising
- Trademarks
- Juma wholesalers owned a motor vehicle valued at 2,000,000 which they comprehensively insured for Kshs. 1,600,000. The vehicle was involved in an accidentandwrittenoff.DeterminetheamountofmoneyJumawholesalersshould expect to get from theirinsurer
Compensation = sum assured/insured premium x loss
Actual value
1,600,000 x 1,600,000 = 1,600,00
2,000,00
- State four ways in which the government is involved in business activities
- Regulation
- Training
- Internal tradepromotion
- Eternal tradepromotion
- Serviceprovisions
- Creation of enablingenvironment
- Consumerprotection
-
- Ifgoodsareperishableafastandappropriatemeansisrequired
- Ifgoodsarefragile,asmoothmeansoftransportisrequired
- Ifgoodsarehighlyvalued,asafeandsecuremeansisrequired
- Ifgoodsareurgentlyrequired,afastermeansisused
- Ifgoodsarebulkyanappropriatemeanswillbeused
- (4marks)
- Reduce transportcost
- Get quality rawmaterials
- Enhance continuousproduction
- Avoidwastageofrawmaterials
ELDORET DIOCESE EXAM 2021
MOCKS 1 2023
Marking Scheme
Business Studies Paper Two
- (a) ExplainfivemeasuresthatKenyamaytaketocontrolunemploymentproblem
- Populationcontrolegfamilyplanning
- Increasedgovernmentexpenditurethushavingmanyprojectssetup
- Encouragingexploitationofnaturalresourcestoincreaseproductionactivities
- Exportinglabortocountrieswithlabordeficiency
- Diversificationoftheeconomytoreduceseasonalunemployment
- Ruraldevelopment
- Encourageforeigninvestmentinthecountry
- Encourageuseoflabor-intensive methodinproduction
- Improvementoftheinfrastructuretostimulateeconomicactivities
- Improvementofeducationsystemstomakeitmoreappropriatetotheemploymentneeds of theeconomy.
(b) Highlightfivedifferencesbetweendirecttaxandindirecttax
Direct tax | Indirect tax |
(i)Tax revenue is certain | (i)Uncertainty in tax collected |
(ii) Does not affect prices of goods and services | (ii)Affectspricesofgoodsandservices |
(iii) The society or taxpayers are conscious | (iii)thetaxpayermaynotbeawareof tax beingpaid. |
(iv) Economical in collection | (iv) Expensive in collection |
(v) Cannot be avoided | (v) Can be avoided |
(vi)Can discourage work | (vi)Encourages people to work hard to maintain their standards of living. |
2.(a) . Explain the meaning and significance in each of the following terms as used in foreign trade.
Termsoftrade:therateatwhichexportsononecountryexchangeswith
imports.Tot=Priceindexofexportsdetermineswhetherthetradebetweenonecountryandanotherisfavorable.
- Balanceofpayment:thedifferencebetweenbothcapitalandcurrentexportsandimportsofa Ifthevalueofexportsishigher,thecountryexperiencesasurplusandviceversa.It determineswhetheracountryisexperiencingsurplusinI
- Exchangerate:rateatwhichacountry’scurrencyexchangeswithanother.Thisratedeterminesthevalueofexportsandimports/showsitsindicationofacountry’seconomicstrength.
- Balancetrade:thedifferencebetweenthevalueofacountry’svisibletangibleimportsandits Determineswhetheracountryisexperiencingsurplus/deficittrade
Commonmarket:anagreementbetweencountriesthatallowfreemovement
ofgoodsand factorsofproduction.Thisallowsmobilizationofresources/
tradewithoutrestriction
(b). Explainfivefunctionsofthenationalbudgetasatoolofplanning.
- Outlininggovernmentexpenditure–Itdetailsthevariousexpenditureprogrammedthe governmentplanstoundertakeoveragivenperiod
- Outlininggovernmentrevenue–Itgivesdetailsofthevarioussourcesofrevenuefor thegovernmenttofinanceitsactivities
- Enablinggovernmentplanning–Thegovernmentusesthebudgettoplanforvarious activitiesandprogrammedthatleadtoeconomicgrowthanddevelopment
- Introducingchangesintaxation–Thevarioustaxestobeapplied,thetaxrateandthe modeofapplicationofthetaxesareoutlinedinthebudget
- Regulatingmoneysupply–Itoutlinesthemonetarysystemstobeinstitutedbythe governmenttoregulatemoneysupplyintheeconomy
- Stimulatingeconomicactivities–Itisusedtoincreasegovernmentexpenditureinthe economywhichwillspureconomicactivitiesinthecountry
- (a) Discussthefactorsthathaveledtothesurvivalofsmall-scaleretailersdespitecompetitionfrom supermarkets(10marks)
- Personalizedservices:smallscaleretailersprovidepersonalizedservicesandarethereforeab
- accessibilityofsmall-scaleretailers/convenienceoflocatingsmallscaleretailersare conveniently in urbancenters.
- Creditfacilitiessmallscaleretailersoffercreditfacilitiestosome oftheircustomerswhichare notavailabletospecificcustomerneeds.
- Runningcostsofsmall-scaleretailersarelittleandthismakesiteasierforthemtosurvive unlikesmallmarketswhichrequirehugecapitaltooperate.
- Management:Smallscalebusinessestherisksinvolvedarelowwhileinsupermarketsaregrew
- Starting/initialcapitalstartingsmallscaleretailersasuitableforpeopleformoflowincome.
- Flexibility-itiseasierforsmallscaleretailerstochangefromoneformofbusinesstoanother locationthanitisforsupermarkets.
(b)
Mutei traders
ProfitandLoss
For the year ended 31/12/2017√
Shs Shs
Generalexpenses180,000 √ Grossprofit b/d 800,000√
Insurance48,000 √ Commission income 125,800 √ Discountallowed55,000 √ Discount received 56,200√
Salariesandwages320,000√
Carriageoutwards60,000√
NetProfit319,000√
982,000 982,000
Marking10√*½=5marks Muteitraders
Balancesheet
Asat31/12/2017 FixedAssets Shs Shs
Buildings1,250,000√ Capital 1,400,000√
Equipment380,000√ AddNetProfit 319,000√
Furniture117,000√ 1,719,000
1,747,000
Currentassets Currentliabilities
Stock 25,000√ Creditors 90,000√
Debtors65,000√BankOverdraft79,000√169,000
Cash 51,000√ 141,000
1,888,000 1,888,000
- (a)Highlightfivebenefitsaccruingtoasellerwhousesthepersonalsellingmethod to promote herproducts
- Personalsellinggivestheselleranopportunitytodemonstratetheproducts that they areselling.
- Salespersons
- Sellerhasanopportunitytoobservethereactionofcustomertotheproduct
Enablesthesellertotargetthespecificgroupsinquestion.
(b) Faraha Traders
DATE | PARTICULARS | D.A | CASH | BANK | DATE | PARTICULARS | D.R | CASH | BANK |
2008
July 1 10 12 16 24 26 28 30 |
Balance b/d
Cash Sales Kuria Bank Capital Sales Cash ©
Balance b/d |
240 125
1200
1565 |
16520
8000 9000 3800
37320 1000 |
19847
15000 11760 2375
18320 67302 32652 |
2008
July 5 6 10 14 24 27 30 |
Transport Kerio traders
Bank Drawing
Cash Babu traders Bank © Balance c/d
|
200
1650
1850 |
15000 3000
18320 1000 37320 |
2000 9800
8000 14850
32652 67302 |
- a)Explainfivemeansofwrittencommunication. (10marks)
- Letters–aformofwrittencommunication;business,official/formal,non–formaletc
- Telegrams-isameansofcommunicationprovidedbythepostoffice,thesender obtainsthetelegramformfromthepostofficeandfillsthemessageonitincapital lettersandhanditovertothepostofficeemployeesatthecounter.
- Telex-isameansofcommunicationusedtosendshortordetailedmessagesquickly byuseofTheserviceisprovidedbythepostofficeonapplication.
- Facsimile(Fax)-involvestransmissionofinformationthroughafaxmachine.Both thesenderandthereceivermusthaveafaxmachine.
- Memorandum (Memo) – is printed information for internal messages within an organization.Itisnormallyusedtopassinformationbetweendepartmentsoroffices in anorganization.
- Notice-isusedtoinformagrouporthepublicaboutpastcurrentorfutureevents.It isusuallybriefandtothepoint.Itcanbeplacedonwalls,inpublicplaces,ontrees,
newspapers or on notice boards.
- Reports-arestatements/withinrecordsoffindingsrecommendationsandconclusion ofaninvestigation/research.Areportisusuallysenttosomeonewhohasaskedforit for a specificpurpose.
- Circulars-aremanycopiesofasingleletteraddressedtoverymanypeoplewhenthe
- Agenda-isanoutlineoftheitemstobediscussedinameeting.Itisusuallycontained inanoticetoameetingsentinadvancetoalltheparticipantsofthemeeting.
Minutes-arerecordsoftheproceedingsofameeting
- (b) Explainfivemeasuresthatareadoptedbythegovernmenttoprotectconsumers againstexploitation
- Settingupstandards-ThegovernmentthroughtheKEBSsetsstandardswhichmust
be maintained by producers and traders.
- WeightsandMeasuresAct-Thegovernmentensuresthattheequipmentusedfor weighingandmeasuringarecorrectandaccuratebyregularcheckingandadjustingof
- Licenses-Thegovernmentrequiresmanufacturersandbusinesspeopletoget licensesbeforecommencingtheirbusinessoperationsthisensuresthatthereis
- FoodandDrugsAct-Thegovernmentensuresthatproducersandtradersdonot includeanysubstancethattheyselltocustomerswhichmayhaveharmfuleffectsto the customershealth.
- TradedescriptionAct-Ensuresthataproducersortradersdoesnotcheatthe
- Pricecontrol-Thegovernmentmaysetapricebeyondwhichacommodityshouldnot
- RentandTribunalAct-
6 (a) Explainfivecharacteristicsofperfectcompetitionmarketstructure
- Largenumberofbuyers/sellerssuchthatactionofsinglebuyer/sellercannotaffectthe market
- Homogeneity/uniformityoftheproduct-productsfromdifferentproducersareidentical in allaspects
- Wideknowledgeofthemarket-thereforenosingleseller/’buyercanaffectthebusiness atanypriceotherthantheequilibriumprice
- Freedomofentry/exit-therearenobarrierstoentryorexittoorfromthemarket
- Uniformityofbuyersandsellers-thereforenobenefitofsellingorbuyingfromaparticular buyer orseller
- Nogovernmentinterference-informoftaxes,subsidies,quotas,pricecontrol/price prevailinginthemarketisdeterminedstrictlybyinterplayofdemandandsupply
- Noexcessdemand/supply-buyerscanbuyalltheywant/sellersareabletosell alltheysupplytothemarket
- Notransportcostsasbuyersandsellersareinonearea
- b) Commodity A and B are complementary Using well label diagrams explain how increase in supply of commodity A would affect the equilibrium price and quantity demanded of commodity B. (10mks)