Form 2 Business Studies Exams and Marking Schemes Free


  1. -Increase in buyers ability to purchase more goods
  • Increase in population
  • Favourable legal-political environment e.g fair taxes
  • Improved technology
  • Favourable cultural environment
  • Fair competition


  1. -Resources are scarce
  • Human wants are endless
  • They are recurrent (repetitive)
  • They are competitive
  • They are habitual


  1. –Public
  • Private
  • Free
  • Bonded


  1. –Insurable interest
  • Doctrine of Utmost Good Faith or “Uberrima Fidei”
  • Indemnity
  • Proximate cause
  • Subrogation
  • Contribution


  1. –Credit facilities

-After sale services

– Avail a variety of goods

-Offer advice

-Avail goods to consumers

-Break bulk


  1. –Marine hull

-Marine Cargo

-Port policy

-Voyage policy








  1. –Holding companies





-Check-off system

-Burial benevolent funds (B.B.F)

-Front office savings account (FOSA)




-Performance contract


  1. –Product

-Primary demand






  1. -Voluntary and open membership

-Democratic administration

-Limited interest on share capital

-Co-operation with other co-operatives

-Promotion of education to members

-Provision of dividends to members


  1. –Transport





  1. –Easy to supervise workers

-Easy location of workers

-Promote team work

-Floor space is saved

-Cheap to decorate

-Maintenance cost is low

-Discourages absenteeism by employees

-Construction cost is low


  1. –Insufficient funds in the account

-Stale cheque

-When the cheque is post-dated

-If the drawer has closed his/her account with the bank

-When the signature of the account holder differ from the specimen in the bank

-A bank learns about death, insanity or bankruptcy

-When the cheque has been altered and the drawer has not signed against the alteration


  1. –Insufficient quantities

-Poor quality goods

-Poor services

-Lack of goods


  1. –When launching a new product

-When a product is tailored to meet customer’s specification

-When demonstration is required

– When the value of the product is high

-When the organization can afford to finance the sales force

-Where the market is concentrated in one area


  1. –Partner’s contributions

-Loans from banks

-Trade credit

-Buying goods on hire-purchase terms

-Retained profit

-Leasing and renting



  1. The sender – Person from whom the message originates

Message – The information to be sent

Medium/channel – Means through which the message is to be sent

The receiver – A person for whom the message is intended

Feed-back – The reaction of the receiver to the message


  1. Cost –should be affordable i.e both initial and maintenance cost

Adaptability – Should be able to cope with future changes and development

Possibility of hiring rather than buying – one has to consider the cost and convenience of buying an equipment as opposed to hiring

Durability – one has to consider the lifespan of equipment

Effect on staff morale – the attitude towards equipment

Availability of complementary resources – e.g power and availability of spare parts

Availability of manpower required to run and operate the equipment

Availability of room to store the equipment

Security of the equipment


  1. – Assist a student to relate the knowledge, skills and attitudes acquired to the day to day business activities
  • Equips a student with knowledge and skills necessary to start and run a business
  • Assist a student to appreciate the role of business in provision of goods and services
  • Makes a student to appreciate the need for good business management practices
  • Assist a student to acquire self-discipline and positive attitude towards work
  • Equips a student to understand the role of government in business
  • Equips a student with abilities to promote co-operation in society through trade
  • Helps a student to develop positive attitude towards the environment
  • Equips a student with ability to understand the role of communication and information technology in modern business management


  1. –Helps people to acquire what they may not be able to produce
  • Avails a variety of goods and services – helps producers to dispose off their surplus produce
  • Creates employment
  • Encourages specialization and division of labour
  • Promote social relations and understanding among parties involved
  • Provides revenue to the business people and the government
  • Ensures steady supply of goods and services


  1. a) Cost – The cheapest means should be chosen
  2. b) Nature of goods – Perishable goods require a fast means while heavy and bulky goods

requires a means of transport convenient for such goods

  1. c) Reliability – A means that assures that goods will reach the intended destination at the right time and in the right form should be chosen
  2. d) Urgency – Goods that are urgently required need the fastest means available
  3. e) Security – Means chosen should ensure that goods on transit are safe against loss, theft

or physical damage

  1. f) Distance – Some means are suitable for long distances while others are suitable for

short distances

  1. g) Availability of means – means should be selected based on its availability
  2. h) Flexibility – Should be able to be manipulated to suit the convenience of the transporter
  3. i) Terminals – Some means of transport may have their terminals near the transporter

than others

  1. Barriers to effective communication
    • Noise
    • Negative attitude
    • Bad weather
    • Emotional response
    • Poor listening






22.Reasons for government involvement in business.

  • To prevent exploitation to consumers
  • To provide sensitive goods
  • To provide essential goods
  • To attract foreign investors in the country

23.The needs for consumer protection

  • To protect consumers against harmful products
  • To protect consumers against misleading advertisement
  • To protect consumers against illegal goods
  • To protect consumers against hoarding

24.Elements of transport

  • Unit of carriage
  • Ways
  • Terminal
  • Method of propulsion

25.Consideration before giving credit

  • Credit worthiness of the buyer
  • The repayment period
  • Ability to pay
  • Frequency of the buying from the seller
  • Amount of goods needed