Form 3 Business Studies Exams and Marking Schemes Free

NAME: …………………………………………………. ADM  ………………..DATE………………..           

CANDIDATE’S SIGN………..……………..…

565/2

BUSINESS STUDIES

PAPER 2

TIME: 2:30HOURS

JOINT EXAMINATION

FORM THREE BUSINESS STUDIES

PAPER 2

END OF TERM 3 EXAMINATION

INSTRUCTIONS TO CANDIDATES:

• Write your name and index numbers in the spaces provided
• All answers should be written in the spaces provided in this booklet.
• Answer any five questions.

For Examiner’s Use Only

2. Explain five accounting documents used in home trade. [10 mks]
3. There has been a decline in demand for wooden furniture. Explain five factors that may have caused this trend.                                                                                     [10 mks]
5. Explain five features that differentiate a public limited company from a partnership.                         [10 mks]
6. Describe five common channels of distribution for the locally manufactured goods. [10mks]

4. The following balances were extracted from the books of Mageta traders on 31^st Jan 2015.

(Shs)

Land                            82 000

Furniture                    61 500

Debtors                       17 700

Bank                            91 000

Stock                           18 600

Cash                            10 800

10 yrs Bank loan         165 000

Creditors                     34 100

Required:                                                                                                                    [10mks]

1. Determine the business capital
2. Prepare a Mageta Traders balance sheet as at 31^st Jan 2015.
3. Highlight five factors that may promote entrepreneurship in Kenyan. [10mks]
5. Explain five ways in which a warehouse may promote trade. [10mks]
6. Explain five problems that may be faced when measuring national income using the output approach.             [10mks]
8. Outline five differences between open office layouts and enclosed office layouts. [10mks]
9. Explain five reasons for consumer protection.             [10mks]
11. Outline four circumstances in which a trader may offer after sales service to the buyer.             [10mks]
12. The following information was extracted from books of Mamboleo Traders in the month of September, 2014.

September  1              Had cash in hand shs. 15 500 and a bank overdraft of shs. 9 700.

September  3              Bought goods for sale shs. 12 300

September  5              Sold goods in cash shs. 8 500

September  9              Sold goods on credit shs. 10 000

September 12                         Receive a cheque of shs. 9 000 from a debtor

September 15                         Paid a creditor shs. 10 000

September 17            Paid wages shs. 2 600 in cash

September 19                         Received a cheque shs. 23 400 from Samson for goods sold in January

September 23            Withdrew shs. 7 700 from the bank for office use.

September  24            Paid electricity bills by cheque of shs. 1 200

September 25             Received a cheque of shs. 11 500 from a debtor

September  26            Made cash sales of shs. 12 800

September  27            Purchased goods worth shs. 8 950 in cash

September  28            Paid water bills by cheque shs. 2 800

Required: Prepare a two column cash book.                                                                       [10mks]

_______________________________________________________________________________________________

JOINT EXAMINATION

FORM THREE BUSINESS STUDIES

PAPER 2

END OF TERM 3 EXAMINATION

MARKING SCHEME.

2. Explain five accounting documents used in home trade. [10 mks]
3. Invoice which is sent by the seller to the buyer demanding payment for goods.
4. Debit note sent by the seller to the buyer to correct an undercharge in the invoice.

• Credit note sent by the seller to the buyer to correct an overcharge in the invoice.

1. Receipt issued by the seller to a buyer when payment is made.
2. Statement of account sent by seller to the buyer showing details of transactions in a month.
3. Payment voucher used to validate payment for goods /services offered.

• Bank deposit slip which shows evidence of payment into the bank account.

1. There has been a decline in demand for wooden furniture. Explain five factors that may have caused this trend.             [10 mks]
2. Decline in consumers incomes reducing the buying ability hence less demand.
3. Fall in prices of substitutes [e.g plastic furniture’s] making them more affordable

• Increase in price of wooden furniture making them unaffordable.

1. Unfavorable government policies e.g high taxes leading to higher prices hence unaffordable
2. Low seasons leading to fewer buyers
3. Unfavorable change in tastes and preferences making them undesirable.

3. Explain five features that differentiate a public limited company from a partnership.                         [10 mks]

1. Describe five common channels of distribution for locally manufactured goods.             [10mks]

Producer                  consumer

Producer retailerconsumer

Producer wholsalerretailerconsumer

Producer wholsalerconsumer

produceragentwholesalerretailerconsumer

4. The following balances were extracted from the books of Mageta traders on 31^st Jan 2015.

(Shs)

Land                            82 000

Furniture                    61 500

Debtors                       17 700

Bank                            91 000

Stock                           18 600

Cash                            10 800

10 yrs Bank loan         165 000

Creditors                     34 100

Required:                                                                                                                    [10mks]

1. Determine the business capital
2. Prepare a Mageta Traders balance sheet as at 31^st Jan 2015.

CAPITAL = ASSETS – LIABILITIES   √     ¼

Total assets = shs. 82000+61500+17700+91000+18600+10800     √   ¼

Total liabilities = shs. 165000+34100     √     ½

Capital = shs. 281600 – 199100 = 82500    √    ¼                  [4 x ¼ = 1mk

MAGETA TRADERS

BALANCE SHEET

AS AT 31^ST JANUARY 2015

9×1 = 9 mks

1. Highlight five factors that may promote entrepreneurship in Kenyan. [10mks]
2. Government policies e.g low taxes which encourage the emergence and expansion of businesses
3. Training where the trainees are equipped with skills to start and run a business.

• Presence of role models who act as an eye opener to the potential entrprenuers

1. Availability of capital for starting and running a business
2. Political stability that creates a suitable environment for a business.
3. Healthy competition that business owners can withstand.

• High technology that leads to production of high quality and quantity of goods and services.
• Availability of markets where the entrepreneurs can sell goods and services.

5. Explain five ways in which a warehouse may promote trade. [10mks]
6. Promote mass production since there’s a space for storage of raw materials and finished goods.
7. Stabilize prices by ensuring continuous supply of goods.

• It enables preparation of goods through branding ,packing, sorting e.t.c

1. Creates time utility by ensuring that consumers Get goods when required.
2. Enables traders look for market while still in the warehouse.
3. Ensures security for goods since they are protected from theft.
4. Explain five problems that may be faced when measuring national income using the output approach.             [10mks]
5. Inaccurate data: difficulties may be experienced due to poor record keeping.
6. Dertemination of goods and services to be included since some output may be as a result of illegal activities.

• Price fluctuations since prices may vary from time to time.

1. Double counting where it may be difficult to differentiate intermediate and final output
2. Lack of qualified personnel to be used to collect and compile data.
4. Outline five differences between open office layouts and enclosed office layouts. [10mks]

1. Explain five reasons for consumer protection.             [10mks]
2. Unfair pricing by traders who may overcharge the consumers
3. Low quality goods that do not meet set standards

• Protection from unsafe structures that endanger consumers life

1. Harmful products that are unfit for use by consumers
2. Underweight goods where the traders sell goods below the right weight.

6.

1. Outline four circumstances under which a trader may offer after sales service to the buyer.                         [10mks]
2. Where goods sold are of technical nature requiring demonstration on use.
3. Where expertise is required in installation and the trader has technical knowledge

• Where the product is new in the market and the trader requires feedback on products performance

1. Where competition is stiff hence the trader uses after sale services to win more customers.
2. When providing personalized services requiring direct contact customers.
3. The following information was extracted from books of Mamboleo Traders in the month of September, 2014.

September  1              Had cash in hand shs. 15 500 and a bank overdraft of shs. 9 700.

September  3              Bought goods for sale shs. 12 300

September  5              Sold goods in cash shs. 8 500

September  9              Sold goods on credit shs. 10 000

September 12                         Receive a cheque of shs. 9 000

September 15                         Paid a creditor shs. 10 000

September 17            Paid wages shs. 2 600 in cash

September 19                         Received a cheque shs. 23 400 from Samson for goods sold in January

September 23            Withdrew shs. 7 700 from the bank for office use.

September  24            Paid electricity bills by cheque of shs. 1 200

September 25             Received a cheque of shs. 11 500

September  26            Made cash sales of shs. 12 800

September  27            Purchased goods worth shs. 8 950 in cash

September  28            Paid water bills by cheque shs. 2 800

Required: Prepare a two column cash book.                                                                       [10mks]

MAMBO LEO TRADERS

TWO COLUMN CASH BOOK

FOR THE MONTH OF SEPT. 2014 √

1.             CR.

NB: 50 ticks x ¹/₅ = 10 mks

_____________________________________________________________________________________________________

NAME..……………………………………ADM No.…….. …………….

CLASS……………………………………….SIGN………………………..

565 /1

BUSINESS

FORM THREE

END TERM THREE

Time: 2 Hours

JOINT EVALUATION EXAMS

INSTRUCTIONS TO CANDIDATES

1. Write your name and admission No. in the spaces provided above.
2. Answer all the questions in the spaces provided

FOR EXAMINER’S USE ONLY

1 a) Outline four reasons why organizations need to safe keep documents in files (4mks)

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

2. Give the four components of business studies (4mks)

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

3. List four reasons why a business may fail           (4mks)

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

4.Use the table below to outline four differences between basic wants and secondary wants

(4mks)

5. Identifyfour activities in the extractive level of production (4mks)

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

6. Outline four ways in which partners may be classified (4mks)

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

7. Highlight four characteristics of mail order store (4mks)

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

8. Outline the meaning of the following terms as used in accounting (4mks)

i)Networth of a business

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

ii)Business transaction

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

iii) Cash transaction ……………………………………………………………………………………..

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

vi)Credit transaction

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

9. State four main factors that may limit the level of a country’s national income. (4mks)

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

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

10. Identify four ways in which a business may be of benefit to people in the surrounding area (4mks)

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

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

11. for each of the transaction shown in the table below, state the balance sheet items affected by each transaction and the manner in which it is affected using (+) for increase and (-) for decrease. (4mks)

12. State four ways of increasing efficiency and effectiveness of human porterage (4mks)

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

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

13. The following information relates to Makuyu Traders. Determine the missing figures. (4mks)

14.Post the following transactions in the ledger books of Embakasi traders           (4mks)

March 1/2013 commenced business with sh. 150,000 cash at bank

March 5/2013 bought machinery in credit for sh. 9500

15. Give four reasons that make insurance companies decline to insure acts of nature (4mks)

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

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

16. Name 4 sources of business ideas.           (4mks)

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

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

17. State 4 office etiquette of a business person.           (4mks)

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

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

18. Mention four main types of demand. (4mks)

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

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

19.State four principle of cooperatives.                                                                 (4mks)

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

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

20. Name 4 methods of government involvement in business           (4mks)

…………………………………………………………………………………………………………………………………………………………………..;…………………………………………………………

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21. List four types of unemployment. (4mks)

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

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

22. Name 4 barriers of effective communication.           (4mks)

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

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

23. Name 4 types of life assurance contracts           (4mks)

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

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

24.Outline 4 benefits of a bonded warehouse to the importer.                          (4mks)

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

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

25. Give 4 characteristics of oligopoly market structure.           (4mks)

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_______________________________________________________________________________________________

JOINT EXAMINATION

FORM THREE TERM3 BUSINESS STUDIES PP1

MARKING SCHEME

1 a) Outline four reasons why organizations need to safe keep documents in files (4mks)

-not to fall in unauthorized hands

-protect from damage

-not to get lost

-keep thieves at bay

-avoid misplacement

2.Give the four components of business studies (4mks)

-Economics

-commerce

-office practice

-accounting

-entrepreneurship

3.List four reasons a business may fail

1. i) Lack of capital
2. ii) unfair/stiff competition

iii) Poor pricing

iv)Political instability

1. v) Lack of planning

4.Use the table below to outline four differences between basic wants and secondary wants

(4mks)

5.Identify four activities in the extractive level of production (4mks)

-farming

-fishing

-mining

-timbering (lumbering)

-Hunting

6.Outline four ways in which partners may be classified (4mks)

-role played by partners

-liabilities of the partners for business debt

-ages of parties

-capital contribution

7.Highlight four characteristics of mail order store (4mks)

-goods are sold through the post office

-have large warehouses

-don’t deal with perishable goods

-customers don’t visit selling premises

-there is heavy advertisement

-goods are dispatched through CWO basis or COD basis

8.Outline the meaning of the following terms as used in accounting (4mks)

i)Network of a business –it is simply the difference between total assets and total liabilities also referredtoo as capital which comprises of owners contribution plus profits less drawings

ii)Business transaction–any dealing between two or more people (parties) that can be assigned a monetary value                                                                                            

iii)Cash transactionwhere both parties of an exchange are executed immediately

vi)Credit transactionwhere goods or services are sold or bought and payment is made at a later date

9.State four main factors that may limit the level of a country’s national income. (4mks)

-poor entrepreneurial culture in the country

-low level of technology

-negative altitudes towards work by citizens

-lack of adequate resources

-political instability

-lack of co-operant factors of production

10.Identify four ways in which a business may be of benefit to people in the surrounding area (4mks)

-job opportunities

-goods and services to satisfy their needs

-increase in economic activities

-outlet for the producers to sell their products

-People become sensitive to the needs of their environment

-Improves life of people living standards

11.a) Assistcash increased(cash)

Capital increased (capital)

1. b) Assist increased (Bank)

Liabilitiesincreased (creditors)

1. c) Assit increased (Bank)

Capital increased (Capital)

1. d) Assist decreased (promises)

Asset increased (cash)

12.State four ways of increasing efficiency and effectiveness of human porterage

-shortening distance travelled

-creation of pathways

-Lighten the load

-Feeding porters properly

-Better pay

-Security pathways

-lightening pathways

-coach them

-on ettiquaette

13.The following information relates to Makuyu Traders. Determine the missing figures. (3mks)

A)Assets – liabilities 50,000-70,000= – 20,000

B)Assets – capital = 320,000-280,000 = 40,000

C)capital +liabilities = 14360 + 12000 = 26360

1. D) 4295

14.Post the following transactions in the ledger books of Embakasi traders (4mks)

March 1/2013 commenced business with sh. 150,000 cash at bank

March 5/2013 bought machinery in credit for sh. 9500

Dr        Capital A/c                 Cr                                    

                        March 2013

1 bank 150,000

Dr        BankA/c                      Cr

March 1         

Capital 150,000

Dr        Machinery A/c                        Cr

March 5 creditor 9500

Dr        CreditorsA/c   Cr

            2013 march

machinery 9500

15.Give four reasons that make insurance companies decline to insure acts of nature (4mks)

–loss may  affect many people at ago

-loss is unpredictable

-people not willing to form pool

-not easy to determine premium

-value of loss may be undeterminable

16.Name 4 sources of business ideas.                  (4mks)

• Newspapers
• Shows & exhibitions
• Magazines articles
• Waste products

17.State 4 office etiquette of a business person.       (4mks)

• Respect
• Punctuality
• Loyalty
• Honesty

18.mention four main types of demand. (4mks)

• Joint demand
• Competitive demand
• Derived demand
• Composite demand

19.State 4 principles of cooperatives.                        (4mks)

• Voluntary & open membership
• Democratic Administration
• Limited interest on share capital
• Promotion of education to member

20.Name 4 methods of government involvement in business          (4mks)

• Regulation
• Training
• Trade promotion
• Provision of public utilities

21.list four types of unemployment in an economy. (4mks)

• Cyclical unemployment
• Frictional unemployment
• Seasonal unemployment
• Structural unemployment
• Involuntary unemployment

22.Name 4 barriers of effective communication.      (4mks)

• Language barrier
• Poor listening
• Negative attitude
• Poor timing

23.Name 4 types of life assurance contracts                         (4mks)

• Term insurance
• Whole life assurance
• Endowment
• Annuities

24. outline four benefits of a bonded warehouse to the imports. (4mks)

• Goods can be prepared for sale
• Security is provided while goods are on bond
• Give importers time to arrange for payment of duty
• Goods can be sold before payment of duty
• Importer can look for market of products

25. Give 4 characteristics of oligopoly market structure. (4mks)

• A few large firms
• Presence of price wars
• High interdependence of firms
• Kinked demand curve
• Formation of cartels