Business Studies Paper 2 Questions - KCSE 2021 Past Papers

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    1. Explain five circumstances under which a producer may sell goods directly to the consumer (10 marks)
    2. Explain each of the following terms of sale as used in international trade: (10 marks)
      1. Ex-works
      2. Cost and Freight
      3. FOB
      4. Landed
      5. In Bond
    1. Explain five factors that may discourage entrepreneurship in Kenya. (10 marks)
    2. Explain five demerits of indirect taxes.(10 marks)
    1. Explain five errors that may not be detected in a trial balance. (10 marks)
    2. Explain five documents prepared by the seller after receiving an order up to the point of delivery.(10 marks)
    1. Explain five reasons that may make a firm operate on a small scale (10 marks)
    2. The following information was extracted from the books of Ushirika Traders as at 31st December 2020.
      Gross profit - Ksh 94,000
      Commission Received - Ksh 32,000
      Carriage Outwards - Ksh 8,000 
      General Expenses - Ksh 15,000
      Discount Received - Ksh 29.000
      Total Fixed Assets - Ksh 1,110,000
      Insurance - Ksh 17,000
      Capital - Ksh 490,000
      Drawings - Ksh 37,000
      Long Term Liabilities - Ksh 610,000 
      Discount Allowed - Ksh 12,000
      Commission Allowed - Ksh 4,000 
      Current Liabilities - Ksh 162,000 
      Current Assets - Ksh 192,000
      Salaries - Ksh 22,000
      1. Prepare a Profit and Loss Account (6 marks)
      2. Determine:
        1. Working capital(1 mark)
        2. Return on Capital Employed. (3 marks)
    1. Explain five reasons that make it necessary for the Government to train business people. (10 marks)
    2. Explain five problems that the Kenyan Government may experience when implementing the Vision 2030. (10 marks)
    1. Explain five advantages of written communication. (10 marks)
    2. Use the transaction given below to prepare Patel Traders Two Column Cash Book for the month of February 2020. (10 marks)
      1st Feb. : Had Ksh 1,200 cash in hand and a bank overdraft of Ksh 1000
      2nd Feb. Used cash to pay water bill Ksh 200, electricity Ksh 100 and wages Ksh 400
      3rd Feb.: Received a cheque of Ksh 14,000 from Daisy
      5th Feb. : Sold goods worth Ksh 7,000 in cash.
      7th Feb. : Paid for goods bought for resale worth Ksh 5,000 by cheque.
      9th Feb.: Received a cheque of Ksh 10,000 from the Cooperative Society as earning from dividends.
      10th Feb.: Withdrew Ksh 2,000 from the bank for family use.
      13th Feb.: Received a cheque of Ksh 10,000 from Petro.
      15th Feb.: Deposited Ksh 1,000 from the office into the business bank account.
      17th Feb.: Paid Manu by cheque Ksh 1,000
      27th Feb.: Used the money in the bank to purchase furniture leaving only a balance of Ksh 2,000

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