Kenya Certificate Of Secondary Education(KCSE 2009) Business Paper 2

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    1. Explain five features of sole proprietorship form of business. (10 marks)
    2. Explain five measures that the government may take to improve the volume of exports. (10 marks)

    1. Explain five demerits that may be associated with water transport. (10 marks)
    2. The trial balance of Zakayo Traders as at June 2008 is given below.


      During the month, the following transactions took place.

      June 5        Paid a creditor Kshs 228,000 by cheque in full settlement of a debt after deducting 5% cash discount.
      15               Withdrew Kshs 100,000 from bank for office use.
      28               Received Kshs 160,000 cash from a debtor after allowing cash discount of Khs 40,000.

      Record the above transactions in the relevant ledger accounts and balance then off. (10 marks)

    1. The diagram below shows an oligopolist kinked demand curve DD and the current price and quantity at Po and Qo respectively.

      demand curve kcse 2009
      1. Name the curve represented by the curve WZ.
      2. State why the curve WZ is vertical to price axis.
      3. Advice when the oligopolist can raise and lower the price of the commodity (10 marks)

    2. Explain five ways in which the government of Kenya may reduce thr level of unemployment. (10 marks)

    1. Using a diagram, explain the circular flow of income in a two sector economy. (10 marks)
    2. Analyze the following documents issued by Sheikh Traders.

      business kcse 2009

      1. Name the document above
      2. Calculate the amount paid for the goods, if the debtor is paid on 28th October 2008.
      3. Determine the net profit of the business if the transaction (ii) above was Ksh 120,400 and the debtor paid for the goods on 15th November 2008.

    1. Explain four services that the Central Bank of Kenya may offer as a Banker to commerical banks.  (8 marks)
    2. Malamu Traders had the following balances as at 31 December 2008.
      trade balance kcse 2009
      trade balance kcse 2009

      1. Profit and loss account for the year ended 31 December 2008.
      2. Balance sheets as at 31 December 2008. (12 marks)

    1. The following table represents the price and quantity of commodity.
      demand curves kcse 2009
      1. Plot the information on a graph. (5 marks)
      2. Calculate the price elasticity of demand. (5 marks)

    2. Lunga, a sole trader, does not keep a complete set of accounting records. Information extracted from the records are as follows.

      account records kcse 2009

      Cash summary of the year was as follows:

      cash summary kcse 2009

      cash summary kcse 2009

      Additional information:
      1. Interest charged on debtors overdue accounts amounted to Kshs 2,000.
      2. Bad debts written off amounted to Kshs  4,200

        Prepare trading, profit loss acount for the year ended 31 December 2007. (10 marks)
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