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Kenya Certificate Of Secondary Education(KCSE 2014) Business Paper 2

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    1. Explain five benefits that a firm may enjoy by preparing a business plan. (10 marks)

    2. Explain five demerits that a country may suffer when the government becomes the major investor in the business. (10 marks)

    1. On first January 2012, Ndovu Traders had shs 30,000 in cash and 75,000 at the bank. During the month, the following transactions took place:
      January 2nd: Bought goods in cash worth shs 15,500
                            5th: Received cash from Chui shs 23,750 after allowing 5% cash discount.
                             8th: Withdrew cash 8,900 from the bank for personal use.
                             11th : Maro, a debtor settled her account of shs 16,800 by a cheque of sh 16,000.
                              15th: Sales amounted to shs 24,250 in cash.
                               17th: Paid Furaha Traders shs 29,100 in cash in full settlement of their account less 3% cash discount.
                              20th:Withdrew shs 15,500 from the bank for business use.
                               22nd: Koko a debtor, settled her account of shs 40,000 by cheque 2.5% cash discount.
                               25th: Paid wages shs 21,000 in cash.
      Required:
      Prepare a duly balanced the column cash book. (12 marks)

    2. Explain four reasons for which traders observe ethical practices in product promotion. (8 marks)

    1. Explain five objectives that may be achieved by establishing firms in different parts of the country. (10 marks)

    2. Describe five accounting documents used in home trade. (10 marks)

    1. The following information relates to Bahari enterprises:
      Details                                                Shs
      Stock 1st January 2012                     430,000
      Purchases                                          930,000
      Sales                                                  1,155,000
      Carriage outwards                               25,000
      Carriage inwards                                  10,000
      Returns outward                                   20,000
      Returns inwards                                   30,000
      General expenses                                100,000
      Insurance                                              25,000
      Stock 31st December 2012                  470,000

      Calculate:
      1. Turnover (1 mark)
      2. Rate of Stock Turnover (3 marks)
      3. Mark up (2 marks)
      4. Margin (2 marks)
      5. Net profit (2marks)

    2. Explain five guidelines that should be followed by the government in its expenditure. (10 marks)

    1. Explain five disadvantages that a developing country may suffer by liberalizing foreign trade. (10 marks)

    2. Explain five features of monopolistic competition. (10 marks)

    1. Apart from selling shares, explain five sources of finance by a public limited company. (10 marks)

    2. There has been a decline in the demand for wooden furniture. Explain five factors that may have caused this trend.

 

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