Business Studies Paper 1 - 2021 KCSE Prediction Questions and Answers Set 1

Instructrions to Candidates

Answer ALL the questions in the spaces provided.

1. Identify four roles that equipments play in an office. (4 marks)
2. Highlight four internal weaknesses that may affect business performance (4 marks)
3. Identify four common means of verbal communication (4 marks)   
4. State the type of co-operative society that fits the description given below (4 marks)
   

   Description	Type of co-operative
   a. A co-operative formed to improve production and selling of goods by members
   b. An association of buyers formed to be buying goods in bulk and selling at fair prices
   c. An association of persons who save regularly and obtain loans at low interest
   d. Formed by members who save into a common pool and funds using to construct houses for members

5. Outline four principles that guide a government in collecting and spending public finance (4 marks)
6. Highlight four disadvantages of monopoly markets (4 marks)
7. Identify four factors that may cause demand- pull inflation too occur in a country (4 marks) 
8. State four problems facing small scale business in Kenya (4 marks)
9. Identify four differences between trade discount and cash discount in the table below (4 marks)
   

   Trade Discount	Cash Discount
   a.
   b.
   c.
   d.

10. Identify how each of the transactions changes the amount of stock in the stock
    

    Transaction	Effects on Stock
    a. purchase of goods from suppliers
    b. sale of goods to customers
    c. sales return by customers
    d. purchase returns by suppliers

11. Name four functions of the central bank of Kenya in the economy
12. Identify four benefits of indirect production to a community (4 marks)
13. Fill the missing figures in the table below
    

    	Fixed asset	Current Assets	Capital	Liabilities
    a.	275,500		315,000	115,500
    b.	182,000	108,700		217,100
    c.		76,400	123,100	91,900
    d.	313,450	211,340	189,170

14. Name four measures that a firm can take to improve efficiency of its workers (4 marks)  
15. Outline four ways in which consumers can benefit from services of a warehouse (4 marks)  
16. The following information relates to Ali General Stores for the year ended 31^st Dec 2018.
    Opening stock              shs 24 000
    Carriage on sales          shs 12 000
    Purchases                    shs 370 000
    Sales                           shs 442 500
    Closing stock                shs 40 000
    Expenses 10% on gross profit
    Prepare Trading profit and loss account for the year ended 31^st Dec 2018 (5 marks)
17. State three pieces of information contained in an insurance policy for goods (3 marks) 
18. Name four types of warehouses. (4 marks)           
19. Outline four ways in which households contribute to national income in a country (4 marks) 
20. Identify four measures taken by government to reduce mortality rate in a country. (4 marks)
21. State four uses of a computer in an organization. (4 marks)   
22. Identify four elements of effective communications. (4 marks) 
23. Highlight four circumstances under which the capital of a business may change. (4 marks) 
24. Name four accounting documents that are used in home trade (4 marks)       
25. Identify four contents of a memorandum of association. (4 marks)

MARKING SCHEME

1. Identify four roles that equipment’s play in an office. (4 marks)
   • Enables work to be done fast
   • Enhances better quality output and more presentable
   • Makes work easy and enjoyable
   • Provides comfortable working experience
   • Ensures security and effective control of work
   • Increased productivity of employees
2. Highlight four internal weaknesses that may affect business performance (4 marks)
   • Poor managerial structures
   • Poor internal communications
   • Lack of adequate resources
   • Poor planning/ goals / objectives
   • Unmotivated workers/ unskilled human resource
   • Poor time management
   • Use of in appropriate technology

3. Identify four common means of verbal communication (4 marks)
   • Face to face conversation
   • Telephone conversation
   • Paging
   • Radio calls

4. State the type of co-operative society that fits the description given below (4 marks)
   
   
   
   
   
   
   

   DESCRIPTION	TYPE OF CO-OPERATIVE
   a. A co-operative formed to improve production and selling of goods by members b. An association of buyers formed to be buying goods in bulk and selling at fair prices c. An association of persons who save regularly and obtain loans at low interest d. Formed by members who save into a common pool and funds using to construct houses for members	a. Producer co- operative b.Consumer co- operative c. SACCOS d. Housing co- operative

5. Outline four principles that guide a government in collecting and spending public finance               (4 marks)
   • Maximum social benefit
   • Efficient allocation (wealth distribution)
   • Proper financial management
   • Flexibility –allow changes
   • Economy in spending
   • Surplus /reserve
   • Approval of public spending

6. Highlight four disadvantages of monopoly markets (4 marks)
   • Exploitation of consumers’ e.g. poor services
   • Limiting entry of other restricts economic development
   • Restriction of consumers choices
   • Absence of competition leads to inefficiency
   • Increase in price of products

7. Identify four factors that may cause demand- pull inflation too occur in a country (4 marks)
   • Increased government expenditure
   • Increase in population
   • Expectation of price increment
   • General shortage of goods and services
   • Increased credit creation by commercial banks
   • A fall in savings
   • Increased in money incomes

8. State four problems facing small scale business in Kenya (4 marks)
   • Small capital- limited sources of capital
   • May lack division of labor and specialization
   • Limited managerial skills
   • Lacks continuity since it depends on the life of the owner
   • Lacks skills to choose a viable investment
9. Identify four differences between trade discount and cash discount in the table below (4 marks)

10. Identify how each of the transactions changes the amount of stock in the stock
    

    Transaction	Effects on stock
    a.purchase of goods from suppliers   b.sale of goods to customers   c.sales return by customers   d.purchase returns by suppliers	a.increase in stock b. decrease in stock c. increase in stock d. decrease in stock

11. Name four functions of the central bank of Kenya in the economy
    • Issuing currency
    • Stabilizes foreign exchange rates
    • Is a banker to commercial banks
    • Controls monetary systems
    • Lend of last resort
    • Administers public debts
    • Banker of the government

12. Identify four benefits of indirect production to a community (4 marks)
    • Leads to provision of wide variety of products
    • People get goods they don’t produce through trade
    • Provision of better quality goods
    • Helps to promote peace with neighboring communities through trade
    • There is surplus production due to use of better technology
    • Increases employment opportunities to community

13. Fill the missing figures in the table below
    

    	Fixed asset	Current Assets	Capital	Liabilities
    a.	275,500	115,000	315,000	115,500
    b.	182,000	108,700	73,600	217,100
    c.	138,600	76,400	123,100	91,900
    d.	313,450	211,340	189,170	335,620

14. Name four measures that a firm can take to improve efficiency of its workers (4 marks)
    • Improve their pay package
    • Use modern technology
    • Improve their terms or condition of service
    • Provide opportunities for their further training
    • Promotion based on merit
    • Provide staff welfare e.g. medication

15. Outline four ways in which consumers can benefit from services of a warehouse (4 marks)
    • Steady prices due to steady supply
    • Goods are made available when required
    • Goods are sold to them while in good condition
    • Goods are prepared for sale
    • With time some goods improve in quality while in the warehouse
16. The following information relates to Ali General Stores for the year ended 31^st Dec 2018.
    Opening stock              shs 24 000
    Carriage on sales          shs 12 000
    Purchases                     shs 370 000
    Sales                            shs 442 500
    Closing stock                 shs 40 000
    Expenses 10% on gross profit
    Prepare Trading profit and loss account for the year ended 31^st Dec 2018 (5 marks)   
                                                                       

17. State three pieces of information contained in an insurance policy for goods (3 marks)
    • The risk covered
    • Amount of premium to be paid
    • Period of the cover
    • Terms and condition of the contract
    • Sum insured
18. Name four types of warehouses. (4 marks)
    • Bonded warehouses
    • Private warehouses
    • Public warehouses
    • Wholesalers warehouses
    • Producers warehouses e.g. manufacturers warehouse
19. Outline four ways in which households contribute to national income in a country (4 marks)
    • Consumption of goods
    • Payment of taxes
    • Provision of labor
    • Provision of land
    • Provision of capital / savings for investment

20. Identify four measures taken by government to reduce mortality rate in a country. (4 marks)
    • Avail better healthcare
    • Control crime
    • Enhance food security
    • Minimize internal conflicts and war
    • Alleviate poverty
    • Control use of drugs and alcohol
21. State four uses of a computer in an organization. (4 marks)
    • Storing data / information
    • For entertainment e.g. games
    • Communication e.g. e- mails
    • For preparing accounting records
    • Processing of information e.g. payrolls
22. Identify four elements of effective communications. (4 marks)
    • Sender –the one who originates the message
    • Message – subject matter of communication
    • Channel /medium – means through which the message is sent
    • The receiver – person for whom the message is intended
    • Feedback – response to the senders message
23. Highlight four circumstances under which the capital of a business may change. (4 marks)
    • In case of profits
    • In case of losses
    • In case of drawings
    • In case of additional investment

24. Name four accounting documents that are used in home trade
    • Invoice
    • Statement of account
    • Debit note
    • Payment voucher
    • Credit note
    • Receipt
25. Identify four contents of a memorandum of association. (4 marks)
    • Name clause
    • Liability clause
    • Objects clause
    • Declaration clause
    • Capital clause
    • Situation clause