BUSINESS PAPER 1 - 2019 LAINAKU JOINT MOCK EVALUATION EXAMINATION

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  1. Outline four factors that may lead to dishonoring of a cheque (4 marks)
  2. State four circumstances when a high population growth rate may be desirable. (4 marks)
  3. Highlight four benefits that accrue to an entrepreneur who prepares a business plan. (4 marks)
  4. Give four differences between ordinary shares and preference shares. (4 marks)
  5. State four reasons why the government issues licenses to business people. (4 marks)
  6. Outline four factors that would influence the amount of money held by an individual for transaction purpose. (4 marks)
  7. Name the international trade documents that relates to each of the following statements: (4 marks)
     

    Statement

    Document

    (a)   

    Gives details about the origin of the goods.

     

    (b)   

    Gives title to the goods traded.

     

    (c)   

    Used to place the order for goods to be imported from a specific exporter.

     

    (d)  

    Written by a commercial attaché of the importing country showing current prices of goods being exported.

     
  1. State four problems that are usually encountered in the formulation stage of a development plan. (4 marks)
  2. Give four circumstances when pipeline would be more preferred as a means of transport. (4 marks)
  3. Name four source documents which are used to provide information used to make entries in the books of accounts. (4 marks)
  4. Complete the table below for business A, B, C and D.

    BUSINESS

    ASSETS

    LIABILITIES

    CAPITAL

    A

    W

    250,000

    700,000

    B

    85,000

    30,000

    X

    C

    420,000

    Y

    120,000

    D

    600,000

    175,000

    Z

  1. State four benefits a trader receives from warehousing. (4 marks)
  2. Highlight four emerging issues in communication. (4 marks)
  3. State four factors that influence the fertility rate of a population. (4 marks)
  4. Outline four expenditure items that are included in the measurement of national income under the expenditure approach. (4 marks)
  5. The following information relates to Kawira Traders on 31st January 2018:
    Opening stock                          40,000
    Purchases                               480,000
    Gross profit                            100,000
    Mark-up                                       25%
    Calculate:
    1. Closing stock. (2 marks)
    2. Rate of stock turnover for the year. (2 marks)
  1. Highlight four ways in which the demographic environment affects the performance of the business.(4marks)                                                                                                                                                                  
  2. State four factors to consider when making a choice of channel to use in distributing locally produced agricultural products. (4 marks)
  3. Outline four benefits received by a student who finished form four and had done business studies as a subject. (4 marks)
  4. Indicate which accounts to be debited and which accounts to be credited from the following transactions: (4 marks)
     

    Transaction

    A/c Dr

    A/c Cr

    (a)     

    Proprietor took cash Sh. 18,000 and paid rent

       

    (b)    

    Brought in personal table and made it to be a business asset.

       

    (c)     

    A debtor paid Sh 80,000 by cheque.

       
  1. Matuu Wholesalers insured their business worth Ksh. 2,850,000 for Ksh. 2,300,000 against fire. Eight months later, fire destroyed the business leading to a loss of Ksh. 1,248,000. Calculate what the insurance company compensated the business (4 marks)
  2. Give four trends and emerging issues in office management. (4 marks)
  3. Highlight four decisions made when deciding which goods and services to produce. (4 marks)
  4. Outline how the following utilities are fulfilled: (4 marks)
     

    Utility

    How it is fulfilled

    (a)   

    Place

     

    (b)  

    Form

     

    (c)   

    Time

     

    (d)  

    Possession.

     
  1. Outline four factors that a county government should consider before spending their county money. (4marks)

MARKING SCHEME

  1. Outline four factors that may lead to dishonoring of a cheque (4 marks)
    Signature differs with specimen in bank
    Post dated cheque
    Stale (more than six months)
    Insufficient funds in the account
    Errors in the cheque
    Torn /defaced cheque
    Alternations which are not signed
  1. State four circumstances when a high population growth rate may be desirable. (4 marks)
    When large market is needed to be offered by the high population;
    When large labour is needed;
    When a pool of talents and gifts is needed;
    When there is need of utilizing resources to the maximum;
    Where there is need to improve technology.
    Any 4 relevant answers; 4*1=4 mks
    NB: The answer should reflect circumstantial condition, i.e. should start with when, where, if, incase.
  1. Highlight four benefits that accrue to an entrepreneur who prepares a business plan. (4 marks)
    He/ she is able to allocate/ distribute resources well;
    He/ she is able to avoid simple mistakes;
    He/ she is able to get finances easily from the financiers, e.g. banks.
    He/ she is able to compare and assess business growth from time to time;
    It is a motivating factor as a result of achieving goals and objectives.
    Any 4 correct answers; 4*1=4 mks
  1. Give four differences between ordinary shares and preference shares. (4 marks)

    Ordinary shares

    Preference shares

    Have voting rights

    no voting rights

    Receive dividends last

    receive dividends last

    Do not have a fixed rate of dividends

    have fixed rate of dividends


    Any 4 correct answers; 4*1=4 mks
    NB: No splitting of marks
  1. State four reasons why the government issues licenses to business people. (4 marks)
    To collect/ raise revenue/ income;
    To regulate unfair competition;
    To control harmful products being sold to the consumers;
    To regulate illegal businesses;
    To control goods leaving and entering the country;
    To ensure those engaged in business meet the professional requirements;
    To ensure that traders engage only in trade activities that they are licensed for.
    Any 4 correct answers; 4*1=4 mks.
  1. Outline four factors that would influence the amount of money held by an individual for transaction purpose. (4 marks)
    Individual’s level of income;
    Individual’s spending habits;
    Prices of commodities;
    Interval between receipts of income;
    Availability of credit;
    Any 4 correct answers; 4*1=4 mks
  1. Name the international trade documents that relates to each of the following statements:
     

    Statement

    Document

    (a)   

    Gives details about the origin of the goods.

    Certificate of origin

    (b)   

    Gives title t

    Bill of landing

    (c)   

    Used to place the order for goods to be imported from a specific exporter.

    Closed indent

    (d)  

    Written by a commercial attaché of the importing country showing current prices of goods being exported.

    Consular invoice

    4*1 =4 mks

    4*1 =4 mks
  1. State four problems that are usually encountered in the formulation stage of a development plan. (4 marks)
    Inadequate data;
    Unreliable data;
    Inappropriate planning models;
    Problem of controlling the private sector;
    Lack of qualified planning personnel/ manpower;
    Inadequate and inappropriate equipment;
    Existence of larger subsistence sector;
    Lack of proper research on policy issues;
    Any 4 correct answers; 4*1=4 mks
  1. Give four circumstances when pipeline would be more preferred as a means of transport. (4 marks)
    When high volume of fuel is needed;
    When traffic jam needs to be avoided;
    When less labour is needed;
    Where there is need to maintain roads;
    Where there is need to minimize/ avoid road accidents;
    Incase supply is needed continuously;
    Where there is need to control environmental pollution.
    Any 4 relevant answers; 4*1=4 mks
  1. Name four source documents which are used to provide information used to make entries in the books of accounts. (4 marks)
    Invoice;
    Receipt;
    Debit note;
    Credit note;
    Payment voucher.
    Any 4 correct answers; 4*1=4 mks
  1. Complete the table below for business A,B,C and D.

    BUSINESS

    ASSETS

    LIABILITIES

    CAPITAL

    A

    W=950,000

    250,000

    700,000

    B

    85,000

    30,000

    X=55,000

    C

    420,000

    Y=300,000

    120,000

    D

    600,000

    175,000

    Z=425,000

  1. State four benefits a trader receives from a warehouse. (4 marks)
    Goods are safe/ secure from being stolen;
    Able to look for transfers/ customers;
    Can prepare the goods for sale while still in warehouse;
    Can receive transport services;
    Can receive credit services;
    Customers can view the goods while in the warehouse, hence creating demand;
    Can sell goods while in the warehouse; hence transfer cost of paying the expenses to the customer, e.g. customs duty.
    Any 4 correct answers; 4*1=4 mks
  1. Highlight four emerging issues in communication. (4 marks)
    Development of paperless offices;
    Transformation of the language of Sheng among the youth;
    Wide use of mobile phones;
    E-mail replacing normal males;
    Internet use.
    4*1 =4 mks
  1. State four factors that influence the fertility rate of a population. (4 marks)
    Economic status of population;
    Education levels;
    Health levels;
    Society’s level of morality/ social customs;
    Government policy on population;
    Political attitude towards family size;
    Natural calamities;
    Technological progress;
    Age and sex structure of population;
    Marriage role among those in productive age brackets.
    Any 4 relevant answers; 4*1=4 mks
  1. Outline four expenditure items that are included in the measurement of national income using expenditure approach. (4 marks)
    Consumer expenditure;
    Government expenditure;
    Imports expenditure (international trade);
    Expenditure by firms on capital goods or investments.
    4*1 =4 mks
  1. The following information relates to Kawira Traders on 31st January 2018:
    Opening stock                         40,000
    Purchases                                480,000
    Gross profit                             100,000
    Mark-up                                  25%
    Calculate:
    Closing stock. (2 marks)
    Markup = GP/ Cogs
    25/100 = 100,000/ Cogs
    Cogs = (10,000 * 100) / 25
    Cogs = 400,000
    Cogs = OS + P – CS
    400,000 = 40,000 + 480,000 – CS
    CS = 520,000 – 400,000
    =120,000
    6 ticks * 1/3 = 2 mks
    Rate of stock turnover for the year. (2 marks)
    ROSTO = COGS/ A.S.
    A.S. = (0.5 + CS) / 2 = (40,000 + 120,000) / 2 = 80,000
    ROSTO = 400,000 / 80,000 =5 times
    4 ticks @ ½ = 2 mks
  1. Highlight four ways in which the demographic environment affects the performance of the business. (4 marks)
    High population creates wider market;
    Large population may cause security/ moral threat to business;
    Population offers labour for business;
    t brings innovation and invention for better technological advancements.
    May provide raw materials.
    4*1 =4 mks
  1. State four factors to consider when making a choice of channel to use in distributing locally produced agricultural products. (4 marks)
    Consumers/ market
    Nature of products
    Firm’s characteristics;
    Level of competition/ competitors;
    Marketing risks;
    Government policy;
    Middlemen cost and characteristics.
    Any 4 relevant answers; 4*1=4 mks
  1. Outline four benefits received by a student who finished form four and had done business studies as a subject. (4 marks)
    It is a career subject;
    Can be able to start and run a business;
    Is able to appreciate the role of government in business;
    Is able to appreciate the role of business in society;
    Will have self-discipline;
    Will utilize skills acquired for self-development.
    Any 4 relevant answers; 4*1=4 mks
  1. Indicate which accounts to be debited and which accounts to be credited from the following transactions: (4 marks)
     

    Transaction

    A/c Dr

    A/c Cr

    (a)     

    Proprietor took cash Sh. 18,000 and paid rent

    Rent

    Cash

    (b)    

    Brought in personal table and made it to be a business asset.

    Furniture/ Table

    Capital/ Investment

    (c)     

    A debtor paid Sh 80,000 by cheque.

    Bank

    Debtor

    (d)    

    Transferred Sh 20,000 to a private bank account.

    Drawings

    Bank

    Matuu Wholesalers insured their business worth Ksh. 2,850,000 for Ksh. 2,300,000 against fire. Eight months later, fire destroyed the business leading to a loss of Ksh. 1,248,000. Calculate what the insurance company will compensate. (4 marks)8 * 1/2 = 4 mks
    Compensation = (Value of policy * Loss) / Value of property = (2,300,000 * 1,248,000) / 2,850,000 = 1,007,158    
    4 ticks * 1= 4 mks
  1. Give four trends and emerging issues in office management. (4 marks)
    More open and landscape office layouts;
    Introduction of public relations departments;
    Improved security, e.g. use of CCTV cameras;
    Extensive use of computers and computerized systems;
    Use of modern office furniture and equipment;
    Health, Safety and Exercise and breakout areas;
    Use of identification name tags.
    Any 4 relevant answers; 4*1=4 mks
  1. Highlight four decisions made when deciding which goods and services to produce. (4 marks)
    Demand/ market scope for the goods and services to produce;
    The cost of production;
    Government policies affecting production;
    Availability of resources;
    Availability of technology;
    Skills requirement;
    Financial viability;
    Return on investment.
    Any 4 correct answers; 4*1=4 mks
  1. Outline how the following utilities are fulfilled: (4 marks)
     

    Utility

    How it is fulfilled

    (a)   

    Place

    Transport

    (b)  

    Form

    Manufacturing/ Production

    (c)   

    Time

    Warehousing/ Storage

    (d)  

    Possession.

    Selling/ Trade

    4*1 =4 mks
  1. Outline four factors that a county government should consider before spending their county money. (4 marks)
    There should be flexibility in spending;
    There should be sanctioning before spending;
    It should be economical;
    It should yield maximum social benefits;
    There should be proper financial management.
    Any 4 correct answers; 4*1=4 mks

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