Business Studies Trial Exams Paper 2 Questions - Alliance Boys High School Mock December 2020

Instructions to Candidate

1. Write your name and index number on the spaces provided.
2. Sign and write the date of examination on the spaces provided.
3. Answer ANY FIVE questions. All the answers should be written on the spaces provided.
4. This paper contains 3 printed Pages.
5. The candidate should check the question paper to ascertain that all pages are printed as indicated and that no question is missing.
6. Candidates should answer the questions in English:

QUESTIONS

1.                          
   1. Ordinary shares and debentures are both sources of capital to limited liability companies. Explain FIVE differences between the two. (10 marks)
   2. Explain FIVE factors that may lead to demand pull inflation. (10 marks)
2.                                    
   1. The following Table shows the percentage contribution in each of the three levels of production in generating INCOME to a country.
       

      FACTORS OF PRODUCTION	PRIMARY	SECONDARY	TERTIARY
      % INCOME CONTRIBUTION	55	30	15

      Explain FOUR factors that may have led to a higher proportion of income contributed at the primary level. (8 marks)
   2. The following trial balance was extracted from the Ledgers of Ashioya's electronics business on 30th April 2010.
      

      Ashioya's Electronics Trial Balance As at 30th April 2010
      TITLE OF ACCOUNT	DEBIT (Dr) SHS.	CREDIT(Cr) SHS.
      Equipment	90,000
      Motor vehicle	250,000
      Sales		320,000
      Returns Inwards	12,000
      Purchases	160,000
      Returns outwards		34,500
      Stock (1/5/2009)	86,400
      Electricity	12,900
      Rent	18,300
      Discount received		19,300
      Salaries	36,000
      Insurance	14,500
      Cash at bank	34,500
      Debtors	63,000
      Capital		374,400
      Creditors		29,400
      TOTAL	777,600	777,600

      Stock on 30th April 2010 was valued at shs. 77,000.
      Prepare: 
      1. A trading profit and Loss account for the year ended 30th April 2010 (8marks)
      2. A balance sheet as a 30th April 2010. (4marks)
3.                        
   1. Explain five factors that can lead to unfavourable balance of payment. (10marks)
   2.                                  
      

      MAMBO TRADERS BALANCE SHEET As at 1" June 2009
      	Sh		Sh
      Equipment	160,000	Capital	272,000
      Stock of goods	90,000	creditors	40,000
      Bank	52.000
      Cash	10.000
      	312.000		312.000

      During the first week of June the following transactions took place in the business: 2009
      • June 2: Mambo introduced additional funds into the business sh. 38,000
      • June 3: Purchased a motor vehicle from Mashalls Ltd worth sh. 200,000 on credit
      • June 5: Paid a creditor sh. 6000 cash
      • June 6: Sold goods on credit to Anita sh. 25,000
      • June 7: Bought equipments worth sh. 50,000 by cheque
        Prepare the balance sheet of Mambo traders as at 7 June 2009 to record the above transactions (10marks)
4.                                          
   1. Explain FIVE ways in which the central bank acts as a banker to the government (10 Marks)
   2. The following were the balances of Maramoja traders as at 1 Jan 2010. Cash sh. 40,000, bank overdraft sh. 17,000. During the following months, the following transactions took place:
      • Jan 2nd Musau a debtor settled his account of sh. 32,000 by cheque of sh. 30,000
      • 4th  paid salaries and wages amounting to sh. 16,000
      • 10th Deposited sh. 12,000 into the business bank account from the cash till.
      • 14th Settled Wayua's account of sh. 40,000 and she was allowed a discount of 1% through a cheque.
      • 16th Deposited sh. 56,000 in the bank from private sources.
      • 17th sold goods for cash sh. 24,000
      • 20th  Mutua, a debtor, settled his account by a cheque of sh. 16,000 having been allowed a discount of 2%
      • 24th Purchased furniture sh. 10,400 paying by cheque
      • 26th  received sh. 7,200 cash from Odhiambo
      • 30th Banked all the available cash except only sh.3,200
        Required: Prepare a 3 column cashbook for Maramoja traders. (10 marks)
5.                      
   1. As a County Governor, explain FIVE ways in which the National Income statistics will be of benefit to you (10 marks)
   2. The diagram below represents the population and output per capita of a certain country. Explain any five challenges to the country if her total population is found at the part marked B. (10marks)
      
6.                            
   1. Explain FIVE methods of price determination of products other than price mechanism in a market. (10 marks)
   2. Explain FIVE reasons why the Kenya government must collect taxes from its citizens. (10 marks)