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

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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:


    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)
    1. The following Table shows the percentage contribution in each of the three levels of production in generating INCOME to a country.
      % 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  
       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.
      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)
    1. Explain five factors that can lead to unfavourable balance of payment. (10marks)
      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)
    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)
    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)
      q5 jhvgjh
    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)
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