Business Studies Trial Exams Paper 1 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 all the questions.
  4. All the answers should be written on the spaces provided.
  5. This paper contains 14 printed Pages.
  6. The candidate should check the question paper to ascertain that all pages are printed as indicated and that no question is missing.
  7. Candidates should answer the questions in English.

For Examiners use only

Question  2 10  11  12  13 
Score                          
Question  14  15  16  17  18  19  20  21 22 23 24 25
Score                        


QUESTIONS

  1. State four ways in which a well laid out business structure leads to the success of a business. (4 marks)
    a............................
    b............................
    c............................
    d............................
  2. State four consequences that may arise due to poor arrangement of goods in a warehouse. (4 marks)
    a............................
    b............................
    c............................
    d............................
  3. Distinguish between the following categories of government expenditure. (4 marks)
    a) Recurrent expenditure
    b) Capital expenditure
  4. Sherwood traders had the following assets and liabilities as at 1st January 2019.
                                 Shs.
    Furniture           350000
    Debtors             45,000
    Cash                 7,000
    Creditors         48000
    For the year ended 31st December 2019,
    1. Additional capital was Shs. 24,000
    2. Drawings were Shs.20,000
    3. Net profit was Shs. 34,000
      Determine the capital as at 31st December 2019. (4marks)
  5. The IMF has advised Kenya to scale down the number of Parastatals in the country for her to benefit from their loans. States possible reasons for such a move by the IMF. (4 marks)
    a............................
    b............................
    c............................
    d............................
  6. Unemployment has been a major problem in Kenya, state four ways in which entrepreneurship can help solve this problem. (4 marks)
    a............................
    b............................
    c............................
    d............................
  7. James is an onion farmer in Narok, highlight four ways in which he can improve the usefulness of his Onions, (4 marks)
    a............................
    b............................
    c............................
    d............................
  8. State four circumstances that may lead to the creation of a monopoly. (4marks)
    a............................
    b............................
    c............................
    d............................
  9. The following balances were obtained from the books of sunset traders as at 30th June, 2019.
                                            Shs.
    Stock 1st July 2019        45,000
    Purchases                     159,000
    Sales                            235,000
    Stock 30/June/2019        33,000
    Capital                          75,000
    Return outwards              3,000
    Operating expenses        13,000
    Calculate:
    1. Stock turnover rate. (1 mark)
    2. Gross Profit. (1 mark)
    3. Net Profit (1 mark)
    4. Return on capital. (1 mark)
  10. Roy has been thinking of starting a printing firm after his graduation. Highlight four main considerations he has to make before implementing his idea.(4 marks)
    a............................
    b............................
    c............................
    d............................
  11. List four stages in their order of occurrence in the historical development of money. (4 marks)
    a............................
    b............................
    c............................
    d............................
  12. Highlight four uses of a Bill of Lading in international trade. (4marks)
    a............................
    b............................
    c............................
    d............................
  13. The government licenses business activities for various reasons. State four such reasons. (4 marks)
    a............................
    b............................
    c............................
    d............................
  14. Most firms are encouraging their employees to work from home. Highlight four advantages of this trend to the business. (4 marks)
    a............................
    b............................
    c............................
    d............................
  15. State four items that are considered when computing the national income using expenditure approach.(4 marks)
    a............................
    b............................
    c............................
    d............................
  16. In each of the following cases, state the type of inflation described. (4 marks)
    CASE  TYPE OF INFLATION 
    The Covid-19 crisis has resulted to an increase in the price of oil  
    The price of maize flour has gone up to Shs.130 due to increase in the price of maize  
    A lot of money in circulation has led to the general increase of price.  
    A rise in price due to uneven growth in some sectors of the economy.  
  17. Study the letter below and answer the questions that follow

    ALLIANCE HIGH SCH
    P.O. BOX 7-00902
    KIKUYU
    5/12/2020

    SALES MANAGER
    BOOKS CENTER
    P.O. BOX 52013
    NAIROBI

    Dear Sir,
    RE............
    We would be pleased to receive information regarding Mathematics books you stock, their prices, the quantities and titles that attract discounts. The delivery period as well as carriage terms.

    Yours Faithfully
    Principal

    1. Identify the document. (1 mark)
    2. Outline any three documents that the books center may choose to reply to the above letter. (3 marks)
      i.........................................
      ii.........................................
      iii.........................................
  18. Highlight four characteristics of tramp type of ships. (4 marks)
    a............................
    b............................
    c............................
    d............................
  19. State four functions of the three-column cash book. (4 mark)
    a............................
    b............................
    c............................
    d............................
  20. For each of the following transactions, indicate the effect of each transaction on the balance sheet items as either increase, decrease or no change. (4 marks)
     Transaction Effect on assets  Effect on liabilities  Effect on capital 
     Drawings of goods from the business      
     The proprietor brought a personal car for business use      
     Borrowed Equity bank loan to pay a creditor      
     Bought stock by cheque       
  21. State four circumstances under which an individual would prioritize his/her needs. (4 marks)
    a............................
    b............................
    c............................
    d............................
  22. The government of Kenya has been emphasizing on achieving the 'Big Four Agenda'. State the four agendas. (4 marks)
    a............................
    b............................
    c............................
    d............................
  23. Identify the type of ledger appropriate for the following accounts. (4 marks)
    1. Land Account
    2. Debtor Ezra Account
    3. Creditor Kamau Account
    4. Electricity Expense Account
  24. State four important aspects that should be contained in an insurance policy. (4 marks)
    a............................
    b............................
    c............................
    d............................
  25. The following information was obtained from the books of K. Mwangutu for the month of November 2020.
    2nd Nov.: Paid Mwangi's account of Sh. 15,000 by cheque, having deducted a cash discount of 10%
    3rd Nov.:Paid Juma in cash Sh. 9,500
    22nd Nov.:Cash purchases Sh. 15,200 was paid for by cheque of Sh. 14,000
    30th Nov.:Cash purchases paid by cheque of Sh. 9,000
    Required: Prepare K. Mwangutu's relevant journal. (4marks)

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