Business Studies P2 Questions and Answers - Nambale Mock Exams 2021/2022

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Instructions to candidates

  • Write your name and adm. no in the spaces provided above.
  • Sign and write the date of the examination in the spaces provided above.
  • This paper consists of six questions.
  • Answer any five questions in the answer booklet provided.
  • All questions carry equal marks.
  • Candidates should answer the questions in English.

For examiner’s use only

Questions

Maximum Score

Candidates Score

1

20

 

2

20

 

3

20

 

4

20

 

5

20

 

6

20

 

 

TOTAL SCORE

 

Questions

  1.                                                 
    1. Explain five benefits that would accrue to Country as a result of delocalization. (10mks)
    2. Explain five features of a perfect competition market structure (10mks)
  2.                                  
    1. The following transactions relate to Vivylex wholesalers for the month of December 1998.
      1998
      Dec. 1 Bought goods on credit from Weka Distributors sh.46,200, Micko sh15,600 and Limo shs38,360.
      3 Sold goods on credit to Lwanda Retailers shs.39,200, Motor Grocers sh.25,560 and Mawe shs.12,650.
      7 Returned goods to Micko sh4,200 and Limo shs6,140.
      11 Bought goods on credit from Tuktuk sh34,830.
      12 Goods returned by motor Grocers hs4,550 and Lwanda Retailers sh1,280.
      15 Sold goods on credit to Motor Grocers shs6,800, Marion traders shs12,800.
      18 Goods returned by Marion Traders shs2,060.
      22 Bought goods on credit from Fatuma shs22,100, Temo shs38,350.
      28 Credit sales to Ngula shs16,060, Oyunga shs12,960 and Mawe shs15,260.
      Enter the above transaction in the respective books of original entry (10mks)
    2. Discuss five factors that enhances efficient running of a warehouse. (10mks)
  3.                              
    1. Explain five negative effects of inflation to a country’s economic development.(10mks)
    2. Highlight five importance of entrepreneurship to the economy of a country. (10mks)
  4.                        
    1. Explain five factors that can lead to unfavourable balance of payment. (10mks)
    2. Explain five factors to be considered when choosing a method of product promotion (10mks)
  5.                          
    1. Describe five procedure to be followed when taking an insurance policy. (10mks)
    2. Explain five limitations of containerization in transport sector. (10mks)
  6.                              
    1. Highlight five benefits that a country will enjoy as a result of indirect production(10mks)
    2. The following trial balance was extracted from the books of Mugoya Traders as at 30th June, 2014
      Mugoya Traders
      Trial balance
      As at 30th June 2014

      Details

      Dr (shs)

      Cr (shs)

      Premises

      1,500,000

       

      Debtors and creditors

           20,000

           30,000

      Cash at bank

           90,000

       

      Cash in hand

           10,000

       

      Purchases and sales

         140,000

         320,000

      Stock of good on 1st July 2013

           45,000

       

      Discounts

             6,000

             2,000

      Salaries and wages

           50,000

       

      Commissions

       

             8,000

      Power and lighting

           12,000

       

      Returns

           15,000

           19,000

      Carriage outwards

             2,300

       

      Carriage inwards

             5,400

       

      Capital

       

      1,543,700

      Furniture

           27,000

       

       

      1,922,700

      1,922,700

      Additional information
      Stock of goods on 30th June, 2014 was worth sh22, 000.
      Required: prepare trading, profit and loss account for the period ended 30th June, 2014. (10mks)

MARKING SCHEME

  1.                                                 
    1. Explain five benefits that would accrue to Country as a result of delocalization. (10mks)
      1. reduced income disparities - people have access to jobs/income
      2. better auxillary services - rural areas develop
      3. increased job opportunities - leading to better standards of living
      4. increase use of locally available resources/ factors of production
        they earn income
        would otherwise have been idle
      5. imrpoved stsandards of living - rural development leads to variety increased / improved goods and services
      6. reduced urban migration/ congestion in towns - reduced pressures on urban resources
      7. balanced economic/ regional development - as firms or economic activities are spread throughout the country
      8. technology skills transfer - leading to improved productivity 
      9. infrastructural development - opens rural areas to development
        - facilitates movement of goods or services
      10. improved/development of social facitlities - leading to improvement in welfare in rural areas
      11. minimized effect of pollution - negative on health
      12. market for raw materials/goods produced in area
      13. minimises effects of calamities that would paralyse country
    2. Explain five features of a perfect competition market structure (10mks)
      1. large number of buyers and sellers
      2. uniformity of product
      3. limiting factors to entry
      4. no government interference
      5. perfect knowledge by buyers and sellers
      6. demand or supply determine the market price
        no excess demand and supply to market
      7. perfect mobility of factors of production
      8. no transport costs
        Any 5 well explained
  2.                                  
    1. The following transactions relate to Vivylex wholesalers for the month of December 1998.
      1998
      Dec. 1 Bought goods on credit from Weka Distributors sh.46,200, Micko sh15,600 and Limo shs38,360.
      3 Sold goods on credit to Lwanda Retailers shs.39,200, Motor Grocers sh.25,560 and Mawe shs.12,650.
      7 Returned goods to Micko sh4,200 and Limo shs6,140.
      11 Bought goods on credit from Tuktuk sh34,830.
      12 Goods returned by motor Grocers hs4,550 and Lwanda Retailers sh1,280.
      15 Sold goods on credit to Motor Grocers shs6,800, Marion traders shs12,800.
      18 Goods returned by Marion Traders shs2,060.
      22 Bought goods on credit from Fatuma shs22,100, Temo shs38,350.
      28 Credit sales to Ngula shs16,060, Oyunga shs12,960 and Mawe shs15,260.
      Enter the above transaction in the respective books of original entry (10mks)
       Purchase day book /journal 
      date  details  folio amount
       Dec 1  weka    46200
       1  mioko    15600
       1  limo    38360
       11  taktak    34830
       22  fatuma    22100
       22  temo    38350
      sales daybook journal    
       date  details  folio  amount 
      Dec 3  lwanda    39200
      motor grocers   25560
      3 mawe   12650
      15 motor grocers   6800
      15 marion traders   12800
        ngula   16060
        oyunga   12960
        mawe   15260
       sales returns journal   
       date  details  folio  amount
       dec 12  motor gorcers    4550
       12  lwanda retailers    1280
       18  marion traders    2060
      purchase returns journal    
       date  details  folio  amount
       dec 7  micho    4200
       7  limo    6140
    2. Discuss five factors that enhances efficient running of a warehouse. (10mks)
      1. labour - skilled/adequate to hndle volume of goods
      2. record keeping / documentation - should be good to enable monitor of movemnt of goods
      3. spacious   - adequate / big to accomodate volume of goods
      4. adequate/relevant equipment / handling facilities for ease of movement
      5. adherence to legar requirements - to avoid conflict with the government
      6. presence of storage facilities  - for preservation of goods
        - goods maintain quality
      7. security/ safety measures - to avoid theft/loss/damage
        - protection of employees
      8. building design / structure - acceptable standards to handle goods dealt in
  3.                              
    1. Explain five negative effects of inflation to a country’s economic development.(10mks)
      • discourage savings
      • increases interest rates
      • people with fixed incomes negatively affected
      • lenders lose
      • socialpolitical unrest
      • worsening balance of payments
      • low income earners
      • invetments decreases
      • unemployement increases
      • hinders implementation of development plans
    2. Highlight five importance of entrepreneurship to the economy of a country. (10mks)
  4.                        
    1. Explain five factors that can lead to unfavourable balance of payment. (10mks)
    2. Explain five factors to be considered when choosing a method of product promotion (10mks)
  5.                          
    1. Describe five procedure to be followed when taking an insurance policy. (10mks)
      1. filing a proposal form
        the person intending to take policy applies by filing a form
      2. determinatio of premium
        the insurance company, studies information provided in proposal form to determine premiums to be paid
      3. payment of first premium
        issuance of cover note/binder
        evidence that an agreement has been entered into by the two parties
      4. issuance of insurance policy / certificate
        the insurance of issues policy /certificate which details the agreement between the 2 parties
    2. Explain five limitations of containerization in transport sector. (10mks)
      1. requires specialised equipment for handling 
        this is lacking or is expensive to buy/maintain
      2. requires specialized staff 
        this is lacking or is expensive to buy/maintain
      3. volume of business may not be large enough to warrant investment / uneconomical
      4. initial capital required is high - not avilable
      5. method requires redesigning of ports or construction - expensive
      6. resistance by employees/COTU and other intended parties as it causes unemployment
      7. requires use of technology which is lacking
  6.                              
    1. Highlight five benefits that a country will enjoy as a result of indirect production(10mks)
      1. use available resources - idle / wasted
      2. creation of employment for those engaged in trading activities
      3. expanded/ wide market for goods
      4. variety of goods/services - gives people a wide choice / to satisfy different consumer needs
      5. increased incomes
      6. imcreased business opportunities
      7. increased production fo goods and services - more goods available to country citizens
      8. increased specialisation - increased quality/output
      9. improved tech due to exchange of ideas
      10. enhances peace/understanding  due  to interaction
      11. disposal/sale of suplus goods - minimising wastage/loss
      12. receive goods/services they dont rpoduce by buying from others
      13. improved infrastructure (eg roads) leading to easy movement
    2. The following trial balance was extracted from the books of Mugoya Traders as at 30th June, 2014
      Mugoya Traders
      Trial balance
      As at 30th June 2014

      Details

      Dr (shs)

      Cr (shs)

      Premises

      1,500,000

       

      Debtors and creditors

           20,000

           30,000

      Cash at bank

           90,000

       

      Cash in hand

           10,000

       

      Purchases and sales

         140,000

         320,000

      Stock of good on 1st July 2013

           45,000

       

      Discounts

             6,000

             2,000

      Salaries and wages

           50,000

       

      Commissions

       

             8,000

      Power and lighting

           12,000

       

      Returns

           15,000

           19,000

      Carriage outwards

             2,300

       

      Carriage inwards

             5,400

       

      Capital

       

      1,543,700

      Furniture

           27,000

       

       

      1,922,700

      1,922,700

      Additional information
      Stock of goods on 30th June, 2014 was worth sh22, 000.
      Required: prepare trading, profit and loss account for the period ended 30th June, 2014. (10mks)
      Mugoya Traders
      Trading profit and loss account
      For the year ended 30th June 2014

        sh sh    sh
      opening stock    45 000  sales 320 000
      add purchases 140 000   less sales returns (15 000)
      less purchase returns (19 000)     305 000
      add carriage 5 400 164 400    
      C.G.A.F.S   209 400    
      less closing stock   (22 000)    
      C.G.S   187 400    
      gross profit   117 600    
          305 000   305 000
      discounts   6 000 gross profit 117 600
      salaries   50 000 discounts 2 000
      power/lighting   12 000 commisions 8 000
      carriage outwar   2 300    
      net profit   57 300    
          127 600   127 600
      No marks at net purchases 164 400
      20 ×  ½ 

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