INSTRUCTIONS TO CANDIDATES
Answer any five questions in the spaces provided.
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- Explain five benefits that could accrue to a customer who buys goods from a departmental store. (10mks)
- Explain five roles played by licensing as a government regulatory tool. (10mks)
-
- Explain five services that the central bank of Kenya offers to commercial banks. (10mks)
- The following information relates to the business of Kipisigs Traders for the week ended 29th Feb 2016.
Feb 24th Started business with shs 24,000 in thebank.
Feb 25 th Bought goods worth shs 18,000 by cheque.
Feb 26 th Sold goods for cash shs 18,900
Feb 28 th Cash sales worth Kshs 5,625
Feb 29 th Paid commission Kshs 900 in cash.
Required
Prepared ledger accounts and balance them off. (10mks)
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- Describe five channels followed in exporting agricultural product. (10mks)
- The following trial balance was extracted from Milka traders on 31st Dec 2020.
Dr
ShCr
ShCapital
Stock
Machinery
Motor vehicle
Purchase
Sales
Returns inwards
Returns outwards
Discount received
Carriage inwards
Carriage outwards
Bad debts (written off)
General expenses
Debtors
Creditors
Rent
25000
250,000
87000
360,000
40,000
2000
3000
80,000
88,000
18,000
1000
954.000250,000
600,000
20,000
5,000
49,000
954.000
Closing stock was sh. 22000
Prepare Milka traders Trading, profit and loss account for the year ending 31/12/2020. (10mks)
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- Explain five reasons why a country imposes taxes on her citizens. (10mks)
- Outline five differences between a public limited company and a cooperative society. (10mks)
Public Co-operative society
-
- Using a diagram illustrate the effects of a positive shift of a demand curve on the equilibrium point, price and quantity (10mks)
- Explain five features of land as a factor of production. (10mks)
-
- Mmanyi Enterprises have decided to construct their own warehouse. Explain five benefits they are likely to derive. (10mks)
- Explain five importance of filing documents in an organization (10mks)
MARKING SCHEME
-
- Advantages of departmental stores
- Access to specialised goods/ service from the relevant / shops / particular type of goods. Personalised / attention to customers.
- Access to auxiliary / after sales services - which may easily be available within the shops.
- One can save time by shopping under one roof.
- Prices of goods are relatively low = making consumers save/ buy more .
- One can access a variety of goods under one roof.
- Use of credit i debit cards - relieving customer the need of carrying cash.
- Access new products which a customer may not have been aware of.
- Explain five roles played by licensing as a government regulatory tool. (10mks)
- Licensing provides the government with a platform to monitor the type of goods moving in and outside the country.
- Through licensing the government can get the total number of businesses operating in the country
- Licensing is used by the government a tool to prevent illegal business activities.
- Licensing ensures that professional standard as stipulated by the government are adhered to against which a license can be withdrawn for a business which does not stick to the standards.
- Ensures that business people do not provide harmful goods and services to the citizens.
- Ensures that there is a healthy competition between people involved in the same business activities.
- Advantages of departmental stores
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- Explain five services that the central bank of Kenya offers to commercial banks.
- Accepts deposits for safe-keeping i.e. banker to commercial banks.
- Licenses the operation of commercial bank Supervises the banking operations.
- Provide clearing house for interbank transaction.
- Ask as a mediator / arbitrator for commercial bank in case of any disputes.
- Lends money to commercial banks.
- Provide advisory services on banking on economic matters to commercial banks.
- Provide them with currency
- Replaces old notes and coins with new ones.
- It repatriates excess foreign currency.
Dr Capital a/c Cr Bal c/d 24.000Bank
24,00024,000
24,000
Dr Bank a/c Cr Capital 24,000Purchases
Bal c/d
24,00018,000
6,000
24,000
Dr Cash a/c Cr Sales
Sales
18,900
5,625
24,525Rent
Commission
Bal c/d/150
^900
23,475
24,525
Dr Sales a/c Cr Bal c/d
24,525
24,525Cash
Cash
18,900
5,625
24,525
Dr Purchases a/c Cr Bank 18,000
18,000Bal c/d 18,000
18,000
Dr Commission a/c Cr Cash
900
900Bai c/d 900
900
Dr Commission a/c Cr Bank
150
150Bal c/d 150
150
- Explain five services that the central bank of Kenya offers to commercial banks.
-
- Describe five channels followed in exporting agricultural product. (10mks)
- Farmer marketing board -> foreign consumers
- Farmer —agent - foreign wholesaler - foreign retailer -foreign consumer
- Farmer foreign wholesaler foreign retailer foreign consumer
- Farmer -foreign retailer -foreign consumer
- Farmer -foreign fanner‘s representative - foreign wholesaler -foreign retailer - foreign consumer
- Farmer - foreign consumer
- Milka Traders
Trading, Profit & Loss A/c
For the year ended 31 December 2020
Shs Shs Shs cts Opening stock
Add purchase
+ C inwards25,000 Sales
600,000
40,000
560,000 Less returns out
Gas
Less C. stock
COS
Gross profit c/d20,000 342,000
367,000
22,000
345,000
215,000560,000 560,000 General expenses
Carriage out
Rent
Bad debts
Net profit c/d88,000
3,000
1,000
80,000
48,000
220,000Gross profit b/d
Add disc. Received215,000
5,000
220,000Net profit 48,000
- Describe five channels followed in exporting agricultural product. (10mks)
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- Reasons why a country imposes taxes on citizens
- Raise government revenue - to cater for various government expenditure
- Reduce income disparity - by facilitating fair distribution of incomes and resources by taxing rich more
- Discourage consumption - of harmful products and engagement in illicit activities
- Control inflation - by reducing money supply through reduction of people‘s disposable income
- Correct unfavourable balance of payments- by taxing imported products more to discourage importation
- Influence business location e.g. high tax on urban centres make entrepreneurs to go to rural areas
- To subsidize various undertakings for the benefit of the society
Cooperatives Public limited cos 1 Formed by a min of 10
2 Registered by commissioner of cooperatives
3 Managed by committee elected by members at AGM
4 Governed by cooperative by – laws
5 Formed with service motive (to serve members)
6 Members have acommon bond
7 Controlled by government through the ministry of cooperative development.1 Min 7 members /shareholders
2 Registered by registrar of companies
3 Managed by Board of directors AGM
4 Governed by Articles of Association
5 Formed for profit motive
6 Members have nothing in common
7 There is no government control
- Reasons why a country imposes taxes on citizens
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- Using a diagram illustrate the effects of a positive shift of a demand curve on the equilibrium point, price and quantity. (10 marks)
- Features of land as a factor of production
- Basic factor of production. Production cannot take place without land.
- Lack geographical mobility- land cannot be moved geographically from one location to another.
- Uneven in quality – the land quality differs from one place to place.
- Suffers from diminishing returns after some time the quality of land reduces.
- Quality can be improved – use of technology and fertilizers can improve the quality of land.
- Using a diagram illustrate the effects of a positive shift of a demand curve on the equilibrium point, price and quantity. (10 marks)
-
- Benefits that Mmanyi Enterprise may derive from constructing their own warehouse.
- Bulk buying; they can buy stock in large scale because they have storage facilities
- They can be able to meet market demands since they stock the right quantities required by the customers.
- Seasonal goods can be stocked in order to satisfy customer‘s seasoned needs
- Variety of goods can be stocked to promote customer‘s satisfaction
- Security of goods is offered untiln they are demanded.
- Preparation of goods for sale such as branding, parking, sorting while in the warehouse is made easier.
- Suitable design- they can construct a warehouse suitable for their own needs
- Construction of one‘s warehouse is economical
- Importance of filing documents in an organization
- Easy retrieval of documents
- Keeps office very tidy
- Safety of documents
- Documents are kept neat
- Documents are kept away from unauthorised persons
- Space is well utilized
- Information for future reference is kept
- Filed documents are used as evidence in case of disputes
- Benefits that Mmanyi Enterprise may derive from constructing their own warehouse.
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