Instructions to candidates;
- This paper consists of six questions.
- Answer any five questions in the spaces provided after question six.
- All questions carry equal marks
- Explain five benefits that are likely to accrue to a firm due to its own expansion. (10marks)
- Explain five factors that may promote entrepreneurship in Kenya. (10 marks)
- Outline five principles of a good tax system. (10 marks)
- The following information was extracted from the books of Songeto traders in the month of July 2019.
July 1: Had cash in hand of shs 520,600 and a bank overdraft of shs 16,000.
July 3: Bought goods for sale shs 15,000 on credit from Mburu
July 7: Amolo, a debtor settled his account of shs 250,000 by cheque after being allowed a cash discount of 5%
July 8: Bought goods from Joy worth shs 138,500, he paid by cash after getting a discount of 10%.
July 9. Sold goods worth shs 2,300 in cash.
July 15: Paid electricity bills by cheque shs 1,300
July 16: Withdrew shs 11,000 from the bank for office use.
July 19: Paid wages in cash shs 5000.
July 21: Received a cheque of shs 18,400 from Kamau after getting a discount of shs 1,600.
July 25: Received a cheque of shs 23,400 from Kimeli for goods sold in January
July 26: The cheque received on 21st July was dishonored.
July 30: Took all the cash to the bank except shs.2000.
Required: Prepare a duly balanced three column cashbook. (10 marks)
- Explain five challenges encountered when implementing development plans. (10marks)
- Chuma owns a fleet of vehicles, and wishes to cover them against the risk of accidents. Identify the procedure he will follow in obtaining the insurance policy. (10marks)
- Explain five merits of government involvement in business. (10marks)
- Explain five forms of economic integration. (10marks)
- Explain five functions of an office. (10marks)
- Outline five circumstances under which a firm may acquire monopoly power. (10 marks)
- Explain four differences between hypermarkets and departmental stores (8marks)
- The following trial balance was extracted from the books of Ashanti’s Electronics business on 30th April 2020.
As at 30th April 2020
TITLE OF ACCOUNT DEBIT (Dr)
Cash at Bank
Total 777 600 777 600
- A trading profit and Loss account for the year ended 30th April 2020. (8marks)
- A balance sheet as a 30th April 2020. (4marks)
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