Paper 2 December
INSTRUCTION TO CANDIDATES
- This paper consists of six questions.
- Answer any five questions of your choice.
- Candidates should answer the questions in English.
- Explain five factors to be considered when setting up an office layout for a business organization. (10 marks)
- Explain five internal economies of scale that may be experienced by the firm. (10 marks)
- Explain five factors that county government Siaya may consider before incurring any expenditure. (10 marks)
- Explain five business considerations an entrepreneur has to evaluate before accepting a chance for investment. (10 marks)
- Explain five ways in the economic environment may affect business operation positively. (10 marks)
- The following trial balance was prepared form the books of Obechi Retailers for the year ended 31st December, 2020.
As at 31st December, 2020
Details Debit (Shs.) Credit (Shs.) Land and building 500 000 Capital 940 000 Plant and machinery 200 000 Motor vehicles 300 000 15 year loan KCB 200 000 Stock 100 000 Debtors and Creditors 80 000 60 000 Accrued Salary 20 000 Cash at bank 200 000 Drawings 100 000 2 year loan Faulu Bank 260 000 TOTALS 1 480 000 1 480 000
- Balance sheet as at 31st December. 2020. (7 marks)
- Working Capital. (1 mark)
- Capital employed (1 mark)
- Borrowed capital (1mark)
- Explain five Errors that a trial balance may not show. (10 marks)
- Explain five benefits that a country derives from transporting oil through pipeline. (10 marks)
- Outline five Circumstances under which a company may prefer to use informative advertising (10 marks)
- On January 1st 2021, Mutiri Traders had cash in hand Shs.74,000 and a credit Bank balance of Shs.500,000.
During the month the following Transactions took place
January 2 Cash Sales Sh.100, 000
January 3 Paid salaries Shs.203,000 by cheque
January 6 Received a cheque of Shs.153, 600 from Mwamba after allowing her a cash discount of 40%
January 16 Settled Romeo’s Account of Shs.80, 000 in cash deducting Shs.1,600 cash discount.
January 18 Received a cheque for Shs.300,000 in respect of sales January 22 Withdrew Shs.60,000 from the bank for office use.
January 25 Took Shs.10,000 cash for his son/s birthday to be celebrated at home. January 28 Received Shs.33,000 cash from Matoke settlement of his account less Shs.1,320 cash discount.
January 30 Deposited all the money into the bank except Shs.50,000.
Prepare a 3 column cashbook duly balanced on 31st January 2021. (10 marks)
- Outline five differences between the Central Bank and Commercial Banks. (10 marks)
- Explain five measures used to solve unemployment problems. (10 marks)
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