INSTRUCTIONS.
- Answer any FIVE Questions
QUESTIONS
-
- Explain five causes of unemployment in Kenya. (10 Marks)
- Explain five circumstances that would influence a producer to use wholesalers in distributing his produce. (10 Marks)
-
- Explain five factors that promote entrepreneurship in Kenya (10marks)
- Explain five non-tax internal sources of revenue to the government. (10mks)
-
- Explain five benefits that a country would get by encouraging investors to locate industries in rural areas. (10 Marks)
- On 1st May 2010 Musa Traders had sh. 15, 000 cash in hand and Sh. 160, 450 at bank. During the month, the following transactions took place.
May 2 Bought goods for Sh. 5, 400 and paid by cheque.
May 8 Received sh. 7, 200 cash from a debtor
May 15 Paid a creditor Sh. 18, 300 by cheque
May 16 Paid salaries sh 4, 200 in cash
May 18 Sold goods for sh. 9, 200 and was paid by cheque
May 20 Withdrew sh. 30, 000 from bank for office use
May 25 Received sh.8, 000 cash from a debtor
May 28 Paid general expenses sh. 4, 000 cash.
May 29 Deposited sh.10, 000 cash in bank
May 30 Paid for electricity sh. 2, 500 by cheque
Record the above transactions in a two column cash book and balance it off. (10 Marks)
-
- Explain five differences between private limited companies and public limited companies. 10 (Mks)
- Explain five factors that could affect the quantity of cabbages supplied in a Market. (10Marks)
-
- Explain five factors to consider when choosing an appropriate means of transport. (10 Marks)
- TLhe following Trial Balance was extracted from the books of Mwangi Traders on 31st December, 2005.
Mwangi Traders
Trial Balance
As at 31st December, 2005Dr (sh). Cr (sh) Purchases 70,000 Carriage Outwards 4,000 Stock 1/1/2005 12,500 Sales 95,000 Fixed Assets 82,000 Creditors 8,500 Debtors 10,500 Salaries 14,000 Bank Overdraft 7,500 Returns 1,500 2,400 Cash In Hand 2,500 General expenses 5,200 Capital 88,800 202,200 202,200 - Closing stock was valued sh 6,500
- Salary outstanding was sh 2,800
Prepare the following- Trading, Profit and Loss Account 6mks
- Balance sheet 4mks
-
- Explain five roles of commercial banks in the development of a country’s economy. (10 Marks)
- Explain five challenges that may be experienced by a country whose population is made up of large proportion of young people. (10 Marks)
MARKING SCHEME
-
- Five causes of unemployment in Kenya.
- High population growth rate.
- Inappropriate education system.
- Inappropriate technology.
- Rural – urban migration.
- Lack of product market.
- Seasonality in production. 5 x 2 = total Marks
- Circumstances that would influence a producer to use wholesalers in distributing his produce.
- If he needs to only specialize in production.
- If he lacks means to distribute his goods.
- If the market is quite large.
- If it is economical to use the wholesalers.
- If the wholesales are versed with the market and he is not. 5 x 2 = total 10 Marks
- Five causes of unemployment in Kenya.
-
- Explain five factors that may promote entrepreneurship. (10marks)
- Availability of finances which supports the growth / expansion / operation of the business.
- Availability of security that ensures safety of business property.
- Availability of market / demand where people can sell goods/services to satisfy their needs.
- Good infrastructure / roads that facilitate movement of goods to the market.
- Political stability that creates a conducive environment for starting / running a business.
- Healthy / fair competition that the owner of the business can cope with / withstand.
- Favourable government policies / government support that may encourage starting / expansion of business venture.
- Presence of role models / successful business people that inspires the youths to go into business.
- Development of positive entrepreneurial culture through early exposure to business activities / that values individuals who are successful entrepreneurs.
- Relevant education / training in the curriculum which prepares the youths to become entrepreneurs.
- Good governance that ensures accountability / transparency in conduct of business activities.
- Availability of appropriate technology that can lead to production of desired quality /quantity of goods
- Need for independence / self-reliance through earning of income
- Explain five non-tax internal sources of revenue to the government. (10mks)
- Fees-Amounts received by the government after rendering direct services to its citizens e.g licensing businesses
- Fines and penalties- Imposed by judicial system (courts and tribunals) on individuals or the firms who break the law of the land
- Incomes from government owned properties- These include land for which rates are charged and houses for which rent is charged.
- Profits and dividends from public corporations- When revenue is earned from these corporations the profits go to the government.
- Loan repayment- Recovery of principal amount and interest on loans lent out by government financial agencies e.g KIE
- Escheats- If a person dies without a proper will and has no legal heirs, the property of such a person revert to the government
- Income from sale of government property and ownership in companies (shares)
- Explain five factors that may promote entrepreneurship. (10marks)
-
- Benefits that a country would get by encouraging investors to locate industries inrural areas.
- Reduced rural – urban migration.
- Improved infrastructure in rural areas.
- Balanced development in the country.
- Better living standards in rural areas.
- Utilization of rural resources in such areas.
- Lesser population in urban areas. 5 x 2 = 10 Marks
- Two column cash-book
Date
Details
Folio
Cash
Bank
Date
Details
Folio
Cash
Bank
2010
Bal b/d√1
Debtor√½
Sales√½
Bank√½
Debtor√½
Cash√½
Sh.
Sh.
2010
Purchases√½
Creditor√½
Salaries√½
Cash√½
Gen.exp.√½
Bank√½
Electricity√½
Bal c/d√1
Sh.
Sh.
May 1
15,000
160,450
May 2
5,400
8
7,200
15
18,300
18
20
25
29
C C
30,000
8,000
9,200
10,000
16
20
28
29
30
31
C
C
4,200
4,000
10,000
42,000
30,000
2,500
123,450
60,200
42,000
179,650√1
123,450√1
60,200
179,650
- Benefits that a country would get by encouraging investors to locate industries inrural areas.
-
- Explain five differences between private limited companies and public limited companies.
Private Ltd Co.
Public Ltd Co.
i) Formed by a minimum of 2 and a maximum of 50 shareholders
i) Formed by a minimum of 7 shareholders with no set maximum
ii) Restricts transfer of shares
ii) Shares are freely transferable
iii) Do not invite subscription for shares and debentures from members of public
iii) Invites subscription for shares and debentures from members of public
iv) Can be managed by one director
iv) Managed by board of directors
- Factors that could affect the quantity of cabbages supplied in a Market.
- Price of cabbages in the market.
- Nature of road / transport network.
- Seasonal factors / climate.
- Production ways embraced.
- Future expectations of change in price.
- Government policies e.g. quota, price control etc. 5 x2 = total 10 Marks
- Explain five differences between private limited companies and public limited companies.
-
- Factors to consider when choosing one appropriate means of transport
- Nature of goods.
- Cost of transport.
- Value of goods.
- Distance to be covered.
- Terminals.
- Flexibility.
- Reliability.
- Availability. Any 5 well explained x 2 = total 10 Marks
-
- Trading profit and loss account for the period ended 31st December, 2005. (6mks)
Mwangi Traders
Trading Profit and Loss Account
For the period ended 31/12/2005
Sh
Sh
Sh
Opening Stock
12500
Sales
95,000
Add Purchases
7000
Less Returns Inwards
1,500
Less Returns Outwards
2400
67600
Net sales
93,500
Cogas
80,100
Less Closing Stock
6,500
Cost of Sales
73,600
Gpc/d
19,900
93,500
93,500
G.P b/d
19,900
General Expenses
5,200
Carriage outwards
4,000
Salaries
14,000
Outstanding salaries
2,800
Net Loss c/d
6,100
26,000
26,000
Net loss b/d
6,100
- Balance sheet as at 31st December, 2005. (4mks)
Mwangi Traders
Balance Sheet
As At 31/12/2005
Fixed Assets
82,000
Capital
88,800
Current Assets
Less net loss
6,100
Stock 6,500
82,700
Debtors 10,500
Current Liabilities
Cash in hand 2,500
19,500
Creditors
8,500
Bank Overdraft
9,500
Outstanding Salaries
2,800
18,800
101,500
101,500
- Trading profit and loss account for the period ended 31st December, 2005. (6mks)
- Factors to consider when choosing one appropriate means of transport
-
- Explain five roles of commercial banks in the development of a country’s economy.
- Promotes savings- savings provide funds which can be changed into useful development projects.
- Source of capital- Commercial banks give loans to firms and individuals that are used in financing various business projects.
- Stimulating economic activities- Commercial banks may do this by giving business advices to its clients and also by lending to them.
- Provision of employment- Commercial banks provide employment opportunities to individuals who work in various departments of the bank hence earn income.
- Act as guarantors and referees- Banks acts as guarantors on behalf of their clients who wish to engage in credit transactions or secure loans from other financial institutions
- Effect foreign exchange payment- Commercial banks provide foreign exchange and the means through which traders who engage in international trade may effect payments.
-
- Explain five challenges that may be experienced by a country whose population is made up of large proportion of young people.
- Increase in crime-idleness may result to illegal means as they look for means of survival
- Dependency ratio will rise- economically active population will shoulder bigger economic burden
- Reduced investment /savings-reduced –investment will decline as a result of low level of unemployment/ high dependency ratio
- low per capita income-since national income is spread through a large non-contributing population the living standards will be low
- Low labour supply-many young people may not attain the working age hence low production of goods Increased unemployment –jobs don’t match the demand-
- Explain five roles of commercial banks in the development of a country’s economy.
Download Business Studies Paper 2 Questions and Answers - Lanjet Joint Mock Exams 2022.
Tap Here to Download for 50/-
Get on WhatsApp for 50/-
Why download?
- ✔ To read offline at any time.
- ✔ To Print at your convenience
- ✔ Share Easily with Friends / Students