Business Studies Paper 1 Questions and Answers - Kijiset Revision Mock Exams 2022

Questions

INSTRUCTIONS TO CANDIDATES

• Answer all the questions

Answer all the questions in the spaces provided

1. What are the reasons that make an individual engage in business. (4mks)
2. Name four types of utilities created in each of the following situations. (4mks)
   
   1. A dairy farmer delivering milk to Brookside dairies.
   2. Mama mboga selling kales in a market stall.
   3. Freshly harvested fruits stored in a granary
   4. Recycling wastes
3. Highlight four ways in which warehousing promotes trade in Kenya. (4mks)
4. The following information relates to Jumbo Traders for the year ended 31/12/2016.
   

   Capital 1/12/2016 Additional investment  Net loss  Monthly drawing

   940 000 420 000 20 000 5 000

   Determine capital as at 31/12/2016 (4mks)
5. Outline four goals of developing a country. (4mks)
6. Outline four ways in which nature of goods may influence the choice of distribution channel. (4mks)
7. Highlight four circumstances under which use of gestures would be appropriate for communication. (4mks)
8. List four fundamental elements of transport. (4mks)
9. Highlight four ways in which consumers may protect themselves against exploitation. (4mks)
10. The following balance sheet was incorrectly prepared.
    Pempe Tatu Traders Balance Sheet as at The Year Ended 31/12/2010
    

    Stock Bank overdraft  Cash	5 000 5 000 9 000	Furniture Debtors  Capital	50 000 7 000 6 600
    	19 000		123 000

    Prepare the correct balance sheet. (4mks)
11. Give four reasons why government of Kenya has been organizing seminars and workshops for training youths in business. (4mks)
12. Name the source document in which each of the following descriptions relates; (4mks)
    1. Issued by the seller to the buyer for cash paid for goods
    2. Issued by the seller to a credit to demand for payment
    3. Used to correct an overcharge for the goods
    4. Filled when either cash/cheque are deposited in the bank account.
13. State four features of monopolistic market (4mks)
14. Highlight four ways how an organization can maintain their equipment’s and machines in good conditions. (4mks)
15. State four components of a business plan. (4mks)
16. Highlight four factors that influence the amount of money an individual may hold for transaction motive. (4mks)
17. The following details were extracted from the books of Ushindi Traders for the year ended 30/6/2018.
    

    Stock (1/7/2017)  Stock (30/6/2018)  Purchases Returns outwards  Sales

    Sh 120 000 Sh 100 000 Sh 650 000 Sh 40 000 Sh 900 000

    Required: prepare the trading account for the period ending 30/6/2018. (4mks)
18. Outline the effects of youthful population on the economy of Kenya. (4mks)
19. State four circumstances under which a company may be dissolved. (4mks)
20. Outline four disadvantages that a manufacturer would suffer if wholesalers are eliminated from the chain of distribution. (4mks)
21. Highlight four assumptions in the circular flow of income in a two sector economy. (4mks)
22. Identify four factors that may lead to a shift in demand curve to the left. (4mks)
23. State any four characteristics of economic resources .(4mks)
24. Outline four characteristics of secondary human wants. (4mks)
25. Identify any four sources of revenue for the county governments. (4mks)

Marking Scheme

1.    
   • To make profit.
   • To create employment opportunities.
   • To make proper use of leisure time.
   • To be your own boss
   • To make use of idle resources.
   • .Enables an individual to get what he does not produce.
2.  
   • Place utility.
   • possessive utility.
   • Time utility.
   • Form utility.
3.  
   • Ensures steady supply of goods.
   • Ensures price stability.
   • Encourages large production.
   • Ensures continuity in production.
4. F.C=0.C+N.P+ADDITIONAL INVESTMENT-[DRAWINGS +LOSSES.]
   Drawings= 12x5000=60000
   f.c=940000+420000-[60000+20000]
   f.c=sh.1360000.
5. 
   
   • TO improve living standards of the people
   • Reduce unemployment.
   • To reduce income and wealth inequalities.
   • Provide environment and technology advancement.
   • To provide variety of goods and services.
   • To improve efficiency in production for self sufficiency.
   • To diversify the economy.
6.      
   • Bulky goods needs a shorter channel to reduce on cost of transport.
   • Perishable goods need a shorter channel
   • Urgently require goods needs a shorter channel to reach on time.
   • Fragile goods needs a shorter channel as they break easily.
   • Highly valued goods requires highly secured shorter channel
   • Technical goods needs a shorter channel as they need demonstrations.
7.  
   • When the other party is dump/deaf.
   • When there is language barrier.
   • When in noisy place.
   • When there is need to reinforce spoken word.
   • When there is need to maintain secrecy.
   • When other people need not to be disturbed.
8.   
   • Terminals.
   • Way.
   • Method of propulsion.
   • Unit of carriage.
9.   
   • By boycotting the illegal products.
   • Carrying out peaceful demonstrations against their rights violation.
   • Forming and joining consumer assertions to air their problems as one.
   • Reporting cases of violation to the relevant authorities.
10.  
    

    PEMBE TATU TRADERS BALANCE SHEET AS AT 31/12/2010
    Fixed Assets		Capital	66 000
    Furniture	50 000	Short term liabilities
    Current Assets		Bank overdrafts	5 000
    Stock Debtors  Cash	5 000 7 000 9 000

11.      
    • Expose them to modern development in business management.
    • Expose them to government policies regarding business activities.
    • Inform them 0n the available risky but profitable business activities.
    • Educate them on how to minimize input in business and maximize output.
    • To identify and discuss possible challenges in business.
    • Educate them on efficient method of operating the business.
    • Impart proper business ethics.
12.  
    1. Receipt issued.
    2. Invoice issued.
       Credit note issued.
       Cash deposit slip issued.
13.   
    • There are many buyers and sellers.
    • Sellers offer differentiated products.
    • No barrier to leave or enter.
    • Buyers and sellers have perfect market knowledge.
    • No single firm has a control over factors of production.
14.  
    • Only acceptable consumable should be used in the machines.
    • They should be assigned to particular persons for accountability.
    • Should be regularly serviced.
    • Should be regularly serviced by a qualified personnel.
    • Should be covered to a void dust.
    • Should be wiped regularly to remove dust.
15. Name of the business.
    
    • Products to be sold.
    • Personnel to manage the business.
    • Amount of finance required.
    • Market to be served.
    • Summary of the plan.
    • Mission and vision of the firm.
16. Level of individual income.
    • Cost of living.
    • Number of dependants.
    • Ones lifestyles.
    • Possibility of getting credit.
    • How regular the income is.
17.    
    

    USHINDI TRADERS. TRADING ACCOUNT FOR THE YEAR ENDED 30/6/2018
    Opening stock  Add purchases.  Less returns outwards  Net purchases  Less closing stock.  Cost of goods sold Gross profit c/d	120 000 650 000 40 000 730 000 100 000 630 000 270 000	Sales	900 000
    	900 000		900 000
    			270 000

18.    
    • High dependency ratio.
    • Low labour supply.
    • High unemployment rate.
    • Diversion of government expenditure.
    • High social evils.
    • Reduced savings and investments.
19.  
    • When members voluntarily agrees to dissolve the company in a general meeting.
    • When the company is declared bankrupt.
    • Where the law renders the company activities illegal
    • When the company acts ultraviresly.
20.  
    • They will supply goods themselves.
    • They will bear risks themselves.
    • Will experience shortage of storage space.
    • Will carry out market research themselves.
    • Will engage in product promotion themselves.
    • Will experience cash shortage for their current expenditure.
21.  
    • Economy is closed.
    • There is no government intervention.
    • Households spend all their income on goods and services provided by the firm.
    • There only two key players in the economy
    • Firms spend all their incomes to pay for factors of production from house holds.
22.      
    • Decrease in consumer income
    • Increase in price of goods and services.
    • Decrease in population.
    • Negative tastes and preferences.
    • Unfavorable government policies
    • Decrease in price of close substitutes.
    • Increase in price of close complements.
23.  
    • Scarce in supply
    • Have utility.
    • Have alternative uses.
    • Can be combined to produce goods and services.
    • Can be complementary.
    • Have money value.
24.  
    • One can do without.
    • Can be postponed.
    • Satisfied after primary wants
    • Make ones life more comfortable.
    • Are not felt needs.
25.  
    • From taxes.
    • Internal and external borrowing.
    • Interests from loans.
    • From rent and rates
    • Sale of government proceeds.
    • Donations from central government.
    • License fee.
    • Fines and fees from law offenders.