QUESTIONS
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- Outline five measures that an office can take to safeguard the organization's property. (10 marks)
- Describe five ways through which commercial banks differ from non-bank financial institutions. (10 marks)
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- Highlight five advantages of government involvement in business (10 marks)
- The following transactions relates to the Ebenezer furniture Ltd. for the month of August 2015
August 2: Invoice received for Matu traders values at shs 60,000
3: Credit note received from Matu traders valued shs 15,000
5: Receipt issued to Jomo Academy worth shs 25,000
8: Invoice issued to Malaika Restaurant shs 80,000
10: Credit sales of furniture worth shs 16,000 to Miugiza Hotels Ltd.
13: Paid Matu shs 8,000 by cheque less 10% cash discount.
16: Purchased furniture on credit valued a tshs 7,000 from Mwendwa furniture stores.
29: Sold an old business van valued at shs 400,000 to Maitima Holdings on credit.
Required:
Record the above transactions in the relevant subsidiary books. (10 marks)
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- Explain five reasons why choice is important in the satisfaction of human wants. (10 marks)
- Explain five factors that may lead to the shift of demand curve from right to left (10 marks)
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- Explain four circumstances that would lead to a firm being located near the market for its products. (8 marks)
- The following trial balance was extracted from the books of Wikaro Enterprises as at 31st December 2015.
Details Dr.(shs) Cr.(shs) Purchase and sales 1,200,000 1,740,000 Stock 31/12/2014 180,000 Debtors and creditors 195,000 120,000 Discounts 75,000 96,000 Returns 60,000 150,000 Machinery 600,000 Commissions 48,000 42,000 Buildings 1,620,000 Carriage outwards 24,000 Cash in hand 210,000 Insurance 90,000 Capital 2,454,000 Furniture 300,000 4,602,000 4,602,000
Required: Prepare- Trading, profit and loss account for the year ended 31st December 2015. (71/2marks)
- A balance sheet as at 31st December 2015. (41/2 marks)
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- The Kenyan government has constructed a new standard Gauge Railway (SGR) line. Explain five benefits that will accrue to Kenyan economy from this railway line. (10 marks)
- Kamau imported a probox car from Dubai. Illustrate five channels that he could have used to import the car. (10 marks)
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- Explain five sources of government revenue for development expenditure. (10 marks)
- On June 2015, Mungai Traders had cash in hand shs 87,000 and cash at bank shs 250,000.
During the month the following transactions took place
June 2nd : Sold goods for shs 60,000 cash.
3rd: Paid stationery shs 101,500 by cheque.
7th: Purchased a computer by cheque shs 86,000
13th: Received cheque of shs 76,000 from Otieno, after allowing him a cash discount of 5%
17th: Settled Kigwadi's account with shs 34,200 in cash, having deducted shs 800 cash discount.
19th: Deposited shs 1,000 into the business bank account from personal savings.
22nd: Received a cheque for shs 165,000 in respect of cash sales.
24th: Withdrew shs 4000 cash for personal use.
26th: Withdrew shs 32,000 from bank for office use.
29th: Received shs 17000 cash from Kipruto in settlement of his account less shs 1000 cash discount.
31st: Deposited all the money from the cash till into the bank except shs 24,000.
Required: Prepare a duly balanced three column cash book. (10mks)
MARKING SCHEME
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- Outline five measures that an office can take to safe guard the organizations property. (10mks)
- Enhance security against theft by employing guards
- Ensure physical care by the people handling them
- Keeping records of movement usage and return of property
- There should be periodic physical stock taking
- The organisation can take an insurance cover against the property
- There should be proper repairs, servicing and maintenance
- Property using electricity requires switching of when not in use.
- The personnel handling these property should undergo training on proper usage
- Property that is obsolete should be replaced regularly to maintain the number required.
Any 5.x 2 = 10mks
- Differences between coinmercial banks and non-bank financial institutions. (5 mks)
Commercial Banks Non-Bank Financial Institutions provide clearing house facilities / do clear cheques Do not provide clearing house facilities/do not clear cheques provide overdraft facilities through current account Do not provide overdraft facilities / Do not offer current account provide short-term to medium term loans Provide medium term to long-term loans provide loans for general use Provide loans for specific purpose Do exchange foreign currencies Do not exchange foreign currencies Closely supervised / controlled by central bank Not closely supervised / controlled by central bank Provide safekeeping of valuable Do not provide safe keeping of valuables
- Outline five measures that an office can take to safe guard the organizations property. (10mks)
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- Highlight five advantages of government Involvement in business activities. (10mks)
- Government provides essential services which may be deemed unprofitable by enterprises.
- Government is able to carry out business that require large amount of capital which may not be raised by private individuals.
- Business managed and run by the government create employment hence help in solving reducing unemployment problems
- Profit realised by the government parastatals distributed through provision of services leading to cquality/protection of consumer against exploitation
- Government run business create competition making private business to improve quality and charge fair prices.
- Government help reduce foreign domination in the economy.
- Government promotes economic development
- Government help in controlling environmental degradation.
- Government involvement in business help in promoting entrepreneurial cultural.
- Government involvement in business help in the adaption of the appropriate technology.
Any well explained points 5x 2 = 10mks
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Purchase Journal Date Details LF Invoice no. Amount 2015 Aug 2 Matu traders PL 60,000 Aug 16 Mwendwa PL 7,000 Purchase Returns Journal Date Details LF Credit note no. Amount 2015 Aug 03 Matu traders PL 15000 Sales Journal Date Details LF Invoice No. Amount 2015 Aug 08 Malaika SL 80000 Aug 10 Miugiza SL 16000 Cash Receipt Journal Date Details LF Receipt No. Cash Bank 2015 Aug 5 Jomo Academy SL 25000 Cash payment/Disbursement Journal Date Details LF Doc no Disc Cash Bank 2015 Aug 13 Matu PL 2000 8000 General Journal / Journal proper Date Details LF DR CR 2015 Aug 29 Maitima Holdings SL 400000 60000 10 ticsks x 1 @ = 10 mks
being a record of cusiness Vanto
- Highlight five advantages of government Involvement in business activities. (10mks)
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- Explain five reasons why choice is important in the satisfaction of human wants (10mks)
- Wants are unlimited in number while available resources are scarce
- Some wants are more urgent and intense than others
- Some commodities sell at different prices hence one has to choose what is affordable There are many varieties of products that satisfy the same wants thus the need for choice
- Commodities differ in quality and others have salient features, thus the need for choice
- Consumers financial position vary with time hence a budget is needed
- Some wants are recurrent hence they must be catered for quite often
- Human wants are competitive, hence a choice is needed.
any 5@2mks=10mks
- Factors leading to the shift of demand curve from right to left (10mks)
- A decline in consumers tastes and preferences for the product
- Seasonal changes not favouring demand for the product eg in a dry season demand for gumboot decreases
- Decrease in population leading to fewer buyers
- Increase in taxation on the prices hence less demand
- A decrease in the consumers level of income
- Decline in the prices of substitutes
- Increase in the prices of the product any five explained points
5x2=10mks
- Explain five reasons why choice is important in the satisfaction of human wants (10mks)
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- Circumstances leading to the location of a firm near the market for its products. (10maks)
- In case the final product is more bulky than inputs or raw materials
- Where the cost of transporting raw materials or inputs is lower than that of transporting the final products to the market.
- Where the market is localised ie concentrated in a particular area it might be economical to have the firm located there to be in close contact with the customers
- Where the government policy requires a firm to be located where the market is situated, the firm will have no choice but to comply.
- Where the substantial external economies can be enjoyed where the market for the product exists, a firm might be established
- If the final product is perishable requiring fast delivery to the buyers.
- If the final product is fragile such that long channels of distribution may damage the product
Any five explained point 5x 2 = 1 10 mks
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- Wikaro 1 Enterprises
Trading, Profit & Loss account
For the year Ended 31st December 2015
Opening stock 180000 sales 1740000 add purchases 1200000 Less return inwards (60,000) less return outwards (150000) Net sales 1,680,000 net purchases 1050000 Cost of G.A.S 1230000 Less closing stock (210000) Cost of sales 1020000 Gross Profit 660000 1,680,000 1,680,000 Expenses Discount allowed 75000 Gross profit b/d 660,000 Commission allowed 48000 Add discount received 96,000 Carriage outwards 24000 Add commission received 42,000 Insurance 90000 Net profit c/d 561000 798000 798000 Net profit b/d 561,000 - Wikaro 1 Enterprises
Balance Sheet
As at 31st December 2015
Assets Capital and liabilities Debtors 195000 capital 2454000 Stock 210000 add net profit 561000 Machinery 600000 creditors 120000 Buildings 1620000 Cash in hand 210000 Furniture 300000 3135000 3135000
- Wikaro 1 Enterprises
- Circumstances leading to the location of a firm near the market for its products. (10maks)
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- Benefits of SGR to the Kenyan Economy.
- Speedy delivery of goods - ensures that goods are distributed faster to reach on the time without delay.
- Large bulky goods - the means will carry more goods at once which reduce cost of transport.
- Lowers the cost of transport - enables the producers to pay less and thus reduce their expenses for carriage. It's cheap method
- Reduces damage of roads- most trucks will be replaced by trains and thus reduce cost of repair on our roads.
- Reduce road congestion- this helps to reduce traffic jams and accidents on roads.
- Not affected by adverse weather- thus offers continuous services all seasons, both rainy and sunny.
- Comfortable commuter services - passengers can be moved conveniently
- Reduced pollution - more environmental friendly.
NB: Candidates must bring out the benefits. Imk stating, 1mk explanation
- Channels of distributing imported probox from Dubai
- Foreign manufactures → local consumer
- Foreign manufacture → local retailer → local consumer
- Foreign manufacturer → local wholesalers →local retailer → local consumer
- Foreign manufacturer→ local wholesalers →local consumers
- Foreign manufacture →local agent → local wholesalers→ local retailer → local consumer
- Foreign manufacture→ foreign agent → local agent → local retailers→ local consumers
- Foreign manufacturer →local agent → local wholesalers → local retailer → local consumer
- Foreign manufacturer →foreign agent → local agent
- Foreign manufacture→ local agent→ local retailer →local consumer
- Foreign manufacture →local agent → local wholesaler →local consumer
- Benefits of SGR to the Kenyan Economy.
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- Source of government revenue for development expenditure
- Government borrowing both internal and external
- Taxation (Taxes)
- Fines and penalties charged to offenders in courts
- Proceeds/income from scale of government properties
- Licenses fees paid by those operating business
- Interests earned on loans advanced by government to firms
- Dividends and profits earned from government direct investments
- Rents and rates paid for use of government property
- Escheats
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Date Details F DA Cash Bank Date Details F DR Cash Bank 2015 2015 June 1 balance b/d 87000 250000 June 3 Stationery 101500 2 Otieno 4000 76000 7 Computer 86000 19 Add investment 10000 17 Kigwadi 800 34200 22 Sales 165000 24 Drawings 4000 26 Bank C1 32000 26 Cash C1 32000 29 Kipruto 1000 17000 31 Bank C2 133800 31 Cash C2 133800 31 Balances c/d 24000 406300 5000 196000 625800 800 196000 625800
- Source of government revenue for development expenditure
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