BUSINESS STUDIES PAPER 1 - KCSE 2019 MOKASA PRE MOCK EXAMINATION

1. Highlight four difficulties faced by a consumer in the satisfaction of human wants.(4 marks)

2. State four contents of a business plan.        (4 marks)

3. Outline four attributes of a good office worker.                   (4 marks)

4. Highlight four circumstances under which a debit note may be issued by the seller. (4 marks)

5. The cost of consumer goods in a basket of an average family is given below.
   Year                          2016                            2017
                                      Ksh                              Ksh
   Maize flour                    90                              110
   Sugar                           100                             115
   Rice                              80                               90
   
   Determine the consumer price index using 2016 as the base year.                      (4 marks)

6. Highlight four factors that determine the fertility rate in a given economy.       (4 marks)

7. With an aid of a well labeled diagram, illustrate the circular flow of income in a two sector economy. (4 marks)
8. The following information relates to four businesses A, B, C and D. Fill in the missing figures.        (4 marks)
   

   Business	Assets Shs	Capital Shs	Liabilities Shs
   A	4,010,000	3,210,000	a).
   B	b).	9,312,000	211,100
   C	1,301,111	c).	412,113
   D	13, 917,331	11,716,000	d).

9. State four reasons that may lead to dissolution of a parastatal.                             (4 marks)

10. Give four importance of a warehouse to a trader. (4 marks)
11. Outline four benefits of the standard gauge railway (SGR) to the Kenyan economy.(4 marks)

12. Outline the steps that are followed in the personal selling process. (4 marks)
13. Highlight four channels that a fish farmer may use to distribute her produce in a local Market.        (4 marks)
14. State four characteristics of a market.                                                              (4 marks)

15. Highlight four factors which may have led to a shift in the supply curve as illustrated below.        (4 marks)
    

16. State four items of information one can obtain from an insurance policy. (4 marks)

17. Outline four advantages of using written communication in an organization.    

18. Record the following transactions that took place in Otiende traders from 21^st august to 24^th August 2018 in the general journal. (4 marks)
    2018
    21^st Aug:         Bought furniture from Lowoi furniture mart at Sh 60,000 on credit
    22^nd Aug:         Sold an old machinery on credit to Muchina at Sh. 90,000
    23^rd Aug:         Bought a lawn mower from Farm Machines on credit Sh. 80,000
    24^th Aug:         Purchased a water tank worth Sh. 140,000 on credit from Kentank ltd

19. Munyao an entrepreneur intends to start a business. Give four factors that he needs to consider when deciding on which goods to produce. (4 marks)

20. For each of the transactions given below indicate the accounts to be debited and the account to be credited.        (4 marks)
    

    Transactions	A/c to Debit	A/c to Credit
    a). Started business with Shs. 400,000 in cash
    b). Returned goods worth Shs. 21,000 to Nyayo      traders
    c). Banked Shs. 80,000 from cash till
    d). Proprietor took goods from the business for      family use

21. The following information was extracted from the books of Kisima wholesalers on 31^st December, 2018.
    1. Opening stock                    sh. 300,000
    2. Purchases                          sh. 1,550,000
    3. Closing stock                    sh. 220,000
    4. Margin                                   1/6
       Required :      Draw Kisima wholesalers trading account.                       (4 marks)

22. Outline four sources of non-tax revenue to a County Government.                     (4 marks)
23. State the business environment described in the statements given below.             (4 marks)
    

    Description	Business Environment
    a).Formal arrangement of activities that are carried out at various levels of the organization so that its objectives can be Achieved.
    b). Factors that affect buyers ability to buy the goods and Services offered by a business.
    c). Norms that regulate behaviors of people in a society.
    d). a combination of employees’ expectations, beliefs and Values within the business.

24. State the ledgers in which each of the following accounts are kept.    (4 marks)
    
    1. Rent Account                                               
    2. Discount received Account                 
    3. Cash Account                                                 
    4. Creditors Account                                         

25. Highlight four features of a fixed deposit account offered by commercial banks. (4 marks)

MARKING SCHEME

1. Highlight four difficulties faced by a consumer in the satisfaction of human wants. (4 marks)
   • Human wants keep on changing with time/age/gender
   • Human wants keep recurring
   • Some wants are habit forming
   • Resources used to satisfy human wants are scarce
   • Human wants are competitive
   • Human wants are too many/numerous/endless/unlimited

2. State four contents of a business plan.        (4 marks)
   • Business Description – gives details of the owner(s) of the business, type of business, location and products to be sold.
   • Executive Summary – gives a brief history of a business, goods and services to be produced and financial needs.
   • Marketing plan- describes the market and how the business will sell its products
   • The Organizational plan - shows how the business will be managed, role and duties of managers and other employees
   • The operational plan – shows how the product will be produced and the cost and source of raw materials and other inputs
   • Financial plan – shows the amount of capital needed, sources, and other financial details
   • Projections - in terms of cash flows, and budgeted financial statements

3. Outline four attributes of a good office worker.                    (4 marks)
   • Physical appearance – respected way of dressing and use of make ups
   • Maintaining a high level of hygiene
   • Adopting a good posture – the way of sitting/walking/posture
   • Displaying a high standard of moral behavior
   • Being of good health and physically fit to enable one to work efficiently

4. Highlight four circumstances under which a debit note may be issued by the seller. (4 marks)
   • When correcting arithmetic mistakes in calculations
   • When some items were omitted during preparation of the invoice
   • When items were charged lower prices
   • When discounts allowed were not captured in the original invoice
   • Where a buyer retains/fails to return the packaging containers/crates

5. The cost of consumer goods in a basket of an average family is given below.
   Year                            2016                            2017
                                       Ksh                              Ksh
   Maize flour                     90                              110
   Sugar                            100                             115
   Rice                               80                               90
   Determine the consumer price index using 2016 as the base year.                      (4 marks)
   

   Commodities	Price in (Base Yr) 2016	Index of Base yr	Price in current Yr (2017)	Index in Current Yr
   Maize flour	90	100	110	122.22√
   Sugar	100	100	115	115√
   Rice	80	100	90	112.5√
   		Average 300/3 =100		Average = 349.72/3 = 116.57√

6. Highlight four factors that determine the fertility rate in a given economy.       (4 marks)
   • Age of women at marriage
   • Health and education levels of the people
   • Famine/epidemics and war outbreaks
   • Socio economic considerations i.e. cost of bringing up children
   • Government policies and programs i.e. family planning.

7. By aid of a diagram, outline the circular flow of income in a two sector economy.(4 marks) 
                                                            

8. The following information relates to four businesses A, B, C and D. Fill in the missing figures.       (4 marks)
   

   Business	Assets Shs	Capital Shs	Liabilities Shs
   A	4,010,000	3,210,000	800,000
   B	9,523,100	9,312,000	211,100
   C	1,301,111	888,998	412,113
   D	13, 917,331	11,716,000	2,201,331

9. State four reasons that may lead to dissolution of a parastatal.                             (4 marks)
   • Persistent loss making
   • Due to change in the act of parliament that formed the corporation
   • Due to Bankruptcy
   • Privatization of a parastatal
   • Mismanagement resulting to poor performance of a parastatal 

10. Give four importance of a warehouse to a trader.        (4 marks)
    • Ensure steady flow of goods into the market
    • Ensures that the prices are stable
    • Ensure that goods are protected from risks such as theft, fraud, damage
    • Ensure continuity in production
    • Goods can be prepared for sale
    • Enables the traders to look for market

11. Outline four benefits of the standard gauge railway (SGR) to the Kenyan economy. (4 marks)
    • Relatively lower cost of transport is relatively low
    • Faster means of transport
    • Reduced traffic jams in roads
    • Reduced wear and tear of roads
    • Reduced air pollution
    • Enables transporters plan for the transport of their goods – scheduled train travel times
    • Relatively secure means of transport

12. Outline the steps that are followed in the personal selling process.        (4 marks)
    • Identifying the prospective customer(s)
    • Preparing the sales presentation
    • Establishing the customer contacts
    • Arousing interest in the product
    • Dealing with the customers objections
    • Closing the sale
    • Giving after sales services

13. Highlight four channels that a fish farmer may use to distribute her produce in a local market.               (4 marks)
    • Fish Farmer→ Consumer
    • Fish farmer →Retailers →Consumer
    • Fish farmer →Wholesaler →Retailer→Consumer
    • Fish farmer→ Cooperative →Retailer→Consumer

14. State four characteristics of a market.        (4 marks)
    • Goods/services to be provided
    • Buyers
    • Sellers
    • Medium of exchange

15. Highlight four factors which may have led to a shift in the supply curve as illustrated below.           (4 marks) 
    
    • Poor/low state of technology
    • An increase in prices of related products
    • Unfavorable natural factors e.g. floods, diseases
    • A rise in the cost of production
    • Unfavorable government policies
    • Where it takes longer time to adjust to production

16. State four items of information one can obtain from an insurance policy.        (4 marks)
    • Period in which policy is effective
    • Name of the insured
    • Premium to be paid
    • The risk covered/insured against
    • Terms and conditions of the insurance contract

17. Outline four advantages of using written communication in an organization.    (4 marks)
    • Provides evidence for future use in case of a problem
    • The information cannot be distorted as it is on record
    • It is cheaper to use in communicating
    • It is suitable for sending long and complicated messages e.g. Diagram, pictures, books etc
    • Suitable for sending confidential messages
    • Several copies can be made and send to many people
    • It is very accurate in sending the messages
    • Firms used to send written messages are easily available e.g. post office and couriers

18. Record the following transactions that took place in Otiende traders from 21^st august to 24^th August 2018 in the general journal.                    (4 marks)
    2018
    21^st Aug:         Bought furniture from Lowoi furniture mart at Sh 60,000 on credit
    22^nd Aug:         Sold an old machinery on credit to Muchina at Sh. 90,000
    23^rd Aug:         Bought a lawn mower from Farm holdings ltd on credit Sh. 80,000
    24^th Aug:         Purchased a water tank worth Sh. 140,000 on credit from Kentank ltd
    Journal proper
    

    Date	Details	Dr	Cr
    21/08/2018	Furniture a/c    Lowoi Furn mart a/c Record of purchase of furniture on credit	60,000	60,000
    22/08/18	Muchina A/c Machinery A/c Record of sale of an old Machine on credit	90,000	90,000
    23/08/2018	Lawn mower A/c Farm holdings Ltd A/c Record of credit purchase of a lawn mower	80,000	80,000
    24/08/18	Water tank A/c    Kentank Ltd A/c Being a credit purchase of a water tank	140,000	140,000

    
    

19. Munyao an entrepreneur intends to start a business. Give four factors that he needs to consider when deciding on which goods to produce.        (4 marks)
    • Profitability
    • Level of existing competition
    • Availability of resources i.e. raw materials, appropriate labour
    • The existing Government policy
    • Availability of Market
    • The cost of production

20. For each of the transactions given below indicate the accounts to be debited and the account to be credited.        (4 marks)
    

    Transactions	A/c to Debit	A/c to Credit
    a). Started business with Shs. 400,000 in cash	Cash	Capital
    b). Returned goods worth Shs. 21,000 to Nyayo    traders	Nyayo traders	Purchases returns/ Return outwards
    c). Banked Shs. 80,000 from cash till	Bank	Cash
    d). Proprietor took goods from the business for      family use	Drawings	Purchases

21. The following information was extracted from the books of Kisima wholesalers on 31^st December, 2018.
    1. Opening stock                    sh. 300,000
    2. Purchases                          sh. 1,550,000
    3. Closing stock                    sh. 220,000
    4. Margin                                   1/6
       Required :      Draw Kisima wholesalers trading account.                       (4 marks)
                                                                                   

22. Outline four sources of non-tax revenue to a County Government.                     (4 marks)
    • Rent and rates paid for use of County Government property
    • Licensing fee paid by those who want to operate business in the county
    • Proceeds from sale of County Government property
    • Central Government allocation to the County Government through CRA
    • Dividends and interest earned from County Government direct investment
    • Grants from National Government/International institutions/other nations/organizations

23. State the business environment described in the statements given below.             (4 marks)
    

    Description	Environment
    a).Formal arrangement of activities that are carried out at various levels of the organization so that its objectives can be achieved.	Business Structure
    b). Factors that affect buyers ability to buy the goods and services offered by a business.	Economic
    c). Norms that regulate behaviors of people in a society.	Cultural
    d). a combination of employees’ expectations, beliefs and values within the business.	Business Culture

24. State the ledgers in which each of the following accounts are kept.        (4 marks)
    
    1. Rent Account                                                         Nominal Ledger
    2. Discount received Account                                   Nominal Ledger
    3. Cash Account                                                        Cash book
    4. Creditors Account                                                 Purchases ledger

25. Highlight four features of a fixed deposit account offered by commercial banks. (4 marks)
    • Earns interest at an agreed rate
    • Minimum amount is required to operate the account
    • Certificate of deposit is issued
    • Loss of accrued interest in case the account holder withdraws money before expiry of agreed period
    • Account holder can withdraw all the money upon expiry of the deposit period.