Business Paper 1 Questions and Answers - Mumias West Pre Mocks 2022

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QUESTIONS

  1. State four characteristics of services.(4 marks)
  2. In the spaces provided below, indicate the level of production that relates to each of the following activities:(4 marks)
    Activity Level of production 
    (a)Selling goods in the market
    (b) Fishing from a river
    (c) Constructing a road
    (d) Making shoes 
     
  3. List four types of business activities. (4 marks)
  4. Highlight four benefits that accrue to an entrepreneur who prepares a business plan. (4 marks)
  5. Give four differences between ordinary shares and preference shares. (4 marks)
  6. State four reasons why the government issues licenses to business people. (4 marks)
  7. Outline four factors that would influence the amount of money held by an individual for transaction purpose. (4 marks)
  8. Outline four factors that may lead to the success of business. (4 marks)
  9. Give four circumstances when pipeline would be more preferred as a means of transport. (4 marks)
  10. Name four source documents which are used to provide information used to make entries in the books of accounts. (4 marks)
  11. Complete the table below for business W, X, Y and Z.
    BUSINESS ASSETS LIABILITIES CAPITAL
    W A 250,000 700,000
    X 85,000 30,000 B
    Y 420,000 C 120,000
    Z 600,000 175,000 D
  12. State four benefits a trader receives from warehousing. (4 marks)
  13. Highlight four emerging issues in communication. (4 marks)
  14. State four factors that influence the fertility rate of a population. (4 marks)
  15. Outline four expenditure items that are included in the measurement of national income under the expenditure approach. (4 marks)
  16. The following information relates to Kamara Traders on 31st January 2018:
    Opening stock - 40,000
    Purchases - 480,000
    Gross profit - 100,000
    Mark-up - 25%
    Calculate:
    1. Closing stock. (2 marks)
    2. Rate of stock turnover for the year. (2 marks)
  17. Highlight four ways in which the demographic environment affects the performance of the business. (4 marks)
  18. State four factors to consider when making a choice of channel to use in distributing locally produced agricultural products. (4 marks)
  19. Outline four benefits received by a student who finished form four and had done business studies as a subject. (4 marks)
  20. Indicate which accounts to be debited and which accounts to be credited from the following transactions: (4 marks)
    Transaction A/c         Dr  A/c         Dr
    (a) Proprietor took cash Sh. 18,000 and paid rent    
    (b) Brought in personal table and made it to be a business asset.    
    (c) A debtor paid Sh 80,000 by cheque.    
    (d) Transferred Sh 20,000 to a private bank account.    
  21. Mumias West Wholesalers insured their business worth Ksh. 2,850,000 for Ksh. 2,300,000 against fire. Eight months later, fire destroyed the business leading to a loss of Ksh. 1,248,000. Calculate what the insurance company compensated the business (4 marks)
  22. Give four trends and emerging issues in office management. (4 marks)
  23. Highlight four decisions made when deciding which goods and services to produce. (4 marks)
  24. Outline how the following utilities are fulfilled: (4 marks)
    Utility How it is fulfilled
    (a) Place  
    (b) Form  
    (c) Time  
    (d) Possession  
  25. State four circumstances when a high population growth rate may be desirable. (4 marks)


MARKING SCHEME

  1.        
    1. They are intangible
    2. They are inseparable from those providing them
    3. Services are highly perishable
    4. Quality of services cannot be standardized.
    5. Price paid for services is for experience but not for ownership.
    6. They can’t be seen 
  2.      
    1. Tertiary level
    2. Primary level
    3. Secondary level
    4. Secondary level
  3.      
    1. Extraction 
    2. Processing 
    3. Manufacturing 
    4. Construction 
    5. Distribution of goods 
    6. Trade 
    7. Provision of services 
  4.      
    1. He/ she is able to allocate/ distribute resources well
    2. He/ she is able to avoid mistakes
    3. He/ she is able to get finances easily from the financiers, e.g. banks.
    4. He/ she is able to compare and assess business growth from time to time
    5. It is a motivating factor as a result of achieving goals and objectives.

  5. Ordinary shares Preference shares
    (a)Have voting rights
    (b)Receive dividends last
    (c)Do not have a fixed rate of dividends
    (d)Have a claim to business assets upon dissolution
    (e)Non cumulative
    No voting rights
    Receive dividends first
    Have fixed rate of dividends
    Have no claim to business assets upon dissolution
    Cumulative or non-cumulative 
  6.      
    1. To collect/ raise revenue/ income
    2. Regulate unfair competition
    3. Control harmful products being sold to the consumers
    4. Regulate illegal businesses
    5. Control goods leaving and entering the country
    6. Ensure those engaged in business meet the professional requirements
    7. Ensure that traders engage only in trade activities that they are licensed for.
  7.      
    1. Individual’s level of income
    2. Individual’s spending habits
    3. Prices of commodities
    4. Interval between receipts of income
    5. Availability of credit
  8.      
    1. Presence of good infrastructure /well developed
    2. Proper allocation of resources
    3. Relevant entrepreneurial skills
    4. Use of modern technology
    5. Availability of market
    6. Availability of capital
    7. Good customer relations
    8. Favourable government policies.
    9. Proper time management.
  9.      
    1. When high volume of fuel is needed
    2. When traffic jam needs to be avoided
    3. When less labour is needed
    4. Where there is need to maintain roads
    5. Where there is need to minimize/ avoid road accidents
    6. Incase supply is needed continuously
    7. Where there is need to control environmental pollution.
  10.      
    1. Invoice;
    2. Receipt;
    3. Credit note;
    4. Debit note;
    5. Payment voucher.

  11. BUSINESS ASSETS LIABILITIES CAPITAL
    W 950,000 250,000 700,000
    X 85,000 30,000 55,000
    Y 420,000 300,000 120,000
    Z 600,000 175,000 425,000
  12.       
    1. Goods are safe/ secure from being stolen
    2. Able to look for transfers/ customers
    3. Can prepare the goods for sale while still in warehouse
    4. Can receive transport services
    5. Can receive credit services
    6. Customers can view the goods while in the warehouse, hence creating demand
    7. Can sell goods while in the warehouse hence transfer cost of paying the expenses to the customer, e.g. customs duty.
  13.      
    1. Development of paperless offices
    2. Transformation of the language of Sheng among the youth
    3. Wide use of mobile phones
    4. E-mail replacing normal mails
    5. Internet use.
  14.      
    1. Economic status of population
    2. Education levels
    3. Health levels
    4. Society’s level of morality/ social customs
    5. Government policy on population
    6. Political attitude towards family size
    7. Natural calamities
    8. Technological progress
    9. Age and sex structure of population
    10. Marriage role among those in productive age brackets.
  15.      
    1. Consumer expenditure
    2. Government expenditure
    3. Imports expenditure (international trade)
    4. Expenditure by firms on capital goods or investments.
  16.      
    1. Markup = GP/ Cogs
      25/100 = 100,000/ Cogs
      Cogs = (10,0000 * 100) / 25
      Cogs = 400,000
      Cogs = OS + P – CS
      400,000 = 40,000 + 480,000 – CS
      CS = 520,000 – 400,000
      =120,000
      6 ticks * 1/3 = 2 mks
    2. ROSTO = COGS/ A.S.
      A.S. = (OS + CS) / 2
      = (40,000 + 120,000) / 2
      = 80,000
      ROSTO = 400,000 / 80,000
      =5 times
      4 ticks @ ½ = 2 mks
  17.           
    1. High population creates wider market
    2. Large population may cause security/ moral threat to business
    3. Population offers labour for business
    4. Brings innovation and invention for better technological advancements.
    5. May provide raw materials.
  18.         
    1. Consumers/ market
    2. Nature of products
    3. Firm’s characteristics
    4. Level of competition/ competitors
    5. Marketing risks
    6. Government policy
    7. Middlemen cost 
  19.         
    1. Is a career subject;
    2. Can be able to start and run a business;
    3. Is able to appreciate the role of government in business;
    4. Is able to appreciate the role of business in society;
    5. Will have self-discipline;
    6. Will utilize skills acquired for self-development.

  20. Transaction A/c   Dr A/c   Dr
    (a) Proprietor took cash Sh. 18,000 and paid rent Rent Cash
    (b) Brought in personal table and made it to be a business asset. Furniture/ Table Capital/ Investment
    (c) A debtor paid Sh 80,000 by cheque. Bank Debtor
    (d) Transferred Sh 20,000 to a private bank account. Drawings Bank
  21. Compensation = (Value of policy * Loss) / Value of property
    = (2,300,000 * 1,248,000) / 2,850,000
    = 1,007,158
  22.        
    1. More open and landscape office layouts
    2. Introduction of public relations departments
    3. Improved security, e.g. use of CCTV cameras
    4. Extensive use of computers and computerized systems
    5. Use of modern office furniture and equipment
    6. Health, Safety and Exercise and breakout areas
    7. Use of identification name tags.
  23.        
    1. Demand/ market scope for the goods and services to produce
    2. The cost of production
    3. Government policies affecting production
    4. Availability of resources
    5.  Availability of technology
    6. Skills requirement
    7. Financial viability
    8. Return on investment.

  24. Utility How it is fulfilled
    (a) Place Transport
    (b) Form Manufacturing/ Production/Processing
    (c) Time Warehousing/ Storage
    (d) Possession Selling/ Trade
  25.          
    1. When large market is needed to be offered by the high population
    2. When large labour is needed
    3. When a pool of talents and gifts is needed
    4. When there is need of utilizing resources to the maximum
    5. Where there is need to improve technology
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