Business Paper 2 Questions and Answers - Mumias West Pre Mocks 2022

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QUESTIONS

  1.      
    1. Explain FIVE benefits that may occur to a community that is involved in trading activities. (10 marks)
    2. Explain FIVE factors to consider when establishing a warehouse for imported goods.(10 marks)
  2.      
    1. Explain FIVE ways of making face to face communication effective. (10 marks)
    2. Explain FIVE documents required to be filled with the registrar of companies to facilitate registration of companies. (10 marks)
  3.    
    1. Explain FIVE factors that may be considered in locating a firm. (10 marks)
    2. Angoa Enterprises had the following balances as at 31st December, 2021. Cash in hand Kshs. 20,000 and a bank overdraft of Kshs. 8,600.
      During the month, the following transactions took place:
      March
      3: Wafula settled his account of Kshs. 16,000 by a Cheque of Kshs. 15,000.
      6: Paid rent by Cash Kshs. 8,000.
      10: Deposited Kshs. 6,000 into the business bank account from the cash till.
      15: Paid Wamalwa account of Kshs. 20,000 by Cheque and he received a discount of 2%. 18: Deposited Kshs. 28,000 in the bank from private sources.
      21: Cash Sales Kshs 12,000.
      26: Purchased furniture for Kshs. 5,200 by Cheque.
      30: Withdrew Cash from the bank for personal use leaving a bank balance of Kshs. 5,600 in the bank account.
      Required: Prepare a dully balanced three column cash book. (10 marks)
  4.    
    1. Explain FIVE measures the government may take to control inflation. (10 marks)
    2. Explain FIVE demerits that may be associated with water transport. (10 marks)
  5.      
    1. Explain FIVE reasons why effective filing system is important in an office. (10 marks)
    2. Explain the following concept as used in population.
      1. Fertility (2 marks)
      2. Infant Mortality rate. (2 marks)
      3. Life expectancy (2 marks)
      4. Optimum population. (2 marks)
      5. Per capita income. (2marks)
  6.      
    1. Explain FIVE benefits a customer will derive from buying goods from a departmental stores. (10 marks)
    2. The following Trial Balance was extracted from the books of Shianda Utensils on June 2010.
      Shianda Utensils
      Trial Balance
      As at 30th June, 2010

      Details Dr Cr
      Capital
      Sales
      Purchases
      Stock (1/7/2009)
      Returns
      Discounts
      Motor vehicle
      Premises
      Debtors
      Creditors
      Rent
      Advertising
      Carriage outwards
      Cash at bank
      Wages and Salaries
      Cash in hand 


      140,000
      21,000
      7,000
      4,800
      30,000
      300,000
      14,500

      6,900
      11,000
      4,500
      8,400
      5,600
      7,400
      336,000
      187,000


      10,000
      4,100



      24,000






      TOTAL 561,100 561,100
      Stock on 30th June, 2010 was valued at Kshs. 20,000.
      Prepare:
      1. Profit and loss account for the year ended June 30th 2010. (6 marks)
      2. Balance sheet as at 30th June, 2010. (4 marks)


MARKING SCHEME

  1.      
    1.      
      1. Accessing a variety of goods/services to choose from/satisfy their numerous needs.
      2. Helping people to acquire what they may not be able to produce.
      3. Helps provide/to dispose off their surplus produce.
      4. Creation of employment opportunities – leading to improved living standards/due to improved economic activities.
      5. Encourages specialization and division of labour.
      6. Promotes social relations/good understanding among trading partners.
      7. Provides revenue to business people/government through taxes/profits.
      8. Foreign exchange earner to a country.
      9. Ensure steady supply of goods/services hence avoiding shortages.
      10. Boosting economic growth of a country/economy.
      11. Exploitation of local idle resources.
        Any 5 × 2 = (10 marks)
    2.      
      1. Handling facilities/equipment – should have modern equipment/for ease of operations.
      2. Security – for protecting goods from theft.
      3. Structures/building design – has to conform to international/accepted standards to handle imported goods.
      4. Management personnel – should be properly skilled/trained to be qualified to handle goods.
      5. Proximity/nearness to entry – for ease of clearance.
      6. Existence of basic infrastructure – such as good roads/power required/communication.
      7. Compliance to legal requirements/government policy/all relevant legal requirements have to be met – to avoid conflict with the law/lawsuits.
      8. Storage facilities/equipment – should be appropriate for the type of goods to be handled.
      9. Documentations/recording system – for proper stock control.
      10. Safety – for protecting goods from damage by weather/rodents/ensure safety of personnel.
        Any 5 × 2 = (10 marks)
  2.      
    1.      
      1. Tone variation – to break monotony/sustain interest.
      2. Audibility – by use of appropriate voice projection/speaker/microphone/PA.
      3. Courtesy/respect – between sender/receiver to avoid hostility.
      4. Adequacy/completeness – to avoid incomplete information/give enough information.
      5. Preparedness/planning – by sender to enhance confidence.
      6. Accuracy/correctness of the message – to avoid misleading of the receiver.
      7. Good listening/attentiveness – to get information being sent/presented.
      8. Positive attitude – between communicating parties.
      9. Use of common language – to enhance understanding.
      10. Making message brief/concise – to avoid unnecessary details/retain attention.
      11. Use of non-verbal cues/gestures – to clarify verbal messages.
      12. Clarity of the message – to avoid misunderstanding.
      13. Use of simple language/non-technical terms/language – to be understood by receiver.
        Any 5 × 2 = (10 marks)
    2.      
      1. Memorandum of Association – specifies the name of the proposed company, capital raised, objectives and headquarters.
      2. Articles of Association – contains the set of rules formulated to govern the internal operations of the company.
      3. Declaration – shows that the registration requirements have been met (it is signed by the company secretary/lawyer/director to be).
      4. A statement by directors – signed by proposed directors agreeing that they will be directors.
      5. List of Directors – specifies their names, addresses and occupations.
        Any 5 × 2 = (10 marks)
  3.      
    1.      
      1. Availability/accessibility of raw materials/where they can easily access raw materials – for use.
      2. Availability of skilled/adequate labour – for use.
      3. Market/demand – for their products.
      4. Favourable government policies – will attract firms in some places.
      5. Availability of land – for future expansion/their operations.
      6. Availability of capital – where they can easily get capital to start/expand.
      7. Sources of energy/power/electricity- where power is easily available for use in their operations/future expansions.
      8. Availability of social amenities – where they can easily access social facilities/banks/schools/ hospitals/water.
      9. Good transport and communication network – to assist them easily access their market supplies.
        Any 5 × 2 = (10 marks)
    2. Required: Prepare a dully balanced three column cash book. (10 marks)
      Angoa Traders
      Dr 3 Column Cash Book Cr

      Date  Details  Disc All Cash Bank Date Details F Disc Rec Cash Bank
      2021
      Jan 1
      3
      10
      12
      18 


      Balance√
      Wafula√
      Cash√
      Sales√
      Add Inve/
      Capital√ 
      b/d

      C





      1,000√





      1,000√
      20,000√


      12,000√


      32,000
      15,000√
      6,000√



      28,000√
      49,000
      2021
      Jan 1
      6
      10
      15
      26
      30
      31
      Balance√
      Rent√
      Bank√
      Wamalwa√
      Furniture√
      Drawings√
      Balance√
      c/d









      400√


      400√

      8,000√
      6,000√


      18,000√
      32,000
      8,600√√

      19,600√
      5,200√
      10,000√
      5,600√
      49,000
      (Any 30 × ⅓= 10 marks)
  4.    
    1.      
      1. Control money supply/ensure that any increase in money supply is matched with increase in goods/services.
      2. Increasing the level of income tax/reduce government spending/use of fiscal policies which reduces disposable income hence reduce/control the level of demand.
      3. Encourage producers to use cheaper local input instead of importing more expensive inputs.
      4. Control trade union wage demand so that they don’t make excessive demand.
      5. Avoid taxation of wide range of commodities and special essential commodities.
      6. Avoid devaluation of its currency in cases of heavy reliance on imported consumer goods.
      7. Avoid imposing tariffs on imported raw materials especially those for the manufacturing of essential goods/products.
        Any 5 × 2 = (10 marks)
    2.      
      1. Relatively slow – hence perishable/urgently needed goods may not be transported/the way take long when travelling.
      2. Limited availability – only applicable where water is available.
      3. Waterways can be affected by adverse weather conditions such as freezing/drought.
      4. Cost of maintaining/construction of ports/canals/waterways/labour may be relatively high/expensive making it unaffordable for some countries.
      5. Waterways may not be navigable – due to rough terrain/waterfalls/cataracts/rapids/shallowness/ inhabited by dangerous animals/rough waters.
      6. High cost of units of carriages/vessels – which may make them unaffordable (to acquire/maintain).
      7. May lack flexibility – to offer door to door services/some vessels follow regular/fixed time/schedules/routes.
      8. May be prone to piracy in the high seas/remote areas – may lead to losses/increased insurance costs.
        Any 5 × 2 = (10 marks)
  5.      
    1.      
      1. Tidiness in the office is maintained/office kept tidy – as documents are neatly arranged.
      2. Quick access to information/retrieval of information is made easy – since documents are serialized/coded.
      3. Safety of information from damage/by bad weather/fire/pests.
      4. Savings on (storage) space/minimum space – as documents are kept compactly/cds/flash disks.
      5. Prompt decision making possible/saves time in making decisions – as information is readily/easily available.
      6. Encourages transparency/accountability – as no documents are easily misplaced/as movements of documents can be monitored.
      7. Safeguard secrets/confidential information as documents are kept away from unauthorized access/under lock/key.
      8. Storage/safe-keeping of information/documents for future reference/use.
        Any 5 × 2 = (10 marks)
    2.    
      1. Fertility - number of live births per thousand women in child bearing age per year/annum
      2. Infant Mortality rate – number of child death per thousand children below the age of one year per annum/year.
      3. Life expectancy – the average number of years a person born alive is expected to live.
      4. Optimum population – population (in a given region) where per capita income is at the highest level possible.
      5. Per capita income - income per head/amount of money earned per person in a nation/geographic region.
        Any 5 × 2 = (10 marks)
  6.      
    1.    
      1. Access to specialize goods – from the relevant departments/shops/since each shop sells/stocks particular type of goods.
      2. Personal attention to customers – since customers have easy access to relevant staff.
      3. Access to auxiliary/after sale services – which may be readily available within the store.
      4. One can save time – by shopping under one roof.
      5. Prices of goods are relatively low – making customers to save/buy more goods.
      6. One can access a variety of goods – under one roof/to choose from.
      7. Allow use of credit/debit cards, relieving customers the need for carrying cash/to purchase goods without cash.
      8. Access to the new products/information – which he/she may not have been aware of.
        Any 5 × 2 = (10 marks)
    2.      
      1. Shianda Utensils
        Trading Profit and Loss Account
        Dr For the period ended 30th June 2010√ Cr
          Sh Sh   Sh Sh
        Opening Stock
        Purchases
        Less Returns Outwards
        G.A.S
        Less Closing Stock
        Cost of Goods Sold
        Gross Profit c/d
        Discounts
        Rent
        Advertising
        Carriage outwards
        Wages and Salaries
        Net Profit


        140,000√
        10,000√





        4,800√
        6,900√
        11,000√
        4,500√
        5,600√



        21,000√

        130,000√
        151,000√
        (20,000) √
        131,000√
        49,000√
        180,000




        32,800√
        20,300√
        53,100

        Sales
        Less Return Inwards
        Net Sales/Turn over




        Gross Profit
        Discount Received





          187,000√
        7,000√
        180,000√




        180,000
        49,000√
        4,100√




        53,100
        (Any 20 × ¼ = 5 marks)
      2. Shianda Utensils
        BALANCE SHEET
        Dr As At 30th June 2010√ Cr
        Fixed Assets  Sh Sh   Sh Sh
        Motor vehicle
        Premises
        Current Assets
        Debtors
        Bank
        Cash
        Stock
        30,000√
        300,000√

        14,500√
        8,400√
        7,400√
        20,000√
        330,000


        50,300
        380,300
        Capital
        Add Net Profit
        Net Capital

        Short Liabilities
        Creditors
          336,000√
        20,300√
        356,300

        24,000√
        467,700
        (Any 10 × ½= 5 marks)

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