Business Studies Paper 1 Questions - Mumias West Pre Mock Exams 2023

INSTRUCTIONS TO CANDIDATES:

• Answer ALL the questions in the spaces provided.
• All questions MUST be answered in English.

FOR EXAMINERS USE ONLY

QUESTIONS

1. Match each of the following classes of business activities with the correct statement in the table below. (Manufacturing, Extraction, Processing, Distribution). (4 marks)
   

   Statement	Activity
   (a) Combining different raw materials and converting them into finished goods.
   (b) Collecting goods from various producers and storing them for onward sale.
   (c) Drilling for oil
   (d) Flour milling

2. Identify four items that can affect stock of a business. (4 marks)
3. Other than serving as a medium of exchange, mention four other functions of money. (4 marks)
4. Outline four features of economic resources (4 marks)
5. Give four limitations of a business that relies on the use of motor cycle transport. (4 marks) (a)
6. The following is an extract of a cash book from Mumias Traders.
   

   Date	Details	Cash (shs)	Bank(shs)	Date	Details	Cash(shs)	Bank (shs)
   2022				2022
   Jan 1	Bal b/d	12,500		Jan 1	Bal b/d		5,500
   Jan 5	Sales		7,200	Jan 8	Wages	2,400
   Jan 10	Cash		1,500	Jan 10	Bank	1,500

   1. Give the name of this cash book. (1 mark)
   2. State the name of the entry made on Jan. 1 on the credit side. (1 mark)
   3. State the name of the transaction of Jan 10 2022. (1 mark)
   4. Describe the transaction on Jan 8 2022. (1 mark)
7. State four advantages of using the internet as a means of communication. (4 marks)
8. The following statements relate to terms used in the study of national income for any country. Identify the most appropriate term for them. (4 marks)
   1. The total monetary value of commodities produced in a year.
   2. Income attributed to one person per year in a country.
   3. Factors that lead to an increase in the income and expenditure in the circular flow of income.
   4. Capital consumption during production.
9. State four ways in which office documents can be reproduced. (4 marks)
10. Mention four non-tax internal sources of revenue to the government. (4 marks)
11. Outline four benefits that would accrue to a country that encourages entrepreneurship.(4 marks)
12. On 31st December, 2020 Kakamega Traders had made a turnover of Sh. 80,000 for the year and closing stock of Sh. 10,000. If the business was working at a margin of 20%. Draw its trading
    account for the period ending 31st December 2020. (4 marks)
13. State four reasons why a form four leaver would want to start a business. ( 4 marks)
14. The table below shows description of different types of partners. Identify type of partners that match the description.
    

    Description	Type of partner
    (a) Do not contribute capital in the business
    (b) Those whose private properties can be used to pay business costs
    (c) Do not participate actively in management
    (d) Are above 18 years of age

15. Identify the relevant element of transport for the descriptions given below. (4 marks)
    1. Mumias – Kakamega road and route
    2. Boda boda transporting tomatoes to Bungoma
    3. Steam engine
    4. Kilindini habour in Mombasa
16. Outline four benefits of warehousing to business. (4 marks)
17. The average consumer prices for a certain commodity for various years are shown in the table below.
    

    Year	Consumer price
    2019	160
    2020	200
    2021	240
    2022	280

    Calculate the consumer price indices using 2019 as the base year. (4 marks)
18. State four causes of changes in capital for a business. (4 marks)
19. Outline four circumstances under which the government may need to involve in business.
20. Give an example for each of the following: (4 marks)
    

    Item	Example
    (a) Free resource
    (b) Human resource
    (c) Non-material good
    (d) Capital good

21. Highlight four factors that a producer would consider before choosing a channel of distribution(4 marks)
22. Identify four types of advertising. (4 marks)
23. The table below illustrates the demand and supply of a commodity.
    

    Price (shs)	Demand (kg)	Supply (kg)
    25	80	40
    30	70	50
    35	60	60
    40	50	70
    45	40	80

    From this table state: (4 marks)
    1. The effect of increase in price on demand
    2. The effect of increase in price on supply
    3. Equilibrium price
    4. Equilibrium quantity
24. Highlight four causes of inflation. (4 marks)
25. For each of the following transaction, indicate in the space provided the source document from which the transaction would be recorded. (4 marks)
    

    Transaction	Source document
    (a) Payment for goods
    (b) Credit sales
    (c) Correction of an overcharge in an invoice
    (d) Credit purchases