Business Studies Questions and Answers - Form 1 End Term 3 Exams 2023

INSTRUCTIONS TO CANDIDATES

• Answer all questions in the spaces provided in the question paper

1. Outline FOUR disciplines incorporated in the business studies course (4 mks)
2. State FOUR characteristics of departmental stores (4mks)
3. Highlight FOUR reasons why human wants may not be fully satisfied (4mks)
4. Identify the rewards of the following factors of production (4mks)
          FACTOR                      REWARD  
   1. Limestone                  _____________________________
   2. Doctor                        _____________________________
   3. Tractor                       _____________________________
   4. Landlord                     _____________________________
5. Mention four reasons why people engage in business. (4 mks)
6. State four circumstances under which cash may be used as a means of payment. (4mks)
7. Outline four characteristics of direct production. (4mks)
8. Identify four ways of generating a business idea. (4mks)
9. Identify four factors that influence entrepreneurial practices in Kenya. (4 marks)
10. Identify four ways in which an office is important to a business. (4 marks)
11. Outline four ways in which a well laid out business structure is likely to lead to success of the business. (4 marks)
12. Identify four functions of a proforma invoice. (4 marks)
13. Outline the importance of trade to a country. (4 marks)
14. Give an example of each of the following Business Activities. (4 marks) 
    

    	Activity	Example
    a.	Extraction
    b.	Manufacturing
    c.	Processing
    d.	Commercial ,services

15. State four factors that you would consider before extending credit facilities to a customer. (4 Marks)
16. The table below shows descriptions relating to some documents used in home trade. Name the document fitting the description. (4 Marks)
    

    DESCRIPTION	DOCUMENT
    (i) Used to correct an undercharge error
    (ii) Seeking information on items stocked and their prices
    (iii) Inform the buyer that the goods ordered have been dispatched
    (iv) Requests payment for goods before they are sent to the customer

17. Mention four characteristics of goods. (4mks)
18. Give four benefits of a partitioned office layout (4mks)
19. Outline four reasons for dishonoring a cheque. (3mks)
20. Highlight four ways in which business studies is useful to a community (4mks)
21. A resource is something that is used by a business to achieve an objective. Identify four resources available in a business. (4mks)
22. State four factors that an entrepreneur would consider before investing in a business opportunity (4 mks)
23. Highlight four characteristics of labor as a factor of production ( 4 mks)
24. In the spaces provided below, indicate the type of utility created by each of the following business activities. (4marks)
           Business activity                           Type of utility    
    1. Selling face masks to customers    ________________________________
    2. Transporting onions                        ________________________________
    3. Storing onions in a granary             ________________________________
    4. Making a camera                             ________________________________
25. State four circumstances under which a business firm may use photocopying as a means of reproducing documents. (4 marks)

MARKING SCHEME

1. Four disciplines incorporated in business studies course.
   1. Accounting
   2. Economics
   3. Commerce
   4. Office practice
   5. Entrepreneurship 1 x4 = 4 mks)
2. Characteristics of departmental stores.
   1. Each department is managed by a departmental manager dealing in different line of products.
   2. They provide services i.e., restaurant is, reading rooms, post offices and banks.
   3. They are usually situated in town centers.
   4. They offer a wide variety of goods at affordable prices. 1x4= (4mks)
3. Reasons why human wants cannot be fully satisfied. (4mks)
   1. Unlimited in number /insatiable
   2. They recur /repetitive
   3. Resources to satisfy them are scarce
   4. Some are habitual
   5. They had to compete in attention
   6. Some are complimentary
4. Rewards of the following factors of production.   1x4= 4mks
   1. Limestone ___________________________ Rent
   2. Doctor ________________________ wages/salaries
   3. Tractor _________________________ interest
   4. Landlord ______________________________ profit
5. Four reasons why people engage in business.
   • To make profit
   • As an outlet of innovation
   • To utilize spare time
   • To utilize local resources
6. Circumstances under which cash may be used as a means of payment.
   • Where the amount involved is small
   • Where the payee does not accept other forms of payment
   • Where the payee require cash urgently
   • when the credit of the buyer is doubtful
   • Where there is need to avoid expenses associated with other means
7. Characteristics of direct production.
   • Production is usually on small scale.
   • Production usually for own consumption
   • Use simple methods of production.
   • Low quality produce
   • Low volume of goods produced.
8. Ways of generating a business idea.
   • Recycling wastes
   • Carrying out market research
   • Listening to what people say
   • Through vocational training and expenses
   • Reading newspapers, journals etc.
9. Factors that influence entrepreneurial practices in Kenya.
   • Government policy
   • Infrastructure
   • Levels of education and skills
   • Availability of resources
   • Culture
   • Competition
   • Political stability
   • Natural factors (any 4 @1mk = 4mks)
10. Ways in which an office is important to a business.
    • Receiving and recording information
    • Distributing (Dissemination) of information
    • Mailing
    • Reproduction of documents
    • Safeguarding and controlling of organization’s property (any 4 @1mk = 4mks)
11. Ways in which a well laid out business structure is likely to lead to success of the business.
    • Each of the employees knows what is expected of him/her.
    • There will no conflicts or confusion among the workers.
    • Teamwork is enhanced.
    • Ensures proper control which. (Any 4 @1mk = 4mks)
12. Functions of a proforma invoice.
    • A polite way of asking for payment before the goods are delivered.
    • Sent when the seller does not want to give credit.
    • Used by importers to get customs clearance before goods are delivered.
    • Issued to an agent who sells goods on behalf of the seller.
    • Sent to show what the buyer would have to pay if the order is approved.
    • Can be used to serve as a quotation (any 4 @1mk = 4mks)
13. The importance of trade to a country.
    • Helps a county to acquire what it cannot produce.
    • Enables a country to obtain a variety of goods and services.
    • Helps a country to dispose of its surplus produce.
    • Creates employment.
    • Encourages a county to specialize.
    • Promotes social relations and understanding between countries involved.
    • Source of income to the country.
    • Ensures steady supply of goods and services. (Any 4 @1mk = 4mks)
14. Example of each of the following business activities. 
    

    	Activity	Example
    a.	Extraction	Mining, farming, lumbering, fishing
    b.	Manufacturing	Bread making, chemical manufacture, textile manufacture
    c.	Processing	Maize milling, coffee processing and refining
    d.	Commercial ,services	Banking, Insurance, wholesaling

15. Factors that you would consider before extending credit facilities to a customer.
    • Frequency of buying.
    • Availability of stock.
    • Credit worthiness.
    • Type of goods needed. Any other relevant @ 1 x 1 Mark = 4 Marks
16. Some documents used in home trade.
    1. Debit Note
    2. Letter of inquiry
    3. Advice notes.
    4. Proforma invoice 1 x 4 = 4marks
17. Characteristics of goods.
    • Are tangible.
    • Not always perishable
    • Have utility.
    • Can be separated from the producer.
    • Some are movable while others are immovable.
    • Can be stored for future use.
    • Can be standardized.
    • Owners are transferable.
18. Benefits of a partitioned office layout
    • Minimum disruption from noise/movement
    • Privacy is enhanced.
    • Provides conducive working environment.
    • Guarantees security of office/personal property/files.
    • Easier to maintain cleanliness.
    • Offer healthy working environment.
19. Reasons for dishonoring a cheque
    • Stale cheque
    • Postdated cheque
    • When the cheque is torn/defaced
    • When the cheque is counter mended/drawer has given the instruction not to honor the cheque
    • When the drawer has closed the account
    • When there are insufficient funds in the account
20. Ways in which Business Studies may be useful to the community include:
    • It enables one to acquire knowledge and skills to start and run a business.
    • It equips on with basic economic concepts.
    • It enables one to understand and appreciate the importance of business activities in the society.
    • Makes the members of society to appreciate the need for business management practices.
    • Assist individuals to acquire self-discipline and positive attitude towards work.Equips individuals with abilities to promote co-operation in society than trade.
      Any other relevant 4 x 1=4mks
21. Resources available in a business.
    1. Human resources
    2. Technological resources
    3. financial resources
    4. Physical resources Any 4 @√x4 = 4mks
22. Factors that an entrepreneur would consider before investing in a business opportunity
    • Capital required.
    • Returns/profitability.
    • Market size
    • Competition level
    • Government policy
    • Political stability (security)     Any 4 @√x4 = 4mks
23. Characteristics of labor as a factor of production
    1. It is a basic factor of production
    2. Cannot be stored
    3. Cannot be separated from the laborer
    4. laborer sell labor but not themselves
    5. labor is mobile
    6. labor is human with ability to think and get annoyed
24. Utility created by each of the following business activities
    1. -Possession
    2. -Place
    3. -Time
    4. -Form 4x1= 4 mks
25. Circumstances under which a business firm may use photocopying as a means of reproducing documents
    • When high quality copies are required
    • When copies are required fast since it quicker than duplicating or printing
    • When colored copies are required
    • When there is no need for comparison with original
    • When the business does not want to pollute the environment