Business Studies Questions and Answers - Form 2 Term 1 Mid Term Exams

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BUSINESS STUDIES
FORM 2
MID TERM
TERM 1

INSTRUCTIONS

  • This paper constitutes two sections: Section A and B
  • Answer all the questions in this paper

SECTION A

  1. State the term given to each of the following statements.(4mks)
    Statement Term 
    Movement of goods and services from producers to consumers  
    Creation of goods and services  
    Using a good or service  
    Satisfaction derived from using a good or a service.  
  2. Give four sources of business ideas.(4mks)
  3. Under what circumstances would cash with order (c.w.o) be appropriate in a business.(4mks)
  4. Outline four principles of cooperatives (4mks)
  5. Give four sources of capital for a limited liability company (4mks)
  6. State four advantages of partnerships over sole proprietorship.(4mks)
  7. Outline four measures taken by an office business to safeguard an organization property.(4mks)
  8. Outline four advantages of an enclosed office layout.(4mks)
  9. State four factors of production giving a reward for each.(4mks)
  10. Identify the macro-environmental factors affecting business operations as described by the following.
    Statement Factor
    Law and policies that regulate business activities.  
    Affects buyer’s ability to buy commodities offered by a business.  
    Firms selling similar products trying to outdo each other.   
    Dictates how people live and what products they consume.  
  11. Give four reasons why office documents should be filed.(4mks)
  12. Outline four features of a supermarket (4mks)
  13. Outline four reasons why choice is important in satisfaction of human wants.(4mks)

SECTION B.
ANSWER ALL QUESTIONS IN THIS SECTION

  1.    
    1. Explain three roles of an entrepreneur to an economy .(6mks)
    2. Identify four characteristics of economic resorces (4mks)
  2. A form four School leaver intends to start a business. Outline three ways in which knowledge of business studies will benefit him.(6mks)

MARKING SCHEME

SECTION A

  1. State the term given to each of the following statements.(4mks)
    Statement Term 
    Movement of goods and services from producers to consumers Distribution 
    Creation of goods and services Production
    Using a good or service Consumption
    Satisfaction derived from using a good or a service. Utility
  2. Give four sources of business ideas.(4mks)
    • Building on ones skills, hobbies or interests.
    • Combining two existing business ideas
    • Identifying a market gap
    • Listening to what people say
    • Recycling waste materials
    • Reading newspapers, journals and magazines
    • Brainstorming
    • Carrying out market research
      Any 4x1=4mks

  3. Under what circumstances would cash with order (c.w.o) be appropriate in a business.(4mks)
    • When the buyer is new to the seller
    • Where the buyer’s credit worthiness in doubt
    • Where the seller is opening mail order business
    • where cash with order is the policy of the business.
      Any 4x1=4mks

  4. Outline four principles of cooperatives (4mks)
    • Voluntary and open membership
    • Democratic administration
    • Limited interest on share capital
    • cooperation with other cooperatives
    • Promotion of education to members
    • Provision of dividends to members Any 4x1=4mks

  5. Give four sources of capital for a limited liability company (4mks)
    • Sale of shares
    • Borrowing from commercial banks and other financial institutions
    • Profits from the operations of the business/retained profits /profit ploughed bak
    • Trade credit from suppliers
    • Leasing and renting of property.
    • Acquiring property through hire purchase
    • Bank overdraft
    • Debentures
      Any 4x1=4mks

  6. State four advantages of partnerships over sole proprietorship.(4mks)
    • A partnership may be able to raise more capital than a sole proprietorship.
    • Sharing of ideas between partners produces better results as opposed to sole proprietorship where there is only one person to make all the decisions.
    • In partnership losses are shared among partners when they occur while a sole proprietor breaks all losses alone.
    • There is sharing of work among the partners make use of each others expertise as opposed to a sole proprietor who performs all the duties alone.
    • In partnerships there is combining of talents, from the different partners as opposed to sole proprietorship.
      Any 4x1=4mks

  7. Outline four measures taken by an office business to safeguard an organization property.(4mks)
    • Enhancing security against theft e.g. by employing watchman, installing security lights and fencing business premises.
    • Ensuring physical care by people using the property
    • Keeping records of movement and usage of each of the property.
    • Physical stock taking of each property
    • taking insurance cover
    • Proper repairs, servicing and maintenance. Any 4x1=4mks

  8. Outline four advantages of an enclosed office layout.(4mks)
    • There is privacy and confidential discussion.
    • There is less noise and disruption from workers and machines.
    • Conducive working environment
    • Confers status to top level employees
    • Provide security for valuable and sensitive items such as documents and cash.
    • Air conditioning, lightning and heating in the room may be controlled according to the needs of the occupants.

  9. State four factors of production giving a reward for each.(4mks)
    • Land Rent/Royalty
    • Labour Wages /salaries
    • Capital Interest
    • Entrepreneurship Profit

  10. Identify the macro-environmental factors affecting business operations as described by the following.
    Statement Factor
    Law and policies that regulate business activities. Legal- political
    Affects buyer’s ability to buy commodities offered by a business. Economic 
    Firms selling similar products trying to outdo each other.  Competitive 
    Dictates how people live and what products they consume. Cultural 
  11. Give four reasons why office documents should be filed.(4mks)
    • To keep the office clean/tidy
    • To keep the documents in good condition/protected form damage.
    • To save on space in the office
    • To gather related documents together
    • To facilitate easy retrieval /finding of needed documents.
    • To provide records for future reference.(4x1=4mks)

  12. Outline four features of a supermarket (4mks)
    • Stocks a wide variety of goods.
    • Operates on self service /selection basis
    • All goods have price tags attached
    • Sells goods in cash basis
    • Free packaging of goods customers buy
    • Saves time by using machines /cash registers to bill customers.
    • Operates for long hours
    • Increases sales volume by giving promotional rewards for bulky/large scale purchases
    • Accept credit/debit cards as a means of payment. Any 4x1=4mks

  13. Outline four reasons why choice is important in satisfaction of human wants.(4mks)
    • Wants are unlimited in number while available resources are scarce.
    • Some wants are more urgent and intense than others.
    • Commodities sell at different prices hence one has to choose what is affordable.
    • There are many varieties of products that satisfy the same wants.
    • Commodities differ in quality and other salient features.
    • Consumers financial position vary with time hence a budget is needed
    • Some wants are recurrent hence must be catered for quite often.
    • Human wants are competitive hence a choice is needed. 4x1=4mks
    • Universal
    • Unlimited
      Any 2x1=2mks

SECTION B.
ANSWER ALL QUESTIONS IN THIS SECTION

  1.    
    1. Explain three roles of an entrepreneur to an economy .(6mks)
      • creation of employment
      • Formation of capital
      • Reducing rural –urban migration through setting up businesses in rural areas
      • Revising standards of living through availing of quality goods and services to citizens and paying them wages and salaries.
      • Saving on imports by producing import substitutes
      • Reducing foreign dominance of the economy
      • promotion of technology
      • Portion of entrepreneurial culture. Any 3x2=6mks

    2. Identify four characteristics of economic resources (4mks)
      • They are scarce
      • They have money value
      • The are unevenly distributed from region to region, county to country or community to community.
      • They have ability to create utility when combined
      • Some can be transferred from one person to another
      • Most of them have alternative uses/variety of uses. Any 4x1=4mks

  2. A form four School leaver intends to start a business. Outline three ways in which knowledge of business studies will benefit him.(6mks)
    • Enables him or her to understand the general business environment
    • He/she is able to make informed decisions on the consumption of goods and services
    • He/She is able to understand /appreciate the role of government in Business.
    • He/she is able to appreciate the need for ethical practices in business
    • Equips him/her with relevant skills to start and mange the business
    • Enables him /her to appreciate the role played by market forces in business/know how to price. Any 3x2=6mks

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