Business Studies Questions and Answers - Form 2 Mid Term 2 Exams 2021

INSTRUCTIONS TO CANDIDATES

• Answer ALL questions

1. Outline four advantages of sole proprietorship form of business.  (4mks)
2. Describe the following factors that make up the external business environment.  (4mks)
   1. Economic factors
   2. Demographic factors
   3. Socio-cultural factors
   4. Technological factors
3. Highlight four services offered by retailers to consumers.  (4mks)
4. Mention four benefits of office machines to an organization.  (4mks)
5. State four roles of an entrepreneur in production  (4mks)
6. Fill the blanks marked A, B, C and D   (4mks)
   
7. Give the provisions of the partnership act of 1963 regarding:  (4mks)
   1. Profits and losses:
   2. Admission of new partner:
   3. Salary to any partner
   4. Contribution of capital
8. Outline four trends in office management.  (4mks)
9. Give four roles played by the stock exchange market in Kenya,   (4mks)
10. State four benefits of hire purchase selling to a trader.  (4mks)
11. Outline four roles of ethics in business operation.   (4mks)
12. Outline four ways by which an institution can improve the performance of its workers.   (4mks)
13. List any four documents used in home trade that originates from the seller.
14. Outline four characteristics of services.  (4mks)
15. List four disciplines that form business studies.   (4mks)
16. Outline four features of cooperative societies.   (4mks)
17. State four circumstances under which a proforma invoice may be used.  (4mks)
18. Outline four reasons why choices are important in the satisfaction of human wants.   (4mks)
19. Give four functions of an office in an organization.   (4mks)
20. Give four reasons why a consumer may prefer buying from a super market.   (4mks)
21. Give four characteristics of indirect production   (4mks)
22. State four ways in which natural resources may be of benefit to a country.
23. Outline four types of business activities.   (4mks)
24. List four factors that constitute the internal environment of a business.  (4mks)
25. Outline four disadvantages of public corporations.

MARKING SCHEME

1. Outline four advantages of sole proprietorship form of business.  (4mks) 
   1. Requires small capital to start
   2. Decision making is faster.
   3. The owner enjoys all profits earned.
   4. Easy to form due to few legal requirements
   5. Flexible in terms of business activities
   6. The owner enjoys business secrets
2. Describe the following factors that make up the external business environment.  (4mks)
   1. Economic factors - Factors that affect the consumer's ability to buy goods/ services 
   2. Demographic factors. Factors affecting the population e.g. size, density age and sex distribution, birth and death rates etc.
   3. Socio-cultural factors - Peoples beliefs /attitudes / lifestyles which affect the consumers purchasing pattems
   4. Technological factors - Refers to the levels of know-how / application of scientific knowledge! tools  and equipment in production
3. Highlight four services offered by retailers to consumers.  (4mks)
   1. Variety of goods
   2. Advice/information about use of goods
   3. Avail goods at convenient location
   4. Break bulk
   5. Offer discount
   6. Offer credit facilities
   7. Accumulate bulk
4. Mention four benefits of office machines to an organization.  (4mks)
   • Saves on labour
   • Time saving since they are faster 
   • Are more accurate
   • The final product is more presentable
   • Enhances uniformity of the output
   • Helps in ensuring control thereby reducing fraud
5. State four roles of an entrepreneur in production
   1. Identifies viable business opportunities
   2. Provides guidelines on how production should be organized! Take/place/Coordinate
   3. Provides the capital necessary to carry on production
   4. Hires and rewards all other factors of production
   5. Bears all the risks/incurs losses/enjoys all  profits
   6. Decides how/Where/when/what to invest the business
   7. Provides/Avails/assembles/marshals other factors of production
6. Fill the blanks marked A, B, C and D  (4mks)
   1. A - Home trade
   2. B - wholesale trade
   3. C - import trade
   4. D - export trade
7. Give the provisions of the partnership act of 1963 regarding  (4mks)
   1. Profits and losses: Profits and losses are to be shared equal
   2. Admission of new partner:A new partner can only be admitted on consent of all partners 
   3. Salary to any partner:No salaries are paid to any partner
   4. Contribution of capital : Partners are entitled to equal capital
8. Outline four trends in office management.
   1. Performance contracting
   2. Introduction of CCTVs to monitor the activities
   3. Adoption of landscaped office plans to replace the enclosed plans
   4. Offices are located outside the town CBD
   5. Introduction of public relations department
   6. Electronic staff log in and out system
   7. Use of communication and information technology
9. Give four roles played by the stock exchange market in Kenya.   (4mks)
   1. Facilitates the buying and selling of shares amongst the citizens
   2. Mobilizing saving
   3. Indicator of the companies' performance.
   4. Promote managerial practices as companies
   5. Ensures protection of investors' interest
   6. Providing useful information to investors on the shares to buy through the mass media
   7. Assist companies to raise capital by creating an environment through which such companies issue new shares to the public (IPO)
   8. Creation of employment e.g. brokers, agents
   9. Raising revenue for our the government e.g, taxes, license fees and rent and rates
   10. Fixing of prices ie to determine the equilibrium price (true market value) of the securities
   11. Measure of a country's economic progress
10. State four benefits of hire purchase selling to a trader  (4mks)
    1. Seller enjoys a higher sales tum over
    2. Seller enjoys higher profits due to interest on hire purchase sales
    3. Seller can re-possess item in case of default in payments
    4. Capital from down payments enables the seller to continue in trading
11. Outline four roles of ethics in business operation.   (4mks)
    1. Encourages good working relationship among workers
    2. Ensures fair competition in business
    3. Encourages good working relationship between employer and employee
    4. Ensure rights of individual workers are upheld
    5. Ensure appropriate professional relationship between professionals and clients
    6. Help workers protect and uphold good image of business organization
    7. Help in protection of environment
    8. Help workers develop proper skills and right attitudes towards their work
    9. Helps in avoiding consumer exploitation
12. Outline four ways by which an institution can improve the performance of its workers.   (4mks)
    1. Introduce them to advance technology.
    2. Set performance contracts.
    3. Regular review of salary / fringe benefits I
    4. Give yearly bonuses to hardworking employees
    5. Regular communication with employees
13. List any four documents used in home trade that originates from the seller   (4mks)
    1. A catalogue
    2. Quotation
    3. Price list
    4. Acknowledgement note
    5. Packing note
    6. Advice note 
    7. An invoice
    8. Receipt
    9. Statement of account
14. Outline four characteristics of services  (4mks)
    1. Are intangible
    2. Cannot be stored Ouality
    3. Quality cannot be standardized
    4. Inseparable from the provider
15. List four disciplines that form business studies  (4mks)
    1. Commerce
    2. Accounting 
    3. Economics
    4. Entrepreneurship Office practice
16. Outline four features of cooperative societies   (4mks)
    1. Formed by a minimum of ten persons with no set maximum
    2. Members are entitled to one vote each
    3. Are managed by an elected management committee
    4. Have perpetual life
    5. Are governed under the cooperative Acts/by laws made by members
    6. Membership is open and voluntary
    7. Enjoy limited liability status
17. State four circumstances under which a proforma invoice may be used  (4mks)
    1. When the seller requests the buyer to make payment of goods before delivery
    2. When the seller doesn't want to give out goods on credit
    3. When the importer of goods want to get customs clearance before the goods are sent
    4. When the seller wants to show the buyer the amount he/she would have to pay for if he/she buys goods on approval
    5. When the seller employs agents to sell goods for him/her.
18. Outline four reasons why choices are important in the satisfaction of human wants.  (4mks)
    1. Wants are unlimited while resources are limited
    2. Some wants are more urgent than others
    3. There are wide varieties that satisfy the same wants 
    4. Commodities differ in quality and other features
    5. Some wants are recurrent
    6. Human wants are competitive
19. Give four functions of an office in an organization.  (4mks)
    1. Receive information from external and internal sources for the organization such as letters, telephone calls 
    2. Distributes information by passing it to the relevant persons / departments for necessary action.
    3. Reproduction of documents
    4. Receive / attend visitors by giving direction on required information
    5. Mailing.
    6. Safeguarding/controlling they organizations property
    7. Filing of documents
20. Give four reasons why a consumer may prefer buying from a super market.   (4mks)
    1. Goods are offered at relative low/fair prices,
    2. Customers can buy a variety of goods under one roof less movement.
    3. They offer quality goods to the customers.
    4. Easier to shop since they accept credit cards/plastic money
    5. They at times offer after sale services to the customers eg Packaging
    6. One can choose the displayed goods hence time saving
    7. Goods bears price tags/no bargaining saves time.
    8. Operate on self-service basis hence easy budgeting
21. Give four characteristics of indirect production  (4mks)
    1. Enhances specialization.
    2. Production of surplus goods
    3. Better quality goods produced
    4. Exchange of goods leading to trade
    5. Encourages innovation and invention
22. State four ways in which natural resources may be of benefit to a country (4mks)
    1. Their exploitation creates employment
    2. Provides raw materials for industries 
    3. They are used to generate income for a country foreign exchange earnings
    4. They are of food to the populace
23. Outline four types of business activities    (4mks)
    1. Extraction
    2. Processing of raw materials
    3. Manufacturing
    4. Distribution of goods
    5. Trade
    6. Provision of services
24. List four factors that constitute the internal environment of a business.   (4mks)
    1. Physical resources 
    2. Financial resources 
    3. Hi. Human resources 
    4. Business culture
    5. The owner(s)
    6. Business structure
25. Outline four disadvantages of public corporations.
    1. May suffer inefficient management due to political appointees
    2. Political interference in the operations
    3. Suffer from diseconomies of scale
    4. Some operate as monopolies therefore may exploit the consumers