Business Studies Questions and Answers - Form 3 Mid Term 2 Exams 2023

QUESTIONS

1. Outline four causes of unemployment. 4mks
2. Outline four characteristics of life assurance policies. 4mks
3. State four reasons for existence of small firms in the economy. 4mks
4. Outline three characteristics of indirect production. 3mks
5. Rahisi traders had the following details on 31^st Jan 2019.
                           ksh
   Machinery    500,000
   Overdraft        38,000
   Capital         620,000
   Debtors          38,000
   Cash            100,000
   Creditors      280,000
   Stock            300,000
   Prepare Rahisi traders balance sheet as at 31^st Jan 2019. 4mks
6. Outline three functions of an entrepreneur. 3mks
7. Outline four characteristics of sole proprietorship form of business. 4mks
8. A business had the following records for the year ended 31 st Dec 2018.
                                                     sh
   Capital as at 31/12/18              64,000
   Net profit                                  14,000
   Capital as at 1/1/18                  42,000
   Drawings                                  15,000
   Calculate additional investments made during the year. 4mks
9. Outline three essential elements of transport. 3mks
10. Outline four factors that may influence entrepreneurial culture in Kenya. 4mks
11. State circumstances under which a cheque may be dishonored. 4mks
12. Highlight four disadvantages of enclosed office layout. 4mks
13. State four features of prefect completion market. 4mks

MARKING SCHEME

1. Outline four causes of unemployment. 4mks
   • Use of inappropriate education system.
   • Use of inappropriate technology
   • High population growth rate rural urban migration
   • Lack of product market
2. Outline four characteristics of life assurance policies. 4mks
   • Have surrender value
   • Can be assigned to beneficiaries
   • Covers exclusively with life
   • One use the policy as security for acquiring loan
3. State four reasons for existence of small firms in the economy. 4mks
   • Small size of the market
   • Small nature of the product sold
   • Flexibility of small firms
   • Belief that small firms are more manageable
4. Outline three characteristics of indirect production. 3mks
   • Goods produced are of high quality
   • Encourages invention and innovations
   • Goods are produced in large quantities
5. Rahisi traders had the following details on 31^st Jan 2019.
   Prepare Rahisi traders balance sheet as at 31st Jan 2019. 4mks
6. Outline three functions of an entrepreneur. 3mks
   • Starts the business
   • Controls the business
   • Makes decisions
7. Outline four characteristics of sole proprietorship form of business. 4mks
   • Requires small capita to start
   • It is flexible
   • Requires few legal formalities
   • One may get assistance from family members
8. A business had the following records for the year ended 31st dec 2018.
   Calculate additional investments made during the year. 4mks
9. Outline three essential elements of transport. 3mks
   • Unit of carriage
   • Ways
   • Terminals
10. Outline four factors that may influence entrepreneurial culture in Kenya. 4mks
    • Availability of good infrastructure
    • Favourable government policies
    • Availability of raw materials
    • Availability of market
11. State circumstances under which a cheque may be dishonored. 4mks
    • If the cheque is postdated
    • If it is torn or dirty
    • If the account holder has no sufficient amount money in the account
    • If the amount in figures do not match with the amount in words
12. Highlight four disadvantages of enclosed office layout. 4mks
    • Encourages absenteeism
    • Encourages laziness
    • Possible misuse of office machines
    • Difficult to locate workers
13. State four features of prefect completion market. 4mks
    • Many buyers and sellers
    • Products are homogenous
    • Uniformity of buyers and sellers
    • Buyers and sellers have perfect knowledge of the market