BUSINESS STUDIES
FORM 4
END TERM EXAMS
TERM 1 2021
PAPER 1
TIME 2 hrs
INSTRUCTIONS
- Answer all the questions
- State four reasons why individuals engage in business activities (4mks)
- List any five characteristics of services (5mks)
- State any three circumstances under which human resources help in exploiting natural resources (3mks)
- Highlight any four means of payment available to tradersin your home town (4mks)
- Mention any three documents used in home trade which do not contain the prices of goods dispatched(3mks)
- State any five business considerations in evaluating a business opportunity (5mks)
- Use the table below to show four differences between partnerships and private companies (4mks)
Partnerships Private companies - Give four reasons as to why a warehouse may be ineffective (4mks)
- Despite the development of widespread & modern means of transportation, human porterage is still popular. Enumerate any four factors that may have contributed to its usage in modernized economies (4mks)
- Identify any five items of information in an insurance policy (5mks)
- State any three unethical practices employed during the promotion of products (3mks)
- Highlight four main circumstances that makes it mandatory for business to use written communication (4mks)
- Identify any four factors that affects both demand and supply of a commodity (4 mks)
- Outline five ways in which “Land” may influence the location of a firm (5mks)
- State any four expenses incurred by intermediaries in the distribution of goods (4mks)
- Using the book keeping equation fill in the missing figures for business A,B,C and D (4mks)
Business Assets Capital Liabilities A 36,000 12000 B 37000 23000 C 70000 53000 D 18000 6000 - Highlight four items that are considered when measuring the national income using the expenditure approach (4mks)
- Use a (√) to classify the following accounts as either personal, impersonal or private.(4mks)
Account Personal Private Impersonal Capital Owino(Debtor) Rent Income Drawings - Complete the following table by indicating the account to be debited and the one to be credited (4mks)
Started a business with Sh 50,000 cash Received a cheque from a debtor Kamunya Bought office equipment by cheque Paid creditor Wambui in cash - Outline five benefits that a community derives from international trade (5mks)
- A part from taxes, state any other four sources of public finance internally (4mks)
- The following information relates to Mwangi traders for the nonth of August
Opening stock Sh.40,000
Purchases Sh.46,000
Carriage in Sh.2100
Closing stock Sh. 22,500
Goods are usually sold at a mark-up of 20%. Prepare a trading account (5mks) - State any four importance’s of preparing a balance sheet to the business (4mks)
- Mogere traders had the following information from his books of account as at 31st December 2009 (4mks)
Capital 1/1/09 sh. 6,800,000
Additional capital sh. 1,221,560
Drawing for the year sh. 50,440
Capital 31/12/09 sh. 9,800,000
Determine the profit for the year. - Outline the meaning of the term “Crowding out effect”
MARKING SCHEME
- State four reasons why individuals engage in business activities (4mks)
- So as to earn profit
- To help reduce cost of operation
- The need to satisfy customers
- To improve living standards
- To utilize extra time
- To create self employment
- Be own boss
- List any five characteristics of services (5mks)
- They are highly perishable
- Are intangibles
- Cannot be stored
- Quality cannot be standardized
- Are inseparable from provider
- Cannot be seen
- State any three circumstances under which human resources help in exploiting natural resources (3mks)
- Constructing solar panels to utilize the solar energy
- Farming to utilize the landWhen constructing dams to access water for industrial & domestic use
- Where mine are dug to obtain minerals
- When individual cut trees to get timber out of forests
- Highlight any four means of payment available to tradersin your home town (4mks)
- Cash – use of notes and coins / currency
- Postal orders
- Bankers cheque
- Promissory note
- Use of cheques
- Bill of exchange
- Money orders
- Mention any three documents used in home trade which do not contain the prices of goods dispatched(3mks)
- Packing note
- Delivery note
- Advice note
- Acknowledgement note
- State any five business considerations in evaluating a business opportunity (5mks)
- Availability of markets
- State of technology
- Availability of raw materials
- Government requirements
- Level of competition
- Use the table below to show four differences between partnerships and private companies (4mks)
Partnerships Private companies Owned by partners Owned by shareholders Some partners have unlimited liabilities Shareholders have limited liabilities Partners share responsibility Employee run company Life discontinuous with death of a partner Has a continuous life - Give four reasons as to why a warehouse may be ineffective (4mks)
- In adherence to the law
- Lack proper network of transport and communication
- Inappropriate location
- Lack of proper storage facilities
- Lack of proper handling equipments
- Lack of properly trained personnel
- Limited access to essential services such as water electricity etc
- Despite the development of widespread & modern means of transportation, human porterage is still popular. Enumerate any four factors that may have contributed to its usage in modernized economies (4mks)
- Its not expensive
- No maintenance
- It is readily available
- Supplements all the other means
- One of the most flexible means
- Human porterage can use any route
- Identify any five items of information in an insurance policy (5mks)
- Period in which the policy is in effect
- Name of the insured person
- The sum insured
- Risk insured against
- Premium to be paid
- Conditions for compensation
- Name of insurer
- State any three unethical practices employed during the promotion of products (3mks)
- Use of false loss leaders to attract customers
- Justified claims on attribute of a product
- Quoting prices that are above normal
- Negative effects on the environment
- Use of promotional messages that erode culture
- Highlight four main circumstances that makes it mandatory for business to use written communication (4mks)
- In case of need for future reference
- Where it is the cheapest
- When conveying complex ideas
- When copies are needed by different people and department
- In case of agreement / contracts
- Identify four factors that affect both demmend and supply of a commodity
- Price of a product
- Government influence
- Future expextations
- Price of other related products
- Seasons
- Population change
- Outline five ways in which “Land” may influence the location of a firm (5mks)
- Cost of land
- Terrain of the land
- Room for expansion
- Government policy on land use
- Proximity of important luxiliary services
- Nearness to developed infrastructure
- State any four expenses incurred by intermediaries in the distribution of goods (4mks)
- Storage for the goods
- Advertising costs
- Salaries and wages
- Cost of transportation
- Packing and blending expenses
- Using the book keeping equation fill in the missing figures for business A,B,C and D (4mks)
Business Assets Capital Liabilities A 36,000 24,000 12000 B 60,000 37000 23000 C 70000 17,000 53000 D 18000 6000 12,000 - Highlight four items that are considered when measuring the national income using the expenditure approach (4mks)
- Spending by households on goods and services
- Expenditure on investments by firms (capital goods)
- Government spending on goods and services
- Net income from abroad exports less imports
- Use a (√) to classify the following accounts as either personal, impersonal or private.(4mks)
Account Personal Private Impersonal Capital √ Owino(Debtor) √ Rent Income √ Drawings √ - Complete the following table by indicating the account to be debited and the one to be credited (4mks)
Dr Cr Started a business with Sh 50,000 cash Cash Capital Received a cheque from a debtor Kamunya Kamunya Bank Bought office equipment by cheque Office Equipment Bank Paid creditor Wambui in cash Wambui Cash - Outline five benefits that a community derives from international trade (5mks)
- Wider market for the community products
- The community access a variety of goods
- Access of modern technology
- Builds social cohesion among people of trading nations
- A part from taxes, state any other four sources of public finance internally (4mks)
- Court fines on offenders
- Income from government business (parastatals
- Sale of government property
- Licence fee
- Rent and rates for use of government property
- The following information relates to Mwangi traders for the nonth of August
Opening stock Sh.40,000
Purchases Sh.46,000
Carriage in Sh.2100
Closing stock Sh. 22,500
Goods are usually sold at a mark-up of 20%. Prepare a trading account (5mks)Mwangi traders
Trading a/c
As at 31st AugustOpening stock 40,000 Sales 78,720 Add purchases 46,000 Add carriage in 2,100 48,100 Cost of goods available for use 88,100 Less closing stock 22,500 Cost of sales 65,600 G.p C/d 13,120 78,720 78,720 - State any four importance’s of preparing a balance sheet to the business (4mks)
- Help to compare performance of business overtime
- Business use it to enquire from finances
- Used by owners to analyze their capital growth
- Used by management
- As a tool for decision making
- Mogere traders had the following information from his books of account as at 31st December 2009 (4mks)
Capital 1/1/09 sh. 6,800,000
Additional capital sh. 1,221,560
Drawing for the year sh. 50,440
Capital 31/12/09 sh. 9,800,000
Determine the profit for the year.- Closing capital = opening capital + added investment + profits – drawings
- 9,800,000 = 6,800,000+1,221,560 +p -50,440
- 9,800,000 = 7,971,120 +p
- P =1,828,880
- Outline the meaning of the term “Crowding out effect”
- A situation where government collect substantial amount of money in internal borrowing leaving private business / investors with very little to borrow from
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