Business Studies KCSE Mock Exams and Answers {Latest Best Collections}

565/1

NAME…………………………………ADM .NO………………INDEX NO.………..………

SIGNATURE…………………………………………..……DATE……………………………..

KENYA CERTIFICATE OF SECONDARY EDUCATION

 

MOCKS 1 202

 

BUSINESS STUDIES

Paper 1

TIME: 2 HOURS

 

Instructions to Candidates

• Write your name and index number in the spaces provided above.
• Sign and write the date of the examination in the spaces provided above.
• This paper consists of 25
• Answer ALL questions in the spaces provided
• This paper consists of 9printed pages. Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing
• Candidates should answer the questions in English

 

For Examiner’s Use Only

 

 

Question	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
Marks

 

Questions	16	17	18	19	20	21	22	23	24	25
Marks

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TOTAL MARKS

 

1. State four benefits of learning business studies to a Kenyan student             (4mks)
2. ………………………………………………………………………………………
3. ………………………………………………………………………………………

• ………………………………………………………………………………………

1. ………………………………………………………………………………………
2. Highlight four measures a business may take to ensure that its environment is conducive to its business activities             (4mks)
3. ………………………………………………………………………………………
4. ………………………………………………………………………………………

• ………………………………………………………………………………………

1. ………………………………………………………………………………………
2. State four factors to consider when evaluating a viable business opportunity (4mks)
3. ………………………………………………………………………………………
4. ………………………………………………………………………………………

• ………………………………………………………………………………………

1. ………………………………………………………………………………………

 

4. Most organizations have come up with customer care desks. outlinethree functions that they play .             (3mks)
5. ………………………………………………………………………………………
6. ………………………………………………………………………………………

iii.            ………………………………………………………………………………………

1. ……………………………………………………………………………………

 

 

 

5. Identify the documents that each of the following descriptions refer to             (4mks)

Description	Document
i.                 Used to inform buyer that seller has received the order
ii.               Used to ask about the availability of goods.
iii.             Used to organize for transportation of goods between seller and buyer
iv.             Used to show goods sold on credit

6. State four factors affecting the circular flow of income                              (4mks
7. ………………………………………………………………………………
8. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. The following balances were extracted from the books of WINNICO Limited on 31^stDecember 2020.

Item	Ksh.
Capital	150,000
Furniture	110,000
Purchases	285,000
Hawi (supplier)	180,000
Sales	230,000
Wages paid	41,000
Return inwards	5,000
Return outwards	15,000
Cash	139,000
Rent received	5,000

Prepare the trial balance of the business as of 31^st December 2020             (5mks)

 

 

 

 

 

 

 

 

 

 

 

 

8. The information given below relates to Jomo Traders for the year ended 31^stAugust 2021

Rate of stock turn over              3 times

Mark -up                                     20%

Opening stock                         ksh. 90,000

Closing stock                          ksh. 150,000

Required

1. Gross profit             (2mks)

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

1. Sales             (2mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………

9. Highlight four features of services . (4mks)
10. ………………………………………………………………………………
11. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. State four causes of seasonal unemployment in Kenya             (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. Highlight four circumstances under which the capital of a business may change (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………

 

 

12. On 1 January 2006, Romano Traders started sh. 180,000 in cash and sh. 170,000 at bank. During the month, the following transactions took place:

2006

January 10 paid ABM Traders sh. 25,000 by cheque less sh. 1000 cash discount

16 sold goods for sh. 14,000 cash.

31 Banked all the cash except sh. 5,200

Enter the above transactions in the relevant cash book  and balance it off. (4mks)

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………

13. List four clauses of memorandum of association for joint stock companies (4mks)
14. ………………………………………………………………………………
15. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. State four causes of demand- pull inflation             (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. State four activities carried out in the process of distribution             (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. Outline four structural changes that may take place when a country is experiencing economic development (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. State four reasons why it is suitable to locate a bonded warehouse at the point of entry of a country             (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. Highlight four reasons why business still use radios to promote their products despite other highly advanced media                         (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. State four factors that may lead to an increase in market supply of a product (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………

 

 

20. State reward of each factor of production (4mks)
21. ………………………………………………………………………………
22. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. Highlight four methods used by a monopolistic firm to differentiate its products (4mks)
3. ………………………………………………………………………………
4. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………
2. Juma wholesalers owned a motor vehicle at ksh. 2,000,000 which they comprehensively insured for ksh. 1,600,000. The vehicle was involved in an accident and written off. determine the amount of money Jumawholesalers should expect to get from their insurer

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

23. State four ways in which the government is involved in business activities. (4marks)
24. ………………………………………………………………………………
25. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………

 

 

24. State four ways in which the nature of goods would influence the choice of transport

(4mks)

1. ………………………………………………………………………………
2. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………

 

25. State four advantages of locating a firm near the source of raw materials             (4mks)
26. ………………………………………………………………………………
27. ………………………………………………………………………………

• ………………………………………………………………………………

1. ………………………………………………………………………………

 

565/2

NAME……………………………………..………………ADM .NO………………………..………

SIGNATURE…………………………………………..……….DATE………………….………….

.

KENYA CERTIFICATE OF SECONDARY EDUCATION

 

 

 

MOCKS 1 2023

 

BUSINESS STUDIES

Paper 2

TIME: 2¹/₂ hours

 

Instructions to Candidates

• Write your name and index number in the spaces provided above.
• Sign and write the date of the examination in the spaces provided above.
• This paper consists of 6
• Answer ANY FIVE questions in the spaces provided
• This paper consists of 3printed pages. Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing
• Candidates should answer the questions in English

Question	Maximum score	Candidates score
	20
	20
	20
	20
	20

 

 

 

 

 

 

 

 

1. (a) ExplainfivemeasuresthatKenyamaytaketocontrolunemploymentproblem (10 marks)

(b) Highlightfivedifferencesbetweendirecttaxandindirecttax .                            (10 marks)

 

2. (a) Explain the meaning and significance in each of the following terms as used in foreign trade.

(10 marks)

1. Terms of trade.
2. Balance of payment.

• Exchange rate.

1. Balance trade.
2. Common market.

(b)Explainfivefunctionsofthenationalbudgetasatoolofplanning.                          (10 marks)

 

3. (a)Discuss five factors that have led to survival of small-scale retailers despite competition from

Supermarkets.                                                                                                       (10 marks)

(b)ThefollowingbalanceswereextractedfromthebooksofMuteitraderson31^stDecember,2017.

Shs

Gross profit                    800,000

General expenses           180,000

Buildings                        1,250,000

Equipment                      380,000

Capital                            1,400,000

Furniture                         117,000

Insurance                        48,000

Stock                               25,000

Commission income      125,800

Discount allowed           55,000

Discount received          56,200

Bank Overdraft               79,000

Salaries and wages         320,000

Creditors                         90,000

Carriage outwards           60,000

Debtors                            65,500

Carriage inwards             34,500

Cash                                 51,000

 

Prepare:

• Profitandlossaccountfortheperiodended31^st
• Balance sheet as at 31^stDecember,2017. (10marks)

 

 

4. (a) Highlightfivebenefitsaccruingtoasellerwhousesthepersonalsellingmethod

to promote herproducts.                                                    (10marks)

(b)The following transactions relate to Furaha traders for the month of July,2008

July 1  : Balance brought down cash sh.16,250 and Bank Shs.19,847

July2   : Sold goods worth Shs.1,348 to Patel and received a calculator in exchange

July 5  : Paid transport by cheque Shs.2,000

July 6  : Issued a cheque to Kerio Traders setting an invoice for Shs.10,000 deducting 2%

cash discount

July 10: Transfer Shs.15 000 from cash till to bank

July 12: Sold goods for cash Shs.12,000 less 2% cash discount

July 13: Sold goods to Onyango on credit worth Shs.15, 000

July 14: The owner of the business withdrew Shs.3000 in cash to buy a present for his

daughter

July 16 : Received a cheque from Kuria Shs.2,500 less 5 % cash discount

July 22 : Bought furniture from Babu Traders on credit worth Shs.16,500 and cash

discount of 10% if payment is made within 2 weeks

July 24: Withdrew cash from bank for office use Shs8,000

July 26: The owner brought into the business Shs.9,000 cash

July 27: Issued a cheque to Babu Traders for amount due

July 28: Sold goods to Kuria worth Shs.5,000 for Shs.3,800 and received payment by

cheque

July 30: Banked all cash and remained with Shs.100 in the cash till

Required;   Prepare Furaha Traders three column cash book for the month of July 2008.

(10 marks)

 

5. a)Explainfivemeansofwrittencommunication. (10marks)
6. b) Explainfivemeasuresthatareadoptedbythegovernmenttoprotectconsumers

againstexploitation.                                                                          (10marks)

 

• (a) Explainfive(10marks)

( b) Commodity A and B are subtitute products. Using well label diagrams explain

how increase in supply of commodity A would affect the equilibrium price and quantity

demanded of commodity B.               (10mks)

 

 

 

 

 

 

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………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MOCKS 1 2023

 

BUSINESS PP1 MS

 

1. • Torelateknowledge,skills,andattitudestodaytoday.
   • Self-
2. Highlight four measuresa bustoensurethatitsenvironmentisconduciveto its businessactivities.
   • Ensuringthebusinessoperatesinsurroundingthatarecleanandattractiveto
   • e.,relevant permitsandlicenseshavebeenobtained.
   • Thatallgovernmenttaxesarepaidpromptly
3. Statefourfactors to
   • Potentialprofits
   • Availability ofmarket
   • Availability of rawmaterials
   • Amount of capitalrequired
   • Level ofcompetition
   • Security
   • Governmentpolicy
   • Futuregrowth
   • Acceptance by thecommunity
   • Cost ofcapital
   • Ability tomanage

 

 

 

 

 

 

4. Mostorganizations havecomeupwithcustomercareOutline functions that theyplay.
   • Advisemanagementonissuesandcomplaints
   • Attend to anyenquiry
   • Buildconfidenceinclients (efficientservice)
   • Attend tocomplaints
   • Ensurethatclientsareattendedtofastenough

 

 

 

 

5. (

Description	Document
i)Used to inform buyer that seller has received the order	Acknowledgements note
i)    Usedtoaskabouttheavailabilityof goods	Letter of inquiry
ii)Usedtoorganizefortransportation of goods between seller and buyer	Consignment notes
iii) Used to show goods sold on credit	Invoice

 

6. Namefour factorsaffectingthecircularflowofincome

• Savings-leakages
• Taxes-leakages
• Governmentexpenditure
• Investments
• Foreigntrade

 

7. WINNICO Limited

Trial Balance

As at 31^st December 2020.

Item	Dr. Ksh.	Cr. Ksh.
Capital		150,000
Furniture	110,000
Purchases	285,000
Hawi (supplier)		180,000
Sales		230,000
Wages paid	41,000
Return inwards	5,000
Return outwards		15,000
Cash	139,000
Rent received		5,000
	580,000	580,000

 

Cost of sales =KSH. 360,000

20=

=KSH.72,000

1. G.P =72,000 + 360,000

                           =KSH. 432,000

9. Characteristics of services
   • They are intangible and invisible as they are not in material form.
   • They can’t be stored for future use-perishable.
   • Quality can’t be standardized.
   • They are inseparable from the provider.

 

10. Statefour causesofseasonalunemploymentinKenya
    • Declineinthesupplyofcertainrawmaterials
    • Temporary employment/contractworkers
    • Economicdepression/declineineconomicactivities
    • Voluntaryresignationduetogreenerpastures
    • e.temporarystoppageorterminationofemployment

 

11. Highlight four circumstances under which the capital of a business may change

(4marks)

• Profit increases capital
• Losses reduces capital
• Additional investment increases capital
• Drawings reduces capital

 

12. Romano Traders

Two column cash Book

 

 

 

 

 

 

 

 

 

 

13. List four clauses of memorandum of association for joint stock companies
    • Nameclause
    • Objectiveclause
    • Liabilityclause
    • Capitalclause
    • Declarationclause

 

14. State four causes of demand-pull inflation

• Increase in government expenditure
• Effects of credit creation by the commercial banks
• Increase in money incomes
• General shortage of goods and services
• Increase in consumer’s expenditure

 

15. Statefouractivitiescarried o  u   t         intheprocessofdistribution (4mks)
    • Handling
    • Storage
    • Packing/packaging
    • Transportation
    • Grading
    • Blending
    • Sorting
    • Breaking thebulk

 

 

 

 

 

16. Outlinefourstructuralchangesthatmaytakeplacewhenacountryisexperiencing economicdevelopment
    • Shiftfromagriculturetomanufacture
    • Reduction in illiteracylevels
    • Increase in skilledmanpower
    • Improvement in healthfacilities
    • Improvement intechnology
    • Improvedinfrastructure
    • Improved balance ofpayment

 

 

17. Statefourreasonswhyitissuitabletolocateabondedwarehouseatthepointof entry of acountry
    • For easyre-exporting.
    • Topreventtheentryofharmfulgoods /dangerousgoods.
18. Highlightfourreasonswhybusinessesstilluseradiostopromotetheirproducts despite other highly advancedmedia
    • Wider geographicalcover
    • Differentradiochannelscancastindifferentlanguages
    • Blindcangetthemessage
    • Abletoreachmanypeopleatthesametime
    • Radioisaccessibleevenintheremoteareas
    • Allows repetition ofmessage
    • Affordable /cheaper toadvertise.
19. Statefourfactorsthatmayleadtoanincreaseinmarketsupplyofaproduct.

(4 marks)

 

• Increaseinthepriceoftheproduct
• Failinthecostofproduction
• Availability of cheapcredit
• Decrease inprices
• Whenthedemandishigh
• Futureexpectedfallinprice

 

20. State reward for each factor of production. (4marks)

• Capital -interest
• Land-rent /rates/royalties/lease fees
• Entrepreneurship -profit
• Labour-wages/salaries /professional fees/commission

21. Highlight4methodsusedbyamonopolisticfirmtodifferentiateitsproducts
    • Branding
    • Packaging in differentsizes
    • Pricing
    • Blending into differentcolours
    • Persuasiveadvertising
    • Trademarks

 

 

 

22. Juma wholesalers owned a motor vehicle valued at 2,000,000 which they comprehensively insured for Kshs. 1,600,000. The vehicle was involved in an accidentandwrittenoff.DeterminetheamountofmoneyJumawholesalersshould expect to get from theirinsurer

 

Compensation = sum assured/insured premium x loss

Actual value

 

1,600,000 x 1,600,000 = 1,600,00

2,000,00

 

23. State four ways in which the government is involved in business activities

• Regulation
• Training
• Internal tradepromotion
• Eternal tradepromotion
• Serviceprovisions
• Creation of enablingenvironment
• Consumerprotection

24. • Ifgoodsareperishableafastandappropriatemeansisrequired
    • Ifgoodsarefragile,asmoothmeansoftransportisrequired
    • Ifgoodsarehighlyvalued,asafeandsecuremeansisrequired
    • Ifgoodsareurgentlyrequired,afastermeansisused
    • Ifgoodsarebulkyanappropriatemeanswillbeused
25. (4marks)
    • Reduce transportcost
    • Get quality rawmaterials
    • Enhance continuousproduction
    • Avoidwastageofrawmaterials

 

 

 

ELDORET DIOCESE EXAM 2021

 

 

MOCKS 1 2023

 

Marking Scheme

Business Studies Paper Two

1. (a) ExplainfivemeasuresthatKenyamaytaketocontrolunemploymentproblem
   • Populationcontrolegfamilyplanning
   • Increasedgovernmentexpenditurethushavingmanyprojectssetup
   • Encouragingexploitationofnaturalresourcestoincreaseproductionactivities
   • Exportinglabortocountrieswithlabordeficiency
   • Diversificationoftheeconomytoreduceseasonalunemployment
   • Ruraldevelopment
   • Encourageforeigninvestmentinthecountry
   • Encourageuseoflabor-intensive methodinproduction
   • Improvementoftheinfrastructuretostimulateeconomicactivities
   • Improvementofeducationsystemstomakeitmoreappropriatetotheemploymentneeds of theeconomy.

 

 

(b) Highlightfivedifferencesbetweendirecttaxandindirecttax

 

Direct tax	Indirect tax
(i)Tax revenue is certain	(i)Uncertainty in tax collected
(ii) Does not affect prices of goods and services	(ii)Affectspricesofgoodsandservices
(iii) The society or taxpayers are conscious	(iii)thetaxpayermaynotbeawareof tax beingpaid.
(iv) Economical in collection	(iv) Expensive in collection
(v) Cannot be avoided	(v) Can be avoided
(vi)Can discourage work	(vi)Encourages people to work hard to maintain their standards of living.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.(a) . Explain the meaning and significance in each of the following terms as used in foreign trade.                                    

Termsoftrade:therateatwhichexportsononecountryexchangeswith

imports.Tot=Priceindexofexportsdetermineswhetherthetradebetweenonecountryandanotherisfavorable.

• Balanceofpayment:thedifferencebetweenbothcapitalandcurrentexportsandimportsofa Ifthevalueofexportsishigher,thecountryexperiencesasurplusandviceversa.It determineswhetheracountryisexperiencingsurplusinI
• Exchangerate:rateatwhichacountry’scurrencyexchangeswithanother.Thisratedeterminesthevalueofexportsandimports/showsitsindicationofacountry’seconomicstrength.
• Balancetrade:thedifferencebetweenthevalueofacountry’svisibletangibleimportsandits Determineswhetheracountryisexperiencingsurplus/deficittrade

 

Commonmarket:anagreementbetweencountriesthatallowfreemovement

ofgoodsand factorsofproduction.Thisallowsmobilizationofresources/

tradewithoutrestriction

(b). Explainfivefunctionsofthenationalbudgetasatoolofplanning.

• Outlininggovernmentexpenditure–Itdetailsthevariousexpenditureprogrammedthe governmentplanstoundertakeoveragivenperiod
• Outlininggovernmentrevenue–Itgivesdetailsofthevarioussourcesofrevenuefor thegovernmenttofinanceitsactivities
• Enablinggovernmentplanning–Thegovernmentusesthebudgettoplanforvarious activitiesandprogrammedthatleadtoeconomicgrowthanddevelopment
• Introducingchangesintaxation–Thevarioustaxestobeapplied,thetaxrateandthe modeofapplicationofthetaxesareoutlinedinthebudget
• Regulatingmoneysupply–Itoutlinesthemonetarysystemstobeinstitutedbythe governmenttoregulatemoneysupplyintheeconomy

• Stimulatingeconomicactivities–Itisusedtoincreasegovernmentexpenditureinthe economywhichwillspureconomicactivitiesinthecountry

 

 

3. (a) Discussthefactorsthathaveledtothesurvivalofsmall-scaleretailersdespitecompetitionfrom supermarkets(10marks)
   • Personalizedservices:smallscaleretailersprovidepersonalizedservicesandarethereforeab
   • accessibilityofsmall-scaleretailers/convenienceoflocatingsmallscaleretailersare conveniently in urbancenters.
   • Creditfacilitiessmallscaleretailersoffercreditfacilitiestosome oftheircustomerswhichare notavailabletospecificcustomerneeds.
   • Runningcostsofsmall-scaleretailersarelittleandthismakesiteasierforthemtosurvive unlikesmallmarketswhichrequirehugecapitaltooperate.
   • Management:Smallscalebusinessestherisksinvolvedarelowwhileinsupermarketsaregrew
   • Starting/initialcapitalstartingsmallscaleretailersasuitableforpeopleformoflowincome.
   • Flexibility-itiseasierforsmallscaleretailerstochangefromoneformofbusinesstoanother locationthanitisforsupermarkets.

 

     (b)

Mutei traders

ProfitandLoss

For the year ended 31/12/2017√

Shs                                                      Shs

Generalexpenses180,000 √  Grossprofit b/d  800,000√

Insurance48,000     √    Commission income  125,800     √ Discountallowed55,000   √    Discount received    56,200√

 Salariesandwages320,000√

Carriageoutwards60,000√

NetProfit319,000√

982,000                                                                                                                                       982,000

Marking10√*½=5marks Muteitraders

Balancesheet

                                                                                                Asat31/12/2017                                                 FixedAssets                                                Shs                                                     Shs

Buildings1,250,000√             Capital            1,400,000√

Equipment380,000√                AddNetProfit                                   319,000√

Furniture117,000√                1,719,000

1,747,000

Currentassets                                                              Currentliabilities

Stock              25,000√                                  Creditors        90,000√

Debtors65,000√BankOverdraft79,000√169,000

Cash               51,000√          141,000

1,888,000                                                            1,888,000

 

 

 

 

 

 

 

4. (a)Highlightfivebenefitsaccruingtoasellerwhousesthepersonalsellingmethod to promote herproducts

 

• Personalsellinggivestheselleranopportunitytodemonstratetheproducts that they areselling.
• Salespersons
• Sellerhasanopportunitytoobservethereactionofcustomertotheproduct

Enablesthesellertotargetthespecificgroupsinquestion.

 (b)                                Faraha Traders

DATE	PARTICULARS	D.A	CASH	BANK	DATE	PARTICULARS	D.R	CASH	BANK
2008 July 1 10 12 16 24 26 28 30	Balance b/d   Cash Sales Kuria Bank Capital Sales Cash ©   Balance b/d	240 125     1200   1565	16520         8000 9000 3800   37320 1000	19847   15000 11760 2375       18320 67302 32652	2008 July 5 6 10 14 24 27 30	Transport Kerio traders   Bank Drawing   Cash Babu traders Bank © Balance c/d	200           1650     1850	15000 3000       18320 1000 37320	2000 9800         8000 14850   32652 67302

 

 

 

 

 

 

 

 

 

 

 

 

 

5. a)Explainfivemeansofwrittencommunication. (10marks)

• Letters–aformofwrittencommunication;business,official/formal,non–formaletc
• Telegrams-isameansofcommunicationprovidedbythepostoffice,thesender obtainsthetelegramformfromthepostofficeandfillsthemessageonitincapital lettersandhanditovertothepostofficeemployeesatthecounter.
• Telex-isameansofcommunicationusedtosendshortordetailedmessagesquickly byuseofTheserviceisprovidedbythepostofficeonapplication.
• Facsimile(Fax)-involvestransmissionofinformationthroughafaxmachine.Both thesenderandthereceivermusthaveafaxmachine.
• Memorandum (Memo) – is printed information for internal messages within an organization.Itisnormallyusedtopassinformationbetweendepartmentsoroffices in anorganization.
• Notice-isusedtoinformagrouporthepublicaboutpastcurrentorfutureevents.It isusuallybriefandtothepoint.Itcanbeplacedonwalls,inpublicplaces,ontrees,

newspapers or on notice boards.

• Reports-arestatements/withinrecordsoffindingsrecommendationsandconclusion ofaninvestigation/research.Areportisusuallysenttosomeonewhohasaskedforit for a specificpurpose.
• Circulars-aremanycopiesofasingleletteraddressedtoverymanypeoplewhenthe
• Agenda-isanoutlineoftheitemstobediscussedinameeting.Itisusuallycontained inanoticetoameetingsentinadvancetoalltheparticipantsofthemeeting.

                      Minutes-arerecordsoftheproceedingsofameeting

 

 

• (b) Explainfivemeasuresthatareadoptedbythegovernmenttoprotectconsumers againstexploitation
• Settingupstandards-ThegovernmentthroughtheKEBSsetsstandardswhichmust

be maintained by producers and traders.

• WeightsandMeasuresAct-Thegovernmentensuresthattheequipmentusedfor weighingandmeasuringarecorrectandaccuratebyregularcheckingandadjustingof
• Licenses-Thegovernmentrequiresmanufacturersandbusinesspeopletoget licensesbeforecommencingtheirbusinessoperationsthisensuresthatthereis
• FoodandDrugsAct-Thegovernmentensuresthatproducersandtradersdonot includeanysubstancethattheyselltocustomerswhichmayhaveharmfuleffectsto the customershealth.
• TradedescriptionAct-Ensuresthataproducersortradersdoesnotcheatthe
• Pricecontrol-Thegovernmentmaysetapricebeyondwhichacommodityshouldnot
• RentandTribunalAct-

 

 

 

 

6 (a)  Explainfivecharacteristicsofperfectcompetitionmarketstructure

• Largenumberofbuyers/sellerssuchthatactionofsinglebuyer/sellercannotaffectthe market
• Homogeneity/uniformityoftheproduct-productsfromdifferentproducersareidentical in allaspects
• Wideknowledgeofthemarket-thereforenosingleseller/’buyercanaffectthebusiness atanypriceotherthantheequilibriumprice
• Freedomofentry/exit-therearenobarrierstoentryorexittoorfromthemarket
• Uniformityofbuyersandsellers-thereforenobenefitofsellingorbuyingfromaparticular buyer orseller
• Nogovernmentinterference-informoftaxes,subsidies,quotas,pricecontrol/price prevailinginthemarketisdeterminedstrictlybyinterplayofdemandandsupply
• Noexcessdemand/supply-buyerscanbuyalltheywant/sellersareabletosell alltheysupplytothemarket
• Notransportcostsasbuyersandsellersareinonearea

 

 

 

• b) Commodity A and B are complementary Using  well label diagrams explain how increase in supply of commodity A would affect the equilibrium price and quantity demanded of commodity B.               (10mks)