Business Studies Paper 1 Marking Scheme
KCSE CLUSTER TESTS 27
Business Studies Paper 1
a)-Problem of making choices
b)-problem of scarce resources
C-Problem of competing wants
d)-Problem of recurring wants
e)-Problem of satisfying complementary wants.
4 marks
a)-Taxation may increase the price
b)-Subsides may reduce the price.
C-Legislation may increase / decrease the price
d)-Price control /price ceiling
e)-Price decontrol /price liberalization
4 marks
(i) Working capital
Current Assets-Current liabilities
(145,220-95,200)
=50,020 2x1mk=(2mks)
(ii) Capital employed
Fixed Assets +Working capital
(480,000+50,020)
=530,020= 2x1=(2mks)
4 marks
(a) Real account
(b)Nominal account
(c)Nominal account
(d)Nominal account
4 marks
a)- Provision of adequate security
b)-Provision of good transport / communication system / infrastructure
C-Offering subsidies
d)-Instituting legal measures / regulations to shield local industries
e)-Tax concession / relief to motivate new investors
4 marks
a)-When training junior staff
b)-When delegating duties to the junior staff
c)-When dealing with those involved in misconduct
d)-When giving rewards to staff
e)-When solving problems facing employees
f)-When evaluating the performance of employees
4 marks
a)-Difference in values of different currencies
b)-Difference in the baskets of goods / services
C-Disparity in income distribution in different countries
d)-Difference in taste / needs of people in different countries
4 marks
(a) Convenient to pay
(b) Not easy to evade
(c)Has wide coverage / reaches the pocket of all income groups
(d) Economical to collect
(e)It is elastic / flexible hence adaptable to economic changes.
4 marks
a)-The product to sell
b)-The target market
c)-The management structure
d)-The capital structure
e)-The extent of competition
f)-The executive summary
4 marks
a)-Installation cost is very high
b)-It is prone sabotage hence loss of product
c)-Where leakage is not detected immediately, heavy losses occur
d)-It has no return journey
e)-It can be used to transport gas / liquid products only
f)-Leakage may cause environmental pollution.
4 marks
a)-Where the firm has adequate resources
b)-Where the market is concentrated in one locality
c)-Where the product is of high unit value
d)-When there is need for demonstration
e)-When introducing a new product in the market
f)-Where there is need to address individual need/ requirement / consumer specification
4 marks
4 marks
a)-Use of bank rate policy
b)-Use of cash ratio
c)-Use of liquidity ratio
d)-Use of open market operation
e)-Use of selective credit control
f)-Use of special/ compulsory deposits
4 marks
(a) Composite machine
(b). Facsimile/ fax machine
(c)Duplicating machine
(d) Banking machine
4 marks
4 marks
a)-Most of them cannot attract qualified staff due to inadequate finance
b)-Some cannot be able to raise enough / adequate capitals as majority of their members are low income earners
c)-Majority are poorly managed leading to poor performance
d)-Most of them are affected by political interference
e)-Withdrawal of members affects their operation / capital base
f)-They suffer from embezzlement of funds by the management
4 marks
a)-To increase productive capital / investment capital
b)-To generate employment opportunities
c)-To encourage the transfer of technology / capital
d)-To develop backward linkages
e)-To diversify export of products/markets
4 marks
a)-Increased labour mobility which enhances economic productivity
b)-Increased market for goods /services which enhances production
c)-Adequate supply of labour
d)-Increased innovation / creativity
e)-Cheap labour due to excess supply
4 marks
a)-Enables the government to collect information on goods imported
b)-Enables the government to raise revenue from customs duty paid
c)-The government is able to control the entry of illegal goods in the country
d)-Verification of the type /nature of goods imported become easier
4 marks
(a). Offer variety / wide range of goods
(b). Sell their goods at relatively lower prices
(c).They are attractive / convenient to shop in
(d).Usually situated in town centres
(e).Each department is managed by a departmental manager
4 marks
a)-Establishment of a planning body
b)-Availability of adequate statistical data
c)-Fixing realistic targets and priorities
d)-Maintenance of proper balance in the economy
e)-Incorruptible and efficient administration
f)-Proper development policy
g)-Non-interference by politicians/political goodwill
4 marks
a)-Recording cash receipts by business
b)-Recording discount allowed by the business
c-Recording discount received by the business
d)-Recording cash payment by the business
e)-Recording payment made by cheques
f)-Recording receipts made by cheques
g)-Showing the cash balances brought down / forward
h)-Showing bank balances brought forward / down
4 marks
a) -The policy cannot be assigned to anybody else
b)-Policy is a contract of indemnity
c)-The policy is usually renewable / short contract /term
d)-Insured must have insurable interest
e)-The policy has no surrender value
f)-Compensation attached to actual value of loss / to the sum insured.
4 marks