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2014 Homa-Bay Mock

Business Studies Paper 1

Answer all questions.
1.

Highlight four studying business as a subject in school.





4 marks

2.

Highlight four merits that will accrue to a business by adopting the internet as a means of
communication.





4 marks

3.

Arrange the following items in balance sheet in the order of liability and assets.

Premises Bank overdraft
Prepaid rent 5 yr bank loan
CashElectricity accrued
CreditorsStationery



4 marks

4.

Write four source documents used in recording business transaction.

4 marks

5.

State four factors to consider when choosing a filing system in an organization.

4 marks

6.

Highlight four problems that a country whose population is made up of a large proportion of
youthful faces.






4 marks

7.

Outline four conditions that would necessitate the writing of a credit note.

4 marks

8.

List four sources on internal economies of scale.

4 marks

9.

Use the following balances to prepare Nandi opening Journal entries on 31st January 2012:

Motor vehicle
Machinery
Creditors
Debtors
Cash at hand
Stock
Rent prepaid
Bank
Premises
Capital
230,000
40,000
10,000
5,000
20,000
10,000
5,000
25,000
335,000
660,000

4 marks

10.

Highlight four circumstances that may create trade restrictions in an economy.





4 marks

11.

Outline four distinctive features of a monopolistic market competition.






4 marks

12.

Under what four conditions would a trader advertise his products over the radio instead of television?






4 marks

13.

Outline four ways entrepreneurship has benefited Kenyan economy.





4 marks

14.

State four circumstances under which a business would choose to transport goods by air.

4 marks

15.

The following information relates to Johny’s Business as at 1/6/2013. Prepare a Trial Balance as at
date:


Stock 76,500
Creditors 450,400
Debtors 350,000
Bank 260,400
Fixed asset 970,200
Capital 1,300,000
Cash 120,500
Rent due 26,700

4 marks

16.

Give four differences between commercial Banks and Non-Bank financial institution (4mks)

Commercial bank Non Bank financial









4 marks

17.

Highlight any four difficulties encountered in satisfaction of human wants.

4 marks

18.

Match the information in A to that in B in the table below using an arrow

UnemploymentDescription
(i) Real wage unemployment Demand in labor due to technological change
(ii) Frictional unemployment Business not willing to employ
(iii) Seasonal unemployment Loosing jobs in order to look for new ones
(iv)Structional unemployment Occurring repeatedly at similar times


4 marks

19.

Highlight four principles of public expenditure.

4 marks

20.

The following figures relates to the retail business of Omondi for the Month of July 2012
Sales 50,000
Expenses were 10% of sales
Cost of good sold 40,000
Calculate:
(i) Mark-up
(ii) Margin
(iii) Total Expenses
(iv) Net profit

4 marks

21.

Outline four functions of Central bank in an economy.





4 marks

22.

State four challenges that farmers encounter when they sell their produce through marketing boards.






4 marks

23.

List down four trends in business ownership.





4 marks

24.

Outline four ways in which the business may be affected by the legal environment in which it operates






4 marks

25.

Highlight benefits drawn from economic intergration.







4 marks

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