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KCSE CLUSTER TESTS 16

Business Studies Paper 1

Answer all the questions.
1.

Outline FOUR human activities that assist trade to take place smoothly from the producer to the consumer.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

2.

State FOUR conditions necessary for a business to maintain a health business environment.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

3.

Outline FOUR measures that county governments in Kenya may take to attract firms to their areas.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

4.

Outline FOUR reasons why office documents should be filed immediately after completion of the days work.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

5.

Rapando a university graduate wishes to begin a business in Mumias market, give FOUR factors that he should consider to evaluate whether the business will be successful.

a. ………………………………………………………………………………………….

b. ………………………………………………………………………………………….

c. ………………………………………………………………………………………….

d. ………………………………………………………………………………………….

4 marks

6.

Highlight FIVE factors that determine the fertility rate in a country.

a. ………………………………………………………………………………………….

b. ………………………………………………………………………………………….

c. ………………………………………………………………………………………….

d. ………………………………………………………………………………………….

4 marks

7.

State FOUR business documents to which each of the following statements relate.

4 marks

8.

Outline FOUR ways in which the nature of goods would influence the choice of transport.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

9.

The following balances were obtained from the books of Kirwa Traders on 30th June 2011.

Details shs

Opening stock 50,000

Sales 360,000

Gross profit margin 25%

Closing stock 70,000

Calculate:

a. Cost of goods sold.


b. Rate of stock turnover.

5 marks

10.

State the effect of the following independent transactions on Owner’s capital.

3 marks

11.

Give FOUR methods that countries use to restrict importation of goods.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

12.

Outline FOUR advantages of verbal communication.

a. ………………………………………………………………………………………….

b. ………………………………………………………………………………………….

c. ………………………………………………………………………………………….

d. ………………………………………………………………………………………….

4 marks

13.

Outline FOUR challenges that may be encountered by using a long channel to distribute farm produce.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

14.

State FOUR measures which the Kenyan government may take to solve unemployment problems.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

15.

The diagram below shows equilibrium price and quantity

Draw a new demand curve on the diagram above showing a decrease in demand and the effect on:
a. Equilibrium price

b. Equilibrium quantity

c. Equilibrium point

4 marks

16.

State FOUR methods of product promotion.

a. …………………………………………………………………………………………

b. …………………………………………………………………………………………

c. …………………………………………………………………………………………

d. …………………………………………………………………………………………

4 marks

17.

State FOUR advantages of using M-pesa account to an individual.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

18.

Highlight FOUR causes of demand –pull inflation in an economy.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

19.

Outline FOUR functions of stock exchange as a market for securities.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

20.

The following is an extract of balances from the books of Mwalimu traders as a 31st October 2010.

Item shs

Stock 4,000

Accrued rent 4,000

Cash in hand 7,500

Trade creditor 3,000

Bank overdraft 6,000

Prepaid insurance 1,400

Trade debtors 2,600

Determine the working capital.

4 marks

21.

The following information relates to Wangila Traders as on December 31st 2013.

Details Shs

Capital 96,600

Debtors 29,520

Creditors 24,670

Motor vehicles 79,000

Cash 11,250

Stock 1,500

Prepare Wangila’s balance sheet.

4 marks

22.

Outline FOUR problems associated with the expenditure approach.

a. …………………………………………………………………………………………..

b. ………………………………………………………………………………………......

c. …………………………………………………………………………………………..

d. ………………………………………………………………………………………......

4 marks

23.

Outline FOUR merits of indirect tax.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

24.

State FOUR characteristics of assets.

a. …………………………………………………………………………………………..

b. ………………………………………………………………………………………......

c. …………………………………………………………………………………………..

d. …………………………………………………………………………………………..

4 marks

25.

Give FOUR types of small scale retailers with shops.

a. …………………………………………………………………………………………..

b. …………………………………………………………………………………………..

c. …………………………………………………………………………………………..

d. ………………………………………………………………………………………….

4 marks

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