KCSE Business Studies Paper 1 – 2014 EKSIKA Joint Evaluation Test
2014 EKSIKA Joint Evaluation Test
Business Studies Paper 1
Answer all questions
1.
Identify four elements of internal business environment that may positively influence
the performance of business.
4 marks
2.
Highlight four features of oligopoly market structures.
4 marks
3.
Explain the meaning of the following terms as used in insurance.
(a) Speculative risk
(b) Surrender value
4 marks
4.
The following features relate to warehousing. Indicate the most suitable type of
warehousing described.
i. Mostly situated entry points and are available at a fee………………………………………………….
ii. Warehouse designed to suit ones particular needs……………………………………………………….
iii. Used to store locally produced goods until excise duty is paid……………………………………….
iv. Warehouse used to store non dutiable goods originating from within or outside the
Country……………………………………………………………………………………………………………………
4 marks
5.
State any four types of advertising
4 marks
6.
Given below is a table showing the market demand for a commodity from 1996 to 2000
Year
Quantity demanded
1996
100,000
1997
120,000
1998
200,000
1999
250,000
2000
270,000
Outline four factors that have contributed to the trend in the demand from 1996.
4 marks
7.
Give four errors that may cause a trial balance not to balance.
4 marks
8.
State four internal diseconomies of scale in a firm.
4 marks
9.
The following is a table of activities. Name the utility that is created by each activity.
Activity
Utility
i. Making chairs from timber
ii. Shopkeepers selling sugar to consumers
iii. Pharmacist delivering milk to a hospital
iv. Delivering milk to consumers early in the morning
4 marks
10.
Highlight four ways in which partners may be classified giving an example in each case.
4 marks
11.
For each of the following cases, name the motive for holding money.
Case
Motive
i. To meet daily transport expenses
_______________________
ii. To meet any unforeseen circumstances
_______________________
iii. To pay for daily food requirements
_______________________
iv. To take advantage of anticipated future fall in prices
_______________________
4 marks
12.
State whether each of the following transactions will increase, decrease or have no effect on the business capital.
Transaction
Effect on capital
i) Bought stock on credit
ii) Owner withdrew some goods for personal use
iii) Business made profit during the year
iv) Paid wages by cheque
4 marks
13.
The following information relates to Mwangi traders for the month of August 2008
Opening stock Sh 40,000
Purchases Sh 46,000
Carriage inwards Sh 2,100
Closing stock Sh 22,500
Goods are usually sold at a mark up of 20%.
Required : Prepare a trading account for the month ended 31st August 2008.
5 marks
14.
Outline four emerging trends in office management.
4 marks
15.
State four circumstances under which lowering prices will not lead to an increase in the quantity demanded of a product.
4 marks
16.
Highlight four principles of co-operative societies.
4 marks
17.
State four ways in which the government may control monopoly power.
4 marks
18.
State four factors that determine the size of a country’s national income.
4 marks
19.
Highlight four circumstances under which cash payment would be preferred to cheque payment.
4 marks
20.
Outline four reasons why a debit note may be sent to a buyer.
4 marks
21.
Outline four ledger accounts used for recording stock.
4 marks
22.
Classify each of the following accounts as real, nominal or personal.
Account
Classification
i) Dividends
ii) Kariuki a debtor
iii) Motor vehicle
iv) Motor vehicle expenses
v) Provision for depreciation on motor vehicle
vi) Capital
vii) Profit and loss
viii) Premises
4 marks
23.
Highlight four ways in which production activities may negatively impact on community health.
4 marks
24.
Highlight four circumstances under which a proforma invoice may be used.
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