KNEC KCSE Business Studies Paper 2 Question Paper / 2015 KCSE Kirinyaga West
2015 KCSE Kirinyaga West
Business Studies Paper 2
1.
a) State and explain five principles of insurance (10mks)
b) One of the reason of government involvement in business activities is to regulate
demand and supply of commodities. Explain five ways through which the government may cause a decrease in the supply of a commodity ( 10 mks)
20 marks
2.
a) The diagram below shows the population and output per capita of China.
Explain five advantages China would get if her total population is found in the part marked Y (10 mks)
b) Explain five assumptions associated with perfect competition (10 mks)
20 marks
3.
a) Study the balance sheet and answer the following questions below
MAVOKO TRADERS
BALANCE SHEET
As at 31st Dec 2000
Fixed Assests Capital 422, 930
Premises 300,000 Add Net profit 220, 500
Furniture 51,500 Less drawings (175,000) 468, 450
Machinery 140,000
Motorcar 190,000 (681,500) LTL
Current Assests Mortage loan 300000
Stock 124,500 Bank loan 100000 400, 000
Debtors 103, 650 Current liabilities
Cash at bank 54850 Creditors 99, 720
Cash at hand 3650 (286, 650)
968, 150 968, 150
Calculate:
i) Working capital (WC) (2 mks)
ii) Return on capital (ROC) (2 mks)
iii) Borrowed capital ( 2mks)
iv) Current ratio (2 mks)
v) Quick ratio ( 2 mks)
b) The new devolved government of Kenya aims at decentralising government and business activities. Discuss any five advantages associated with this type of government (10 mks)
20 marks
4.
a) Explain five benefits of warehousing to a business (10 mks)
b) Enter the following transactions in the cashbook and balance it at the end of the month (10 mks)
– Soko Huru traders had the following balances on 1st Jan 2000
Cash in hand 4,000
Cash at bank 10,000
Jan 2: Paid salaries in cash 2000
– Jan 3: Received a cheque from a debtor ksh 12,000
– Jan 4: Withdrew kshs. 7000 from bank for office use
– Jan 5: Paid water bill by cheque ksh. 2000
– Jan 20: Purchased furniture worth ksh. 30,000, paid ksh. 10,000 in cash and the rest by cheque
20 marks
5.
a) Discuss five factors that have limited the practise of barter trade in Kenya (10 mks)
b) The following information relates to Ndonga Traders for the month of Jan 2015
Jan 1: Sold goods on credit worth ksh. 100,000 to Maina, invoice no. 101
Jan 2: Sold goods to Wema traders on credit worth ksh. 50,000, invoice no. 102
Jan 3: Maina returned goods of ksh. 20000, credit note no. 206
Jan 4: Wema Traders returned goods worth ksh. 5000, credit note no. 207
Required:
Prepare relevant journey entries, record the above transactions and then post to the relevant ledger accounts (10 mks)
20 marks
6.
a) As a business expands, it experiences economies of scale such division of labour and specialization. Explain five benefits of the economy of scale mentioned (10 mks)
b) Discuss five features of a supermarket (10 mks)
