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Form 3 Business Studies Paper 2 Question Paper

Form 3 Business Studies Paper 2

Course:Business Studies

Exam Year:2011

1. (a) Explain the following types of inflation:
(i) demand-pull inflation
(ii) cost-push inflation
(iii) imported inflation
(iv) structural inflation. (8 marks)
(b) Explain six factors that may hinder the development of a country. (12 marks)
(a) Explain five circumstances under which containerization may be used to transport
goods. (10 marks)
(b) (i) Explain the procedure for making an insurance claim. (5 marks)
(ii) A farmer's house valued at Ksh. 1,200,000 was insured against fire for
Ksh. 900,000 under the "with average clause". Fire occurred and damaged the
house causing a loss of Ksh. 500,000. Determine the value of compensation due
to the farmer. (5 marks)
(a) Discuss five factors that may be considered when choosing a method for promoting a
product. (10 marks)
(b) Describe five features of economic resources. (10 marks)
(a) Explain five benefits that may accrue to an organization that adopts an open office plan.
(10 marks)
(b) Discuss five circumstances under which a partnership may be dissolved. (10 marks)
(a) Amboseli Roses is a horticultural company producing flowers. Explain six factors that
may influence the choice of a channel for distributing its products. (12 marks)
(a) Give four reasons for maintaining books of original entry. (8 marks)
(a) Discuss five causes of unfavorable balance of payment for most developing countries.
(10 marks)

(b) The following balances were extracted from the books of Rehema Traders on 1st January, 2007.
Kshs.
Capital 600,000
Creditors 180,000
Motor van 200,000
Furniture 200,000
Stock 60,000
Debtors 80,000
Cash 240,000
The following transactions took place during the year ended 31st December, 2007:
(i) Sold furniture worth Ksh. 60,000 for which Ksh. 40,000 cash was received and the balance was due at the end of the year.
(ii) Purchased goods worth Ksh. 100,000 for which cash of Ksh. 70,000 was paid and the balance was still outstanding at the end of the year.
(iii) Cash Ksh. 10,000 was taken from the business by the proprietor to settle the spouse's hospital bill.
Required:
Draw Rehema Trader's balance sheet as at 31st December, 2007 showing the items in
their relevant classes. (10 marks)

Form 3 Business Studies Paper 2 Question Paper

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