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Business Studies Paper 2 Question Paper
Business Studies Paper 2
Course:Secondary Level
Institution: Kcse question papers
Exam Year:2007
565/2
Business studies
Paper 2
Octo. /Nov. 2007
2 ½ hours.
1. a) Explain six reasons why a new business may fail (12mks)
b) Explain four advantages of transaction business through e-commerce. (8mks)
2. a) Explain six sources of government revenue for development expenditure. (12mks)
b) Karani does not keep a complete set of accounting records.During the year ended
30 June 2006, the following balances were extracted from the books of accounts.
Sh.
Stock 140,000
Land and buildings 500,000
Cash in hand 2500,000
Cash at bank 120,000
Credit 240,000
Long term loan 1400.000
Plant and machinery 600,000
Additional information:
_ Karani drew sh. 140,000 from the business for private use.
_ Opening capital was sh.2000 000 as at 1 July 2005
_ Additional capital during the year was sh.120,000.
i) Prepare statement of affairs for the year ended 30 june 2006
ii) Determine profit or loss for the year ended 30 june 2006
3. a) explain five ways is which the Agriculture Finance Corporation(AFC)
b) Explain five factors that could affect the quantities of cabbages supplied in a
market. (10mks)
4 a) Explain five strategies that a small – scale firm could adopt to expand so as to enjoy
economies of scale. (10mks)
b) Explain five benefits that could accrue to a customer who buys goods from a
departmental store. (10mks)
5. a) Discuss five reasons why less developed countries are reluctant in implementing
free trade agreement. (10mks)
b) Draw a diagram to show how equilibrium price and output are determined undermonopoly.
(10mks)
6. a) Explain five features that you would consider in establishing a warehouse for
imported goods. (10mks)
b) The following trial balance was prepared from the books of Mugambi Traders for
the year ended 31 December 2005
Mugambi Traders
Trial Balance
Dr Cr
Kshs Kshs
Land and buildings 500,000
Capital 940,000
Plant & Machinery 200,000
Motor Vehicles 300,000
10 year bank loan 200,000
3 year ICDC loan 100,000
Stock 100,000
Debtors 60,000
Creditors 60,000
Accrued expenses 20,000
Cash at Bank 100,000
Cash in hand 20,000
Drawings 40,000
1,320,000 1320,000
Prepare
(i) A balance sheet for the year ended 31 December 2005
(ii) Determine
Working capital
Capital employed
Borrowed capital ( 10 marks)
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