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Business Studies Paper 1 Question Paper

Business Studies Paper 1

Course:Secondary Level

Exam Year:2006

565/1
BUSINESS STUDIES
Paper 1
Oct./ Nov. 2006
2 ½ hours

1. State four types of complaints that a consumer organization may receive from consumers.
(4 marks)
(a) ……………………………………………………………………………….
(b) …………………………………………………………………………………
(c) ………………………………………………………………………………..
(d) ………………………………………………………………………………
2. The following terms relate to mommunitaction: vertical, horizontal, formal and informal.
Write the appriate term of communication associated with each of the following statements.
Statement Terms
(a) A manager gives instructions to a supervisor in her
division
(b) Rumours going around that the most disciplined
workers will be rewarded.
(c) A manager issues a general circular to the employ ees
(d) Prefects discussing discipline in their school
3. Outline three features of a Re – insurance company
a) ………………………………………………………………………………..
………………………………………………………………………………..
b) ………………………………………………………………………………..
………………………………………………………………………………..
c) ………………………………………………………………………………..
………………………………………………………………………………..
4. A firm wishes to introduce a new product into the market. Outline four factors that should
be considered in choosing an appropriate medium for promotion.
a) ………………………………………………………………………………
………………………………………………………………………………
b) ………………………………………………………………………………
……………………………………………………………………………..
c) ………………………………………………………………………………
………………………………………………………………………………
5. The diagram below shows the current demand for petrol.
Price Do
Po
Do

o Qo Quantity
a) What is the effect of a fall in the price of cars on demand for petrol? 2mks)
………………………………………………………………………………………..
………………………………………………………………..……………………..
b) Draw a new demand curve on the diagram above to show the effect of a fall in price
or cars. (2mks)
6. State four ways in which production activities may negatively impact on community health.
a) ……………………………………………………………………..…………………
………………………………………………………………………………………
b) ……………………………………………………………………….………………
………………………………………………………………………..………………
c) ………………………………………………………………………..………………
………………………………………………………………………..………………
d) ………………………………………………………………………..………………
……………………………………………………………………….………………
7. Outline four negative effects of an ageing population to an economy. (4mks)
a) ………………………………………………………………………..………………
b) ……………………………………………………………………….………………
c) ……………………………………………………………………….………………
d) ……………………………………………………………………….………………
8. The following are some of the accounts available to customers in the Kenyan banking
industry: Current account, savings account and Fixed deposit account. Give the account
that corresponds to each of the descriptions given below. (4mks)
Description Type of Account
(a) Account holders require to deposit a specific initial
amount as well as maintain a minimum balance
(b) Account holder may deposit and withdraw money
whenever they want without maintaining a minimum
balance
(c) Banks pay interest on the deposit at comparatively higher
rates.
(d) Money may be deposited at any time and interest is
earned if a specified balance is maintained
9. The following are some of the documents used in home trade: Cash sale receipt, catalogue,
invoice and statement of account. Match each document with the appropriate description
provided in the table below.
Description Document
(a) Shows details of goods offered for sale.
(b) Give quantity, unit price and total amount to be paid.
(c) Shows transactions since the date of last statem ent.
(d) Shows description of goods bought, prices and total
amount paid.

10. The following diagram represents equilibrium position of a firm under perfect competition.
Label the parts represented by the letters a,b,c, and d
a) ……………………………………………………………………………………..
b) ……………………………………………………………………………………..
c) ……………………………………………………………………………………..
d) ……………………………………………………………………………………..
11. State four circumstances under which air transport may be used to ferry goods (4mks)
a) ………………………………………………………………………………………..
b) ………………………………………………………………………………………..
c) ………………………………………………………………………………………..
d) ………………………………………………………………………………………..
12. On 1 January 2006, Mzalendo Traders sh.180000 in cash and sh.170000 at bank.
During the month, the following transactions took place:
2006
January 10 paid ABM Traders sh.25, 000 by cheque less sh.1000 Cash discount.
16 Sold goods for sh. 14,000 cash, less 5% discount
31 Banked all the cash except sh.5200
Enter the above transactions in cash book extract given below and balance it off.(5mks)
DR CASH BOOK EXTRACT CR
Date particularDiscount
allowed
cash Bank Date Particulars Discount
received
Cash Bank
Sh. Sh. Sh. Sh. Sh.
y
(a)
(b)
(c)
(d)
Output x
Price

13. Outline four benefits to abusiness that uses its own warehouse. (4mks)
a) …………………………………………………………….……………………..
b) …………………………………………………………….……………………..
c) …………………………………………………………….……………………..
d) …………………………………………………………………………………..
14. Identify the book of original entry used in recording each of the following transactions of
Soya Traders. (4mks)
Transaction Book of original entry
(a) Sold goods on credit to Wanjau for sh.20,000
(b) Bought goods on credit from Saipei Traders for sh.
1000.
(c) A chieng returned goods worth sh.6000
(d) Soya returned goods worth sh.11000 to Nzome T raders.
15. The following information related to Kerubo Traders for the year ended 31 December,
2006.
Sh.
Opening stock 24,000
Carriage on sales 12,000
Purchases 370,000
Sales 442,500
Closing stock 40,000
Other expenses 10% on Gross profit.
Prepare Trading profit and Loss Account for the year ended 31 December, 2006. (5mks)
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………
16. The average consumer price for a500g container of cooking fat for various years is shown
in the table below.
year Consumer price
Kshs.
Consumer price
Index
2000
2001
2002
2003
47
53
62
74
100
-
-
-

Calculate the consumer price index using year 2000 as the base year .(3mks)
17. State four ways that may be used to control the amount of money in circulation by the
central Bank of Kenya.
a) ………………………………………………………………………………
………………………………………………………………………………
b) ………………………………………………………………………………
………………………………………………………………………………
c) ………………………………………………………………………………
………………………………………………………………………………
d) ……………………………………………………………………………..
………………………………………………………………………………
18. Outline four differences between a good and a service. (4mks)
a) ………………………………………………………………………………
b) ………………………………………………………………………………
c) ………………………………………………………………………………
d) ………………………………………………………………………………
19. Highlight four factors that could influence mobility of capital as a factor of production.
(4mks)
a) ……………………………………………………………………………..
b) ……………………………………………………………………………..
c) ……………………………………………………………………………..
d) ……………………………………………………………………………..
20. State four advantages of an open office layout to an organization. (4mks)
a) …………………………………………………………………………….
b) …………………………………………………………………………….
c) …………………………………………………………………………….
d) …………………………………………………………………………….
21. Highlight four ways in which the running of public corporations may be improved. (4mks)
a) ………………………………………………………………………………
b) ………………………………………………………………………………
c) ………………………………………………………………………………
22. State four reasons why countries may decide to trade with each other. (4mks)
a) ……………………………………………………………………………
b) …………………………………………………………………………….
c) ……………………………………………………………………………..
d) ……………………………………………………………………………..
23. Outline four benefits that accrue to a customer who uses automated teller machine (ATM)
banking service. (4mks)
a) ………………………………………………………………………………

b) ………………………………………………………………………………
c) ………………………………………………………………………………
d) ………………………………………………………………………………
24. State four factors that could hasten the economic development of a country. (4mks)
a) ………………………………………………………………………………
b) ………………………………………………………………………………
25. Outline four elements that may comprise the external environment of a business. (4mks)
a) …………………………………………………………………………….
b) …………………………………………………………………………….

Business Studies Paper 1 Question Paper

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