Get premium membership and access revision papers, questions with answers as well as video lessons.

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 hours
1. State four advantages of operating a partnership form of business. (4mks)
a) ………………………………………………………………………………………
b) ………………………………………………………………………………………
c) ………………………………………………………………………………………
d) ………………………………………………………………………………………
2. Outline four risks against which a shopkeeper may insure. (4mks)
a) ………………………………………………………………….…………………
b) …………………………………………………………………..…………………
c) ………………………………………………………………………………………
d) …………………………………………………………………..…………………
3. Give four ways in which a government may participate in the operations of a state
corporation. (4mks)
a) ……………………………………………………………………..…………………
b) …………………………………………………………………….…………………
c) ………………………………………………………………………………………
d) ………………………………………………………………………………………
4. Outline four considerations that a seller should take into account before giving credit to
a new customer. (4mks)
a) ……………………………………………………………………………………….
b) ……………………………………………………………………….……………
c) ……………………………………………………………………………………
d) ……………………………………………………………………….………………
5. The table below shows some of the occupations in production. Indicate the level of
production associated with each of the occupations. (4mks)
Occupation Level of production
a) Mining _________________
b) Oil refining _________________
c) Insurance _________________
d) Teaching _________________
6. What are the advantages of personal selling as a method of sales promotion? (4mks)
a)` ……………………………………………………………………..…………………
b) ……………………………………………………………………..…………………
c) ……………………………………………………………………..…………………
d) …………………………………………………………………….…………………
7. The diagram below shows the demand and supply curves of a certain commodity and the
corresponding equilibrium price (Po) and quantity (Qo). On the diagram, show the new
equilibrium quantity and price as a result of an increase in the supply of the commodity.
(4mks)

D So
Price
Eo
Po
So D
Qo Quantity
8. Give four assumptions that are associated with perfect competitor. (4mks)
a) ………………………………………………………………………………………
b) …………………………………………………………………………………………
c) …………………………………………………………………………………………
d) ………………………………………………………………………..…………………
9. List four types of unemployment in an economy and give the cause for each. (4mks)
a) ……………………………………………………………………………………………
b) ……………………………………………………………………………………………
c) ………………………………………………………………………….…………………
d) ……………………………………………………………………........…………………
10. What benefits may accrue to manufacturing firm that uses modern technology? (4mks)
a) ………………………………………………………………………….…………………
b) …………………………………………………………………………..……………….
c) …………………………………………………………………………..………………
d) …………………………………………………………………………..………………
11. Highlight four benefits of using electronic filing system. (4mks)
a) ………………………………………………………………………….…………………
b) ………………………………………………………………………….…………………
c) ………………………………………………………………………....…………………
d) ………………………………………………………………………….…………………
12. State four social responsibilities that a manufacturing firm should have on the community.
(4mks)
a) ………………………………………………………………………….………………
b) …………………………………………………………………………..………………
c) ………………………………………………………………………….………………
d) …………………………………………………………………………..………………
13. What factors may encourage entrepreneurship in Kenya (4mks)
a) ……………………………………………………………………………………………
b) ……………………………………………………………………………………………
c) ……………………………………………………………………………………………
d) ……………………………………………………………………………………………
14. Highlight four characteristics of economic resources. (4mks)

a) ……………………………………………………………………………………………
b) ……………………………………………………………………………………………
c) ……………………………………………………………………………………………
d) ……………………………………………………………………………………………
15. Give four reasons why one would prefer a letter to a telephone to send a message. (4mks)
a) …………………………………………………………………………….………………
b) ……………………………………………………………………………………………
c) ……………………………………………………………………………..………………
d) …………………………………………………………………………….………………
16. State the effect of each of the following transactions on the balance sheet by writing
increase, or decrease or no effect in each case.
Transaction Effect
a) Bought machinery on credit __________________
b) Withdrew cash from the business for person use __________________
c) Purchased stock in cash __________________
d) Paid outstanding loan by cheque. __________________
17. The following balances were extracted from the books of Chebi Traders for the month
ended 31 March 2005.
Sh.
Sales 420,000
Purchases 240,000
Motor Van 300,000
Equipment 120,000
Debtors 80,000
Creditors 40,000
Expenses 160,000
Capital 440,000
Prepare trial balance of Chebi Traders for the month ended 31 March 2005. (4mks)
18. The following balances were extracted from the books of Chombo Wholesalers for
the year ended 31 Dec 2005.
Shs.

Sales 500,000
Purchases 320,000
Opening stock(1.1.2005) 80,000
Closing 31.12.2005 40,000
Debtors 140,000
Creditors 90,000
Calculate
a) margin
b) Current ratio
c) Rate of stock turnover (4mks)
19. Outline four benefits of direct taxation to the government. (4mks)
a) ……………………………………………………………………………………
b) ……………………………………………………………………………………
c) ……………………………………………………………………………………
d) ……………………………………………………………………………………
20. State four factors that may cause inflation in an economy. (4mks).
a) …………………………………………………………………………………
b) …………………………………………………………………………………
c) …………………………………………………………………………………
d) …………………………………………………………………………………
21. Outline four ways that the World Bank may use to assist developing countries to
improve their economy. (4mks)
a) …………………………………………………………………………………
b) ………………………………………………………………..…………………
c) ………………………………………………………………..…………………
d) ……………………………………………………………………………………
22. State four problems that a planner may encounter in development planning. (4mks)
a) …………………………………………………………………..………………
b) ………………………………………………………………..…………………
c)………………………………………………………………….. …………………
d)…………………………………………………………………. …………………

Business Studies Paper 1 Question Paper

More Question Papers

Popular Exams