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Pbus 021-Business Studies 2009 Question Paper
Pbus 021-Business Studies 2009
Course:Certificate Of Pre-University Business
Institution: Kabarak University question papers
Exam Year:2009
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010 ACADEMIC YEAR
FOR THE CERTIFICATE OF PRE- UNIVERSITY BUSINESS
COURSE CODE: PBUS 021
COURSE TITLE: BUSINESS STUDIES
STREAM: PRE-S2
DAY: FRIDAY
TIME: 9:00 – 11:00A.M.
DATE: 11/12/2009
INSTRUCTIONS:
1) The paper contains FIVE questions
2) Attempt question ONE and any other THREE.
3) Question ONE carries 25 marks and the remaining FOUR 15 marks each.
QUESTION ONE.
a) Briefly explain the difference between the following terms as used in business.
1) Form Utility and Possession Utility.
2) Economic activity and Non Economic Activity.
3) Market environment and Micro environment.
4) A commercial bank and a financial intermediary.
5) Double Entry Book keeping and Accounting Equation. (10 marks)
(b) The Macro Environment includes different forms of environments that affect the way
business operate. Giving examples, List and explain these different environments that are
part of the Macro Environment. (8 marks)
(c) Explain the factors that determine the classification of the different forms of business
ownership. (7 marks)
QUESTION TWO
a) What do you understand by the term Business Finance? (2 marks)
b) Business finance sources can be classified according to ownership (Internal or external)
or according to repayment periods (short term of long term). List and Explain any three
sources of business finance that are long-term and external. (9 marks)
c) List the conditions under which businesses prefer using hire purchase as a source of
finance. (4 marks)
QUESTION THREE
a) Registered companies operate under the Company act that govern them. Discuss the
various classifications of these companies, clearly indicating the features for each class.
(8marks)
b) One of the functions of commercial banks is credit creation. Explain the process of credit
creation by banks.
(7marks)
QUESTION FOUR
a) Clearly distinguish between Book Keeping and Accounting. List the importance of each
of them
(10marks)
b) On 30th December 2008, the following balances were extracted from the ledger accounts
of Juma general stores. Creditors – 355,000, Motor Vehicles – 850,000, Long Term
Loans – 1,100,000, Cash at Bank – 15,000, Land and Buildings – 1,250,000, Owners
Equity – 950,000, Debtors – 250,000, Fixtures – 40,000. Draw up a balance sheet and
show the totals. (5marks)
QUESTION FIVE
a) The Central Bank of a country has many functions one of which is controlling credit in
order to maintain economic stability. Explain what you understand by controlling credit.
(3marks)
b) Explain the role of commercial banks in business activities in the economy.
(12marks)
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