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Form 4 Business Studies Paper 1 Term 2 Question Paper
Form 4 Business Studies Paper 1 Term 2
Course:Business Studies
Institution: Form 4 question papers
Exam Year:2016
KENYA CERTIFICATE OF SECONDARY EDUCATION 2016
BUSINESS STUDIES
PAPER 1
TIME: 2 HRS
Form 4
INTRODUCTIONS
a) Write your name and Index number
b) Sign and write the date of the exam
c) Answer all question in the spaces provided
d) This paper consists of 11 pages
e) English language should be used.
1. Distinguish between the following types of retailers
(4 marks)
| Tied shops | Chain stores |
| a) | a) |
| b) | b) |
| c) | c) |
| d) | d) |
2. Identify the original book of original entry the following transaction would be recorded.
Transaction -----------------------------------Book of original entry
a) Sales of furniture on credit ----------------------------------
b) Payment of rent by cash-----------------------------------------
c) Receipt of a cheque from a debtor---------------------------------
d) Return of goods initially bought---------------------------------------
On credit by customers.
(4 marks)
3. Highlight 4 types of information you can get from an Article of Association.
(4 marks)
a)
b)
c)
d)
4. State 4 non monetary techniques that can be used control high inflation in country.
(4 marks)
a)
b)
c)
d)
5. Outline 4 circumstances that can lead to use of paging as a means of communication.
(4 marks)
a)
b)
c)
d)
6. Describe 4 types of direct taxes.
(4 marks)
a)
b)
c)
d)
7. Record the following transaction in a three column cash book and balance it off.
(4 marks)
June 1st 2000 started trading wit 25, 000 cash in hand and 30, 000 bank (Cr)
June 2nd 2000 settled the following accounts by cash after deduction 10% discount.
Akumu 5000/-, Bernard 7000/-
June 3nd paid for water Cheque 3000/-
June 4th deposited 10,000/- cash into bank
June 5th received a cheque of 9, 000/- from Tim having allowed him a discount of 10%
June 6th cash sales directly bank 15, 200/-
June 7th deposited all cash into bank leaving a balance of 1,000/=
8. Highlight 4 problems encountered in the implementation stage of development plans
(4 marks)
a)
b)
c)
d)
9. You have been provided with the following items of Pesa Moja Wholesalers
Land-----------------------700,000
Bank overdraft--------------40,000
Cash------------------------100,000
Debtors---------------------43,000
Creditors-------------------34,600
Stock-----------------------73,300
3 yr loan-------------------160,000
2 yr loan-------------------25, 000
Furniture------------------200,000
Calculate:
a) Capital employed
(1 mark)
b) Current ratio
(1 mark)
c) Liquid ratio
(1 mark)
d) Borrowed capital
(1 mark)
e) Owners Equity
(1 mark)
10. State 4 reasons why Nelly a domestic worker should not open a current account.
(4 marks)
a)
b)
c)
d)
11. Outline 4 advantages of having an I.C.D. (Inland container depot)
(4 marks)
a)
b)
c)
d)
12. Kamugut Co Ltd would wish to use posters for advertising. Highlight 4 challenges they are likely to face.
(4 marks)
a)
b)
c)
d)
13. State the type of marine policies described below.
(4 marks)
----------------------------------------------Marine policies
a) Apply where several insurance companies have……………………………
Insured a particular ship against same risk ………………………………………
b) Cover the ship against loss or damage. …………………………………….
c) Under this policy shippers pay a lumpsum to cover several ships………………………..
d) Cover a ship on a journey and for a particular period of time…………………………………..
14.Highlight 4 external dis – economies of scale
(4 marks)
a)
b)
c)
d)
15. Outline 3 basic by which a monopolist is able to separate market for price discrimination.
(3 marks)
a)
b)
c)
16. Highlight 4 advantages a country will have if it is over populated.
(4 marks)
a)
b)
c)
d)
17. State 4 problems associated with calculation of national income using the output approach.
(4 marks)
a)
b)
c)
d)
18. Identify whether the following are Internal or External business environmental factors.
(2 marks)
a) Human resources
b) Generic completion
c) Business culture
d) Political
19. You have been provided with the following data from Kalu Traders
(5 marks)
Stock on 31/12/2010------------15,300
Stock on 1/1/2010--------------14,200
Sales--------------------------20,100
Purchase-----------------------19,100
Carriage------------------------5,000
Return Inwards------------------1,000
Return Outwards-----------------700
1/5 of carriage relates to sales
Prepare Kalu Trading account.
(4 marks)
20. State 4 disadvantages of bonded warehouse
(2 marks)
a)
b)
c)
d)
21. Outline 4 measures that can be taken to improve the volume of a country’s exports.
(4 marks)
a)
b)
c)
d)
22. State 4 functions played by consumer organizations in Kenya.
(4 marks)
a)
b)
c)
d)
23. Define the following terms
(4 marks)
a) Privatization
b) Dumping
c) Globalization
d) Franchising
24. Write the following in full as applicable in business studies.
(4 marks)
a) F. O. S. A………………………………………
b) W.T.O …………………………………………………
c) C. I. F ……………………………………………
d) C.P.I …………………………………………………
25. Record the following transactions in relevant ledger accounts. No balancing is required.
(5 marks)
March 1st Bought goods worth 35,000 from Wahu paying 5, 000 cash the rest to be paid later.
March 2nd Withdraw cash 10, 000/- and stock with 2, 000 for personal use.
March 3rd received commission by cash 1, 800 and paid commission by cheque 8000/-
Marking Scheme/Answers
KENYA CERTIFICATE OF SECONDARY EDUCATION 2016
BUSINESS STUDIES PAPER 1
MARKING SCHEME
1.
| Tied Shops | 1Chain Stores |
| Sell goods from one manufacturer | Sell goods from different manufactures |
| Manufacturer advertise for the tied shops | The business does its own advertisement |
| Manufacturer sets the price for the goods | The business sets their own prices |
| Owned and controlled by manufacturer | Are not owned nor controlled by the manufacturer |
| May be small scale in operation | Are large scale in operation |
| Must get authority from manufacturer to dial with other products from other producers | Does not need authority from the manufacturer to deal with other goods from other producers |
2. Transaction-------------------Book of original entry
a) Sales of furniture on credit---General Journal/ Journal proper
b) Payment of rent by cash-----Cash payment Journal/ Three column cash book
c) Receipt of cheque from a debtor---Cash receipt Journal / three column cash book
d) Return of goods initially bought on credit by customers----Return Inward/ Sales return journal
3. Information in Articles of Information
a) Rules governing elections
b) Ways of calling meetings
c) Rights of each director
d) Rights of shareholder
e) Rules governing internal audit of accounts
f) Duties of the directors
4 Non monetary ways of controlling inflation
- Price control
- Wages/ salary guidelines
- Reduction of public expenditure
- Increase in production of goods
-Rationing of goods
- Increase in taxation/ Direct taxation
- Reduce exportation of goods
5. Circumstances leading to use of a pager
-To locate staff quickly/ in hospital/ factory
- Used within a certain radius/short distance
- can be used in case of an emergency.
- When sending S.M.S short message service.
6. Types of direct taxes.
- Pay as you earn /personal income tax
- Corporate tax
- Stump duty
- Estate/ Death tax
- wealth tax
- Capital gains tax
- Capital transfer tax
7.
8. Problems at implementation stage of development plans
- Lack of inadequate resources
- Dependence on donor funds/not reliable
- Natural disasters/ calamities
- Lack of support from the locals/ failure to include the local
- Over ambitious plans/ not workable
- Lack of political will
- Lack of co operation among the various departments/ parties.
9. Capital employed = FA + WC
= 700, 000 73, 300 40, 000
200, 000 43, 400 34, 600
100, 000
= 900, 000 + 142, 100
= 1, 042, 100
Or
Capital Employed = CO + BC
857, 100 + 185, 000
1, 042, 100
b) Current ratio = CA:CL
= 100, 000----40, 000
43, 400-----34, 400
73, 300
= 216, 700: 76, 400
= 2: 8 : 1
c) Liquid ratio = CA - stock :---------CL
216, 700 – 73, 300---76, 400
1: 88 : 1
Or 1: 9 : 1 or 2 : 1
d) Borrowed Capital = Total long term liabilities
160, 000 + 25, 000
= 185, 000
e) Owners Equity A – L
= 700, 000-------------40, 000
100, 000--------------34, 000
43, 400--------------160, 000
73, 300-------------25, 000
200, 000
1, 116, 700----------254, 600
= 857, 100
10. Why Nelly should not use current account
- length procedure for opening
- No interest on deposit
- High initial deposit
- There is ledger fee
- Does not encourage savings
11. Advantages of I. C. D – Inland container Deport
- Solve the problem congestion at the main port
- Save on transport for owners of goods in the inland
- There is efficient handling of Cargo
- For those in the inland they don’t have to move cargo up the main port/saves.
12. Challenges of using posters
- Many be destroyed by rain/weather/wind
- It is silent/does not show motion
- Can be vandalized
- Not ideal from those with seeing challenges
- Only those who pass where they are will get the advertisement
13. a) Apply where several insurance companies have Insured a particular ship against same risk composite
b) Cover the ship against loss or damage. Marine Hull Policy
c) Under this policy shippers pay a lumpsum to cover several ships Floating policy
d) Cover a ship on a journey and for a particular period of time Mixed policy
14. External dis – economies of scale
- Scramble for raw material
- Inadequate land for expansion
- Scramble for labour
- High competition in the market
- Can be targeted during wars.
- High pollution in such areas
15. Basis for monopolies in separation of market through price discrimination
- Geographical – ie market are in separate regions
- Time – High price for peak and low price for off peak
- Income – Those in higher income bracket the buy at high price while those in low income pay less.
17. Merits of over population
- Wider market
- better utilization of resources
- Pool of labour promote creativity
- Encourage investment
- Promote labour
- Defence is guaranteed
- Economy to provide public services/ utilities.
18. a) Human resource-----------Internal
b) Generic competition-----External
c) Business culture-------Internal
d) Political--------------External
KALU TRADERS
TRADING ACCOUNT
FOR THE YEAR ENDED
Dr.-----------------------------------Cr.
Opening stock----14, 200-----Sales---20, 100
Add purchases--19, 100--------------1, 000
Add carriage in--4, 000-------------9, 100
Less Return Out--700---------gross loss--2, 200
Net Purchases----22, 400
Goods available for sales--36, 600
Less closing Stock--------15, 300
Cost of sales--------------21, 300
----------------------21,300----21,300
20. Disadvantages of bonded warehouse
- Withdrawing goods in bits leads to higher custom duty
- Cost of hiring are incurred by the importer.
- Failure to pay custom duty
- May lead to auctioning of cargo
- Damage to goods is a high possibility
- Goods mix up can occur where different cargo are stored.
21. Measures to improve exports
- Custom draw back
- Export compensation
- Subsidizing local firms
- Use of E.P.Z
_ lobbying for removal of trade restriction.
- Through commercial Attachees
- Devaluation
22. Functions of consumer organizations
- deal with complaints
- Ensure weights/ measurement of goods are accurate
- Ensure health/ safety standards are adhered
23. Privation – changing movement/ state owned firms to public limited companies
Dumping – Importation of cheap goods into the country that threaten local firms
Globalization – Firms being able to conduct business activities in any part of the world
Franchising – Firm grants another right to another to distribute or band product using their name.
24. F.O.S.A – Front office saving Account
W. T. O – World Trade Organization
C. I. F – Cost Insurance and Freight
C.P.I – Consumer Price Index.
25. Dr.--------------------PURCHASES A/C----------Cr.
March 1st cash-------------5,000
March 1 creditor Wahu------30,000
Dr-------------------------CASH /A/C-------------Cr. --------------------March 1st Purchases--------5,000
Dr.------------------Creditors Wahu------------Cr.
---------------------March 1st purchases-------30, 000
Dr.------------------CASH A/C------------------Cr.
March 3rd Commission--1, 800 March 1st purchases--5, 000
---------------------March 2nd Drawings----------10, 000
---------------------March 3rd Commission-------8, 000
Dr-------------------STOCK A/C-------------------Cr
----------------------March 2nd Drawings--------2,000
Dr.------------------DRAWINGS A.C---------------Cr
March 2nd Cash--------10, 000
March 2nd stock------2, 000
Dr.------------------COMMISSION A/C
March 3rd Bank--------8000 March 3rd---Cash-----1, 800
Dr--------------------BANK A/C------------------Cr.
-----------------------March 3rd commission------8,000
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