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Form 4 Business Studies Paper 2 Term 2 With Answers Question Paper
Form 4 Business Studies Paper 2 Term 2 With Answers
Course:Business Studies
Institution: Form 4 question papers
Exam Year:2016
KENYA CERTIFICATE OF SECONDARY EDUCATION 2016
BUSINESS STUDIES
PAPER 2
TIME 2 HRS 30 MINS
INTRODUCTIONS:
I) Write your name and index no.
II) Sign and write the date of exams
III) This paper consists of 3 printed pages
IV) English language should be used
v) Answer only five questions from this paper
VI) All questions carry equal marks.
1. a) Explain 5 reasons why small firms have continued to do well despite the stiff competition from the big firms.
(5 marks)
b) You have been provided with the following items of Kakuro Traders on 1st May 2011
Fixtures and fittings--------890,000
Cash at bank-----------------160,400
Cash in hand----------------100,700
Debtors---------------------50,200
Creditors------------------70,000
Furniture-----------------98,000
Motor vehicles------------300,000
Stock-------------------80,000
The following transactions took place in the month.
Sold stock valued at valued at 32, 000 for 30, 000/- by cash.
Exchanged the motor vehicle with a tractor valued at 360, 000
Debtors paid by cheque 25, 400
Paid the creditors by cash 40, 400
Withdrew from bank for office use 60, 000/-
Bought stock on credit for 16, 700/-
Got a loan from K.C.B 140, 000/-
Money deposited in the bank
Sold stock valued at 10, 000/- for 13, 400: 3, 400 received in cash the rest to be paid later.
Prepare a balance sheet after the above transactions
(10 marks)
2 a) Supply curve in a certain market have shifted to the left.
(i) In well illustrated diagram show the new equilibrium points.
(5 marks)
(ii) Explain 5 reasons that could have lead to the shift of the supply curve to the left.
(5 marks)
b) Explain 5 new trends in banking in Kenya today.
(10 marks)
3a) Describe 5 features of debentures.
(10 marks)
b) Explain 3 advantages and 2 disadvantages of using a bill of exchange as a mean of
Payment
(10 marks)
4 a) In evaluating a business opportunity, there are factors you but into account. Explain 5
such factors under business consideration.
(10 marks)
b) Explain 5 reasons why an organization should not use landscape office layout
(10 marks)
5a) Explain 5 factors that determine the fertility of a country.
(10 marks)
b) Explain 5 principles that should govern / public expenditure.
(10 marks)
6. a) Explain five factors that determine the premiums paid in property insurance.
(10 marks)
b) Record the transactions below in their appropriate books of original entry.
Sept 1st credit sales to June 120, 000/-
Sept 2nd credit not issued to Kim traders 8, 000/-
Sept 3rd credit purchased from Ndolo wholesalers 190, 000
Sept 4th credit not received from Ndolo traders 1000/-
Sept 5th invoice sent to fadhili 80, 000
Sept 6th received an invoice from Tembo wholesalers 135, 000/-
Sept 7th fadhili returned goods worth 5, 000 as they were defective
Sept 8th credit not received from Tembo 2000/-
Sept 9th credit purchased from Dan worth. 70, 000/-
Sept 10th invoice issued to Mbiki amounting to 72, 000/-
Sept 11th sold old furniture on credit to Sussies worth 45, 000/-
Sept 12th bought a car on credit from C. M. C Worth 295, 000
(10 marks
Marking Scheme/Answers
KENYA CERTIFICATE OF SECONDARY EDUCATION 2016
BUSINESS STUDIES PAPER 2
MARKING SCHEME
1 a) Why small firms have continued to do well
- They are easily to manage
- They are easy to start/ few legal is required
- They have personal contact with customer
- Require little capital to start
- They sell in small quantities
- They are flexible
- The risks involved are low
- Have low running cost
b) KAKURO
BALANCE SHEET AS AT 30th MAY 2011
Fixed Assets-----------------Capital------1, 670, 700
Fixture & Fittings--80, 0000
Tractor--360, 000-------Long term liabilities
Furniture--98, 000-------Loan KCB--140, 600
Current Assets------------------------Current liabilities
Stock--54,700---------Creditors--------46, 700
Debtors--34, 800
Bank--265, 800
Cash --154, 100
----------509, 400
----------1,857, 400 1, 857, 400
2. (a)
(ii) Causes of shift to the left
- Poor technology
- Withdrawal of some firms
- High cost of production
- Unfavorable weather
- Unfavorable government policy e,g low subsidy e,g high tax
- Lack of factors of production
- Future expectation of higher prices
- Industrial action/ strike/ go slow.
2 b) trends in banking
- High use of credit cards
- Mobile banks – use of vehicle
- Customer care services
- Pesa point money service
- A. T. Ms
- Increase use of computer/ technology
- Change in the features of various types of accounting e,g…………………………….
- M- Banking / E banking e,g Top up suing mobile.
NB the points marked may have several points only one should be awarded 5 well explained points.
3a) Features of Debentures
- Are loan capital
- Usually refundable
- Earns interest
- Interest earned is fixed
- Interest must be paid whether the company is making profit or losses.
- Holders are …………………./creditors
- Can be secured or unsecured
- Don’t have a voting right
- Paid divided before ordinary share and preference shares.
3b) Advantages of using a bill of Exchange.
- It can be endorsed
- Payment date is determined
- Signing ,acceptance makes it legally binding
- Can be discounted.
c) Demerits of bill of exchange
- Cash may not be readily available
- In discounting may involve costs ie Discounting fee
- May not acceptable by other parties
4a) Factors to consider when evaluating a business failing under business consideration
- Availability of market / market gap/niche
- Technology required
- Raw material
- Government policy
-Capital requirement
- Competition
- Infrastructure development
- Room for expansion
- Impact on the environment
4b) Why an organization should not use landscape office layout.
- Noise disruption from machine and other workers
- Expensive to construct
- There is no privacy for seniors
- Lacks confidentiality
- Inclined to beauty that creating a good environment for working
- May be expensive to maintain.
5a) Determinants of fertility
- Age of the population
- Gender/sex
- Barrenness in the community
- Culture of people/ Region
- Marriage rate
- Importance of children to parents
- Level of education
- Government policy
5b) Principle governing public expenditure
- Authorization
- Maximum social benefits
- Economy
-Flexibility
- Accountability/ proper financial management
6a) Factors determining premiums to be paid on property insurance
- Value of the property
- Risks covered
- Duration/ time/ period of the policy
-Extent of previous losses
- The location of the property ie is it high risk area.
6b) Sales Journal
DATE--------DETAILS----INVOICE--LF---AMOUNT
Sep 1st-----Jane----------------SL---120, 000
Sep5th-----Fadhili--------------SL---80, 000
Sep10------Mbeki----------------SL---72, 000
Total posted to the Sale A/c In the Gl Cr 272, 000>
RETURN INWARDS/ SALES RETURN JOURNAL
DATE--------DETAILS---CREDIT NOTE---LF----AMOUNT
Sep 2nd-----Kim-------------------SL------8,000
Sep 7th-----Fadhili---------------SL------5,000
Total posted to sale return A/C Dr.13,000
PURCHASES JOURNAL
DATE---------DETAILS------INVOICE----LF------AMOUNT
SEPT 3------NDOLO-------------------PL----190, 000
SEPT 6-----TEMBO--------------------PL----135, 000
SEPT 9-----DAN---------------------PL-----70, 000
Total posted to the purchases a/c in the GL Dr 395,000
RETURN OUT/ PURCHASES RETURN JOURNAL
DATE------DETAILS-----CREDIT NO.-----LF-----AMOUNT
SEP 4-----NDOLO---------------------PL------1000
SEPT 8----TEMBO---------------------PL-------2000
Total posted to the return outwards a/c in the GL(Cr) 3000
GENERAL JOURNAL/JOURNAL PROPER
DATE----------DETAILS ------F-----DEBIT---CREDIT
SEPT 11-----Sussie---------------45, 000
-------------Furniture--------------------45, 000
------------Sale of furniture on credit
Sept 12-----Motor Vehicle --95,000
------------CMC-------------------------295, 000
----------Purchase of a M/V on credit
20 x 1/2 = 10 marks
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