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Form 4 Business Studies Paper 1 Term 2: Mock 2016 With Answers Question Paper
Form 4 Business Studies Paper 1 Term 2: Mock 2016 With Answers
Course:Business Studies
Institution: Form 4 question papers
Exam Year:2016
Business Studies Form 4
Mock Examinations 2016
Paper 1
1. State the type of utility created by each of the following activities. (4 marks)
i) Delivering milk to customer
ii) Keeping money in the bank
iii) Selling bread to students
iv) Making uniform for students
2. List four items that are considered when measuring the national income of a country using the expenditure approach. (4 marks)
3. Outline four roles of International Monetary Fund (I.M.F). (4 marks)
4. Highlight four disadvantages of using internet as a means of communication. (4 marks)
5. Outline four causes of cost – push inflation.
6. State four disadvantages of a monopoly market structure. (4 marks)
7. State four negative effects of unemployment. (4 marks)
8. In the course of preparing his balance sheet as at 31st December 2010, Omondi found out that he had capital amounting to Kshs. 120, 000 in his business. During the year, the investment amounted to Kshs. 50, 000, while monthly drawing were KShs. 5, 000. Calculate his capital as at 1st January, 2010 if the profit was Kshs. 38, 000. (4 marks)
9. State four ways that the government can use to service its public debt. (4 marks)
10. Describe four challenges encountered in satisfaction of human wants (4 marks)
11. State four reasons why it is necessary for the government to carry out population census.
(4 marks)
12. state four benefits that Kenya will reap after the completion of the Lamu Port and Lamu South Sudan – Ethiopia Transport Corridor (LAPSSET) project whose construction is underway. (4 marks)
13. Highlight four reasons why employers are expected to provide their employees with insurance cover. (4 marks)
14. Outline four measures to be taken by a business to improve internal business environment. (4 marks)
15. Highlight four factors to consider when deciding on an ideal office layout. (4 marks)
16. State four negative effects of economic development. (4 marks)
17. State four factors that inhibit entrepreneurial development. (4 marks)
18. The following diagram represents the demand and supply of a commodity
State four effects of fixing maximum price at Po. (4 marks)
19. State the major use of each of the following documents. (4 marks)
i) Certificate of Trading
ii) Certificate of incorporation
iii) Memorandum of Association
iv) Article of Association.
20. Highlight four factors that a producer would consider when choosing a distribution channel. (4 marks)
21. Identify four documents used in the delivery process in home trade. (4 marks)
22. Outline four circumstances under which a producer would not require a lot of warehousing space. (4 marks)
23. From the following transactions, open the relevant ledger accounts (4 marks)
i) 1/1/2010 sold goods on credit for Kshs.15, 000
ii) 2/1/2010 Bought goods on credit for Kshs.5, 000
iii) 3/1/2010 Paid creditors Kshs.3, 000 /= by cheque
iv) 4/1/2010 Received a cheque of Kshs.2, 000/= from a debtor.
24. State four factors that influence the prices of shares traded at Nairobi stock exchange.
(4 marks)
25. The following information relates to Liston Traders for the period ended 31st march 2012.
Opening stock sh.40, 000
Sales sh. 100, 000
Closing stock 25% on cost of sales
Mark – up 25%
By clearly calculating gross profit and purchase, prepare a trading account. (4 marks)
Marking Scheme/Answers
Business Studies
PAPER 1
MARKING SCHEME
1. – Place utility
- time utility
- Possession
- Form utility
2.
- Expenditure on capital goods
- Government expenditure
- Net income from abroad (exports – imports)
- Taxes
- Subsidiaries
- Depreciation
3.
- Offer loans to members countries
- Give technical advices and support
- Maintenance of stable exchange rate
- Give member countries debt receipt
- Provide sufficient international liquidity
- Promote consultation and co – operation
- Assisting member countries with balance of payment deficits
4.
- Information may not be secure since other people may access it.
- Information can be diverted by competitor who know the password
- Computer may be invaded by virus that will interfere with computer programme
- Could be used to transit harmful information e.g terrorism, drugs and pornography
- It may be slow (taking longtime to access information)
- One needs to be computer proficient/ literate.
- Computer require electricity
5.
- Rise in wage and salaries
- Increase in profit margin
- increase in indirect taxes
- Increase in cost of inputs other than labour
- Reduction in subsidies
6.
- Operate at access capacity i.e below optimum capacity
- Charge higher prices
- Poor quality goods and services,. Limit variety of goods in the market/ lack of freedom of choice
- May limit the output (create shortage)
7.
- Labour increase is lost as it cannot be stored
- Increased social evils and crime rate
- High stress level leading to aggression
- Reduces savings and investments
- Increase the dependency ratio
- Leads to low standards of living/ poverty
- Encourages brain drain
- Increases corruption
8.
- C.C = I.C + P + I – D
- I.C = C.C – PI +D
- I.C = 120, 000 + 60, 000
- I.C = SH 92, 000
9.
- Sale of government property
- Borrowing from other sources
- Sales of shares held in business
- Budget allocation
- Negotiating for write offs
10.
- Too many to be fully satisfied
- Recourses required are scare
- Some are complimentary and attract other wants
- Some are habitual are hard to break
- Are repetitive hence cannot be satisfied and once for all
- They are competitive hence don’t give way to each other
Nb/ do not accept general characteristics of human wants. The change must be brought out.
11.
- Statists obtained is used for economic planning
- Statists is used to distribute national resources e.g. CDF, Bursary etc.
- Statists obtained is used to determine boundaries i.e districts, countries etc.
- Statists obtained is used to determine per capita income.
- Statists is used to establish population structure
- Statists is used to determine the number of security personnel for adequate provision of security
12.
- Reduce over dependence on Kenya’s main port of Mombasa.
- It will open up under developed Northern Frontier region
- Increase trade co – operation between Kenya and neigbouring countries
- Will help reduce cases of banditry/ insecurity in exit points
- Will enhance the creation of job opportunities
13.
- It is legal requirement
- To motivate workers to provide quality goods and services
- To cater for their medical expenses when they are hospitalized
- To ensure that employees have financial security later after retirement
- To encourage the saving habit among employees
14.
- Improve the workers welfare
- Develop a workable business structure.
- Develop and adopt an effective business culture.
- She smart objectives
- Avil the necessary resources to be used by business e.g. finance
- Apply proper management policies and styles
- Train workers to get knowledge skills and experience needed for the job.
15.
- There should be case of movement
- There should be ease of flow of work
- There should be ease of coordination of staff/ work
- There should be no obstruction of light and verification and ventilation by furniture and equipment.
- There should be ease of communication
16.
- May lead overcrowding due to rural – urban migration
- May lead to high levels of environmental degradation and pollution
- Adoption of foreign values
- May lead to emergences of social evil such as prostitution and crime in the urban centres
- Stretching of social amenities in urban centres such as housing medical facilities, educational facilities etc.
17.
- Unfavorable government policies e.g. high taxes
- Poor infrastructure e.g. poor roads and communication
- Lack of relavant education and skill
- Inability to cope with competition
- Political instability
- Shortage of resources i.e capital human resources etc.
18.
- There will be excess demand
- There will be less supply in the market
- There will be boarding of goods
- Black situation may development/ some traders will secretly sell at higher price
- Some suppliers will be unwilling to supply at low price
19.
- Certificate of trading = authorizes the business to commence its business activities
- Certificate of incorporation = shows that a company has been duly registered as a separate legal entity
- Memorandum of association = Shows the relationships between company and outsiders
- Articles of association = shows the rules and regulation to be used in the internal organism/ operation of a company
20.
- Nature of the product
- Nature of the market
- Conveniences of an intermediary
- Resources and size of the firm
- Competitors
- Government policy
21.
- Delivery note
- Packing note
- Consignment note
- Advise note
- Invoice
22.
- When dealing with perishable goods
- When demand is very high
- If located near the market
- If he deals with goods that require order/ if goods are manufacture on order
- If goods are of high value
- Where there is middlemen with warehouses
-Nb/ answers to begin with when, where in case or if.
23.
N/B
- There must be date
- Label Dr. and Cr.
- Correct side
- Correct amount and heading
24.
- The demand and supply of the shares
-Recent performance of the company
- Popularity of the company’s products
- General performance of the economy
- Political stability
- Company’s level of social responsibility
- Changes made in the management of the company
- Announcements or rumours of mergers
25.
- Opening stock sh. 40, 000
- Sales shs. 100, 000
- Closing stock 25% on cost of sales
- Mark – up 25%
- By clearly calculating gross profit and purchases, prepare a trading account
i) Gross profit
mark up = 1/4 margin = 1/5 gross profit 1/5 , 100, 000 = sh. 20, 000
ii) purchases for the year
C.O.S = SALES g.p 100, 000 – 20, 000 = sh 80, 000
Purchase = C.O.S + closing stock – opening stock
= 80, 000 + 20, 000 – 40, 000 = shs 60, 000
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