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Business Studies Paper Two Question Paper

Business Studies Paper Two

Course:Secondary Level

Exam Year:2008

FRIENDS SCHOOL KAMUSINGA
KIMILILI

565/2
BUSINESS STUDIES
PAPER 2
TIME: 2½ HOURS

(MANG’U H. SCH. 2006)

INSTRUCTIONS
? Answer any five questions.
? All questions carry equal marks.

1. (a) Explain five assumptions of monopolistic competition. (10 marks)
(b) Containerization if one of the current trends in transport. Explain five advantages of containerization as a mode of transport. (10 marks)

2. (a) Identify five principles of insurance highlighting the significance of each to the insured. (10 marks)
(b) State and explain five factors that may limit the size of the firm. (10 marks)

3. (a) With the help of diagrams, distinguish between a movement a long and a shift in a supply curve. (10 marks)
(b) Outline five document which are required to be filed with the registrar of companies to facilitate the registration of a company. (10 marks)

4. (a) Explain five factors that may cause a change in a country’s terms of trade. (10 marks)
(b) A multi-national company is planning to launch its products in the local Kenya market. Highlight five factors that should be considered by the company when choosing an appropriate media through which to advertise its products. (10 marks)

5. (a) Discuss five factors that have led to the survival of small scale retailers despite competition from supermarkets. (10 marks)
(b) Mario intends to open a bank current account. Explain to him five merits of operating a current account. (10 marks)

6. (a) The balance sheet of Mumo Traders as at 31st October 2000 is given below.

Mumo traders
Balance sheet as at 31st December 2000
Shs Shs
Fixed assets
Land 1,000,000 Capital 4,700,000
Building 2,000,000 Net profit 300,000 5,000,000
Equipment 1,500,000
Furniture 500,000 5,000,000 Current liabilities
Creditors 570,000

Current assets
Stock 200,000 O/expenses 80,000 650,000
Debtors 200,000
Bank 200,000
Cash 50,000 650,000
5,650,000 5,650,000

Additional information
? Sales during the year amounted to sh. 2,000,000
? Stock on 1st January was sh. 100,000
? Gross profit margin was 20%

Calculate
(i) Current ratio (2 marks)
(ii) Gross profit mark up (4 marks)
(iii) Rate of stock turnover (4 marks)

(b) Ayub Traders maintains single entry records. The following cash booked summary was extracted from their records for the year ended 31st December 2001.

Cashbook
Particular Cash Bank Particular Cash Bank
Balance 1/1/01 1,960 38,800 Cash © 109,000
Receipts from debtors - 894,120 Trade creditors 13,840 634,900
Cash sales 14,960 - Rent and rates 81,320
Loan from bank - 41,000 Drawings 106,780 62,900
Bank (C) 109,000 Sundry expenses 3,440 33,840
Balance31/12/01 1,860 51,960
125,920 973,920 125,920 973,920

The following information was also available.

31/12/2000 31/12/2001
Trade creditors 98,920 102,820
Debtors 121,260 143,640
Rents and rates owing - 6,000
Rents and rates in advance 6,640 7,240
Motor van (at valuation) 57,000 57,000
Stock 224,260 261,420

Prepare a trading, profit and loss account for the year ended 31st December 2001. (10 marks)

Business Studies Paper Two Question Paper

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