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Business Studies Paper Two Question Paper

Business Studies Paper Two

Course:Secondary Level

Exam Year:2007

FRIENDS SCHOOL KAMUSINGA
KIMILILI
BUSINESS STUDIES
PAPER 2
FORM 3 CAT 2 TERM 1 2007
TIME: 2½ HOURS

INSTRUCTIONS
• Answer all five questions in the stationery provided.

1. (a) Explain five benefits of publicity as a method of production. (10 marks)
(b) Highlight five good qualities of a good salesperson. (10 marks)

2. (a) Wanyoki, a newly employed school leaver intends to take a life assurance policy. Give five reasons why it would be advisable for him to take an endowment policy instead of a whole life policy. (10 marks)
(b) Discuss five principles of insurance. (10 marks)

3. (a) The balance sheet of Tamu Tamu Enterprises as at 1st May, 2004, is given below

TAMU TAMU ENTERPRISE
BALANCE SHEET
AS AT 1ST MAY, 2004
Asset Sh Liabilities Sh
Equipment 19000 Capital
Loan
Creditors 71000
120000
19000

210000
Delivery van 120000
Stock 36000
Debtors 22000
Cash at bank 13000
210000

The following transactions took place in the business.

May 2: Paid creditor by cheque sh 9000.
May 3: Debtors paid sh 18000 by cheque and shs 2,000 in cash.
May 4: The proprietor deposted sh 50,000 into the business bank account from a cash prize won in a competition.
May 5: Bought equipment sh 6000 and paid by cheque.
May 6: Paid a creditor sh 7500 by cheque.

Draw up the balance sheets of the business after the transactions above showing fixed assets, current assets, long-term liabilities and current liability. (10 marks)

(b) Explain five shortcomings of self-employment. (10 marks)

4. (a) Explain five differences between public company and a public corporation.(10 marks)
(b) Highlight five differences between a departmental store and multiple stores.(10 marks)

5. (a) Discuss five advantages of public warehouses. (10 marks)
(b) Explain five reasons why parastatals perform poorly in Kenya. (10 marks)

Business Studies Paper Two Question Paper

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