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Business Studies Paper One Question Paper
Business Studies Paper One
Course:Secondary Level
Institution: Kcse question papers
Exam Year:2006
FRIENDS SCHOOL KAMUSINGA
KIMILILI
565 /1
BUSINESS STUDIES
PAPER 1
2 HOURS
Answer all the questions in the spaces provided.
1. highlight four ways in which the study of Business studies would be if Importance in society( 4 marks)
a)
b)
c)
d)
2. Outline four limitations of using the expenditure a approach in measuring income of a country. ( 4marks)
a)
b)
c)
d)
3. Give four reasons why human wants are not easily satisfied. ( 4 marks)
a)
b)
c)
d)
4. Outline four features of Indirect production ( 4 marks)
a)
b)
c)
d)
5. Distinguish between deadweight and productive debt as used in public finance.
( 4 marks)
6. I) Define monopoly ( 1 mark)
ii) Give any three sources of monopoly power. ( 3 marks)
a)
b)
C)
7. state four characteristics of a good tax system. ( 4 marks)
a
b
c
d
8. Distinguish with the aid of a diagram between “a shift of”’ and “a movement along “ a curve ( 4 marks)
9. The following diagram represents a type of elasticity of demand for a product.
price
Quality
With reference to the diagram above,
a) Name the type of elasticity represented ( 1 mark)
b) Name two classes of products whose demand is associated with this type of ealasticity. ( 2 marks)
I
II
10. State four functions of money. ( 4 marks)
a
b
c
d
11. Highlight four reasons why businesses fail in Kenya. ( 4 marks)
a
b
c
d
12 Briefly explain how the following types of utilities are created. ( 4 marks)
a) Time
b)Place
c) Possession
d)Form
13 In the course of preparing his balance sheet as at 31 December 2004 Mary found that he had capital a mounting Sh. 120 000 in his business. During the year , investments totaled to Sh 50,000 while drawings were sh. 56,000. Calculate her intial capital as at 1st January 2004, If the Net profit was Sh 38,000. ( 3 marks)
14. The following are some of the source documents used in accounting , Invoice issued, Credit note issued, Cash sale slip and credit note received. Match each of the following books of original entry with the relevant source document. ( 4 marks)
Book of original entry Source document
A Cash book
B Purchase returns book
C Sales day book
D Sales returns book
15.The following information was extracted from the books of Mwalimu Traders as at 30 April , 2003
Sh
Cost of goods sold 334,200
General expenses 59,800
Profit margin for the period was 20%
Capital for the period was 1,300,000.
Calculate rate of net profit to capital. ( 5 marks)
16. For each of the following accounts , indicate by writing Dr or Cr the side of record for increase and decrease. ( 4 marks)
Type of account Increase Decrease
Capital
Revenue
Experience.
17. On 31st December 19-5 A. Patel books of accounts had the following Information.
Shs.
Gross profit 2,500
Carriage outwards 1,500
Rent income 2, 500
Discount allowed 1,800
Discount received 1,400
Commission income 2,600
Rent ( premise) 4, 000
Bad debts written off 1, 000
Required:
Prepare the profit and loss account for the period entered 31 December 19-5 ( 5 marks)
18 The following is an extract of a cash book.
Date 200 Particulars Cash Bank Date 200 Particulars Cash Bank
May2
12
20
28
Balance b/d
Sales
Were P
Sales Sh
W
20,000
120,000 Sh
X
50,000
May 6
18
22
30
Wages
Purchases
Rent
Balance c/d Sh
6,000
Y Sh
60 000
30,000
60,000 60,000 Z
Determine the figures represented by w,x,y,z. ( 4 marks)
W
X
Y
Z
19. For each of the following discounts , Indicate by writing Dr or Cr the side of profit and loss account in which it should be entered and give a reason in each case. ( 4marks)
Discount Side Entered Reason
a) Discount allowed
b) Discount Received.
20 In the spaces provided , state the type of error committed in each of the following transactions. ( 4 marks)
Transaction Type of error committed.
a) Motor vehicle sold on credit and recorded in sales journal.
b) A cheque for sh. 3000 received from Marso, debited in his account and credited in the bank.
c) Purchases of sh. 35 , 200 from a supplier recorded as sh. 53,200 in purchases journal.
d) Goods sold on credit to Sawe traders recorded in Same’s account.
21. State four incentives provided by the government to enhance delocalisation of Industries. ( 4 marks)
a
b
c
d
22. Highlight four factors that limits effective communication within a firm. ( 4 marks)
a
b
c
d
23. State four features of bonded warehouse. ( 4 marks)
a
b
c
d
24 State four ways in which transport has helped in exploitation of natural resources in Kenya. ( 4 marks)
a
b
c
d
25. Setting of objectives is very important in management . Highlight four characteristics of good objectives. ( 4 marks)
a
b
c
b
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