BUSINESS STUDIES PAPER 2 - 2017 KITUI MOCK EXAMINATION

Questions

1.  
   1. Discuss five causes of unemployment in Kenya today.  (10 marks)
   2. Explain five roles of transport to the economy of a country.   (10 marks
2.  
   1. Discus five roles of public finance.   (10 marks)
   2. Explain five barriers to effective communication.  (10 marks)
3.  
   1. Highlight four problems likely to be faced by consumers when a firm operates as a Monopoly. (8 marks)
   2. The following trial balance was extracted from the books of Tumaini Traders as at 30^th June 2015.
      

      Details	DR	CR
      Stock on 1st July 2014	180,000
      Debtors and creditors	195,000	120,000
      Discounts	75,000	96,000
      Sales and purchases	1,200,000	1,740,000
      Premises	1,630,000
      Carriage outwards	24,000
      Returns	60,000	150,000
      Fixtures and fittings	300,000
      Carraige inwards	100,000
      Machinery	600,000
      Commissions	48,000	42,000
      Capital		2,454,000
      Wages and salaries	90,000
      Cash in bank	420,000
      Rent income		110,000

      
      Additional information
      Closing stock was valued at sh 210,000.
      
      Required
      1. Prepare a trading, profit and loss account for the year ended 30^th June 2015. (8 marks)
      2. Prepare Tumaini Trades balance sheet as at 31^st June 2015.(4 marks)
4.  
   1. Explain five ways in which the nature of a commodity may influence its distribution. (10 marks)
   2. Outline five differences between a public limited company and partnership form of a business.  (10 marks)
5.  
   1. Explain five reasons for continued existence of small firms alongside large firms.  (10 marks)
   2. Explain five benefits enjoyed by a firm that has expanded its scale operations.   (10 marks)
6.  
   1. Explain five instruments of monetary policy a central bank may use to reduce money supply in a country. (10 marks)
   2. On January 2005 Njeri traders had the following transactions.
      2005
      January      
      • 1: Started business with capital sh.80,000 cash and sh.200,000 at the bank
      • 2: Bought furniture by cheque sh.20,000
      • 3: Bought goods by cheque sh.70,000
      • 8: Received cash from Chemai sh.19,000 having allowed him a cash discount of  sh.1,000
      • 9: Paid the following accounts by cheque:- Muthoni sh.30,000, Salim sh.15,000 and Kiptoo sh.26,000 having deducted 10% discount in each case
      • 12:Cash sales sh.14,000, paid for postage in cash sh.2,000
      • 16 Received a cheque of sh.27,500 from Ngondi in full settlements of his account of sh.30,000
      • 20:Received cheque of the following amounts from: Adijah sh.18,000, Adongo sh.28,800 and Maranga sh.12,600. The business had allowed each of them a discount of 10%
        
        Required:
        
        Prepare a three column cashbook and balance it off.      (10 marks)