Business Studies Paper 2 - Alliance High School Pre-Trial Examination 2018

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BUSINESS STUDIES
PAPER 2
MAY-2018
TIME: 2¹/₂ HOURS

ALLIANCE HIGH SCHOOL
PRE-TRIAL EXAMINATION 2018

INSTRUCTIONS TO CANDIDATES:

• This paper consists of 6 questions
• Answer 5 questions only

1.  
   1. Explain five challenges that may be experienced by a new entrepreneur (10 marks)
   2. A leading milk processing fim embarked on a vigorous campaign for their brand of milk. The graph below shows the sales volume in months from the first month of advertising. Explain five reasons for the trend from part marked a to part c. (10 marks)
      
      
2. 1. The following were the balances of Kikastar Traders as at 1^st January 2017. Cash Sh.40,000, bank overdraft Sh.17,000. During the month the following transactions took place.
      
      January 2^nd: Mutiso a debtor settled his account of Sh.32,000 by cheque of Sh.30,000
      4^th: Paid salaries amounting to Sh.16,000 by cash.
      10^th Deposited Sh 12,000 into the business bank account from the cash till.
      14^th Settled Wayua's account of Sh.40,000 and she was allowed a discount of 1% through a cheque.
      16^th Deposited Sh.56,000 in the bank from private resources,
      17^th: Sold goods for cash Sh.24.000.
      20^th Mutua, a debtor, settled his account by a cheque of Sh.16,000 having been allowed a discount of 2%.
      24^th: the cheque received from Mutiso on 2nd January was dishonoured.
      26^th: Received Sh.7.200 cash from Odhiambo.
      30^th: Banked all the available cash except Sh3200
      
      
   2. Describe the procedure of obtaining an insurance claim. (10 marks)
3.  
   1. Explain five advantages of using celebrities in product promotion (10 marks)
   2. Describe five money transfer facilities provided by the Commercial Banks (10 marks)
4.  
   1. Explain five ways that a country can use to correct a deficit in her balance of payments. (10 marks)
   2. Explain five Importance of warehousing to business. (10 marks)
5.  
   1. Explain five services that Kingsweet sugar wholesalers offer to sugar producers.
   2. Explain five benefits to a Country as a result of delocalization (10 marks)
6.  
   1. The accounts of Tatua Traders showed the following balances on 1 January 2018.
      
      

      	Sh.
      Cash	250,000
      Debtors	60,000
      Creditors	42,000
      Stock	30,000
      Bank loan	120,000
      Motor vehicle	310,000

      
      The following transactions took place during the month of January 2018.
      Jan 2: Bought stock Worth Sh 50,000 on credit
      Jan 3: Cash sales Sh. 80.000
      Jan 5: Received Sh. 20,000 cash from debtors
      Jan 10: Paid part of loan Sh. 70,000 cash
      Jan 12: Paid creditors Sh. 52,000
      Jan 16: Bought office furniture Sh. 45,000 cash
      Jan 20: Paid salaries Sh. 40,000 cash
      Jan 25: Deposited Sh. 100,000 into the bank
      
      Required: Open ledger accounts and record the above transactions and balance the accounts on 31^st January 2018
      
      
   2. Explain five ways in which communication enhances trading activities. (10 marks)