Business Studies Questions and Answers - Form 2 Term 1 Opener Exams 2021

1. State the two classifications of trade (1mk)
2. List four features of supermarkets (4mks)
3. What is the difference between open cheque and crossed cheque. (4mks)
4. State four sources of capital for sole proprietorship form of business. (4mks)
5. Give the two types of partners according to the role they play. (2mks)
6. Differentiate between general and limited partners. (2mks)
7. Define a co-operative society.( 1mk)
8. Explain two principles of co-operatives. (4mks)
9. State four advantages of SACCOs. (4mks)
10. Differentiate between redeemable and irredeemable debentures. (4mks)

Marking Scheme

1. State the two classifications of trade(1mk)
   1. Home trade
   2. Foreign trade
2. List four features of supermarkets (4 mks)
   1. Offer- service facilities
   2. Prices of goods are fixed
   3. Sell at comparatively low prices
   4. Don’t offer credit facilities (1×4, Any other relevant answer)
3. What is the difference between open cheque and crossed cheque (4mks)
   • An open cheque is the one that can be cashed over the counter while a crossed cheque is the one that can only be deposited in the payee’s bank account,thereby increasing the amount of money therein.
4. State four sources of capital for a sole proprietorship form of business
   1. Leasing and renting out property
   2. Inheritance
   3. Donations from friends and relatives
   4. Credit buying (1×4, Any other relevant answer)
5. Give the 2 types of partners according to the role they play (2 mks)
   1. Active
   2. Dormant
6. Differentiate between general and limited partners (2 mks)
   • General partners have unlimited liability while limited partners have limited liability
7. Define a co-operative society(1mk)
   • A group of people who come together mainly to provide convenient and efficient services to its members
8. Explain two principles of co-operatives
   1. Voluntary and open membership-Membership is open and voluntary to any person who has attained 18 years of age. No one should be denied membership due to social, tribal, political or religious differences.
      He/she is also free to leave the society at will
   2. Co-operation with other co-operatives –Co-operatives must learn from each others’ experience since they have a lot in common in the local, national and international levels. (2×2, Any other relevant answer explained)
9. State four advantages of SACCOS
   1. Enables members to save
   2. Members can obtain loans at low interest rates
   3. May offer banking facilities through their front office services
   4. Offer education to members (1×4, Any other relevant answer )
10. Differentiate between redeemable and irredeemable debentures(4mks)
    • Redeemable debentures are those that can be bought back by the company within a specified future period while irredeemable debentures are those that can only be redeemed when the company is being dissolved, otherwise, they can’t be redeemed.