Business Studies Questions and Answers 2 - Form 4 Mid-term Exams Term 1 2022

QUESTIONS

INSTRUCTIONS TO CANDIDATES:

• Write your name and Adm Number in the spaces provided.
• Answer all the questions
• Candidates should check the question paper to ascertain that no questions are missing.

1. The following transactions relate to the books of Amina traders as at 31st December 2015.
   

   Gross profit ............................................................................................. 20,000
   Commission allowed .............................................................................. 200
   Carriage on sales .................................................................................... 4,000
   Discount received................................................................................... 8,000
   Salaries.................................................................................................. 6,000
   Rent........................................................................................................ 2,000
   Discount revived .................................................................................... 400
   Commission received............................................................................. 1,500
   Interest on bank loan .............................................................................. 500
   Prepare Amina’s profit and loss account for the period ended 31st December, 2015. (5 marks)

2. The National Transport Safety Authority (NTSA) is a department within the transport sector in Kenya. Highlight four benefits Kenyans enjoy due to the establishment of NTSA (4 marks)
3. Outline four reasons why a firm would prefer to locate near the market of its products (4 marks)
4. List three withdrawals in the circular flow of income (3 marks)
5. The following transactions relate to the books of kilimo holdings. Record them in the relevant ledger accounts. (4 marks)
   1. 1st January 2015, took a loan with ICDC of kshs. 50,000 receiving by cheque.
   2. 5th January 2015, kelunyo, a debtor paid his account of kshs. 40,000 in cash.
   3. 10th January 2015, took money from bank, kshs. 50,000 for office use
   4. 12th January 2015, bought furniture kshs. 35,500 in cash
6. Unemployment solving has been an agenda to most developing economies. Identify the type of unemployment being solved below. (4 marks)
   1. Government initiating irrigation projects to ensure continuous production of food
   2. Retraining teachers to embrace use of technology in teaching and learning
   3. Government and private sectors inventing job advertisement sites for easy access by job seekers
   4. Parliament passing legislation that accommodate the disabled people to acquire jobs
7. State four essentials of effective communication (4 marks)
8. Highlight four reasons why people engage in Business activities.(4marks)
9. Outline four characteristics of a good filing system (4mks)
10. Highlight four methods that Government uses to protect consumers. (4mks)
11. The following trial balance was extracted from the books of Mugoya Traders as at 30th June, 2014
    Mugoya Traders
    Trial balance
    As at 30th June 2014
    

    Details	Dr (shs)	Cr (shs)
    Premises	1,500,000
    Debtors and creditors	20,000	30,000
    Cash at bank	90,000
    Cash in hand	10,000
    Purchases and sales	140,000	320,000
    Stock of good on 1st July 2013	45,000
    Discounts	6,000	2,000
    Salaries and wages	50,000
    Commissions		8,000
    Power and lighting	12,000
    Returns	15,000	19,000
    Carriage outwards	2,300
    Carriage inwards	5,400
    Capital		1,543,700
    Furniture	27,000
    	1,922,700	1,922,700

    Additional information
    Stock of goods on 30th June, 2014 was worth sh22, 000.
    Required: prepare trading, profit and loss account for the period ended 30th June, 2014. (10mks)

MARKING SCHEME

1. AMINA TRADERS
   PROFIT AND LOSS A/C
   FOR THE PERIOD ENDED 31ST DEC 2015
   

   Expenses Commission allowed               200 Carriage on sales                   4,000 Discount allowed                    8,000 Salaries                                  6,000 Rent                                       2,000 Interest on Bank loan              500 Net profit c/d                          8,400                                              21,900                                      ----------------

   Revenue Gross profit                                 20,000 Discount received                       400 Commission received                1,500 .                                                  21,900                                                  ========= Net profit b/d                             8,400

2. Benefits of NTSA to the Kenyan people. (4 marks)
   • Unroadworthy vehicles have been removed hence reducing road accidents
   • Use of speed limiter has reduced road accidents
   • Carrying capacity has been limited hence reducing overloading and uncomfortability
   • PSV are operated by people with certificates of good conduct comfortable of customers/there is order
   • Drivers and conductors have uniforms that help in identifying them
   • Yellow lines help identify PSV by their users
   • Use of alcoblows has helped reduce the effect of drunk driving hence reducing accidents.
   • Requirement that all PSVs be members of a SACCO for order, discipline and proper management of PSVs. Passengers can take their complains to the Sacco.
3. Reasons why a firm would locate near the market for products (4 marks)
   • Competing tool
   • If the market is concentrated in one place
   • If the product is heavy to avoid the cost of transportation
   • The product is perishable
   • It may be due to Government policy
4. Withrawals in the circular flow of income (3 marks)
   • Taxation
   • Saving
   • Imports
5.                             
   

   DR	CR
   Bank Account
   1/1.2015 ICDC                      500,000	10/1/2015 Cash                    50,000
   ICDC A/C
   	1/1/2015     Bank                   500,000
   Kelunyo  account
   	5/1/2015   Cash    40,000
   Cash      A/C
   5/1/2015 Kelunyo 40,000	12/1/2015 Furniture  35,500
   10/1/2015 Bank 50,000
   Furniture account
   12/1/2015 Cash 35,500

6.                                         
   1. Kenya government initiating irrigation projects to ensure continuous food production
      • seasonal unemployment
   2. Retraining teachers to embrace the use of technology in teaching and learning
      • structural unemployment
   3. Government and private sectors inventing job advertisement sites for easy access by job seeker;
      • frictional/involuntary unemployment
   4. Parliament passing legislation that accommodate the disable people to acquire jobs;
      • residual unemployment
7. State four essentials of effective communication. (4marks)
   1. Medium used should be appropriate
   2. Language used must be simple to understand
   3. Information overload should be avoided
   4. Both the sender and the receiver must have positive attitude while communicating.
   5. It must be free from distortion
   6. Environment should be free from noise
   7. Message should get to the intended recipient in good time.
   8. The sender should have adequate knowledge of information being conveyed.
8. Highlight four reasons why people engage in Business activities. (4mks)
   1. To create employment opportunities
   2. To make use of available local resources
   3. To be their own bosses
   4. To increase their present income
   5. To utilize their free time
   6. To commercialize their skills and talents
9. Outline four characteristics of a good filing system (4mks)
   1. Simplicity
   2. Compactness i.e occupy little office space
   3. Suitability
   4. Should be economical
   5. Safety
   6. Accessibility
10. Highlight four methods that Government uses to protect consumers. (4mks)
    1. Setting up standards
    2. By licensing
    3. Weights and measures act
    4. Food and drug act
    5. Trade description act / sale of good act
    6. Public health act
    7. Rent and tribunal act
11.