Name: . …………………………………………………………..School:…………………………
Adm No. …………………………………………………………
565/1
BUSINESS STUDIES
Paper 1
July / August 2008
2 hours
KISUMU DISTRICT JOINT EVALUATION TEST - 2008
Kenya Certificate of Secondary Education (K.C.S.E)
565/1
BUSINESS STUDIES
Paper 1
July / August 2008
2 hours
INSTRUCTIONS TO CANDIDATES:
Answer ALL the Question in the spaces provided
This paper consists of 11 printed pages
Candidates should check the question paper to ensure that all the printed pages are printed as indicated and no questions are missing.
1. State FOUR roles played by Retailer Intermediataries in the chain of distribution. (4mks)
2. The diagram below represents a shift in supply curve of a commodity from SoSo to S1S1.
State four factors that may have accounted for the shift. (4 mks)
3. State four ways in which the nature of the goods may influence the choice of transport.
(4 mks)
4. In the space below, Name the type of business organization described by each statement.
(4 mks)
Statement / Business Organizationa) Formed by act of parliament
b) Shares are not freely transferable
c) Minimum number of shareholders
d) Can be run by family
5. State four activities carried out by staffing department in an organization. (4mks)
6. Otieno and Njoroge bought a building for Ksh.12,000,000. Otieno paid 8,000,000 while Njoroge paid sh. 4,000,000. The building was insured for sh. 8,000,000 against the risk of fire. Later the building was partially destroyed by fire to a tune of Shs.6,000,000.
i) State the amount of the compensation likely to be paid by the insurance company. (1mk)
ii) Give a reason for your answer. (1mk)
iii) Calculate the amount of compensation that each of the owner will receive based on their capital contribution. (2mks)
7. State FOUR electronic means of advertising. (4mks)
8. Highlight FOUR reasons that have led to serious budget deficit in developing countries. (4mks)
9. The following information relates to Migumo dealer for the year ended 30th June, 2007.
Shs.
Stock at 30th June, 2007 400,000
Current assets 3,625,000
Current Liabilities 1,369,000
Rate of stock turn over 4 times
Purchases 6,000,000
Gross Profit Margin 20%
Trading Expenses 15% of sales
Required
i) Calculate working capital (1mk)
ii) Calculate Gross Profit (1mk)
iii) Stock as at 1st July, 2006 (1mk)
iv) Net profit (1mk)
10. List four factors that justify the continued existence of small firms in Kenya despite competition from large-scale business. (4mks)
11. From the table below, complete the figure A,B,C and D. (4mks)
Price / Output / Total revenue / Average Revenue / Marginal Revenue200
180
160
140
120 / 1
2
3
4
5 / 200
360
480
C
60 / 200
A
160
140
D / -
160
B
80
40
A …………………………………………………………………………………………………
B …………………………………………………………………………………………………
C ………………………………………………………………………………………………...
D …………………………………………………………………………………………………
12. Outline FOUR measures that can be put in place to control demand-pull inflation. (4mks)
13. The following information relate to Mweza Enterprise for the year ended 31-7-2006
Shs
Creditors balance 1-8-2007 38,000
Cash paid to creditor 64,000
Discount received 8,900
Return outward 11,200
Creditors balance 31-7-08 43,400
Determine credit purchase (4mks)
14. State any FOUR reasons that account for the existence of the business Enterprise in the society. (4mks)
15. Highlight four circumstances under which a firm would be located near the market for its products. (4mks)
16. The balance sheet relates to Diala Enterprise as at 1st May, 2006.
DIALA ENTERPRISES
Balance sheet
As at 1-5-2006
Machinery 120,000 Capital 98,000
Stock 40,000 Creditors 95,000
Cash in Hand 24,000 Bank Overdraft 11,000
Debtors 20,000
204,000 204,000
During the month of May the following Transactions took place.
May 5 - Sold stock and got a cheque sh.15,000
May 6 - Got cash sh sh. 13,000 from debtor
May 7 - Paid creditors cash shs.80,000 from personal savings.
Prepare DIALA’S balance sheet as at 7-5-2006. (4mks)
17. With the aid of a well-labelled diagram show the equilibrium of a firm under perfect competition in the long-run. (4mks)
18. State FOUR current trends in communication in Kenya. (4mks)
19. Highlight FOUR circumstances that may make a country reluctant to join a trading bloc. (4mks)
20. Highlight four situations under which a firm will prefer to establish an open office. (4mks)
21. Highlight FOUR reasons why the government imposes taxes. (4mks)
22. State any FOUR modern Trends in Banking. (4mks)
23. Enumerate FOUR distinguishing features between Hypermarket and department stores.
(4 mks)
Hypermarket / Department’s stores(i)
(ii)
(iii)
(iv)
24. State FOUR limitations of weights and measures Acts in the protection of. (4mks)
25. State FOUR factors that enhance a healthy business environment in the country. (4mks)
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© 2008 Kisumu District Joint Evaluation Tests Business Studies 565/1 Turn Over