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565/2
BUSINESS STUDIES
PAPER 2
JULY/ AUGUST 2008
TIME 2 ½ HOURS
MOLO DISTRICT MOCK EXAMINATION
Kenya Certificate of Secondary Education 2008
565/2
BUSINESS STUDIES
PAPER 2
JULY / AUGUST 2008
INSTRUCTIONS TO CANDIDATES
v Answer any five questions on the foolscaps provided.
v All questions carry equal marks.
This paper consists of 3 printed pages Candidates should check the question paper to ensure that both pages are printed as indicated and no questions are missing.
1. (a) Explain four services offered by wholesalers to producers. (8mks)
(b) Prepare a duly balanced three column cash book from the following information. (12mks)
Jan. 1 Balance b/d cash shs. 4,000, bank shs. 27,000
Jan. 4. settled olweny creditors account of shs 8,000 by cheque having
deducted 6% cash discount
Jan. 8 received shs. 6000 cash from mutoma traders
Jan. 16 Deposited shs 4,500 to the bank
Jan. 24 Withdrew shs. 9,200 from the bank for private use.
Jan.29 Received shs. 19,950 from kawawa by cheque after allowing 5%
discount.
Jan. 31 Banked all the cash leaving only shs. 1500 in the office.
2. (a) Explain five causes of balance of payments disequilibrium. (10mks)
(b) Explain five factors that limit the size of a firm (10mks)
3. (a) Explain five differences between a public corporation and a public limited Company
(10mks)
(b) Explain five conditions necessary for a market under perfect competition. (10mks)
4. (a) A farmer in Molo has to transport his maize to Mombasa. He could either use road or
railway transport. Explain to him five merits of using road instead of railway. (10mks)
(b) The following information relates to Nakuru traders for the month of March 2008. You
are required to enter the transactions in the appropriate journals. Credit sales to:
(10mks)
March 3 Teresa invoice No. 240 shs. 5,000
March 3 Adan invoice No. 241 shs. 6,000
March 3 Koffi, invoice No. 242 shs. 11,000
March 12 Kamau invoice No. 243 shs. 5,400
March 12 Nancy invoice No. 244 shs 8,800
March 21 Adan invoice No. 245 shs. 6,200
March 21 Nancy invoice No. 246 shs. 8,900
March 30 Koffi invoice No. 247 shs.5,000
March 30 Kamau invoice No. 248 shs. 7,000
5. (a) Explain five sources of finance available to Kenya government (10mks)
(b) Explain five factors that hinder geographical mobility of labour. (10mks)
6. (a) Explain six emerging trends related to product promotion. (12mks)
(b) The following information relates to Njoro Traders for the year ended 31st
April 2005.
Bank Shs. 30,000
Cash Shs. 40,000
Current liabilities Shs. 500,000
Sales shs. 920,000
Opening stock shs. 150,000
Closing stock Shs 230,000
Margin 25%
Expenses 15% of sales
Determine:
(a) Gross profit (2mks)
(b) Cost of sales (2mks)
(c) Purchases for the year (2mks)
(d) Net profit (2mks)
© 2008 MOLO DISTRICT MOCK EXAMINATION 565/2