KCSE 2024 KEY AREAS

BUSINESS STUDIES
{310 BUSIENSS PREDICTION QUESTIONS}
{COMMONLY KCSE TESTED QUESTIONS}
A Series of KCSE 2024 Prediction Questions
Prepared by a Pannel of Top KNEC Examiners HQ
Nairobi
All KCSE 2024 Candidates are advised to take the
questions Serious!

Confidential!!!
For Marking Schemes
Contact 0724333200/0795491185/0768321553
Or Order online at
www.kenyaeducators.co.ke
KENYA EDUCATORS CONSULTANCY

Compiled and supplied online by Kenya Educators Consultancy|P.O. Box 8076 – 00200, Nairobi Tel:
+254724333200 | +254 795491185 mail: [email protected] Website:
www.kenyaeducators.co.ke
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

SECTION A (565/1 BUSINESS PAPER 1)

{QUESTIONS 1-250}
1). Outline four features of Basic wants (4mks)
2). Name the type of warehouse associated with each of the statement given below (4mks)
Statement Type of warehouse
a). Good can be stored before payment of custom duties
b). Individual can hire storage facilities
c). goods are stored from several manufacturers
d). Specialized goods are stored
3. Highlight four characteristics of monopolistic competitive market (4mks)
4). The following balances were extracted from The books of Gaitu Traders for the month ended on 31st
march 2005,
Sh.
Sales 420,000
Purchases 240,000
Motor van 300,000
Equipment 120,000
Debtors 80,000
Creditors 40,000
Expenses 160,000
Capital 440,000
Prepare trial balance for Gaitu Traders as at 31st march 2005. (4mks)
5). Outline four benefits that Kenyan government from may get as a member of common market for
Easter and Southern Africa (COMESA) (4mks).
6). Highlight Four circumstances under which a seller may offer after sales service to the buyer (4mks)
7). Highlight four indicators of economic growth that may be observed as a country progresses (4mks)
8). Outline four ways in which internal environment may contribute to success of a business (4mks)
9).Highlight four principles of a co-operative society (4mks)
10). Mobile phones have become a common means of communication in Kenya today. State four
challenges that a trader may encounter when using mobile phones (4mks)
11). State four ways in which a youthful population may be useful to Kenyan economy (4mks)
12). State four characteristic of money (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

13). Outline four principles of public expenditure. (4mks)

Occupation Level of production

a) mining
b) oil refining
c) insurance
d) Teaching
14). On 2nd November 2006 Kinoti received an invoice of Ksh. 12,000.Terms of payment were trade
discount 5% and cash discount of 10% if payment is made within 30days. Determine the amount
paid if payment was made on 28th November 2006. (4mks)

15). Outline four characteristic of property insurance (4mks)

16).Highlight four factors that may cause supply curve to shift to the right (4mks)
17). List four features of a good filing system (4mks)
18).The following information relates to Khadija wholesalers. Capital at the end of the year 2016 was sh.
190, 000, profit sh, 20,000, additional investment sh, 75,000 and drawings were sh.5000. Calculate
Khadija wholesalers’ initial capital.
19). Kenya has recently discovered crude oil in turkana. Outline four advantages of transporting the oil
through pipeline (4mks)
20. The table shows some occupation in production .Indicate the level of production associated with
each of the following occupations. (4mks)

21). Highlight four benefits that would accrue to a firm located near other existing firms. (4mks).
22). State four roles of intermediaries in the chain of distribution. (4mks)
23). Outline four benefits of a business plan to an entrepreneur (4mks)
24). The following balances were extracted from the books of Kinja traders as at 31st December 2005.
Sh.
Current liabilities 150,000
Net profit 50,000
Total Assets 500,000
2years Bank loan 100,000
Calculate the rate of return on capital (5mks)
25). Outline three monetary policy tools used by the central bank to control inflation. (3mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

26. Atieno is employed as a filing clerk at ministry of land offices. Highlight four challenges
that the office is facing as a result of Atieno’s incompetence. (4 marks)

27. For each of the following situations, name the most suitable means of payment to be
used. ( 4 marks)

Situation Means
a) To pay salary of 50 employees using one cheque
b) Paying school fees for a student from Nairobi who is at
Nakuru school
c) Paying insurance premium to UAP Insurance
d) Njoki wishes to transfer kshs 100,000 immediately from
her account to Mwende’s account

28. Give four reasons why extractive level of production is the highest income earner in most
third world countries. (4 marks)
29. The following extract is from Manga traders as at 31st December, 2018.
Kshs.
Capital 2,000,000.
Net profit 500,000.
Borrowed capital 1,430,000.
Fixed assets 2,880,000.
Current assets 2,350,000.
Current liabilities 1,300,000.

Determine:-

i) Working capital (1 mk)

ii) Current ratio (1 mk)
iii) Capital employed (1 mk)
iv) Rate of return on capital employed (1 mk)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

30. State four advantages of using social media to a business person. (4 marks)
31. State whether the following taxes are direct or indirect ( 4 marks)

Type of tax Classification

a) Sales tax
b) Corporate tax
c) Value added tax
d) Excise duty

32. Indicate four indicators of workers who are poorly motivated in an organization (4 mks)
33. Name four advantages of operating a public limited company (4 mks)
34. Janet observed that there are many small scale retail businesses in her home town that are
surviving despite the presence of large supermarkets. Write four reasons that may explain
this scenario. (4 mks)
35. In the transactions below, indicate whether the balance sheet totals are going to
increase(+),decrease(-), or remain the same(No effect) (4 mks)

Transaction Effect
a) Sold some old furniture on credit
b) Borrowed a bank loan of Ksh 100,000 in cash
c) Sold stock worth Kshs 5,000 and was paid by cheque
d) The owner added kshs 20,000 to the business cash
from personal sources

36. The following table represents the demand for tomatoes.

Price of tomatoes Quantity demanded of

(Shs) tomatoes per week (Kgs)

50 10
100 8
150 6

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

200 4
250 2
From the above demand schedule plot the demand curve for tomatoes. (4mks)

37. Highlight four challenges that a new entrepreneur faces when carrying out business
activities. (4mks)

38. Highlight four differences between monopoly and monopolistic market structures.
(4mks)

39. Mention four features of capital as a factor of production. (4mks)

40. A TV set was sold for sh.20,000. If the buyer was allowed a trade discount of 5% and a
cash discount of 2% if payment is made within a month. Determine the amount received
by the seller if payment is made within 2 weeks. (4 mks)
41. Give four reasons that make insurance companies decline to insure acts of nature such as

earth quakes, floods, etc. (4 mks)

42. The following information was extracted from the books of soma label traders on 31st march,

2009

shs
Stock(1st April, 2008) 650,000
Purchases 2,400,000
Sales 3,200,000
Mark up 25%
Stock ( 31st march, 2009) x

Required:
Use the information above to prepare a trading account for the year ended 31st march, 2009.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

43. Highlight four reasons why a business plan is important to a business unit. ( 4 marks)

44. Outline four reasons why different businesses merge (4 marks)

45. Name the element of transport represented by each of the following items (4 marks)

Item Element
a) Bus station
b) Bicycle
c) Railway line
d) Diesel engine
46. Mawingu company would like to erect billboards for product promotion purposes. Highlight

four short comings of using this method ( 4 marks)

47. Record the following transactions in the relevant ledger accounts of Karua’s business. ( 4 mks)

I) Jan 20th : the owner took stock worth kshs 1500 to his aunt while on a visit
II) Feb 12th : bought a business motor cycle worth shs 80,000 on credit from Nakuru motors
ltd.
III) march 18th : withdrew shs. 10,000 from bank for business use
IV) Received an invoice on April 10th from summer wholesalers worth sh 50,000.

48. Outline four drawbacks that accrue to a society that practice subsistence production.
( 4 marks)
49. Highlight four measures that the government may use to control demand pull inflation.
( 4 marks)

50. Outline four reasons for maintaining a trial balance. ( 4 marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

51. Outline four factors that may lead to dishonoring of a cheque (4 marks)
52. State four circumstances when a high population growth rate may be desirable. (4 marks)

53. Highlight four benefits that accrue to an entrepreneur who prepares a business plan.(4 marks)

54. Give four differences between ordinary shares and preference shares. (4 marks)

55. State four reasons why the government issues licenses to business people. (4 marks)

56. Outline four factors that would influence the amount of money held by an individual for
transaction purpose. (4 marks)

57. Name the international trade documents that relates to each of the following statements:(4 marks)
Statement Document
(a) Gives details about the origin of the goods.

(b) Gives title to the goods traded.

(c) Used to place the order for goods to be imported from a

specific exporter.
(d) Written by a commercial attaché of the importing
country showing current prices of goods being exported.

58. State four problems that are usually encountered in the formulation stage of a development
plan. (4 marks)

59. Give four circumstances when pipeline would be more preferred as a means of transport.
(4 marks)
60. Name four source documents which are used to provide information used to make entries
in the books of accounts. (4 marks)

61. Complete the table below for business A, B, C and D.

BUSINESS ASSETS LIABILITIES CAPITAL

A W 250,000 700,000

B 85,000 30,000 X

C 420,000 Y 120,000

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

D 600,000 175,000 Z

62. State four benefits a trader receives from warehousing. (4 marks)

63. Highlight four emerging issues in communication. (4 marks)

64. State four factors that influence the fertility rate of a population. (4 marks)

65. Outline four expenditure items that are included in the measurement of national income
under the expenditure approach. (4 marks)

66. The following information relates to Kawira Traders on 31st January 2018:
Opening stock 40,000
Purchases 480,000
Gross profit 100,000
Mark-up 25%
Calculate:
(a) Closing stock. (2 marks)

(b) Rate of stock turnover for the year. (2 marks)

67. Highlight four ways in which the demographic environment affects the performance of the
business. (4 marks)

68. State four factors to consider when making a choice of channel to use in distributing
locally produced agricultural products. (4 marks)

69. Outline four benefits received by a student who finished form four and had done business
studies as a subject. (4 marks)

70. Indicate which accounts to be debited and which accounts to be credited from the
following transactions: (4 marks)
Transaction A/c Dr A/c Cr
(a) Proprietor took cash Sh. 18,000
and paid rent

(b) Brought in personal table and

made it to be a business asset.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

(c) A debtor paid Sh 80,000 by

cheque.

(d) Transferred Sh 20,000 to a private

bank account.

71. Matuu Wholesalers insured their business worth Ksh. 2,850,000 for Ksh. 2,300,000
against fire. Eight months later, fire destroyed the business leading to a loss of Ksh.
1,248,000. Calculate what the insurance company compensated the business(4 marks)

72. Give four trends and emerging issues in office management. (4 marks)

73. Highlight four decisions made when deciding which goods and services to produce.(4 marks)
74. Outline how the following utilities are fulfilled: (4 marks)
Utility How it is fulfilled

(a) Place

(b) Form

(c) Time

(d) Possession.

75. Outline four factors that a county government should consider before spending their
county money. (4marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

76. State four external factors that may positively influence the operations of a business
(4mks)
77. Outline four circumstances under which producers may prefer to sell goods directly to
the consumers.
(4mks)
78. Name four ways through which consumers can be cheated in their dealings with traders
(4mks)
79. The following information relates to Tamu Traders for the year ended 31st Dec. 2011
Sh
Fixed Assets 5,000,000
Current Assets 650,000
Net profit 300,000
Current liabilities 650,000
Sales 2,000,000
Closing stock 100,000
Opening stock 200,000
Gross profit margin 20%
Calculate; (4mks)
a) Current ratio
b) Gross profit mark up
c) Rate of stock turn over
d) Capital employed.

80. Outline four circumstances under which a credit note may be issued. (4mks)
81. The equation given below relate to quantity demanded and the quantity supplied at
equilibrium price.
Qde = 4P + 50
Qse = 8P + 30
Determine the equilibrium price and quantity (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

82. Kendi started a shop dealing in ladies clothing but failed after two years. Outline four
factors that many have caused this failure (4mks)
83. Name the type of warehouse described below
Statement Type of warehouse
a) Goods can be stored before payment of custom duties
b) Individuals can hire storage facilities
c) Goods are stored from several manufacturers
d) Specialised goods are stored
84. State four ways in which the nature of goods would influence the choice of transport
(4mks)
85. Outline any four circumstances under which human wants may be fully satisfied (4mks)
86. Highlight four ways in which business studies is useful to a community (4mks)
87. State the books of original entry in which the following documents are used. (4mks)
a) Incoming invoice ………………………………………………………………………………………………………..
b) Incoming receipt ……………………………………………………………………………………………………….
c) Outgoing credit note …………………………………………………………………………………………………
d) Outgoing invoice ……………………………………………………………………………………………………..
88. State the type of ledger into which the following accounts would be found. (4mks)
Account Relevant ledger
a) Capital ………………………………………………………..
b) Mueni (debtor) ………………………………………………………..
c) Kariuki (supplier) ……………………………………………………….
d) Bank ………………………………………………………
89. Outline any four advantages of operating in an open office layout. (4mks)
90. George operates a petrol station in Nakuru. He insured his stock worth Ksh 2.4 million
for ksh 2 million. Later in the year stock worth ksh 600,000 was destroyed by fire.
Calculate the amount he was compensated and give a reason. (4mks)
91. State four characteristics of money (4mks)
92. Name the rewards for the following factors of production (4mks)
Factor of production Reward
a) Employee

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

b) Machine
c) Minerals
d) Farmer
93. Outline four challenges that may be experienced by a country whose population is
made up of a large proportion of young people (4mks)
94. Highlight any four characteristics of perfect competition type of market structure
(4mks)
95. State the line of communication involved in each of the following. (4mks)
a) The manager of ABC company Ltd talking to the manager of XYZ company Ltd
…………………………………………………………………………………………………………………………………
b) A secretary asking for time off from her boss …………………………………………………………..
c) The production manager giving instructions to the secretary of the sales manager
……………………………………………………………………………………………………………………………………
d) The store keeper giving explanations to the chief accountant
…………………………………………………………………………………………………………………………………
96. State the effect of each of the following transactions on the balance sheet totals by
writing increase or decrease or no effect in each case. (4mks)
Transaction Effect
a) Bought machinery on credit
b) Withdrew cash from the bus for personal use
c) Purchased stock in cash
d) Paid outstanding loan by cheque

97. Outline the assumptions that the circular flow of income in a closed economy work under
(4mks)
98. The following balances were extracted from the books of Wanji traders for the year
ended 30th June 2005. (4mks)
Sh
Debtor 120,000
Creditor 60,000

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Machinery 450,000
Cash in hand 70,000
Cash at bank 180,000
5 years bank loan 270,000
Stock 60,000
Prepare a balance sheet of Wanji traders as at 30th June 2005.

99. Outline four reasons for maintaining a cash book in a business enterprise. (4mks)
100. Highlight four factors that should be considered when choosing a method of
promoting a product. (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

101. State four characteristics of human wants (4mks)

102. Outline four ways in which utility of a good is created in production
(4mks)
103. State four benefits that a farmer may derive from being a member of
producer co-operative society (4mks)
104. Highlight four ways in which consumers may protect themselves
against exploitation (4mks)
105. Highlight four factors a firm must take into account when deciding on
the product(s) to produce (4 mks)
106. Below is a diagram of demand and supply curve

D0S0

S1

P E

Price P1 E1

S0 D0
S1

Q Q1
Quantity

Highlight four factors that may have led to the above behavior (4mks)
107. Mention four characteristics of good money (4mks)
108. State four ways in which human resource can positively influence the
internal environment of a business (4mks)
109. State four benefits that Kenya will derive from the completion of
Standard gauge railway (SGR) (4mks)
110. State four characteristics of a successful entrepreneur (4mks)
111. Name four documents required by the registrar of companies in order
to register a Public Limited Company (4mks)
112. State four circumstances under which cash with order (CWO) may be
used by a business (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

113. Outline four challenges that may be encountered in measuring

National income using the output approach (4mks)
114. Highlight four factors to be considered when choosing a method of
product promotion (4mks)
115. Identify the source documents into which the following information
would be recorded (4mks)
Information Source document
i. Payment received from debtors
ii. Purchases made on credit
iii. Validating payments made by
cashier
iv. Sale of a fixed asset on credit

116. For each of the transaction state the account to be debited and the
account to be credited (4mks)
Transaction Account debited A/C
credited
i. Deposited cash into the bank
ii. Owner withdrew cash for
personal use
iii. Purchased goods on credit
iv. Sold furniture by cheque
117. The following information was obtained from Wamwangi traders as at
31 December 2018
st

Shs
Stock 1/1/2018 20000
Stock 31/12/2018 30000
Mark up 20%
Rate of stock turn over 7 times
Required
Prepare Wamwangi’s trading account for the year ended 31/12/2018
(4mks)
118. Muriuki prepared a trial balance for his business but it failed to
balance. Help him prepare a correct one (4mks)
MURIUKI TRIAL BALANCE AS AT 31 DEC 2017
ST

Fixed Assets Liabilities

Land 110,000 Debtors 80,000

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Creditors 60,000 Machinery 90,000

Capitals 230,000 Prepaid rent 10,000
400,000 180,000
119. State the kind of information recorded in the following ledger
accounts
i. Sales Ledger
ii. Private Ledger
iii. Nominal Ledger
iv. Cash book
120. State four components of a Business plan (4mks)
121. State four roles of Insurance Industry in Kenya (4mks)
122. Outline four measure used by the Central Bank to control supply of
money in the economy (4mks)
123. Highlight four features of perfect competition market
(4mks)
124. Mention the four elements of transport . (4mks)

125. State the type of unemployment described below (4mks)

i. Experienced where demand for goods and services is seasonal
ii. Occurs when a person seems to be employed but is mainly under
utilized
iii. Occurs when jobs are available but one does not have the required
qualifications
iv. Caused by Economic factors leading to poor performance of the
Economy

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

126.State Four internal (Micro) environment factors that influence the business positively.
(4mks)

127.Outline Four disadvantages of division of labour (4mks)

128.Your neighbour intends to start a business and has come to you for advice on how to
identify a business idea. Highlight four sources she can use. (4mks)

129.Name Four machines/equipments found in a general office. (4mks)

130. Outline Four factors to consider when intending to buy office furniture (4mks)

131. State Four challenges facing small scale businesses in Kenya (4mks)

132. Give Four instances when a seller may send a proforma invoice to a buyer (4mks)

133.Identify Four Clauses of a memorandum of association (4mks)

134. Outline Four benefits Kenyan traders have enjoyed from globalization (4mks)

135.State Four advantages of transporting oil by pipeline rather than road. (4mks)

136. Highlight Four ways in which warehousing is useful to a trader. (4mks)

137. Highlight Four ways that the government may put in place to create a favourable
business environment. (4mks)

138. Outline Four advantages of audio-visual communication (4mks)

139.State Four policies covered under general insurance (4mks)

140.Name Four types of advertising (4mks)

141. Explain Four factors that may lead to the shift of the supply curve to the right (4mks)

142.Highlight Four ways in which the production activities of firms in your country affect
the environment negativity. (4mks)

143. Fill in the missing figures in the table below. (4mks)

Fixed asset Current Assets Capital Liabilities

a. 275 500 315 000 115 500
b. 182 000 108 700 217 100
c. 76 400 123100 91 900
d. 313 450 211 340 189 170

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

144. The following balances were extracted from the books of Raji Enterprises on 1st July
2019

Shs.

Capital 550,000

Motor Van 185,000

Debtors 68,000

Cash 200,000

Stock 50,000

Furniture 160,000

Creditors 95,000

Bank Loan 18, 000

The following transactions took place during the month.

(a) Sold some of the old furniture for sh. 50,000 for which sh. 45, 000 was paid by cash
and the balance to be settled later.
(b) The owner took sh. 8,500 cash from the business to cater for family shopping
(c) Bought goods for resale for cash sh. 59, 800.

Required:

Prepare Raji Enterprises balance sheet as at 30th July 2019 (4mks)

145. Record the transaction given below in their relevant ledger A/cs. (4mks)

2018
May 1 Started business with Ksh. 400,000 cash.
3 Purchased office furniture by cash sh. 90,000
5 Paid Wages by Cash sh. 3,000.
10 Bought stock of goods by Cash sh. 190,00

146. The following information relates to Ali General Stores for the year ended 31st Dec
2018.

Opening stock shs. 24,000

Carriage on Sales shs. 12,000

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Purchases shs. 370,000

Sales shs. 442,500

Closing Stock shs. 40, 000

Expenses 10% on gross profit

Prepare Trading profit and loss account for the year ended 31st Dec 2018 (5mks)

147.Apex traders provided you with the following .

Margin 25%

Cost of Sales 15,000

Opening Stock 2,000

Closing Stock 1,000

Operating expenses 2% of Capital

Sales and capital are in ratio of 1:4

Calculate

(a)Rate of Stock turnover (2mk)

(b)Purchases (1mk)

(c)Return on Capital (1mk)

148.Give Four roles played by the Central Bank of Kenya in the economy (4mks)

149.Name Three sources of public finance (3mks)

150.Give Four benefits one gets from self –employment (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

151.Identify four features of economic resources. (4 marks)

152.Outline four causes of cost push inflation. (4 marks)
153.Outline four circumstances under which hire purchase may be used to acquire goods.
(4 marks)
154.The descriptions stated below refer to various methods of product promotion. For each
description give the method that best matches it. (4 marks)

Description Method of product promotion.

(a) Any mention of a person, firm or product in the mass
media.
(b) Presentation of a commodity to prospective buyer, face
to face by a sales man with an aim of making sales.
(c) Process of information with a view of creating,
promoting or maintain goodwill and favourable image
of the organization to the public.
(d) Any paid form of impersonal presentation of a product
made through mass communication media.

155.State four goals of development in a country. (4 marks)

156.Highlight four ways in which monopoly differs with perfect competition. (4 marks)
157.Outline four functions of a wholesaler. (4 marks)
158.The following balances of assets and liabilities were provided by safari merchants as at
31/12/2015

Item Shs.
Bank overdraft 80,000
Land 200,000
Accrued electricity bill 50,000
Stock 10,000
Debtors 20,000

The business had drawings amounting to Shs.20,000 during the year.

Prepare a balance sheet to determine the net worth of the year. (4 marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

159.Indicate whether the following taxes are direct or indirect. (4 marks)

Tax Type of tax

(a) Corporation tax

(b) Value added tax (VAT)

(c) Capital gains tax

(d) Excise

160.Highlight four methods the government uses to protect consumers. (4 marks)

161.State four benefits that people from your area may benefit from business enterprise.
(4 marks)
162.Highlight four disadvantages to the manufacturer if wholesalers are eliminated from the
chain of distribution. (4 marks)
163.Highlight four demerits of newspapers as a means of advertising. (4 marks)
164.Juma Munyasia sells all his goods at 25% above costs. His books gave the following
information as at 31st December 2015.

Stock 1st January 2015 Shs.98,720

Stock 31st December 2015 Shs.126,000

Sales for the year Shs.600,000

Calculate the profit made by Munyasia. (4 marks)

165.Globalization is a term often used to denote business ownership and trend. Outline four
merits of globalization of business units. (4 marks)
166.Outline four reasons why a new business may fail. (4 marks)
167.Outline four ways in which commercial banks facilitate transferring of money from one place
to another. (4 marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

168.Write down the international trade documents that relate to each of the following statements.
(4 marks)

Statement Documents

(i) Prepared by an exporter giving details about ______________________________________________

the origin of goods.

(ii) A document of title to the goods traded in ______________________________________________

international trade.

(iii) Show prices charged as certified by the ______________________________________________

importing country’s officials.

(iv) Enables the importers to initiate clearing of ______________________________________________

customs duty earlier enough to avoid delays.

169.Highlight four factors that determine the size of a firm. (4 marks)

170.Outline four benefits of pooling of risks. (4 marks)
171.Outline four circumstances under which the per capita income statistics would be a good
indicator of the welfare of the country. (4 marks)
172.For each of the following transactions indicate in the appropriate column the source
documents and the books of original entry in which the transactions should be recorded.
(4 marks)

Transaction Source document Books of original entry

(a) Goods returned by a consumer.

(b) Purchase of goods on credit.

173.State four errors that do not affect the agreement of a trial balance. (4 marks)
174.Outline four circumstances under which verbal communication would be preferred to written
communication. (4 marks)
175.The following assets and liabilities belong to Jacky’s stores as at 31 March 2005. Buildings
st

Shs.200,000, debtors Shs.8,000, creditors Shs.32,000, stock Shs.24,000, cash at bank

Shs.120,000, cash in hand Shs.40,000, loan from HFCK Shs.100,000 and capital
Shs.260,000.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

During the month of April 2005, the following transactions took place.

April 1 Sold goods worth Shs.2,100 cash.

2 Paid creditors Shs.8,000 cash.
10 Received Shs.2,000 from debtors in cash.
15 Bought a motor van Shs.350,000 paying by cheque.

Required:

Prepare a balance sheet as at 15th April 2005. (4 marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

176.State four advantages of a partitioned office layout to the office staff. (4mks)
177.For each of the farm resources given below, identify the appropriate factor
reward (4mks)
RESOURCE FACTOR REWARD
i. Farm yard ………………………..
ii. Farm guards ………………………..
iii. Farm owner …………………………
iv. Livestock …………………………

178.List the principle of insurance that was violated in each of the following
instances given below
(4mks)
INSTANCE PRINCIPLE
i. A car owner was paid ksh. 400,000 when
his car worth ksh. 390,000 was stolen ………………………………..
ii. Okado insured his neighbors retail shop
against robbery ………………………………..
iii. A school was compensated when its bus
got burnt by rioting students yet it had
been insured against a road accident ………………………………..
iv. A hotel owner took away remains of
items destroyed by fire being fully paid
for the damages ………………………………...

179.Give four reasons why business firms participate in conserving the

environment (4mks)
180.State four measures that a county government may take to improve the quality
of its services to the residents of the county (4mks)
181.Outline four reasons that make human wants difficult to satisfy (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

182.Give four types of small scale retail businesses that can operated without
shops. (4mks)

183.The information below was extracted from the books of Khadudu Hardware’s
for the year 2019
Ksh.
Capital (31/12/2019) 980,000
Investment 300,000
Monthly drawings 10,000
Capital (01/01/2019) 600,000

Required; determine the net profit for the year (3mks)

184.The diagram below shows the circular flow of income in a two sector
economy

X finished products factors Y

of production

a. Name the economic agent marked A and B (2mks)

b. Identify the expenditure represented by the arrows X and Y (2mks)
185.Highlight four advantages of a private warehouse to a manufacture (4mks)
186.Give four disadvantages of using mobile phones for communication in an
organization (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

187.Outline three differences between monopoly and oligopoly as product

markets. (3mks)

MONOPOLY OLIGOPOLY
i.

ii.

iii.

188.State four measures that the Central Bank can take to reduce inflation in the
country (4mks)

189.Give four reasons why governments impose taxes on incomes (4mks)

190.The diagram below shows a change in the supply of a farm products in a
market

Price (ksh.) S2

S1

S2

S1

Quantity (kgs)

Outline four circumstances under which the supply curve would shift from
S1S1 to S2S2 (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

191.For each of the business transactions given below name the ledger account to
be debited and to be credited (4mks)

TRANSACTION DR. CR.

i. Proprietor took goods worth Ksh.
2000 for family use
ii. Goods valued at Ksh. 4500 were sold
on credit
iii. A cheque of Ksh. 8000 was issued by
the business in payment of rent
iv. The business withdrew Ksh. 15,000
from the bank account for office use

192.State FOUR disadvantages of pipeline transport (4mks)

193.The information below relates to Musoma Bookshop for the year ended
30.09.2020

Sales Ksh. 1,500,000

Opening stock Ksh. 250,000
Purchases Ksh. 1,300,000
Mark up 25%

Determine:

i. Gross profit (2mks)

ii. Cost of sales (2mks)
194.Mrs. Obote sells a variety of fruits, vegetables and cereals in a market stall
located in an urban market. Identify four methods that she may use to increase
her volume of sales (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

195.List the type of unemployment that suits each of the descriptions below
(4mks)
Description Type of unemployment
i. A large number of laborers
crowded on a small piece of work.
ii. School leavers without information
on where to get a job.
iii. Many people kept out of
employment because of physical
disabilities.
iv. A female job seeker opting to get
married instead of being idle.
196.Highlight four population characteristics of a country that is economically
underdeveloped (4mks)

197.Give four reasons why some producer firms carry out production close to the
product market (4mks)
198.Outline four circumstances under which a manufacturer would not require the
services of middlemen (4mks)

199.List four ways used to classify partners in a business (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

200.The two column cash book below is incomplete

Date Details F Cash Bank Date Details F Cash Bank

2020 (Ksh.) (ksh.) 2020 (ksh) (ksh)
Jan1 Capital 350,000 150,000 Jan3 Rent T
10 Sales Q 4 Purchases 200,00
18 Cash C1 250,000 18 Bank C1 P
28 Debtors 70,000 25 Electricity 15,000
31 balance c/d R 345,000

600,000 400,000
600,000 S

Determine the missing values represented by letters P, Q, R, S and T

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

201.State four characteristics of services. (4mks)

202. Outline four disadvantages of division of labour. (4mks)
203.Mention four advantages of using Automatic Vending Machines. (4mks)
204.Give four benefits one gets from self-employment. (4mks)
205.Outline four factors to consider when intending to buy office furniture. (4mks)
206.Name the source document to which each of the following description relate. (4mks)
Description source document

(i) Issued by the seller to a buyer for cash paid

(ii)
Used for processing and authorizing payments

(iii) Sent to a credit buyer to demand payment

(iv) Used to correct undercharge

207.Outline four principles of co-operatives. (4mks)

208.Highlight four measures that the government puts in place to create conditions that will
be favorable for business development. (4mks)

209.State four advantages of transporting oil by pipeline rather than by road. (4mks)

210.Outline four advantages of audio-visual communication. (4mks)

211.Highlight four ways in which the production activities of firms in your country affect the
environment. (4mks)

212.Highlight four disadvantages of a private warehouse. (4mks)

213.Ragati and Nzonge operates a business with a stock valued at ksh.350,000 and have
interests of 3/5 and 2/5 respectively. Ragati decided to insure 2/4 of the stock against
fire. Sometimes later fire occurred at their business premises and destroyed stock worth
ksh. 250,000. Calculate the amount of compensation Ragati would get from the
insurance company. (4mks)

214.Outline four sources of monopoly power. (4mks)

215.Name four sources of public finance. (4mks)

216.State four benefits that would accrue to a customer who borrows a loan from a non-bank
financial institution. (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

217.Match each of the statements given below with the relevant type of capital. (4mks)

Statement Type of capital

a. Resource invested into a business by the owner

b. Excess of current assets over current liabilities

c. Amount invested into the business by outsiders

d. Represents total finance in a firm

218.The following information was extracted from the books of farmers choice supermarket
on 31st Dec 2009
shs
Average stock 30,000
Closing stock 40,000
Purchases 336,000
Carriage inwards 2,000
Return outwards 18,000
Margin 1/6

Required. Calculate sales for the year . 4mks

219.Outline four important characteristics of a general journal. (4mks)

220.Apex traders provided you with the following

Margin 25%
Cost of sales 15,000
Opening stock 2,000
Closing stock 1,000
Operating expenses 2% of capital
Sales and capital are in the ratio of 1:4

Calculate :
a. Rate of stock turnover
b. Purchases
c. Return on capital

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

221.Indicate the subsidiary ledger in which each of the following should be recorded. 4mks

Account Subsidiary ledger

a. Return inwards

b. Bank

c. Drawings

d. Juma traders ( a debtor)

e. Discount received

f. Uchumi wholesalers (a supplier) …………………………………

222.Highlight four types of advertising. (4mks)

223.State four natural sources of energy in Kenya. (4mks)

224.The statement below described various types of goods. Identify the type of goods best
described by each statement. (4mks)

a. Owned by the government on behalf of its citizens.

b. Goods that are capable of directly satisfying human want.

c. Goods that are used to make other goods.

d. Goods that get spoilt within a very short time.

225.Identify four reasons why many youths in urban centre are starting hawking businesses.
(4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

226.Mention the four essential elements of transport (4mks)

227. Give four reasons why shelter is a basic human want. (4mks)
228.For each of the following source documents, identify the book of original entry in which the
information will be recorded. (4mks)
Source document Book of original entry
a. Received credit notes

b. Cash receipts received

c. Received invoices

d. Issued credit notes

229.Mention four assumptions in the circular flow of income in a two sector economy (4mks)
230. Outline four benefits of a youthful population to an economy. (4mks)
231.State whether the following transactions will increase, decrease or have no effect on the balance
sheet items and totals (4mks)
Transaction Assets Capital Liabilities Totals
a. Took a loan from KCB and
used it to pay a KIE loan
b. Bought furniture and paid by
cheque
c. Took stock of goods and
donated to a local church
d. Sold stock of goods on credit
at a profit

232.Highlight four features of the oligopoly market structure (4mks)

233.Define the following principles as used in insurance (4mks)
a) Indemnity
b) Utmost good faith
c) Subrogation
d) Contribution
234.Complete the following diagram (4mks)

Trade

a c

Retail trade b d Import Trade

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

235. Outline four importance of entrepreneurship in an economy. (4mks)

236. Highlight four advantages of a public warehouse to a trader. (4mks)
237.State the level of production that matches the following occupations (4mks)
Occupation Level of production
a. Carpentry

b. Lumbering

c. Fishing

d. Banking

238. Highlight four ways in which the internal business environment may affect a
business negatively. (4mks)
239. State four sources of capital to public limited companies. (4mks)
240. Outline four circumstances under which personal selling may be appropriate in
product promotion. (4mks)

241. The following transactions were obtained from the books of Kimende Traders for
the month of February 2017.
2nd Feb. 2017. Opening balance: cash in hand kshs 500,000 and cash at bank
kshs 50,000.
rd
3 Feb. 2017. James, a debtor, paid kshs 20,000 by cheque.
5th Feb 2017. Purchased a motor vehicle worth kshs 300,000 from Shah Motors
on credit.

Required: Record the transactions in the relevant ledger accounts (4mks)

242. State four reasons for popularity of WhatsApp as a trend in communication. 4mks
243. State four benefits that may accrue to a firm as a result of growth of the industry.
(4mks)
244. The following information was extracted from the books of Kemei Traders for the
month of December 2010;
Opening stock Shs. 60,000
Sales Shs. 360,000
Gross profit 25% of sales
Closing stock Shs. 70,000
Calculate;

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

a) Mark-up (2mks)
b) Rate of stock turn over (2mks)

245. Highlight four reasons why the government trains potential entrepreneurs.(4mks)
246. Complete the table below. (4mks)
Assets Capital Liabilities
100,000 a. 35,000

b. 112,000 80,000

310,000 100,000 c.

d. 140,000 60,000

247. Give four reasons why a producer may prefer to sell directly to consumers. 4mks)
248. Highlight four reasons for the shift below. (4mks)

Price d0
dI

dI d0

Quantity

249. Highlight four reasons why most organizations prefer locating their offices in the
outskirts of town. (4mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

250. Below is a two column cashbook showing the transactions which took place in the
business of Anyango in the month of June the year 2003.
Dr Two column cashbook Cr
DATE DETAILS F CASH BANK DATE DETAILS F CASH BANK
1/6/03 Bal b/d 15,000 1/6/03 Bal b/d 20,000
3/6/03 Onyango 35,000 7/6/03 Rent 5,000
10/6/03 Bank 10,000 10/6/03 Cash 10,000
15/6/03 Onyango 35,000
30/6/03 Bal c/d 30,000 30/6/03 Bal c/d 10,000
15,000 65,000 15,000 65,000
State the transaction that took place during the following dates: (4mks)
st
i. 1 June 2003.

ii. 7th June 2003.

iii. 10th June 2003.

iv. 15th June 2003

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC 2024
©KCSE 2024 KEY AREAS {500+ QUESTIONS}

SECTION B (565/2 BUSINESS PAPER 2)

{QUESTIONS 251-310}
251. a).Explain five factors that may promote entrepreneurship in Kenya (10mks).

b). Explain five causes of balance of payments disequilibrium (10mks)

252. a). Explain five features that would be considered when establishing a warehouse for

imported goods (10mks)

b). On 1st September 2015, Kakamega Traders had shs55, 000 in hand and shs 250,000 in Bank.

During the month, the following transactions took place. (10mks)

Sept: 2: cash sales were banked shs. 35,260.

3: Bought ribbons in cash shs. 4,500.
8: Paid Wangila creditor shs. 94, 000 by cheque,
In full settlement of his account after deducting 6% cash discount.
12: received a cheque for shs. 59,800 from macharia after allowing him cash
discount of shs. 1,200
15: Paid salaries of shs 34,000 in cash.
25: withdrew shs. 50,000 from bank for office use.
28: Wanjiku a debtor paid her account of shs. 75,000 by cheque less 10% cash
discount
30: Deposited all the cash into the bank except shs. 13,700.
Required: Prepare Kakamega Traders 3 –column cash book and balance it off (10mks)

253. a). Explain five benefits that a private limited company may enjoy by changing to a public

limited company (10mks)

b). Explain the functions of the following documents as used in home trade (10mks)

i). Invoice

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC 2024
©KCSE 2024 KEY AREAS {500+ QUESTIONS}
ii). Debit note

iii). Credit note

iv). Receipt

v). Statement of account

254. a). Explain any five sources of monopoly power in a monopoly (10mks)

b). Explain five benefits that Kenya enjoys by being a member of the African development Bank

(10mks)

255. a). Outline any five principles of insurance (10mks)

b). The following trial balance relates to XYZ ltd.

XYZ limited
Trial Balance
As at 31st Dec. 2013.

Details Dr CR
Kshs Kshs
Capital 800,000

Opening stock 200,000

Purchases 680,000
Returns 50,000 80,000
Discount 80,000 45,000
Carriage inwards 42,000
Debtors and creditors 200,000 105,000
Sales 1,200,000
Motor vehicles 750,000
Furniture and fittings 250,000
Rent 50,000 60,000
Bank overdraft 42,000
Carriage outwards 30,000
Additional information:
Closing stock was valued at shs. 80,000

Required:

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC 2024
©KCSE 2024 KEY AREAS {500+ QUESTIONS}
Prepare XYZ limited Trading, profit and loss account (10mks).

256. a). Unemployment has been major problem that the Kenyan government has been trying

to solve. Explain any five measures that the Kenyan government has taken to solve this

problem (10mks).

b) Explain any five sources of public finance (10mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

257 (a)

Explain five benefits that may be realized by a country as a result of government policyto relocate indust

ries to rural areas. (10 marks)

b)Kenya has experienced a lot of loses through road accidents. Explain five measures the
government has taken to reduce further loss of lives. (10 marks)

258(a)Discuss five principles that would guide the Kenya’s Government on effective use of

public resources. (10 marks)

b)On1st Jan 2011,Tradelink Enterprise had 22,250 Cash and 250,000 in the Bank
2nd Jan. – Made cash sales of shs 465,200
5th Jan – Received a cheque for shs 451,250 from Kamau
Traders in full settlement of their debt after allowing a
5% cash discount.
15th Jan – Paid Ndaru Traders Shs 184,000 in cash after
deducting a cash discount of shs 16,000
20th Jan – Deposited shs 200,000 from the cash till into the bank
25th Jan – Paid wages shs 144,000 in cash
28th Jan – Settled Mbago Trader’s account of Shs 300,000 by
cheque, less 15% cash discount
29th Jan – Withdrew shs 250,000 from the bank for office use
30th Jan – Deposited all the cash into the bank, except
shs 59,700.

Required

Open a duly balanced Three Column Cash Book for the above transactions

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

259.(a) The table below shows the age distribution of a country.

Age in years % of population

0 – 15 45
16 – 55 31
56 and above 24

Explain five negative economic implications of this age distribution to a country.

(10 marks)

b)Explain five services that the Central Bank of Kenya offers to commercial banks.
(10 marks)

260(a)Discuss Five characteristics of under developed countries

(b)The following balance sheet was prepared from the books of Kimani Traders.

Kimani Traders
Balance sheet
As at 31st Dec 2011
Sh sh sh
Fixed assets capital 280,000
Motor vehicle 600,000 long term liabilities
Furniture 80,000 680,000 bank loan (5 years) 500,000
Current assets short term liabilities
Stock 200,000 creditors 280,000
Cash 60,000 bank overdraft 20,000 300,000
Debtors 140,000 400,000
1,080,000 1,080,000

The following transactions then took place in January 2012

(i) Opened a bank account for the business and deposited shs 120,000 from personal
sources.
(ii) Paid part of the bank loan shs 40,000 by cash.
(iii) Bought goods worth shs 50,000 on credit.
(iv) Sold part of the furniture worth shs 10,000 in cash

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Required:

Prepare Kimani Traders Balance Sheet as at the end of January 2012

261.a)Explain five benefits to Kenya for being a member of the East African Community
Economic block.

(b) Explain five importance of Entrepreneurship to the development of the Kenyan economy.
(10 mks)

262(a)Describe four factors considered when choosing a means of communication. (8mks)

(b) The following trial and balance relates to business of Twiga Traders as at 30th June
2008.

Twiga Traders,

Trial balance,

As at 30th June 2008

Shs. Shs
Land and Buildings 750, 000
Cash at bank 45, 000
Prepaid rent 5, 000
Debtors/creditors 10, 000 15, 000
Opening stock 22, 500
Discounts 3, 000 1, 000
Purchases/sales 70, 000 160, 000
Wages 25, 000
Furniture 13, 500
Capital 771, 850
Carriage outwards 1, 150
Carriage inwards 2, 700
Returns 7, 500 9, 500
Lighting 6, 000
Commissions 4, 000
961, 350 961, 350

Closing stock was valued at shs 11, 000.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Required:

(a) Prepare a trading profit and loss account as at 30th June 2009.
(8mks)
(b) Calculate the following ratios:-
(i) Rate of return on capital (1mk)
(ii) Margin (1mk)
(iii) Quick ratio (1mk)
(iv) Rate of stock return over (1mk)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

263. (a) Explain five negative effects of inflation (10mks)

(b) Explain five circumstances under which an insurance contract may be terminated (10 mks)

264. (a) Explain five ways in which transport promotes the growth of trade. (10mks)

(b) On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh
24,300. During the month, the following transactions took place
March 3 cash sales paid directly into the bankKsh 16,500
4 bought goods for Ksh 15,000 and paid by cheque
6 cash sales Ksh. 50,000
9 received a cheque of ksh 18,000 from Amolo in full settlement of his debt
13 paid insurance premiums of Ksh 16,000 in cash
15 paid Kamotho by cheque Ksh 9,700 in full settlement of his account less 3% cash
discount
21 withdrew Ksh 30,000 from bank for office use
24 received a cheque of Ksh23,750 from Rotich in full settlement of his account less
5% cash discount
25 paid wages in cash Ksh 20,000
30 banked all cash except Ksh 3,000
Required: prepare a three column cash book

265. (a) Explain five types of wholesalers who may be found in our country today (10mks)

(b) Explain five ways through which the Central Bank regulates economic activities in the
Country (10mks)

266. (a) Explain five ways of solving unemployment in Kenya (10 mks)

(b) Explain five merits of proper filing of documents in an organization. (10mks)

267. (a) Explain five short comings of using per capita income as a measure of economic
welfare
(10 ks)
(b) Explain five benefits that may accrue to a country from trading with other countries.
(10 mks)

268. (a) Demand for bananas in a certain market has been declining over time.
Explain four factors that may be responsible for this trend. (8 mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

(b) The following balances were extracted from the books of Nakuru Enterprises as at
30th June, 2016.
Shs
Sales 400,000
st
Stock (1 July, 2015) 5,000
th
Stock (30 June, 2016) 8,000
Discount received 13,000
Discount allowed 6,000
Insurance premium 4,000
Premises 300,000
Fixtures and fittings 200,000
Carriage inwards 7,000
Carriage outwards 3,000
Bank loan 23,000
Bank overdraft 50,000
Creditors 30,000
Cash in hand 10,000
Debtors 12,000
Drawings 14,000
Capital 340,000
Gross profit margin 25%

Prepare;
i) Nakuru Enterprises profit and loss account for the year ended 30th June
2016. (6 mks)
th
ii) Nakuru Enterprises Balance sheet as at 30 June 2016. (8 mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

269. a) Outline any five differences between private limited liability company and
public limited liability company.
(10mks)
b) Describe five accounting documents used in home trade. (10mks)
270. a) The table below shows the demand and supply schedules for product A in a
week.
Price(sh) Quantity demanded Quantity supplied
(‘000’ tonnes) (‘000’ tonnes)
35 5 80
30 10 65
25 20 55
20 25 40
15 30 35
10 40 20
5 55 5
Use the information in the table above, draw the demand and supply curve showing the
market equilibrium for the produce. (10mk)
b) Explain five benefits that a firm may enjoy by preparing a business plan. (10mks)
271. a) Traders are required to observe ethical practices when carrying out product
promotion. Explain five reasons for observing such ethical practices
(10mks)
b) Explain five benefits that may be realized by a country as a result of government policy
to relocate Industries to rural areas. (10mks)
272. a) Outline any five factors to consider while locating a ware house.
(10mks)
b) On 1stSeptember 2015, Miriam had sh 55,000 in hand and sh. 250,000 in bank. During
the month the following transactions took place.
Sep 2: Cash sales banked sh 35,260
Sep 3: Bought ribbons in cash sh 4,500
Sep 8: Paid Wangila, a creditor sh 94,000 by cheque in full settlement of his account
after deduction 6% cash discount.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Sep 12: Received a cheque for sh 58,800 from Wetu after allowing her cash discount of
sh 1,200
Sep 15: Paid salaries of sh 34,000 in cash
Sep 25: Withdrew sh 50,000 from bank for office use.
Sep 28: Anyango a debtor paid her account of sh 75,000 by cheque less 10% cash
discount.
Sept 30: Deposited all the cash into the bank except sh 13,700
Prepare a three column cash book and balance it off. (10mks)
273. a) Explain any five uses of National Income Statistics
(10mks)
b) The following trial balance related to Tai Traders as at 31st December 2014

TAI TRADERS
TRIAL BALANCE
AS AT 31ST DECEMBER 2014
Details Dr (Ksh) Cr(Ksh)
Stock 10,000
Bank 3,500
Purchases 15,000
Sales 28,000
Returns 800 1,100
Rent 580
Insurance 950
Creditor 450
Carriage in 1,200
Discounts 300 1,620
31,750 31,750
Additional information
- Closing stock was valued at Ksh 2,500
- Carriage out was Ksh 1,200

Required: Prepare trading profit and loss account. (10mks

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

274. a) Explain any five reasons why one would prefer to transport goods on road
than rail.
(10mks)
b) On 1st January 1993 Makena started a business with sh 120,000 cash and sh 300,000 in
the bank.
The following transactions were done in the month of January 1993.
January 3: Bought goods worth sh 60,000 by cheque
January 10: Sold goods worth sh 35,000 cash
January 14: Bought goods worth sh 90,000 cash from Odero
January 18: Paid wages sh 18,000 by cash
January 20: Withdrew sh 40,000 from bank for office use.
Required;
Record the above transactions in the relevant ledger account, balance them off and extract a
trial balance. (10mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

275.a]Explain five characteristics of economic resources. [10 mks]

b]Explain five merits of using audio visual means of communication. [10 mks]

276. a]Explain five circumstances under which a partnership may be dissolved. [10 mks]

b]The following balances were extracted from the books of Kasuku traders on 30th June 2018.

Furniture 18,000 Debtors 40,000

Motal van 40,000 Creditors 50,000

Capital 75,000 Cash 4,000

C.F.C Loan 50,000 Bank 19,000

Stock 54,000.

The following transactions took place in the month of July 2018.

July 10 Kasuku traders received ksh. 15,000 from a debtor by cheque.

July 15 Bought more furniture worth ksh. 2,500 and paid in cash.

July 20 Took goods worth 14,000 for home use.

Required.Prepare a balance sheet as at 30th July 2018. [10 mks]

277. a]Describe five principles that guide insurance businesses in Kenya. [10 mks]

b]The following information relates to Rose holdings for May 2015.

May 1.Sold goods to Garry at ksh. 660.

May 5.Bought goods from K.N.T.C for ksh. 7500.

May 10 Bought three office machines at ksh 2,500 each on credit from Fine elecronics.

May 15 Goods worth ksh.1,850 were sold to Jack on credit.

May 18 She sold old furniture on credit to Twiga motols at KSH. 1,500 whose book value was
ksh.1000.

Required.Record the above transactions in appropriate journals. [10

mks]

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

278. a]Explain five features of monopolistic competition. [10

mks]

b]Outline five differences between public and private warehouses. [10

mks]

279 .a]Explain five documents used in home trade that are prepared by the buyer. [10 mks]

b]Explain five ways in which the central bank of Kenya controls the operations of commercial
banks.
[10mks]

280.a]The following transactions were extracted from the books of Furaha retailers.

April 1.Balance brought forward cash ksh 1,900 cash at bank ksh. 6500.

April 3.Sold goods in cash ksh. 1,200.

April 5. Paid transport by cheque ksh. 2,050.

April 7.Bought goods worth ksh.2,500 in cash less 5% cash discount.

Apri l 10.Paid postage charges by cheque ksh.3,000.

April 12.Furaha deposited ksh.600 from cash till to the business bank account.

April 13.Bought goods ksh .8400 by cheque.

April 15. Sold some old furniture for ksh 3,900 and received the money by cash.

April 17.Brought a table to be used in the business whose value was ksh.1,800.

April 18.Paid electricity bill by cheque ksh.2,100.

April 20.Sold goods goods against a cheque for ksh.6,600 whose value was ksh.6,850.

April 21.Took cash ksh 400 for family use..

April 26.Sold goods on credit to Kamani valued at ksh 4,500.

April 28.Received cash ksh.1,500 from Bidii stores.

April 30.Deposited all cash with the bank exceptksh.3,525.

Required to prepare a three column cash book duly balanced. [10 mks]

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

b]Draw a well labeled diagram to show the effect of increase in demand and increase in supply on
equilibrium point, equilibrium price and equilibrium quantity.
[10mks]

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

281. (a) Explain five reasons that make an insurance company to refuse to compensate the
insured in the event that a risk occurs. (10mks)
(b) Discuss any five weaknesses of using per capital income to measure the standard of
living of people in a country. (10mks)

282. (a) Explain five factors that may promote entrepreneurship in Kenya. (10mks)

(b) Explain five benefits that a private limited company may enjoy by changing to a
public limited company. (10mks)

283. (a) Explain five functions rendered by wholesalers to retailers. (10mks)

(b) The following information relates to Zawadi Enterprises for the year ended 31st.
August 2018
Kshs.
Stock 1.8.2017 80,200
Purchases 1,120,000
Sales 1,880,000
Returns inwards 5,800
Returns outwards 20,800
Carriage Inwards 40,000
Discount received 7,500
Discount allowed 4,000
Salaries and wages 230,000
Rent 15,000
General Expenses 56,700
Electricity bill 250,000

Stock 31.8.2018 120,000

Required

Prepare Zawadi Enterprises Trading and Profit and Loss Account for the year ended 31st
August 2018. (10mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

284. (a) Unemployment has been major problem that the Kenyan government has been
trying to solve . Explain any five measures that the Kenyan government has taken to
solve this problem. (10mks)

(b) On 1st September 2015, Kakamega Traders had shs. 55,000 in hand and shs. 250,000
in Bank.

During the month, the following transactions took place. (10mks)

Sept. 2: Cash sales were banked Shs. 35,260.

3: Bought ribbons in cash Shs. 4,500

8: Paid Wangila creditor Shs. 94,000 by cheque

in full settlement of his account after deducting 6% cash discount.

12: Received a cheque for shs. 59,800 from Macharia after allowing him cash
discount of shs. 1.200

15: Paid salaries of Shs. 34,000 in cash.

25: Withdrew shs. 50,000 from bank for office use.

28: Wanjiku a debtor paid her account of Shs. 75,000 by cheque less 10% cash
discount.

30: Deposited all the cash into the bank except Shs. 13,700

Required: Prepare Kakamega Traders 3 – column cash book and balance it off. (10mks)

285. (a) Explain five principles of a good tax system. (10mks)

(b) Explain five measures the government is taking to encourage delocalization of firms
in Kenya. (10mks)

286. (a) Explain any five sources of monopoly power. (10mks)

(b) Outline five advantages of a large population to a country. (10mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order

online at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

287.
(a) Explain five benefits that may accrue to a country with a large proportion of skilled labour
force. (10 marks)
(b) Explain five disadvantages a country would face if she restricted trade with other countries.
(10 marks)
288.
(a) Draw five features that differentiate a cooperative society from a partnership form of a
business. (10 marks)
(b) Explain five factors that have contributed to declining population growth rate in some
developing countries. (10 marks)
289.
(a) Explain five factors that a business organization would consider when choosing office
equipment. (10 marks)
st
(b) On 1 July 2018, Muranga had Shs.136,500 at bank and cash in hand Shs.3,250. During the
month the following transactions took place.

July 2 Cash sales Shs.42,630 paid directly to the bank.

July 3 Received a cheque for Shs.14,100 from Koech in full settlement of a debt.
July 8 Bought goods for Shs.26,240 and paid by cheque.
July 12 Cash sales Shs.42,450.
July 14 Paid Ochako by cheque Shs.23,750 in full settlement of his account less 5% cash discount.
July 15 Paid wages Shs.24,000 in cash.
July 16 Withdrew Shs.36,000 from the bank for office use.
July 18 Bought stationery in cash Shs.750.
July 20 Cheque received from Koech was dishonoured.
July 28 Paid salaries by cheque Shs.48,600.
July 30 All cash was banked except Shs.5,000.

Required:

Prepare a three column cash book. (10 marks)

290.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

(a) Explain five circumstances under which containerization may be used in transporting goods.
(10 marks)
(b) Graphically show, the effect of increased supply on equilibrium price and quantity.
(10 marks)

291.
(a) Wizard is an importer of assorted goods from different countries. Explain five advantages he
may enjoy while his goods are stored in a bonded warehouse. (10 marks)
(b) Explain five principles that would lead to effective use of government resources. (10 marks)
292.
(a) Explain five benefits that may be achieved if the government relocates industries to rural
areas. (10 marks)
(b) The following information relates to Baraka traders.

BARAKA TRADERS
TRIAL BALANCE
AS AT 31/12/2012
Details Dr. (Shs.) Cr. (Shs.)
Capital 100,000
Motor vehicle 10,000
Machinery 16,000
Stock (1/1/2012) 12,000
Debtors 33,500
Cash 18,000
Bank 12,800
Creditors 45,000
Sales 180,000
Purchases 120,000
Carriage inwards 2,000
Returns 1,200 1,000
Carriage on sales 4,000
Discount 3,000 4,000
Salaries 2,000
Rent 21,500

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

Insurance 10,000
Electricity 17,000
351,500 351,500

Closing stock Shs.8,000.

Required:

Prepare Trading and Profit and Loss A/C. (10 marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

293.a) Explain five factors to consider when choosing office equipment. (10marks)
b) Explain the causes and remedies of the following types of unemployment.
(10 marks)
i) Seasonal unemployment
ii) Structural unemployment
iii) Disguised unemployment
iv) Residual unemployment
v) Involuntary unemployment
294.a) Explain five importance of insurance to an economy. (10marks)
b) On 1st march 2019, Ukwala traders had ksh 95,000 in hand and a bank overdraft
of ksh 15,000. During the month, the following transactions took place.
March 2: Bought goods for resale in cash ksh 68,000.
March 3: Cash sales banked, ksh 22,000
March 9: Paid Anyang’ a creditor ksh, 12,880 by cheque in full settlement of his
account after deducting 8% cash discount.
March 11: Paid salaries ksh 14,000 in cash.
March 16: Received a cheque of ksh 40,200 from Sakaya after allowing him a
cash discount of ksh 1,800.
March 20: Shamim, a debtor paid her account of ksh 55,000 by cheque less 10%
cash discount.
March 24: Withdraw 26,000 from bank for office use.
March 27: Took ksh 9,000 cash to pay his brother’s medical bill.
March 28: Deposited all the cash into bank except ksh 14,400.

Required: prepare a three-column cashbook and balance it off. (10 marks)

295.a) Explain five features of oligopoly. (10 marks)

b) Explain the difference between partnerships and cooperative societies forms of
business units. (10marks)

296.a) Explain five reasons for continued existence of small firms in an economy.
(10marks)
b) Outline five channels that can be appropriate for the distribution of exporting tea
to France. (10marks)

297.a) Explain five reasons for government involvement in business. (10 marks)
b) Explain five documents sent by the buyer to the seller in Home trade. (10marks)

298.a) Explain four unethical practices in product promotion. (8marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

b) The following trial balance relates to the business of OMASAJA Traders for the
period ended 31st March 2019.

OMASAJA TRADERS
TRIAL BALANCE
AS AT 31ST MARCH 2019
Dr Cr
Shs. Shs.
General expenses 120,000
Rent expenses 46,000
Telephone expenses 20,000
Carriage inwards 28,000
Salaries 360,000
Sales 4,000,000
Purchases 2,400,000
Discount received 36,000
Sales returns 40,000
Motor vehicle 500,000
Debtors 300,000
Stock (1st April 2018) 200,000
Land and buildings 2,000,000
Cash at bank 120,000
Cash in hand 12,000
Capital 1,850,000
Drawings 80,000
Creditors 240,000

6,226,000 6,226,000
Additional information
Stock as at 31st March 2019 was valued at ksh. 100,000
Prepare:
i) A Trading profit and loss (7marks)
ii) A Balance sheet (5marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC 2024
©KCSE 2024 KEY AREAS {500+ QUESTIONS}
299.(a) Highlight five characteristics of an efficient tax system. (10mks)

(b) Differentiate between a public limited company and a public corporation. (10mks)

300.(a) Explain clearly the malpractices by traders against which consumers may need protection by the
government. (10mks)

(b) Explain clearly with the aid of a diagram the change in equilibrium as a result of a change in demand
of a commodity. (10mks)

301.(a) Discuss five benefits that a customer may get by using Automated Teller Machine (ATM) for
financial transactions. (8 mks)

(b) The following trial balance related to Kimani’s business as at 31st December 2012
DR(SHS) CR(SHS)
Stock on 1st January 2003 60,000
Purchases and sales 400,000 580,000
Returns 20,000 50,000
Debtors and Creditors 65,000 40,000
Premises 540,000
Machinery 200,000
Fixtures and fittings 100,000
Carriage outwards 8,000
Wages and salaries 30,000
Discounts 25,000 32,000
Commissions 16,000 14,000
Cash in hand 70,000
Capital 818,000
1,534,000 1,534,000

REQUIRED:
(a) Prepare a trading profit and loss account for the period ended 31st December 2012 and a balance
sheet as at that date if the closing stock was worth shs 70,000 (12 mks)

302. (a)Explain clearly the problems associated with expenditure approach method in measurement of
national incomes. (10mks)

(b) Outline five reasons why ethical practices is necessary in product promotion. (10mks)

303. (a) Jane,a petty cashier was given Sh ,2000 on 1st June 2005. During the month, she
made the following payments:
2005
June 2 Stationery Sh 100, staff tea Sh 80.
5 Telephone bill Sh 50, postage stamps Sh 100.
8 Travelling Sh 200, telephone Sh 100.
10 Stationery Sh 50, staff tea Sh 100.

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC 2024
©KCSE 2024 KEY AREAS {500+ QUESTIONS}
15 Postage stamps Sh 50, travelling Sh 100.
20 Sundry expenses Sh 100.
23 Stationery Sh 80, telephone Sh 40.
25 Travelling Sh 50, sundry expenses Sh 100.
28 Envelopes Sh 20, staff tea Sh 50.
30 Adhiambo, a creditor, was paid Sh 100.
Use the following analysis columns to prepare a petty cash book:
Stationery, Staff tea, Travelling. Telephone, Sundry expenses. Ledger accounts. (12 mks)

(b) Explain five demerits that a country may suffer when the government becomes a major investor
in business. (8 mks)

304.(a) Explain the role played by insurance industry in promoting the development of Kenyan
economy. (10mks)

(b) Explain clearly the tools of monetary policy used by the central bank to control inflation. (10mks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online at

www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

305.a) Explain five factors to consider when choosing an office equipment.

(10 marks)
b) Explain the causes and remedies of the following types of unemployment.
(10 marks)
i) Seasonal unemployment
ii) Structural unemployment
iii) Disguised unemployment
iv) Residual unemployment
v) Involuntary unemployment
306.a) Explain five importance of insurance to an economy. (10marks)
st
b) On 1 march 2019, Ushindi traders had ksh 95,000 in hand and a bank overdraft
of ksh 15,000. During the month, the following transactions took place.
March 2: Bought stock in cash ksh 70,000.
March 3: Cash sales banked, ksh 22,000
March 9: Paid Kiprop a creditor ksh, 12,880 by cheque in full settlement of his
account after deducting 8% cash discount.
March 11: Paid salaries ksh 14,000 in cash.
March 16: Received a cheque of ksh 40,200 from Sawanda after allowing him a
cash discount of ksh 1,800.
March 20: Hanifa, a debtor paid her account of ksh 55,000 by cheque less
10%cash discount.
March 24: Withdraw 26,000 from bank for office use.
March 27: Took ksh 7,000 cash to pay his brother’s medical bill.
March 28: Deposited all the cash into bank except ksh 14,200

Required: prepare a three-column cashbook and balance it off. (10 marks)

307.a) Explain five sources of monopoly power. (10 marks)

b) Explain the difference between partnerships and cooperative societies forms of
business units. (10marks)

308.a) Explain five reasons for continued existence of small firms in an economy.
(10 marks)
b) Outline five channels that can be appropriate for the distribution of imported
machinery from Germany. (10marks)

309.a) Explain five reasons for government involvement in business. (10 marks)
b) Explain five documents sent by the buyer to the seller in Home trade. (10marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]
 KNEC
©KCSE 2024 KEY AREAS {500+ QUESTIONS} 2024

310.a) Businesses are currently employing new product promotional strategies as a way
of boosting their sales volumes. Identify and explain four such strategies. (8marks)

b) The following trial balance relates to the business of Kazi Nzuri Traders for the
period ended 31st March 2016.

KAZI NZURI TRADERS

TRIAL BALANCE
AS AT 31ST MARCH 2016
Dr Cr
Shs. Shs.
General expenses 120,000
Rent expenses 46,000
Telephone expenses 20,000
Carriage inwards 28,000
Salaries 360,000
Sales 4,000,000
Purchases 2,400,000
Discount received 36,000
Sales returns 40,000
Motor vehicle 500,000
Debtors 300,000
Stock (1st April 2015) 200,000
Land and buildings 2,000,000
Cash at bank 120,000
Cash in hand 12,000
Capital 1,850,000
Drawings 80,000
Creditors 240,000

6,226,000 6,226,000
Additional information
Stock as at 31st March 2016 was valued at ksh. 100,000
Prepare:
i) A Trading profit and loss (7marks)
ii) A Balance sheet (5marks)

©KNEC 2024 [Contact 0724333200 for Marking Schemes or Order online

at www.kenyaeducators.co.ke]