STAREHE BOYS CENTRE

MOCK EXAMINATIONS 2018

565/1 BUSINESS STUDIES PAPER 1

Time 2 Hours

Name_____________________________________________________________Form Set_________

Instructions to Candidates

Answer All the questions in the spaces provided

1. Classify each of the following goods as either producer or consumer. (4 marks)

Goods Classification
(i) Factory
(ii) Private Car
(iii) Iron Ore
(iv) Clothing
2. State Four reasons that may make government to control the exploitation of its natural resource.
(4 marks)
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3. Highlight Four limitations of using consumer initiated methods in consumer protection. (4 marks)
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4. State Four ways in which the nature of goods would influence the choice of transport. (4 marks)
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5. The following is the demand schedule of product X

Quantity demanded Price
Units Kshs
100 50
50 100
25 200
5 250
Draw a demand curve from the above information. (4 marks)

6. Highlight Four reasons that may make a trader to engage in sales promotion. (4 marks)
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7. State Four measures that may be taken by the government to attract firms in an area. (4 marks)
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8. State the term that best fit each of the following descriptions. (4 marks)
(i) Money brought into the business by the owner _____________________
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 (ii) Goods bought for resale ________________________________________
(iii) Money withdrawn from the business by the owner__________________
(iv) Money withdrawn from bank for business use______________________

9. The following trial balance was prepared by the accountant of Oka Traders as at 30 June 2017
Dr. Cr.
Sh Sh
Capital 996,000
Debtors 305,200
Creditors 256,700 800,000
Motor Vehicles ---------
Cash 122,500
Stock 1 Jan 2017 25,000
1,402,500 1,105,200
Prepare a corrected trial balance (4 marks)

10. In the spaces provided, indicated with a (+) or (-) the effect of each of following transactions on the
assets, liabilities or capital (4 marks)

Assets Liabilities Capital

Bought furniture on credit
Paid Creditors by cash
Withdrew cash for personal use
Converted personal car for
business use

11. State Four uses of a three column cash book (4 marks)

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12. The following information was extracted from the books of Kaka Traders as at 31 December 2017.
shs
Gross Profit 1,308,000
Carriage on sales 47,000
Commissions received 80,000
General expenses 182,000
Insurance 40,000

Prepare an income statement for the year ended 31 December 2017 (4 marks)

13. Highlight Four characteristics of money (4 marks)

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14. Highlight Four benefits that a country derive from engaging in international trade. (4 marks)
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15. State Four features of a bonded warehouse (4 marks)

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16. Highlight Four principles of insurance (4 marks)

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17. Highlight Four positive effects of inflation. (4 marks)

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18. Highlight Four assumptions of a perfect competition market. (4 marks)

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19. Outline Four contents of the memorandum of association. (4 marks)

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20. Highlight Four ways in which the government may participate in the operations of state
corporations. (4 marks)
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21. Outline Four causes of unemployment in Kenya. (4 marks)

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22. Kenya has been experiencing high population growth in the recent past. Highlight Four negative
effects of such a growth on the economy. (4 marks)
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23. Outline Four reasons that may cause a cheque to be dishonored. (4 marks)
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24. Outline Four elements that may comprise the external environment of a business. (4 marks)
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25. Highlight Four factors that could hasten the economic development of a country. (4 marks)
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