Business Studies KCSE Paper 2 565/2 (2010-2020) Questions and Marking Schemes
- Identify the types of wholesalers described in the statements given below. (4 Marks)
a) A wholesaler who trades in maize grain only-
Specialized Wholesaler
b) A wholesaler who supplies goods to most of the traders in Kitui, Mbooni and Machakos districts in Eastern part of Kenya-Regional Wholesaler
c) A wholesaler who buys tomatoes from farmers in rural areas and sells the same to other wholesalers in urban areas-
Rack Jobber
d) A wholesaler who trades in a wide variety of human medicine-General Line Wholesaler - Outline four factors that should be considered before buying office equipment. (4 Marks)
(i) Space available
(ii) Cost of the equipment
(iii) Funds available
(iv) Availability of manpower
(v) Availability of complementary resources eg. electricity
(vi) Adaptability possibility of hiring rather than buying
(vii) Effect on staff morale
(viii) Durability of the equipment - Malpractices by traders against which consumers need protection by the government. (4 Marks)
(i) Overcharging
(ii) Selling underweight goods
(iii) Selling expired goods
(iv) False advertisement/misleading information.
(v) Hoarding
(vi) Breach of contract
(vii) Selling sub-standard goods/poor quality - State three features of an insurable interest. (3 Marks)
i) Presence of property rights or interest
ii) Potential insurable risk must be present
iii) The property must have monetary value
iv) The insurable risk must be legal
v) There must be possibility of suffering financial loss in case of occurrence of risk - Outline four ways of reducing the level of unemployment in Kenya. (4 Marks)
i) Exporting surplus manpower
ii) Adopting appropriate education system to instill relevant skills
iii) Encouraging informal sector (Jua Kali)/Encouraging self-employment
iv) Increase government expenditure to expand economy
v) Population control to avoid overpopulation
vi) Diversification of economy by encouraging different industries
vii) Delocalization of industries to ensure balanced regional balance
viii) To improve infrastructure to support economic activities
ix) Encouraging foreign investment by giving foreign investors incentives
x) Adopting use of modern technology to increase production and reduce wastage - State four services offered by a commercial bank to its consumers. (4 Marks)
i) Accepting deposits
ii) Safekeeping of valuable items
iii) Advancing loans
iv) Offering foreign exchange services
v) Offering advisory services on financial matters
vi) Money transfer services - List four sources of public finance. (4 Marks)
i) Taxes
ii) Fines from courts
iii) License fees
iv) Borrowing
v) Grants and foreign aid
vi) Rent and rates for use of government property
vii) Dividends and profits from government investments
viii) Proceeds from sale of government property
ix) Interest earned from loans advanced by government
x) Escheats - Outline four reasons why countries may trade with each other. (4 Marks)
i) To dispose of their surplus
ii) To acquire what they do not have
iii) To enhance bilateral ties/promote peace among trading partners
iv) To enhance access of variety of goods for its citizen to improve their quality of life
v) To earn foreign exchange
vi) To create employment for their citizens.
vii) To earn revenue through taxation - Outline four reasons why economic development is desirable to a country. (4 Marks)
i) To improve standards of living of the citizens
ii) To improve infrastructure
iii) To create employment
iv) To increase life expectancy of the citizens
v) To improve social welfare of citizens
vi) To reduce rural-urban migration - Indicate the reward associated with each of the factors of production in the table below. (4 Marks)
Factor of production
Reward
a.
Land
Rent/Rates/Royalties
b.
Labour
Wages/salaries
c.
Capital
Interest
d.
Entrepreneurship
Profits
11. Outline four circumstances under which a co-operative society may be dissolved. (4 Marks)
i) Where there is a court order to dissolve it.
ii) Where the objectives of the co-operative society have been achieved
iii) If majority of the members vote to dissolve it during AGM
iv) In case of mass withdrawal of members leaving less than ten
v) If the co-operative society is declared bankrupt
vi) In case of an order from commissioner of co-operatives to dissolve it.
vii) In case of continuous loss making.
- Highlight four features of a bonded warehouse.
i) They are usually located at the entry points.
ii)Stores goods that are under bond.
iii) Goods are released on production of release warrant.
iv) Storage fees are charged on all goods stored in the warehouse.
v) Goods can be prepared for sale while still in the warehouse.
vi) Goods can be re-exported while still on bond. - Outline four factors that may be considered when measuring the size of a firm. (4 Marks)
i) The volume of output
ii) The number of employees
iii) The amount of capital invested
iv) The floor area covered by the firm premises
v) The level of technology used/method of production used
vi) The sales volume
vii) The market served
14.
a) Salim Traders Account (b) Shah Traders Account
Mar 10 Purchases 200,000 Mar 25 sales 420,000
(c) Purchases Account (d) Sales Account
Mar 10 Salim Traders 200,000 Mar 25 Shah T. 420,000 - On 2nd November 2006, Oromo received an invoice for Ksh. 12,000. Terms of payment were trade discount 5% and cash discount 10%. If payment is made within 30 days. Determine the amount paid if payment was made on 28th November 2006. (4 Marks)
πππππ πππ πππ’ππ‘=5100π₯12,000=600 π΄πππ’ππ‘=12,000β600=11,400 πΆππ β πππ πππ’ππ‘=10100π₯11,400=1,140 π΄πππ’ππ‘ ππππ=11,400β1,140=πΎπ β 10,260 - π΄=πΆ+πΏ
500,000=πΆ+(150,000+100,000) 500,000β250,000=πΆ =>πΆππππ‘ππ=πΎπ β.250,000 π ππΆ=π.ππΆ=50,000250,000π₯100%=20% - Amina Traders on 31st December 2006
Amina Traders
Trading Account
For the period ended31st December, 2006
Opening stock 75,000 Sales 400,000
Add: Purchases 260,000
Add: Carriage in 12,500 272,500
COGA4S 347,500
Less: Closing stock 27,500
Cost of goods sold 320,000
Gross profit c/d 80,000
400,000 400,000 - State four benefits that a farmer may get by transporting produce to the market by road. (4 Marks)
i) Transporting is relatively fast.
ii) It is readily available
iii) It is relatively flexible
iv) They are variety means of transport to choose from.
v) It is relatively cheap to hire - Causes of decrease in supply of Sukuma Wiki. (4 Marks)
i) Fall in price of kales
ii) Outbreak of kales destroying kales
iii) Prolonged drought
iv) Increase in cost of farm inputs such as fertilizer and seeds
v) Use of inappropriate method of production.
vi) Increased government taxation on kales.
vii) Off peak seasons
viii) Increase in price of competitively produced products
ix) Increase in price of substitutes such as cabbage making producers to shift to producing them. - Outline four ways in which households contribute to national income of a country. (4 Marks)
i) Consumption of goods and services.
ii) Savings and investments.
iii) Provision of factors of production.
iv) Payment of taxes. - Outline four circumstances in which a trader may use oral communication. (4 Marks)
i) Where there is need to bargain/negotiate.
ii)Where there is need to explain use and features of product.
iii) When selling over the counter.
iv) Where there is need to get immediate feedback from customers. - Outline four reasons why a firm may remain small.
i) Where the nature of product requires small-scale production
ii) Where market is small
iii) Lack of adequate funds for expansion
iv) Lack of appropriate technology
v) Ownerβs decision to remain small
vi) Legal constraints/government policy - State four benefits that a trader may get by advertising products in a newspaper. (4 Marks)
i) Wide coverage/message will/each many people
ii) It has reference/evidence of message exists.
iii) Advertised message can last for a long time.
iv) It allows detailed messaged.
v) Graphical details/pictures can be included.
vi) Advertised message is readily acceptable by readers. - πΆππΌ=π1π0π₯100 πΆππΌ (2006 )=100%
πΆππΌ (2007)=16001200π₯100%=13313% π»ππππ,πΌππππππ π=13313β100=3313%
Business StudiesΒ KCSE Paper 2 565/2Β (2010-2020) Questions and Marking Schemes