FORM THREE END OF TERM THREE 2022
BUSINESS STUDIES PP 1
MARKING SCHEME
1 a) Outline four reasons why organizations need to safe keep documents in files (4mks)
-not to fall in unauthorized hands
-protect from damage
-not to get lost
-keep thieves at bay
-avoid misplacement
2.Give the four components of business studies (4mks)
-Economics
-commerce
-office practice
-accounting
-entrepreneurship
3.A business is expected to be socially responsible to various groups such as customers, employees, government, public and suppliers. Indicate against each statement the most appropriate group (5mks)
| Statement | Group |
| i)Fair remuneration | Employees |
| ii)Timely tax returns | Government |
| iii)Fairness in tender allocation | suppliers |
| iv)Equal job opportunities | Public |
| Quality products | customers |
4.Use the table below to outline four differences between basic wants and secondary wants (4mks)
| Basic wants | Secondary wants |
| Requirements for life | One can do without them |
| Necessary for survival | Make life comfortable |
| Cannot be postponed | Can wait for later use |
| Appear first in scale of preference | Are last in scale of preference |
| Are felt needs | Aren’t felt |
5.Identify three activities in the extractive level of production (4mks)
-farming
-fishing
-mining
-timbering (lumbering)
-Hunting
6.Outline four ways in which partners may be classified (4mks)
-role played by partners
-liabilities of the partners for business debt
-ages of parties
-capital contribution
7.Highlight four characteristics of mail order store (4mks)
-goods are sold through the post office
-have large warehouses
-don’t deal with perishable goods
-customers don’t visit selling premises
-there is heavy advertisement
-goods are dispatched through CWO basis or COD basis
8.Outline the meaning of the following terms as used in accounting (4mks)
i)Network of a business -it is simply the difference between total assets and total liabilities also referred too as capital which comprises of owners contribution plus profits less drawings
ii)Business transaction -any dealing between two or more people (parties) that can be assigned a monetary value
iii)Cash transaction where both parties of an exchange are executed immediately
vi)Credit transaction where goods or services are sold or bought and payment is made at a later date
9.State four main factors that may limit the level of a country’s national income. (4mks)
-poor entrepreneurial culture in the country
-low level of technology
-negative altitudes towards work by citizens
-lack of adequate resources
-political instability
-lack of co-operant factors of production
10.Identify four ways in which a business may be of benefit to people in the surrounding area (4mks)
-job opportunities
-goods and services to satisfy their needs
-increase in economic activities
-outlet for the producers to sell their products
-People become sensitive to the needs of their environment
-Improves life of people living standards
11.State the effect of each of the following transaction on the balance sheet by writing increase or decrease or no effect in each case
| Transaction | Effect |
| a)Bought machinery on credit | Increase |
| b)withdrew cash from the business for personal use | decrease |
| c)Purchased stock in cash | No effect |
| d)Paid outstanding by cheque | Decrease |
12.State four ways of increasing efficiency and effectiveness of human porterage
-shortening distance travelled
-creation of pathways
-Lighten the load
-Feeding porters properly
-Better pay
-Security pathways
-lightening pathways
-coach them
-on ettiquaette
13.The following information relates to Makuyu Traders. Determine the missing figures. (3mks)
| Assets | Liabilities | Capital | |
| a) | 50000 | 70000 | |
| b) | 320000 | 280000 | |
| c) | 14360 | 12000 |
a)Assets – liabilities 50,000-70,000= – 20,000
b)Assets – capital = 320,000-280,000 = 40,000
c)capital +liabilities = 14360 + 12000 = 26360
14.Post the following transactions in the ledger books of Embakasi traders (4mks)
March 1/2013 commenced business with sh. 150,000 cash at bank
March 5/2013 bought machinery in credit for sh. 9500
March 7/2013 withdrew sh 5000 from bank for office use
March 8/2013 paid sh 3000 cash to creditor
Dr Capital A/c Cr
March 2013
1 bank 150,000
Dr BankA/c Cr
March 1 march 7
Capital 150,000 cash 5000
Dr Machinery A/c Cr
March 5
Creditors 9500
Dr CreditorsA/c Cr
March8 2013 march
machinery 9500
Cash 3000
Dr Cash A/c Cr
March 7 march 8
Bank 5000 creditors 3000
15.Give four reasons that make insurance companies decline to insure acts of nature (4mks)
-loss may not affect many people at ago
-loss is unpredictable
-people not willing to form pool
-not easy to determine premium
-value of loss may be undeterminable
16.Name 4 sources of business ideas. (4mks)
- Newspapers
- Shows & exhibitions
- Magazines articles
- Waste products
17.State 4 office etiquette of a business person. (4mks)
- Respect
- Punctuality
- Loyalty
- Honesty
18.mention four main types of demand. (4mks)
- Joint demand
- Competitive demand
- Derived demand
- Composite demand
19.State 4 principles of cooperatives. (4mks)
- Voluntary & open membership
- Democratic Administration
- Limited interest on share capital
- Promotion of education to member
20.Name 4 methods of government involvement in business (4mks)
- Regulation
- Training
- Trade promotion
- Provision of public utilities
21.Name 4 types of public utilities. (4mks)
- Water
- Transport
- Power & communication
- Sewerage
22.Name 4 barriers of effective communication. (4mks)
- Language barrier
- Poor listening
- Negative attitude
- Poor timing
23.Name 4 types of life assurance contracts (4mks)
- Term insurance
- Whole life assurance
- Endowment
- Annuities
24.Name 4 characteristic of a good filing system. (4mks)
- Simplicity
- Suitability
- Elasticity
- Economical
- Accessibility
25. Give 4 characteristics of oligopoly market structure. (4mks)
- A few large firms
- Presence of price wars
- High interdependence of firms
- Kinked demand curve
- Formation of cartels
