Pbus 021: Introduction To Business Question Paper
Pbus 021: Introduction To Business
Course:Pre-University Programme (Pre-University)
Institution: Kabarak University question papers
Exam Year:2011
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2011ACADEMIC YEAR
FOR THE CERTIFICATE OF PRE-UNIVERSITY BUSINESS
PBUS 021: INTRODUCTION TO BUSINESS
DAY: FRIDAY DATE: 30/03/2011
TIME: 9.00 – 11.00 A.M. STREAM: SEM 2
INSTRUCTIONS:
1. Answer question ONE and any other THREE questions
2. Answer Question ONE which is compulsory and has 25 marks.
3. Answer any other THREE questions with each question having 15 marks.
QUESTION ONE
a) Briefly explain the difference between the following terms as used in business:
i. Share capital and Debentures
ii. Money as a medium of exchange and as a Unit of account
iii. Money market and Capital market
iv. Book keeping and Accounting
v. Memorandum of Association and Article of Association
vi. Industrial Businesses and Commercial Businesses (12 mks)
b) Define utility and give four types of utility (2 ½ mks)
c) Briefly discuss the 3 levels of production and give their relative importance to the economy
(5 mks
d) The following balances were extracted from the books of Mogotio Enterprises.
Office Supplies-55,000, Motor Vehicle-300,000, Stock of goods-66,000 Long term loan
300,000, Land 250,000, Debtors- 86,000, Bank overdraft-80,000, Cash in Hand- 36,000, Bank
Account-250,000, Plant and Equipment-280,000, Premises-400,000, Creditors 180,000,
Unearned Revenue 230,000
Find the owners equity and prepare a balance sheet showing the totals. (5 ½mks)
QUESTION TWO
a) Outline the main difference between public limited companies and private limited
companies (5 mks)
b) You have been appointed as the new finance manager and you have been told to consider
leasing as an option for obtaining finance for the business.
Outline the conditions under which leasing is most ideal and give both the advantages
and disadvantages of the source. (10 mks)
QUESTION THREE
a) Differentiate between ordinary shares and preference shares (5 mks)
b) The Central Bank plays an important role in the country’s economy. Discuss five
functions of this bank. (5 mks)
c) Define a cooperative as a form of business and give the International Cooperative
Alliance (ICA) principles under which they operate. (5 mks)
QUESTION FOUR
a) Kenya has had increasing rate of the development of financial institutions in the past
years. Give the factors responsible for the development of financial institutions in
Kenya. (5 mks)
b) Hire Purchase and Factoring are sources of finance to businesses. Differentiate the two
giving advantages of each. (10 mks)
QUESTION FIVE
i. Give the demerits of the Barter System that led to development of money. (5 mks)
ii. The government engages in business activities in the country through the public sector.
Give five reasons as to why government-owned enterprises are important to the country
and its economy. (5mks)
iii. Gregory and Isaac are considering getting into a partnership. Give reasons as to why
they should get into partnership and not sole proprietorship. (5 mks)
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