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Keiyo District Mock- Business Studies Paper 2 Question Paper

Keiyo District Mock- Business Studies Paper 2

Course:Secondary Level

Exam Year:2006

565/2
Paper 2
1. (a) Explain six circumstances which may make an insurance company not to compensate the
Insured in the event of loss. (12mks) *Kyo*
(b) Explain four factors that influence the incidence of tax. (8mks) *Kyo*
2. (a) Explain five monetary instruments used by the government to reduce the supply of money in an economy. (10mks) *Kyo*
(b) Explain five reasons why firms with popular products find it necessary to continually advertise the same products. (10mks) *Kyo*
3. (a) The Kenya shilling has been depreciating in relation to the Sterling pound.
(i) Define the term depreciation. (2mks) *Kyo*
(ii) Explain four disadvantages of this process to Kenya's economy. (8mks) *Kyo*
(b) Explain five assumptions of monopolistic competition. (10mks) *Kyo*
4. (a) Discuss five causes of unemployment in Kenya. (10mks) *Kyo*
(b) Air transport is popular among businessmen even though it is expensive. Explain five reasons why businessmen opt for air transport. (10mks) *Kyo*
5. (a) Explain five characteristics of under-development. (10mks) *Kyo*
(b) Explain five advantages that accrue to a country as a result of foreign firms locating their
enterprises in the country. (10mks) *Kyo*
6. The following information relates to Soittara Enterprises for the year ending 31st December 2005.
Sh.
Gross profit 18000
Transport out 3000
Discount allowed 2000
Rent received 5000
Sundry expenses 3000
Salaries 5000
Insurance 2200
Required:
a) (i) Prepare the profit and loss account for Soittara Enterprises for the year ending 31st December
2005. (5mks) *Kyo*
(ii) Give the importance of the profit and loss account. (5mks) *Kyo*
b) Discuss five problems encountered when computing the consumer price index of commodities.
(10mks) *Kyo*

Keiyo District Mock- Business Studies Paper 2 Question Paper

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