Business Studies: Pbus 021 Question Paper
Business Studies: Pbus 021
Course:Certificate Of Pre-University Business
Institution: Kabarak University question papers
Exam Year:2010
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2010/2011 ACADEMIC YEAR
FOR THE CERTIFICATE OF PRE – UNIVERSITY BUSINESS
COURSE CODE: PBUS O21
COURSE TITLE: BUSINESS STUDIES
INSTRUCTIONS:
1. The paper contains FIVE (5) questions
2. Answer question ONE and any other TWO from the remaining FOUR
3. Question one carries 30 marks and the other 20 marks each
QUESTION ONE
(a) Write short notes on the following
(i) A Corporate Body (2 marks)
(ii) Accruals (2 marks)
(iii) A Joint Stock Company (2 marks)
(b) Giving examples, discuss the FOUR major economic utilities that businesses often
Create (8 marks)
(c) Explain FOUR similarities between a private limited company and a partnership (4 marks)
(d) What are the advantages of Co-operatives as a form of business ownership (4 marks)
(e) The following balances in kshs. Were extracted from the books of Nakuru Enterprises
as at 30th November 2010. Prepare a balance sheet for this business and determine the
owners Equity
Office machinery – 38,000, Bank overdraft – 100,000, Supplies – 25,000,
Creditors – 45,000, Motor vehicle – 125,000, Debtors – 48,000, Accruals – 15,000,
Bank loan – 64,500, Fixtures – 32,600, Stocks – 56,400, Debentures – 84,000, cash -20,000,
Cash at bank – 60,000,
Owners Equity -?. (6 marks)
(f) What is the meaning of credit creation by commercial banks (2 marks)
QUESTION TWO
(a) Differentiate between Trade Credit and credit cards as sources of finance for businesses
Clearly indicating the advantages of each source (6 marks)
(b) Eldon and his friends have decided to form and register a company. They do not know
what documents are required for registration and they seek your advice. Explain to them
the type documents required and the purpose of each document. (10 marks)
(c) What are retained earnings? Why would business management decide to take this kind of action of retained earnings? (4 marks)
QUESTION THREE
(a) You have been appointed the financial manager of a company and part of your role is to
Source for funds for this company. Explain the reasons for and conditions under which
you would prefer using Hire purchase as a source of finance for your company (8 marks)
(b) Explain the stages in the development and evolution of money as a form of exchange
(8 marks)
(c) Briefly discuss on any FOUR functions of commercial banks in Kenya. (4 marks)
QUESTION FOUR
(a) Explain the main differences between the following as used in business
(i) Debentures and preferential shares (3 marks)
(ii) Micro Environment and Macro Environment (3 marks)
(iii) Money as a unit of account and money as a measure of value (3 marks)
(iv) A balance sheet and profit and loss account (3 marks)
(b) Highlight on any two main objectives of Co-operative societies (2 marks)
(c) Define the term business finance. Explain the classification of the different sources of finance
available for businesses (10 marks)
QUESTION FIVE
(a) One of the main functions of the Central bank of Kenya is monetary control. Explain what
this means and discuss the different techniques/methods used to achieve this function
(10 marks)
(b) Tom is a sole proprieter who has decided to admit his two cousins to form a partnership.
Discuss the advantages of making such a decision (6 marks)
(c) Identify any FOUR Disadvantages of a public limited company (4 marks)
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