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Business Studies(Buss 030) Question Paper

Business Studies(Buss 030)

Course:Education And Pre-University

Institution: Kenya Methodist University question papers

Exam Year:2010

TIME : 2 HOURS
INSTRUCTIONS Answer ANY FOUR Questions

Question 1
a) Sam runs a small business as a sole-proprietor. His business has grown in the past one year and is therefore considering inviting his friend Siti to join him so that they form a partnership. Discuss with Sam the benefits as well as the challenges he might face from this kind of arrangement. (10marks)
b) Briefly discuss five sources of financing available to both Sam and his friend (5marks)

Question 2
a) The supply of maize has increased significantly as a result of favorable weather conditions experienced in the country. Draw a diagram showing the effect of this on equilibrium price and quantity. (10marks)
b) Identify and briefly explain five sources of Government revenue for development expenditure.(5marks)

Question 3
a) Discuss five factors within the external environment of a business and show how they can negatively affect a business. (10marks)
b) Explain five features that differentiate a public limited company from a partnership (10marks)

Question 4
The following details relate to ICHO ENTERPRISES, a private limited company as at 31st December 2007 Shs.
Building 540,000
Bank Loan 472,500
Debtors 116,900
Creditors 227,000
Capital 1,400,000
Motor vehicle 900,000
Furniture 408,170
Stock as at 31st 72,500
Interest on loan 1,200
Discount allowed 142,200
Rent received 120,000
General expenses 102,100
Lighting 25,200
Repairs on buildings 60,000
Repairs on furniture 72,030
Salaries and wages 300,000
Gross profit 520,600

Required
a) Prepare the profit and loss account for the year ended 31st December 2007. (8marks)
b) Prepare the Balance Sheet as at 31st December 2007 (7marks)

Question 5
a) Explain five ways in which effective management practices may contribute to the success of a Business. (10marks)
b) Discuss five measure that the Government can take to encourage entrepreneurship in the country. (5marks)

Question 6
a) Highlight any five principles of taxation (10marks)
b) Describe five functions of the Nairobi Stock Exchanges (5marks)

Business Studies(Buss 030) Question Paper

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