312/2 Kcse Business Studies Paper 2 Question Paper
312/2 Kcse Business Studies Paper 2
Course:Business Studies
Institution: Kcse question papers
Exam Year:2010
BUSINESS STUDIES 2010
PAPER 2
1. (a) Explain five features that differentiate a Public Limited Company from a partnership form of business. (10 marks)
(b) With the aid of a diagram, explain the behaviour of average cost curve in the short run for a firm with fixed production capacity. 10 marks)
2. (a) Explain five challenges that may be experienced by a country whose population is made up of a large proportion of young people. (10 marks)
(b) On 1 September 2006. Igonji had Sh55 000 in hand and Sh 250 000 at bank. During the month, the following transactions took place:
September 2 Cash sales banked Sh 35 260
3 Bought ribbons in cash Sh 4 500
8 Paid Wangila, a creditor Sh 94 000 by cheque in full settlement of his account after deducting 6% cash discount
12 Received a cheque for Sh 58 800 from Wetu after allowing her a cash discount of Sh 1200
15 Paid salaries Sh 34 000 in cash
25 Withdrew Sh 50 000 from bank for office use
28 Anyango, a debtor paid her account of Sh 75 000 by cheque less 10% cash discount.
30 Deposited all the cash into bank except Sh 13 700
Prepare a three column cash book and balance it off. (10 marks)
3. (a) Explain five ways in which effective management practices may contribute to the success of a business. (10 marks)
(b) Explain five reasons why an effective filing system is important in an office.
(10 marks)
4. (a) Explain five circumstances that would influence a producer to use wholesalers in distributing farm produce. (10 marks)
(b) Memon Traders does not keep a complete set of accounting records. The following information relates to the year ended 3 1 December 2006.
(i) Extract of cash summary- was:
Cash receipts
Cash sales 420,200 Commission received 36,400
Cash payments
Purchases 260,000 General expenses 50,000 Insurance 14,800
(ii) Extract of assets and liabilities:
1.1.06 31.12.06
Sh. Sh.
Stock 65,000 92,500
Insurance paid in advance 16,200 4,000
Commission receivable 8,400 10,200
Unpaid General expenses 48,000 70,000
Additional information
Included in credit sales are drawings of stock valued at Sh 25 000.
For the year ended 3 1 December 2006, determine the following:
(i) Total sales
(ii) Total purchases
(iii) Commission receivable
(iv) Insurance expense
(v) General expenses (10 marks)
5 (a) Describe four measures that the Government may put in place to reduce the amount of money in circulation. (8 marks)
(b) Explain six circumstances under which a country may restrict international trade.(\2 marks)
6 (a) Explain four circumstances in which a trader may offer after sales service to the buyer. (8 marks)
(b) The following balances were extracted from books of Simba Traders for the year ended 3 I December 2006.
Shs
Debtors 1 30,200
Motor vehicles 750,000
Creditors 260,000
Furniture 160,500
Drawings 60,800 '
Salaries 322,600
Rent 14,800
Bank loan 200,000
Discount received 14,500
Gross profit 210,000
Stock 45,600
Additional information
(i) Motor vehicle is depreciated by Shl87 500 while furniture is to be depreciated by Shl6 050 per year.
(ii) Interest on loan is charged at 18% per year. This interest was still owing on 31 December 2006.
(iii) Rent unpaid on 31 December 2006 was Sh 2400
Prepare
(a) Profit and loss account for the year ended 31 December 2006
(b) Balance sheet as at 31 December 2006. (12 marks)
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