1) Highlight any four problems that a country may experience when it has decentralized its industries.                                                                                                             

2.     Highlight any four characteristics of money that enables it to serve its purpose efficiently.                                                                                                                                              4mks

3.     Explain any four problems that Kenya would experience from participating in international trade.                                                                                                                      4mks

4.     Outline any four importance's of advertising as a sales promotion method.                  4mks

5.     Highlight any four ways in which insurance companies make profits.                           4mks

6.     Mention four of the contents in the articles of association.                                            4mks

7.     In the spaces provided, name the type of business organisation described by each of the following features.                                                                                           4mks

Description                                                                Business organisation

a)     Each member has only one vote                                .............................................

b)     The business enjoys perpetual succession                  .............................................

c)     Each member may act on behalf of the business       .............................................

d)    Formed by an act of parliament                                 .............................................

 

8.     Identify four services that can be conveniently paid for using standing orders (bank orders)                                                                                                                                            4mks

9.     Give any four reasons why the Kenyan government is actively involved in licencing

business activities.                                                                                                           4mks

10. Outline any four main principles of investment                                                              4mks

11. Explain the meaning of the following terms.                                                                   4mks

i)                   Par value

ii)                 Blue chips

iii)               Cum right or Ex-Right

iv)               Tilt Edged securities

 

12. The following is a summary of transactions for Ryan Traders for the month of April 2002. 

2^nd April   - Commenced business with shs. 12,000 in cash and shs. 150,000 at the bank

3^rd  April   - Made cash sales amounting to shs. 6,000

5^th April    - Received cash shs. 16,000 from a debtor

12^th April  - Paid for motor expenses shs. 7,000 in cash

13^th April  - Drew shs. 30,000 from bank for office use

15^th April  - Paid salaries in cash amounting to shs. 15,000

17^th April  - Bought furniture worth shs. 18,000 paying by cheque.

18^th April  - Paid expenses amounting to shs. 15,000 by cash

19^th April  - Cash sales of shs. 40,000 received by cheque

23^rd April  - Paid shs. 20,000 cash into the bank

25^th April  - Paid a creditor shs. 16,000 by cheque

 

You are required to prepare two-column cash book for Ryan Traders for the month of April 2002.                                                                                                                   8mks

13. Highlight any four reasons why the Kenyan government finds it necessary to train businessmen.                                                                                                                                    4mks

14. The following balances were extracted from the books of A & B Co. as at 1^st April 2002.

Capital      shs. 200,000

Fixed Assets shs. 180,000

Current Assets     shs. 40,000

Current Liabilities shs. 20,000

 

During the month, the following took place.

i)         Goods worth 50,000 were taken away from the business for personal use.

ii)       Net profit of shs. 80,000 was realized.

Calculate capital as at 30^th April 2002.                                                                      4mks

 

15. Other than advertising, mention any other four methods of sales promotion.               4mks

16. Highlight any four reasons why most businessmen do not prefer transferring their goods

 via canals.                                                                                                                        4mks

17. Alex is an employee of an advertising firm as a sales executive. He receives a salary of

Kshs. 10,000 plus commission of the following basis:-

On the first sales of shs. 100,000 - 2%

On the next shs. 200,000             - 5%

On the balance of sales                - 10%

He sold an advertising space worth shs. 450,000 during the month of January 2002. 

Calculate his total income for the month.                                                                        4mks

18. Highlight any four methods that the government can use to influence the quantity of a commodity supplied.                                                                                          4mks

19. Indicate the type of resource represented by the following.                                           4mks

Type of Resource

 

           Forest                                     ......................................................................

           Road                                      ......................................................................

           Doctor                                    ......................................................................

           Wildlife                                  ......................................................................

 

 

 

 

20. Outline any four methods of determining prices in the market.

21. Write short notes on the following types of partners.                                                     4mks

a)     Active Partners

b)     Minor partners

c)     Quasi partner

d)    Outgoing partner

22.  "The office performs a fundamental role in any business organisation." Account for this statement.                                                   

Question

1.    Highlight any four problems that a country may experience when it has decentralized its industries.

·        Increases problem of coordination among various unit

·        Increases the administrative expenses

·        It bring problem of inadequate uniformity since managers will form their own policies and actions

·        Overreliance on managers

2.   Highlight any four characteristics of money that enables it to serve its purpose efficiently

·        Durability money can serve for longer period

·        Portability money can be easily be carried around

·        Divisibility money can be divided into smaller other denominations

·        Uniformity money is in the same size, shape and value.

3.      Explain any four problems that Kenya would experience from participating in international trade. 

·        Cultural differences: by participating in international trade Kenyan will interact with people with different culture hence can lead to erosion of its own culture.

·        Intellectual property theft. the wider a product is distributed, the more likely that it may be illegally copied by a competitor, and with cross country boarders it becomes difficulty for a company to prosecute

·        Language barriers: despite of availability of online translators language is still a problem of international due to poorly translated products and also need to interact with customer.

·        Returning products since not all customers will be satisfied with the county's product, a process must be in place to return them and a process of refund which is costly.

4.   Outline any four importance of advertising as a sales promotion method. 

·        It helps to remove customers dissatisfaction about a particular product

·        It creates a brand image in the mind of consumers and the users

·        It helps in stimulating the demand for the product in the market

·        It helps in the marketing control about the performance conditions.

5.   Highlight any four ways in which insurance companies make profits.

·        Charging premiums in exchange for insurance cover

·        Re-investing premiums into other interest generating assets

·        When the risk does not occur the premium contributed is not refunded

·        By getting a lot of policies at the lowest possible costs and keeping those policies active as for long as possible

6.    Mention four of the contents in the articles of association.        

·        Directors, their appointment, powers and duties

·        Classes of shares, their values and rights attached to them.

·        Dividends and reserves

·        Procedures of calling the meeting

·        Voting rights of members

7.   In the spaces provided, name the type of business organisation described by each of the following features.                                                                                           4mks

Description

Business organization

a)      Each member has only one vote

 cooperatives

b)     The business enjoys perpetual succession

Limited companies

c)      Each member may act on behalf of the business

Partnership

d)     Formed by an act of parliament

Statutory company

 

8.    Identify four services that can be conveniently paid for using standing orders (bank orders) 

·        Paying utility bills

·        Paying rent

·        Putting into saving account

·         Paying for fuels at Petrol station.

9.   Give any four reasons why the Kenyan government is actively involved in licensing

Business activities. 

·        To regulate the number of businesses in a given place at any given time to avoid unhealthy completion

·        To ensure there are no legal businesses

·        To raise revenue for the government

·        To control the type of goods entering and leaving the country

10. Outline any four main principles of investment

·        Setting goals of investments, having a specific goal in mind will help you to reduce vulnerability to investment noise during periods of market volatility

·        The concept of balanced portfolio, it includes building an asset allocation strategy that aligns to your investment goals, based on realistic return assumptions.

·        Cost, cost takes a significant toll on your portfolio particularly when compounded over years

·        Discipline, maintaining a long term discipline approach will help to avoid making decisions that are rooted in impulsiveness.

11.  Explain the meaning of the following terms.                                                                   4mks

i)  Par value this means the stated value or face value

ii)   Blue chips refers to a nationally recognized, well established and financially sound company

iii) Cum right or Ex-Right refers to a .stock that is a subject of aright offering and is trading with the rights attached to the common stock

iv) Tilt Edged securities refers to high grade bonds that some national government and private organization issue in an effort to generate revenue

12.  You are required to prepare two-column cash book for Ryan Traders for the month of April 2002.

DR                                                                                                                                   CR

Date

 Description

Cash

bank

Date

description

cash

bank

2^nd April

Balance b/d

12000

150000

12 April

Motor expenses

7000

 

3^rd April

sales

6000

 

13 April

Cash (c)

 

30000

5^th April

Debtors

16000

 

15 April

salaries

15000

 

13 APRIL

Bank (c)

30000

 

17 April

Furniture

 

15000

19 April

sales

 

40000

18 April

expenses

15000

 

23 April

cash

 

20000

23 April

Bank (C)

20000

 

 

 

 

 

25 April

creditors

 

16000

 

 

 

 

30 April

Balance c/d

7000

1490000

 

 

64000

210000

 

 

64000

210000

1 May

Balance b/d

7000

1490000

 

 

 

 

13. Highlight any four reasons why the Kenyan government finds it necessary to train

·        To expose them to modern business management

·        To expose them to government policies in managing a business

·        To impact proper business ethics in traders and business people

·        To educate them on efficient method of doing business

14.  Capital = fixed assets+ current assets+ profit- current liabilities- drawings

              = 180000+40000+80000-20000-50000

                   = sh.230,000

Capital as at 30^th April =sh. 200000 balance b/f+sh.230000

= sh430,0000.

15. Other than advertising, mention any other four methods of sales promotion. 

 

·        Offering premiums where customers are offered goods at a discount

·        Providing product samples with other famous products to increase on sales

·        Offering coupons where you buy one and get one free

·        Product placement.

16. Highlight any four reasons why most businessmen do not prefer transferring their goods via canals

·        It is more risky due to dangers of sinking

·        It is slow

·        It is not more reliable since canals can freeze over the winter rendering them useless

·        It is costly since it requires huge amount of capital investment to construct and maintain its track

17. Calculate his total income for the month

Commission on first sale= 2%*100000=ksh.2000

Commission on next sale= 5%*200000=ksh. 10000

Commission on balance of sale=10%*(450000-100000-200000)

                                                 =ksh.15000

Total income= basic salary +total commissions =10000+15000+2000+10000 =ksh.37000

18. Highlight any four methods that the government can use to influence the quantity of a commodity supplied.

·        Offering subsidies

·        Creation of monopolies through licensing

·        Price control

·        Taxes

19. Indicate the type of resource represented by the following. Type of Resource

forest

Natural resource

road

Manmade resource

doctor

Human resource

wildlife

Natural resource

 

20. Outline any four methods of determining prices in the market.

·        Cost based pricing, here some % of desired profit margin is added to the cost of product to obtain the final price

·        Competition based pricing here the organization considers the prices of competitor's product to set the prices of its own product

·        Demand based pricing here the price of a product is finalized according to its demand

·        Value prizing here the organization charge low prices for high quality goods to win loyal customers.

21. Write short notes on the following types of partners.                                                

a)     Active Partners refers to a partner who takes part in the day to day running of the business and also takes active participation in the conduct and management of business firm

b)     Minor partners is a partner who is yet to obtain the age majority in the land of law, however, he can also be appointed to claim the benefits of the partnership

c)     Quasi partner is a partner who was once a partner of the business but left his share capital to be used in the business. Such a partner act as a creditor to the business and has to be paid interest on his share capital.

d)    Outgoing partner is a partner who voluntarily retire without dissolving a firm. He is liable for all his debts and obligations incurred before his retirement.

22. The office performs a fundamental role in any business organization." Account for this statement.

·        Office receives and collect information from different source that is internal and external

·        Recording information, the office records information available from different sources which help to organize record and message of the business

·        Analyzing collected information to find out the necessity of the information for future purposes

·        Storing information, the office stores information in separate files for future purpose.