question archive 1) Indicate the account in which the following entries as made
1) Indicate the account in which the following entries as made
Subject:FinancePrice: Bought3
1) Indicate the account in which the following entries as made. (4mks)
Entry
Account
Bad debts
Carriage inwards
Returns inwards
Discounts given
Gross profit
Purchases
Drawings
Pre-paid rent
2. Highlight four ways in which Insurance companies make profits. (4mks)
3. The major objective in commerce is to maximize profits. Highlight four ways in
which businesses can achieve this important objective. (4mks)
4. Use the following information to Calculate the required ratios.
Sundry debtors 52,000
Stock 5,000
Cash at bank 100,000
Capital 40,000
Net profit 16,000
Current liabilities 82,000
Calculate:
(i) Current ratio. (3mks)
(ii) Quick ratio. (2mks)
5. Mention four types of wholesalers. (4mks)
6. List down four machines used in the mail nom and their use. (4mks)
MACHINE
USE
(i)
(ii)
(iii)
(iv)
17. The law of demand applies 'ceteris penbus' all other factors held constant ). Highlight
four circumstances under which this law may not hold. (4mks)
11. As the transport manager of a busy company. Highlight four factors you would consider
before choosing a mode of transport for your goods and services. (4mks)
8. The following balances were extracted from the books of Beauty Care Enterprises on
31st of March 1997.
Shs.
Fixed Assets 42,000
Stock 48,000
Debtors 50,000
Bank overdraft 25,000
Creditors 40,000
Cash in hand 2,000
During the month of April the following transactions took place.
(a) Bought Motor Vehicle on credit valued at kshs. 80,000 from General motors.
(b) With drew Sh. 28,000 for personal use.
Required: Prepare balance sheet as at April 30th 1997. (5mks)
9. Give four reasons why an office may prefer storing information in Micro-films instead
of files. (4mks)
10. Name four documents used in home trade. (4mks)
11. Mention four reasons to justify that the Central Bank is not a Commercial Bank. (4mks)
12. Give four reasons why people prefer using a cheque to cash when effecting payment. (4mks)
13. The following information relates to Sis Mis traders for the year ended 31st Dec 1996.
Opening stock
Closing stock turnover 8 times
Sales for the year 293,000
Determine:
(a) Cost of sales
(b) Purchases
(c) Gross profit or Gross loss. (5mks)
14. Give four advantages of personal selling as a means of sales promotion. (4mks)
15. Mention four of the contents in articles of association.
2. (a) Despite major development in the transport sector. Many people are still using
carts (both those driven by animals and those pushed by human beings).
Discuss five reasons to show why this type of transport is still preferable to others.
(10mks)
(b) Money evolved through several stages to get to the currency notes and coins we
have today. However " Modern - day trade may compare negatively with barter
trade". Discuss this statement giving it your support. (10mks)
15. (a) A business enterprise should keep a budget other than the other statements it
keeps. Discuss reasons why this activity is important. (10mks)
(b) You are the sales manager of 'speed' Industries Ltd. that manufactures tyres.
You are faced with the decision to choose an appropriate channel to distribute the
product. Discuss the factors you consider in your choice. (10mks)
16. (a) Mail order business is whereby customers place their orders through mail and goods
are also send through mail. This business is however not popular in Kenya.
Discuss five reasons to encourage your colleagues to start this type of business. (10mks)
(b) Discuss the factors that influence the choice of a filing system in an organization. (10mks)
17. (a) Briefly explain the following terms as used in Capital structure of a company.
(i) Registered capital. (2½ mks)
(ii) Called - up capital. (2½ mks)
(iii) Issued capital. (2½ mks)
(iv) Paid - up capital. (2½ mks)
(b) Specialization is the separation of jobs, activities and processes so that every individual concentrates on what they can do best. Name and explain four major such divisions.
(12mks)
18. (a) Discuss five benefits that the Kenyan government gets from Binded Warehouses. (10mks)
(b) Mwachai BINA's books disclose the following information for the period ended
31 Dec. 1996.
Opening Stock 21000
Purchases 40000
Closing Stock 10000
Sales 82000
Returns inwards 2000
Motor Vehicle 10000
Rent 3000
Sales expenses 18000
Discount received 3000
19. State four advantages of a bonded warehouse 4mks
20. Name the factor of production that each of the following resources relate to. 5mks
Resource Factor of production
a) Teacher ______________________________________
b) Computer ______________________________________
c) Water ______________________________________
d) Sole proprietor ______________________________________
e) Forest ______________________________________
21. Mention any four methods used for sending money through the post office. 4mks
22. Using the book keeping equation, indicate the correct figure in the empty spaces provided.
Assets
Capital
Liabilities.
180,000
50,000
200,000
90,000
45,000
38,000
150,000
50,000
23. The following information was drafted from the books of Rayrose college on 31st Jan 2002.
Item Amount (Kshs)
Opening stock 400,000
Sales 700,000
Closing stock 10,000
Purchases 150,000
Sales returns 20,000
Purchase returns 50,000
Salaries and wages 80,000
Rent 70,000
Income 80,000
Calculate:
a) Gross Profit 4mks
b) Net profit 4mks
c) Mark-up percentage 2mks
