Form 3 Business Studies Paper 1 questions and answers

Questions/Lessons List

1. Outline four reasons that can lead to dissolution of sole proprietorship. ()

2. State four characteristics of services. ()

3. State four reasons why a trader needs a business plan. ()

4. Mention four roles of Nairobi stock exchange. ()

5. Outline four reasons why the government may use regulatory measures to protect consumers exploitation. ()

6. outline four methods that can be used to solve unemployment problem in Kenya. ()

7. Outline four roles of good filing system. ()

8. Under what circumstances would a trader prefer to use cash as a means of payment rather than a cheque. ()

9. State the type of insurance policies as explained by the following statements. a) It covers employees who may suffer injuries while on official duty b) Protect one from dishonest employees c) Covers losses caused by vehicles to other people, other property and other vehicles d) Covers ship against loss or damage while at sea ()

10. The economy of the country has grown at the rate of 10% per annum for the last three years. However , the standard of living among citizens has not changed. Outline four reasons that may account for this trend. ()

11. Give reasons to justify existence of small firms in economy. ()

12. State four reasons that may limit the use of modern technology in business. ()

13. State four difficulties faced in satisfaction of human wants. ()

14. Classify the following items as either basic or secondary wants. i) Drinking water ii) Shoes iii) Education iv) Entertainment ()

15. State four features of monopolistic completion. ()

16. State four ways in which office documents can be reproduced. ()

17. Personal selling is an important tool of product promotion. State five circumstances under which personal selling would be effective. ()

18. State four benefit of locating a business close to where others are located. ()

19. State four features of a supermarket. ()

20. state four reasons why government issues licenses to business in the country. ()

21. State four disadvantages of using credit card when paying for goods. ()

22. State four reasons for popularity of “bodaboda” as means of transport. ()

23. Explain the meaning of the following terms as used in business unit. i) Unlimited liability ii) Limited liability ()

24. State whether each of the following factors fall under internal or external business environment. factor Internal or external business environment a) suppliers b) facilities c) business culture d) Cultural environment ()

25. State three examples of each of the following resources -renewable resources -non-renewable resources ()

26. Distinguish between the division of labour and specialization. ()

27. Explain the meaning of the following characteristic of human wants. a) Human wants are unlimited b) Human wants are universal ()

28. Outline four characteristics of good business opportunity. ()

29. State four ways of reproducing documents in an office. ()

30. Highlight four disadvantages of operating a kiosk business. ()

31. State four characteristics of chain stores type of retail business. ()

32. Outline four factors that influence choice of appropriate means of transport. ()

33. State the principle of insurance to which each of the following statement relate. a) Restoring the insured to the financial position he/she was in just before the risk occurred b) A person can only insure property whose destruction would result to a financial loss to him/her c) Whatever remains of the property of insured after the insured has been compensated becomes the property of the insurer. ()

34. Highlight four essential features of any market. ()

35. The following balance sheet relates to Kaptik wholesalers. Kaptik wholesalers Balance sheet As at 1st Oct.2016 Sh sh Furniture 90,000 capital 100,000 Debtors 40,000 creditors 20,000 Cash 70,000 AFC loan 80,000 200,000 200,000 The following transaction took place during the month of October; a) Received cash sh 30,00 from debtors b) Paid creditors sh 20,000 c) Banked all the cash except 10,000 ()

36. Distinguish between derived and joint demand. ()

37. State four government initiated methods of protecting consumers from unscrupulous traders. ()

38. Sate four disadvantages of face to face communication in business. ()

39. Outline four factors which affect the circular flow of income. ()

40. State four features of bonded warehouse. ()

41. Outline four measures that can be used that can be used to stimulate employment in rural areas. ()

42. State four features of monopoly market. ()

43. Outline four merits of a short chain of distribution. ()

44. State four factors that can influence the location of a firm. ()

45. Shekinah traders had the following record for the year ending 30th June 2016. Capital as at 30th June 2018 sh 640,000 Net profit for the year sh 140,000 Capital as at 1st July 2015 sh 420,000 Drawing for the year sh 180,000 Required: calculate the additional capital during the year. ()

46. Highlight four features of land as a factor of production ()

47. Outline four circumstances under which business organization would hire rather than purchase an office machine ()

48. State four factors that may limit an individuals ability to satisfy his/her basic wants ()

49. Outline four measures an entrepreneur should take to ensure a conducive internal environment for his business ()

50. Highlight any four reasons why a trial balance may not balance ()

51. Highlight four factors that account for the shift of supply curve to the right ()

52. Explain the following in relation to bill of exchange a)Discounting b)Maturity date c)Acceptor ()

53. State four requirements necessary to secure a loan from the saccos ()

54. Outline four ways in which nature of goods influence the channel of distribution ()

55. Highlight four problems faced by the government in measuring national income ()

56. Highlight four circumstances under which goods may delay in the bonded warehouse ()

57. Highlight four ways a trader benefits from localization of industries ()

58. State the documents used in each of the following purposes a)To inform the customer that the account has been reduced b)Contains a summary of transactions for a specified period of time between a seller and the buyer c)To ask a dealer to supply specific goods d)To inform a customer that the account has been increased ()

59. The following trial balance was incorrectly prepared Task: prepare a correct trial balance ()

60. The following are special delivery services provided by the post office: Post restante, speed post,business reply service and express delivery. Match each description with the term a)The arrangement to deliver the mail of senders post office b)The arrangement to deliver the mails to the addresses post office c)Services offered to travelers who wish to receive correspondence while away from home ()

61. Outline any four reasons that account for the popularity of motor bikes as a means of transport ()

62. Give four measures being used by the government to attract foreign investors ()

63. Highlight four limitations of consumer initiated methods of consumer protection. ()

64. The following information relates to Buda traders Capital on 1st jan 2015 sh 700000 Drawing during the year sh 80000 Investments during the year sh 460 000 Capital on 31 st December 2015 sh. 900000 Required: determine the net profit or net loss of the business ()

65. Outline four characteristics of oligopoly market ()

66. Outline five positive implications of high population growth rate in the country ()

67. Give four situations under which insurance policy may be terminated ()

68. Airtel mobile company is running “Angulia million promotion”. Highlight four benefits of this method of advertising ()

69. An entrepreneur may spot a gap in the market which may be converted into a business idea Identify four such gaps ()

70. Outline five differences between a public limited company and a public corporation ()

71. new1 ()

72. this one payable ()