THE KENYA NATIONAL EXAMINATIONS COUNCIL
Kenya Certificate of Secondary Education
Time: 2 ½ hours 565/2 – Business Studies – P2
Tuesday 11:30 am – 2:00 pm
20/11/2012 (2nd Session)
Instructions to Candidates
- Write your name and index number in the spaces provided above.
- Sign and write the date of the examination in the spaces provided above.
- This paper consists of SIX questions.
- Answer any FIVE questions.
- Write your answers in the spaces provided after question SIX.
- All questions carry equal marks
- This paper consists of 16 printed pages.
- Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing.
For Examiner’s Use Only
1 (a) Explain five benefits of division of labour to an organization (10 marks)
(b) Explain five ways in which a computer may be used in an office. (10 marks)
2 (a) The table below shows the demand and supply schedules for product A in a week.
Price (sh) Quantity demanded Quantity supplied
(‘000’ tones) (‘000’ tones)
35 5 80
30 10 65
25 20 55
20 25 40
15 30 35
10 40 20
5 55 5
Using the information given in the table above, draw the demand and supply curves showing the market equilibrium for the product. (10 marks)
(b) Explain five merits of direct taxes to the government. (10 marks)
3 (a) Explain five disadvantages that a country would suffer if she restricted trade with other countries. (10 marks)
(b) Discuss five factors that may promote entrepreneurship in Kenya. (10 marks)
4 (a) Explain five characteristics of property insurance (10 marks)
(b) Explain five elements of effective communication (10 marks)
5 (a) The following Trial Balance was prepared by Laketi Traders on 31st December, 2009.
Particulars Dr (shs) Cr (shs)
Motor vehicle 800,000
Gross profit 1,960,200
Cash in hand 150,000
General expenses 117,800
Discount received 66,100
Commission allowed 12,400
Capital ___ 1,000,000_
Using the information given above, prepare:
(i) A profit and loss account; (5 marks)
(ii) A balance sheet (7 marks)
(b) Describe four characteristics of services (8 marks)
6 (a) A school leaver plans to start a retail business. Explain five types of small scale retail shops the person may start. (10 marks)
(b) Explain five circumstances in which a firm may acquire monopoly power (10 marks)