THE KENYA NATIONAL EXAMINATIONS COUNCIL

Kenya Certificate of Secondary Education

BUSINESS STUDIES

Paper 2

Time: 2 ½ hours 565/2 – Business Studies – P2

Tuesday 11:30 am – 2:00 pm

20/11/2012 (2nd Session)

Instructions to Candidates

  1. Write your name and index number in the spaces provided above.
  2. Sign and write the date of the examination in the spaces provided above.
  3. This paper consists of SIX questions.
  4. Answer any FIVE questions.
  5. Write your answers in the spaces provided after question SIX.
  6. All questions carry equal marks
  7. This paper consists of 16 printed pages.
  8. 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

Question 1 2 3 4 5 6 Total
Marks

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)

Premises 850,000

Debtors 650,500

Creditors 820,000

Motor vehicle 800,000

Equipment 550,500

Gross profit 1,960,200

Furniture 350,000

Stock 75,000

Bank 200,000

Cash in hand 150,000

General expenses 117,800

Discount received 66,100

Commission allowed 12,400

Insurance 7,500

Lighting 4,600

Salaries 78,000

Capital ___ 1,000,000_

3,846,300 3,846,300

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)