Business Mocks s1 Qs

BUSINESS MOCKS
COMPRISES OF 10 TRIALS OF mocks

(BOTH PAPER 1 AND PAPER 2 are present in each trial)
N/B:DUE TO HIGH COSTS INCURRED

WHILE COMING UP WITH THIS AND OTHER SIMILAR RESOURSES,
MARKING SCHEMES ARE NOT FREE OF
CHARGE.
QUESTIONS ARE FREE OF CHARGE.
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
SERIES 1 TRIAL 1 PAPER 1
Kenya Certificate of Secondary Exams
TIME:2HRS 30 MINS
Answer all questions
1. Outline FOUR features that constitute a market. (4 Marks)
2. The following diagram represents demand and supply of a product y
a b
Price (ksh)
p
q
Quantity
State what is represented by curves

(a) ap
(b)bq
(c) letter c
(d)On the diagram, indicate equilibrium price (PE) and equilibrium quantity (QE)
(4 Marks)
3. Outline FOUR advantages of after sales services as a method of sales promotion to a
customer. (4 Marks)
4. Give FOUR reasons why a consumer should satisfy basic wants before secondary
wants. (4 Marks)
5. Outline FOUR reasons why a multinational company may prefer setting up a
production unit in developing country instead of exporting finished goods to the
country. (4 Marks)
6. State the factor of production that each of the following resources relate to:-
(5 Marks)
Resource Factor of production
(a) Manager
(b) Quarry
(c) Vehicle
For marking schemes,call/whatsapp Mdm Mariam-0746 711 892
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(d) Water
(e) Owner
7. In the spaces provided below, indicate with a tick ( ) whether each of the following
statements relates to preference or ordinary shares. (3 Marks)
Statement Preference Ordinary
(a) Represents real owners of
company
(b) Rate of dividends is fixed
(c) Has voting rights
(d) Redeemable
(e) May be cumulative
(f) Considered last in
liquidation
8. Outline FOUR features of trade credit as a source of finance for business units.
(4 Marks)
9. State the term that best fit each of the following description. (4 Marks)
(a) Money brought into the business by owner
(b)Goods bought for resale
(c) Money withdrawn by owner of business for personal use
(d)Money borrowed from outsiders by owner of the business for business use
10. The following balances were obtained from the books of Jomba Traders as at 30th July
2014
Shs.
Opening stock 50,000
Sales 360,000
Gross profit 25% of sales
Closing stock 70,000
Calculate
(a) Cost of goods sold (2Marks)
(b) Rate of stock turnover (2 Marks)
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11.Enter each of the following transactions in the relevant ledger accounts (a) Started
business in June 15th 2014 with Ksh. 500,000 in bank.
(a) Bought a motor vehicle in June 16th 2014 for KSh. 250,000, payment
made by a cheque.
(b) Withdrew Ksh. 50,000 in June 20th 2014 from the business bank a/c to be
used in the office. (d) June 24th, 2014, paid salaries Ksh. 18,000 cash.
12.On June 1st 2015, Kelly had KSh. 6000 cash in hand and a bank overdraft of Sh. 2000;
during the month the following transactions took.
(a) Received cheques from debtors totaling to KSh. 80,000 on June 2nd
(b)June 5th, paid telephone bills Sh. 1200 cash
(c) June 8th, withdrew Sh. 16000 from bank for office use.
Enter the above information in the two – column cash book given below and balance it off
(4 Marks)
Kelly Traders
Two – Column
Cashbook for the month
of June 2015
Date Particulars Bank Cash Date Particulars Cash Bank
13.Outline FOUR ways of curbing cost push inflation. (4 Marks)

14.Outline FOUR circumstances under which the per capita income statistics would be a
good indicator of the welfare of the citizens of country. (4 Marks)
15.Outline FOUR challenges associated with a high ageing population in a country.
(4 Marks)
16. Outline FOUR purposes of taxation. (4 Marks) 17.
State FOUR basis of international trade (4 Marks)
18. Outline FOUR methods that a country may use to restrict international trade.
(4 Marks)
19. State FOUR reasons why an invoice received is important in accounting. (4 Marks)
20. Outline FOUR items that are included when computing national income using the
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expenditure approach. (4 Marks)
21. Outline FOUR features of insurable risks
22. State FOUR features of chain stores. (4 Marks)
23. Outline FOUR factors that constitute an efficient transport system. (4 Marks)
24. State FOUR goals of development. (4 Marks)
25. Outline FOUR disadvantages of use of Automatic Teller Machines (ATMs) in banking.
(4 Marks)
NAME……………………………………ADM NO……………………………………
SCHOOL…………………………………..CLASS…………………………………….
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. (a) Explain FIVE methods of payments offered by commercial banks in Kenya.
(10 marks)
(b)Highlight FIVE reasons as to why a high national income may not necessarily mean
better welfare for the citizens of a country. (10 marks)
2. (a) Kapa Oil manufacturers have decided to eliminate wholesalers in their chain of
distribution. Outline FIVE possible effects that would result if wholesalers were
eliminated. (10 marks) (b) Differentiate
between a perfect competition from a monopolistic competition.
(10 marks)
3. (a) Explain FIVE causes of inflation in an economy. (10 marks) (b) Outline
FIVE challenges that Kenya faces when trying to implement her
development plans. (10 marks)
4. (a) Explain FIVE reasons why a public limited company may prefer to raise finance
through issue of ordinary
shares instead of debentures. (10 marks)
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(b)The following balances were extracted from books of Masaku Traders for the year
ended 31/12/2004
Rent 48,000
Lighting 7,200
Water 9,220
Salaries 75,000
Commission received 12,370
Discount allowed 4,600
Discount received 8,500
Gross profit 320,000
General expenses 98,000
Stock 25,250
Motor Vehicle 2,300,000
Furniture & equipment 650,000
Debtors 270,000
Creditors 396,400
Bank 200,000
Cash 50,000
Capital 3,000,000
Prepare
(i) Profit and loss a/c for the year ended 31/12/2004 (5 ½ marks)
(ii)Balance sheet as at 31/12/2004 (4 ½ marks)
5. (a) Explain SIX measures that the Government of Kenya may take to control her
persistent Balance of payment deficit. (12 marks)
(b) Outline FOUR differences between endowment policy and whole life policy.
(8 marks)
6. (a) Explain FIVE factors that limit the usage of Railway as a means of transport.
(10 marks) (b)
The accounts of Hakuna Matata Traders showed the following balances on 1st January
2014.
Sh.
Cash 250,000
Debtors 60,000
Creditors 42,000
Stock 30,000
Bank loan 120,000
Motor vehicle 310,000

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The following transactions took place during the month of January 2014.
Jan 2: Bought stock worth Sh. 50,000 on credit.
Jan 3:Cash sales Sh. 80,000
Jan 5: Received Sh. 20,000 cash from debtors
Jan 10: Paid part of loan Sh. 70,000 cash
Jan 12: Paid creditors Sh. 52,000
Jan 16: Bought office furniture Sh. 45,000 cash
Jan 20: Paid salaries Sh. 40,000 cash
Jan 25: Deposited Sh. 100,000into the bank
Required:
Record the above transactions in the relevant ledger accounts and balance the
accounts on 31stJanuary 2014. (10marks)
NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. State whether each of the following activities would satisfy basic or secondary wants.
(4 marks)
Activities Basic Secondary

Buying clothes for the
family.
Transporting milk.
Providing food for school
children.
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(a) Entertaining the President.
(b)
(c)
(d)
2. Outline four reasons why a new business may fail. (4 marks)

3. Outline four advantages a consumer enjoys when he/she buys directly from a
manufacturer. (4 marks)
4. Highlight four reasons that make a current account popular among the business people
(4 marks)
5. Boda boda/motorcycles have become popular in Kenya today. Outline four demerits of
this mode of transport. (4 marks)
6. Highlight four circumstances under which deferred payment is acceptable to a trader.
(4 marks)
7. Give four reasons why the government should impose taxes upon its citizens apart
from raising revenue. (4 marks)
8.State the best type of machine one would use to perform the following tasks. (4 marks)
9. Outline four factors that may cause the supply curve to shift to the left.
(a)To arrange papers in a required order.

(b)To trim papers to the required sizes.
(c)To fold documents, put them in envelopes and seal team. (d)To
make exact copies of a certain original document.
10.Kiganjo Traders had the following balances as at 31st December, 2014.
Sh.
Capital (1st December, 2014) 350,000
Additional investments 100,000
Drawings each month 48,000
Capital (31st Dec’ 2014) 470,000
Determine the profit for the year. (4 marks)

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11.Outline four features of direct production. (4 marks)
12. State four ways in which, the government of Kenya may reduce the level of
unemployment. (4 marks)
13.State four benefits of registering a company with the stock exchange market.
14.The following balances relates to the retail business of Omondi for the month of July
2012. Sales 50,000 Expenses 10% of sales
Cost of goods sold 40,000 Calculate:
(i) Mark up. (1 mark)
(ii) Margin. (1 mark)
(iii) Total expenses. (1 mark)
(iv) Net profit. (1 mark)
15. State four uses of a bill of lading in international trade. (4 marks)
16. Outline four circumstances under which insurance companies in Kenya may reinsure.
(4 marks)
17. For each of the following transactions, state the account to be debited and account to be
credited. (4 marks)
Transactions A/c debited A/c credited
The owner brought in cash
from private sources.
Bought goods and paid by
cheque.
Withdrew cash for personal

use.
Paid a creditor by cheque.
18. State four ways in which the utility of a commodity can be increased. (4 marks)
19. Identify four benefits that may accrue from political stability in a country. (4 marks)
20. List four ways in which the government creates an enabling business environment.
(4 marks)
21. State four features of an oligopoly market structure. (4 marks)
22. Give four disadvantages of public warehouses to traders. (4 marks)

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23. Put down four functions of the Kenya Bureau of Standards. (4 marks)
24. Outline four external factors that may influence the operations of a business
negatively. (4 marks)
25. Highlight four limitations of using after-sale services as a method of promoting

products. (4 marks) NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. (a) Explain five features that differentiate a public corporation from a private limited
company form of business unit. (10 mks)
(b) Explain five factors that one needs to consider when selecting an office layout.
(10 marks)
2. (a) Explain five benefits that a country derives from transporting oil through pipeline.
(10 marks)
b)Explain five reasons why citizens may experience low standards of living despite
improvement in the per capita income. (10 marks)
3. (a) Explain five methods of price determination other than price mechanism in a
market. (10 marks)
(b) Explain the following types of unemployment. (10 marks)
i)Cyclical unemployment. ii)Structural unemployment. iii)Frictional
unemployment.
Iv)Seasonal unemployment.
v)Involuntary unemployment.
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10
4. The following trial balance was extracted from the books of Okumu traders as at
31/12/2012.
Dr. (Shs.) Cr. (Shs.)
Purchases/sales 275,000 390,000
Debtors 47,000
Returns 10,000 6,000
Carriage inwards 16,000
Bad debts 3,000
Wages 20,000
Rates 12,000
Buildings 450,000
Furniture 180,000
Bank overdraft 210,000
Insurance 19,000
Discounts 5,000 7,000
Drawings 25,000
Creditors 52,000
Cash at bank 250,000
Cash at hand 40,000

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Capital 689,000
1,390,000 1,390,000
Additional information:
1. Closing stock Sh.50,000
2. Carriage outwards Sh. 8,000 Required:
(i) Prepare Okumu traders trading, profit and loss account for the period ended
31/12/2012.
(ii)Balance sheet as at 31/12/2012. (10
marks)
(b) Explain five monetary policies that the Kenyan government uses to control the
supply of money in an economy. (10 marks)
5. (a) Kenya is a member of EAC. Explain five problems the member countries are likely
to encounter that may hinder them from achieving their objectives. (10 marks)
(b) The following were the balances of Kiboko Traders as at 1st January 2009. Cash
Sh.40,000, bank overdraft Sh.17,000. During the month the following transactions
took place.
January 2nd : Mutiso a debtor settled his account of Sh.32,000 by cheque of Sh.30,000
4th : Paid salaries amounting to Sh.16,000 by cash.
10th: Deposited Sh.12,000 into the business bank account from the cash till.
14th: Settled Wayua’s account of Sh.40,000 and she was allowed a discount of
1% through a cheque.
16th: Deposited Sh.56,000 in the bank from private resources.
17th: Sold goods for cash Sh.24,000.
20th: Mutua, a debtor, settled his account by a cheque of Sh.16,000 having been
allowed a discount of 2%.
24th: Purchased furniture Sh.10,400 paying by cheque.
26th: Received Sh.7,200 cash from Odhiambo.
30th: Banked all the available cash except Sh.3200.
Required: Prepare a three column cash for Kubuka Traders. (10 marks)
6. (a) Explain five factors that have led to the survival of small scale retailers despite
competition from supermarkets. (10 marks)
(b) Kenya is looking forward to the realization of vision 2030. Explain the obstacles that
may hinder the efforts made towards this dream. (10 marks)
NAME……………………………………ADM NO…………………………………
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12
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. Highlight four reasons why people engage in Business activities. (4 mks)
2. Outline four types of resources that are important in Business. (4mks)
3. State four functions of an entrepreneur in the production of goods and services. (4mks)
4. Identify the machine used to perform the following tasks. (4mks)
Statements The machine

a) To count coins and notes
b) To trim paper into required sizes and
shapes
c) To fold documents, place them in
envelope and seal the envelope
d) To print postage impression on
envelopes
5. Outline four differences between chain stores and departmental stores. (4mks)
6. State four statistics that are associated with the measurement of National income.
(4mks)
7. Prepare Sunshine Traders Balance sheet from the following list of balances extracted
from his books as at31 December
2013. (4mks)
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13
Capital 357,000
Stock 40,000
Machines 150,000
Furniture 7,000
Motor vehicles 200,000
Bank 20,000
Creditors 25,000
Cash 5,000
Debtors 60,000
Loan from KCB 100,000
8. Outline four characteristics of a good filing system (4mks)
9. Highlight four methods that Government uses to protect consumers. (4mks)
10.State four factors that a manager should bear in mind to ensure that he/she effectively
communicates with the employees. (4mks)
11.State the meaning of the following principles of insurance. (4mks) a) Subrogation
b) Contribution
c) Insurable interest
d) Indemnity
12.Highlight four characteristics of underdevelopment. (4mks)
13.
Price
Quantity supplied
State four factors that may have caused the change shown in the diagram above.
14.Highlight four causes of unemployment in Kenya. (4mks)

15.Outline four circumstances under which MrOndieki (a farmer) may distribute his
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14
products directly to his customers. (4mks)
16.Tripple SSS wholesalers had the following information as at 31 December 2013

(4mks)
Closing capital 70,000
Total expenses 5,000
Drawings of goods 6,000
Total incomes 3,000
Calculate the capital at the beginning of the year.
17.Highlight four advantages of localization of firms. (4mks)

18. State four characteristics of good money. (4mks)
19. Identify the day book associated with the following source documents given below.
(4mks)
Source documents Day books
Invoice received
Credit note received
Receipt issued
Debit note received
20. Highlight four purposes of public finance. 4mks)

21. The following balances were extracted from the books of Okinda wholesalers on 31st
December 2006. (4mks)
Sh
Capital 800,000
Sales 250,000
Debtors 70,000
Purchases 160,000
Creditors 45,000
(1.1.2006)

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15
(31.12.2006)
General expenses 50,000
5 year bank loan 200,000
Insurance expenses 20,000
Salaries and wages 80,000
Calculate:
(i)Mark up (1 mk)
(ii)Current ratio (1 mk)
(iii)Rate of stock turn over (1 mk)
(iv)Rate on return on capital (1 mk)
22.Highlight four uses of a proforma invoice. (4mks)
23. State four factors that affect the productivity of an office worker. (4mks)
24. In each of the following cases, state the type of inflation described (4mks)
a) The unrest in Libya has resulted to an increase in the price of
oil
b)The price of bread has gone upto sh.60 due to increase in the
price of wheat
c) A lot of money in circulation has led to the general increase
of price
d) Arise in price due to uneven growth in some sectors of the
economy.

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16
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. a) Explain five benefits that would accrue to Country as a result of delocalization.
(10mks)
b) Explain five features of a perfect competition market structure (10mks)
2. a) The following transactions relate to Vivylex wholesalers for the month of
December 1998.
Dec.1 Bought goods on credit from Weka Distributors sh.46,200, Micko
sh15,600 and Limo shs38,360.
3 Sold goods on credit to Lwanda Retailers shs.39,200, Motor
Grocers sh.25,560 and Mawe shs.12,650.
7 Returned goods to Micko sh4,200 and Limo shs6,140.
11 Bought goods on credit from Tuktuk sh34,830.
12 Goods returned by motor Grocers hs4,550 and Lwanda Retailers sh1,280.
15 Sold goods on credit to Motor Grocers shs6,800, Marion traders shs12,800.
18 Goods returned by Marion Traders shs2,060.
22 Bought goods on credit from Fatuma shs22,100, Temo shs38,350.
28 Credit sales to Ngula shs16,060, Oyunga shs12,960 and Mawe shs15,260.
Enter the above transaction in the respective books of original entry (10mks) b)
Discuss five factors that enhances efficient running of a warehouse. (10mks)
3. a) Explain five negative effects of inflation to a country’s economic development.

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(10mks)
b) Highlight five importance of entrepreneurship to the economy of a country.
(10mks)
4. a) Explain five factors that can lead to unfavourable balance of payment.(10mks)
b) Explain five factors to be considered when choosing a method of product
promotion (10mks)
5. a) Describe fiveprocedure to be followed when taking an insurance policy.
(10mks)
b)Explain five limitations of containerization in transport sector. (10mks)
6. a) Highlight five benefits that a country will enjoy as a result of indirect production
(10mks)
b) The following trial balance was extracted from the books of
Mugoya Traders as at 30th June, 2014
Mugoya Traders
Trial balance
As at 30th June 2014
Details Dr (shs) Cr (shs)
Premises 1,500,000
Debtors and creditors 20,000 30,000
Cash at bank 90,000
Cash in hand 10,000
Purchases and sales 140,000 320,000
Stock of good on 1st July 45,000
2013
Discounts 6,000 2,000
Commissions 8,000
Power and lighting 12,000
Returns 15,000 19,000
Carriage outwards 2,300

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Capital 1,543,700
Furniture 27,000
1,922,700 1,922,700
Additional information
Stock of goods on 30th June, 2014 was worth sh22, 000.
Required: prepare trading, profit and loss account for the period ended 30th June, 2014.
(10mks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. Highlight four reasons why public relations are a popular way of product promotion
among banks. (4mks)
2. Mention four non-tax internal sources of revenue to the government. (4mks)
3. Outline four measures that an employer can put in place to improve the performance of
her human resource. (4mks)
4. State whether each of the following transactions will increase, decrease or have no
effect on the Balance Sheet totals (4mks)
Transaction Effect on Balance sheet
totals

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19
a) Sold a private car and deposited the money in business
bank account
b) Withdrew money from bank for office use
c) Paid Mr. Kimeli, a creditor in cash
d) Purchased a Motor car by cheque
5. Highlight four conditions that must be met in order for an insurance contract to be
valid. (4mks)
6. Enter the following transactions in the relevant book of original entry (4mks)
2014 June 1. Made cash purchases worth sh. 25,000
,, 5. Paid sh.38,000 by cheques in full settlement of a debt owed to Kibogong
after deductinga 5% cash discount.
,, 12. Bought stationery and paid by cash sh.19,000.
,, 19. Settled a debt of sh.90,000owed to Yatich stores by cheque after
deducting a 3% cashdiscount. ,, 28. Paid the month’s salaries of sh 80,000,
by cash, sh. 30,000 and the balance by cheques.
7. Outline four ways which the government can use to influence the supply of maize in
Kenya. (4mks)
8. Outline four negative effects of inflation to an economy. (4mks)
9. Highlight four benefits enjoyed by a holder of a credit card (4mks)
10.The following balances relate to the business of Roba Traders during the period ended
31st March 2014. Shs.
Cash at bank 680,000
Premises 500,000
Machinery 175,000
Creditors 190,000
Furniture 85,000
Motor van 200,000
Cash in hand 50,000
Extract the trial balance of Roba Traders as at 31st March 2014.
11.Highlight four circumstances under which air transport can be preferred to transport
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goods from one place to another. (4mks)
12.Study the following document used in home trade. SIRO TRANSPORTERS CO. LTD
SIRO BUILDING,
OLOO STREET, NANDI ROAD
P.O BOX 100, ELDORET

SUPPLIER’S NAME & ADDRESS BUYER’S NAME & ADDRESS
HANDLING INFORMATION
QUANTITY DESCRIPTION WEIGHT(KGS) COMMODITY /ITEM

NUMBER TOTAL
TRANSPORT CHARGES PAID

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21
SIGNATURE OF TRANSPORT CO. SIGNATURE OF SELLER
DATE- DATE -
i) Name the document shown above (1mk)

ii) Name two uses of the document (2mks)
13. List four costs incurred by intermediaries in the chain of distribution (4mks)
14. Prepare ledger accounts from the following transactions relating to Tito Traders for the
month of January 2015 . (4mks)
January 5 sold goods for Shs 20,000 cash
th
10th bought furniture for Shs 50,000 on credit from Jamwal Traders
21st Paid Shs 10,000 cash to Jamwal traders
21st Returned furniture worth Shs 6,000 found damaged to Jamwal Traders
15. Highlight any four features of time deposit account (4mks)

16. Name four commercial services that facilitate trade. (4mks)
17. The following balances were extracted from the books of Njoro Traders for the period
ended
31st December 2013 Ksh.

Gross profit 10,000
Salaries 2,000
Commission income 4,000
Rent received 3,000
Electricity 2,000
Prepare a profit and loss account (4mks)
18. Highlight four factors that determine the National income of a country. (4mks)
19. Highlight four causes of demand pull inflation (4mks)
20. Outline four ways in which the problem of scarce resources can be addressed by a
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22
consumer. (4mks)
21. Highlight four ways in which local resources can be managed to alleviate
unemployment problems in Kenya. (4mks) 22. Outline four factors that comprise a
negative internal environment in a business. (4mks)
23.The following information relates to Waruhio Traders as at 31st December 2011.
Waruhio Trader
Balance Sheet
Shs. Sh.
203,000 Capital
Plus Net profit
174,000 Less Drawings

113,000
53,000 Short term liabilities:
1 year Loan
Creditors
543,000
As at 31st December 2011

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23
a) Calculate the total current assets. (1mk)
b) Determine the capital owned. (2mks)
c) Calculate the working capital (1mk)
24.Given below are functions of office equipment. Identify the name of the equipment
against the rightful use (4mks)
Functions of the Machine Office
Equipment
a) Used in posting information to ledgers and preparing payrolls
b) To transmit printed messages such as photographs, letters,
and maps
c) Usually fire proof where important documents in an
organization are stored
d) Used to carry out many functions such as storing information,
typing and performing complex calculations
25.Outline four factors that may give rise to monopoly power in an economy.(4mks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………

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24
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. (a) Explain five measures put in place by the government to bring order in road
transport sector in Kenya today. (10 marks) (b)
Explain five reasons why per capita income is not a good indicator of standards of
living. (10 marks)
2. (a) On 1st November 2013:Tabagon Co. Ltd. had a balance of shs. 12,000 at the bank
and shs. 2500 in hand. During the month, the following transaction took place; Nov.
1 Cash sales Shs. 2500, cash purchase Shs. 1750 Nov. 3 Paid the following
accounts by cheque.
Kirop Shs. 1500 less 5% cash discount
Kirui Shs. 2000 less 5% cash discount
Nasimiyu shs. 2100 less 3 % cash discount
Nov. 5 Received the following amounts from debtors,
Ondiekshs.1200, Jane shs.3850 and Mueni by chequeshs.2050 after allowing her shs.
300 cash discount. Nov. 14Paid office cash to the bank shs. 2000
Nov. 17 Cash sales 8500
Nov. 22 Mueni paid her account of shs. 5000 by cheque less 10% cash discount
Nov. 28 Withdrew all the money from the bank for office use except shs. 1000
Nov. 29 Paid salary cash shs. 8000

Nov. 30 A cheque received from Mueni on Nov. 5th was dishonoured.
Prepare Tabagon Co. Ltd. three column cash book. (10 marks)
(b) Describe the procedure of obtaining an insurance claim. (10 marks)
3. (a) Explain the meaning of the following terms as used in business ownership.
(10 marks)
(i) Franchising
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(ii) Merger
(iii) Holding company
(iv) Front Office Savings Account (FOSA)
(v) Globalization
(c) Explain five features of a hypermarket. (10 marks)
4. (a) Explain five emerging issues in office practice today. (10 marks)
(b) Explain five reasons that account for the existence of small firms in an economy.
(10 marks)
5. (a) Explain five ways in which communication enhances trading activities. (10 marks)
(b) Highlight five factors that facilitate entrepreneurial development in an economy.
(10 marks)
6. (a) The following trial balance was extracted from the ledgers of Gathioro’s mobile
phones business for the year ended 31st Oct 2013.
Gathioro’s mobile phones Trial Balance As
at Gathiro’s 31st Oct 2013
Details Dr.(Shs) Cr.(Shs)
Sales 855,000
Purchase 420000
Sales returns 12000
Purchase returns 20000
Creditors 165000
Debtors 63000
Motor vehicle 480000
Cash in hand 65000
Furniture 190000
Carriage inwards 14000
Stock 280000
Capital 626250
Drawing 88000
Telephone 6400

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26
Insurance 8200
Postage 3850
Rent 19600
Discounts received 4000
Advertising 12900
Discount allowed 7300
1670250 1670250
On 31st Oct. 2013, the business had closing stock valued at Shs. 60,000
Required
(i) The trading, profit and loss a/c for the year ended 31st Oct 2013.
(8 marks)
(ii) A balance sheet as at that date. (4 marks)
(b)Explain five services rendered by the Central Bank to the government. (10 marks)
NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1.Define the following as used in business studies (4 mks)

i)Economics (i) Entrepreneurship

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27
(ii) Opportunity cost
(iii)Scale of preference
2. Highlight four reasons why food is an important basic need. (4 mks)
3. Outline four importance of a warehouse to a consumer. (4 mks)
4. Outline four requirements for one to start a limited liability company as one of the
forms of business units. (4 mks)
5. Highlight four factors a firm must take into account when deciding on the product(s) to
produce.
6. Highlight four ways in which entrepreneurs can observe ethics in the management of
their business. (4 mks)
7. The following information was extracted from the books of Dawida business enterprise
for the year ended 30th June 2000.
Capital as at 30th June, 2000 640,000
Capital as at 1st July 1999 420,000

Drawing for the year 180,000
Net profit for the year 140,000
Determine the additional capital during the year.
8. Highlight four ways through which one can convey verbal communication. (4 mks) 9.
Below is a demand and supply curve.
Highlight the factors that may have led to the above behavior.
10.Outline four circumstances under which a trader can issue a credit note to a customer.
(4 mks)
11.Give the difference between: (4 mks)
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28
(a) Double and co-insurance
(b)Premiums and surrender value
12.Highlight four advantages of indirect tax. (4 mks)
13.Highlight four ways in which a legal-political environment can impact negatively on
entrepreneurs. (4 mks)
14.Highlight four duties of commercial attaches in trade promotion. (4 mks) 15.
Identify the book of original entry in which the following transactions can be recorded.
(4 mks)
Transaction Book of Original Entry
Paid salaries by cheque
returned goods to a
supplier
Sold goods on credit
Bought delivery van on
credit
16. Outline three leakages in a circular flow of income. (3 mks)

17. Outline four advantages of using celebrities in product promotion. (4 mks)
18. Distinguish between the following terms of sale as used in international trade. (4 mks)
(a) Free on rail (FOR)
(b)Free on board (FOB)
(c) In Bond
(d)On nearest offer (ONO)
19. Kenya is planning to extend her pipeline transport. State four advantages of pipeline
transport to the country. (4 mks)
20. Outline four emerging issues in office management. (4 mks) 21.
Kiburu carried out the following transactions during the month of February 2015.
February 1: Started business by depositing sh 220,000 in business bank account
7: Bought goods on credit from MiyogoSh 72,000
8: Paid rent by chequeSh 20,000
16: Sold goods to Kamula on credit Sh 50,000.
Required: Post the above transaction in the relevant ledge accounts.

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29
22. Highlight four features of perfect competition market. (4 mks)
23. Mention whether the following transactions have an increase, decrease or no effect on
the assts, capital and liabilities of a business. (4 mks)
Transaction Assets Capital Liabilities
(a) Bought premises on credit
(b) Took stock of goods and donated to a local
dispensary
(c) Withdrew money from bank for office use
(d) Sold furniture receiving cash
24. The following information relates to Liston traders for the period ended 31st March
2012.
Opening stock Sh 40,000
Sales Sh 100,000
Closing stock 25% on cost of sales
Mark-up 25%
By clearly calculating gross profit and purchases, prepare a trading account
(i) Gross profit (1 mk)
(ii)Purchases for the year (2 mks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS

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30
TIME:2HRS 30 MINS
1. (a) Explain five factors that will influence the choice of office layout to be adopted by a
firm. (10 marks)
(b) Explain five advantages of a country belonging to a trading bloc. (10 marks)
2. (a) Explain five differences between a public corporation and a private limited
company. (10 marks)
(b) Highlight five circumstances under which an insurance contract may be terminated. (10
marks)
3. (a) Discuss five contributions of an efficient transport to the economic development of a
Country. (10 marks)
(b) Explain five benefits of retailers to wholesalers (10 marks)
4. (a) Describe five factors that may influence the firm’s decision on what products to
produce. (10 marks)
(b) Explain five challenges that may be experienced by a new entrepreneur who has just
establish a business in Kenya
5. (a) Explain five services offered by commercial banks to business people. (10 marks)
(b) The following transactions relates to David Traders for the month of December 2018.
Dec 1st started a business with sh. 200,000 in the Bank account.
2nd Bought furniture for sh, 50,000 and paid by cheque
3rd Sold goods on credit to Caleb shs, 20,000; Salau 10,000
4th Bought goods on credit from Rose sh 30,000; Kinga shs. 40,000
5 th
Returned faulty goods to Rose sh 5,000
6th Paid Rose on account by cheque less 10% cash discount.
7th Received faulty goods from Caleb shs. 2000
8 th
Received payment due from Caleb and Salau by cheque less 5% cash
discount.
9th Cash sales shs. 100,000
10th Paid for wages shs. 20,000 by cash and electricity shs.10,000 by cheque.
11th Deposited all the cash in hand into the bank account.
Required: Prepare a three column cash book duly balanced. (10 marks)
6. (a) Discuss five factors to be considered when making a development plan in a less
developed countries. (10 marks)
(b) The following information was extracted from the books of James wholesalers for the
trading period ended June 2018.
Sh
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31
Stock on 30.06.2017 40,000
Purchases 35,000
Sales 70,000
Return inwards 1,500
Return outwards 2,000
Discount allowed 2,100
Insurance 2,000
Transport 1,400
Electricity 2,400
Rent received 3,000
Wages and salaries 5,000
Advertising 2,000
Stock 30. 06.2018 15,000
a)Prepare a trading profit and loss account for the year ended 30th June 2018.
(10 marks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
SERIES 1 TRIAL PAPER 1
Kenya Certificate of Second6ary Exams
TIME:2HRS 30 MINS
1. Name the internal environment whose effects are described by the following
statements: (3mks)
EFFECT Internal
Environment
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32
(a) Allows duties to be allocated to the right people thus
resulting in higher productivity.
(b) Helps the business achieve its objectives e.g. higher
production level of goods and services.
(c) Makes employees to acquire norms and code of conduct
that is acceptable to all.
2. State four reasons why choice should be made in satisfying human wants. (4mks)
3. State any four characteristics of secondary wants. (4mks)
4. A surgeon set up a clinic in a distance rural centre. The business opened two other
branches after six months. Identify four possible causes for the success. (4mks)
5. Mwita has introduced computers in his business operations. Outline four benefits
that he may experience. (4mks)
6. State four functions of a statement of account for Kaptich Secondary School Bursar.
(4mks)
7. In the spaces provided below, state the business document, to which each of the
following statements relates.
STATEMENT DOCUMENT
(a) Gives a description of the goods and the prices at which the
seller can supply the goods to the buyer.
(b) Accompanies the goods and it contains the list of goods
delivered.
(c) To inform the buyer that goods have been dispatched.
(d) To correct an under-charge.
8. In the spaces provided below, write the type of partner described by each of the
following statements: (4mks)
STATEMENT PARTNER
(i) One who is below 18 years of age:
(ii) One who has unlimited liability:
(iii) One who gets involved in the daily running of the business
(iv) One who allows his / her name to be used in the business
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33
9. You have been charged with a duty of preparing an Article of Association for your
company. State four items that you will include in your Article of Association.
(4mks)
10. Local leaders would like to see more business enterprises established within Nandi.
Outline four measures the government can take to encourage investments in this
region. (4mks)
11. Bucket Ltd is an international pharmaceutical company. Under what circumstances
can the firm send its products to customers by air transport? (4mks)
12. The following are special delivery services provided by the Post Office: (4mks)
Post Rest Ante, Speed Post, Business Reply Service,

Express Delivery. Match each description with item.
(i) The arrangements to deliver the mail starts at the sender’s post office
(ii) The arrangement to deliver the mail starts at the addressee’s post offic
(iii) Service offered to travelers who wish to receive correspondence while away
from home
(iv) Service that relieves customer of postage expenses
13. State four reasons why it is necessary to locate a bonded warehouse at the point of
entry of a country. (4mks)
14. Kazi Moto insured a motor vehicle against fire with Moto Motocompany by paying
Kshs. 300,000. Later the car was destroyed at a garage and a compensation of Kshs.
400,000 were paid. Using insurance terms, state what each of the following stand
for:
(4mks)
(i) Kazi Moto-
(ii) Fire:-
(iii) Kshs. 300,000
(iv) Moto Moto company:-
15. Below are terms used in sales promotions.
- Competitive advertising.
- Product advertising.
- Informative advertising.
- Institutional advertising.
- Primary demand advertising.
Identify the most appropriate term descried in each of the following case.

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(i) Aims at increasing the sales volume of the company’s entire range of products
(ii) Provides relevant information about producers products
(iii) Seeks to popularize the business enterprise offering goods for sale. (iv) Seeks to
promote the sale of a new variety of a company’s product..
16. Outline the procedures of taking an insurance policy on property. (4mks)
17. Kenya Cooperative Creamers (KCC) sell its dairy products directly to retailers.
Highlight four factors that were considered in the choice of this channel of
distribution. (4mks)
18. Identify four factors that may be contributing to income disparity between the rich
and poor citizens in Kenya. (4mks)
19. The following information relates to Ogello Traders as at 31 December 2009.
st
Capital (1-1-2009) Kshs. 100,000

Loss during the year Kshs. 40,000
Investment Kshs. 35,000
If the trader took goods worth Kshs. 15,000 during the year for private use, calculate
the capital of the business as at 31.12.2009. (4mks)
20. Prepare Betty’s trial balance from the following information. (4mks)
Items Kshs.
Purchase 130,000
Capital 150,000
Sales 165,000
Debtors 45,000
Creditors 40,000
Motor vehicles 120,000
Stock 50,000
Cash at Bank 10,000
21. Ondiko Traders had Kshs. 100,000 cash in had, Kshs. 243,000 cash at bank during
the month of March 2008. The following transactions took place in that month.
March 3 – Paid insurance Kshs. 5,000 cash.
March 11 – Cash sales Kshs. 14,000

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35
March 14 – Purchased equipment worth Kshs. 37,000 paying by cheque.
March 20 – Deposited Kshs. 30,000 into Bank from cash till. March 31
– Took Kshs. 10,000 cash for personal use.
Prepare Ondiko Trader’s Two-column Cash Book for March 2008.
22. State the journal that deals with each of the following types of transactions. (4mks)
Type of transaction Journal
(i) Credit sales
(ii) Return of goods by customers.
(iii) Return of goods to suppliers.
(iv) Cash cheques received.
(v) Credit purchases
(vi) Sale of fixed assets
(vii) Purchase of motor van on credit from General
Motors
(viii) Correction of errors.
23. Differentiate between progressive and regressive taxation giving an example of

each. (4mks)
24. Otwoma intends to start a business. Give four reasons why it is advisable for him
to start a retail business shop instead of buying shares in public limited company.
(4mks)
25. Write in full the following abbreviations: (4mks) (i)
LPO:
(ii) IPO:
(iii) C.W.O
(iv) I.O.U
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………

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36
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. (a) Explain any five benefits that a business which adopts an enclosed office layout
enjoys. (10mks)
(b) Discuss five emerging trends in Banking. (10mks)
2. (a) Explain five advantages of warehousing to the consumers. (10mks) (b)
The following information relates to Bahari retailers for the month of January 2013.
Invoices received
Jan 6 Mandela Ltd shs. 70,000
12 Othiambo Traders shs. 150,000
18 Jua Kali Enterprises shs. 50,000
Invoices
Jan 5 Jambini Traders shs. 10,000
10 Fedha Ltd shs. 100,000
15 Kalu Works Ltd shs. 120,000 Credit
Note issued
Jan 5 Jambini Traders shs. 12,000
13 Fadhili Ltd shs. 6,000
Credit Note received
Jan 7 Mandela Ltd shs. 5,000
14 Othiambo Traders shs. 1,000 Additional
Information:
Jan 8 Sold machinery on credit to Kwetu retailers shs. 50,000
9 Bought electronic equipment on credit from lowland retailersshs. 8,000
10 Brought shs. 5,000 cash into the business from own sources.
Required: Record the above transactions in the appropriate diary books. (10mks)
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37
3. (a) Describe any five types of unemployment experienced in Kenya. (10mks)
(b) Under what circumstances would a producer use wholesaler in distributing farm
produce. (10mks)
4. (a) Discuss fivefactors that influence the level of National Income of a country.
(10mks)
(b) Outline any five differences between Partnerships and Cooperative societies.
(10mks)
5. (a) Explain five factors that an insurance company will consider before determining
the premium to charge an applicant for an assurance policy. (10mks) (b)
The following information relates to the books of Mwalimu Traders as a 31st
December 2014.
Sale 670,000
Purchases 380,000
Return inwards 70,000
Carriage on purchases 10,000

Rent paid 18,000
Postage 2,000
Travelling 12,000
Repair and maintenance 4,000 Required:
Prepare Mwalimu Traders Trading Profit & Loss Account for the year ended 31st
December 2014. (10mks)
6. (a) With the aid of a diagram, explain the effects of increase in consumer’s level of
income on the equilibrium point. (10mks)
(b) Explain five ways in which the government may promote local trade. (10mks)

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38
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39
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. The table below describes some terminologies used in business Studies. Identify the
term given to each statement (4mks)
Statement Term
a) Activities carried out with a view to
making profit
b) Increasing the usefulness of a good or
service
c) Movement of goods from producers to
consumers
d) A person who uses a good or service
2. State four factors that an entrepreneur would consider before investing in a business
opportunity (4mks)
3. Outline four measures that may be taken by an office to safeguard the property of
the organization (4mks)

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40
4. Highlight four features of a departmental store (4 mks) 5.
Among the documents required by the Registrar of companies is the Articles of
Association. Highlight four contents of the Articles of Association (4 mks)
6. State four reasons why consumers need protection from unscrupulous traders
(4 mks)
7. One of the flagship projects by the Kenyan Government is LAPSSET and
Standard Gauge Railway (SGR). Outline four benefits of the new Railway line to
the Kenyan economy (4mks)
8. Highlight four limitations of a siren as a means of communication (4 mks)
9. State four merits of a bonded warehouse to the Government (4 mks)
10. Give any Four contents of a cover note (4 mks)
11. The descriptions stated below refer to various methods advertisement. For each
description give the method that best matches it. (4 mks)
a) Any mention of a person/firm or product in the mass media

b) Presentation of a commodity to prospective buyers, face to face
by a sales person with an aim of making sales
c) Process of information with a view of creating, promoting or maintaining good
will and favourable image of the organization
to the Public
d) Any paid form of impersonal presentation of a product made through mass
communication Media
12. Identify what is represented by the letters W,X,Y and Z in the diagram below
(4 mks)

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13. The table below shows the growth rate of Gross Domestic product (GDP) of a
certain Country for two years (4mks)
14. Year 15. G.D.P
16. 2003 17. 6.5%
18. 2005 19. 2.0%
Highlight four circumstances under which the standards of living of the citizens of
the country referred to above may not necessarily have been lower in 2005 than
2003. (4mks)
14. Outline four features of a Monopoly market structure (4mks)
15. Highlight four reasons why many governments discourage localization of firms
(4 mks)
16. Giving an example in each case, define the following terms:
a) Long term liability (2marks)
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b) Current Assets (2marks)
17. A resource is something that is used by a business to achieve an objective. Identify
four resources available in a business. (4 mks)
18. The following balances were extracted from the books of Mwenge Traders on 30th
June2010.
Shs.
Debtors 120 000
Creditors 240 000
Ten-year loan Loan 400 000
Closing Stock 25 000
Cash in hand 50 000
Drawings 30 000
Furniture
Required: Prepare a Balance Sheet as at 30th June 2010
19. Highlight four merits of current account to the account holder (4 mks)
20. Outline four reasons why the government may impose trade restrictions on her
trading activities (4 mks)
21. The following transactions were carried out by Ushirika Stores during the month
of July2012.
July 1 : Started a business with sh. 10 000 in cash
July 2 : Opened a bank account for the business by depositing Sh. 20 000 from
Personal savings
July 10 : Bought goods worth Sh.10 000 and paid by cheque
July 20 : sold goods worth Sh. 20 000 which were paid in cash
Required: Record the above transactions in the relevant ledger accounts
22. Outline four causes of cost –push inflation in any country ( 4mk)
23. Highlight fourreasons why the Kenyan government imposes tax (4 mks)
24. The following information was extracted from the books of Ngikwa Stores for
thefollowing years

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43
2014 2013
Shs. Shs.
Stock 120 000 224 000
Bank 20 000 60 000
Debtors 268 000 120 000
Creditors 272 000 2000
a)Determine the current Ratio for 2014 and 2013 (3mks)

b)Comment on the significance of the change in current Ratio (1mk)
25. Identify four goals development (4 mks)
NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. (a) Kenya has been relying on Coffee as a key driver of her economy. Explain
FIVE benefits that may accrue to her due to this specialisation (10
mks)

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44
(b) Explain FIVE ways in which a Country’s labour force can be improved to promote
economic growth (10 mks)
2. (a) Explain FIVE factors that determine the amount of money held for
precautionary purposes
(b) Kitinga Enterprises runs a general Merchandise business. The transactions during
the month of June 2014 were as follows: 2014
June 1 - Bought on credit from Orina Ltd. goods worth shs. 100 000, received a
20% trade discount.
June 4 - Sold goods on credit to Rono Ltd. shs. 30 000 and allowed them a 10% trade
discount.
June 8 - Sent Rono Ltd. a credit note for goods returned, which had a value ofshs.
30 000.
June 10 - Sold goods on credit to Akinyishs. 60 000
June 12 - Purchased goods from Wamalwa ltd for shs. 100 000 and he allowed a 30%
trade discount.
June 15 - Purchased goods on credit from Nyamburashs. 45 000

June 16 - Sent Akinyi a credit note for goods returned worth shs. 10 000
June 18 - Wamalwa Ltd. sent us a credit note for sh.30 000 for goods returned.
June 19 - Received a credit note for goods returned to Orina worth sh.25 000
June 25 - Sold goods to Wairimu on credit sh. 25 000
June 27 - Sent Wairimu a credit note for sh.5 000 to rectify an overcharge on their
invoice.
June 28 - Sold goods on credit to Rono for sh. 56 000
June 29 - Purchased a Motor Van on credit from Awori Ltd. worth shs. 80 000
June 30 - Sold on credit Old machinery to Nairobi Trading Company for sh.35 000

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45
(prior to this owned machines worth shs. 100 000 (10 mks)
Required: Make the necessary entries in the relevant books of original entry
(NB. Posting to the ledger Accounts is not necessary) (10 mks)
3. (a) Outline FIVE causes of Balance of payments equilibrium (5 mks)
(b) Describe FIVE channels of distribution that may be followed by imported

manufactured goods
4. (a) Explain FIVE types of unemployment (5 mks)
(b) The following trial balance was extracted from the books of Mwelu Traders on 30th
April 2015 (10 mks)
Account name Dr Cr
Sales 186 000
Purchases 115 560
Stock on 1/5/2014 37 760
Carriage outwards 3 260
Carriage inwards 2 340
Returns inwards 4 400

Return outwards 3 550
Salaries 24 470
Electricity 6 640
Rent 5 760
Sundry Expenses 12 020
Equipment 24 000
Furniture 6 000
Debtors 45 770
Creditors 30 450

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46
Bank 38 760
Cash 1200
Drawings 20 500
Capital 128 440
348 440
Stock as at 30th April 2015 was Shs. 49 980

Required: Prepare Trading profit and Loss Account for the period ending 30th April
2015. (10 mks)
5. (a) Highlight FIVE differences between Insurance and gambling (5
mks) (b) Explain FIVE principles of a good tax system
(5 mks)
6. (a) Explain FIVE factors that influence the level of National income of a Country
(b) Explain FIVE Money transfer facilities provided by Commercial Banks

NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS

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47
TIME:2HRS 30 MINS
1. Name four features that differentiate a bill of exchange from a cheque (4marks)
2. State the books of original entry in which each of the following transactions would
be recorded (4marks)
Transactions Books of original entry
a) Bought a machinery on credit
b) Received sh. 40,000 from Mweni a debtor
c) Sold goods worth sh. 20,000 on credit to Salama
d) Returned goods previously bought on credit to
Wainaina
3. Outline four factors that may account for predominant direct production in a country
(4marks)
4. Highlight four reasons why a business firm would prefer to operate a current
account from a commercial Bank. (4marks)
5. Outline four factors to consider when introducing a new product in the market
(4marks)
6. State four benefits that a company would get by raising capital through sales of
ordinary shares (4marks)
7. State four factors that determine the period for which documents should be stored
(4marks)
8. The following balances of assets and liabilities were provided by mawazo Traders as
at 31st/12/2014. (4marks)
Item shs
Land 200,000
Accrued electricity bill 50,000
Stock 10,000
Debtors 20,000
The business had drawings amounting to sh. 20,000
during the year. Prepare a balance sheet to determine the
net worth of the year
9. The following information relates to commodity ‘X’.
Year Price (shs)
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48
2010 450
2014 675
(i) Calculate the consumer price index
(ii)Comment on your answer. (4marks)
10.Outline any four limitations of social responsibility to a business (4marks)
11.A business enterprise had the following transactions on 3 June 2008. (i) Returned
rd
goods worth sh. 15,000 to Kombo traders.

(ii) Awino, a customer returned goods worth 3,500 to the business.
Required: Record the above transactions in the relevant ledger accounts (4marks)
12. State four benefits that consumers get from warehousing (4marks)
13. Highlight any four factors that a government should consider when deciding on a
good tax system (4marks) 14.
Highlight four measures that can be taken to control the volume of imports(4marks) 15.
The following information relates to Kitui Traders for the year 2013.
Turn over shs 270,000
Margin 40%
Rate of turnover 6 times
Expenses sh 40,000
From the information given above, Calculate:- (4marks)
(a) Gross profit
(b)Cost of goods sold
(c) Net profit
(d)Average stock
17.List four factors that may discourage the use of pipeline as a means of transporting
petroleum products in a country (4marks)
18.Outline four circumstances under which one may use signs in communication.
(4 marks)
19.Yvonne has just completed her studies at University and would like to start a
business. Highlight four factors that would influence her to locate her business near
the market. (4mks)
20.Outline four differences between perfect competition and monopoly (4mks)
21.Identify the types of utility created in the following circumstances. (4 mks)
Circumstance Type of Utility
a) Processing and packing Tea leaves in a factory
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49
b) Transporting Tea from Kiambu to Nairobi
c) Selling Tea leaves in a shop
d) Where the retailers stores tea leaves packets in his
warehouse
22.State the effect of the following transaction on the balance sheet totals indicating
either “increase, decrease or No effect” (4marks)
Transaction Effect on Balance sheet
total
a) Dec 14
Received a cheque for sh 150,000 being amount
borrowed from a lending institution.
b) December 15 – paid creditors sh 10,000 in cash
c) Dec 26- owner took cash sh 10,000 from business for
own personal use
d) Dec 3 – Deposited cash sh 15,000 in to the business
bank account.
23.Highlight four factors that may influence supply positively. (4marks)

24.Highlight four limitations of using consumer initiated methods in consumer
protection (4marks)
25.Outline any four features of an economic union level of economic integration
(4marks)
26.State for disadvantages of Automatic Teller Machines (ATM) (4marks)
NAME……………………………………ADM
NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………

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50
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. a) Explain five reasons that may account for the continued use of hand carts as a
mode of transport (10marks)
b) Shah and Patel are importers of vehicles in Kenya from Japan. Explain five
terms of sale that may be quoted by the seller of the vehicles. (10
marks)
2. a) By the use of diagram, explain the effects of excess supply over demand on
quantity demanded and supplied (10marks)
b) The following balances relate to Brian traders as at 31st December 2013 Shs.
Salaries 70,000
Stock (1/1/2013) 30,000
Creditors 35,000
Capital 700,000
Purchases 150,000
Insurance 10,000
Electricity 40,000
Debtors 60,000
Sales 350,000
Stock (31/12/2013) 20,000
2 year bank loan 200,000
Returns inwards 15,000 Required:
(i) Prepare a trading, profit and loss account for the year ending 31st December 2013
(5 Marks)
(ii)Calculate the following ratios
(a) Margin (1 mark)
(b)Rate of stock turn over (2 marks)
(c) Rate of return on capital (2 marks)

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51
3. a) The per capita income in country A is considerably higher than that in country B.
Discuss Five reasons why the citizens of country A may not necessarily enjoy
higher standards of living than citizens of country B. (10 Marks)
b) Explain five circumstances under which the nature of goods may influence
the choice of appropriate means of transport (10 marks)
4. a) Highlight five ways in which the Central Bank acts as a banker to the government
(10 marks)
b) Explain five characteristics of under development (10 marks)
5. a) Highlight five reasons why Kenyan government encourages the development of
small business enterprises (10Marks)
b) Explain five circumstances under which personal selling is appropriate
(10 marks)
6. a) Explain four services rendered by retailers to consumers (8 marks)
b) On 1 July 2014 moshi traders had cash in hand Ksh.560,000 and a
st
bank overdraft of Ksh. 175,000. The following transactions took place

during the month:
July 9: Paid the following creditors by cheque after deducting 10% cash discount:
Betty Ksh. 140,000
Mary Ksh. 98,000
July 12: Settled kithekas account Ksh.70, 000 by cheque after deducting 10%
cash discount
July 16: Received cheques from the following debtors after deducting 10%
discount in each case:
Ali Ksh. 350,000
Hassan Ksh.105,000
July 23: Received the following cheques from debtors after having deducted
cash discount of 2% In each case:
Joseph Ksh. 411,600
Daniel Ksh. 123,480
July 29: Received the following amounts in cash from debtors having deducted
cash discount of 2% Josephine Ksh.82, 320
Fatuma Ksh.246, 960 Required:
(i) Record the above transactions in a three column cash book and balance it off at the end
of the month (10 marks)

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52
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. State four benefits of public corporations in Kenya. (4 marks)
2. State four advantages of entrepreneurship in an economy. (4 marks)
3. Highlight four factors that can make a company to re-insure. (4 marks)
4. State four economicfactors that determine a consumer’s buying ability(4 marks)
5. State four ways in which a good filling system may facilitate the operations on
office. (4 marks)
6. Highlight four benefits of a free warehouse. (4 marks)

7. State four circumstances where a firm would be located near a source of raw
materials. (4 marks)
8. Show the accounts to be debited or credited for the following transactions(4 marks)
Transactions Account to Debit Account to
Credit
A Paid wages in cash
B Took business cash for private use
C Purchased office furniture on credit from
Ritho Ltd
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53
D Paid electricity bill by cheque
9. Highlight four factors that determine precautionary motive for holding money
(4 marks)
10.State four functions of an entrepreneur as a factor of production. (4 marks)
11.The following information was extracted from the books of Juma Traders as at 31st
December 2009,
Shs
Opening stock 2,500
Purchases 46,000
Closing stock 1,500
Mark-up 20%
Required:
Prepare Juma Trader’s Trading Account (4 marks) 12.
Outline four changes in the economy associated with economic development.
(4 marks)
13. The diagram below shows a population pyramid for a certain country.
Give four challenges facing this country. (4 marks)

14. Highlight four ways in which individuals consumers can protect themselves.

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54
(4 marks)
15. State the source documents for each of the following subsidiary day Books
(4 marks)
Subsidiary Books Source Documents
A Sales Journal
B Purchase Sales Journal
C Returns Inwards Journal
D Returns Outward Journal
16. State four problems that are experienced by consumers when firms become
monopolies. (4 marks)
17. State four causes of demand pull inflation. (4 marks)
18. Highlight four reasons why the use of rail transport is not well developed in Kenya.
(4 marks)
19. Outline four things a business need to know about their competitors. (4
marks)
20. The following balances of assets and liabilities were provided by Pati Traders as at
31st December 2012
Items Shs
Land 200,000
Accrued electricity 50,000
Stock 10,000
Debtors 20,000
The business had drawings amounting to sh 20,000, during the year. Required:
Prepare balance sheet for Pati Traders. (4 marks)
21. List four factors that may limit the growth of a country’s national income.(4 marks)
22. State four current trends in sales promotion. (4 marks)
23. Outline four factors to be considered when choosing a channel of distribution.
(4 marks)
24. State whether the tax described below is direct or indirect (4 marks)
a) Stamp duty
b) Wealth tax
c) Excise duty
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55
d) Value Added tax
25. A business enterprise had a cash balance of 50,000 and overdraft of sh 15,000 on 1st
June 2007. The following transactions were conducted.
June 2, A debtor paid sh 40,000 by cheques
June 10, The business bought stock sh 10,000 in cash
June 15, Sold goods sh 30,000 cash.
Required:
Prepare a two column cash book. (4 marks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. a) Outline five ways in which a computer can improve efficiency of an organization.
(10 marks)
b) Intermediaries play a key role in the chain of distribution. Explain any five such
roles. (10 marks)
2. a) Explain five ways in which the government may create an enabling environment
for business. (10 marks)
b) The following trial balance was extracted from the books of Tausi Traders as at
30th June 2014
Details Dr Cr

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56
Stock on 1st July 2013 180,000
Debtors and creditors 195,000 120,000
Discounts 75,000 96,000
Sales and purchases 1,200,000 1,740,000
Premises 1,630,000
Returns 60,000 150,000
Fixtures and fittings 300,000
Carriage in wards 100,000
Machinery 600,000
Commissions 48,000 42,000
Capital 2,454,000
Wages and salaries 90,000
Cash in bank 420,000
Rent income
4,712,000

Required:Prepare a trading, profit and loss account for the year ended 30th June 2014.
(8 marks)
Prepare tausi’s balance sheet as at 31st June 2014 (4 marks)
3. a) Explain five remote external factors that influence business operations.
(10 marks)
b) Expalin five reasons why government may impose trade restrictions. (10 marks)
4. a) Record the following information relating to the traders in the relevant books of
original entry for the month of June 2013 and post them to the relevant ledger
Accounts. (10 marks) June
2: Credit sales to Wako retailers worth sh 8,000 issued invoice No. 0111.

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57
June 5: Credit purchases from Jamu suppliers worth sh 30,000 received invoice No.
20
June 8: Credit sales to Mwenda worth sh 12,000 issued invoice No.12
June 16: Credit purchases from Sam Traders and Mwiti traders worth sh 5,300 and sh
6,200 and issued with an invoice No.13 and 14 respectively.
June 18: Credit sales Wako retailers and Mwiti traders worth sh 5,300 and 6,200 and
issued with an invoice No. 13 and 14 respectively.
June 24 : Credit purchases from Sam and Wangu traders sh 1000 and 2,800, invoice
No.451 and 722 respectively.
b) In the last few months, the supply of mangoes in Chuka Town was on increase.
Explain any five factors that may have attributed to this. (10 marks)
5. a) Most of the African countries are suffering from rapid unemployment rates.
Explain five causes of this situation.
b) Public finance refers to activities carried out by the government in raising and
spending of finances. Explain five purposes of public finance.
6. a) Outline five advantages of pipeline transport over the road transport. (10 marks)
b) The following transaction took place in the business of JohanaMakembo in the
month of May 2013.
2013
May 1: started business with sh 100,000 in bank and sh
20,000 in cash May 3: Purchased goods values at sh
24,000 from Kanyua on credit May 6: Paid rent sh 1200 by
cheques.
May 10: Purchased a delivery van valued at sh 720,000 from Mwema Motors and paid
by cheques.
May 12: Sold goods in cash sh 45,000.
May 15: Paid Kanyuash 10,000 by cheques.
Required: Use the above information to:
(i)Prepare the relevant ledger accounts and balance them off as at 15th May 2013(7 marks)
(ii)Extract a trial balance. (3 marks)
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………
DATE………………………………………

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58
BUSINESS MOCKS
TIME:2HRS 30 MINS
1. State whether each of the following factors fall under micro-environment or macro-
environment (4 mks)
Factor Environment
i) Legal political environment
ii) Business structure iii)
Economic environment iv)
Human resources
2. State four ways in which consumers may protect themselves against exploitation.
(4 mks)
3. Give two differences between goods and services. (4 mks)
4. Outline four circumstances under which cash with order (C.W.O) is appropriate
(4 mks)
5. Using a well labeled diagram explain the movement along a demand curve.
(4 mks)
6. Highlight four factors that may limit the exploitation of natural resources.
(4 mks)
7. Identify the term of insurance described in each of the following statements.
i) A risk which when it occurs it may result to a loss or a profit (4 mks) ii)
A specified amount of money paid at regular intervals by the insured to the insurer.
iii) The insurance company that undertakes to compensate the insured in event of a
loss arising from occurrence of the insured risk.
iv) A document containing the terms and conditions of the contract between the
insurer and the insured.
8. Outline four sources of monopoly power. (4 mks)
9. Highlight four effects of eliminaing wholesalers from a distribution channel(4 mks)
10.State four advantages of publicity as a method of product promotion. (4 mks)
11.Highlight four disadvantages of free trade. (4 mks)

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59
12.State four accounts used to record the movement of stock. (4 mks)
13.Outline four barriers to effective communication. (4 mks)
14.Highlight four money transfer facilities offered by commercial banks to its
customers. (4 mks)
15.State four positive effects of inflation (4 mks)
16.Outline four merits of indirect tax. (4 mks)
17.State four demerits of underpopulation to a country. (4 mks)
18.The following balance sheet was extracted from the books of Tumaini Investment as
at 31st December 2014.
Calculate:-
i) Borrowed capital ii) Capital employed iii) Working capital
19. From the transactions given below name the account to be debited (Dr.) and the
account to be credited (CR) (4 mks)
TRANSACTION DEBIT (DR) CREDITED (CR)
i)Deposited shs. 2000 into the bank from the cash box
ii)Sold goods on credit worth shs
5,000
iii)Purchased goods in cash worth shs
4,000
iv)Withdrew goods worth shs
2,500 for own consumption.

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60
20. The following balances were extracted from the books of Rioba Agencies for the
period ended 30th June 2013.
shs
Stock (1/7/12) 14,700
Sales 86,400
Purchases 65,000
Returns outwards 4,700
Salaries 2,500
Stock on 30th June 2013 20,000 Required:
Prepare the trading account for Rioba Agencies for the year ended 30th June 2013.
21.Outline four current trends in the road transport in Kenya today. (4 mks)
22.State four structural changes that may take place when a country is experiencing
economic development. (4 mks)
23.Highlight four features of a bounded warehouse. (4 mks)
24.State four negative implications of production activities on the community.
(4 mks)
25. The following cash transactions took place in he business of Ochieng during the
first week of June 2013.
2013 June
2013 June 1.Balance brought down was cash shs 20,000, bank shs 45,000
2013 June 2. Sold goods worth shs 10,000 by cash
2013 June 3. Sold a piece of furniture for shs 8,000 and the amount was directly paid to
the bank.
2013 June 4. Bought goods worth shs 16,000 paying partly by cheque worth shs 9,000
and the balance was paid in cash.
2013 June 5. Banked all the cash except shs 5,000
Required
Prepare a two column cash book.
NAME……………………………………ADM NO…………………………………
SCHOOL…………………………………..CLASS…………………………………

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61
DATE………………………………………
BUSINESS MOCKS
TIME:2HRS 30 MINS
1.a)Explain five measures the government may take to curb push inflation(10 mks)
b)Explain five principles under which co-operation societies should be managed
(10 mks)
2a)Explain five advantages of a declining population (10 mks)
b)The following information was obtained from the books of Nyota
Njema Traders Invoices Received Jan

2,2015 Shari Traders for sh.
80,000 invoice No. 41 Jan 18,2015
Chacha traders for sh. 120,000 invoice no. 72.
Jan 25,2015 Nala traders for sh. 200,000 invoice
no 31
Invoices issued
Jan 5,2015 Song traders for sh. 50,000 invoice no.1
Jan 6,2015 Mali traders for sh. 6,800 invoice no. 2
Jan 10,2015 Mamba traders for sh. 22,000 invoice no. 3 Credit
Notes received
Jan 10,2015 Shari traders sh. 4,000 Credit Note number 16
Jan 28,2015 Malo traders for sh. 3,500 Credit Note no. 23 Credit
notes issued
Jan 8,2015 Song traders for sh. 3,000 credit note No. 1
Jan 26,2015 Mali traders for sh. 7,200 credit note no. 2
Required: Journalize the information above in the relevant subsidiary books

(10 mks)

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62
3. a) Explain five disadvantages of long chain of distribution of goods to a buyer.
(10 mks) b) Explain five qualities of an office messenger. (10 mks)

4. a) Explain five measures taken by the central bank of Kenya (CBK) to control credit.
(10 mks)
b) Discuss five economic importance of natural resources. (10 mks) 5. a)
Explain five benefits of economic integration to member states. (10 mks)
b) Despite the advantages of railway transport. It has not been competitive as other
means of transport in Kenya.Explain five reasons that have hindered its
competitiveness. (10 mks)
6. a) The following transactions relate to Leo traders for the Month of Feb 2015
Feb 1 started a business with sh. 180,000 in bank
6 Bought goods on credit from Mato sh. 80,000 and King sh. 50,000
10 Sold goods for credit to Edna sh. 141,500
12 Paid Mato sh. 25,000 and King sh. 31,000 by cheque
15 Recieved a cheque worth sh. 24,000 from Edna
28 Returned goods to Mato sh. 1,000
28 Withdrew sh. 5,000 from bank for personal use.
Required: Enter the transaction above in the relevant ledger accounts and balance them
off. (13 mks)
b) Outline Seven benefits of pooling of risks. (7 mks)

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BUSINESS MOCKS

COMPRISES OF 10 TRIALS OF mocks

N/B:DUE TO HIGH COSTS INCURRED

State what is represented by curves

13.Outline FOUR ways of curbing cost push inflation. (4 Marks)

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

Activities Basic Secondary

2. Outline four reasons why a new business may fail. (4 marks)

(a)To arrange papers in a required order.

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

15. State four uses of a bill of lading in international trade. (4 marks)

Withdrew cash for personal

21. State four features of an oligopoly market structure. (4 marks)

22. Give four disadvantages of public warehouses to traders. (4 marks)

25. Highlight four limitations of using after-sale services as a method of promoting

improvement in the per capita income. (10 marks)

Opening stock 30,000

Purchases/sales 275,000 390,000

Commission received 36,000

Returns 10,000 6,000

Carriage inwards 16,000

Bad debts 3,000

Bank overdraft 210,000

Discounts 5,000 7,000

Cash at bank 250,000

Cash at hand 40,000

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

Statements The machine

14.Highlight four causes of unemployment in Kenya. (4mks)

16.Tripple SSS wholesalers had the following information as at 31 December 2013

17.Highlight four advantages of localization of firms. (4mks)

20. Highlight four purposes of public finance. 4mks)

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

OLOO STREET, NANDI ROAD

P.O BOX 100, ELDORET

QUANTITY DESCRIPTION WEIGHT(KGS) COMMODITY /ITEM

TRANSPORT CHARGES PAID

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

i) Name the document shown above (1mk)

21st Paid Shs 10,000 cash to Jamwal traders

15. Highlight any four features of time deposit account (4mks)

31st December 2013 Ksh.

174,000 Less Drawings

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

Nov. 17 Cash sales 8500

Nov. 29 Paid salary cash shs. 8000

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

1.Define the following as used in business studies (4 mks)

For marking schemes,call/whatsapp Mdm Mariam-0746 711 892

Capital as at 1st July 1999 420,000

Determine the additional capital during the year.

16. Outline three leakages in a circular flow of income. (3 mks)

8: Paid rent by chequeSh 20,000

16: Sold goods to Kamula on credit Sh 50,000.