KWIMA JOINT EXAMINATIONS

COUNCIL
Kenya Certificate of Secondary Education
FORM 4 PRE-KCSE EXAMINATION-JULY 2025
565/1 BUSINESS STUDIES Paper 1

2 HOURS
Name: ………………………………........................................Adm No: ……….

…………

School: ……………………………………………...Candidate’s Signature:

Instructions to candidates
a) Write your name and index number in the spaces provided above.
b) Sign and write the date of the examination in the spaces provided above.
c) This paper consists of 25 questions.
d) Answer all the questions in this paper.
e) All your answer must be written in the spaces provided in the question paper
f) This paper consists of 9 printed pages
g) Non –programmable silent electronic calculator may be used.
h) Candidates should check the question paper to ascertain that all pages are printed as
indicated and that no questions are missing.
i) Candidates must answer the questions in English.

FOR EXAMINER’S USE ONLY

Question 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Candidate’s
score

21 22 23 24 25 TOTAL
MARKS
1. State the level of production that matches the following occupations. (4marks)
Occupation Level of production

a) Carpentry .................................................

b) Lumbering .................................................

c) Bridge construction .................................................

d) Banking .................................................

2. State four reasons that may make a firm to be located near a source of raw materials. (4marks)
a) ………………………………………………………………………………………………

b) ……………………………………………………………………………………………

c) ……………………………………………………………………………………………

d) ………………………………………………………………………………………………

3. Outline four channels used to distribute locally manufactured products in Kenya. (4 marks)

a)………………………………………………………………………………………………

b)………………………………………………………………………………………………

c)………………………………………………………………………………………………

d)………………………………………………………………………………………………

4. Give four types of small-scale retailers with shops (4marks)

a) ………………………………………………………………………………………………

b) ……………………………………………………………………………………………

c) ………………………………………………………………………………………………

d) ……………………………………………………………………………………………
5. State four external factors that may influence the operations of a business negatively(4marks)

a) …………………………………………………………………………….. ………………

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

6. State four circumstances under which the capital of a business may change. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

7. List down factors that a trader may consider when choosing a means of transport. (4marks)

a) ……………………………………………………………………………………………..

b) ………………………………………………………………………………………………

c) ………………………………………………………………………………………………

d) ………………………………………………………………………………………………

8. State four factors that may lead to the success of a business. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..
 d) ……………………………………………………………………………………………..

9. Highlight four advantages of promoting sales through the internet. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

10. Indicate the document to be used for each of the following descriptions. (4marks)
Description Document

a) Reply to a specific letter of inquiry ________________________

b) To update a catalogue ________________________

c) To show the content of container ________________________

d) To correct an overcharge in the invoice ________________________

11. The information below relates to Kimeu’s business as at 31st JULY/AUG 2010.

Kshs

Capital 100,000

Additional investment in the year 40,000

Profit realised in the year 25,000

Drawings made in the year 45,000

Determine Kimeu’s capital as at 31st JULY/AUG 2010. (4 marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

13. Highlight four reasons for consumer’s protection. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

14. Outline four factors that would make John and Ann taking the same type of life assurance
policy with the same insurer to pay different amount of premiums. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

15. The information below was extracted from the books of Wapendwa Traders on 31st
JULY/AUG 2014
Details Amount
Furniture and fittings 234,000
Debtors 67,500
Capital 157,900
Commission earned 13,200
Creditors 34,750
Drawings 21,800
 5 years bank loan 114,450
Discount received 3,000

Required; Prepare Wapendwa Traders trial balance as at 31st JULY/AUG 2014.(5marks)

16. Identify the ledger in which the following accounts are maintained. (4marks)

Account Ledger

a) Pendo (Debtor) ______________________________

b) Machinery ______________________________

c) Rent ______________________________

d) Capital ______________________________

17. Indicate the source document that relates to the following books of original entry. (3 marks)

Books of original entry Source document

a) Purchase return journal .......................................................

b) Cash book ........................................................

c) Sales return journal ........................................................

18. Identify the type of unemployment described by the statements below. (4marks)

a) Introduction of tea picking machines to replace human labour ___________________

c) Decline in economic activities of a given country____________________________

d) Five employees handling a single task in an organisation.______________________

19. The diagram below shows supply of a certain commodity. Give four reasons that may cause
such a shift
(4 marks)

S1 So

Prices

S1 SO

Quantity

a) …………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

20. Outline four tools of monetary policy that a government may use to reduce excess money
supply (4marks)
a) ………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..
21. State whether the following transactions will increase, decrease or have no effect on the
balance sheet items. (4marks)
Transaction Assets Capital Liabilities

a) Took a loon from K.C.B and used it to pay a K.I.E loan.

b) Bought furniture and paid by cheque

c) Took stock of goods and donated to a local church

d) Sold stock of goods on credit at a profit.

22. The following information was provided from the Mzalendo Traders books for the period
ending 31st JULY/AUG 2010.
Commission received 20,000
Gross loss 50,000
Rent paid 30,000
Discount received 35,000
Carriage outward
10,000 Interest on loans
5,000

Required: Prepare profit and loss account for the period ending 31st JULY/AUG 2010.(4mks
23. State four assumptions in the circular flow of national income in a two-sector economy 4mks

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

24. Highlight four characteristics of underdeveloped countries. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

25. Outline four levels of inflation. (4marks)

a) ……………………………………………………………………………………………..

b) ……………………………………………………………………………………………..

c) ……………………………………………………………………………………………..

d) ……………………………………………………………………………………………..

THIS IS THE LAST PRINTED PAGE