BUSINES STUDIES - Paper 2
SERIES 1 FEBRUARY 2025
TIME: 2 ½ HOURS
KLMSEN
SCHOOLS
NAME …………………………………………………………………………………….
NAME OF SCHOOL…………………………………..…………DATE……………….
INDEX NO. …………….……….……..…..… SIGNATURE …………..…………..
INSTRUCTIONS TO STUDENTS
a) Write your name, school 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 contains six questions.
d) Answer any five questions.
e) Write your answers in the spaces provided after the question six.
f) All questions carry equal marks.
g) This paper consists of 4 printed pages.
h) Candidates should check the question paper to ascertain that
all the pages are printed as indicated and that no questions
are missing.
i) Candidates should answer the questions in English.
For Examiner’s Use Only
Questio Maximum Candidate
n score ’s score
20
20
20
1
20
20
Total Score
1. (a) Explain FIVE benefits that accrue to a community as a result of engaging in home trade
(10mks)
(b) Highlight FIVE circumstances that will lead to the dissolution of a public limited company.
(10mks)
2. (a) The table below shows the demand and supply schedules of potatoes in Bukura market.
Price kshs per kg Quantity demanded (‘000kgs) Quantity supplied (‘000kgs)
60 5 55
55 10 50
50 15 40
45 25 35
40 35 20
35 40 15
(i) On the same axis draw a demand and supply curve from the above schedule. (6mks)
(ii) From the graph, determine the equilibrium price and quantity. (2mks)
(iii) Determine the market surplus at kshs 53 price.(2mks)
(b) Explain FIVE ways commercial banks help traders in facilitating payments. (10mks)
3. (a) Explain FIVE post-delivery documents used in home trade (10mks)
(b) The trial balance below belongs to Baraka stores as at 31-10-2020.
Details Dr. (kshs) Cr. (kshs)
Stock 142,000
Creditors 80,000
Debtors 64,000
Bank 120,000
Hustler loan 154,000
Cash 72,000
Premises 385,000
Capital 549,000
783,000 783,000
During the month of November 2020 the following transactions took place.
2/11/2020: Paid creditors ksh 68,000 by cheque
2
4/11/2020: Took ksh 10,000 from business for own use
7/11/20202: Withdrew ksh 27,000 from the bank for business use
18/11/20202: Sold goods worth ksh 30,000 on credit
Required: Prepare the relevant ledger accounts and balance them off.(10mks)
4. (a) Explain FIVE trends in the transport sector in Kenya (10mks)
(b) Discuss FIVE causes of unfavourable balance of payment in most third world countries
(10mks)
5. (a) Explain FIVE features of a monopoly market structure (10mks)
(b) Explain FIVE factors that may hinder effective communication in an organization (10mks)
6. (a) Explain FIVE market gaps that may present a business opportunity to potential entrepreneurs.
(10mks)
(b) The following information was extracted from the Books of Maraba Ventures on 31-12-2022.
(10mks)
Details Ksh.
Sales 220,000
Purchases 141,000
Stock (01-01-22) 39,250
Stock (31-12-22) 8,000
Return-in 12,500
Return - out 3,750
Carriage in 4,000
Carriage out 8,500
Required:
(i) Prepare Maraba Ventures trading account on 31-12-2022.
(ii) Work-out Maraba Ventures Mark-up.
(iii) Calculate Maraba Ventures Rate of stock Turn over.
