KCSE Past Papers 2021 Business Studies Paper 2

1. (a) Explain five circumstances under which a producer may sell goods directly to the consumer. (10 marks)

(b) Explain each of the following terms of sale as used in international trade: (10 marks)

(i) Ex-works

(ii) Cost and Freight

(iii) FOB

(iv) Landed

(v) In Bond

2. (a) Explain five factors that may discourage entrepreneurship in Kenya.(10 marks)

(b) Explain five demerits of indirect taxes.(10 marks)

3. (a) Explain five errors that may not be detected in a trial balance.(10 marks)

(b) Explain five documents prepared by the seller after receiving an order up to the point of delivery. (10 marks)

4. (a) Explain five reasons that may make a firm operate on a small scale.(10 marks)

(b) The following information was extracted from the books of Ushirika Traders as at 31st December 2020.(10 marks)

Gross profit94,000
Commission Received32,000
Carriage Outwards8,000
General Expenses15,000
Discount Received29,000
Total Fixed Assets1,100,000
Long Term Liabilities610,000
Discount Allowed12,000
Commission Allowed4000
Current Liabilities162,000
Current Assets192,000

5. (a) Explain five reasons that make it necessary for the Government to train business people.( 10 marks)

(b) Explain five problems that the Kenyan Government may experience when implementing the Vision 2030. (10 marks)

6. (a) Explain five advantages of written communication. (10 marks)

(b) Use the transaction given below to prepare Patel Traders Two Column Cash Book fOr the month of February 2020. (10 marks)

1st Feb. : Had Ksh 1,200 cash in hand and a bank overdraft of Ksh 1000

2nd Feb. : Used cash to pay water bill Ksh 200, electricity Ksh 100 and wages Ksh 400

3rd Feb. : Received a cheque of Ksh 14,000 from Daisy.

5th Feb. : Sold goods worth Ksh 7,000 in cash.

7th Feb. : Paid for goods bought for resale worth Ksh 5,000 by cheque.

9th Feb. : Received a cheque of Ksh 10,000 from the Cooperative Society as earning from dividends.

10th Feb.: Withdrew Ksh 2,000 from the bank for family use

13th Feb.: Received a cheque of Ksh 10,000 from Petro.

15th Feb.: Deposited Ksh 1,000 from the office into the business bank account.

17th Feb.: Paid Manu by cheque Ksh 1,000

27th Feb.: Used the money in the bank to purchase furniture leaving only a balance Ksh 2,000