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Business Studies Paper 1


State four factors that determine the choice of human wants to be satisfied.

4 marks


Highlight four reasons why the Kenya government has decided to control the exploitation of her natural resources.

4 marks


Outline four benefits of a self-service shop to a customer.

4 marks


Give four factors that one should consider when choosing a means of transport.

4 marks


Outline four circumstances under which a bill of exchange may be preferred as means of payment.

4 marks


As Kenya’s economy strives to do well, most Kenyans are bound to live beyond 70 years.

Outline four negative effects of an ageing population to Kenya’s economy.

4 marks


Highlight four salient features of a public warehouse.

4 marks


Give the terms used in insurance that best fits each of the following descriptions.

4 marks


Outline four advantages of using e-mail in communication.

4 marks


State four factors that determine the period for which documents should be stored.

4 marks


List four external business environments that may negatively affect the operation of a business.

4 marks


Outline four dangers of comparing living standards in different countries using national income statistics.

4 marks


Highlight four disadvantages of operating a business as a partnership.

4 marks


State four factors one should consider when evaluating a business opportunity.

4 marks


State the factor of production that each of the following resources relate to.

4 marks


The following information relates to Lwakhakha Traders as at 31st December 2012. Details

a) Total drawings shs 380,000

b) Brought in a private car valued at shs.730 000 into the business.

c) Capital shs. 8,350,000 on 31st December 2012.

d) Profit earned during the year was shs. 2,880,000. Determine Lwakhakha’s capital as at 1st January 2012.

3 marks


The following balances was extracted from the books of Naitiri Hardware

Enterprises on 1st June 2014. Shs.

Debtors 700,000

Creditors 100,000

Prepaid rent 85,000

Cash at bank 100,000

Cash in hand 50,500

Equity bank loan 750,000

Fixed assets 2,700,000

Stock in trade 214,000


Prepare Naitiri’s Hardware Enterprises balance sheet as at 30th June 2014.

5 marks


From the following transactions, indicate the account to be debited and the account to be credited.

4 marks


On 1st December 2013, Kimilili Traders had shs.85, 000 cash in hand and

a bank overdraft of shs.88, 000. During the month, the following transactions took place.

2nd December: Cash sales shs 209,400

4th December: Bought goods worth shs 80,000 on credit from Kimaeti Wholesalers.

6th December: Wafula, a debtor settled his account of Shs, 500,000 by cheque less 5% cash discount.

16th December: Paid wages shs. 30,000 in cash.

21st December: Settled a creditor Maruti’s account of shs. 20,000 by cheque less 2% cash discount.

31st December: Banked all the cash except shs. 25,000

Enter the above transactions in the three column cash book.

4 marks


The following balances were extracted from the books of Bukunjabo Traders

for the month ending 30th June 2010.


Sales 420, 000

Purchases 240, 000

Equipment 120, 000

Motor van 300, 000 Debtors 80, 000

Creditors 40, 000

General expenses 160, 000

Capital 440, 000

Prepare a Trial Balance of Bukunjabo Traders for the month of June 2010. (4 marks)

4 marks


Post the following transactions to the books of Bumula Wholesalers. (4 marks)

1st March 2014: Commenced business with shs. 150, 000 cash at the bank.

10th March 2014: Bought motor vehicle from CMC Ltd for shs.950, 000 on credit.

15th March 2014: Withdrew shs.50, 000 from bank for business use.

20th March 2014: Paid shs.30, 000 cash to CMC Ltd Dr.

4 marks


State four emerging issues in product promotion.

4 marks


The figure below shows a shift in the supply curve of maize production in Bungoma County.

Outline four factors that may have caused the shift in the supply curve from S1 S1 to S2 S2

4 marks


Highlight four ways in which productivity of labour can be enhanced.

4 marks


State four characteristics of a good filing system.

4 marks

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