1. a) Discuss FIVE functions of the budget as a planning tool. 10mks

Explain five adverse effects of a large population on the economic development of a

country. 10mks

2. a) Explain FIVE reasons for trade restrictions. 10mks

b) Highlight FIVE differences between a private limited company and public corporation 10mks

3. a) Explain FIVE uses of national income statistics.

b) Discuss FIVE advantages of mobile phones in communication 10mks

4. a) Describe FIVE steps followed in personal selling. 10mks

b) Explain FIVE contributions of appropriate technology to the success of business enterprise. 10mks

5. a) Discuss FOUR types of marine Insurance. 8mks

b) Enter the following information to the relevant books of original and post to the ledger

10mks

Feb 1 Sales to Ng'eno goods worth shs.4500 invoice no. 458

Feb 4 Sales to Njuguna goods worth shs.7,200 invoice no 213

Feb 12 Credit sales Ng'eno shs.8,000 invoice no. 469

Feb 17 Invoice no.214 to P.K Ndoto shs.9,200

Feb 24 Credit note no.102 from J. Ngeno shs.450

6. a Explain FIVE shortcomings of self employment 8mks

from the following trial balance of Utumishi enterprises, draw up a trading, profit and loss for the year ended 31st December, 2004

7.(a) Explain six circumstances which may make an insurance company not to compensate the

Insured in the event of loss. (12mks)

(b) Explain four factors that influence the incidence of tax. (8mks)

8. (a) Explain five monetary instruments used by the government to reduce the supply of money in

an economy. (10mks)

(b) Explain five reasons why firms with popular products find it necessary to continually advertise

the same products. (10mks)

9. (a) The Kenya shilling has been depreciating in relation to the Sterling pound.

(i) Define the term depreciation. (2mks)

(ii) Explain four disadvantages of this process to Kenya's economy. (8mks)

(b) Explain five assumptions of monopolistic competition. (10mks)

10. (a) Discuss five causes of unemployment in Kenya. (10mks)

(b) Air transport is popular among businessmen even though it is expensive. Explain five reasons

why businessmen opt for air transport. (10mks)

(a) Explain five characteristics of under-development. (10mks)

(b) Explain five advantages that accrue to a country as a result of foreign firms locating their

enterprises in the country. (10mks)

11. The following information relates to Soittara Enterprises for the year ending 31st December 2005.

Sh.

Gross profit 18000

Transport out 3000

Discount allowed 2000

Rent received 5000

Sundry expenses 3000

Salaries 5000

Insurance 2200

Required:

(i) Prepare the profit and loss account for Soittara Enterprises for the year ending 31st December

2005. (5mks)

(ii) Give the importance of the profit and loss account. (5mks)

12. Discuss five problems encountered when computing the consumer price index of commodities.

(10mks)