1. a) Explain five benefits of direct production.

(10marks)

b) Explain five differences between private limited company and partnership forms of Business units. (10marks)

2. a) Discuss five factors that Nakuru county government may consider before spending county Funds.

(10marks)

b) The following information relates to Maralal Traders for the month of May 2014.

May 1: Balance brought forward:

Cash Shs. 180,000

Bank Shs. 450,000 (Cr)

3:

Received a cheque of 1,500,000 from Mpasha, a debtor

7:

Cash sales Shs. 280,000

11:

Jolloimat, a creditor of Shs.600, 000 was paid by cheque of sh 400,000 and the balance by cash.

14:

Received commission in cash sh. 150,000

17:

A debtor, Leteipa, paid his account of 185,000 by cheque less 2% cash discount.

19:

Paid the following expenses by cheque:

Rent Shs. 75,000, Electricity Shs. 32,000, Water Shs. 25,000

21:

Withdrew Shs. 100,000 from bank for personal use

24:

Paid cash Shs 133,280 to Kinai after deducting a cash discount of 2%

25:

Received a cheque of sh. 200,000 from Kiyapi, a debtor

28:

Paid Salaries Shs. 120,000 by cheque.

31:

Banked all cash except sh. 50,000.

Required:

Record the above transactions in a three column cash book.

(10marks)

3. a) Describe five types of unemployment.

(10marks)

b) Explain five problems a country may encounter when measuring national income using the output approach

4. a) Explain five factors that encourage entrepreneurial development in Kenya.

(10marks)

b) By use of diagrams, show the effects on the equilibrium price and output due to increase in demand and supply

respectively.

(10marks)

5. a) Explain five benefits that Kenya as a country may achieve by adopting 2030 Millennium development goals. (10marks)

b). Discuss five reasons why a manufacturer may sell directly to consumers.

(10marks)

6. a) The following trial balance has extracted from the books of Bishar Retailers on 30thApril, 2006.

Dr shs

Cr shs

Sales

186,000

Purchases

115,560

Stock 1.5.2005

37,760

Carriage outwards

3,260

Carriage inwards

2,340

Returns outwards

3,550

Returns inwards

4,400

Motor expenses

6,640

Rent

4,560

Salaries and wages

24,490

General expenses

12,000

Rates

1,200

Equipment

60,000

Machinery

31,960

Trade debtors

45,770

Trade creditors

30,450

Bank

38,760

Cash

12,000

Drawings

20,500

Capital

_______

128,440

348,440

348,440

Stock at 30th April, 2006 was shs 49,980.

Required;

i) Prepare Trading, profit and loss Account for the year ended 30th April 2006.

(7marks)

ii) Balance as at 30th April 2006.

(5marks)

b) Explain four forms of economic integration.

8. In the spaces provided below, write the type of partner described by each of the following statements: (4mks) STATEMENT PARTNER (i) One who is below 18 years of age: (ii) One who has unlimited liability: (iii)One who gets involved in the daily running of the business (iv) One who allows his / her name to be used in the business 9. You have been charged with a duty of preparing an Article of Association for your company. State four items that you will include in your Article of Association. (4mks) 10. Local leaders would like to see more business enterprises established within Nandi. Outline four measures the government can take to encourage investments in this region. (4mks) 11. Bucket Ltd is an international pharmaceutical company. Under what circumstances can the firm send its products to customers by air transport? (4mks) 12. The following are special delivery services provided by the Post Office: (4mks) Post Rest Ante, Speed Post, Business Reply Service, Express Delivery. Match each description with item. (i) The arrangements to deliver the mail starts at the sender's post office............................................ (ii) The arrangement to deliver the mail starts at the addressee's post office........................................ (iii) Service offered to travelers who wish to receive correspondence while away from home................... (iv) Service that relieves customer of postage expenses................................................................... 13. State four reasons why it is necessary to locate a bonded warehouse at the point of entry of a country. (4mks) 14. Kazi Moto insured a motor vehicle against fire with Moto Motocompany by paying Kshs. 300,000. Later the car was destroyed at a garage and a compensation of Kshs. 400,000 were paid. Using insurance terms, state what each of the following stand for: (4mks) (i) Kazi Moto.................................................................................... (ii) Fire:............................................................................................ (iii) Kshs. 300,000 ................................................................................. (iv) Moto Moto company:........................................................................ 15. Below are terms used in sales promotions. - Competitive advertising. - Product advertising. - Informative advertising. - Institutional advertising

- Primary demand advertising. Identify the most appropriate term descried in each of the following case. (4mks) (i) Aims at increasing the sales volume of the company's entire range of products (ii) Provides relevant information about producers products (iii) Seeks to popularize the business enterprise offering goods for sale. (iv) Seeks to promote the sale of a new variety of a company's product.. 16. Outline the procedures of taking an insurance policy on property. (4mks) 17. Kenya Cooperative Creamers (KCC) sell its dairy products directly to retailers. Highlight four factors that were considered in the choice of this channel of distribution. (4mks) 18. Identify four factors that may be contributing to income disparity between the rich and poor citizens in Kenya. (4mks) 19. The following information relates to Ogello Traders as at 31st December 2009. Capital (1-1-2009) Kshs. 100,000 Loss during the year Kshs. 40,000 Investment Kshs. 35,000 If the trader took goods worth Kshs. 15,000 during the year for private use, calculate the capital of the business as at 31.12.2009. (4mks) 20. Prepare Betty's trial balance from the following information. (4mks) Items Kshs. Purchase 130,000 Capital 150,000 Sales 165,000 Debtors 45,000 Creditors 40,000 Motor vehicles 120,000 Stock 50,000 Cash at Bank 10,000 21. Ondiko Traders had Kshs. 100,000 cash in had, Kshs. 243,000 cash at bank during the month of March 2008. The following transactions took place in that month. March 3 - Paid insurance Kshs. 5,000 cash. March 11 - Cash sales Kshs. 14,000 March 14 - Purchased equipment worth Kshs. 37,000 paying by cheque. March 20 - Deposited Kshs. 30,000 into Bank from cash till. March 31 - Took Kshs. 10,000 cash for personal use. Prepare Ondiko Trader's Two-column Cash Book for March 2008. (5mks)

22. State the journal that deals with each of the following types of transacti