1.

(a) Explain five roles of Stock exchange in the Kenyan economy.

(b) Explain five reasons why a high per capita income is not an indicator of better living standards in a country.

20 marks

2.

(a) Discuss five roles that intermediaries play in distribution of goods.

(b) Office staff is expected to have appropriate office etiquette. Describe five of them expected from a good office worker.

3. Highlight four reasons why people choose to be enterpreneurs (4mks)

4. List four ways in which filling of documents may facilitate smooth running of an office (4mks)

5. State four functions of an invoice in commercial transactions (4mks )

6. List four circumstances under which a trader may issue a debit note (4mks)

7. Outline four benefits that accrue to a business person who uses the latest technology in record -keeping

8. State four circumstances under which a business person may prefer to transport goods by boda boda (4mks)

9. Highlight four problems facing savings and credit co-operative societies ( Saccos) (4mks)

10. Outline circumstance under which verbal communication would be preferred to written communication (4mks

11. The following descriptions relate to insurance . State the term used for each description (4mks)

(a) Temporary certificate of contract between the Insurer and the Insured

(b) Periodic payments made by a policy holder

(c) Insurance experts who appropriate the actual premiums to be paid

(d) Life assurance lasting for a specified period

12. Highlight four features of a bonded warehouse (4mks)

13. State four benefits a trader may get by advertising products in a radio (4mks) 14. Outline four reasons why the government may use regulatory measures to protect consumers against exploitation 15. On 2nd November 2010, Kamu received an Invoice for sh. 24,000. Terms of payment were trade discounts 10% and cash discount 20% , if payment is made within 30 days . Determine the amount paid if payment was made on 28th November 2010 (4mks)

16. In the spaces below indicate the source documents that correspond to the books of original entry (4mks) Source Document Books of original entry (a) Sales journal (b) Purchase Journal (c) Return Inwards Journal (d) Purchase Returns Journal.

17. The following information relates to Maguna - Andu Traders Sh . Stock 31/12/06 60000 Average stock 55000 Rate of stock turnover 6 times Mark up 25% Required Prepare trading account (4mks)

18. Outline four advantages of M- Banking (4mks)

19. State the term that is used for each of the following statements (4mks)

(a) A situation where the government has borrowed internally at high interest rates leaving little space for locals to borrow from

(b) Debts Incurred by the government to finance activities that do not generate revenue at all at any time

(c) Government expenditure which is incurred all the time on a regular basis

(d) Type of tax paid by companies based on profits

20. Highlight four measures that may be taken by a country to correct balance of payment deficit

24. The government has risen the retirement age of civil servants from 55 years to 60 years. Highlight four economic effects of such a move (4mks) 25. The following transactions were extracted from the books of Rehema traders on 1st January 2009 Shs Capital 600,000 Creditors 180,000 Motor van 200,000 Furniture 200,00 Stock 60,000 Debtors 80,000 Cash 240,000 The following transactions took place during the year ended 31st Dec 2007 (i) Sold furniture worth sh. 60,000 for which sh. 40,000 cash was received and the balance was due at the end of the year (ii) Purchased goods worth sh. 100,000 for which cash of sh. 70,000 was paid and the balance was still outstanding at the end of the year . (iii) Cash of sh. 10,000 was taken from the business by the proprietor for personal use Required : Prepare Rehema's balance sheet as at 31:12:07