1. Explain the following terms as used in commerce 4mks

Registered capital

Subscribed capital

Issued capital

Paid up capital

2. Outline any four circumstances under which a credit note may be used. 4mks

3. The main objective of commerce is profit maximization. Highlight any four ways in

which businesses can achieve this objective. 4mks

4. Give any four functions of commercial attaches. 4mks

5. Mention four investment services offered by the Kenya Postal Corporation. 4mks

6. Give any four reasons that may lead to dishonour of a cheque. 4mks

7. Highlight any four benefits that accrue to a seller who uses personal selling as a method

of sales promotion. 4mks

8. Give any four categories of goods that are suitable for direct distribution from producers

to retailers. 4mks

7. Highlight four ways in which Insurance companies make profits. 4mks

8. State any four sources of capital to co-operative societies. 4mks

9. The following balances relates to a business for the year ended 31st Dec 2000.

Capital as at 31st Dec 2000 170,000

Drawings for the year 5,000

Net profit for the year 5,000

Extra capital introduced 52,000

Purchases 20,000

9. Determine the amount of capital as at 1st Jan 2001. 3mks

Calculate the Net profit ratio 3mks

10. Outline any four features of a fixed deposit account. 4mks

11. Give any four reasons why most business people prefer to transport their finished

products via road transport. 4mks

12. Give any four benefits that you may reap as a consumer from an advertising campaign. 4mks

13. Mention any four remittance services offered by the post office. 4mks

14. Give four reasons why an office may prefer storing information in micro-films instead

of files 4mks

15. Assume that you want to start photocopying business in your nearest town.

16. Cite any four factors you would consider before buying your copies. 4mks

17. The following machines are found in a mailroom. State the function of each. 5mks

Machine

Functions

Addressing machine

Shredding machine

Guillotine

Franking machine

Composite machine

18. Give any four reasons why the use of Electronic mail (E-mail has become very popular

in Kenya today. 4mks

19. The following balances were extracted from the books of MM traders on 31st January 2002.

Item Amount

Sales 10,000

Purchases 6,000

Bank loan 2,000

Buildings 30,000

Machinery 40,000

Premises 60,000

Debtors 5,000

Creditors 4,000

Opening Stock 7,000

Capital 132,000

You are required to prepare trial balance for MM traders as at 31st January 2002 from

the above information. 6mks

20. Outline any four functions of money as a medium of exchange. 4mks

21. Give any four reasons why the government would need to train businessmen. 4mks

22. Identify three reasons that can lead to dissolution of partnership. 3mks