6. The following details were extracted from the books of Chantal traders as at 30th September 2012. Debtors - Sh 12,000 Creditors - Sh 30,000 Stock of goods - Sh 25,000 Bank overdraft - Sh 15,000 Premises - Sh 260,000 Cash in hand - Sh 18,000 Motor vehicle - Sh 140,000 Calculate her capital and prepare her balance sheet as at 30th September 2012.

Identify four causes of demand pull inflation in an economy. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks

19. Mention the principle of insurance involved in the following statements. (a). One cannot insure the neighbour's house. ..............................................................................................................................................

(b) Compensation is paid out by an insurance company only if the loss is a direct result of happening of the event insured against. .........................................................................................................................................

(c). After having been compensated the insured is not allowed to take the scrap. .........................................................................................................................................

(d). The aim of the insurance company is to put back the insured to his/her original material financial position and not to profit him/her. ........................................................................................................................................ 4 marks

20. On 1st Feb 2012 Muthoni had sh. 14,000 at bank. Transactions for the week ending 7th Feb 2012 were as follows. Feb 3: Received ksh. 38,000 cash form Karendi after allowing 5% cash discount. Feb 4: Deposited sh. 20,000 into the bank from cash till. Feb 6: Paid kihenju sh. 16,000 by cheque in full settlement of his account of sh. 16,900. Record the above information in a three column cash book and balance it off. ........................................................................................................................ ........................................................................................................................ 5 marks

21. During the 2013 election period, many aspiring politicians campaigned using billboards. Highlight four limitations of using this method. (i) .................................................................................................................. (ii) .................................................................................................................. (iii) .................................................................................................................. (iv) .................................................................................................................. 5 marks

22. State four differences between perfect competition market and oligopolistic market. 4 marks

23. Give three advantages of using M-pesa as a means of payment. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... 3 marks

24. State the term that is used for each of the following statements. (a). A situation where the government has borrowed internally at high interest rate leaving little 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 profit. ..............................................................................................................................

25. The following transactions took place in the business of Gift traders during the first week of March 2013. March 2: issued an invoice no. 840 to Karen Sh. 80,000. March 3: Received an invoice no. 940 from Mugeka Traders sh. 50,000. March 4: Issued a credit note no. 110 to Karen sh. 8,000. March 5: Received a credit note no. 014 from Mugeka Traders sh. 5,000. Record the above information in the relevant ledger accounts.

(i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 9. Outline four measures a country like Kenya may take to correct unfavourable balance of payment. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 10. Give four types of errors not disclosed in a trial balance. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 11. Highlight four factors which are likely to hinder a country's development. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks(i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 9. Outline four measures a country like Kenya may take to correct unfavourable balance of payment. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 10. Give four types of errors not disclosed in a trial balance. (i) ............................................................................................................... (ii) ............................................................................................................... (iii) ............................................................................................................... (iv) ............................................................................................................... 4 marks 11. Highlight four factors which are likely to hinder a country's development.