(a) Marketing boards are producer organizations set up to encourage and control the

Selling of agricultural products. Discuss five functions of these organizations.

(10mks)

(b) Discuss five differences between a bank statement and a bank pass book. (10mks)

(a) Despite major development in the transport sector. Many people are still using

carts (both those driven by animals and those pushed by human beings).

Discuss five reasons to show why this type of transport is still preferable to others.

(10mks)

Money evolved through several stages to get to the currency notes and coins we

have today. However Modern - day trade may compare negatively with barter

trade. Discuss this statement giving it your support. (10mks)

(a) A business enterprise should keep a budget other than the other statements it

keeps. Discuss reasons why this activity is important. (10mks)

You are the sales manager of speed Industries Ltd. that manufactures tyres.

You are faced with the decision to choose an appropriate channel to distribute the

product. Discuss the factors you consider in your choice. (10mks)

(a) Mail order business is whereby customers place their orders through mail and goods

are also send through mail. This business is however not popular in Kenya.

Discuss five reasons to encourage your colleagues to start this type of business. (10mks)

Discuss the factors that influence the choice of a filing system in an organization. (10mks)

(a) Briefly explain the following terms as used in Capital structure of a company.

Registered capital. (2 mks)

Called - up capital. (2 mks)

Issued capital. (2 mks)

Paid - up capital. (2 mks)

Specialization is the separation of jobs, activities and processes so that every individual concentrates on what they can do best. Name and explain four major such divisions.

(12mks)

(a) Discuss five benefits that the Kenyan government gets from Bonded Warehouses. (10mks)

Mwachai BINAs books disclose the following information for the period ended

31 Dec. 1996.

Opening Stock 21000

Purchases 40000

Closing Stock 10000

Sales 82000

Returns inwards 2000

Motor Vehicle 10000

Rent 3000

Sales expenses 18000

Discount received 3000

Required: Draw up Mwachais trading profit and loss account for the period ended. (10mks)

Distinguish the following terms: 6mks

Free goods and economic goods

Consumer goods and producer goods

Business wealth and personal wealth

State four advantages of a bonded warehouse 4mks

Name the factor of production that each of the following resources relate to. 5mks

Resource Factor of production

Teacher ______________________________________

Computer ______________________________________

Water ______________________________________

Sole proprietor ______________________________________

Forest ______________________________________

Mention any four methods used for sending money through the post office. 4mks

Using the book keeping equation, indicate the correct figure in the empty spaces provided.

Assets

Capital

Liabilities.

180,000

50,000

200,000

90,000

45,000

38,000

150,000

50,000

The following information was drafted from the books of Rayrose college on 31st Jan 2002.

Item Amount (Kshs)

Opening stock 400,000

Sales 700,000

Closing stock 10,000

Purchases 150,000

Sales returns 20,000

Purchase returns 50,000

Salaries and wages 80,000

Rent 70,000

Income 80,000

Calculate:

Gross Profit 4mks

Net profit 4mks

Mark-up percentage 2mks

State any four conditions under which a proforma invoice may be used. 4mks.

Highlight any four services rendered by retailers to consumers. 4mks

Outline any four functions of the Kenya External Trade Authority by (K.E.T.A.) 4mks

Mention four limitations of advertising as a means of sales promotion 4mks

As the transport manager of a busy company highlight four factors you would consider

before choosing a mode of transport for your goods and services. 4mks

Most secondary schools maintain that students should pay fees with cheques and not cash Account for this statement. 4mks

Indicate the account in which the following entries are made.

Entry

Account

Carriage inwards

Carriage outwards

Incomes receivable

Return inwards expenses.

List four features of co-operative societies. 4mks

Outline any four barriers that hinder effective communication. 4mks

Highlight any four problems or challenges that businesses would face due to adoption

of the decentralization policy. 4mks

Give any four benefits that a farmer would reap from being a member of a producer cooperative. 4mks

Outline any four features of multiple shops. 4mks

With the aid of a tree diagram, show the main divisions of trade. 3mks

What is meant by the following abbreviations as used in the study of commerce. 4mks

F. O. R __________________________________________________________

O . M . O __________________________________________________________

C. I . F ___________________________________________________________

C. W. O ___________________________________________________________

State any four methods that the government of Kenya uses to protect its consumers. 4mks

Give any three characteristics of money as a medium of exchange 3mks

What is a bill of exchange 2mks

Highlight any three demerits of the barter system of trade.