Questions

1. State any four advantages of a wholesaler to a consumer4mks

2. List four qualities of good filing system

a) Outline the two causes of this curve 2mks

4. Why would an exporter prefer to use container services as a method of transport4mks

5. State any four after sales services business firm sellingelectronic goods sets can offer

to the customers4mks

6. The following information was extracted from the books of a trader :

Creditorssh60,000

Cash at bank20,000

Debtors 40,000

Stock 70,000

Calculate :

(i) Current ratio3mks

(ii) Quick ratio 2mks

7. Give four reasons why the budget is an important government tool of control to the economy4mks

8. Differentiate between Balance of trade and Balance of payments4mks

The following information was extracted from the books of

9.A company intends to promote its products by arranging a prize winning competition through the media. Prizes can only be won through buying the products.

(a)Explain five benefits that the company would get by using this method of sales promotion10mks

(b) Explain four factors determining the market prices of commodities. 10mks

10.(a) Thegovernment of Kenya has been adopting the policy of privatisation of firms.

Discuss someof the benefits that the Kenyan people reap from this policy 10mks

(b) The following balance were extracted from the books of Charles & SonsCo.

as at May31^st 2002 .

Capital600,000

Net profit130,000

Plantfixtures160,000

Equipment's100,000

Buildings240,000

Office furniture 10,000

Stock 192,000

Cash 118,000

Debtors 158,000

Pre-paidexpenses 22,000

Creditors 130,000

Outstanding expenses20,000

Bank overdraft 110,000

Required :

(i)Prepare balance sheet as at31^st may 20027mks

(ii)Calculate

(a)Working capital

(b)Current ratio

(c)Net profit as percentage to capital3mks

3. (a) Explain five circumstances under which an insurance company would not compensate

the insured in the event of loss 10mks

(b) Odhiambo's publishingcompany recently joined the Nairobi stock exchange.

Describe five benefits 10mks

11.Opportunities exist for purchasing of necessary durable goods by instalment

(a)Describe two methods commonly used for this purpose4mks

(b)Mention three advantages of each to:

(i)Manufacturers

(ii)Consumers12mks

(c)Give any two differences of the two methods 4mks

12. (a) Explain anyfive methods that the Kenyan government may adopt in order to control the

volume of imports10mks

(b)Discuss the main sources of capital to small scale enterprises 10mks

13. (a)Explain five reasons why it is necessaryfor a country to control internationaltrade

10mks

(b) Explain five diseconomies that may be suffered by firms due to large scale production

10mks

14.Explain the following terms as used in commerce4mks

i)Registered capital

ii)Subscribed capital

iii)Issued capital

iv)Paid up capital

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

16The main objective of commerce is profit maximization.Highlight any four ways in

which businesses can achieve this objective.4mks

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

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

19Give any four reasons that may lead to dishonour of a cheque.4mks

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

of sales promotion.4mks

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

to retailers.4mks

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

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