Questions.

1.a)The following balances were extracted from the books of spikes Ltd on 31^st Dec 2001.

Shs.

Fixed Assets42,000

Stock48,000

Debtors50,000

Bank overdraft25,000

Creditors40,000

Cash in hand 2,000

Capital77,000

During the month of January, the following transactions took place.

a)Bought motor vehicle on credit valued at Kshs. 80,000 from General motors.

b)Withdrew sh. 28,000 for personal use.

Prepare balance sheet as at 31^st Jan 2002 for spikes Ltd.

c)Give any five reasons to justify that the central Bank is not a Commercial Bank.

10mks

2.a)Discuss circumstances under which a wholesaler may be eliminated from the chain

of distribution.10mks

b)Explain the essentials of a good warehouse.10mks

3.a)Advertising media refers to the means used to convey the sales message to the customers /

users of any given product.Explain any five.10mks

b)What do you understand by 'containerization'.Briefly explain the benefits associated

withcontainerisation.10mks

4.a)Explain the role played by consumer co-operative societies in Kenya today.10mks

b)To a certain extent, public corporations are to considered desirable.Explain10mks

5. The following information was extracted from the books of Roadside kiosk as at

Sept 30^th1999:

Cash at handShs. 30,000

Capital170,000

Creditors 40,000

Stock 70,000

Purchases 150,000

Sales 205,000

Debtors 65,000

Motor vehicles100,000

Prepare trial balance as at 30^th Sept 1999. 5mks

6. What are the four methods of personal sellingcarried out by salesmen 4mks

7. In the recent past many countries have adopted trade liberalization as the way forward to development. Highlight any four adverse effects that such nations may experience due

to liberalization4mks

8.Outline any four functions of the Nairobi stock exchange4mks

9. List four methods used by the central bank of Kenya in creditcontrol4mks

10. Consumer protection issafeguarding consumersfrom exploitation by producers andbusinessmen . Give four reasons why this is necessary4mks

11. The following is a demand/ supply schedule for kerosene. Draw a diagram to illustrate

using your own scale 5mks

Also find the equilibrium price / quantities

Price Quantity Demanded Quantity Supplied

Per dayPerday

5 60 10

75015

1040 20

153525

20 30 30

2525 35

30 20 40

12. Name four characteristics that should be posed by goods in order for them to be described

as wealth. 4 mks

13. Limited companies are Large Organizationswhich attract large profits. However these undertakings are still not popular in Kenya andsole proprietorship seemsto be more

popular. Give four reasons to explain this 4 mks

14. Give four reasons why most organization prefer oral interviews whenever they are

recruiting new employees/staff 4 mks

15. Thelaw of demand states that 'Other things being equal, a fall in price will lead to an

increase in quantity demanded .'Highlight any Four circumstances under which this

law may not hold.4 mks

16. In the spaces provided below indicate the level of production that relates to each ofthe followingactivities

Activity Level of production

Selling goods in a shop__________________________________

Fishingfrom a river __________________________________

Growing maize__________________________________

Making leather belts__________________________________

4 mks

17. Enter the following transaction into a cash book and balance it as at 20^th March 1995.

March 2^nd started business with Kshs. 28,000 of which Kshs. 8000 was banked .

March 4. Bought stock from Nekesa worth Kshs 2000 and paid by cheque.

March 6. Paidwages in cash Ksh4000.

March 10.Received a cheque for Kshs. 3000 from a debtor

March 20. Deposited cash in bank fromcash till Kshs. 3000.5 mks

18.State any four benefits accruing as a result ofSmithKline Beechammerging with 8. Mention four types of wholesalers. (4mks)

9. List down four machines used in the mail nom and their use. (4mks)

MACHINE

USE

(i)

(ii)

(iii)

(iv)

10. The law of demand applies 'ceteris penbus' all other factors held constant ). Highlight

four circumstances under which this law may not hold. (4mks)

11. 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)

12. The following balances were extracted from the books of Beauty Care Enterprises on

31^st of March 1997.

Shs.

Fixed Assets42,000

Stock48,000

Debtors50,000

Bank overdraft25,000

Creditors40,000

Cash in hand 2,000

During the month of Aprilthe following transactions took place.

(a) Bought Motor Vehicle on credit valued at kshs. 80,000 from General motors.

(b) With drew Sh. 28,000 for personal use.

Required: Prepare balance sheet as atApril 30^th 1997.(5mks)

13. Give four reasons why an office may prefer storing information in Micro-films instead

of files.(4mks)

14. Name four documents used in home trade.(4mks)

15. Mention four reasons to justify that the Central Bank is not a Commercial Bank.(4mks)

16. Give four reasons why people prefer using a cheque to cash when effecting payment.(4mks)

17. The following information relates to Sis Mis traders for the year ended 31^st Dec 1996.

Opening stock

Closing stock turnover 8 times

Sales for the year 293,000

Determine:

(a) Cost of sales

(b) Purchases

Gross profit or Gross loss. 8. Mention four types of wholesalers. (4mks)

18. List down four machines used in the mail nom and their use. (4mks)

MACHINE

USE

(i)

(ii)

(iii)

(iv)

19. The law of demand applies 'ceteris penbus' all other factors held constant ). Highlight

four circumstances under which this law may not hold. (4mks)

20. 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)

21. The following balances were extracted from the books of Beauty Care Enterprises on

31^st of March 1997.

Shs.

Fixed Assets42,000

Stock48,000

Debtors50,000

Bank overdraft25,000

Creditors40,000

Cash in hand 2,000

During the month of Aprilthe following transactions took place.

(a) Bought Motor Vehicle on credit valued at kshs. 80,000 from General motors.

(b) With drew Sh. 28,000 for personal use.

Required: Prepare balance sheet as atApril 30^th 1997.(5mks)

22. Give four reasons why an office may prefer storing information in Micro-films instead

of files.(4mks)

23. Name four documents used in home trade.(4mks)

24. Mention four reasons to justify that the Central Bank is not a Commercial Bank.(4mks)

25. Give four reasons why people prefer using a cheque to cash when effecting payment.(4mks)

26. The following information relates to Sis Mis traders for the year ended 31^st Dec 1996.

Opening stock

Closing stock turnover 8 times

Sales for the year 293,000

Determine:

(a) Cost of sales

(b) Purchases

Gross profit or Gross loss.