KCSE Business Studies Topical Questions and Answers

The table below shows general price changes over a period of five years:

27/11/2020

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The table below shows general price changes over a period of five years:

Using year 2010 as the base year, determine the Consumer price index for years 2011, 2012, 2013 and 2014. (4 marks)

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State four means of payment that may be provided by commercial banks to their customers. (4 marks)

27/11/2020

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Means of payment that may be provided by commercial banks to their customers

Means of payment that may be provided by commercial banks to their customers include:

Cheques
Bank drafts/Banker’s cheques.
Standing orders.
Traveler’s cheques.
Credit transfers.
Telegraphic transfers.
Use of credit/debit cards.
Electronic Funds Transfer.

State four means of payment that may be provided by commercial banks to their customers

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Outline four features of money that enables it to facilitate the exchange of goods and services. (4 marks)

27/11/2020

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Features of money that enables it to facilitate the exchange of goods and services

Features of money that enable it to facilitate the exchange of goods and services include:

General acceptability as a medium of exchange.
Cognizability.
Portability/easy to carry.
Divisibility/can easily be converted to smaller denominations without losing value.
Made of homogeneous/unjfo material.
Stability in value.
Malleability.
Durability.
Scarcity.
Not easy to forge (authenticity).

features of money that enables it to facilitate the exchange of goods and services

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Outline four benefits of proper filing to an organisation. (4 marks)

27/11/2020

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Benefits of proper filing to an organisation

Benefits of proper filing to an organisation include:

Vital documents will be kept for future reference.
Easy retrieval and accessibility of documents.
Economic use of available space.
Documents are kept safe from damage/loss.
Limits accessibility of documents to only authorized personnel.
Aids in keeping the office tidy /neat.
May help the organization to keep some documents for the length of time as specified by the law.
Helps to keep the documents neat.

Outline four benefits of proper filing to an organisation

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Chem Chemi Ltd is a new cement manufacturer. Outline four factors that may encourage this company to be established in Athi River town where other cement manufacturers are located despite the obvious competition. (4 marks)

27/11/2020

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Factors that may encourage Chemchemi Ltd. to be located in Athi River include:

Availability of raw materials in Athi River.
Skilled labour is readily available in Athi River (can be poached from other companies).
Market is readily available in Nairobi and its environs.
There is ready supply/source of power.
Government policy encourages the establishment of such firms in Athi River which is also an E.P.Z.
An established transport network
An established communication network.
Availability of well-developed social amenities like schools, stadia, sewerage systems and water supply.
Availability of security.
Availability of auxiliary services e.g. banks.

Chem Chemi Ltd is a new cement manufacturer

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Outline four benefits of using the internet for office communication. (4 marks)

27/11/2020

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Benefits of using the internet for office communication

Benefits of using the internet for office communication include:

Reduced cost of communication.
Provides unlimited space for filing.
A fast means of communication.
Provides a source of information for research.
Facilitates quick decision making.
Reduces paperwork and the need for paper files.
Accords convenience while communicating.
Communication can take place at all times.
Information can be passed to many people at different places at the same time.

Outline four benefits of using the internet for office communication

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The following information relates to Zawadi Traders rental income:

27/11/2020

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The following information relates to Zawadi Traders rental income:

1.1.15 Had Ksh 50,000 in the rent income account at the beginning of the year.
10.6.15 Received Ksh 120,000 from tenants.
12.11.15 Refunded Ksh 20,000 to a tenant who had vacated the premises.

Required
Prepare Zawadi Traders Rental income Account. (4 marks)

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Highlight four items that would be included in the measurement of national income using the income approach. (4 marks)

26/11/2020

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Items that would be included in the measurement of national income using the income approach

Items that would be included ¡n the measurement of national income using the income approach include:

Salaries/wages or personal earnings by households.
Interest received for use of capital.
Profits made by public enterprises.
Dividends received by shareholders.
Rent received for the use of land.
Undistributed profits before tax on firms.
Stock appreciation.
Transfer payments e. g. grants to students.
Depreciation on capital.
Net income from abroad.

items that would be included in the measurement of national income using the income approach

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State the principles of insurance described in the statements given below: (4 marks)

26/11/2020

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State the principles of insurance described in the statements given below

(a) Restoring the insured’s financial position after suffering loss from an insured risk.
(b) Existence of a very close relationship between the loss suffered and the insured risk.
(c) The insurer taking ownership of the remains of the destroyed property after the insured is duly compensated.
(d) Proof that the insured will suffer direct financial loss if property is destroyed.

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Highlight four indicators of economic growth that may be observed as a country progresses. (4 marks)

25/11/2020

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Indicators of economic growth that may be observed as a country progresses

Indicators of economic growth that may be observed as a country progresses include:

Increasing national income.
increasing national output/GDP.
Improved infrastructure.
Improvement in the provision of health facilities.
Increased education opportunities.
increasing life expectancies.
Improved housing for the population.
Provision of more social amenities for leisure e.g. stadia.
improved standards of living for the citizens.
Increased per capita income.
Increased employment opportunities.
Reduced dependency ratio/self employment.
Reduced income disparities.
Reduction of negative cultural practices.
Good governance/democracy.

Highlight four indicators of economic growth that may be observed as a country progresses

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The following information was extracted from the books of Salome Traders:

25/11/2020

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The following information was extracted from the books of Salome Traders:

Capital Ksh 1,119,300; Long term liabilities Ksh 1 ,807,000; and current liabilities Ksh 978,700.
Required

(a) Determine Salome Traders Rate of Return on Capital Employed if the business made a net profit of Ksh 438,945. (4 marks)

(b) State the importance of the rate of return on capital employed. (1 mark)

Importance of the rate of return on capital employed.

It enables the business to determine the rate at which net profit is generated in relation to the total investments into the business.
To compare the performance of the business with similar ones.
To compare the performance of the business over time.
Shows whether the finances of the business have been invested wisely or not.

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Outline four circumstances under which goods may be transported by use of containers. (4 marks)

25/11/2020

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Circumstances under which goods may be transported by use of containers

Circumstances under which goods may be transported by use of containers include:

When goods are fragile and require protection from damage.
When goods are highly valued and need to be secured from theft while on transit.
When goods are regular in shape and can easily be packed into containers.
When there is need to minimize handling of goods both at the port and in transit.
When there is need to use the available space more efficiently.
When specialized machines for loading and off-loading are available.
When there is need to cut down on transport
When there is need to cut down insurance costs.
Where goods are special and require special attention e.g. perishable and inflammable goods.

Outline four circumstances under which goods may be transported by use of containers

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State four elements of the demographic environment that may influence the operations of a business. (4 marks)

25/11/2020

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Elements of the demographic environment that may influence the operations of a business

Elements of the demographic environment that may influence the operations of a business include:

The population size.
The geographical distribution of the population.
The population density.
The distribution of the population by sex/Gender.
The distribution of the population by age.
The population growth rate.
The birth rate.
The death rate/mortality rate/attrition rate.
Immigration rate.
Emigration rate
Health of the population.

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The table below shows general price changes over a period of five years:

State four means of payment that may be provided by commercial banks to their customers. (4 marks)

Means of payment that may be provided by commercial banks to their customers

Outline four features of money that enables it to facilitate the exchange of goods and services. (4 marks)

Features of money that enables it to facilitate the exchange of goods and services

Outline four benefits of proper filing to an organisation. (4 marks)

Benefits of proper filing to an organisation

Chem Chemi Ltd is a new cement manufacturer. Outline four factors that may encourage this company to be established in Athi River town where other cement manufacturers are located despite the obvious competition. (4 marks)

Outline four benefits of using the internet for office communication. (4 marks)

Benefits of using the internet for office communication

The following information relates to Zawadi Traders rental income:

Highlight four items that would be included in the measurement of national income using the income approach. (4 marks)

Items that would be included in the measurement of national income using the income approach

State the principles of insurance described in the statements given below: (4 marks)

State the principles of insurance described in the statements given below

Highlight four indicators of economic growth that may be observed as a country progresses. (4 marks)

Indicators of economic growth that may be observed as a country progresses

The following information was extracted from the books of Salome Traders:

(b) State the importance of the rate of return on capital employed. (1 mark)

Outline four circumstances under which goods may be transported by use of containers. (4 marks)

Circumstances under which goods may be transported by use of containers

State four elements of the demographic environment that may influence the operations of a business. (4 marks)

Elements of the demographic environment that may influence the operations of a business

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Means of payment that may be provided by commercial banks to their customers

Features of money that enables it to facilitate the exchange of goods and services

Benefits of proper filing to an organisation

Benefits of using the internet for office communication

Items that would be included in the measurement of national income using the income approach

State the principles of insurance described in the statements given below

Indicators of economic growth that may be observed as a country progresses

​(b) State the importance of the rate of return on capital employed. (1 mark)

Circumstances under which goods may be transported by use of containers

Elements of the demographic environment that may influence the operations of a business

Categories

Archives

(b) State the importance of the rate of return on capital employed. (1 mark)