i

sabokemi
cah@gmai
l.
com

BUSI
NESSSTUDI
ES
KCSEQUI
CKREVI
SION
(
MrI
saboke0705525657)
I
NTRODUCTI
ONTOBUSI
NESSSTUDI
ES
1. St
ate4r
easonswhypeopl
eengagei
nbusi
ness

 Tomakepr
ofi
t

 Topr
ovi
degoodsandser
vices

 Todi
sposeof
fsur
pluspr
oduce

 Toexpl
oiti
ndi
vi
dualt
alent

 Tokeeponesel
foccupi
edorbusy

2.Out
li
nef ourway
sinwhi
chabusi
nesscanbesoci
all
yresponsi
blet
oit
simmedi
ate
env
ironment

 Av
ail
i
ngi
tsi
nfor
mat
ionconcer
ningi
tsoper
ati
onst
othepubl
i
c

 Maki
ngdonat
ionst
ohel
pdev
elopandsuppor
teducat
ion

 Suppor
ti
ngt
hecommuni
tybypur
chasi
ngr
awmat
eri
ali
tuses

 Suppor
ti
ngt
hei
nfor
malsect
or

 Pr
ovi
dingempl
oymentoppor
tuni
ti
est
osoci
ety

 Av
ail
i
ngi
tspr
oduct
satacheaperpr
icet
othecommuni
ty.

3. Hi
ghl
i
ghtf
ourbenef
it
sthatacommuni
tyshoul
dder
ivef
rom amanuf
act
uri
ngf
ir
m

 Par
ti
ci
pat
ingi
ncommuni
typr
ogr
ammes

 Pr
ovi
si
onofj
oboppor
tuni
ti
es

 Pr
oduct
ionofsaf
epr
oduct
s

 Pr
operdi
sposalofwast
epr
oduct
s

 Conser
vat
ionofenv
ironment

 Pr
ovi
si
onofsaf
eandheal
thywor
kingpl
ace.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 1
 isabokemi
cah@gmail.
com
4. Out
li
nef
ourmai
nreasonswhybusinessent
erpr
iseexi
st

 Pr
ovi
degoodsandser
vices

 Toear
npr
ofi
t

 Tout
il
izeext
rar
esour
ces

 Tout
il
izespar
eti
me

 Tobeownboss

 Tocr
eat
eempl
oymentoppor
tuni
ti
es

5.St
atefourbenef itsoflearningbusinessstudi
est oaKeny anstudent.(
4mar
ks)
 Tor elateknowl edge,skil
lsandat t
it
udestodayt oday .
 Skil
lsnecessar ytostartabusiness.
 Appr eciat
er oleofbusinessinpr ovi
sionofgoodsandser v
ices.
 Appr eciat
eneedf orgoodbusi nesspract
ices.
 Selfdi sci
pli
neandposi ti
veatt
itudetowardswor k.
 Under standt heroleofgov er
nmenti nbusinessacti
viti
es
 Under standt heroleofcommuni cati
onandi nf
ormationtechnol
ogy.
 Dev elopposi ti
veatti
tudetowar dstheenvir
onment .

BUSI
NESSANDI
TSENVI
RONMENT
1. Out
li
ne4el
ement
sthatmaycompr
iset
hei
nter
nal
env
ironmentofabusi
ness

 Busi
nesscul
tur
e

 Busi
nessst
ruct
ure

 Humanr
esour
ces

 Fi
nanci
alr
esour
ces

 Technol
ogy

 owner
s

2.Out
li
ne4measur
est
obet
akenbyabusi
nessmant
oimpr
ovei
nter
nal
busi
ness
env
ironment

 Set
ti
ngsmar
tobj
ect
ives

 Dev
elopi
nganef
fect
ivebusi
nesscul
tur
e

 Av
ail
i
ngnecessar
yandr
equi
redski
l
ls,
knowl
edgeandv
alues

 Car
ryi
ngoutser
vicet
rai
ningf
ort
heexi
sti
ngper
sonnel

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 2
 i
sabokemi
cah@gmail
.com
 Dev
elopawor
kabl
ebusi
nessst
ruct
ure

 I
mpr
ovi
ngt
hewor
ker
swel
far
e

3. St
ate4way
sinwhi
chabusi
nessmaynegat
ivel
yaf
fectt
hephy
sical
env
ironment

 Env
ironment
aldegr
adat
ion

 Env
ironment
alpol
l
uti
on

 Depl
eti
onofr
esour
ces

 def
orest
ati
on

4. Stat
e4waysi
nwhi
chHI
V/AI
DSpr
eval
encehasnegat
ivel
yaf
fect
edbusi
ness
acti
vi
ti
es

 Regul
arabsent
eei
sm ofwor
ker
s

 Lowpr
oduct
ivi
tyduet
oil
lheal
th

 Mar
ketl
oss

 Resour
cesbei
ngusedt
opr
ovi
decar
eforAi
dspat
ient
s

 Loseofski
l
ledl
abour

 I
ncr
easei
ndependencyr
ati
o

5.Expl
ain4measuresabusi
nesscant
aket
oensur
ethati
tsenv
ironmenti
sconduci
vet
o
i
tsbusinessact
ivi
ti
es

 Ensuri
ngthebusi
nessoper
atesi
nsur
roundi
ngt
hatar
ecl
eanandat
tr
act
ivet
o
customer
s.

 Ensuri
ngthatl
egalr
equir
ementsandcondi
ti
onshav
ebeenf
ulf
il
ledi
.e.
rel
evantper
mitsandli
cenceshav
ebeenobtai
ned

 Thatal
lgov
ernmentt
axesar
epai
dpr
ompt
ly

 Suppl
i
erst
othebusi
nesspai
dpr
ompt
lyf
ort
hei
rser
vices

 Ensur
ingt
hegoodsandser
vicesf
air
lypr
icedi
nrel
ati
ont
othei
rqual
i
ty

6.Out
li
ne4measuresanentr
epreneurshoul
dtaket
oensur
eaconduci
vei
nter
nal
env
ironmentf
orhi
sbusi
ness

 Agoodbusi
nessst
ruct
ure

 Pr
operr
esour
ceal
l
ocat
ion

 Goodbusi
nesscul
tur
e

 Bet
terdeci
sionmaki
ngbyt
heowner
s

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 3
 i
sabokemicah@gmail
.com
Highli
ghtf
ourwaysi
nwhichabusinessownercanposit
ivel
yinf
luencet
hei
nter
nal
envir
onmentofhi
s/herbusi
ness. (4mks)
 Pr
ovi
si
onofadequat
efi
nancet
orunt
hebusi
ness.

 Pr
ovi
si
onofenoughphy
sicalr
esour
cesl
i
kemachi
nes,
andequi
pment
.

 Empl
oyi
ngski
l
ledper
sonnelandal
l
ocat
ingt
hem t
her
ightdut
ies.

 I
ntr
oduci
ngmoder
nandappr
opr
iat
etechnol
ogy
.

 Set
ti
ngupr
eal
i
sti
cgoal
s.

 Est
abl
i
shacl
earbusi
nessst
ruct
ure.

7. Hi
ghl
i
ght4i
nter
nal
weaknessest
hatmayaf
fectbusi
nessper
for
mance

 Poormanager
ialst
ruct
ure

 Useofi
nappr
opr
iat
etechnol
ogy

 Lackofadequat
eresour
cesegphy
sical

 Unmot
ivat
edwor
ker
s

 Poori
nter
nalcommuni
cat
ion

 Poort
imemanagement

 Poorpl
anni
ng

8. Outli
nefourel ement st hatmaycompr i
setheext
ernal
env
ironmentofabusi
ness
 Pol i
tical
 Economi cal
 Soci al-cul tural
 Technol ogi cal
 Legalst ruct ure
 Cust omer s
 Intermedi aries
 Geogr aphi cal
 Demogr aphi cal
 Suppl iesofr awmat eri
als
 Compet i
tion
St
atefourext
ernal fact orst hatwi ll
enhancetheper
for
manceofabusiness.
 Increasedpopul ati
on( Market
)
 Impr ov edi nf rastructure
 Fav our ablecl i
mat e
 Impr ov edt echnol ogy
 Secur i
ty
 Lowt axes.
 Fashi onandt ast efarmingthebusi
ness.
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 4
 i
sabokemi
cah@gmai
l.
com

St
ate4way sinwhi chHI V/AIDSprevalencehasnegat
ivel
yaf
fect
edbusi
nessact
ivi
ti
es.
Regularabsenteeism ofworkers/owner/lossofti
me.
Lowpr oducti
vi
tyduet opoorhealth.
Lossofmar ket.
Incr
easeindependencyr ati
o.
Lossofskill
edlabour.
Resourcesbeingusedt oprovidecareforpat
ient
s

St
ate4reasonsf orethi
calpract i
cesinbusiness.

Toensurewor kersarepaidfai r
lyandont i
me.

Toensurethatt her ei
snodi scriminati
onofempl oyees.

Tocreatefairnessi ncompet i
tion.

Toensureright sofemploy eesar eprotect
ed/uphel d.

Toavoidcorrupt i
on/ensur er esponsibl
epromot i
on.

Toavoidconsumerexpl oit
ation.

Toensurepr otectionoftheenv i
ronment/hencenopol l
uti
on.

Toensurecompl iancewithcount ry‘
slawsandr egulat
ions.

9. Expl
ainf
iver
easonswhyanewbusi
nessmayf
ail

 Inadequat ecapi tal/lackoff unds-i nitial/oper ationcapitalmaybei nadequat etosust ai

n/
run/expandduet olackofcol later al/secur i
ty
 Poori nappr opr iatemar keti
ng/st r
at egi es/leadi ngtolowsal es/fewercust omers/
 Unf ai
r/st iffcompet iti
on
 Inadequat e/l ackofpoor /i
nef f i
cientmanagementski ll
s.Thebusi nessmayhav einsuf f
ici
ent
skill
st ooper at e/manager
 Lackofi nadequat emanpower
 Thebusi nessmaynothav eenoughmanpowert ooperate/manage
 Lack/ inadequat emoder nt echnol ogy / i
nappr opr i
atet
echnol ogy.Thismayl eadtol ess
quant i
ty/qual it
ygoods/ser vices
 Unf ri
endly/poormanagementpol i
cies.Maybet hegov ernmentpol i
ciesareunfav ourableto
thegr owt h/expl osionofbusi ness
 Inadequat e/l ackofmar ketduet ol owi ncomeofbuy ers/cust omers/culturalpracti
ces/
beliefs
 Poorpr i
cingwhi chmi ghtmaket hepr oduce/ser vi
cestooexpensi vetoat t
ractbuy er
s/t oo
cheapt osust ai
nt hebusi ness
 Inappropr iatepr oduct /busi nessf ort hei ntendedmar ket/
 Pol i
ti
calinst ability/insecur i
t yt hatmayhi ndersmoot hr unningofthebusi ness
 Poor /inadequat einfrastruct urewhi chmayhi nderaccesst hemar ket/inputs/
 Lackofpl anni ngt oaccommodat ef ut urechanges.
 Mi sall
ocat i
on/ mi sappropr i
at i
onofr esour cesleadingt owast ages/misuseofr esour ces.
 Poorcust omerr elat
ion/car el eadingt ol ossofmar ket.
 Poort imemanagementwhi chmaycausel ossofbusi nessoppor t
unit
ies/inabil
iti
est o
accompl isht asks

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 5
 i
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cah@gmai
l.
com

10. Expl ainf iveway si nwhi chef fectivemanagementpr acticesmaycont r

ibutethe
successofabusi ness
 Properpl anni ngi sputi npl acesot hatgoodr esultscanbeant icipatedandal so
accommodat ef ut urechanges.
 Relev antst r
ategi esmaybeest abl i
shedsoast oachi ev edesiredr esults.
 Settingcl eargoal sandobj ectivessoast oachi evet hei ntendedr esult
s.
 Prov i
di ngandusi ngor gani zationalr esour cesef f
icient l
yandef fectivel
y.Thi s
i
nv olvesbudget ingt oav oi dwast ageandmi suse.
 Propert i
memanagementt oensur esetact ivi
ties(tasks)ar eaccompl i
shedwi thi
n
ther equi redt i
me.
 Goodsuppl i
er/ cust omer /empl oyeer elati
onst oattractandr etaint hem (supplier
s,
empl oy eesandcust omer s).
 Cor porat esoci alr esponsi bili
tyisf ost ered.Thi sbui ldsont heimageandr eputati
on
ofthecompany .
 Compl iancewi thl egalrequi rement si nor dert ooper at esmoot hl yandav oidconf l
ict
withl awenf or cementaut horit
ies.
 Mot ivat i
onofempl oyeest oincreasepr oduct i
v i
ty.
 Properor gani zat iont oav oidov erlap/ duplicationofdut i
es.
 Properdi rectiont oensur eact ivit
iesar egear edt owar dsachi evingt hesetgoal s.
 Identifyingt her equi redski ll
s/trainingr elev antstafff orsmoot hr unningoft he
organi zat ion
 Moni tor i
ng/ ev aluat ing/checki ngt hatpl annedact i
vitiest akeplacei nor dertoachieve
desi r
edr esults.
 Properco- ordinat iont or educeconf l
icts.

11. Amanuf act

uri
ngf
ir
m hasbeenconsi
stent
lyr
eleasi
ngt
oxi
cwastesi
ntothe
nei
ghbourhood.out
li
nef
ourmeasuresyoucantaketostopt
hefi
rmfr
om such
malpr
acti
se

 Publ
i
cizet
hemal
pract
ice

 Takel
egalact
ionIsuet
hef
ir
m

 Repor
ttoNat
ionalEnv
ironment
alManagementAut
hor
it
y(NEMA/Rel
evantaut
hor
it
y

 Educat
ethenei
ghbour
sont
hei
rti
ght
s.

 Boy
cot
tthef
arm pr
oduct
s

 Car
ryoutdemonst
rat
ionsagai
nstt
hef
ir
m.

12. Stat
efourr
easonswhyt
hegov
ernmentshoul
dcr
eat
eanenabl
i
ngenv
ironmentf
or
i
nvest
ors

 Tomi
nimi
zecostofdoi
ngbusi
ness

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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 isabokemicah@gmail
.com
 Toopennewar
eas/
hit
hertonegl
ectedbyi
nvestor
s(l
ocalf
orei
gn)

 Toexpandt
het
axbaseandhencei
ncr
easer
evenue

 Toenhanceeconomi
cdev
elopmenti
nthecount
ry

 Topr
omot
epubl
i
c/pr
ivat
esect
orr
elat
ionshi
p

 Tocr
eat
eempl
oymentoppor
tuni
ti
es

 Toi
ncr
easet
hel
evelofNat
ional
/i
ncr
easepr
oduct

 Toav
ailav
ari
etyofgoodsandser
vices.

13. Jumaopenedupashopatmusi
koma.St
atef
ivebenef
it
sthecommuni
tyar
ound
woul
dbenef
itf
rom t
hebusi
ness

 Theycanbuyfarminput sfrom theshop

 Theycanbuyconsumergoodsf rom t heshop
 Theycangetgoodsoncr edit
.
 Theycansel
lsomeoft hefarm pr oducet ojumashop
 Theshopcanbeusedasacommuni cati
oncentr
e.
 Theshopcanbeusedasaf i
nancialcent r
e
 Jumacanofferempl oymentoppor tunit
ies
 Advi
cecanbeof fer
ed
 Goodsarebroughtclosertot hem

14. Expl
ainf i
vefact orst hatcont ribut
et obusi
nesssuccessi
nthesoci
ety
 availabil
it
yofcapi t
al.
 dev elopedinf rastructure.
 availabil
it
yofski l
ledl abour .
 gov ernmentsuppor t.
 accesst omar kets/cust oms
 aggr essivemar keting.
 propermanagementoft hedebt s
 availabil
it
yofsecur it
y
 ideallocation
 faircompet i
tion
 availabil
it
yofr awmat eri
als/stock
 goodpubl i
cr elations
 beingcr eative&i nnov ati
ve/ent erpr
isi
ng/technol
ogy
 properal l
ocat ionofr esour ces
 properr ecordkeepi ng
 politi
calstabi l
ity

15.Stat
e4way si
nwhicht
heeconomi
cenvir
onmentmayposi
ti
vel
yinf
luencet
heact
ivi
ti
es
ofabusi
ness
 Thepricesofcommodi
ti
esarel
owleadi
ngtoi
ncr
easeddemand

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 7
 isabokemi cah@gmai l
.com
 Increaseinconsumer sincomeshencehi ghdemand
 Ifthetaxeslevi
edongoodsar elowasi twillmakepr icesofcommodi ti
estofall
 Ifbankschar gel
owi nterestratesonl oans,itencouragespeopletoborrowloans
andbuymor egoods
 Iftherei
slowl evel
sofi nflat
ionincreasingormai ntai
ninghigherabi
l
itytobuy

16. Explainf i
veway si nwhi cht hei nter
nalbusinessenv ir
onmentaf fectsbusiness
operations
-Businessst ructure/or ganisat i
onaswel lasdefinedstructuressetupal lowsduti
es
tobeal locat edt other ightpeopl ehencehi gherproductivi
ty
-Businesspol icies-Rul est hatar ewelldefi
nedmakei teasierforempl oyeesto
i
nterprett hem accor dingly
-Humanr esour ces-Wel ltrainedandexper iencedwor kfor
cecani ncr
ease
product i
vityofbusi ness.Empl oyeesneedt obepai dwellt
opr eventthem f r
om
quitt
ingf orbet terpay ment
-Financialr esour ces-Av ai
labilit
yofphy si
calresourcescanensur eef f
ici
ent
operationoft hebusi ness
-Businesscul ture-Aposi t
iver el
ati
onshipbet weent hebusinessandi tsempl oy
ees
willmaket hem per f
ormi ntheirduties.Goodr el
ationshi
p
withthecust omer sincreasesdemandf oritsgood

17.Expl ainf iveext ernal businessenv i

ronmentf actorsthatwoul di nfl
uencet hebusi ness
negatively .

Soci al/culturalbel i
ef soft hepeopl eiftheculturei sagai nstt heconsumpt ionoft he
productbei ngt raded/ i
fpr oductbei ngtradedi sagai nstthev aluesoft hepeopl e.

Pol i
ticalef fect;Poli
ticalinstabil
itymaymakebusi nessf ail/hi
ghtaxat i
on/ unconduci ve
l
egalsy stemsar enotconduci veforbusi ness.

Technol ogi calchanges; 
Fai l
uretoadopthi ghl evelsoft echnol ogymayr esulttopoor
quali
ty/ l
owquant i
ti
es.

Compet iti
on;Cutt hroatcompet i
ti
onmayi mpactnegat i
v elytothebusi ness/ closi
ng
down.

Lackofr equi r
edsuppl iers–Busi nessmayexper ienceshor t
ages/irregularsuppl i
es.

Economi cenv i
ronment–pur chasingpower /inflation/Hi ghi nt
erestonl oans/ tari
ff
sby
tr
adingpar tner sboast /lowerdemandf orthepr oduct s.

Legalf actor s–changesi nl aws/ r
egulati
onmayr equirenewway sofconduct ing
business/ adj ustment sf orbusi nesst ocontinue/oper ati
on.

Lackofi ntermedi ariest odistri
but egoodst oconsumer s/ maynotr each
consumer s/ l
eadi ngt olossofmar ket.

SATI
SFACTI
ONOFHUMANWANTS.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 8
 isabokemicah@gmai
l.
com
1.St
ate4char
act
eri
sti
csofbasicwants

 Onecannotdowi
thoutt
hem

 Theyar
efel
tneeds

 Cannotbepost
poned

 Theyar
esat
isf
iedf
ir
stbef
oresecondar
ywant
s

2.Hi
ghl
i
ght4char
act
eri
sti
csofcapi
tal
asaf
act
orofpr
oduct
ion

 Capi
tali
samanmader
esour
ce

 Capi
talcanbemov
edf
rom onepl
acet
oanot
her

 I
tcanr
educei
nval
uei
.e.i
tssubj
ectt
odepr
ecat
ion

 Canbei
mpr
ovedt
hroughadv
ancementoft
echnol
ogy

 I
tsr
ewar
disi
nter
est

 I
tisabasi
cfact
orofpr
oduct
ion

3.St
ate4r
ewar
dsofl
abourasaf
act
orofpr
oduct
ion

 Sal
ari
es

 Wages

 Fees

 Commi
ssi
on

 Roy
alt
ies

4.Out
li
ne4di
ff
icul
ti
esf
acedi
nsat
isf
act
ionofhumanwant
s

 Theyar
etoomanyt
osat
isf
y

 Theyar
ehabi
tual

 Theyar
erepet
it
ive/
recur
ri
ng

 Theychangewi
tht
ime,
age,
gender

 Li
mit
edr
esour
cesr
equi
redt
osat
isf
ythem

 Pr
obl
em ofdeci
dingwhi
chonet
osat
isf
y

Nov
els,
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5.St
ate4r
easonswhyconsumer
shav
etomakechoi
cesbet
weencompet
ingwant
s

 Becauseofawi
dev
ari
etyofneeds

 Di
ff
erentt
ast
esandpr
efer
ences

 Di
ff
erentpr
icesofgoods

 Li
mit
edr
esour
ces/
income

6.St
ate4way
sinwhi
chaf
ir
m cani
mpr
ovet
hepr
oduct
ivi
tyofi
tshumanr
esour
ce

 Pr
ovi
dewor
ker
swi
thmor
eeducat
ionandt
rai
ning

 Paywor
ker
swel
l

 Pr
omot
ingwor
ker
s

 Pr
ovi
demedi
calcar
e

 Ensur
egoodr
elat
ionshi
pwi
thmanager
s

 Pr
ovi
dinggoodwor
kingenv
ironment

 Pr
ovi
dewor
ker
swi
thgoodt
ool
sofequi
pment

7.7Out
li
ne4way
sinwhi
checonomi
cresour
cesar
eusef
ult
oKeny
a

 Theyhav
emoneyv
aluet
huscanbesol
dandt
hemoneyusedt
odev
elopt
he
economy

 Theycanbecombi
nedt
opr
oducemor
eusef
ulgoodsf
ort
hecount
ry

 Theycanbeusedt
ocr
eat
egoodsandser
vicest
hatsat
isf
yhumanwant
s

 Theyl
eadt
oeconomi
cdev
elopmentoft
hecount
ry

8.St
atef
ourdi
ff
icul
ti
esconsumer
sfacewhensat
isf
yinghumanwant
s

 Humanwant
sar
etoomanyt
obesat
isf
iedf
ull
y

 Resour
cest
osat
isf
ythem ar
escar
ce

 Humanwant
sreccurandt
heyr
equi
ref
reshr
esour
cest
osat
isf
ythem

 Humanwant
sarecompet
it
ivet
her
efor
efacedwi
tht
het
askofdeci
dingwhi
ch
wantwi
l
lbesat
isf
ied
Nov
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 Humanwant
sar
ecompl i
mentar
yandr
equi
remor
eresour
cest
osat
isf
ythem

 Theychangewi
tht
ime,
ageandgender

9.Ment
ion4f
eat
ureswhi
chqual
i
fiesf
oodasapr
imar
ywant

 Cannotbepost
poned

 Requi
redf
orsur
viv
al

 I
tisaf
eltneed

 Sat
isf
iedf
ir
stbef
oresecondar
ywant

 Cannotbef
ull
ysat
isf
ied

10.
Out
li
ne4r easonst
oaccountf
orcont
inuousexi
stenceofdi
rectpr
oduct
ioni
n
modernsociet
y

 Requi
resl
esscapi
tal

 Lackofent
repr
eneur
ialski
l
ls

 Cul
tur
albackgr
ound/
bel
i
efs

 Poort
echnol
ogy

 Pr
ovi
desel
fempl
oyment

 Leadst
oindependence

11.
Stat
e4char
act
eri
sti
csofl
aborasaf
act
orofpr
oduct
ion

 I
t’
sahumanr
esour
ce

 I
t’
sabasi
cfact
orofpr
oduct
ion

 I
tssuppl
ycanbev
ari
ed

 I
tsqual
i
tycanbei
mpr
ovedt
hrougheducat
ion,
trai
ningandexper
ience

 I
tsr
ewar
dissal
ari
es,
wages,
commi
ssi
on,
feesandr
oyal
ti
es

 I
tcannotbest
oredi
elabouri
sper
ishabl
e.

 Labori
smobi
l
ethati
scanmov
efr
om pl
acet
opl
ace

St
ate4r
easonswhyshel
teri
sabasi
cwant
.

Nov
els,
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 Pr
ovi
deswar
mthtothebody

 Pr
event
sdi
seases

 Pr
event
smanagai
nstadv
erseweat
her

 Forst
orageofbasi
cit
ems

 Forsur
viv
al

 Pr
ovi
desspacef
orr
elaxat
ionandsl
eepi
ng

12.
Stat
e4char
act
eri
sti
csofhumanwant
s

 Theyar
einsat
iabl
e

 Theyar
ecompet
it
ive

 Theyar
erecur
rent

 Somear
euni
ver
sal

 Theyv
aryi
nint
ensi
tyandur
gency

 Theyar
ehabi
tual

 Theyr
equi
rer
esour
ces

13.
Stat
e4r
easonswhyconsumer
str
ytosat
isf
ybasi
cwant
sbef
oresecondar
ywant
s

 Consumer
shav
eli
mit
edr
esour
ces

 Basi
cwant
scannotbepost
poned

 Basi
cwant
sar
efel
tneeds/
urgent

 Basi
cwant
sar
eamustf
orsur
viv
al

14.
Stat
e4occupat
ionsaper
sonmayengagei
natt
hepr
imar
ylev
elofpr
oduct
ion

 Fi
shi
ng

 Far
ming

 Mi
ning

 Lumber
ing

 Quar
ryi
ng

Nov
els,
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15.
Stat
e4way
sinwhi
chcl
othi
ngsat
isf
ieshumanwant
s

 I
tpr
ovi
deswar
mth

 I
thi
desnakedness

 I
tpr
otect
sani
ndi
vi
dualegf
rom i
nsectbi
tes

 I
tmakesaper
sonpr
esent
abl
e/l
ookgood

 I
tpr
otect
sfr
om di
seases

16.
Highli
ghtfourway
sinwhi
chaf
ir
m cani
mpr
ovet
hepr
oduct
ivi
tyofi
tshuman
resources

 Tr
aini
ngt
hewor
ker
s

 Remuner
ati
ngt
hewor
ker
saccor
dingt
othei
rjobs

 Pr
ovi
dingwor
kingt
ool
sandequi
pment
s

 Pr
ovi
dinggoodwor
kingcondi
ti
ons

 Al
l
owi
ngwor
ker
stot
akepar
tinsomedeci
sion-
maki
ng

 Gi
vi
ngpr
omot
ionst
odeser
vingwor
ker
s

 Pr
omot
inggoodwor
kingr
elat
ionshi
pbet
weenwor
ker
sandmanagement

17.
Highl
i
ghtf
oursi
tuat
ionsi
nwhi
cht
heoppor
tuni
tycostconceptmaybeused

 Wher
eresour
cesar
escar
ce

 Wher
ewant
sar
emany

 Wher
ewant
sar
ecompat
ibl
e

 Wher
ewant
svar
yinur
gencyandi
ntensi
ty

18.
Stat
efourf
eat
uresofeconomi
cresour
ces

 Theyar
escar
ce/
li
mit
edi
nsuppl
y

 Theyhav
emonet
aryv
alue

 Theyar
eunev
enl
ydi
str
ibut
ed

Nov
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 Theyar
ecompl
i
ment ary

 Theyhav
eut
il
it
y

 Theycanchangeowner
shi
p

19.
Outli
nefourbenef
itsaccr
uedf
rom appl
i
cat
ionofmoder
ntechnol
ogyi
nthe
product
ionsector

 Reduct
ioni
nthecostofpr
oduct
ion

 I
ncr
easedv
alueofout
put

 Hi
ghqual
i
tyofout
put

 Possi
blet
ost
andar
dizeout
put

 Enhancesef
fi
ciencyandaccur
acy

 Fast
erpr
oduct
ionpr
ocesst
her
ebysav
ingont
ime

20.
Expl
aint
hebenef
it
sofi
ndi
rectpr
oduct
iont
oaconsumer

 Var
iet
yofpr
oduct
sar
eav
ail
edi
nthemar
ketl
eadi
ngt
omor
erangeofchoi
ce

 Al
l
owsf
orexchangeofpr
oduct

 Encour
agesspeci
ali
zat
ion-l
eadi
ngt
opr
oduct
ionofhi
ghqual
i
typr
oduct
s

 Resul
tsi
nsur
pluspr
oduct
ionhencenoshor
tages/
product
sar
echeaper

 Pr
omot
escompet
it
ionl
eadi
ngt
opr
oduct
ionofhi
ghqual
i
typr
oduct
s

 Leadst
oint
eract
ionst
her
efor
epr
omot
ingpeaceandunder
standi
ng

21.
Explai
nfiv
ebenefi
tsthatmayaccr
uet
oapr
oducerwhoencour
agesdi
vi
sionof
labourandspeci
ali
zat
ion

 Out
putperwor
keri
sincr
eased

 I
tsav
est
imeduet
ouseofmachi
nes

 I
tencour
agesi
nvent
ionsandi
nnov
ati
ons

 Enabl
eswor
kert
oengagei
ntr
adewhi
chhe/
shei
sbestat

 Leadst
opr
oduct
ionofqual
i
tygoodsandser
vices

 I
tleadst
omechani
zat
ion/
useofmachi
neshenceeasi
ngwor
k.
Nov
els,
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 Withspeci
ali
zati
on,aworkercanengageinat
radewhi
chshe/
hei
sbest
t
alentedorsui
ted.

22.
Expl
ainf
ourt
ypesofut
il
it
iescr
eat
edbypr
oduct
ion

 For
m uti
li
ty–Thisischangi
ngthefor
m ofacommoditybyconvert
ingraw
mater
ial
stofi
nishedgoods.I
tisdonethr
oughpr
ocessi
ng/manufactur
ing.

 Timeuti
lit
y-Thisiscr
eatedwhenagoodi sstor
edunt
ilwheni
tis
needed.
.donet
hroughstorageorwar
ehousing

 Placeuti
li
ty–Thi
sismovementofgoodsandser
vicesf
rom onepl
acet
o
another
.Donethr
ought
ranspor
tat
ion

 Possessi
veuti
li
ty–Referstot
ransf
erofownershipofgoodsandser
vices
fr
om onepersontoanother
.Donethrought
rade,gi
ft
s

23.Hi
ghl
i
ghtf
ourmeasur
esaconsumermayundert
aket
osat
isf
ytheunl
i
mit
edwant
s

 Hast
omakeachoi
ce

 Hav
eascal
eofpr
efer
ence

 Shoul
dconser
ver
esour
ces

 Shoul
dhav
eoppor
tuni
tycost

 Shoul
dinv
entnewpr
oduct
s

24. Hi
ghl
i
ght4r
easonsf
ormaki
ngchoi
cesbet
weencompet
ingwant
s

 Li
mit
edr
esour
cest
omeett
heneeds

 Theyar
ecompl
ement
aryi
.e.i
fyousat
isf
yone,
itl
eadst
oneedoft
heot
her

 Somehumanwant
srecur

 Theyar
einsat
iabl
ei.
e.cannotbesat
isf
iedf
ull
y

 Theykeeponchangi
ngwi
thage,
educat
ionl
evel

 Theyar
ecompet
it
ive

 Di
ff
erentpr
icesofgoods

25.
Expl
ainfi
vef
eat
uresofhumanwantapar
tfr
om t
hef
actt
hatt
heyr
equi
rer
esour
cest
o
sati
sfy
.

(
i) Theyareinsati
abl
e/endl
ess/
unli
mited-Thesati
sfact
ionofonehumanneedleads
totheneedt ost
il
lhavei
tbutinamor eimprov
edway .Onehasacar
,fori
nst
ance
butsti
l
lwor kshar
dtobuyabet t
erone.

Nov
els,
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(
ii
) Someareuni
ver
sal
-somehumanwantsli
kefoodandcl
othi
ngar
ecommont
oal
l
humanbei
ngs

(
ii
i) Theyarecompl
ementar
y-Somehumanneeds,oncesati
sfi
edwillr
equi
rethat
other
sareal
sosat
isf
iedsoasfori
ttoworkorser
veit
spurpose.Fori
nstancei
fon
acqui
resacar
,heorshemustbuyfuelsot
hathecarcanrun.

(
ii
i) Theyar
erepet
it
ive/
recur
rent
-Somehumanneedsl
i
kehungercanonl
ybesat
isf
ied
tempor
ari
l
y

(
iv) Theyar
ehabitfor
ming/
addict
ive-useofcer
tai
ngoodst
osat
isf
ysomeneedsmay
l
eadtodependenceonsuchsubstances

(
v) Theyvar
yinur
gencyandi
ntensi
ty-Somehumanwant
sar
emor
eur
gentt
han
other
s

(
vi) Theyaredynamic-Humanneedschangewi
tht
ime,
age,
heal
thst
atus,
soci
aland
eveneconomicstat
us

(
vi) Theyarecompeti
ti
ve-Humanwant
sal
way
scompet
eforat
tent
ion.Eachwoul
dli
ke
tobesati
sfi
edfi
rst
.

26.Expl
ain5char act
eri
sticsofeconomi cr esources

Haveuti
l
ity–t heyhaveabili
tytobeused.

Havemoneyv alue–Theyhav eav al
ueatwhi cht heycanbeexchangedf orownershi
p.

Haveal
ternati
veuse–Theycanbeputi ntodifferentuses.

Scar
ceinsuppl y–Theyar enotav ai
labl
einsuf ficientquantit
ies.

Canbecombi ned–Theycanbecombi nedsoast oproducedi ff
erentgoodsandservi
ces.

Canchangeowner shi
pf r
om oneper sontoanot hert hr
oughsal e.

Canbecompl ementary–Di ff
erentresourcescanbeusedt ogether.

Theyar
edi st
ri
buted–t heyareav ail
ableinv ary
ingquant it
iesatdiffer
entplaces;

27.Expl
ainsomeoft hepr oblemsencount eredbyconsumersast heytr
yt osati
sfyt
heir
wants.
˗Means/resourcesofsat isfyingtheirwant sareli
mitedduetoscar ci
ty.
˗Wantskeeponr ecur r
ing.
˗Wantsarehabitualandhencer equir
eonet oconti
nuelooki
ngf orresourcestosati
sfy
them
˗Somewant sareessent ialforsur vi
valt
huscannotbepost poned.
˗Wantschangewi thage, timeandgender .
˗Somewant sarecompl i
ment ar
y-sat i
sfactionofonewantr equir
essat i
sfact
ionofanother
.
˗Competit
ivenatureofsomewant s.
˗Wantsarenumer ous/unl imited.

Nov
els,
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PRODUCTI
ON.
1.St
ateway
sinwhi
chasoci
etybenef
it
sfr
om i
ndi
rectpr
oduct
ion

 Betterqual i
tygoods
 Availsav ariet
yofgoods
 Highpr oduct i
oncapacity/masspr oduct
ion
 Betterut i
l
isati
onofr esources
 Facili
tatesexchange/ tr
ade
 Goodsbecomecheaper
 Leadst ohi ghstandardsofl i
ving
 Createsempl oyment
 Leadst ospeci al
isat
ion/betterski
ll
s

2.Out
li
neway
sinwhi
cht
hepr
oduct
ivi
tyofl
andcanbei
ncr
eased

 Ir
ri
gat i
ont ogetper enni aloutput /cont i
nuousout put
 Usingf ert
il
izerstoi ncreaseorr estoresoi lf
erti
li
ty
 Afforestati
ont oprot ectsoilandat tractrain
 Cropr otat
iont oensur et hatsoi lnutrientsarenotexhaust ed
 Furrowingt orejuvenat ethel and/ l
andl eftunculti
vated
 Mechani sationtof acili
tatelandcul ti
vation/useofmachi ner
y
 Reclamat i
ont omakel andhi thertounpr oduct i
vetomor eproducti
ve
 Pestcont roltoreducedamage
 Landt enuresy stem t oensur eeconomi call
yv i
ablepieceoflandexi
sts
 Topr otectsoilthusav oidsoiler osion

3.Li
stt
hebenef
it
sthatsubsi
stencepr
oducermaygetbypar
ti
cipat
ingi
npr
oduct
ion

 Earninganincome
 Willbeselfemployed
 Getti
ngwhathedoesnotpr oduce
 Hemayi mprovehisskill
s
 Disposingoffhi
ssur pl
us
 Hislivi
ngstandardswillbei
mproved
 Hewi llpr
oducegoodsofhi ghqual
it
y
 Hewi lldomasspr oducti
on

4.St
atef
unct
ionsofanent
repr
eneuri
npr
oduct
ion

 Organisesthef act
orsofproducti
oncontrols/
planseval
uat
es/coordi
nates
business
 Providesfactorsofproduct
ion(l
andlabourandcapital
)
 Makesdeci sions
 Paysf ortheuseoff act
orsofproducti
onsuchaswages, sal
aries,
int
erest
 Takest herisks
 I
dent i
fiesbusinessopport
unit
y/star
tsbusiness
Nov
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5.Gi
ver
easonswhyKeny
ashoul
dusemet
hodsofpr
oduct
iont
hatr
elymor
eonl
abour
t
hanmachi
ner
y

 Machinesareexpensive/l
abouri
scheap
 Maintenanceofmachineisexpensi
ve
 Itwi
lleaseunemployment
 Itwi
llsavefor
eignexchange
 Labourisabundantl
yav ai
l
able

FORMOREHI GHSCHOOLNOTRS,REVISI
ON0714497530
6.Cl
assi
fyeachofthef
oll
owi
ngpr
oducti
onactiv
iti
esasei
therpr
imar
yort
ert
iar
y
Acti
vi
ty Lev
elofproducti
on

Di
ggi
ngcl
aysoi
l Pr
imar
y

Const
ruct
ionofabr
idge Secondar
y

Sel
l
ingofashop Secondar
y

Gr
owi
ngv
eget
abl
es Pr
imar
y

Tr
anspor
tat
ionofmedi
cine Ter
ti
ary

7.Hi
ghl
i
ghtf
ourway
sinwhi
chanent
repr
eneurcont
ri
but
est
othepr
oduct
ionofgoods

 I
dent
if
iesv
iabl
ebusi
nessoppor
tuni
ti
es

 Pr
ovi
desgui
del
i
nesonhowpr
oduct
ionshoul
dbeor
gani
zed/t
ake/pl
ace/Coor
dinat
e

 Pr
ovi
dest
hecapi
talnecessar
ytocar
ryonpr
oduct
ion

 Hi
re/r
ewar
dsal
lot
herf
act
orsofpr
oduct
ion

 Bear
sal
lther
isks/i
ncur
slosses/enj
oysal
lpr
ofi
ts

 Deci
deshow/wher
e/when/whatt
oinv
estt
hebusi
ness

 Pr
ovi
des/av
ail
s/assembl
es/mar
shal
sot
herf
act
orsofpr
oduct
ion

8.Out
li
nef
ourr
easonswhypr
oduct
ioni
nthesubsi
stencesect
ori
susual
l
ylow

 Doesnoti
nvol
veexchangeandt
her
efor
enosur
pluspr
oduct
ion

 Ther
eisl
i
mit
eduseofmoder
ntechnol
ogy

 Ther
eisuseofl
esscapi
tal

 Pr
oduct
ioni
sdoneonsmal
lscal
e

 Ther
eisl
i
mit
eduseofmachi
nes

Nov
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9.Outli
nef
ourreasonswhyamul t
i-
nati
onalcompanymaypref
ersett
ingupapr
oduct
ionuni
tina
dev
elopi
ngcountr
yinst
eadofexport
ingfi
nishedgoodst
othecount
ry

 Takeadv
ant
ageofcheapl
abouri
nthecount
ry

 av
oidpay
ingt
axont
hegoodst
hatwoul
dot
her
wisebei
mpor
ts

 Tot
akeadv
ant
agesofsui
tabl
erawmat
eri
alsi
nthecount
ry

 Tomakepr
oduct
scheaperhencemor
esal
es

 Tomaket
ranspor
tcheaper

10.
Namet
hef
act
ort
hateachoft
hef
oll
owi
ngr
esour
cesr
elat
eto

Resour
ces Fact
orofpr
oduct
ion

Manager Labour

Vehi
cle Capi
tal

Cot
ton Land

Wat
er Land

Owner Ent
repr
eneur

11.
Out
li
ne4char
act
eri
sti
csofdi
rectpr
oduct
ion

 Pr
oduct
ivi
tyusual
l
yonsmal
lscal
e

 Usual
l
yforownconsumpt
ion

 Pr
oduct
ioni
snotf
ort
hemar
ket

 Usesi
mpl
emet
hodofpr
oduct
ion

 Lowqual
i
tyofpr
oduct
spr
oduced

12.
Listf
ourf
unct
ionsofent
repr
eneur
sasaf
act
orofpr
oduct
ion

 I
dent
if
iesv
iabl
ebusi
nessoppor
tuni
ty

 Combi
net
heot
herf
act
orsofpr
oduct
ion

 Pr
ovi
descapi
talr
equi
redt
ocar
ryoutpr
oduct
ion

 Empl
oysandr
ewar
dsot
herf
act
orsofpr
oduct
ion

Nov
els,
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imar
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 Hebear
sal
lther
isksandlosses

 enj
oyst
hepr
ofi
ts

 Hemakesal
lthedeci
sionsont
hebusi
ness

 Hecont
rol
sandmanagest
hebusi
ness

13. St
ate4way
sinwhi
chpr
oduct
ionact
ivi
ti
esmaynegat
ivel
yimpactoncommuni
tyheal
th

 Airpolluti
oncauseai rbornedi seases
 Wat erpol l
uti
oncauseswat erbor nediseases
 Congest i
on–Congest i
oncr eatedasmor epeoplecometolookforwork(job)
 Noise–pol luti
on–causi nghar ingfacili
ti
es-demandforheal
thf
acil
i
tiesi
ncrease
 Soli
dwast epol l
uti
on–causi ngmanydi seases
 Environment aldegradati
on-Thi smayl eadtohealt
hprobl
ems
 Socialev i
lse.gimmor ali
ty
 Occupat i
onalhazards
 Unheal thyproducti
on
 Globalwar ming

14.Hi
ghl
i
ghtf
ourf
act
orst
hatcoul
dinf
luencemobi
l
ityofcapi
tal
asaf
act
orofpr
oduct
ion

 Dif
ferentusesi nwhichcapi talcanbeputto/degr
eeofspeci
ali
zat
ion
 Amountofcapi talav
ailable
 Ski
llsofknowl edgeav ail
ablet ooper
atecapi
tal
 Governmentpol icy
 Governmentgoodwi l
l(suppor t)
 Ti
met akent omodi fy
 Rewar dof fered
 Securityinthenewl ocat i
on
 Natureofcapi tal(fi
xedorl i
quid)
 Costofmov i
ngt hecapi t
al
 Ti
met hecapi talhasbeeni nthecurr
entuse
 I
nfrastructure

15. St
ate4adv
ant
agesofdi
vi
sionofl
abour

 Developmentofindivi
dualskill
s.
 Incr
easedoutput.
 Producti
onofstandardizedgoods.
 Maximum useofmachi nery.
 Developmentofnewt alents.
 Encouragesi
nvention/i
nnov ati
on.
 Savestime.
 Lessuseofment alandphy si
calef
for
t.
 Highquali
tygoods/servicesproduced/of
fer
ed.
 Incr
easesemploy mentoppor tuni
ti
es.
Nov
els,
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 Reducestr
aini
ngti
me.
 Faci
li
tat
esplanni
ngandmanagement.

16. St
atef
ourf
act
orsthatmayaff
ectt
hegeogr
aphi
cal
mobi
l
ityofl
abour
 Unf
avor
abl
ecli
mat i
ccondi
ti
ons

 Languagebar
ri
ers

 Jobsecur
it
y

 Rel
ocat
ioncost
s

 I
nadequat
einf
ormat
ionaboutj
oboppor
tuni
ti
esel
sewher
e.

 Soci
alt
ips/r
elat
ives!f
ami
l
y

 Secur
it
yoft
hepl
ace

 Pol
i
ticalst
abi
l
ity

 Gov
ernmentpol
i
cy(
immi
grat
ionr
ules)

 Age

 Soci
alameni
ti
es(
school
s,hospi
tal
s)

 Costofl
i
ving

 Av
ail
abi
l
ityofi
nfr
ast
ruct
ure

 Rewar
ds(
sal
ari
es,

17. Expl
ainf
ivebenef
it
sofdi
vi
sionofl
abourt
oanor
gani
zat
ion

Lessti
meisspenti
ncomplet
ingaj
ob/sav
esti
me/fast
er/
qui
cker
/speedi
er.Ther
e
isl
essmovementbyworker
s.No/
mini
malchangi
ngfr
om doi
ngonewor kto
anot
her.

I
ncreasedproduct
ion/
quanti
ty/output-Peoplebecomemoreexpert/
speci
ali
stat
t
heirjobsastheydoitr
epeatedly(henceincreasi
ngpr
oduct
ivi
ty)

Standar
dizedgoods/uni
form goods-Goodsproducedareofuni
for
m qual
it
ydueto
useofmachi nes/
workcanbeaut omatedleadi
ngt ol
owercost
sofproducti
on
/makingworkeasier/
effi
cient
.

Bet
ter
/i
mpr
oved/
enhancedmanagement
-Thi
sfaci
l
itat
escont
rol
/co-

Nov
els,
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imar
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com
ordi
nat
ion/
Planni
ng/
dir
ect
ing/
account
abi
l
ity
/st
aff
ing/
eval
uat
ion/
organi
zat
ion/
su
perv
isi
on.

Hi
ghquali
tygoods/serv
iceproduced-Peopleconcent
ratei
ndoingjobsf
orwhi
ch
t
heyarebestsui
ted(whichimprovequali
tyofoutput
)/r
epeat
ingsame
t
ask/
repeati
ngsamet ask/speci
ali
zati
on.

I
ncreasedcreati
vi
ty/
invent
ion/i
nnov
ation-t
heorganizati
onmayt apworker
s
tal
entsandskil
lswhichmayhel pt
omodi fyexi
sti
ngpr oduct
s/devel
opnew
product
s/i
niti
atenewmet hodsofproduct
ion/t
echnology/di
scovernewmarket
s.

I
mprov
edeffici
ency–duet
obet
teruseofr
esour
ces/i
mpr
ovei
mage/
reput
ati
onof
t
heorgani
zati
on

18. St
atef
ourchar
act
eri
sti
csofi
ndi
rectpr
oduct
ion

 Goodsarepr oducedf orsale/mar ket.

 Goodsarepr oducedinl argequantit
ies/sur
plus
 Therei
sspeci ali
zati
oninpr oducti
on.
 Highqual
itygoodsar epr oduced.
 Moderntechnol ogyi
sext ensiv
elyused/machines
 Promoteinterdependence

19. Out
li
ne4way
sinwhi
chl
andi
nfl
uencest
hel
ocat
ionofi
ndust
ri
es

 Costoft
hel
and

 Gov
ernmentpol
i
cyonl
andut
il
izat
ion

 Nat
ureoft
hel
and/
ter
rai
n

 Pr
oxi
mit
ytoauxi
l
iar
yser
vices

 Av
ail
abl
eroom f
orexpansi
on

20. St
ate4occupat
ionsengagedi
nter
ti
aryl
evel
ofpr
oduct
ion

 Nur
sing

 Hai
rdr
essi
ng

 Teachi
ng

 Tr
anspor
t

 Communi
cat
ion

 War
ehousi
ng

 I
nsur
ance

 Banki
ng

Nov
els,
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imar
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21. Gi
veanyf
ourr
easonswhyoccupati
onal
mobi
li
tyofski
l
ledl
abori
slow

 Costofr
etr
aini
ngi
stoohi
gh

 Fearofunknown

 Per
iodoft
rai
ningi
slong

 Lackofi
nfor
mat
ionaboutoppor
tuni
ti
esi
not
heroccupat
ions

 Pr
ofessi
onalbar
ri
erst
ojobent
ry

ENTREPRENEURSHI
P.
1.Whatar
ethef
act
orst
hathav
econt
ri
but
edt
othegr
owt
hofent
repr
eneur
shi
pin
Keny
a.

 needt oexploittalent
 highmar ketav ai
labili
ty
 growthi nawar eness
 improv edsecur i
ty
 improv edinf
rastructure
 Needt obeownboss
 Av ai
l
abi l
i
tyofsour ceoffinance
2.Out
li
nefourreasonsf orest abl
ishmentofabusi
nessent
erpr
ise

 Profi
tgener ati
on/maximizat
ion
 Creationofempl oyment
 Provisionofgoodsandser vi
ces
 Forpr esti
ge/enhanci
ngowni mage
3.St
atef
ourreasonst oconsiderwheneval
uat
ingav
iabl
ebusi
nessoppor
tuni
ty

 Potent i
alprof i
ts
 Availabil
ityofmar ket
 Availabil
ityofr awmat eri
als
 Amountofcapi t
alrequi
red
 Levelofcompet it
ion
 Secur i
ty
 Gov ernmentpol i
cy
 Levelofdev elopmentofi nf
rast
ruct
ure.
 Futuregr owt h
 Accept ancebyt hecommuni ty
 Costofcapi tal
 Abil
itytomanage

4. Asur
geonsetupacl
i
nici
nadi
stantr
ural
cent
re.Thebusi
nesswascl
osedaf
tersi
x

Nov
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imar
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months. I dentifyf ourpossi blecausesf orthefailur
e
 I nadequat ecapi tal
 Poorwor kingst rat egies
 Unf av orablegov er nmentpol i
cies
 I nsecur i
tyint hear ea
 I nadequat eacademi candt echni calknowl edge
 I nadequat ebusi nessmanagementknowl edge
 I nadequat edemandmar ket
 Poorr ecor dkeepi ng
 Poorcust omerr elat i
ons
 Lar gedr awi ngsf rom f i
rm
 Lackofsel fdi sciplineandpoormor alcharacter
 Poorpl anning
 Changesi nt echnol ogy
 Changesi nbusi nessenv ironment
6. Stat
ef ourreasonswhyt hegov ernmentofKeny ai sencour
agingent
repr
eneur
ial
knowledgei nschool s
 Tor educer at eofunempl oy ment
 Equi pl earner swi thent repr eneur i
alskill
sandknowl edge
 Cr eatei nformedpopul ationoncommer cialacti
vi
ti
es
 Lear ner stobeabl et out il
izel ocalresources
 Enabl el earner st obesel fr eli
ant

7.Ident
if
yfourbenef i
tsofent repr eneurshiptot hedevelopi
ngeconomi
essuchas
Kenya
 Promot esj obcr eation
 Promot epr oduct i
onofawi dev ariet
yofgoods
 Improv esinfrast ructur eofacount ry
 Promot esheal thycompet it
ionhencepr oduct
ionofhi
ghquali
tygoods
 Enhancesf ullexpl oitat i
onofacount ry’
sresource
 Promot esi ndust r
ialdev elopment
 Providesconsumerwi thv ari
etyofgoods
 Promot essav ingsandi nv estment s
 Raisest helivingst andar dsofcitizens
 Reduct i
onofr ur alur banmi grati
on
 Itsavest hecount r
yoni mpor t
ationofgoods
 Leadst opr omot ionofent repreneurialcult
ure
 Reducesf oreigndomi nanceoft heeconomy

9.I
dent
if
y4gapst hatmaycr eateabusi
nessoppor
tuni
tyi
nthemar
ket
 Poorqual i
typroducts
 Inavai
labil
i
tyofproducts
 Unaffordablepri
ces
 Poorser vi
ces
 Insuff
ici
entquantit
ies

Nov
els,
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10.
Out
li
ne4f
act
orst
hatmayhi
nderent
repr
eneur
shi
pinKeny
a

 Degener
ati
vecul
tur
es

 I
nsuf
fi
ci
entsuppor
tandgoodwi
l
lbyt
hegov
ernment

 Lackofr
olemodelent
repr
eneur
sinsoci
ety

 Lackoff
inanci
alsuppor
t

 Lackofent
repr
eneur
ialcul
tur
e

 Lackofbusi
nessski
l
ls

 St
if
fcompet
it
ionf
rom out
sidet
hecount
ry.

 Poori
nfr
ast
ruct
uresuchaspoorr
oadnet
wor
k.

11.
Stat
e4r
olesofanent
repr
eneuri
npr
oduct
ion

 Pr
ovi
descapi
talr
equi
redf
orpr
oduct
ion

 Combi
nesot
herf
act
orsofpr
oduct
ion

 I
dent
if
iesv
iabl
ebusi
nessoppor
tuni
ti
es

 Empl
oysandr
ewar
dsot
herf
act
orsofpr
oduct
ion

 Hebear
sal
lri
sksandl
osses

 Hemakesal
ldeci
sionsont
hebusi
ness

 Hecont
rol
sandmanagest
hebusi
ness

12.
Stat
e4pr
obl
emst
hatmaybef
acedbyent
repr
eneur
swi
thoutbusi
nesspl
an

 Theent
repr
eneurwi
l
lcommi
ttomanymi
stakesorer
ror
sint
hebusi
ness
oper
ati
ons.

 Theentr
epreneurwi
l
lnotbeabl
etoi
dent
if
yst
rengt
hsandweaknessoft
he
busi
ness.

 Thebusinesswi
llnotbebeablet
omeett
her
equi
rement
sbyt
hef
inanci
ers
bef
oretheyprov
idefinance.

 Ther
ewi
l
lbepooral
l
ocat
ionofr
esour
ces

 Theentrepr
eneurwi
llnotbeabl
etodet
ermi
net
hef
inance/
capi
talt
hati
s
requi
redbythebusi
ness.

Nov
els,
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 Thewor
ker
soft
hebusinessmaynotbemot i
vat
ed

13.
Stat
e4sour
cesofbusi
nessi
deas

 Newspaper
s

 Showsandexhi
bit
ions

 Magazi
near
ti
cles

 Hobbi
es

 Li
steni
ngt
owhatpeopl
esay

 Spot
ti
ngamar
ketgap(
niche)

 Sur
vey
s

 Vocat
ionalt
rai
ningandexper
ience.

 Li
steni
ngt
owhatpeopl
esay

 Wast
epr
oduct
s

14.
Highl
ight4measur esthatthegov er
nmentmayt aketoencour
ageent
repr
eneur
shi
p
inthecountry
 Of fer
ingsubsi di
est oentrepreneurs
 Pr ovi
dingsecur ity
.
 Pr ovi
dingtaxi ncenti
vesandt axholidays.
 Fundi nginstit
utionsthattrainentrepreneurs.
 Impr ovinginfr
ast r
ucturalfaci
lit
ies.

15.
Highl
i
ght4f
act
orst
hatf
avourent
repr
eneur
ial
growt
hinKeny
atoday

 Av
ail
abi
l
ityofgoodr
olemodel
s

 Fav
orabl
egov
ernmentpol
i
cies

 Av
ail
abi
l
ityofappr
opr
iat
etechnol
ogy
.

 Appr
opr
iat
eeducat
ionsy
stem.

 Easyaccesst
oloans.

 Goodi
nfr
ast
ruct
ure.

 Av
ail
abi
l
ityofmar
ket
.

 Ent
repr
eneur
ialcul
tur
e
Nov
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16.
Stat
e4adv
ant
agesofbusi
nesspl
ant
oabusi
ness

 Enhancescommuni
cat
ioni
naf
ir
m

 Hel
psdet
ermi
net
heamountoff
inancer
equi
red

 Hel
psi
dent
if
ythest
rengt
hsandweaknessesoft
hebusi
ness

 Usedt
oev
aluat
eper
for
manceoft
hebusi
ness

 Usedt
oat
tractext
ernalf
undi
ng.

 Test
sbusi
nessi
deasonpaper
.

 Pr
operal
l
ocat
ionofbusi
nesssour
ces

 Mot
ivat
eswor
ker
sandmanagement

17.
Ment
ion4component
sofagoodbusi
nesspl
an

 Nameoft
hebusi
ness

 Pr
oductt
obesol
d

 Per
sonnelt
omanaget
hebusi
ness

 Amountoff
inancer
equi
red

 Mar
kett
obeser
ved

 Ty
pesofempl
oyeesr
equi
red

 Summar
yoft
hepl
an

18.
Thegov er
nmentofKeny
athoughtheMinistr
yofTr
adeandIndust
ryhasdevel
oped
poli
ciestopr
omoteentr
epreneur
shi
p.Explai
nfi
vei
mportanceofsuchi
nit
iat
ivet
o
theeconomyofKenya

 Creationofempl oyment .
 Exploitati
onofresources
 Promot i
onoftechnology .
 Promot i
onofentrepreneur/cult
ure.
 Format ionofcapital
/joi
ning.
 I
ncreaseofconsumer s’choice.
 Developmentofi nfrastr
ucture.
 Foreignexchangeear ningsandconserv
ati
on

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 27
 i
sabokemi
cah@gmai
l.
com

20. Entrepr
eneur shipi sbecomi ngt hedr i
vi
ngf orcebehi ndmosteconomi esint hewor ld
andmostgovernment ssuppor ti t
.Expl ainwhyent repreneurshipisi mpor tanttothese
economi
es
 Cr eationofempl oy ment /jobsbyabsor bi
ngpeopl ewhowoul dother wisebe
j
obless
 For mat ionofcapi talthroughpr ofit
swhi chmaybeusedt oexpandt he
business
 Reduci ngr ural
-urbanmi gr at i
onasbusi nessesi nrur alareaof f
er
empl oymentoppor tuniti
es
 Rai singst andardsofl ivi
ngt hroughr eceiptofsal ari
esandwagesaswel las
avail
ingav ari
etyofqual itygoodsandser vices
 Sav ingoni mpor tsasent repr eneursar eablet oproducegoodandser vi
ces
thatar esubst i
tutest oimpor ts
 I mprov inginfrastructuret hr oughi mpr ovementofr oadsandsecur it
ybyt he
gover nment
 Reduci ngf orei
gndomi nanceoft heeconomybyi ncreasingt heparticipati
on
oflocalent repreneur sinv ar i
ousbusi nessact i
vit
ies
 Maki nguseofl ocalr esour ceswhi chwoul dot herwisebei dl
eort houghtt obe
awast e
 Pr omot i
onoft echnol ogyt hr ought heent repreneurscr eativi
tyandi nnov ati
on
 Pr omot i
onofent repreneur ialculturebyusi ngsuccessf ulentrepreneur sas
rol
emodel s

21.
Expl
ainf
ivefactorst hatmayhi nderentrepreneurshipdevelopmentinKenya
 Cult
uralpract i
cest hatdoesnotal l
owi ndivi
dual
stobesuccessf ul
 Teachersdonotencour aget heirstudenttobeentrepr eneur
s
 Lackofrelev antbusi nesscoursesi nschool s
 Lackofrolemodel si nthesoci ety
 Peergroupi nfluencet hewaypeopl eact
 Lackoffinanci alandbusi nessconsul tancyinst
it
ution
 HIV/AIDSisbecomi ngade- mot i
vatingfactor
 Genderdiscrimi nati
oni nmanyAf ri
cant radi
ti
ons

22.
Expl
ainanyf
iver
easonswhyanewbusi
nessmayf
ail

 Wr ongchoiceofbusi ness:Ev al
uatey ourbusinessinter msofaccept abili
ty,
fi
nance,ti
me, mar kete. t.
c.
 Av ail
abi
l
ityoffinancesandi nadequat ef i
nances:Businesst aketi
mebef ore
theycangener atepr of i
ts.I
tistheni mpor t
anttohav eenoughmoney
 Failuret
ounder standt hemar ket:Youneedt ounder standt hemarkettrends
e.g.areapr oductseasonal ,
targetconsumer s,compet i
torse.t
.c.
 Poorpr i
cing:Nott ool owast or eali
zelossesandnott oohi ghforthetarget
consumer s
 Compet it
ion:Alway st rytostayaheadofy ourcompet itorsbydoingt he
nor malt
hingsinadi fferentandappeal ingwaye. g.packagi ng
Nov
els,
Updat
edCPA,
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imar
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es 0705525657 28
 i
sabokemi cah@gmail.
com
 Ignori
ngconsumer sneeds:al waysst
ri
vetosat
isf
yyourcust
omer
s
 Poorlocat i
on
 Poorpl anni
ng
 Ineff
ectiveorpoormar keting
 Poortimemanagement
 Poorr ecordkeepi ng
 Poormanagementoff inances
 Poorpubl i
cr el
ations
 Lackofcr eativ
ityandi nnov at
ion

23. Expl
ainanyf
ivef
act
ort
obeconsi
der
edwhenev
aluat
ingabusi
nessi
deas

 Prof
ittobeearnedi nor dertocov eralloperati
onalexpenses
 Technologytobeusedi npr oduci
ngt hepr oduct
 Avai
labil
it
yofmar ket /
demandwhi chshouldbeadequat e
 Governmentpolicy/legalrequir
ementwhi chshouldbef avorabl
e
 Channelofdistr
ibutiontoensur ethepr oductsisavail
ableinthemarket
 Compet i
ti
onwhi chshoul dbef air
 Capit
alwhichshoul dbeadequat et ostar
t
 I
nput/suppli
eswhi chshoul dbemi nimal
 Paybackperiodwhi chshoul dber easonabl ei
nrelat
iontoamount si
nvested

24. Explainfi
vewaysinwhicht
hegov
ernmentofKeny
acanpr omot
eent
repr
eneur
ial
developmenti
nhereconomy
. (10mar
ks)

 i
mpr
ovementofi
nfr
ast
ruct
uralf
aci
l
iti
esi
ntheeconomy

 Beef
ingupsecur
it
yint
heeconomy

 Enact
ingl
awst
hatf
avor
s/pr
omot
esr
egi
str
ati
onofbusi
nesses

 Fi
xi
ngpr
icecont
rol
sforbasi
cnecessi
ti
es

 Of
fer
ingi
ncent
ivest
obusi
nessesi
.e.t
axhol
i
day
s

 Ext
endi
ngcr
edi
tfaci
l
iti
est
olocalent
repr
eneur
ial
/gi
vi
ngsof
tloans

 Pr
otect
ingl
ocali
ndust
ri
esf
rom excessi
vei
mpor
tat
ionoff
orei
gngoodsand

 ser
vices/
for
eignt
rader
s

 Cr
eat
ingf
aircompet
it
ivebusi
nessenv
ironment

25. Explain5f actor

sthathinderentrepr
eneuri
alacti
vi
ties

Unfavor
ablegov er
nmentpol i
cieswhichtendtodiscourageestabli
shmentofbusi
nesses
e.
g.hight
axation

Poorinf
rastruct
urewhichdiscouragesmoot hrunni
ngofbusinesses

Lackofadequat eknowledgeandskill
st ostar
tandmanagebusi nesses

Lackofmar ketwhichdiscouragesestabli
shmentofnewbusi nesses/conti
nuati
onofthe
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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 i
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cah@gmai
l.
com
exist
ingones
I
nadequat eresourcestostart/runbusinessessmoothly
Sti
ffcompet i
ti
onwi thcheapandhi gherquali
tyi
mpor t
smaki ngdemandforlocalgoods
todeclinehencecl osureoflocal
businesses
Poli
ti
calinst
abili
tycreati
ngapoorenv ironmentforbusinessestost
art/t
hri
ve
Unfavorabl
ecul t
ure-somev al
uesandnor msdiscourageest abl
i
shmentofbusinesses/
consumpt ion

26.Expl ai
n5ci rcumst ancesunderwhi chanent r
epr eneurwoul dpr epareabusi nessplan
Whenat tract
ingfundi ng-itisusedt oat tr
actf undingf rom pot entialinvest or
sandl ender
s
asisjustif
iesthev i
abilit
yoft hebusi ness.
Whenonewant stoav oidmi stake-itmi ni
mi zesthei mpactofdi sruptionofbusi ness
acti
vit
iesasar esul
tofunf oreseenci rcumst ancesb7yant i
cipati
ngchal lengesandpossi bl
e
setbacks.
Whenonewant sabl ueprintf orstarti
ngandoper atingabusi ness.-Itgui destheowner
/management ‘
sdeci si
onandact i
onsondayt odaybusi ness.
Whenat oolforevaluationi sr equi
red-I tisusedt oev aluatebusi nessper formancet o
seeifi
t‘sachievingthesetobj ect i
ves
Whent heowner swant st odet erminet hef i
nancesr equiredt ost artthebusi ness
Wheni dentif
yingcust omer s.-I tenablesonet otargetappr opriatecust omerst obuythe
product

27.Explain5chal lengest hatmaybeexper i

encedbyanewent repreneurinKeny a
˗I
nadequat ecapital/fundst osust ain/expand.
˗I
nadequat eskill
s/poormanagement .
˗Unfri
endly/poorgov ernmentpol i
ciese.g.hi
ght axeswhichareunf avourabl
et othe
growth/expansionoft hebusi ness.
˗Poorinfrastr
ucture/poorr oadswhi chmayhi nderaccesstomar ketsorinputs.
˗I
nappropr i
atetechnologywhi chmayr esul
tsinlessquant i
tyorpoorqual i
typr
oducts.
˗Unfai
rcompet i
ti
on.
˗I
nadequat emanpowert orunt hebusi nesseffecti
vel
y/laboursupply.
˗Poorpr i
cingwhichmi ghtmaket hepr oducttobet ooexpensivetoattractbuy
erort oo
cheaptosust ainthebusi ness.

*
LATESTHI
GHSCHOOLNOTES*
*
0714497530*(
MrI
saboke)
Mat
hsf
orm 1-
4

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Engl
i
shf
orm 1-
4
ki
swahi
l
ifor
m 1-
4
chemi
str
yfor
m 1-
-4
Bi
ologyf
orm 1-
4
Phy
sicsf
orm 1-
-4
Agr
icul
tur
efor
m 1-
-4
Busi
nessf
orm 1-
-4
Cr
efor
m 1-
-4
Hi
stor
yfor
m 1-
-4
Comput
erf
orm 1-
-4
Geogr
aphyf
orm 1-
-4
Homesci
encef
1--
4
I
.R.
Est
udi
esf
1-4
Fr
enchnot
es
Set
booksgui
des
Pr
imar
yschool
not
es
KCSETopi
cal
s
*
CPA*t
uit
ioni
ng
Updat
ed*
CPA,
CIFAATD*KASNEBnot
es
Updat
ed*
CPS,
CICT,
ATD*KASNEBNot
es

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ed*
ICT,
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T,ACCA,
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es
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ext
radi
nggui
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nst
all
ati
on&Net
wor
kingser
vices
Onl
i
neser
vices
*
_Al
lthemat
eri
alsar
einsof
tcopyandwe'
l
lupdat
ed

OFFI
CE.
1.Hi
ghl
i
ght4qual
it
iesofanef f
ecti
veoffi
cemanager
 Shoul
dbeabletoleadhis/herst
aff
 Shoul
dbeabletomakewi sedecisi
ons
 Shoul
dhaveastrongcharacter
 Shoul
dbeadiscipl
inedperson
 Shoul
dbepleasantandpolit
e

2.St
ate4advantagesofl andscapeof f
icel ayouttoanor gani
zati
on
 Givegoodi mpressionofanor gani zati
on
 Createsanat t
ract
ive/condusiv ewor ki
ngenv i
ronment
 Supervi
si onofwor ker siseasysi ncet hemanagermaybeatar ai
sedground.
 Lowconst r uct
ioncost
 Easylocat ionofwor kers
 Staffmov ementi smi nimum hencesav ingti
me
 Lowmai nt enancecost
 Savingoff loorspace
 Promot est eamwor kamongempl oyees
 Discouragesabsent eeism ofempl oyees
 Promot esshar i
ngofof fi
ceequi pmentt herebyreduci
ngthecostofbuy
ing
more

3.Name4featuresofalandscapeof fi
celayout
 Moder nfaci
li
ti
es
 I
nternaldecorat
ions/fl
owerlylook
 Si
ngleof f
icemayser ve/housemanywor ker
s
 Entert
ainmentfacil
it
iese.gvideoshows
 Coversal ar
gespace

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 32
 i
sabokemi cah@gmai l.
com
4.St
atet
heusesoft hefoll
owingoff i
cemachi nes
o Guill
otine-tri
mmi ngdocument sintorequiredshapesandsizes
o Foldi
ngmachi ne-f ol
dinglettersandseal i
ngenv el
opes
o Frankingmachi ne-printi
ngpost ageimpr essionsonenvel
opes
o Papershr edder–f ordestroyingunwant eddocument s
o Composi te-tof ol
ddocument splacethem i nenvol
opesandsealt
hem

5.Li
st4r
easonswhymostf ir
msst i
llpref
erclosedoffi
celay
outt
oopenone
 Ther eislessnoi se
 Itpresentsaconduci veworkingenv i
ronment
 Itconfersstat ust otoplevelemploy ees
 Ther eisprivacyf orconfidenti
aldiscussi
ons
 Prov i
dessecur i
tyf orval
uableandsensi t
ivei
temssuchasdocumentsand
cash
 Airconditioning,lighti
ngandheat ingintheroom maybecont
rol
ledaccor
ding
totheneedsoft heoccupant .
 Iti
seasi ertomai ntain

6.Mostorganisat
ionstodayhavecomeupwi thcustomercar
edesks.Out
li
ne4
f
uncti
onst hatt
heyplay
 Adv i
semanagementoni ssuesandcompl ai
nts
 At tendtoanyenquiry
 Bui ldconfi
denceincli
ent
s(eff
ici
entserv
ice)
 At tendtocompl ai
nts
 Ensur ethatcli
entsareat
tendedtofastenough

St
ate4waysinwhi chitcomput erizat
ioncontri
butest
othesuccessofanorgani
zat
ion.
 I
thasenabl eglobali
zation
 I
thasmadecommuni cat i
onf ast
er.
 I
thasreducedpaperwor k.
 Hasassistedindatast or ageandinv ent
orycont
rol
.
 I
tfaci
l
itatesmar ketresear chactivi
ti
es
 Makesiteasyt heperformanceofanycompl exmathemati
cprocedur
e
 Ai
dinsecur i
tycontrols

7.Hi
ghl
i
ght4adv ant
agesofusi ngaf ranki
ngmachi
nei
nanorgani
sat
ion
 Canbeusedt opri
ntmessages
 Canprintaccurat
epost ageamount s
 Lessenstheft/
misuseofl oosestampsbyempl
oyees
 Minimizeslossofstamps
 Producesneatwor k

8.Stat
e4reasonswhyt hecomputeri
sincr
easingl
ybei
ngusedf
orr
epr
oduci
ng
documentsinanoffi
ceinst
eadofatypewri
ter
 Producesneatdocument
s
 Fasteri
nproduci
ngdocuments
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 33
 i
sabokemi cah@gmai l
.com
 Easi
ertomani
pul
atedocument sincomputers
 Requi
resl
essphy
sicaldocument s
 Computer
sareef
fi
cientorfasteri
nproducingdocument
s

9.Outl
i
ne4mer itsofr epl
acingmanual
syst
emswi
thaut
omat
edonesi
ncar
ryi
ngout
of
fi
ceact
ivit
ies
 Theyar el aboursaving
 Faster(sav esti
me)
 Theyar eaccur ate
 Present ableoutput
 Cont r
olf r
aud
 Uniformi t
yofout put

10.
State4measur esthatcanbet akenbyanof f
icet osafeguardthepropert
yofthe
organi
zat i
on
 Keepr ecor dst otheasset smov ement s
 Taki ngi nsurancecov er
 Enhanci ngsecur i
tyagainstt
hef tegbyempl oyi
ngwat chmen,inst
all
ing
securi
tyl ightsandf encing
 Ensur ingphy sicalcarebypeopl eusi ngthepr operty
 Pr operr epairsser vi
cingandmai ntenanceofequi pment s
 Keepi ngr ecordsofmov ementandusageofeachoft hepropert
y.
 I ssuedi recti
vesont hei
ruse
 Keeppr operr ecordsont heasset sacquir ed
 Cont rol/expendi tureonassets
 For mul atessy st
emsandpol i
ciesr egardingasset sauthor
izat
ion

11.
State4waysinwhi choffi
ceequipmentmayfacili
tatetheoper
ati
onsi
nan
organi
zat
ion
 Isl
aboursav ing
 Reducesf i
rm’slabourr
elatedpr
oblemse.gunr est
 Wor kproducedisofhighquali
tyandpresentable
 Speedsupr ateofproducti
on
 Improveslevelofaccuracy
 Lowerscostofpr oducti
on

12.
Stat
e4circumstancesunderwhichanor ganizat
ionmaychoosetoselloutanof
fi
ce
machine
 Wheni ti
sexpensivetomai ntai
n
 Wheni tcannotadopttoanewt echnology/changesi
nthebusi
ness
 Wheni thasbecomeabsol ete/outdat
ed
 Ifi
tlackssparepart
sforrepai r
 Ifi
tcannotcopewi t
hincr
easedwor kload

13.
Highl
i
ght4di
sadv
ant
agesofusi
ngmoder
ntechnol
ogyi
npr
oduct
ion

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 34
 isabokemicah@gmai
l.
com
 Mayleadtolossofj obs
 Expensi
vetoaf f
or dandmaintai
n
 Poll
uti
onoftheenv i
ronment
 Harmfulef
fects/accident
s

14.
Stat
e4charact
erist
icsofagoodf i
li
ngsyst
em
 Easytoaccess
 Shoul
dbecompact -notoccupytoomuchspace
 Shoul
dbesaf e
 Shoul
dbeeconomi cal-
notexpensi
vetost artandmai nt
enance
 Shoul
dbeexpandabl e
 Shoul
dbesi mpletounderst
andandoper ate
 Shoul
dbeel ast
ic-f
lexi
blei
.ecancaterf
orf uturechangesorexpansi
on.
 Shoul
dbeeconomi calonspace

15.
Stat
e4modernt r
endsinoffi
cemanagementi nKeny a
 Useofcomputersinmostor gani
zati
ons
 Mostorgani
zati
onshav ei
ntroducedcustomercaredesks
 Useofmobilephones/cel
lphones
 Mostoffi
ceshaverel
ocatedf r
om urbansetti
ngtosub-
urbanar
east
oav
oid
tr
aff
icj
ams
 Mostoffi
ceshaveadoptedlandscapeofficel
ayout
s

16.
Namef
ourequi
pmentt
hatcanbeav
ail
abl
eint
heaccount
sof
fi
ce

 Addingmachine
 Cashregist
er
 Cal
culat
ingmachine
 Accounti
ngmachine
 Computer
 Moneycount i
ngmachi
ne.

17. I
denti
fyfourquali
ti
esofaper sonal
secr
etar
y
 loyal
 abletowor kforlonghours
 quali
fiedinsecretari
alduti
es
 goodpl anner
 abletokeepsecr ets
 goodcommuni cationskil
l
s
 goodgr ooming

18. Gi
vefourchar
acterist
icsofagoodmemo
 Properl
yaddressed
 shouldbedated
 shouldbeprécised
 Mustcontai
nt hemai nobj
ect
ive/
massage
Nov
els,
Updat
edCPA,
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 i
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 Besi
gned

19. Out
linefourdut i
esofacompanysecr etary
 Pr ovi
del egaladvice
 Wr iti
ngmi nutesofboar dmeet i
ngs
 Mai ntainsconfidenti
alrecordsoft heor gani
zat ion
 Mai ntainsandupdat esor ganizati
onsl egalr egister
s
 Ensur escompl iancebyt heor gani
zat i
onwi t
hl egisl
ati
onorl
aw
 Pr eparati
onofcont ract
s, l
easesandot herlegaldocuments
 Interpretslawandl egalnoticestot hedi rectors

20.. Mwi t
ahasi ntr
oducedcomputersi
nhisbusi
nessoper
ati
ons,
out
li
nef
ourbenef
it
s
thathemayexper i
ence
 Fast/qui
ck
 Storelar
geamountofinfor
mation/
data
 Largeoutput
 Qualit
youtput/
standar
doutput
 Saveonl abour

21. Hi ghli
ghtfourwaysinwhi
chanopenof
fi
cel
ay-
outcancont
ri
but
etoef
fi
ciencyi
n
off
iceoperat
ions
 Easyt osupervi
se
 Cheaperast herear
enopart
ions

 Mov
ement
sar
efast
er

 Shar
ingofi
deas

 Wor
kisdonei
nuni
ty

 Shar
ingofequi
pment

 Of
fi
cecanbeputt
ovar
ioususes(
e.g.conf
erence)

22.Stat
efourr
easonswhyanor
gani
zat
ionshoul
dkeepst
ockr
ecor
dsf
ori
tsof
fi
ce
stati
onery

 Toensureeffici
entuse/preventmisuse
 Maintai
ntheirsafecustody
 Foraccounti
ngpur poses/st
orekeepingrecords
 Tomoni t
ortheirmov ementwi t
hintheor
ganizati
on
 Ensureadequatesupplyatallti
mes

23.
Stat
efourl
imit
ati
onsofadopt i
onofnewt echnol
ogybyabusi
ness
 Leadstounemployment
 Hinder
screati
vit
yandinnov at
iveness
 Manymachi nesaresubjecttofrequentbr
eakdowns
 Expensi
vetoacquire,
instal
landmai ntai
n
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 36
 i
sabokemi
cah@gmai
l.
com

24.Stat
e4measuresthatcanbet
akenbyanor
gani
zat
iont
oensur
esecur
it
yof
i
nfor
mationanddocumentsint
heoff
ice
 f
il
ingi
nfor
mat
ioni
nti
me
 ensur
ingonl
yaut
hor
izedper
sonshandl
ethef
il
es
 ensur
ingpr
operr
ecor
dingoff
il
esl
eav
ingher
egi
str
y
 t
rai
ningst
affonhowt
ohandl
efi
l
es
 usi
ngsecur
efi
l
es
 conduci
ngr
egul
arphy
sicalchecki
ngoff
il
esi
nther
egi
str
y/ot
herof
fi
ces
25.State4t rendsinof ficemanagement .
Useofcomput er
st oper form dif
ferenttasks.
Customercaret odealwi thcustomeri ssues.
Useofclosedci rcui
ttelev i
sion(CCTV)f orsurveil
lance.
HIV/AI
DSawar enessint heof fi
ce.
Str
essmanagementt or educest r
essatwor kplace.
Useofbetterof f
icelayoute. g.adoptionofopenpl anof
fices.
Si
gningofperf or
mancecont ractbywor kers.
Team-buil
dingamongdi ffer
entcategor i
esofof fi
cestaff
.

Paper2
17.
Discuss5factorstobeconsi deredwhenenclosi
ngameansofr
epr
oduci
ng
documentsinanof fice
 Numberofcopi esneeded
 Qualityrequi
red
 Avail
abilit
yofper sonnel
 Costofpr oduction
 Avail
abilit
yofothermeansofr eproduci
ngdocument
s
 Nature/typeofdocumentt obepr
oduced
 Desiredimpressi on

18.
Expl
ain5fact orstoconsi derwhenchoosi ngaf ill
ingsy stem toadopt
 Economi calinspace/ compact ness/ shoul doccupysmal lspacet
ocreate
room f oroffi
ceact i
vit
ies
 Lessexpensi vet oinstal
l
/mai ntain/operate
 Secur i
ty/safetytoav oidloss/protectdocument sf r om t
he
theft/
damage/ misplacement
 Accessi bletof acil
it
atefastretrievalofdocument s
 Simplicity–shoul dbeeasyt ooper ate/understandt oavoi
dconfusi
on/del
ay
inretri
ev i
ngi nformat i
on
 Adapt able/fl
exibletosuitchangi ngneedsofanor gani
zati
on
 Suitabili
tyoft heneedsoft heor ganizati
on
 Crossr eferencingt ofacil
it
ateeasyl ocationofr elateddocuments
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 37
 i
sabokemi
cah@gmai
l.
com

19.
Discussfi
v econsi derationabusi nessper sonmayt akeintoaccountwhenpr epar
ing
abusinesspl an
 Obj ect iv
esofv ent uri
ngi nt
ot hebusi ness
 Skillst ost artandr unthebusi ness
 Commi t
mentt ot hebusi ness
 Interestwhet herthei ntendedbusi nesswi lli
nteresttheenter
prenuerornot
 Av ailabili
tyofmar ketwher eexistsamar ketgap
 Technol ogyr equi redtor unt hebusi ness/ appropri
ate/costoftechnol
ogy
 Av ailabili
tyofr awmat eri
al–qual i
tyofr awmat eri
al
 Gov er nmentpol icy
 Amountofcapi t
al
 Lev elofcompet ition
 Difficul t
iesinmar keting
 Secur it
y
 Possi bil
ityofexpansi on

20.
Explai
nf i
v ereasonswhymoder ngov er nmentof f
iceshav eadoptedt heopenof fi
ce
lay
outasopposedt oencl osedpl anl ayout
 Bi dt ocur bcor r
uption/ menace/ problem
 Exposedpubl icof f
icer sar ediscour agedf r
om sol i
cit
ingforbr i
besf r
om
cli
ent s
 Li mi t
edmachi nesl iket elephones, pr i
nterscanbesgher dbyt hegov ernment
staff.
thisreducest hecostofoper at i
on
 Cr eatest eam wor kspi ritbecausewor kersconsul teachot herregular
lyand
i
nf ormal l
y.i
tincreasespr oduct i
vityintheof fice
 I ti
seasyt osuper vi
seempl oyeesf rom onel ocati
onasopposedt o
managementbywal kingar oundhencer educi ngti
mewast age
 I treduces/ eli
mi natesabsent ism ofempl oyeesf r
om theirplaceofwor k.
it
i
ncr easesmanhouratwor kplace
 I treducesbur eaucracy /red–t apewhendeal ingwithseniorstaff.some
emer gingi ssuesar esol vedbyt opmanagementf astastheyar ise
 Di scour agesabsent eei sm byempl oyees
 St affmov ementi smi nimi zedt hussav i
ngt imeusedi npassi nginformat i
on.
 Of ficeequi pment sandmachi ner yar enotmi susedduet oclosesuper v i
si
on
ofwor ker s
 Const ructi
oncosti sl owbecausepar titi
onsar efew

21.
Expl
ainf
ivereasonswhyef fectiv
ef i
ll
ingisimport
anti
nanof fi
ce
 Ti
dinessinthev oi
ceismai nt
ainedasdocumentsareneatlyarr
anged
 Quackaccesst oinformation/retri
evedofi
nfor
mationismadeeasysince
documentsareser i
ali
zed/ coded
 Safetyofi
nfor
mat ionf r
om damagedbybadweat her/
fir
e/pests
 Savingonstoragespace/ mini
mi zespaceasdocumentsarekeptcompactl
y
 Promptdecisi
onmaki ngpossible/ sav
esti
meinmaki ngdecisi
onsas

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 38
 i
sabokemi cah@gmai l.
com
i
nformati
onencour agetransparency/
accountabi
li
tyasondocumentsar
e
easil
ymisplacedasmov ementofdocumentcaneasi l
ybemonitor
ed
 Securi
tyforinf
ormationagainstlossduetotheft
/mispl
acement
 Safeguar
dconf i
denti
alinfor
mat i
onasdocument sarekeptawayfr
om
unauthor
isedaccess

22.
Ident
if
yandexplainfi
vechar acteri
sti
csofanef fi
cientof f
icelay
out
 Wor kfl
ow-anef fi
cientlayoutisonewher et hereissmoot hworkfl
owor
;
 Mov ement-onewher et hereisleaststaf
fmov ement
 Consultat
ion-onewher ethereiseasyconsul t
ation
 Floorspace–onewher ef l
oorspaceshoul dnotr estri
ctmovement
 Furnit
ure–arrangementoff urni
tureshouldalloweasysuper v
isi
on
 Shouldnotrestr
ictnaturalli
ght
 Shouldenhancephy sicalappearance

23.
Discuss5f act orsanor ganizati
onwi l
lconsiderwhensel ecti
nganof f
icelayout
 Costofl ayout-shoul dbecheaper/ economi calt
oconst ruction
 Gov ernmentpol icy-shouldconsidergover nmentpoli
cyont helayoutt oadopt
orelsewi l
lgoagai nstthelaw
 Numberofwor kers- i
fthenumberi slargeopenl ayoutischoosenandi fthe
numberi ssmal lcl
osedl ayoutischosen
 Spaceofl andav ail
able-ifsmallopenlay outni
schoseni flargeclosedl ayout
i
schosen
 Needf orsupervisi
on-i fworker
sneedcl osesupervi
sionanopenl ayoutois
chosen
 Fl ow/ speedofwor k-whereworkneedt obedonef asteranopenl ayoutis
chosen
 Fl exibi
lityinappear ance-whenthesitti
ngpl anneedstobechangedeasi l
y
thenopenl ayoutischosen

24.
Out
li
ne5advantagesofapaper lerssoffi
ce
 Theoffi
ceiskeptneat
 Timesavingi sdocumentr etr
ival
 Envi
ronment all
yfr
iendl
y/conser v
et r
ees
 Economisesspace
 Enhancesgoodi mageoft hebusi ness

Expl
ainany5usesofacomput eri
nanof fice.

Inventorycont
rol–i tcanaccuratel
ykeepar ecor
dofst ockathand, r
eceipt
sandi
ssue.

Itcanbeusedt opr ocessaccount i
ngtransit
ionsandpr epareledgeraccount
sand
payrol
ls.

Dat astorage–itcanst orei
nformationrelat
iontotheBusi ness.

Usedi ncommuni cat
ionservi
cessuchasi nt
ernet,
intr
anetandwebsi te.

Usedf orenter
tainmentsuchasmusi c,videoandgames.

Productpr omoti
on/mar ket
ingproductionthroughinternet,
website.
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 39
 i
sabokemi
cah@gmai
l.
com

Tocar
ryoutmar
ketr
esearchusi
ngi
nter
net

St
ate4r easonswhyshoppi ngmall
shavebecomepopul arinKenva

Offerextensi
vepar ki
ngf aci
li
ti
es

Customer sdoalltheirshoppingi
nonebuildi
nghencesav esti
me

Shoppingmai l
ssav eonspacewhi chreducesrent
sandr ates

Usuall
yopenf orlonghour s

Theyacceptcr editcards

Theyof ferawidev ari
etyofgoods

Theyar econvenienttoshopi nsi
ncet
heypr ovi
deser
vicessuchasrest
aur
ant
s,post
of
fi
ces,readingroomset c.

Areusual l
ysi
tuatedi ntowncentr
es

Expl
ainfi
v ereasonswhyabusi nessmayr epl
aceanol dmachi newithanewone

Adaptabilit
y-whent hemachi neisnotabl etocopewi thnewchanges/obsol et
e

Lackofspar eparts-whi chmakesi tdiffi
cul
tt oser
v i
ce/repair

Wheni thasaf fectedtheof fi
ce-mor al
enegat i
vel
ytoi mproveperformance

Whent hecompl ement aryresourcese.g.powerar elacki
ngy ett
henewonecanuset he
newresour ces

Whent hemanpowerav ail
ableforit
soper at
ionisnol ongeravai
lable

Wheni tsnol ongersecur etost or
ethemachi neinthepremiseswhi chmakesi t
endangered

Wheni tsuf f
ersfrom occassi onalbreakdownhencemaki ngitexpensivetooperat
e

25.
Descr
ibefi
vequal
it
iest hatamanageri sexpectedtohaveinordertopromot
e
teamworkamongmember soft hestaff
 Shoul
dbeabl etosetcl earandachi evabl
egoalsfort
hemember sofstaf
f.
 Shoul
dbesoci ablewithst affmember s
 Shoul
dhaveadequat eknowl edgeaboutthejobhesuper v
ises
 Heshouldbeabl et odelegatedutiest
ost af
fmember s
 Shoul
dbeconcer nedaboutst affwelf
are
 Shoul
dalwaysl i
stentost affmember sinmat t
ersdeci
sionmaking.

26.
Explai
n4f act orsamanagerwoul dconsiderbeforebuyingoffi
ceequipmentfort
he
organi
zation
 Cost -itshouldnotbet ooexpensivetoacquireandmai ntai
n
 Adapt abili
ty–itshouldbeabletocopewi ththefut
urechangesand
development
 Dur ability–itbeabletolastf
orlong.
 Ef f
ectonst affmorale–itshoul
dnotdi scouragestaf
ffrom worki
ng
 Av ail
abi li
tyofmanpower–Theper sonneltorunandoper at
etheequipment
shouldbeav ail
abl
e.
 Av ail
abi li
tyoftheroom –theroom forkeepingtheequipmentshouldbe
avail
abl e.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 40
 isabokemicah@gmai l
.com
 Securi
tyoft
heequipment–onehast oconsiderwhethert
heavai
labl
e
resour
cesareadequatetoofferenoughsecuri
tyfort
heequipmentornot

27.
Expl
ainf
iveway sinwhi chaf ir
m canimprovet heproductiv
ityofi
tshumanresour
ce
 Trai
ningwor kers
 Remuner at
ingwor kingaccordingt
ot heirjobs/
tasks-pay i
ngthem wel
l
 Provi
dinggoodwor kingcondit
ions
 All
owingwor kerstot akeparti
ndecisionmaki ng
 Promotinggoodwor kingrel
ati
onshipbet weenwor kersandthemanagement
 Givi
ngpr omotionstodeser vi
ngworker s
 Provi
dingwor kingtoolsandequipment

28.
Expl
ainf
ivebenef
it
sthataccr
uet
oabusi
nesst
hatconduct
str
adet
hroughE-
commerce/Websi
te

 Faci
l
itat
esaccesst
oal
argemar
ket

 Lar
geandsmallbusinessescant
ransactbusi
nesst
hrought
hei
nter
net
wit
houtdi
scr
iminat
ion

 Af
astwayofdoi
ngbusi
ness

 Reducespaperwor
ksi
ncemanydeal
i
ngsar
eonl
i
ne

 Sav
esont
hecostofsendi
ng,
recei
vi
ngandst
ori
ngi
nfor
mat
ion

 Onecanaccessi
mport
antbusinessi
nfor
mat
ionwhi
chwoul
dbeusedt
o
enhancer
unni
ngoft
hebusiness.

29Expl
ainf
iveaccept
abl
ecodesofbehav
iori
nanof
fi
ce (
10mar
ks)

 Cour
tesy
;oneshoul
dbepol
i
teandpl
easant

 Respect
-oneshowr
egar
dtoot
her
s.

 Punct
uali
ty-oneshoul
dhav
etheabi
l
ityt
okeept
imei
nat
tendi
ngdut
iesand
appoi
ntments.

 Loy
alt
y-bei
ngcommi
tt
edanddev
otedt
ohi
sorherwor
k.

 Accur
acy-byper
for
mingdut
ieswi
thexcel
l
ence,
preci
sionandcor
rect
ness.

 Honest
y–bei
ngsi
ncer
ebyt
ell
i
ngt
het
rut
h.

 Cooper
ation– oneshoul
dwor
kwi
thot
herpeopl
ewi
thoutmal
i
ce,f
ri
cti
onor
sel
fi
shness.

 I
nit
iat
ive–oneshoul
dbeabl
etomakepr
operdeci
sionsandbecr
eat
ivei
nideas.

 Judgment–beabl
etoconsi
deral
lpossi
bil
i
tiesandcomeupwi
thr
ightdeci
si
ons.

 Diplomacy–oneshoul
dbeabl
etoconvi
nceot
herpeopl
etact
ful
l
y.
Nov
els,
UpdatedCPA,
KASNEB,Hi
ghSchool
&Pri
maryNotes 0705525657 41
 i
sabokemi cah@gmai l.
com
Expl ainfi
v efact orstoconsi derwhenbuy i
ngofficeequipment.
Costofbuy i
ng/mai nt
ainingtheequi pment:Ifcosti
shighconsiderthemost
affor dabl
e.
Qual it
yofequi pment–Consi derthelonglasting/bestquali
tyappropri
atef orit
s
use.
Dur abil
ityoft heequi pment–shoul dchooset hemostdur able.
Manpower/Per sonneltooper atetheequipment–chooseequi pmentt hatthe
personnelcanoper ate/lookf or/t r
ain
personnel .
Av ail
abili
tyofspar eparts–chooseanequi pmentwhosespar epart
sar ereadily
available/ aff
or dable.
Space/r oom f ortheequipment–chooseanequi pmentthatcanfittheavailabl
e
rooms/av ailther ooms.
Comf ort/secur i
tyofwor kers–chooseequi pmentthatarenotinjuri
oust o
wor ker shealth/comf or
t.
Effectonmor aleofwor ker s–chooseequi pmenti naccordancewi t
hgov ernment
policy .

HOMETRADE.
1.St
ate4f
eat uresofsupermar kets
 Requi r
elargecapit
altoi nvest
 Stocksv ari
etyofgoods
 Offersselfservi
cefacili
ties
 Goodshav epri
cetags
 Nocr editfaci
li
ti
esareof fered
 Saleatcompar ativ
elylowpr i
ces
 Pricesofgoodsar efixed

2.St
ate4benefi
tst hatconsumersgetf
rom smal
l
-scal
eret
ail
ers
 Freeadv i
ce
 Widev arietyofgoods
 Steadysuppl yofgoods
 Creditfacil
iti
es
 Bringsgoodsneart otheconsumers
 Theybr eakbul kf
orconsumers

3.St
ate4usesofpr
oformainvoi
ceforasell
erofgoods
 Inf
ormsthebuyeronwhathewoul dpayifhedeci
dest
obuythegoods
 Apolit
ewayofaskingforpaymentbefor
ethegoodsar
edel
iv
ered
 Sentwhenthesell
erdoesnotwantcredi
t
 Canbeusedt oser
veasaquot at
ion

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 42
 isabokemi
cah@gmail
.com
 I
ssuedt
oanagentwhosell
sgoodsonbehalfoft
hesel
l
er

4.I
dent
if
ythedocumentsthateachoft
hef
oll
owi
ngdescr
ipt
ionsr
efert
o:
Descr
ipt
ion Document

i
)Usedtoi
nfor
m buyert
hatsel
l
erhas Acknowl
edgementnot
e
r
eceiv
edtheorder

i
) Usedtoaskaboutt
heav
ail
abi
l
ityof Let
terofi
nqui
ry
goods

i
i
)Usedt oor
gani
zefortr
anspor
tat
ionof Consi
gnmentnot
e
goodsbet
weensel
lerandbuyer

i
i
i)Usedt
oshowgoodssol
doncr
edi
t I
nvoi
ce

5.Out
li
ne4benefi
tsofusingM- pesaasameansofpay ment
 Easytouseasagent sprov i
deassist
ance
 Fastasitisconveyedthroughsms
 Conveni
entasi tcanbesentandr ecei
vedfr
om anylocation
 Accessi
bleasagent sarelocat
edi nmostur
banandr uralar
eas
 Confi
dentialasPINisused
 Affor
dableassendingandr ecei
vingmoneyisr
elat
ivelycheaper
.

6.Outl
i
ne4benef i
tstheretail
ersmayder ivefrom t
hepresenceofwhol
esal
ersi
nan
ar
ea
 Provideawi dev ar
ietyofgoods.
 Providegoodsatconv enientpri
ces.
 Providetransportfacil
it
iestoretai
ler
s.
 Adv i
ceretail
ersonav ail
ablegoodsandpr ices.
 Offercreditfaci
l
iti
est oretai
ler
s.
 Breakthebul ktoenabl ethem buyinsuit
ablequanti
ti
es.

7.St
ate4di
sadvantagesofusingchequeasameansofpay
ment
 Requir
espay eetotraveltothebank.
 Chequesmaybedi shonoured
 Bankchargesar epaid
 Canonlybei ssuedbyt heholder
 Notreadi
lyacceptablebyev erybody
.
 Canonlybei ssuedbyanaccounthol der

8.St
ate4cir
cumstancesunderwhichanov erchargemayoccuri
nani
nvoi
ce
 Arit
hmeti
cer r
oregaddit
ionalmistake.
 Useofhigherpri
cesthanthecorrectprice
 Incl
usi
onofi t
emsintheinvoicethatwer enotdel
i
ver
ed.
 Notall
owingadeserveddiscount
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 43
 i
sabokemicah@gmail.
com
 I
ncl
usi
onoft
ransportordel
iv
erychar
ges

9.Ment
ion4typesoflargescal
eret
ail
ers
 Departmentalstor
e
 Hypermarkets
 Supermarkets
 Chainstor
es

10.
Stat
e4usesofani nvoicef
orasel l
erofgoods
 I
tusedforfutureref
erence
 Actsasanev i
denceoft r
ansacti
on
 I
tisusedtorequestthebuy ert
omakeapayment
.
 Canbeusedassecur itytoborr
owmoneyfort
hebusi
ness

11.
Out
li
ne4ci
rcumst ancesunderwhi chacreditnot
emaybeissued
 Tocorrectanov ercharge
 Whengoodsar ereturned
 Whenempt ycasespr evi
ouslyi
ncl
udedi nt
hei
nvoi
cesareret
urned
 Wherethesel l
erforgottodeductdiscount

Underwhatci
rcumst
ancesisachequeappr opri
ateasameansofpayment.
(4marks)
 Wheretheamountofmoneyi nvol
vedislarge.
 Wherethepol
icyofthebusi
nessdemandsso
 Whereachequeistheonlymeansav ail
able.
 Wherether
eisneedt oav
oidriskassoci
atedwithot
hermeansofpay
ment.

12.
List4t
ypesofretai
lersthatmai
nlysel
lgoodsandser
vicesoncashbasi
s
 Supermarkets
 Automaticvendingmachi
nes
 Mailordersstores
 hawkers

13.
Giv
e4benef itsthatconsumersgetfr
om smallscal
eretai
l
ers
 Varietyofgoodsf orchoi
ce.
 Adv i
ceonuseofpr oduct
s
 Aftersaleser v
ices
 Goodsar eav ail
edatconveni
entpl
aces/
points/
shops
 Creditfacil
it
ies

14.
Outl
ine4f actor
st hatmaydiscourageconsumer
sfr
om buy
inggoodsf
rom t
he
supermarket
 Fixedpr i
ces
 Impul sebuy i
ng
 Donotof f
ert r
ansportforconsumer
 Nocr edi
tfacil
it
ies
15.
Outl
ine4f eatur
esofahy per
mar ket

Nov
els,
Updat
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.com
 Dealindif
ferentlines/vari
etyofgoods
 Goodaccessr oads
 Locatedintheout skir
tsoft own
 Usuall
ylocatedoutoft owns
 Openupt olatehour sonal ldays
 Provi
depar ki
ngspacef orcar s
 Operateunderoner oofthoughownedbydi f
fer
entpeopl
e.

16.
Highl
i
ght4t y
pesofsmal
lscal
eret
ail
erswi
thshop
 Si
ngleshops
 Ti
edshops
 Ki
osks
 Marketstal
ls
 Canteens
 Mobileshops.

17.
Stat
e4diff
erencesbet
weenHi
repur
chaseandCredi
tbuyi
ng
Hi
rePur
chase Cr
editbuyi
ng

i
)Thehi
repur
chasepr
icei
shi
ghert
han Credi
tpri
cei
susual
l
ythesameast
he
cashpr
ice cashpri
ce

i
i)
Thebuyerdoesnotbecometheowner i
i)
Thebuyerbecomestheowneroft
he
ofthepr
oductonpossessi
on pr
oductontaki
ngpossessi
on

i
i
i)Thebuy
ercannotr
esel
lthepr
oduct i
i
i)Thebuy
ercanr
esel
lthepr
oduct

i
v)Ther
eisdownpay
ment i
v)Ther
eisnodownpay
ment

v)
Thereisanagr
eementt
ohirewi
than v)
Therei
snoopt
ionofr
etur
ningt
he
opt
iontobuyorr
etur
nthegood goods

vi
)Goodscanberepossessedi
ncaseof v
i)Goodscannotber
epossessed
defaul
tinpay
ment

18.
Stat
e4disadvantagesofHirepurchasetot
hesell
er
 Goodsbecomemor eexpensive
 Temptati
onst obuymor ehencefi
nanci
alpr
oblems
 Goodsbelongt othesel
lerunti
ll
asti
nst
all
mentispaid.
 Li
mitedtypeofgoodscanbeboughtonhi repurchase.

19.
Highl
i
ght4adv ant
agesofHi repurchaset ot
heseller
 Incr
easeinsalesv ol
ume.
 Higherprof
itmar gi
nsarereali
zed.
 Goodscanber epossessedifthebuyerdefaul
ts.
 Ownershipofthegoodsi sretainedunt
ilt
hepay menti
scompl
eted.
Nov
els,
Updat
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l.
com

20.
Stat
e4factorsthatmaydi scouragetheuseofcr edi
tcardsaster
msofpay
ment
 Theholdersar echar gedhighinter
estrat
esbyt hecardcompany
.
 Theiruseislimitedtospeci fi
careas
 Onlyfewbusi nessesacceptt hecar ds
 Theyarepr onetoabuset hroughfraud.
 Thebuy ermaybet empt edtoov er
spend.
 Acquisi
tionprocessi slong.

21.
Highl
i
ghtfeat
uresofmai lorderstores
 Goodsaresoldthroughpostof f
ice.
 Customersdonotv isitt
hesel l
i
ngpr emi
ses.
 Goodsaredispatchedmost l
yonCWOorCOD
 Theymayhav elargewar ehouses
 Theyadvert
isethroughmeanssuchaspr intmedi
a,el
ect
roni
cmedi
a,j
our
nal
s

22.
Stat
efourf eaturesofchainstor
es
 Pur chasesar ecentr
ali
zed
 Salesar edecentrali
zed
 Pricesar estandardforal
lthei
rproductsinal
lthei
rbranches
 Allbr anchesdealinthesamet ypeofproduct
s
 Theyar eunif
ormi noutwardappearanceandinter
iorl
ayout

23.
Stat
efourcharacteri
sti
csofdepar t
ment al
stores
 Theyof f
erawi devarietyofgoodsatrelati
vel
ylowerpr
ices
 Theyar eattr
acti
veandconv enientt
oshopi n.
 Theyar eusuall
ysituatedintowncentres.
 Theymaypr ovi
deser vi
cessuchasr estaur
ants,r
eadi
ngroomsandpost
off
ice.
 Eachdepar tmentismanagedbyadepar t
mentalmanagerdeal
i
ngi
na
dif
ferentl
ineofgoods

PAPER2.

24.
Explainfivereasonsf orthecont
inueduseofor dinarychequesinsettl
ingdebt s
despiteadv ancement sinmodernf or
m ofmoneyt ransf
er
 Evidenceofpay ment- Thecount
erfoi
lprovi
despr oofthatpaymentshav ebeenmade
 Conv enienceofpay ment -Thedr
awerdoesnotneedt otr
aveltomakepay ment
 Secur e-Ifiti
sstoleni tcanbetr
acedtot hepersonwhocashedi t.
 Itcanbenegot i
able.-Itcanbetransf
erredtothet hir
dpartytosettl
etransactions.
 Canbedi scounted-Canbecashedbef orematur i
tyunderspecialci
rcumst ances
 Easy/lighttocarry
.-Itcanbeeasi l
yusedt ocarrylargesumsofmoney .

25.
Enumeratefi
vedif
ferencesbet
weenachai
nst
oreandadepar
tment
alst
ore
Depar
tmental
store Chai
nstor
e

Nov
els,
Updat
edCPA,
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imar
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cah@gmai
l.
com
i
)Eachdepar
tmentset
sitsownpri
ce i
)Pr
icesar
euni
for
minal
lthebr
anches

i
i
)St
ocksav
ari
etyofgoods i
i
)St
ocksl
i
mit
edt
ypeofgoods

i
i
i)Al
ldepar
tment
soper
ateunderoner
oof i
i
i)Hav
ebr
anchesal
lov
ert
hecount
ry

i
v)Eachdepar
tmentdeal
swi
thadi
ff
erent i
v)Al
lbr
anchessel
lsi
mil
argoods
l
i
neofgoods

v
)Pur
chasesar
edecent
ral
i
zed v
)Pur
chasesar
ecent
ral
i
zed

vi
)Goodsr
emaininthei
rdepar
tment
s vi
)Goodsmaybemovedtoother
eveni
fdemandislow br
ancheswher
ethei
rdemandishigh

26.
Out
li
nefivedisadvantagesofHirepurchasearrangementtoabuy er
 Buy erhasnoowner shi
pofgoodsunt i
lpaymentiscomplet
ed
 Hi repurchaseisexpensiveast hebuyerpaysmoreduet ohighint
erest
charged.
 I t
em/ proper
tycanber epossessedwhent hebuyerdefaul
tsinpaying
i
nstalments.
 Buy ercannotresell
./t
ransferi
tem toathir
dpartybecauseitdoesnotbelong
tohim.
 Buy erlosesallinst
almentspaidiftheit
em isr
epossessed.
 Hi repurchasemayencour agei mpulsebuyi
ng/buyermaybet empt edt
obuy
mor egoodsthatshecantaf fordtopay.

27.
Expl
ainf
ivebenefit
sof feredbyt hewhol esalerstoretailers
 Theystockawi dev arietyofgoodsi nlar
gequant it
iesreli
evi
ngt heret
ail
er
fr
om buy i
ngf r
om di fferentproducer s
 Theyavailgoodsatpl acesconv enienttoretai
lers
 Theybreakbul kfort hebenef itofr et
ail
ers
 Theyoffertr
anspor tf acil
iti
est oretail
ers
 Theyofferadvisoryser vi
cest oretail
ersregardingmar kettr
ends
 Theyoffercreditfacili
tiest oretai
lers
 Theyengagei npr oductpr omot i
ononbehal fofr etai
ler
s
 Theysort,bl
end, packandbr andgoodssav i
ngr etail
ersfrom havi
ngtodoit.

28.
Expl
ainfi
vecircumst ancesunderwhi chasel lermaysendadebi tnotetoabuy er
 Whengoodsar eunder charged
 Whenomi ssionsaremadei ntheinvoice
 Whenpacki ngcasesandmanyempt ycontainer
swhichwer enotr et
urnedare
chargedbyt hebuy er
 Whent herear ecalculati
oner ror
sr esulti
nginlowerfi
gur
esi ntheinvoice
 Whenmor egoodst hanor deredaredel iver
edandkeptbyt hebuy er
 Whenmor eexpensi vegoodst hanor deredaresentandthebuy erischarged
forcheapergoods.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 47
 i
sabokemi
cah@gmai
l.
com

29.
Expl
ainanyf i
v emeansofpay ment sav ail
abletobusinessesinKeny a
 Cash–t hisistheuseofcoi nsandnot esofdif
ferentdenomi nationsfor
payment s
 Cheque–i sawr it
tenor derbyanaccounthol derwi t
hthebank( drawer)tothe
bankt opayondemandaspeci fi
edamountofmoneyt ot henamedper sonor
tothebear er
 Bil
lofexchange–i tisanuncomdi ti
onalorderinwr i
ti
ngaddr essedbyone
personanot her,r
equiringt hepersont owhom i tisaddressedt opayon
demandt hesum ofmoneyont hebilltoanamedper sonorbear er.
 Promi ssor ynote-i
sadocumentwher ebyoneper sonpromi sest opaya
specifiedsum ofmoneyatacer tai
nst at
eddate.
 Moneyor der-moneyor dersaresoldbypostof fi
ceforthepur poseof
remitti
ngmoney ,
 Postalor der -t
hesear eal sosoldbyt hepostof fi
ceindenomi nat i
onseg5.10,
20,50100, 200forthepur posesofr emitt
ingmoney .Forexampl eaper son
wishingt osendksh230wi l
lbuy200, 20and10
 Banker scheque( bankov er
draft
)–t hisisachequedr awnbyt hebank.One
cansendi ttoapay eetocashi t
.

30.
Expl
ainfi
vedi sadvantagesf ort heuseofcr editcardsasmeansofpay ments
 Thecar dhol derischar gedhi ghi nt
erestr atebyt hecardcompany
 Int
eresti salsochargedwhent hereisdel ayinpay ment
 Iti
spr onet oabuset hr oughf raud
 Ami nimum ageof18y ear sisrequiredf oronet obecomeahol der
 Theirusei slimitedtospeci fi
careasorur banar eas
 Facescompet i
ti
onfrom ot hermeansofpay mentsuchascheques,money
ordersandpost alorder s
 Onlyfewbusi nessesacceptt hecards
 Longpr oceduresarei nvol v
edi ngettingt hecards
 Holdermaybet empt edt oov erspend
 Thecar dscanonl ybeaf fordedbypeopl ewi t
hhi ghincome

31.
Expl
ainf
ivecircumst anceswher eaf t
ersal
esser v i
cesar eneeded
 Wher e goods sol d ar e of techni cal nat ur e and may need
advice/demonst rat i
ononuse.
 Wher eexper ti
sei sr equiredininst
al lati
onandt het raderhast echnical
knowl edge/abili
ty/backup.
 Wher et heproducti snewi nthemar ketandt het raderrequiresf
eedback
onthepr oduct’
sper formance.
 Wher ecompet it
ioni sstiffandthet raderusesaf tersalesservi
cesasa
productpr omot i
onalt ooltowinmorecust omersandi ncreasesal
es.
 Wher eexper ti
sei srequiredinmaintenance/ ser
vice/ r
epairsandthet rader
i
sabl et oprovidet heservice.
 Wher ei tisthepol i
cyoft hebusi
nessasawayofi mpr ovi
ngcust omer

Nov
els,
Updat
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com
r
elat
ionsandi mprovebusinessimage.
 Whereitisthegovernmentpol i
cy,t
hetraderwi
llhav
enoopt i
on.
 Wheret henat ureoft hepr oductissucht hatisrequi
resspeci
ali
zed
t
ransportandt hetr
adercanpr ovi
deit.

32.Explainf ivedocument sthatar esentbyt hesel l

ert ot hebuy erinhomet rade.
(10mar ks)
 Bookl etwhi chbr ieflydescr i
best hegoodsasel lerst ocks.I tisnor mal l
ysent
whenabuy ersendsagener alletterofi nquiry.I tcont ainst ermsofsal es, after
sal eser vicesof feredbyt hesel ler, deli
v erser vi
cest obeused, packi ngand
post ingexpensesi ncurred.
 Quot at ion-I tissentt opr ospect i
v ebuy erspeci fyingt hecondi tionsunder
whi ch t hesel l
eriswi ll
ingt osuppl ygoodsandser v ices.
 Pr i
cel ist-Thi sissi mplyal istofi temssol dbyt het ract ort oget herwi tht hei r
prices.
 Acknowl edgementnot e-Documentsentt oapr ospect iv ebuy ert oi nfor m
him/ hert hattheor derhasbeenr eceiv edandi tisbei ngact edupon.
 Packi ngnot e- Documentshowi ngt hei temspackedi napar t
icularcont ainerin
whi chgoodsar ebei ngdel ivered.I tmaycont ainquant iti
esofgoodspacked, t
he
meansofdel i
veryandquant iti
esofgoodspacked. I
thel pst hebuy ert omakea
spotcheckont hegoodswhent heyar rive.
 Adv i
cenot e-Documentsentbyt hesel lert othebuy eraf t
ergoodshav ebeen
dispat chedt oinf orm him/ hert hatgoodshav ebeendi spat ched.Sentt hrough
thef ast estmeansav ail
ablesoast or eachbef or egoods.I tisusedt oi nfor mt he
buy ert hatt hegoodsar eont hewaysot hatincaseofanydel ayi ndel iver ythe
buy ercanmakei nquiri
esandal sot oal ertthebuy ersot hatthenecessar y
arrangementcan bemadef orpay ment swhengoodsar rive.
 I nv oi
ce- Documentsentbyt hesel l
ert ot hebuy erdemandi ngpay mentf or
goodsdel i
vered.Ther ear et wot y pes; cashi nvoi cewhi chissent when
pay menti sexpect edi mmedi atelyaf terdel iveryandcr edi t invoi cewhi chis
issuedwhenabuy erisal l
owedt opayata l ater dat e.Ani nv oiceshowst he
det ail
sofgoodssol dandi tisal soused assour cedocumenti nr ecor ding
transact i
onsi nt hebooksofaccount s.
 Pr o-f
or mai nvoice-Sentbyt hesel lertot hebuy erbef or egoodsar edel iver ed
showi nghowt hei nvoicewoul dl ookl ikei fthebuy erbuy sthegoods.

 Stat
ementofaccount -Statementthatissentbythesel
l
ert
obuyergi
vinga
summar yofalltr
ansacti
onst hathastakenplacebet
weent
hesell
erandbuyer
over aspeci
fiedperi
odoft ime.
 Creditnot
e-Usedt ocorrectanovercharge.
 Debitnote–Usedt ocor
rectanunder charge.

33. Expl
ainbenef
it
sthatmayaccruetoacommuni tyi
nvolv
edinhometrade

Vari
etyofgoods/servi
ces-enhanceconsumerchoi
ce

Promotespeaceandharmony-amongt radi
ngpart
nersastheyi
nter
act

Nov
els,
Updat
edCPA,
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imar
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
Sourceofgov ernmentr evenue-f r
om licences,f
ee,taxesongoodsetc.

Employment-t hoseengagedi ntradingact i
vi
ti
es

Improvedinfr
ast r
ucture-tof aci
li
tatemov ementofpeopl eandgoods

Uti
li
zati
onofl ocall
yav ail
ableresources-t hatwouldhaveother
wiser
emainedi
dle

Sal
e/di sposalofsur plus-mi ni
mizingwast age

Improvedtechnology- duetoexchangeofi deasleadingtoi
mprovedqual
it
y

34.Explainfiveadv ant agesofbuy i

nggoodsonhi repurchaseter
ms. (10mar ks)

Abuy erisabl et otakepossessi onofgoodsaf terthepaymentofthefi
rstinstal
l
ment .

Instal
lment sar espreadov erareasonabl eperi
odoft i
mehencedoesnotcausef i
nanci
al
str
aintothebuy er.

Aftersaleser viceareof feredtobuy ers.

Nosecur ityisr equiredapar tf
rom thei t
em boughthencer educi
ngthecostofcr edit
.

Thebuy erusest hegoodsbef oreclear i
ngdebt .

Pay mentispr edet erminedhencet hebuy ercanbudgethisincome.

Buy er
scanaf fordt obuyexpensi veitems, whichtheycannotaffor
dotherwise.

Canaf fordtobuyav ar
ietyofgoodsatt hesamet ime.

Itisakindofsav i
ngi nform ofgoods.

35.Explainthedifferencesbet weenti
edshopsandsi ngleshops
Tiedshop Singl
eshop
1.Thepr opri
etorisnor mal lyt hemanuf act
urer1.Ownerbyi ndi
vidual
s
2.Itsell
sproduct sfrom asi nglemanuf act
ur er
‘s. 2.Itsel
lsproduct‘
sfrom dif
fer
ent
manuf actur
er.
3.Theshopsusual lyhav et hesomedesi gns. 3.Thedesignoftheshopi s
accordingtotheowner ‘s
wish
4.Pricesofgood‘ saredet er mi nedbythe 4.Pri
cesofgoodsar edeterminedby
dif
ferent
manuf actur
er.manuf acturesorshopowner s.
5.Theoper atorareusual l
yt rainedbythe 5.Theoperator‘
sarenottrai
nedby
themanuf actures.
6.Dealershi
pcanbewi t
hdr awnbyt he 6.Theowneri satli
bertytostockwhatever
heorshe
manuf actur
eriftheoper atorst ockcompet i
ngwi shestostock.
products.

36.Explainf
ivecircumstanceunderwhichapro-for
mai nv
oicemaybeused.

Whent her
eisneedt oaskf orpay
mentbef or
ethegoodsar edeli
vered.

Whent hesel
lerdoesnotwantt ogivecredi
t.

Itmaybeusedbyi mporter
stogetcustomsclearancebeforethegoodsaredeli
ver
ed.

Whenonewant stogiveittoanagentwhosellsgoodsonbehal f
ofthesell
er.

Whenonewant stoshowt hebuyerwhathe/shewouldpayi ft
heorderisappr
oved.

Wher eonewant st ouseittoserv
easaquot ati
on.

Nov
els,
Updat
edCPA,
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FORMSOFBUSI
NESSUNI
TS.
Li
stanyf
ourclausesofmemor
andum ofassoci
ati
onf
orj
ointst
ockcompani
es
 Namecl ause
 Objectiv
ecl ause
 Liabi
lit
ycl ause
 Capitalclause
 Declarationclause

Ment
ionf
ourcircumstancesunderwhichstocki
nabusi
nessmaychange
 Sal
eofst ock
 Purchaseofstock
 Returnofstockbycustomers(r
eturni
nwar
ds)
 Returnofstocktosuppli
ers(r
eturnout
war
ds)

Hi
ghl
i
ghtf
ourf act
orsthatmayl eadtobusinessmer ger
s
 Toel
iminatewast ef
ulcompetiti
on
 Toexpandt hecapit
albase
 Toenableaf i
rmtodi v
ersif
y
 Toenableaf i
rmtopoolt hei
rhumanr esources
 Toestabli
shmonopol ytocontrolt
hemar ket.

St
atef
ourbenefitsthataninvestorwouldder i
vefrom astockexchangemarket
 Providereadymar ketforbuyers
 Investor
scangeti nformationont hecurrentpri
cesofthetypesofshar
es
 Providesinvestor
swi t
hr eadymar kettosellt
heirshar
es
 Providesecurit
ytot heinvest
ors,sincesecuri
ti
esquotedaregov er
nedbythest
ock
exchanger egulat
ion.

Gi
vef
ourr
easonswhyt hegov ernmentmayf i
nditnecessaryt
ostar
tapubl
iccor
porat
ion
 Toprov i
deessentialserv
ices
 Togener ater
evenuef orotheroperati
ons
 Tocreateempl oyment
 Toi
nv estinventur
est hatrequi
relargecapitaloutl
ay
 Toi
nv estinventur
est hatareunattract
ivetoprivat
esect
orsduet
olowprofi
t
 Toredistri
but
eweal th

Hi
ghl
ightfourreasonstoaccountf
ortherapi
dgrowthinmember
shi
pint
hesav
ingsand
cr
edi
tco-operati
vesociet
iesi
nKenya
 Easyt osav ewit
hthem duetocheckoffsy
stem
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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 i
sabokemi cah@gmail.
com
 Easytogetl oans/ fewpr ocedur es
 Chargesl owi nterestratesont heirl
oans
 Provi
desdi fferenttypesofl oansegemer gency,r
efi
nanci
ng,
nor
mal
 Loansdonotr equiresecuriti
es
 Improvest andar dsofl i
vingthroughdivi
dends
 Flexi
bleloanr epay mentper iod
 Loansf oradeadmemberi swritt
enoff

Out
li
nefourfeaturesoft r
adecr editasasourceoffi
nance
 Itisashor tterm credi
tfacili
ty
 Practi
cedbyt rader
sonl y
 Buy er
st akeowner shipofgoodsi mmediatel
y
 Creditattractsnointerestifpai
dwithi
nagreedperi
od.

Out
li
nef
ourbenefitsofpr i
vati
zationt okeny aseconomy
 Reducegov ernmentexpendi t
ure
 Leadstoefficiencyi nmanagement
 Attr
act
sf or
ei gninv est
ors
 Promotesinv enti
onandi nnov ation
 Reducespol i
ticalinter
ferencei nt heeconomy
 Helpsthegov ernmentt or aiser evenue
 Leadstoproduct ionofhi ghqual i
tygoodsandservi
ces
 Leadstoproduct ionofav arietyofgoodsandservices.

Out
li
net
her ol
esofst ockexchangemar ketinthedev elopmentoftheKeny
aneconomy
 Facil
it
atest hebuy ingofshar es
 Facil
it
atest hesel l
ingofshar es
 Safeguardst heinv estorsinterests
 Provi
desusef ulinformationt oinv estors
 Helpstocr eateempl oymentf orexampl ebr oker
s
 Thegov ernmentget sr evenuei nfor m oftaxes
 Avail
sav arietyofsecur i
ties/sharet oinvestors
 Promotescul tureofsav i
ng
 Actsasani ndicatorofeconomi cper for
manceoft hecount
ry

St
atef
ourr
easonswhypublicli
mi tedcompani esarev
iewedasl
egal
per
sons
 Theycanent
erintocontractsundertheirownnames
 Theycanownoracquirepr opertyunderthei
rownnames
 Theycanbesuedbyot herpar t
iesunderthei
rownnames
 Theycansueotherpart
iesundert heirownnames.

St
atef
ourfeatur
esofpubli
ccorporations
 Establ
ishedbyanactofpar l
iament
 Ownedandr unbythegov ernment
 Isaseparateent
it
yfrom theirowner

Nov
els,
Updat
edCPA,
KASNEB,
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 i
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cah@gmai
l.
com
 Havelimitedl i
abil
ity
 For
medt opr ovideessent
ialgoodsandserv
ices
 I
nit
ialcapitalprovidedbythegovernment

Out
li
nef
ourcharacteri
sti
csofpref
erenceshares
 Haveaf i
xedr at
eofdivi
dends
 Holder
sar epaiddivi
dendsbefor
eordinar
yshar
ehol
der
s
 Havenov oti
ngr i
ghts
 Canber edeemableorirr
edeemable
 Canbecumul at
iveornon-
cumulati
ve

Li
stfourt y
pesofpar tner
shi
ps.

Ordinarypart
nership/Generalpar
tner
shi
p.

Limitedpart
nership.

Tempor arypart
nership.

Permanentpar t
nership

St
atef
ourcharacteri
sti
csofagener alpar
tner
 Isarealpartner
 Mayt akepartintherunningthebusiness
 Enti
tl
edt otheshareofpr of
it
 Contri
butescapitali
ntothebusiness
 Mustbe18y earsandabov e
 Bearsunlimitedl
iabi
li
tytowardsdebtsofpar
tner
shi
p

St
atef
ourreasonst hatwouldmaket raderstoform acart
el
 Toav oidunhealthycompet i
ti
on
 Todet erminear easonabl
epr i
cef ort
heproduct
 Toincreaset hei
rbargaini
ngpower
 Tohel pthem getf av
orabl
epol i
ciesfort
heiri
nter
est
 Toenabl ethem sharethemar ket

Out
li
nef
ourpri
ncipl
esofcooper ati
ves
 Openandv ol
untarymember ship
 Democrati
cadmi nist
rati
on
 Divi
dendpayment
 Li
mi t
edint
erestonshar ecapit
al
 Promoti
onofco- operat
iveeducati
on
 Co-oper
ati
onwi t
hot herco-
operati
vesatal
ll
evel
s

Namef
ourdocument srequi
redfortheregi
str
ati
onofali
mit
edl
i
abi
l
itycompany
 Memor andum ofassoci
ation
 Arti
clesofassoci
ati
on
 Li
stofdirect
orswhoagr eestoserveasdi
rect
ors
 Stat
ementofshar ecapi
tal

Nov
els,
Updat
edCPA,
KASNEB,
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imar
yNot
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 i
sabokemicah@gmail
.com
 Decl
arat
iont
hatr
egi
str
ati
onrequi
rementshav
ebeencompl
i
edwi
th

Stat
ef ourbenefi
tst
hatmayaccr uet oacompanyt hatisquotedi
nNair
obi
secur
it
ies
exchange
 Thecompanyi sabletorai
ser ev
enue
 Thr oughquot
ingthecompany ’
simageimpr oves
 Thecompanyget stimel
y,accurateandrel
iabl
einvestmenti
nfor
mati
on
 Hel psthecompanyt oknowt hevalueofit
sshares
 Thecompanyat t
ractsquali
fi
edmanpower

Expl
ainf
ivebenefit
sofSACCOst othemembers (
10marks)
 Member sareabletosavet hr
oughcheckoffsyst
em
 Borr
owingofl oansoflowinter
est
 Off
ersdiff
erenttypesofloansegeducati
onloans,devel
opment,
emergency
 Educat
iont omember soninvestment
 Member ssavingsearndivi
dendsannual
lyfr
om sharingofpr
ofi
ts
 Member sloanupondeathar ewrit
tenof
fhencear el
ieft
othebenef
ici
ari
es

Expl
ainanyf i
vedocument soft hememor andum ofassoci at
ionofacompany
 Namecl ause:showst henameoft heCompanyendi ngwi t
hthewor dl
imit
ed(lt
d)
 Obj ectscl ause:setoutact i
viti
est hecompanyengagesi n
 Situationcl ause:indicat
esther egister
edheadof f
iceforeasycommuni cation
 Capi talclause:disclosestheamountofcapi talwhichthebusinesscanrai
seand
speci fythet ypeofshar esandv aluesofeachshar e.
 Liabilit
ycl ause:Disclosesorwar nst hepubl
i
ct hattheliabi
li
ti
esofthemember sare
li
mi ted
 Decl arationclause:Adecl arationsi gnedbythepromot ersindi
cati
ngthattheywish
tof ormt hecompanyandwi llbuyshar esintheproposedf ir
m

Expl
ainfi
vedif
fer
encesbet
weenapubl
i
cli
mit
edcompanyandaco-
oper
ati
vesoci
ety
Publ
icli
mitedCompany Co-oper
ati
ve

Gov
ernedbyt
hecompani
esAct Gov
ernedbyco-
oper
ati
veact

For
medbyami
nimum of7member
s For
medbyami
nimum of10member
s

Ai
medatget
ti
ngpr
ofi
t Ai
medatser
vingmember
s

Member
shav
enot
hingi
ncommon Member
shav
eacommonbond

Nodi
rectgov
ernmentcont
rol Cont
rol
ledbyt
hegovernmentt
hrought
he
mini
str
yofco-
oper
ati
ves

Descr
ibef
ivefeat
uresofpart
ner
shi
ps (
10marks)
 Unl
imit
edliabil
i
ty
o Thel iabi
li
tyoft
hepar
tner
sisnotl
i
mit
edt
otheamountofcapi
tali
nvest
edbut

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
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 isabokemi cah@gmai l.
com
ext endst ot hei rper sonalpr oper t
ies.
 Deci sionmaki ng
o I npar tner shipdeci sionmaki ngisshar edbyal lpart
ners
 Shar ingpr ofit
s/ l
osses
o Shar edaccor dingt ot heter msoft hepar tnershi pdeedorpar t
ner shipact
 Mut ualagency
o Eachpar t neri sanagentoft hepar tnershipoft hebusinessf ort hepur poseof
theoper at i
on
 Limi tedl ife
o Par tnershi phasshor tli
fet hatcanbet erminat edbyei t
herdeat h, i
nsanity
bankr upt cyorwi thdr awalofapar tner
 Possi bi l
ityofdi sagr eement s
o Par tnershi pi susual lypronet odisagr eement samongt hepar tner s
FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530
Expl
ainfiveemer gingt rendsi nt heowner shipandmanagementofv ari
ousbusi nessuni t
s
(10mar ks)
 Pr i
vat i
zat ion–changi ngowner shi pofast ateownedf i
rmtoapubl i
cownedf i
rm
throughsal eofshar es/asset s
 Hol dingcompani es–af ir
m acqui r
escont roll
ingint eresti
nanot hercompanyby
buy ingov er51%ofshar es
 Takeov er /Absor ption–Af ir
m buy sal lasset s/sharesofanot herfrom whi chthen
ceasest oexi st
 Mer ger / amal gamat i
on–f i
rmscombi ne/ j
oint oform anewf i
rmt hatisbi ggert han
individualf irms
 Franchi sing–Af ir
m gr ant sanot hert her i
ghtt opur chase/ manuf acture/ distr
ibute
itsbr andedpr oductsusi ngi tsname.
 Global izat ion–abusi nessoper atesi nev erypar toft hewor l
degcocacol acompany
 Nat ional izat i
on–St atet akesov erabusi nesspr eviouslyownedbypr ivate/public
 Car tels–Acar telisagr oupofr elatedcompani est hatagr eetowor kt oget herin
ordert ocont r
olout put ,pricesandmar ket soft heirgoodsandser vi
ces.
 Per formancecont racts-Theyar esi gnedcont ractsbyempl oy eesofst ate
corpor at ionsi nanat t
emptt oimpr oveper f
ormance.

Expl
ainfiv
ediff
erencesbet
weenapubl
i
ccor
porat
ionandapubl
i
cli
mitedcompany
(10marks)
Publi
cCor por
ati
pn Publ
icli
mit
edcompany

Est
abl
i
shedbyanActofpar
li
ament Est
abl
i
shedt
hroughcompany
sact

I
nit
ialcapi
talcomesf
rom t
hegov
ernment Ini
ti
alcapi
tali
scont
ri
but
edby
sharehol
ders

Di
rect
orsar
eappoi
ntedbyt
hegov
ernment Di
rect
orsar
eel
ect
edbyshar
ehol
der
s

Capi
tali
snotsub-
div
idedi
ntoshar
es Capi
tali
ssubdi
vi
dedi
ntoshar
es

Notl
i
stedi
nthest
ockexchangemar
ket Li
stedi
nthest
ockexchangemar
ket
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
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 i
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cah@gmai
l.
com

Out
li
nefivefeaturesofapar astatal (10marks)
 Theyar ecreatedbyanactofpar li
amentwhi chdefinesthei
rstr
uctureai
msand
object
ives
 Theydonothav esharecapit
al
 Mostoft hem ar ewhollyownedbyt hegovernmentorareundergov ernmentcont
rol
 Thest at
epr ovidesmostoft hefinancinginaddi
tiontothefeesomeoft hem
chargesint heprovisi
onofser v
ices.
 Theyar eformedt oprov i
deessentialgoods/ser
vicesatsubsidi
zedratetothepubl
ic.
Theyar enotpr ofi
tmot i
vated
 Theyar erunbyt heboar dofdir
ector sappoi
ntedbyt hegovernment

Explai
nf i
veadv antagesofPubl icli
mit edcompany (10mar ks)
 Rai semor ecapi tal
o Canr ai
semor ecapitalbecauseofl argemember shipthrought hesaleof
sharest othepubl i
c
 Hav el
imitedliabili
ty
o Hav eli
mi t
edl i
abil
it
ieshenceper sonalpropert
iesofshar eholderscannotbe
soldtopaydebt softhecompany
 Fr eetransferofshar es
o Shar esanddebent uresar ef reelytr
ansferabl
ewhi chencour agesmany
peoplet oinvestinthecompany .
 Hi requalif
iedper sonnel
o Abl etoempl oyprofessional sast heyhav emor ecapital
 Ther eiscont i
nuity
o Hasaper petualsuccessi onhencedeat h,bankruptcyorinsecur i
tyofa
shareholderdoesnotl eadt odi ssol
uti
onoft hecompany .
 Rai semor ecapi tal
Compani escanr aisemor ecapi t
alt hrought hesaleofdebent ures
 Shar eholderscannotwi thdrawf r
om t hecompanyt husensur ingmai nt
enanceof
sharecapital
 Hasasepar atelegalentit
yfrom i t
sowner shencecanownordi sposepr oper
ty

St
atef
ourr
equir
ementsnecessar
ytosecur
eal
oanf
rom t
heSACCO’
s
 Onehastobeamember
 Guar
anteefr
om fell
owmembers
 Memberssalary
 Memberssaving/shar
es

Gi
vef
ourhitchesfacedbyt hegovernmentofKenyai
ntheendeav
ort
opr
ivat
izest
atef
ir
ms
 lackofpolit
icalgoodwil
l
 corrupti
on/ i
nsensit
ivepubl
icserv
ice
 fearoftransferr
ingownershi
pintoforei
gnl
ands
 Needt okeepi nvest
mentopportunit
ies

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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 i
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cah@gmai
l.
com

Out
li
nef
ivebenef it
sofbecomi ngamemberofasav i
ngsandcr
edi
tcooper
ati
vesoci
ety
(
SACCO)
 Wil
lgetadv i
ceanar eaoff i
nances
 Earninterestoninvestment
 Receiveloansathowi nter
estrates
 Receivecr edi
tfaci
l
ities
 Assistedint i
mesofpr oblems( benor
elent
)
 Sourceofsav i
ngs

Inthespacesprov
idedbelow,wr i
tethetypeofpar
tnerdescri
bedbyeachofthefol
l
owi
ng
statements (i
)Onewhoi sbelow18y earsofage-Mi nor
(
ii
)Onewhohasunl imit
edl i
abil
it
y-General
(
ii
i)Onewhogetsinvolv
edi nthedail
yrunni
ngoft hebusi
ness-Acti
ve
(
iv)Onewhoall
owshi s/hernamet obeusedint hebusi
ness-Norminal

Otwomaintendst ostartabusi ness.Giv

ef ourr
easonswhyitisadv
isabl
eforhi
mtost
arta
r
etai
lbusi
nessshopi nsteadofbuy ingsharesinapubli
cli
mitedcompany
 Willhavef ullcontrolofthebusiness.
 Noshar i
ngofpr ofits.
 Easydeci sionmaki ng.
 Therearef ewl egalf or
mal i
ti
es.
 Topsecr ecy .
 Fl
exible.

St
atef
ourcir
cumstancest hatmayl eadt ot hedi
ssoluti
onofapar
tner
shi
p
 Ifthepart
nersmut uall
yagr ee/ decidetodissolvei
t
 Incaseofdeath/insanit
y/bankr uptcyofapar tner
 Incasethecourtordersso
 Incasecompletionofhei ntendedpur pose
 Ifthebusi
nessengagesi nunl awf ulpract
ices
 Incaseofret
irement/ admissi onofanewpar t
ner
 Incaseofcontinueddisagreement samongt hepart
ner
s

Stat
efourfeaturesofi ncorporatedbusi nessuni ts
 Legalprocedur eisf oll
oweddur ingf ormation
 Theyar esepar atelegalentiti
esfrom t heowner swhoformedi t
 Shareholdershav elimitedliabil
i
ty
 Theyhav eper petualsuccessi on
 Theycanr ai
sel ar
geamountofcapi t alhencelar
geinsize
 Fail
ureoft hebusi nessdoesnotnecessar il
yrefr
eshthefail
ureofitsowner
s
Li
stfourdocument st hatar erequir
edbef oreapubl i
cli
mit
edcompanyi sall
owedto
operat
einthecount ry
 Memor andum ofAssoci ati
on
 Arti
clesofassoci ation

Nov
els,
Updat
edCPA,
KASNEB,
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imar
yNot
es 0705525657 57
 i
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cah@gmai
l.
com
 Declarati
on
 Certi
ficateofi
ncorpor
ation
 Prospectus
 Tradingcerti
fi
cat
e
Hi
ghl
i
ghtfourway sinwhichther unni
ngofpubl
i
ccor
por
ati
onsi
sinef
fect
ivei
nthi
scount
ry
 Toomuchpol i
ti
calint
erference
 Inadequatecapit
al
 Poormanagementski l
l
s
 Embezzl ementofpubli
cf unds

Youhavebeenchar gedwi thadut yofpreparinganarti

cleofAssoci
ati
onf
ory
ourcompany
;
st
atefouritemst haty ouwi ll
includeinyourar t
icl
eofAssociat
ion
 Ther ightsofeacht ypeofshar eholderseg.Voti
ngr i
ght
s
 Met hodsofcal lingmeet ings
 Rul esgov erningel ecti
onsofof fi
cialsinthecompany
 Rul esr egardingprepar at
ionandaudi t
ingofaccounts
 Power s,
dutiesandr i
ghtsoft hedirect
ors

Honeyi nt
endst oj oi
naconsumerCo- oper atesociet
y;Highli
ghtfourbenef
it
sshewoul dget
bybeingamemberoft hesoci et y
 Shewi l
lear nprofits
 Shewi l
lgetbet terqualitygoods
 Shewi l
lear nint
er estoncapi tali
nv ested
 Shewi l
lenj oycreditfacilit
ies
 Shewi l
lbuygoodsonf airprices
 Shewi l
lbeassur edofpr otectionagai nstmalpracti
ce
Stat
ef ourfeaturesofmul ti
national corpor ati
on
 Theyt rainlocalpeopl esoast ocr eatethenecessar ymanpoweri nthesubsi
diari
es
 Theydomi nateinternationalmar ketbecauseoft heirgreati
nfl
uences
 Theyassi stdev elopingcount riesfinanciall
y
 Theyhomeaguesti nfl
uencei nint ernati
onaltr
ade
 Theyhav eal otofcapi tal

St
atef
ourtypeofpartnershipbusi
nesses
 Permanent
 Tempor ar
y/j
ointv ent
ure
 Generalpart
nership(unli
mit
ed)
 Limit
edpar t
ner ship
 Tradi
ngpar tnerships

Out
lineFourway sinwhi
chasavingsandcr
edi
tco-
oper
ati
vesoci
etycanr
aisecapi
tal(
4
marks)
 Member shipcont
ri
but
ion
 Ret ainedprofi
t
 I nvestments
 Hi repurchase

Nov
els,
Updat
edCPA,
KASNEB,
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imar
yNot
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 i
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cah@gmai
l.
com
 Creditpur
chasing
 I
nterestfr
om credi
text
ended
 Borrowingloans

Mutukuwi
shestoj
oinasav
ingsandcr
edi
tco-
operat
ive(
Sacco)
.Out
li
nef
ourbenef
it
she
wi
ll
enjoybybei
ngamemberoftheco-
oper
ati
ve. (4mks)

 Hewi
l
lear
ndi
vi
dendsonshar
essav
ed.

 Hewi
l
lobt
ainl
oansatl
owi
nter
estr
ates.

 Hewi
l
lbeencour
agedt
osav
ebyuseofcheckof
fsy
stem.

 Hewi
l
lobt
ainl
oanseasi
l
ysi
nceonl
yaf
ewf
ormal
i
tiesar
erequi
red.

 Hewi l
laccessdif
fer
entcat
egor
iesofl
oanssuchasnor
mal
,emer
gency
,medi
cal
dev
elopmentetc.

 I
ncaseofdeat
h,hi
sbenef
ici
ari
eswi
l
lber
efundedhi
sshar
econt
ri
but
ion.

 I
ncaseofdeath,hi
sloanswi
l
lbewr
it
tenof
f/hi
sbenef
ici
ari
eswi
l
lnotbeaskedt
o
payhi
sloans.

 Hi
ssav
ingswi
l
lbesaf
esi
ncet
heywi
l
lbei
nsur
ed.

 Hewi
l
lnotr
equi
reanysecur
it
ytoobt
ainl
oans.

 Hemayaccessbanki
ngf
aci
l
iti
est
hrought
heSACCOSf
rontof
fi
ceser
vices.

Descri
bethepr ocedurethatashar eholderwouldf ollowinselli
ngsharethr
ought hest
ock
exchange.
 Shareholderscont actabr oker/agentsnot i
fyi
ngofi ntendedsale
 Sharehol derssur rendert heor iginalsharecer t
if
icatetothebroker/agent
 Sharehol dersi gntransferform
 Shareholdergivethepr iceheexpect sf ort heshares
 Thebr oker/agentsv er
if
iesowner shipoft heshar e/ownershi
pisv eri
fi
ed
 Thebr oker/agentgetsbuy erfort heshar es
 Sharesar esol d/paidfor

Expl
ainf
ivechal lengesf acedbythesavi
ngsandcr editcooperat
ivesocieti
es (10marks)
 Compet iti
on-Ther ehadbeensteadyriseint helevelofcompetiti
onfrom
commer cialbankswhi chhaveencroachedi ntothetradi
ti
onalroleofthesav i
ngs
andcr editco-operati
ves.Manymicro-f
inancei nst
itut
ionshavealsojoinedt hefiel
dto
providethesameser vi
cesasthoseofSACCO.
 Manager ialchallenges–Mostoft heco- operati
vesocieti
eshav eexperienced
manager ialwhi chi nsomecaseshav enear l
ycausenearcol l
apseofsomeoft he
societi
es
 Delayedr emi tt
ance–someempl oyershav ebeendel ayi
ngremi t
tingmember s
Nov
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&Pr
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.com
deduct ionstothesociety.Thishasaf fectedthesoci ety’
scashf lowaf fecti
ngt he
societyl endi
ngprograms. Member smayt akeforl ongtogett heloansasa
result.
 HIV/ AIDS–Thescour gehasaf fectedmanymember s.Thesoci et yspendal otof
moneyi nassisti
ngthef amil
iesaffect edt hough,forexampl e,of fsett
ingorwr iti
ng
offofl oans.
 gov ermentpol i
cy–Thegov ernmentt hrought heMi nistr
yofco-oper ativeshasbeen
regulatingthesector.sometimest hegov ernmentmaydesi gnsomepol ici
esthatwil
l
affectthe member sorsocietyadv erselye.g.1/3r ule
 Politi
cali nt
erf
erence-especiall
ydur ingt heelecti
onsofof f
ici
als, somepol iti
cians
suppor tt hei
rfri
endstobeel ected

TheKeny aGov ernmenthasbeenpr ivatizingitsparast atalstowoul dbei nvest ors.Explai

n
anyfi
vebenef i
tsoft hepr ivati
zationpr ocesst othegov ernment ( 10mar ks)
 Reduct i
oni ngov ernmentexpendi t ure–Gov er nmentceasest ohav et heobl i
gation
ofsubsi di zingl ossesmadebyt hecor porati
ons
 Increasedef ficiency–Thi si sbecausepr ivatizedf i
rmsar esubj
ectt ocompl eti
on
 Av oidanceofpol it
icalinterference–Nor oom f orappoi ntofunqual i
fiedmanager s
onpol i
ti
calgr ounds
 Attractf orei gni nv est ors
 Increasedf oreignexchangeear nings
 Allowancef orwi derpar ti
cipation
 Increasedi nnov ativeness–car r
youtr esearchi ntobet termethodsofpr oducti
on,
 organi zationandmar keti
ng
Expl
ainfi
v edi f
fer encesbet weenpr i
vatel imi t
edcompani esandpubl i
climi t
edcompani es
 Atl eastt woandamaxi mum of50member sf orapr ivatecompanywhi leatleast
sev en
 member sar er equi redf orapubl icl i
mitedcompanyandnomaxi mum
 Privatel i
mi t edcompani esar enotal lowedt oadv ertisesaleofshar ewher easpubl i
c
li
mi tedcompani esar eall
owed
 Unl i
kepr ivat el imi tedcompani es, sharesofpubl i
climi t
edcompani esar equot edand
canbesol dt hrought hestockexchange
 Wher easpubl icl i
mi tedcompani esmustwai tforacer t
ifi
cateoftradingt o
commence, pr i
v atel i
mi t
edcompani esareal l
owedt ocommencebusi nessupon
receiptofcer tificateofi ncor porat ion
 Unl i
kepubl icl imi tedcompani eswhi chmusthav eatl easttwodirector s,pri
vate
li
mi tedcompani escanbeal l
owedt ohaveonl yonedi rector
 Wher east her ei snoagel i
mi tfordi r
ector
sofapr i
vat eli
mi t
edcompany ,dir
ectorsof
publ i
cl i
mi tedcompani esmustr etireat75y ear s
 Unl i
kepr ivat el imi tedcompani es, publicl
imitedcompani esmustpubl ishbooksof
account sinnewspaper s

Discussfiv
ebenefi
tst
hattheKeny
angov er
nmentmaygetbypr i
vat
izi
ngastate
corporat
ion
 Tor est
ruct
urei
tformoreef
fici
encyandef
fect
ivenesst
ogeneratemoreprof
it
s

Nov
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 Toeliminateunnecessaryposi t
ionsandr educet hestaf
finordertoachiev
e
economi cnumberandqual i
ty
 Inordertoimprov eonqual i
tyandquant itytoincreasecustomer’schoi
ceintermsof
g/savailabl
e
 Tomakei tmorecompet it
iveinser viceprov i
sionshenceloweri
ngofpr i
cesto
advantagecustomer s
 Toappoi ntandempl oydirectorswi t
houtpol i
ti
calinf
luencebutonmer it
 Toimpr oveonaccount abil
ityofdi r
ector
ssandt omanager s
 Tomakei tprof
itori
entedandhenceef f
iciency
 Toimpr oveoncust omerser vice

Descr
ibefi
v ecircumst
ancesunderwhichl
imit
edl
i
abi
l
itycompani
esmaybeli
qui
dat
ed
(
10mar
ks)
 Bankrupt
 Ult
ra-v i
res
 Amal gamat i
on
 Courtorder
 Decisionbyshareholder
s
 Compl etionofi
ntendedpur
pose/per
iod

Descr
ibef
ivedi
sti
nct
ionsbet
weenapubl
i
clt
dcompanyandpubl
i
ccor
por
ati
on (
10mar
ks)

PUBLICLTDCO. PUBLI CCORPORATI ON

 Formedundercompani esAct FormedbyActofpar l
i
ament
 Managedbyboar dofDi rect
ors ManagedbyBoar dofdi rect
ors
 Appointedbyshareholders. Appointedbyt he
minist
er/govt
/Parl
iament
 I
niti
alcapit
alcontr
ibut
edbyshar eholderInit
ialCapitalcontr
ibutedbyt hegov t
 Formedwi thanaim ofmaki ngpr
ofit Formedwi thanai m ofprov
iding
goods
 Profi
tsmadei ssharedamongshar eholders Profi
tsmadegoest othegovernment

Dist
inguishbet weenapubl i
cli
mit
edcompanyandapr ivatelimitedcompany
(10marks)
PUBLICLI MITEDCOMPANY PRIVATELI MITEDCOMPANY
Formedbyami ni
mum of7andnoset Canbef ormedbybet ween2- 50
maximum
Canst artbusi
nessonlyaf
terget
ti
nga Canst artbusinesssoonaf t
erreceivi
ngt
he
cert
if
icateoftradi
ng cert
if
icateofi ncorporat
ion[Cer
ti
ficat
eof
regi
stration
Canbemanagedbyoneort wo Managedbyaboar dofdir
ector
s
dir
ectors

Nov
els,
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 isabokemicah@gmail.
com
Advert
isesandinvi
testhepubli
cto Doesnotadv er
tiseit
ssharestothepubli
c
subscri
beforit
sshares
Sharesarefr
eelytr
ansferabl
efr
om Restri
ctst
ransferofshares.Shar
eholder
s
oneper sontoanother canonlysellt
heirshareswithconsentof
othershar
eholders

KatwaaisamemberofBi diisav i
ngsandcr editCo-operati
ve.(SACCO) .Whatbenefit
sdoes
sheenj
oyf orbei
ngamemberoft heSACCO (10marks)
 SACCOwi llenablehert osav e
 Profit
smadebyt heSACCOwi llbedistri
butedtoherandmember sasdividends
 Katuracanobt ainaloanf rom theSACCOatl owinterestrat
es
 IncaseKatwadi estheout standingloansar ewr i
ttenof f
 Katwacanobt ai
ndifferenttypes/cat egori
esofloansf r
om theSACCO
 Loanscaneasi l
ybeobt ainedasf or
mal i
ti
es/procedur esinv
olvedarefew
 SACCO’ soffereducationt omember s

Expl
ainfi
ver olesofst ockexchangeasamar ketforsecur it
ies
 Facil
itatesbuy i
ngofshar es–Thest ockexchangemar ketprovidesaconduci ve
envir
onmentt oinv estor swant i
ngt obuyshar esi ndiferrentcompani es.
 Facil
itatessel l
ingofshar es–Cr eatesar eadymar ketf orthosewhowi sht osell
thei
rsecur iti
es
 Assist scompani est or aisecapi tal–Thest ockexchangemar ketassistcompani es
toraisecapi talbycr eatinganenv i
ronmentt hr oughwhi chsuchcompani esi ssue
newshar est omember soft hepubl i
c
 Creationofempl oyment–st ockexchangemar kethasassi st
edi nthecreat i
onof
empl oy mentoppor tuni ti
es.Thepeopl eempl oy edincludet hebroker sandt heir
agent s.
 Raisi
ngr evenuef ort hegov er nment–Thegov er nmentear nsrev enuebycol lect
ing
feesandot herduesf rom act i
vit
iescar ri
edouti nthest ockexchangemar ket .
 Avail
ingav arietyofsecur i
ties–Thest ockexchangemar ketavailsav ar
ietyof
securitiesfrom whi chi nvest orscanchoose.
 Measur eofacount ry’
seconomi cpr ogr ess–Theper formanceofsecur i
tiesinthe
stockexchangemar ketmaybeani ndi catorofacount ryseconomi cprogress.
 Promot esthecul tur eofsav ing–St ockexchangemar ketprovidesinvestorswi t
h
oppor tunit
iest ochannelt heirexcessf unds.

Expl
ainfi
veadv antagesofpubli
ccor porat
ions/par astat
als
 Readycapi t
al–I ni
ti
alcapit
alisreadil
yavailablebecauseitispr ovi
dedbythe
government
 Provi
desgoodsatl owprices–Acor por
ati
oncanaf fordtoprov idegoodsand
servi
cesatl owpr i
ceswhichwoul dotherwisebev er
yexpensiv eiftheywer
eleftt
o
theprivatesect or.
 Masspr oduct i
on–Mostoft hecorporat
ionspr oducegoodsandser vi
cesi
nlarge
quantit
iest herebyreapi
ngt hebenefit
soflar gescaleproduction
 Somear emonopol i
es–Theyhenceenj oythebenef itsofbeingamonopol y.For

Nov
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exampl
etheydonothav etoadv er
tisethei
rpr
oducts
 Bail
edbythegover
nment–Cor porati
onsareusual
lybai
l
edoutbyt
hegov
ernment
wheninfi
nanci
alprobl
ems.

Di
sti
ngui
shbet
weenco-
oper
ati
vesoci
eti
esandpar
tner
shi
p. 
  
  
  
  
  
  
  
 (
10mar
ks)

Co-
oper
ati
vesoci
eti
es Par
tner
shi
p

Managedbyacommi
tteeofni
ne Managebyact
ivepar
tner
s
members
For
medbyami ni
mum of10 For
medby2-20part
nersunl
essf
orpr
ofessi
onal
memberswit
hnomaxi
mum. par
tner
shi
pwhichgoestoamaxi
mum of50

Themainmot
ivei
stoi
mpr
ovet
he Mai
nmot
ivei
stomakepr
ofi
ts
wel
far
eofmembers

Gov
ernbyco-
oper
ati
veact Gov
ernbypar
tner
shi
pact

Member
shav
eli
mit
edl
i
abi
l
ity Somepar
tner
smayhav
eunl
i
mit
edl
i
abi
l
ity

Notaff
ect
edbydeat
h,i
nsani
ty, Maybedissol
veduet
oexi
t,ent
ry,
deat
h,i
nsani
tyand
exi
torent
ryofamember bankr
upt
cyofamember.

Expl
ainanyf
ivedocument
st hatarerequi
redt
obefi
l
ledwi
tht
her
egi
str
arof
companiest
ofacil
i
tat
etheregist
rati
onofacompany. (
10marks)

 Memor andum ofassoci ation:t

hisisabr iefstat ementt hatspeci f
iesthenameoft he
proposedcompany ,amountofcapi talr aisedorexpect ed,theobjectiv
esoft he
companyandi tspr oposedheadquar ters
 Arti
clesofAssoci ation:thisdocumentcont ainst hesetr ul
esformulatedtogov ern
theinternaloper ationsofacompany .Itcov erst hingssuchaspr ocedur etobe
fol
lowedi ncal li
nggener almeet i
ngs,issueandt r
ansf erofcompanyshar esand
shareholdersvotingr i
ghts
 Alistofdi r
ectors:thi sdocumentcont ainsdet ai l
sofnames,addr esses,occupati
on,
sharessubscr i
bedandst at ementofagreementt oaper sont oserveasadi rect
or
 Declarati
on:thisdocumentshowswhet hert her egistr
at i
onr equir
ementasl aiddown
bylawhasbeenmet .Itmustbesi gnedbyt hesecr et
ar y
, thedir
ectorandal awyer
 Ast atementsi gned:t hi
si sadocumentsi gnedbyt hedi r
ector
sst ati
ngt hatthey
haveagr eedtoactasdi rectors

(
b)Pr
oblemsfaci
ngthesav
ingsandcr
edi
tcooper
ati
vesoci
eti
esi
nKenya
 Loandefaul
ti
ngbymembersassomeleaveempl
oymentduet
otermi
nali
l
lness,
sacki
ng

Nov
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 andper sonalreasons.
 Lackofmanagementski l
lsamongmember sleadi
ngtopoormanagementof
soci eti
es.
 Cor rupt i
onandembezzl ementoff undsbyof f
icial
 Poori nv estmentdecisionsbysomeof f
ici
alsl
eadingtol osses.
 Sti
f fcompet it
ionfrom commer ci
albanksandmi cr
ofi
nanci alinsti
tut
ions.
 Lat er emi tt
anceofmember scontri
butionsbyempl oy
er s.
 Hi ghdemandf orl
oansagai nstthereceiptsfr
om mont hlycont r
ibuti
ons.
 Ret renchmentofwor kersbybot hgov ernmentandprivatesect orhasledto
fi
nanci al
 probl emst othesociety.

GOVERNMENTANDBUSI
NESS.
1.St
atef
ourway sinwhichthegovernmentmayr
egul
atebusi
nessact
ivi
ti
es
 Thoughl i
censi
ng
 Byof f
eri
ngadv i
soryser
vices
 Throughtaxati
on
 Registr
ati
on
 Throughlegisl
ati
ons

2.Stat
efourmeasur esthatthegovernmentofKenyahasputi
nplacet
opr
otect
consumersfrom unscrupulousbusinesspeopl
e
 SettingstandardsthroughtheKeny abur
eauofst
andar
ds
 Wei ghtsandmeasur esAct
 Tradedescr i
ptionAct
 Publ i
chealthAct
 Licensing
 Pr i
cecontrolAct
 Rentt ri
bunalAct

3.Out
li
nefourmajorar
easofgover
nmentpar
ti
cipat
ioni
nbusi
nessact
ivi
ti
es
 Regulati
on
 Trai
ning
 Tradepromoti
on
 Provi
sionofpubl
i
cuti
li
ti
es
 Enabli
ngenvir
onment

4.I
dent
if
yfourmet
hodsusedbyt
rader
sassoci
ati
onst
opr
otectconsumer
s

Nov
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.com
 Set
tingsstandar
dsforpr
oduct susedbymember s
 I
nvestigat
ingcompl
aint
smadebyconsumer sagainstthei
rmember
s
 Set
tingcodeofethi
cstoguidemember sastheyt
rade
 Enl
ighteni
ngconsumersont heirr
ightsfrom t
imetotime.
 Act
ingoncasesofexploit
ati
onnot edbymember s

5.St
atef
ourreasonsthatbri
ngtheneedf orconsumerpr otecti
on
 Toensurefairpri
cesofgoods
 Toensurethatstandardsar emet
 Toensurethatconsumer sgetqual it
ygoods
 Toensurethatgoodsar eofr ightwei ghtandmeasur es
 Toprotectconsumersagai nstbr eachofcont r
act
 Toensurethatconsumer sar epr otectedf rom thesaleofharmf
ul
commodi t
ies
 Toprotectconsumersf r
om f alseadv erti
sing
 Toensurethathealt
hst andardsar eadheredt o
 Toensurethatcommodi t
iesar er eadil
yavai l
abletotheconsumers
 Toensurethatbuil
dingconst ructionandsaf etystandar
dsaremaintai
ned,
.

6.Hi
ghl
ightf
ourcircumstancesunderwhi chthegov ernmentmayi ssueli
censes
 Whent hereisneedtoregulat
et henumberofbusi nesses
 Wher etherei
sneedofdoi ngawaywi thi l
l
egalbusi nessinthecountry.
 Whent hegov er
nmentwant stoensur ethattradersengageonl yinthose
businessesforwhicht
heyhav ebeenl icensed.
 Whent hegov er
nmentwant stoearnt orevenuef rom theissui
ngofl i
censes.
 Whent hereisneedtoprotectconsumer sagai nsttheexploit
ati
onbyt rader
s
 Whent hereisneedtocontrolthetypesofgoodst hatenterorleavethe
country.

7.Out
li
nefourway si nwhi chthegov ernmentmaypr omot elocaltr
ade
 Traini
ngbusi nessmenonappr opri
ateway sofcar ryi
ngbusinesses
 Offeri
ngf inancialai
ds(subsidies)
 Prov i
dingincent i
vessuchast axexemptions
 Adv i
singbusi nesspeopleonbet t
erway sofcar r
y i
ngoutbusiness.
 Organi zi
ngshows, tr
adefai r
sandexhibiti
onst hroughwhi chl
ocaltr
ader
s
maypr omot etheirgoodsandser vices
 Creatinganenabl i
ngenv i
ronmentf orbusinessest othr
ive.

8.Hi
ghl
i
ghtfourdemeri
tsofgov ernmentinv
olvementi
nbusi nessact
ivi
ti
es
 Maycreateunfaircompet i
ti
ontopri
vatei
ndi
viduals
 Leadstomisappr opriationofpubli
cfunds
 Mayleadtoproduct ionofpoorqual it
ygoods
 Itmayscareawayi nv est or
swhowoul dhaverenderedthesameser vi
ces
 Mostmanagerialpost singov er
nmentrunbusinessesarepol
it
icalandnot
basedonquali
fication

Nov
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.com
 Mostgov ernmentproject
sar eexpensiveenter
pri
seswhichrequi
reheav
y
i
nvestmenti ntermsofper sonnelt
raini
ngandequi pment
 Somestat e-r
unorganizat
ionscontinuoslymakelossesther
ebyfai
li
ngto
sust
ainthemsel v
es.

9.Hi
ghlightfourway sinwhi chthegov ernmentcreatesanenabli
ngenv i
ronmentt
o
at
tractinv
est ors
 Fav ourabl
egov ernmentpol i
ciesli
kelowt ax
 Dev elopmentofi nfr
astruct
ure
 Offeringsubsidies
 Offeringincenti
ves
 Politi
calstabil
i
tyensur i
ngsecur i
tyinthecountry
 Prov i
sionofrelevanteducationalskil
l
sandt rai
ningf
acil
it
ies
 Act i
ngasl oanguar antorst
obusi nesspeople

St
atef
ourreasonswhyconsumer sneedprotecti
onfrom unscrupul
oustrader
s.
(
4mar ks)
 Ensurecommodi ti
esar eofgoodquality
 Rightquantit
yandsizeofgoods
 Ensurestandardsofhealtharemaintai
ned
 Ensurebuildi
ngconstruct
ionandsafetystandardsaremai nt
ained
 Ensurefairpri
cesarecharged
 Ensurecommodi ti
esar eavail
abl
e
 Protectconsumersfrom fal
seadverti
sing
 Protectconsumersfrom saleofharmfulcommodi ti
es
 Protectconsumersagainstbreachofcontract
.

10.
Highli
ghtfourway sinwhichconsumer smaypr otectt
hemsel
vesagai
nst
exploi
tat
ionbyt r
ader s
 Byj oi
ningconsumerassoci at
ions
 Byr eporti
ngt r
aderswhoexploitthem
 Enlighti
ngot herconsumersaboutt hei
rri
ghts
 Boy cott
ingtraderswhoselldefecti
v epr
oducts

11.
Giv
efourway sinwhi chcommer cialatt
acheesmaypr omotethev ol
umeofexpor ts
int
hecountri
eswher etheyar ebased
 Explor i
ngandi dent i
fyi
ngnewmar kets
 Keepi ngst at
ist
icsofpr oduct sexpor t
ed
 Publ i
shingandadv erti
si ngt hei
rcount r
ysproductsinjournal
s
 Selectingbuy ersagent sanddi stri
butorsofthehomecount r
ysexports
 Orgainisingv i
sit
st otradef air
sandexhi bi
tionsforbusinesspeoplefrom
theirhomecount ries
 Attendmeet i
ngs, semi nar sandwor kshopsont r
adepat t
ernsofthecountri
es
andkeepdat aofnewmar ketsforexports
 Informt radersintheirhomecount riesofthestandardsrequir
edf orexpor
ts

12.
Stat
efourr
easonswhyt
hegov
ernmenthast
oor
gani
zesemi
nar
sforbusi
ness
Nov
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peopl
e
 Exposebusi nesspeopl etomoder ndev elopment sinmanagement
 Enabl ebusi nesspeoplet oacquir
eknowl edgeonhowt ouseavailabl
e
resources
 Toi nform busi nesspeopleonpr of
itablebusi nessesoppor
tunit
ies
 Educat et hem onef f
icientmethodsofoper atingbusi
ness
 I mpartproperbusi nesset hi
csforexampl egoodcust omerrelati
ons
 Exposet hem togov ernmentpolici
esr egardingbusinessacti
vit
iesinthe
country.

13.
Descr
ibef i
ver olesoft heKeny aBur eauofst andards(KEBS)inconsumerpr otecti
on
(10marks)
 Itsetsst andar dsont hequal i
tythatmustbemetbybot ht helocallypr oduced
goodsaswel lastheimpor tedgoods.
 Itensur est hatharmf ulgoodsar eneitherproducednori mpor t
edi ntot he
count r
ybyi nspectingalllocalgoodsandi mpor ted
 Itprovidesqual i
tyassuranceexper tssev i
cestopr oducerstoensur et hatthey
producehi ghqual i
tygoods.
 Ittakesl egalact i
onagai nstthosewhooper ateoutsidethesetst andar ds
 Itensur est hatallproductsaretest edtoensurequal i
tyandt hattheybeara
KEBSmar kofqual i
ty
 Itensur est hatallfoodsar ewelllabeledandpackedsoast oensur et hatsuch
foodi spr otected

14.
Explainf i
vemeasur esthatt hegov er nmentusest ocreateanenabl i
ngbusi ness
Environmentf orbusi nessesi nthecount r
y
 Givi
ngeconomi cincentives-Thesei ncent iv
eswi llboostt hebusi nessactivit
iesinthe
count ry.Theyincludelowt axes, subsi diesandcheapl and.
 Impr ov i
nginfr
astructure-Byput ti
ngupandi mpr ov inginfr
ast r
ucturesuchasr oads
watercommuni cati
onandel ectricit
yi nthecount r ytoattractinvestors.
 Impr ov i
ngsecurity-
Byensur i
ngt hatt hereispol i
ticalstabili
tyandgoodsecur i
tyto
createaconduci vebusi nessenv ironment
 Dev elopmentofsoci alameni t
ies-Thesei ncl
udesschool s, housing,hospital
sand
recreat i
onfacil
iti
eswhi char er equi redbyi nvestor s
 Enact ingfavourablelawsandr egul ationsinthecount rythatwi l
lboostbusi ness
acti
v it
ies
 Simpl ify
ingprocedur esinst artingandr unningbusi nessest oattractmorebusi ness
peopl e
 Prov i
sionofsubsi dies-Thi sar ef i
nanci alassistancet obusi nesses.Italsoinvolves
technicalassistanceandmanpowerespeci al
lyint opmanagement .

15.
Expl
ainfi
veproblemsfacedbyKETA
 Poorinfr
astruct
urewhi
chdiscour
agesinvest
ors
 Highrateoftaxati
onwhi
chdiscouragesi
nvestor
sandmakesl
ocalgoods
expensi
v e

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 I
nsecur
itythatdi
scouragesinv
estors
 Cor
rupti
onwhi chmayaddext racosttoproj
ects/
inv
est
ments
 I
nadequatefundsthatmakesitdiff
icul
tforKETAtocar
ryouti
tsf
unct
ions

16.
Explai nfivereasonst hatjusti
fyt heinvol
v ementofagov ernmenti nbusi ness
activiti
es( 10mar ks)
 Topr ovidesensi t
ivegoodsandser vi
ces-Thegov ernmentpr ovi
desgoodsand
servicest hatar etoosensi t
ivetobel eftinthehandsoft hepr i
vatesect orfor
exampl efirearms.
 Topr eventexpl oi
tationoft hepubl ic-Thegov ernmenti nv olvesinbusinesst o
prev entexpl oi
tati
onoft hepubl icbypr i
vateper sonsespeci all
yinthepr ovisi
onof
essent ialgoodsandser vi
cessuchassal t,sugarandcommuni cati
on.
 Topr ovideessent ialgoodsandser vi
ces-Thegov ernmentget sinvolvedi nbusi
ness
activiti
est oprov i
dei tsciti
zenswi thessentialgoodsandser vi
cesinar easwhere
privatesect orsar eunwi ll
ingtoi nvestbecauseofl owpr of i
tsegpr ovi
sionofwat er.
 Topr eventforeigndomi nanceoft heeconomybyi nvestingi nareaswher ethel
ocals
arenotabl et o
 Tocr eateempl oy mentoppor tuniti
esbyi nit
iatingpr oj
ectssuchaspr ovisionof
electricit
yandkazikwav i
janai niti
ati
ves.
 Topr ovideessent ialgoodsandser vi
ceswhi chpr iv at
eindi vidual
sarenotabl et
odue
tolar geamountofcapi t
al r
equi r
edegel ectricity.

17.
Expl ainfi
vemeasur est hatareadopt edbyt hegov ernmentt oprotectconsumer s
agai nstexploit
at i
on
 Sett i
ngupst andar ds-Thegov ernmentt hrought heKEBSset sstandardswhich
mustbemai ntainedbypr oducersandt r aders.
 Wei ght sandMeasur esAct-Thegov ernmentensur esthattheequi pmentusedf or
wei ghingandmeasur ingar ecor r
ectandaccur atebyregularcheckingandadj usti
ng
oft heequi pment .
 Licenses-Thegov er
nmentr equir
esmanuf acturersandbusi nesspeopletoget
li
censesbef orecommenci ngtheirbusinessoper ati
onst hi
sensur esthatthereis
cont rolofthety peofbusi nesscar r
iedout .
 FoodandDr ugsAct -Thegov ernmentensur est hatproducersandt rader
sdonot
includeanysubst ancet hattheysellt ocust omer swhichmayhav ehar mfuleffect
s
tot hecust omer sheal t h.
 Tradedescr i
ptionAct -Ensur esthatapr oducer sortradersdoesnotcheatt he
consumer sbypr ov i
dingf al
sedescr ipti
onofcommodi t
ies.
 Pricecont rol-
Thegov er nmentmaysetapr icebey ondwhi chacommodi tyshould
notbesol d.
 RentandTr i
bunalAct -Ensur esthatt enant sarenotov erchargedbyl andl
ords.

18.
Stat
efourr
easonswhyt
hegov
ernmenti
ssuesl
i
censest
obusi
nesses

 Toobtai
nrevenue/
sourceofr
evenuef
orthegover
nment
 Regul
ati
ngthenumberofbusi
nessesi
nanygivent
imetoav
oidunheal
thy
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competiti
on.
 Regulat
ingt henumberofbusi nessinanyonel i
neofact ion.
 Ensuri
ngt hattradersengageonlyinthosebusinessact i
vit
yforwhi
cht
hey
havealicense.
 Contr
oll
ingi l
legalbusi
nessinthecount ry
 Ensuri
ngt hatthosewhoengagei nprofessi
onalacti
vit
iesmeetthe
requi
rement .
 Contr
olthet ypeofgoodst hatshouldenterorleavethecountry.

19.
Highl
i
ghtf
ourser
vicesof
fer
edbyt
hel
ocal
aut
hor
it
iesi
nKeny
a

 Gar bagecollecti
on
 Wat ersupply
 Streetlight
s
 Repai rofroads
 Prov i
sionofsocialservi
cese.
g.school
s,hospit
als
 Recr eati
onalfaci
li
tiese.
gspor
tsfiel
ds,
stadiumse.t.
c
 Prov i
sionofhousi ngneeds

20.
Outl
i
nefourway
sinwhi
cht
hegov
ernmentcr
eat
esenabl
i
ngenv
ironmentf
or
busi
ness

 Offer
ingseverali
ncent ivestoencour
ageinvest
ment sl
iket
axhol
i
daysubsi
dies
 Provi
sionofcreditt
hr oughgov er
nmentinst
itut
ions
 Creat
ingapoolofqual ifi
edmanpower
 Provi
sionofsecurit
y
 Ensuri
ngthereispoliticalst
abil
it
yandgoodwi l
l
 Provi
sionofinfr
astruct uret
oreducecostofprovisi
on
 Li
berali
zat
ionofmar ket i
ng
St
ate4f
unct
ionsofKEBs

 Testgoodst
oensur
etheyar
esaf
eforconsumer
suse
 Dest
roycont
ami
nat
edgoodsorpoi
sonousgoods
 Dest
roypoorqual
i
tygoods
 Ensur
eal
lpr
oducer
shav
emetr
equi
redst
andar
dswhenpr
oduci
ngt
hei
rgoods
 Checkl
abel
sandpackagest
oensur
etheyhav
ecor
recti
nfor
mat
ion
 Cont
rolandmoni
tort
heuseofst
andar
dizat
ionmar
ks

Amanufacturingfi
rm hasbeenconsist
entl
yrel
easi
ngtoxi
cwastesi
ntot
he
nei
ghbor
hood.Out l
i
nef ourmeasuresyoucantaketost
opthef
ir
mf r
om such
malpr
act
ice
 Publi
cizingt
hemal pract
icetobeknowntothepubl
ic
 Takelegalacti
oni ncour
t

 Repor
ttot
her
elev
antaut
hor
it
yli
keNEMA

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 Educat
enei
ghbour
stof
ightf
ort
hei
rri
ght
s

 Boy
cot
tthef
ir
m’spr
oduct
s

 Car
ryoutdemonst
rat
ionagai
nstt
hef
ir
m

 Reasonoutwit
hthef
ir
mst
oeducat
ethem ont
hei
mpor
tanceofconser
vingt
he
envi
ronment
.

21.Localleaderswoul dliket oseemor ebusi nessenter

prisesestabl
ishedwi
thi
nUgenya.
Out
li
nef ourmeasur est hegov er
nmentcant aket oencourageinvestmentsi
nthi
sregi
on
 I mpr ov
ei nf
rastructureespeci all
yroads
 Pr ovidesecur i
ty
 Pr ovideincenti
vese. g.t axholiday
 I mpr ov
eaccesst of i
nance/ provide
 Reducebur eaucr at
icrequi rementforlicensing
 Pr ovidesocialameni tiese.g.school s,hospital
s,marketskil
lse.t
.c
 Pr ovideawar enessofi nvestmentoppor t
unit
ies

22.
Limi
tat
ionsofconsumeri
nit
iat
edmet
hodsofconsumermet
hods

 Lackofsuppor tbythegovernment
 Lackoff inance
 Ignoranceofconsumer s
 Reluctanceofconsumer stojoi
ntheseassoci
ati
on
 Lackofi nit
iat
ivefrom consumerstocheckontrader
sper
for
manceandr
epor
t
casesonnon- compliance

23.
Stat
efourreasonswhysomel
ocal
aut
hor
it
iesi
nKeny
afi
ndi
tdi
ff
icul
ttopr
ovi
de
publ
icuti
l
ity

 Lackofadequatefinance
 Poormanagementski l
l
softheselocalaut
hor
it
ies
 Poli
ti
calint
erf
erenceandwrangle
 Poorgarbagecoll
ectionandisposal
 Embezzlementoff unds
 Corr
uption

24.
Listf
ourt
ypesofcompl
aint
sthataconsumeror
gani
zat
ionmayr
ecei
vef
rom
consumer

 Poorqual it
ygoodsandser vices/damagedgoods
 I
ncorrectwei ghtsandmeasur es
 Poorhy gienicconditi
ons
 Contrabandsi tems/prohi
bitedgoods
 Hoarding
 Misl
eadi ngadv ert
isements
 Envi
ronment alpol
luti
on
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 Harmfulproduct
s
 Pr
iceovercharge

St
ate4waysi nwhi chKeny aBur eauofst andards( KEBS)r egulatesbusinesses.
 Conduct i
ngr egularinspect ionstoensur ethatstandar dsar emeetbybusinesspeople
 Theyst amponpr oduct stopr ovethattheest abl
ishedst andardshavebeenadher edto.
 Takel egalactionsagai nstt hosewhov iol
etsetst andards.
 Setstandar dsf oralllocalandi mpor tedmanuf acturedgoodsbyconduct i
ngresearchand
t
est
sont hesegoods.
 Ensuresbusi nesseshav evalidli
censes
 Testgoodst oensur et heyar esafef orconsumeruse
 Destroycont ami natedorpoi sonousgoods
 Checkl abelsandpackagest oensuret hattheyhav ethecor recti
nformati
on

25.St
atef
ourway
sinwhi
cht
hegov
ernmenti
sinv
olv
edi
nbusi
nessact
ivi
ti
es

 Regulati
on
 Trai
ning
 I
nternaltr
adepr omotion
 Eter
naltradepromotion
 Servi
cepr ov
isi
ons
 Creati
onofenabl i
ngenvir
onment
 Consumerpr ot
ection

25.
Stat
efourfuncti
onsofconsumerassociat i
ons
 Deali
ngwithcomplaintsaboutef
fect
iveitemsboughtbymember s.
 Makingsurecommodi ti
esarenothoardedandt hataregul
arsupplyismaintai
ned
 Ensuri
ngthatweightsandmeasurement sofcommodi ti
esarecorrect
 Educati
ngmember sont hei
rri
ghtsasconsumer s
 Ensuri
ngthathealt
handsaf et
yregul
ati
onsar eadheredto
 Ensuri
ngthatessenti
algoodsandservicesareavail
abl
eandt hatthei
rpr
icesarefai
r.

26.
Stat
e4f act
orsl i
mi t
ingther ol
esofconsumerassoci at
ionsinKenya
 Lackofsuppor tfrom thegov er
nment
 Lackofcapi taltof i
nancetheirorganizat
ions
 Ignoranceofconsumer sabouttheirri
ghts
 Reluctanceofmanyconsumer stojointheseassociati
onssothatt
heymay
voicetheircompl aintsasagr oup
 Lackofi nit
iati
vesf rom consumer stocheckont rader
sperfor
manceand
reportcasesofnon- compliancetoqual i
tyandprice.

27.
Outli
nef iveway sinwhi chthedepar tmentofext er
naltr
adepromotesacount
ry’
s
externaltr
ade
 Exploreandi dent
if
ynewmar ketsf ormoreexportopport
unit
ies
 researchandanal y
semar ketsf orexport
sf r
om t hei
rhomecount ri
es
 keepst at
ist
icsofpr oduct
si.e.volume,packagingsizesandmet hodsof

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manufacturi
ng
 att
endmeet i
ngssemi nar
sandwor kshopsontradepat ternsoft hetr
ading
countr
ies/onbehalfofexport
ers
 publi
shandadv er
ti
sethei
rcountr
y’sexpor
tsinbusi nessjournalsofmagazines
 sel
ectbuy er
s, agentsanddi
str
ibut
orsoft hehomecount ry’
sexports
 i
nformt radersoft hei
rhomecount r
iesofthestandardsrequiredforexpor
ts

28.Expl ain5chal lengesf acingconsumerassoci ati

ons
˗Lackofsuf fi
cienteducat iontoconsumer s-consumer sar enotawar eoftheirri
ghtsand
thust akenoact i
on
˗Consumerapat hy-consumer sdonotr eportexploit
ati
veact i
onsbyt r
aders
˗Inadequat efunds/f inances-t heassociati
onsl ackfundstocar r
ytheiracti
viti
esrelat
ed
toconsumerpr otecti
on
˗Lowmember ship-f ewconsumer sareunawar eoft heirexi
stenceandt husdonotj oin
˗Lackofsuf fi
cientgov ernmentsuppor t-manyconsumeror gani
zati
onsar enotsuppor t
ed
byt hegov ernmentast heyar eseenashumanr ightsgroups
˗Lackofpol i
ti
calgoodwi ll-poli
tici
ansdonotsuppor tconsumer sintheirf
ightfortheir
ri
ght s
˗Individuali
sm -consumer sprefertoactindi
v i
duallywhenbuy i
nggoodsorhandl ingunfair
traders,theydonotuni teandcompl ainasagr oup

COMMUNI
CATI
ON.
1.Def
inetheter
m communicat
ion
 Communi cat
ioni
sthepr
ocessbywhi
chi
nfor
mat
ioni
spassedf
rom oneper
sonor
placet
oanother.

2.Out
li
net her ol
epl ayedbycommuni cati
oninanygi venorganizati
on
 Iti
susedt ogiv
ei nstructionsonwhatshoul dbedoneatwor kanddur ingwor k.
 Itenhancesgoodr elationsamongwor kerstherebypromot i
ngandenhanci ngt hei
r
effi
ciency .
 Throughcommuni cationmostor gani
zati
onshav ebeenabl etoimpr ovet heirimage,
forexampl ethroughadv erti
sing.
 Itusedt oi mprovet her elat
ionshipbetweent heorganizati
onandt hecust omeror
cli
ent s.
 Forco- ordinati
ngpur poses, communi cati
oni susedt oensurealldepar t
ment swork
i
nhar mony .
 Thef eedbackgotf rom t heclient
sorcust omershelpst oimproveanor ganizati
on’s
rel
iabi l
i
tyandqual i
tyofgoodsandser vi
cesof f
ered.
 Communi cati
onisusedasat oolformanagement .
 Gooddeci sionsar emadeascommuni cationhelpsoneunder st
andal lthenecessar y
mat ters.

FORMOREHI
GHSCHOOLRESOURCESCONTACT MRI
SABOKE0714497530

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3.Brief
lyexpl ainthef oll
owi nglev el
sofcommuni cati
on
(a)Vertical communi cat i
on
 I nv olvest hef l
owofi nformat ionei therdownwar dsorupwar ds,f
orexample,fr
om a
seni orempl oyeet oaj uniorempl oyee
(b)Horizont al communi cation
 I sal sor eferredt oasl ateralcommuni cationwhi chispassi ngofinf
ormation
bet weenpeopl eoft hesamer ankorst atus,forexampl efr
om onedepartment al
managert oanot herdepar tment almanager
(c)Diagonal communi cati
on
 I scommuni cationofdi fferentpeopl ei ndi f
ferentlevel
sofmanagementor
depar tment sforexampl ear ecept ionistcommuni cat i
ngt oaproducti
onmanager .
4.Disti
ngui shbet weenf or
mal andi nfor mal communi cat
ion
 For malcommuni cationi sofficialanddocument edandf ol
lowscertai
nrulesfor
exampl eawor kerwr it
inganof f
iciallettertoanor ganizati
on’sseni
ors.I
nformal
communi cati
ondoesnotconf ormt oanyt i
me, forexampl ecommuni cati
ngto
friendsandr el
at i
ves.

5.St
atetheessent
ialel
ement sincommuni cat i
on.
 Thesenderwhoi sthesourceoft heinformati
onbeingcommunicat
ed
 Therecei
ver(
orrecipi
ent)ofinfor
mat i
on
 Themessagebei ngcommuni cat
ed
 Thechannel(ormedium)t hr
oughwhi chthemessageispassedon
 Feedbackwhichistheresponseorr eactionofther
ecipi
ent
.

6.Highl
i
ghtthev ar
ioustypesofver
bal
communi
cat
ion
 Face-to-
facecommuni cat
ion
 Telephoneconversati
on
 Radiocallsconver
sati
on.

7.Stat
et headvantagesanddi sadv
antagesofv erbalcommunicati
on
Advantages
 Al argenumberofpeopl ecanreceivetheinformati
onatoncef orexamplewhen
addr essi
ngi nameet ing.
 Ther eisimmedi at
ef eedback
 Clarifi
cat
ioncanbemadeeasi l
yandi mmedi atel
y
 Thi sispersonalappeal
 Itcanbev er
yconv enientandpersuasi
v e
 Itisfastsincetheintendedinformati
onr eachesthereci
pienti
mmedi at
ely.

Di
sadv
antages
 Iti
snoteasyt oknowifthemessageorinf
ormati
onhasbeenreceiv
edparti
cul
arl
yif
therecei
versaremany
 Iti
spronetoout si
dei
nterf
erenceduet
onoiseandotherf
ormsofdi sr
upt
ions
 Incaseofincorr
ectpr
onunciati
onofwords,t
her
ecouldbedist
ort
ionofthe
inf
ormati
on

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 73
 i
sabokemi cah@gmail.
com
 Ther
eisnorecordforfutur
ereference.
 Themethodisnoteffect
iveforrecipi
ent
swithlearni
ngpr
obl
ems.
 Cantakeal
otoftimet opassintendedinfor
mat i
on.

8.Out
li
net hevar i
ousbar r
ierstoeffect
ivecommuni cati
on
 Noisemayhi nderef f
ecti
vecommuni cati
on
 Theemot ionalst at
eofbot hthesenderandt hereci
pient
 Useoft hewr ongchannelt ocommuni cate
 Breakdownofachannelusedt ocommuni cat e
 Il
l
iteracyoft her eci
pientparti
cularlyf
orwrit
tencommuni cati
on.
 Theat ti
tudeoft her ecipi
enttowar dsthesenderandt heinfor
mationbei
ng
communi cated
 Useofdi fficultvocabularyorwor dsbythesender
 Lackofconcent r at
ionont hepartoftherecipientmayaffectcommunicati
on
 Poort i
mi ngbyt hesender .

9.Highl
ightreasonst hatwoul dmakeanor ganizat
ionusecel
lphonesforcommuni cat
ion
wit
hinandout sidetheor ganizat
ion.
 Oneget simmedi atefeedback
 Itisfastandcanbeusedt osendur gentmessages
 Ther eispersonalappeal
 Thesenderhasagr eatoppor tunityt
oconv i
nceandpersuadetherecipi
ent
.
 Itisnotv eryexpensivepar t
icularl
yformakingcall
sforashortdurat
ionofti
me
 Itcanbeusedev enwhenbot ht hesenderandthereci
pientar
efarapart

10.St
atethev ari
oust
ypesofwr
it
tencommuni
cat
ion.
 Writ
t en
 Memor andum(
memos)
 Repor ts
 Notices
 Tel
egr ams
 Cir
cul ar
s
 Minut es

11.St
atether easonswhyanor ganizati
onwoul dusewr it
tencommuni cati
oninsteadof
ver
balcommuni cation.
 Wr i
ttencommuni cati
onpr ovidesev idencewhi chmaynotbet hereinverbal
communi cation
 Wr i
tteninformat i
oncanbest oredf orfuturerefer
enceunli
kev erbalwhichcannotbe
storedanddependsont her ecipientsmemor y
 Iti
snotpr onet odist
orti
onsandt hereforemor eaccuratethanv erbal
communi cation
 Wr i
ttencommuni cati
oncanbei nform ofdi agr
ams, i
ll
ustr
ationandmapswhi chis
notpossi bleforverbalcommuni cation
 Somewr ittencommuni cationsuchasl etterswouldbecheaperandt imesav i
ngthan

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 74
 i
sabokemi
cah@gmai l
.com
ver
balcommunicati
on,f
orexampl
emaki ngl
ongtelephonecal
ls.
 Wri
ttencommunicati
oncanbeusedforconf
ident
ialmessages,f
orexampl
e
r
egister
edmai
ls.

12.St
atet hedisadvantagesofwr i
ttencommuni cati
on
 Wr it
tenisnotv eryper
suasiveorconv inci
ng
 Ther eisnoper sonalt
ouch
 Itcanonl ybeusedbyl it
erate
 Itcanbesl owwher el
ett
erst aketi
met or
eachtherecipi
ent
 Ittakestimet ogetafeedbackf rom thereci
pient
 Messagescannotbeenhancedbygest ur
es,t
hatis,bodylanguageorf
ace
expr essi
ons
 Itcanbeexpenset ofi
leallthewr i
tt
encommuni cat
ion

13.Out
li
net hevari
ousmeansofvi
sualcommuni
cat
ion
 Charts
 Photographs
 Gestures,whi
chmayincl
udesi
gnsandsymbols
 Sl
ides

14.Statetheadvantagesanddisadvant
agesofaudi
o-vi
sualofcommuni cat
ion
Advantages
 Informati
oni smoreattr
acti
veandappeal
ing
 Canr eachmanypeopl eatonce
 Itcanbeusedev enfort
hosewhocannotreadandwr it
e
 Immedi at
ef eedbackisr
eceivedfr
om t
hewayt hereci
pientbehav
e
 Canbeent er
taini
ng

Di
sadv
antages
 Canbemi si
nterpr
eted, f
orexampl eift her ecei
verdoesnotunderstandthesi
gnsor
gesture
 Notsuitableforpassingconf ident
ialinformat i
on
 Iti
snotpossi blefortherecipienttogiveaf eedback
 Gestureandsi gnsar eonlysuitabl
et ot hosewhocanunder standthem
 Theinit
ialcostofpr epari
ngt heseformsofcommuni cat
ionmaybehi ghfort
he
sender
 Itmaytakeal otoft i
met opr eparethesef or msofcommuni cati
on

15.Out
li
net hev ari
ousser vicet hatfacil
it
atecommuni cat
ion
 Registeredmai l
, forsendi ngvaluableorconfi
denti
ali
nfor
mat i
on.
 Speedpostser vicesof feredbyt hepostoffi
cetosendlet
tersparcelsusi
ngthe
qui
ckestmeanspossi ble
 Poster estante,usuallyusedbyt hosewithoutpost
aladdr
esses
 Busi
nessr eplyser v
icewhi chenablescustomersandcli
entstoreplytoabusiness
wit
houthav ingtopayf orpostagest amps

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 75
 isabokemicah@gmail
.com
 Broadcasti
ngservi
cesthroughvari
ousradi
ostati
ons
 Pri
ntmedi asuchasthev ar
iousnewspaper
s,magazinesandj
our
nal
s
 I
nternetservi
ceswhichconnectonetotheworldwidewebsi
te
 Telephoneservi
ces

16.St
atethev ar
ioustr
endsincommuni cat
ion
 Mobileorcellphoneuse
 Int
ernetwhichusesinterl
inkedcomputer
stothewor
ldwidewebsit
e
 Fax,whichcanbeusedt osendwr i
tt
enmessagesver
yfast
 Inf
ormat i
onandt el
ephonebureauswhereonecanmakelocalandi
nter
nat
ionalcal
l
s
 Mov etowardsapaper l
essoffi
ce.
 Transformati
onoflanguage.

17.Hi
ghli
ghtthefactorstobeconsi der
edwhenchoosi ngameansofcommuni
cat
ion.
 Thecostbecausesomear emoreexpensi v
et hanot hers
 Avail
abil
it
yofthemeans
 Rel
iabil
it
yorassur ancethatthemessagewi llreacht hereci
pient
 Thedistancebetweent hesenderandther ecipient.
 Thelit
eracylevelofboththereceiv
erandt her ecipi
ent
 Theconf i
denti
alnatureoftheinfor
mationbei ngsent
 Theurgencyoft hemessage
 I
fthereisneedf orevidenceorneedforf ut
urer efer
ence
 Thedesiredimpactoft hemeansupont herecipient.

18.AdviceMar yWaki owhysheshoul dnotuset el

extocommuni catetoherfr
iends
 Herfriendsmaybei l
li
ter
ateandmaybeunabl etoreadt hemessager eceived
 Herfriendsmaynothav ear eceivi
ngmachineandwi l
lbeunabl etogetthe
i
nf or
mat ion
 Itcanbeexpensi vetouseast hesenderpaysasubscripti
onf eeandrentalfeewhil
e
heandt her ecipi
entpaysforthesentmessage
 Itcanbeexpensi vetobuyt het el
epri
nter
susedinrecei
v i
ngandsendi nginformati
on
 Telexmayonl ysendwr i
tt
enmessagesbutcannotbeusedt osendmaps, diagr
ams
andchar ts

19.St
atecircumst anceswhensi gnlanguagecanbet hemostappr opri
ateform of
communi cati
on
 Whencommuni catingtosomeonewhohasahear i
ngpr obl
em
 Ifonewi shest opassasecr etorcodedmessage
 Ifbothther eceiverandt hesenderaref arapartbutcanseeeachot her
 Itcanbeusedi ncaset hereisalanguagebar r
ier
 Inanenv ir
onment alwher ether
ei salotofnoiseorphy si
cali
nterf
erencetoother
formsofcommuni cati
on,signlanguagemaybeused
 Itcanbeappr opriatewher eboththerecipi
entandt hesenderunderstandthesi
gns.

20.St
atef
ourr
easonswhyf
ace-
to-
facecommuni
cat
ionwoul
dbepr
eff
eredt
owr
it
ten

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 76
 i
sabokemi
cah@gmai
l.
com
communicat
ion
 Wheni mmedi atefeedbackisrequi
red
 Incaseofameet i
ng
 Ifclar
if
icati
oni srequired
 Wher einformationisconf i
denti
al
 Wher efacialexpressionisrequi
red

21.St
atefourci
rcumstancesunderwhichsignl anguagemaybeusedincar
ryi
ngout
busi
ness
 Wherethereisnocommonv er
ballanguage
 Wherethereisalotofnoi
seinter
ruption
 Wheresil
encemustbeobser ved
 Wherethereisneedfordemonstrati
ons
 Whereonepar t
yisdeafordump
 Whereiti
st heonlymeansofcommuni cation
 Wherethemeani ngofsi
gnsiswel lunderstoodbythet
wopart
ies

22.Out
li
nefourli
mitat
ionsofusinginter
netasameansofcommuni
cat
ion
 Expensi
vetoaffordbysmallfir
ms
 Onlyoper
atesinconnectedareas
 Canonlybeusedbyl i
ter
ategroups
 Cannotbeusedi nar
easwi t
houtpower/el
ect
ri
cit
y

23.Hi
ghl
ightf
ourli
mitationsfortheuseofmobilephonesi
ncommuni
cat
ion
 Poornetworkcov erageinsomear eas
 Pronetothef
tincr owdedar eas
 Expensi
vetomai ntain(
frequentai
rti
metopups)
 Notsuit
ableforthedeafanddump
 Radiowavesmaycauseheal t
hproblems

24.St
atefouradvantagesofsendinginf
ormati
onthroughSMSoveral
ett
er
 Itisfaster
 Itcanpr ovi
dequickfeedback
 Itsmor erel
iabl
e/sendercanknowifthemessageisdel
i
ver
edornot
 It’
sacheapmeansofcommuni cati
on
 Identit
yofthesenderisreveal
ed
 Themessagecanbesav edforfut
ureref
erence

25.Out
li
nef
ourcircumstancesunderwhi chatraderwil
lusee-
mai
ltosendmessages
 Whenmessagei ssendur gentl
y
 Whensav i
ngoncost s
 Whenimmedi atefeedbackisrequi
red
 Whenmessagei sdet ai
led
 Wherethemessagei stobesendt omanypeopl e
 Wherethereisneedforstorageforfut
urerefer
ence

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 77
 i
sabokemi
cah@gmai
l.
com

26.Gi
vefouradvantagesofdownwar dcommunicati
oninanor
gani
zat
ion
 Facil
it
atestraini
ngofjuniors
 Importantwhenev al
uatingbusinessper
formance
 Necessarywhendel egatingduti
es
 Helpsinsolvinganyproblemsf aci
ngworkers
 Helpsininspiri
ngandmot i
vati
ngjuni
ors

27.Expl
ainfiv ebenefit
st hatmayoccurt oapersonwhousese- mail
asaf
orm of
communi cation
 Itfasterinsendingmessaget hussav i
ngtime
 Itall
owsf orimmedi atefeedback
 Iti
sr elati
velycheapandonecanaf f
ord
 Informat i
onobt ainedcanbesav edforfutureref
erence
 Itmakesi tpossibletocommuni catewithpersonsfaraway
 Onecangetamessaget hatcont ai
nphot os/di
agrams
 Possi bletoforwar dinf
ormat i
ont ootherpeople
 Itreducesont heuseofpaper s

28.Expl
ainfi
vefactorstoconsiderwhenchoosingmeansofcommuni cati
on
 Speed–chooset hemosturgent
 Cost–chooset hecheapest
 Conf i
denti
ali
ty
 Distance-det er
mi nedbythedistancebet
weenthesenderandtherecei
ver
 Ev i
dence–i ncaseoffutureref
erencewrit
tencommunicat
ioni
st hebest
 Reliabil
i
ty
 Desi r
edimpression

29.Explainfi
veshort
comingsofinter
netservices
 I nformati
onmaynotbesecur e–si ncepeoplenoti
ntendedt omayaccessi
t.
 I nformati
oncanbedivert
edbycompet it
ors–whoknowt hepassword
 Comput ersmaybeinvadedbycomput ervi
rust
hatwilli
nterf
erewit
hcomputer
programs
 Coul dbeusedtotr
ansmitharmf uli
nformati
onegterr
orism ,dr
ugsandpornogr
aphy
 I tmaybesl owortaki
nglongt i
met oaccessinf
ormationsincecomputer
shastogo
throughamassi nf
ormation
 Oneneedst obecomput erl
it
erate

30.Hi
ghl
ightfi
vebenefi
tsthatmaybeenj oyedbyabusi
nessorgani
zati
onthatengagesi
n
e-
commerceinhertradi
ngactivi
ti
es
 Facil
it
atesaccesstolargemarket
 Largeorsmallbusinesscantransactbusi
nesswi
thoutdi
scr
iminat
ion
 Iti
saf astwayofdoingbusiness

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 78
 isabokemi cah@gmail
.com
 I
treducespaperworkasmanydeal sareonl
i
ne
 Servi
cesoncostofsendingreceiv
ingandstori
ngbusi
nessinf
ormationischeap
 Onecanaccessotherbusinessinformati
onfr
om thei
nter
netenhancingtherunni
ng
ofthebusi
ness

31.
Stat
efouressent
ial
component
sforcommuni
cat
iont
otakepl
ace
 Thesender
 Thechannel
 Themessage
 Ther ecei
ver

32.
.Li
stf
ourformsofcommuni
cat
ion
 Verbal/
oral
 Wr i
tt
en
 Audio-v
isual
 Audio
 Visual

33.Stat
efourci
rcumstancesunderwhichver
balcommuni
cat
ionmaybepr
efer
redt
o
wri
ttencommunicati
oninabusinessenter
pri
se

 Wher
econf i
denti
ali
tyi
srequi
red
 Wher
ei mmediatefeedbacki
srequi
red
 Wher
espeedi snecessar
y
 Whenitiseasi
ertoconvi
nce/per

34.St
ateanyfourcurr
enttrendsi
ncommuni
cat
ioni
nKeny
atoday
 Incr
easeinuseofcalli
ngcards
 Useofmobi lephones
 Useofemai l
 Useofi nter
net
 Useofintranet
 Useofcy bercabl
es

35.Explai
nfi
veposi
ti
veef
fect
sofi
ntr
oduci
ngmobi
l
ephonesi
ncommuni
cat
ioni
ndust
ry
i
nKeny a.

 Fast
ercommuni cati
on
 Canbeusedt or emit/tr
ansferofmoney
 Cansendwr i
ttenmessages
 Theyarepor t
able
 Accessi
blefor24hrs/ continuous
 Youcanaccessi nternetfrom anywher
e
 Youcanusef oralterati
on

36.
Expl
ainf
ivef
act
orswhi
chmayhi
nderef
fect
ivecommuni
cat
ion

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 79
 i
sabokemi cah@gmai l.
com
 Lackofcommonl anguagef orbothsenderandt hereceiver
 Languagebar r
ier-whichr eceivermaynotf ullyunder stand
 Wideagegapbet weent her ecei
v er
sandsender
 Poort iming-whenonemaynotber eadyt or eceivethemessage
 Useofi ncorrect/inappr opr i
atemeans- l
eadingt odist
or t
ionoft hemessage
 Negat iveat ti
tudes- ofoneoft het wocommuni cat
ionpar ti
es
 Sev eralmessagespassedt hroughf ew oronechannel
 Poorl i
steningski lls-
oneoft hepar t
iesfail
ingt olist
enpr operly
 Badweat her-meansbei ngusedi saffect
edbybadweat her
 Differencei nsoci alstatusoft hecommuni cat ingparties-andar enotconsi dered
toeachot herposi ti
ons
 Unav ail
abi l
it
y/ ineffectivei nfr
astructuree.g.landl ines/opt i
ccabl ef orcheap
i
nter netconnect ions
 Distracti
onbynoi se,li
ghtsmel letc
 Wr ongmedi um-f orexampl eonemaynotconv eyaconf i
dent ialmessageov erthe
tel
ephoneef fectively
 Unf amili
arnon- verbalsi gns–useoff aci
alexpr essi
ons, gest uresandnoddingt hati
s
notf amiliartooneoft hepar tymaymakecommuni cationi neffecti
ve.

37.Explainanyf i
vebenef i
tst hatmayaccr uet oanor gani
zationthatuseseffecti
ve
communi cation
 Bet terPer formance–Goods&obj ectiveswi l
lbeknownhencewor kerswi l
lwork
towar dsachi evi
ngt hem.
 Ef fi
ciency–Wor kersar eabl etoincreasepr oducti
vit
ywhencommuni cation
i
appr opriate.
 Bet termanagement-Thei nfor
mat ionwi l
lbeusedf orbetterpl
anning/cont r
ol.
(Easydeci sionmaki ng) .
 Pr operuseofr esour ces–Thusr edeemi ngt i
meandef f
ortwastage.
 I mprov edcust omerr elations–Thef i
rm wil
lbeabl etoestabli
shcustomerneeds
/eli
mi nati
ngcust omerdi ssatisf
action.
 Coor dinati
on–I rrespect i
v eofdistance/ wouldthusenhanci ngteamwor k.

38.
Outl
inefi
vedi
sadv
antagesofsi
rensasaf
orm ofcommuni
cat
iont
hati
spopul
arwi
th
ambul
ancesandt
hepoli
ce

 Maybedi ffi
cultt
ointer
pretint
heabsenceofwr it
tenorspokenword
 Mayr equir
eadditi
onalorspeci
ali
zedskil
lsofcompr ehensi
onandint
erpr
etat
ion
 Expensivewayofcommuni cat
ionasitneedssomeski ll
s
 Thereisnof eedback
 Li
mi t
edcov erageasitserv
essmal laudi
encewhoar eaccessi
ble
 Meaningofsomesy mbolsmaynotbeunder stood

39.Di
scussfi
veadvant
agesofmobi l
ephonesincommuni
cat
ion
 I
tisport
abl
ehenceconv enient
 Hasshortmessageservi
ces
 Canbeusedforotherpurposese.g.cal
cul
ator
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 80
 isabokemicah@gmail
.com
 Canbeusedanywherewhenthereisnet
work
 Aff
ordabl
e/cheap
 Canbeusedforst
rongi
nformati
on

40.Expl
ainf iveel ement sofef fect i
vecommuni cation
 Sender–Thi sist hesour ceoft hemessage.
 Message- Thi sist heinfor mat i
ont obecommuni cat ed.
 Channel -Thi si sthemedi um/ meanst obeusedi nconv ey i
ngt he
message/ inf ormat ion
 Encodi ng-Thi sist hepr ocessoff or ming/ gener atingt hemessage.
 Decodi ng–Thi sist hepr ocessofi nterpreti
ngt hemessagesor ecei
ved.
 Recei v er/Reci pient–Thepar t
y/per sont owhom t hemessagei ssent.
 Feedback–Thi sist herecei ver’
sr eact i
on/ r
esponset ot hemessage.
 Cl ari
ty-Themessageshoul dnotbev ague/ ambi guous.
 Pr ecision/ conci seness–byav oidingunnecessar ydet ail
s.
 Pr epar edness-sendershoul dcaref ull
yt hinkt hrough/ plant hemessagebef or
e
sendingi t.
 Accur acy /Cor rectness–Messageshoul dbef actual /errorf r
ee
 Ti meliness/ propert iming–messageshoul dbepr esent edatt he
ri
ght/appr opr i
atetime.
 Compl etenessoft hemessage-shoul dcont ainal lt her elevantfacts/det
ail
s.
 At tentivenessoft her ecipient-ther eceiv ershoul dl istencar ef
ullytobekeent ot
he
message.
 Posi tiveat titude-sender /receivershoul dhav eduer egar df oreachot her
.
 Pr opermedi a/ meansi nter m ofchoi ceandf unct ionality.

41.a)Expl
ainf
ivemeansofwr
it
tencommuni
cat
ion. (
10mar
ks)

 Let
ter
s–af
orm ofwr
it
tencommuni
cat
ion;
busi
ness,
off
ici
al/
for
mal
,non-
for
malet
c

 Tel
egrams-isameansofcommuni cati
onprovidedbyt hepostoff
ice,t
hesender
obt
ainsthet
elegr
am for
mf r
om thepostoff
iceandfil
lsthemessageoni ti
ncapit
al
l
ett
ersandhanditov
ertothepostof
ficeemployeesatthecounter
.

 Tel
ex-i sameansofcommunicati
onusedtosendshortordet
ail
edmessages
qui
cklybyuseofa tel
epr
int
er.Theservi
ceisprov
ided byt
hepostoff
iceon
appl
icat
ion.

 Facsi
mile(Fax)-i
nvolvestr
ansmissi
onofinf
ormat
iont
hroughaf
axmachi
ne.Bot
h
thesenderandthereceiv
ermusthaveafaxmachi
ne.

 Memorandum (Memo)-i spr

int
edinfor
mat
ionfori
nter
nalmessageswithi
nan
or
gani
zati
on.Itisnormall
yused t
o passi
nfor
mati
on bet
ween depar
tment
sor
of
fi
cesinanorgani
zat
ion.

 Not
ice-i
susedtoinf
orm agr
ouporthepubli
caboutpastcurr
entorf
utur
eevent
s.It
i
susuall
ybr
iefandtothepoi
nt.I
tcanbeplacedonwalls,i
npubli
cpl
aces,ontr
ees,

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 81
 i
sabokemicah@gmai
l.
com
i
nnewspaper
soronnot
iceboar
ds.

 Repor
ts -ar e stat
ements/wit
hinr ecor
ds of fi
ndi
ngs recommendat
ions and
concl
usionofaninvest
igati
on/r
esearch.Arepor
tisusual
l
ysenttosomeonewho
hasaskedfori
tforaspecif
icpurpose.

 Cir
cul
ars-aremanycopiesofasingl
elet
teraddr
essedt
over
ymanypeopl
ewhen
themessagei
ntendedf
oreachi
sthesame.

 Agenda-isanout
li
neoft
heit
emst obediscussedi
nameet i
ng.Itisusuall
y
cont
ainedi
nanoti
cetoameet
ingsenti
nadvancetoallt
hepart
ici
pant
soft he
meeti
ng.

 Mi
nut
es-ar
erecor
dsoft
hepr
oceedi
ngsofameet
ing.

42.Expl ai
nf i
veSer vicest hatfaci li
tatecommuni cation.

Post alserv i
ce–Del iveri
ngr egi stered, expressandor dinar ymai lthr
oughpost al
corpor ation.

Busi nessr eplyservice–wher ebusi nesspeopl egivet heircust omer sal
readyst amped
envelopest ousewhenr eplyi
ngt oletters.

Cour ierservices–pr ov i
dedbypr iv
at eindividualsoror gani zationsbydel i
veri
ngparcels,
document sorl et
tersusi ngf astmeansoft r
anspor t
.

Franki ng–whencust omer s/ organizat i
onsar eal l
owedbypost alcorporati
ontousea
fr
anki ngmachi net oaf fixpost agest ampi mpr essiononl etters.

PostRest ante–ser vicepr ovidedt ov isitorswhomaynothav ef i
xedaddress.

Tel ephoneser v
ices–pr ovidedbyf ir
msegAi rt
el,Safar i
com, telkometcforaf ee.

Br oadcast ingser vi
cesi eradioandt elevisi
onser vices.

Pr i
nt ingmedi aservices–wr itt
encommuni cationt opassi nformat i
onienewspaper s,
magazi neset c

43.Yourschool i
ntendst opl aceanor derwi thEl imuCompanyl imi t
edf orthesuppl
yof
someurgentlyr equiredl aboratoryequi pment .Expl ainfi
vereasonswhyi twoul dbe
advi
sablefortheschool touseemai linsteadoft elephonewhenpl acingtheorder.(
10
marks)

Emailsprov i
deev idencef orusei ncaseofadi sput e

Emailmessagesar emor econf identi
alhenceabl etomaintainsecr ets/i
nformati
oncan‘
t
gettounauthorizedper sons.

Messagesar erecei vedwi thoutdistortioni.e.isreliabl
e.

Iti
saffordablet osendmessagesv i
aemai l.

Messagescanbest or edforf ut
ureref erence.

Emailscanbesentt osever alpeopleatonce.

Itcanprovidedet ailedandcompl exinf ormationsuchast ables,statist
icsandgraphs.

44.Explai
nanyfiv
ebenefit
sthatmayaccr
uetoabusi
nessor
gani
zat
ionwhi
chusee-
mai
l
tocommuni cat
e. (10mar
ks)
Savesonthecostofsendi
ng/recei
vi
ngi
nfor
mat
ion.
Reducespaperwork.
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 82
 isabokemi cah@gmail.
com

Savesont hecostofstori
nginfor
mat ion

Iti
sfast.

Faci
li
tatesacesstoalargernumberofr ecipi
ent
s

Onecansendmessagest hatcertai
nphot ogr
aphanddiagrams.

Thereisevidenceofcommuni cat
ion.

Iti
spossibletofor
wardtheinformationtootherbusi
nessmen

45.Explainanyfi
velimit
ationsofadv erti
singgoodsinnewspaper s.(10marks)
Notal
lpotenti
alcustomersar eabletoreadnewspaper s
Thenewspapersmaybewr i
tt
eni nalanguageormedi um thati
snotf amil
i
artomany
customers
I
tisexpensi
vetobuynewspaper sandmanypeopl ecannotaf ford.
I
tisexpensi
vetoadv er
ti
seusi ngnewspaperasonei ncursextr
acost .
Newspapersarenotablet odiscri
minatebetweent hei nt
endedgr oupandothers
Newspapersmaynotr eachal lpart
soft hecountr
y.
Newspapershaveashor tli
feandt hereforeeasi
l
ydi scarded

TRANSPORT.
St
atef
ourci
rcumst
ancesunderwhi chabusinessmanwoul dchooset otranspor
tgoodsbyai
r?
 Wheregoodsareofhighvaluetoj
ustifyhighfr
eightcosts
 Wheregoodsareprof
itabl
eandsor equireshortter
mt ranspor
tat
ion
 Wheresecur
it
yisnecessary

 Wher
eot
heral
ter
nat
ivemeansoft
ranspor
tar
enotav
ail
abl
e

 Wher
egoodsar
eur
gent
lyneeded

1. Out
li
nef
ourr
easonswhyaschooli
nKisumumaypref
ertot
ranspor
tit
ssixt
yst
udent
s
toamusi
cfest
ival
inNai
robi
bytrai
nrat
hert
hanbybus. (
4mks).

 Tr
avelbyt
rai
nisr
elat
ivel
ycheapert
hatt
rav
elbybus

 I
tismor
ecomf
ort
abl
etot
rav
elbyt
rai
nov
erl
ongdi
stancest
hanbybus

 Tr
aveli
smor
erel
i
abl
efor
m oft
rav
elt
hanbus

 Tr
avelbyt
rai
nhasconv
eni
entf
eat
uresascat
eri
ngandt
oil
etf
aci
l
iti
es

2.Giv
efi
vereasonswhyamanuf
act
uri
ngf
ir
m woul
dbel
ocat
edi
nanar
eawel
lser
vedby
goodr
oadnetwork. (
4mks)
.

 Tof
aci
l
iti
eseasydel
i
ver
yofr
awmat
eri
als

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 83
 i
sabokemi
cah@gmail
.com
 Toeasewor
ker
smov
ementtoandfr
om wor
k

 Tof
aci
l
itat
emov
ementoff
ini
shedgoods

 Togai
neasyaccesst
oauxi
l
iar
yser
vicesl
i
kebanks,
postof
fi
cee.
t.
c

 r
educedcostoft
ranspor
t

Stat
e4measur
est
hathav
ebeenputi
npl
acebyt
hegov
ernmentt
oensur
ethesaf
etyof
passenger
s
 Remov
alofunr
oadwor
thyv
ehi
cleswhi
chmaycauseacci
dent
s
 I
nst
all
ati
onofbumpst
oreducespeed
 heav
ypenal
ti
esonmot
ori
stwhodi
sobeyt
raf
fi
crul
es
 maki
ngsur
ethatpassenger
svehi
clehav
esaf
etybel
tst
omi
nimi
zecasual
ti
es
 ensur
ingt
hatPSVhav
espeedgov
ernment
stol
i
mitt
hespeed
 r
est
ri
cti
onont
rav
ell
i
nghour
stoensur
edr
iver
shav
eampl
eti
met
orest
 al
lthePSVsar
eoper
ati
ngunderaSACCO

3.Out
li
nef
ourl
i
mit
ati
onsofcont
ainer
izat
ion. (
4mks)

 Cont
ainer
sar
eexpensi
veandt
hisi
ncr
easest
hecostoft
ranspor
ti
nggoods

 Cont
ri
but
est
ounempl
oymentsi
ncecont
ainer
sar
ecapi
tali
ntensi
ve.

 Notsui
tabl
efort
ranspor
ti
ngsmal
lquant
it
ies

 Requi
resspeci
alhandl
i
ngequi
pmentwhi
chmaybeexpensi
ve

 Maynotbesui
tabl
eforgoodswi
thi
rr
egul
arshapes

4. St
atef
ourr
easonswhyr
oadt
ranspor
tispopul
ari
nKeny
a (
4mks)
.

 Av
ail
abl
einmostpar
tsoft
hecount
ry

 Fl
exi
bil
i
tyt
ovar
iet
yofv
ehi
cles

 Fl
exi
bil
i
tyofr
out
es

 Fl
exi
bleov
ershor
tdi
stances

 Fl
exi
bil
i
tyi
nschedul
es

5. St
atef
ourway
sinwhi
cht
henat
ureofgoodswoul
dinf
luencet
hechoi
ceoft
ranspor
t.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 84
 i
sabokemicah@gmail
.com
 I
fgoodsar
eper
ishabl
eaf astandappr
opr
iat
emeansi
srequi
red

 I
fgoodsar
efr
agi
l
e,asmoot
hmeansoft
ranspor
tisr
equi
red

 I
fgoodsar
ehi
ghl
yval
ued,
asaf
eandsecur
emeansi
srequi
red

 I
fgoodsar
eur
gent
lyr
equi
red,
afast
ermeansi
sused

 I
fgoodsar
ebul
kyanappr
opr
iat
emeanswi
l
lbeused

6. Out
li
nefourreasonswhyat r
anspor
terofgoodsf
rom Mombassat
oNai
robi
mayprefer
rai
ltr
anspor
ttor oadt
ranspor
t. (
4mks)
.

 Tr
anspor
tbyr
aili
scheapert
hanr
oadt
ranspor
t

 Wher
egoodst
obet
ranspor
tedar
ebul
ky

 Rai
ltr
anspor
ttendt
ohav
eregul
art
imeschedul
e

 Wher
egoodsar
eur
gent
lyr
equi
red,
afast
ermeansi
sused

 I
fgoodsar
ebul
kyanappr
opr
iat
emeanswi
l
lbeused

7.St
atet
heuni
tofcar
ri
agef
oreachoft
hef
oll
owi
ngmodesoft
ranspor
t.(
5mks)

Modeoft
ranspor
t Uni
tsofcar
ri
age

i
. Por
tage Humanbei
ngs

i
i
. Sea shi
ps

i
i
i. Road v
ehi
cles

i
v. Car
tage car
ts

v
. Ai
r ai
rpl
anes

8. l
i
stf
ourway
sinwhi
cht
ranspor
tpr
omot
esgr
owt
hoft
rade. (
4mks)

 Assi
sti
nthedi
str
ibut
ionoff
ini
shedgoods

 Ai
dsi
nthet
ranspor
tofl
abourt
othei
ndust
ri
es

 Mov
ement(
transpor
t)ofr
awmat
eri
alst
othei
ndust
ri
es

 Cr
eat
eut
il
it
yofpl
aceandt
imeoft
hegoods

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 85
 isabokemi
cah@gmai
l.
com
 Faci
l
itat
esf
ast
erexchanges.

9.Gi
ve4di
sadv
ant
agesofr
ail
wayt
ranspor
tinKeny
a. (
4mks)

 Notf
lexi
bleast
rai
nsf
oll
owast
ri
ctt
imet
abl
e

 Notal
lar
easar
eser
vedbyr
ail
wayl
i
nes

 Tr
ainsar
eexpensi
vet
oacqui
reandmai
ntai
n

 Notsui
tabl
efort
ranspor
ti
ngur
gent
lyr
equi
redgoods

10.Li
st4di
sadv
ant
agesofusi
ngcont
ainer
stot
ranspor
tgoods. (
4mks)

 Cont
ainer
sar
eexpensi
veandt
hisi
ncr
easest
hecostoft
ranspor
ti
nggoods

 Notsui
tabl
efort
ranspor
ti
ngsmal
lquant
it
ies

 Requi
resspeci
alhandl
i
ngequi
pmentwhi
chmaybeexpensi
ve

 Maynotbesui
tabl
eforgoodswi
thi
rr
egul
arshapes

 Cont
ri
but
est
ounempl
oymentduet
ouseofmachi
ness

11.
Out
li
ne4di
sadv
ant
agesofi
nlandwat
ert
ranspor
t (
4mks)

 Sl
owandunsui
tabl
efort
ranspor
ti
ngur
gentgoods

 Doesnotal
l
owuseofl
argev
essel
s

 Of
tenaf
fect
edbywat
erweeds

 I
tsi
nfl
exi
blei
.eboat
scanonl
ytr
avelonwat
erwi
thi
nthel
ake

FORMOREHI
GHSCHOOLRESOURCESCONTACT MRI
SABOKE0714497530

12.
List4adv
ant
agesofusi
ngcont
ainer
stot
ranspor
tgoods

 Reducet
hef
tofgoods

 Reducedamageofgoods

 Sav
est
imesi
ncel
oadi
ngandof
fl
oadi
ngofgoodsi
sbyuseofmachi
nes

 I
nsur
ancer
atesar
elowbecauseofenhancedsecur
it
y1

 Speci
alcont
ainer
scanbemadet
ocar
ryspeci
algoods

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 86
 i
sabokemicah@gmai
l.
com
13.
Stat
efourmer
it
sofmar
inetr
ansport

 Handl
esbul
kygoods

 Thewayi
ssmoot
hhencecomf
ort
abl
e

 Lesspr
onet
oacci
dent
scompar
edt
oot
hermeans

 Sui
tabl
eforl
ongdi
stancet
rav
ell
i
ng

14.
Outl
ine4benef
it
sthatcanber
eal
i
zedbyr
educi
ngt
henumberof14seat
ermat
atusi
n
fav
ourofbuses

 Reducednumberofacci
dent
s

 Reducedf
uelconsumpt
ion

 Reducedcongest
ion

 Reducedl
evelofpol
l
uti
on

 Easysuper
visi
on/
cont
rolbypol
i
ce

 Reducedcostoft
rav
eli
ng

15.
Out l
inef
ourf
act
orsf
ort
hei
ncr
easei
ntheuseofmat
atusasameansofpassenger
transpor
t

Oneofthefl
agshippr oj
ectsbyt heKeny anGover
nmenti
sLAPSSETandStandardGauge
Rai
lway(SGR).Outlinefourbenef i
tsofthenewRail
wayl
inet
otheKenyaneconomy.
(4marks)
 Mor eempl oymentoppor tunit
ies
 Fastermov ementofgoods/ people
 Gov ernmentr evenue
 Tour i
sm wi l
li
ncr ease
 Mor egoods/ cargowi l
lbetranspor
ted
 Reduct i
onofcongest i
ononKeny anroads
 Openupr emot ear eas

16.
Out
li
nef
ourchar
act
eri
sti
csofagoodt
ranspor
tsy
stem

 I
tshoul
dbecostef
fect
ivet
otheuser
s

 I
tshoul
dber
eli
abl
e

 Shoul
dbecomf
ort
abl
etopassenger
s

 I
tshoul
dof
fersaf
etyt
othegoodsandpassenger
s

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 87
 i
sabokemicah@gmai
l.
com
17.
Stat
efourpr
e-r
equi
sit
esoft
ranspor
t

 Way

 Ter
minal

 Met
hodofpr
opul
sion

 Uni
tofcar
ri
age

18.
Highl
i
ghtf
ourf
eat
uresoft
ramps

 Theydonotoper
ateonaf
ixedr
out
e

 Theydonotf
oll
owaf
ixedt
imet
abl
e

 Thei
rchar
gesar
efl
exi
ble

 Theyar
eownedbyi
ndi
vi
dual
s

19.
Highl
ightfourwaysi
nwhicht
hegov
ernmentofKeny
acanuset
oeaset
raf
fi
c
congesti
oni nur
banareas

 Useofbusesi
nst
eadofmi
nibuses

 Wi
deni
ngofr
oads/
const
ruct
ionofdualcar
ri
ageway
s

 Under
groundt
rai
ns

 Const
ruct
ionoff
ly-
over
s

 I
ncr
easi
ngt
hepar
cki
ngf
ee

 Rest
ri
cti
ngpr
ivat
evehi
clesf
rom t
heCBD

20.
Hi ghl
i
ghtfourci
rcumst
ancesunderwhi
chonewi
l
lchooseai
rtr
anspor
trat
hert
hanr
oad
transpor
t

 Fast
ert
hanr
oad

 Nothi
nder
edbyphy
sicalbar
ri
ers

 Rel
ati
vel
yfl
exi
ble

 Saf
eint
ranspor
ti
ngv
aluabl
eit
emssuchasgol
d

 Fr
eeway

 Conv
eni
entov
erl
ongdi
stance
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 88
 isabokemicah@gmail
.com
 Sui
tabl
efort
ranspor
tingperi
shableandur
gentl
yrequi
redgoods.

21.
Out l
inef
ourreasonst
hataccountf
ort
hepopul
ari
tyofhumanpor
ter
agemeansof
transpor
tinKenya

 Fl
exi
blesi
ncei
thasnof
ixedt
imet
abl
e

 Cheapcompar
edt
oot
hermeans

 Readi
l
yav
ail
abl
ewhenr
equi
red

 Conv
eni
entov
ershor
tdi
stances

 Compl
ement
sot
hermeansoft
ranspor
t

22.
Stat
efourr
easonsf
ort
hepopul
aruseofmot
orcy
clesi
ntr
anspor
t

 Cheapt
oacqui
re

 Lowmai
ntenancecost

 Char
ger
elat
ivel
ylowerf
are

 Doesnotr
equi
respeci
alski
l
ls

 Rel
ati
vel
yfast
ercompar
edt
ocar
tageandhumanpor
ter
age.

23.
Stat
efourmoder
ntr
endsi
ntr
anspor
t

 Pi
pel
i
neandcont
ainer
izat
ion

 El
ect
ri
ctr
ainsar
erepl
aci
ngdi
eselengi
ne

 Dual
-car
ri
ager
oadsar
ebei
ngdev
eloped

 Under
groundt
unnel
sfort
rai
ns

 Dev
elopmentofpl
aneswi
thl
argercar
ryi
ngcapaci
ty

 Useofbi
cycl
escommonl
yknownasbodaboda

PAPER2

1. Explai
nf i
vereasonst
hatmayaccountf
orcont
inueduseofhandcar
tsasamodeof
transportinKenya.

 I
tisr
elat
ivel
ycheapcompar
edt
oot
hermodes

 Requi
resl
i
ttl
ecapi
talascar
tsar
echeap
Nov
els,
Updat
edCPA,
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imar
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es 0705525657 89
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com
 Doesnotr
equi
respeci
alski
ll
s

 Doesnotnecessar
il
yrequi
rear
oad

 Doesnotr
equi
respeci
alt
ermi
nus

 Sui
tabl
eov
ershor
tdi
stance

 Appr
opr
iat
einr
emot
ear
easwher
eot
hermeansar
enotav
ail
abl
e

 Compl
i
ment
sot
hermeansoft
ranspor
t

 Readi
l
yav
ail
abl
eforhi
re

2.Theoi
lpi
pel
i
nehasr
ecent
lybeenext
endedf
rom Nai
robi
towest
ernKeny
a.

Expl
ainf
ivebenef
it
sthatmaybeaccount
edt
othecount
ryf
rom t
heext
ensi
on.
(10mks)
.

 Largerv ol
umeofoi lwillbet ransport
edwithi
ngi venti
me.Roadacci dent
sshouldbemi ni
mized
astherewoul dbef ewert anker sontheroad.
 Roaddamagewi llbemi ni
mi zedduet ofewertankers
 Delays/shortageoff ueltoWest er
nKeny awil
lber educedaspi pel
inegiveconti
nuessupply.
 Envir
onment alpoll
utionf r
om heav ytankerswillbeminimized
 Pil
ferageoffuelwillber educedasi tisdif
fi
cul
tt ostealoi
lf r
om thepipel
ine.
 Traveli
ngbetweenNai robiandWest ernKenyat akesshorterti
meduet oreducedcongesti
on
ofther oad
 Reducedcost softranspor tationoil

3.Di
scussf
ivef
act
orst
hathav
ehi
nder
edt
heexpansi
onofr
ail
wayt
ranspor
tinKeny
a.

 Highcost–rai
l
wayconst r
uct
ionandmaint
enanceisexpensi
vev
ent
urer
equi
ri
ng
hugeinvest
ment.Suchhugei
nvestment
sareunaff
ordabl
e.

 Competi
ti
onfr
om ot
hermodesther
eexi
stsar
elat
ivel
ywi
der
oadnet
wor
kwhi
ch
mayleadtol
owdemandforrai
l
way.

 Poormanagement–t
her
ail
wayt
ranspor
tsect
orhasbeenpoor
lyr
unr
esul
ti
ngi
n
hugel
osses.

 Lackofmoderntechnol
ogy–themoderntechnol
ogyt
hati
srequi
redf
oran
eff
ici
entr
ail
waysystem i
sabsenti
nKenya

 Li
tt
legov
ernmentcommit
ment -t
hegover
nmenthascommitedit
sresour
ces
moreonotherf
ormsoft
ransportatt
heexpenseofr
ail
wayt
ranspor
t

 Lackofflexi
bil
i
ty–i
nabi
l
ityt
orenderdoort
odoorser
vicesmakesi
tless
att
ract
ive.

 Speed–i t
srel
ati
vel
ylowspeedr
enderi
tinappropr
iat
eforcar
ryi
nggood.
Nov
els,
Updat
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ghSchool&Pri
mar yNotes 0705525657 90
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cah@gmai
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com

4.Expl
aint
headv
ant
agesofpi
pel
i
neasamodeoft
ranspor
ti
ngoi
lpr
oduct
s.(
12mks)
.

 Pi
pel
i
nei
senv
ironment
alf
ri
endl
yasi
tcont
ri
but
est
olesspol
l
uti
on.

 I
tisaf
astmodeoft
ranspor
tasi
tisnotaf
fect
edbyweat
herorcongest
ion

 I
tisl
esspr
onet
oacci
dent
sandhencemayr
educer
oadacci
dent
scausedby
t
anker
s

 Lowmai
ntenancecost
sduet
oeasei
nmai
ntai
ningt
hewayanduni
tofcar
ri
age

 Cont
inuossuppl
yoft
hepr
oducti
nlar
gev
olumes

 Pipel
inesmaybeconst
ruct
edi
nar
easwher
eiti
sdi
ff
icul
ttoconst
ructr
oadsor
rai
lwayli
nes

 I
tisl
aboursav
ingasi
trequi
resmi
nimalmanpower

 Pi
pel
i
net
ranspor
tmaynotbeaf
fect
edbyadv
erseweat
hercondi
ti
ons

 I
tischeapmeansov
erl
ongdi
stanceorov
erwi
der
egi
on

5. Out
li
nef
ivef
act
orst
hatshoul
dbeconsi
der
edwhenchoosi
ngameansoft
ranspor
t.

 Costoft
hemeans

 Di
stancet
obecov
ered

 Speedoft
hemeans

 Av
ail
abi
l
ityoft
hemeans

 Nat
ureoft
hegoods

 Saf
etyandsecur
it
y

6. Expl
ainsi
xadv
ant
agesofcont
ainer
izat
ionasamodeoft
ranspor
t.
(10mks)

 Mi
nimi
zest
her
isksofl
ossordamageofgoodsascont
ainer
s

 Cont
ainer
sar
efi
tt
edwi
thdev
iceswhi
chmakemov
ementandhandl
i
ngeasy

 Sav
est
imeandl
abouri
nloadi
ngandof
f-
loadi
ngduet
ouseofmachi
nes

 Speci
alcont
ainer
sar
eav
ail
abl
eforgoodsr
equi
ri
ngspeci
alat
tent
ion

 I
nsur
ancecost
sar
erel
ati
vel
ylowasr
isksar
eless

 Cont
ainer
sseal
edatsour
cei
npr
esenceofcust
omsof
fi
cial
smaynotbeopened
Nov
els,
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com
unt
ilt
heyr
eacht
hei
rdesti
nat
ions.

 Spaceissav
edwhencontai
ner
sar
eusedasopposedt
owheni
ndi
vi
duali
tems
arepackedi
nthecar
ri
er.

7.Expl
ainf
ivef
act
orst
hatl
i
mit
/di
scour
aget
heuseofpi
pel
i
neasamodeoft
ranspor
tina
count
ry(
10mks)

 Al
eakagenotdet
ect
edi
ngoodt
imemayl
eadt
ohi
ghl
osses

 I
nit
ialconst
ruct
ioncosti
sver
yhi
gh

 Acci
dent
all
eakagesmayl
eadt
oenv
ironment
alpol
l
uti
on

 I
tisuni
dir
ect
ionalt
hati
s,t
rav
elsonl
yinonedi
rect
ion.

 I
tcant
ranspor
tonl
yonepr
oductatat
ime.

 Costofmonit
ori
ngthepipel
i
necouldbehi
ghasitmaynecessi
tat
etheuseof
ai
rcr
aftsduet
ofrequentmovementtomoni
tort
hesaf
ety.

 Gener
atecompar
ati
vel
yfewerj
oboppor
tuni
ti
esasi
tiscapi
tali
ntensi
ve/
requi
res
l
it
tl
elabour
.

8.Expl
ainf
ivemeasurethegovernmentcant
aket
oimpr
ovet
heef
fi
ciencyoft
her
oad
tr
anspor
tsyst
em inthecountr
y(10mks)

 I
mpr ov
ingther
oadnet
wor
ksy
stem byt
armacki
ngmor
eroadspar
ti
cul
arl
yin
r
uralareas.

 Ensur
ingt
hatvehicl
esdonotexceedt
hei
rloadcapaci
ti
esast
hiscauses
damagestoroads.

 Ensur
ingt
hatt
her
eisst
ri
ctadher
encet
otr
aff
icl
aws

 I
mpr
ovi
ngr
ailt
ranspor
tsoast
oeasecongest
iononr
oads

 Under
taki
ngregularmai
ntenanceofr
oadst
oensur
ethatt
heyar
eingood
condi
ti
onatallt
ime.

 Ensuri
ngthatonl
ytr
ainedandl
i
censedpeopl
ear
eal
l
owedt
odr
ivev
ehi
cleson
theroads

 Establ
i
shmentofby
-passr
oadsy
stemsi
ntheout
ski
rt
sofur
bancent
resdoes
nothavet
opassthr
ough.

9.Expl
ainf
iveci
rcumst
ancesunderwhi
chat
raderwoul
dpr
efert
otr
anspor
tgoodsby

Nov
els,
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com
t
rai
n

 Whenthegoodsar ebulky/
heav y
 Whenthegoodsneedspeci alattent
ion/
handli
ng
 Wher
et hedistancei
slong
 Wher
et her
ei sneedforsecur
ityforthegoods.

10.
Expl
ainfi
veadv
antagesofpi
peli
netr
ansport (
10mks)
 Iti
senvi
ronmental
l
yfr
iendl
ysincei
tisfr
eeofnoi
seandsmoke

 Pi
pel
i
nesal
l
owscont
inuousf
lowofgoodsbei
ngt
ranspor
ted

 Pipel
i
net
ranspor
thel
pst
oreduceacci
dent
sthatmaybecausedbyt
anker
son
roads

 I
tisl
aboursav
ingasi
trequi
resmi
nimalmanpower

 Lowmai
ntenancecost
sduet
oeasei
nmai
ntai
ningt
hewayanduni
tofcar
ri
age

 I
tischeapmeansoverl
ongdi
stanceorov
erwi
der
egi
onbecausepr
essur
eor
f
orceofgrav
ityi
sused.

11.
Explainf
iver
easonst
hatmayaccountf
ort
hecont
inueduseofhandcar
tsasamodeof
transpor
tinKenya (10mks)

 I
tisr
elat
ivel
ycheapcompar
edt
oot
hermodes

 Requi
resl
i
ttl
ecapi
talascar
tsar
echeap

 Doesnotr
equi
respeci
alski
l
ls

 Doesnotnecessar
il
yrequi
rear
oad

 Doesnotr
equi
respeci
alt
ermi
nus

 Sui
tabl
eov
ershor
tdi
stance

 Appr
opr
iat
einr
emot
ear
easwher
eot
hermeansar
enotav
ail
abl
e

 Compl
i
ment
sot
hermeansoft
ranspor
t

 Readi
l
yav
ail
abl
eforhi
re

12.
Expl
ainfi
veway
sinwhichagoodt
ranspor
tsy
stem f
aci
l
itat
est
hedev
elopmentof
manufact
uri
ngi
ndust
ri
es (10mks)

 Rawmat
eri
alsar
esuppl
i
edt
othef
ir
m hencecont
inuospr
oduct
ion.

 Fi
nishedgoodsar
edel
i
ver
edt
othemar
ketl
eadi
ngt
ofast
erpr
oduct
ion/
reduced

Nov
els,
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com
st
oragecost
s

 Worker
scaneasi
l
ymov
einandoutoft
hef
act
oryl
eadi
ngt
oef
fi
ciencyi
n
oper
ati
on

 Reducescostoft
ranspor
tleadi
ngt
olowpr
icesofgoods

 St
abi
l
izespr
icesofgoodsduet
ocont
inuossuppl
y

 Enhanci
ngspeci
ali
zat
ionasgoodspr
oducedi
ndi
ff
erentf
ir
msar
eexchanged.

13.
Expl
ainfivecircumst ancesunderwhi chatraderwoul dprefertot ranspor tgoodsbyr ai
l
 Incaset hegoodst r
ansportedarebulky
 Wher egoodst r
ansportedareheavy
 Incasegoodsr equiresecurit
ybecausecasesoft heftandacci dentaremi nimalinr
ail
way
transpor t
 Incaseofl argequant i
ti
esbecausei thaslargecar r
yingcapaci ty
 Railwayt ranspor ti
scheapandeconomi caloverlongdi stances
 Railway sstat i
onshav ewarehousestost or
egoodsbef oret heyar ecollectedbyowner s
 Incaset het r
aderwant stomakeadv anceplannedf ormov ementofgoodsbecauset rai
n
foll
owr egul artimetabl
es
 Railwayst at i
onshav emanycar gohandlingfacil
i
tiesforloadi ngandof floadingofgoods
hencesav est i
me.
 Railwayaut hori
tieshavetheirownmot orvehicl
edeliveryser vicesf r
om theirrail
way
stations, t
hishelpsinconnect i
ngthetraderstoothert erminus

14.Outl
inefi
vef
actorst
hatmayl
i
mitt
heuseofcont
ainer
sasamet
hodoft
ranspor
ti
nggoodsi
na
dev
elopi
ngcountr
y. (10marks)

 Special i
zedequi pmentwhi char eexpensi ve.Themet hodcallsforspeci alizedequipment
forhandl i
nggoodswhi char el acki ng/expensivet obuy /use/maintain.
 Organi zat i
onper sonnel /talents/ traini
ng/operational /managementski l
lsneededf orthe
met hodmaybel acking/trainingmaybeexpensi v e.
 Volumeofbusi nessmaynotbel argeenough/ war rantt heheavyi nvestment /v
olumeof
businessmaybel ow.
 Ini
ti
alcapi talneededf orthesy st em/ noteasilyav ailable/expensive.
 Themet hodr equi resre-degr adi ngofexi sti
ngpor ts/reconst r
ucti
ngpar twhi chisquit
e
expensi ve.
 Useofmedi um t echnologywhi chi slimit
ed/lacing/ notr eadil
yav ail
able/li
mi tedmedium
technol ogy( inadev elopingcount ry)whichmaysl owt herateofpr ocessi nggoods.
 Gener alr esistancest ochangebyst akeholders/inter ested/aff
ectedpar t
iesofpeopl e
general l
yr esistchange.
 Maynotbesui tablef orgoodswi t
hi r
regularshapes

15.
Expl
ainf
ivedi
sadv
ant
agesoft
ranspor
ti
nggoodsbywat
er

Nov
els,
Updat
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.com
 Seapi
rat
esandst
ormsmayoccurr
esul
ti
ngt ol
osses

 Notsui
tabl
efort
ranspor
ti
ngper
ishabl
eandur
gent
lyr
equi
redgoods

 I
tisexpensi
vet
oconst
ructandmai
ntai
nar
ti
fi
cialhar
bour
s

 Unf
avour
abl
eweat
hercondi
ti
onsmayaf
fectwat
ert
ranspor
t

 Seat
ranspor
tisnotaccessi
blet
olandl
ockedcount
ri
es

 Lackofl
oadi
ngandof
fl
oadi
ngf
aci
l
iti
esmayl
eadt
odel
ay

 Costofacqui
ri
ngandmai
ntai
ningshi
psi
shi
gh

16.
Discussfact orst hatshoul dbeconsi deredwhenchoosi nganappr opr i
atemeansof
transpor
t
 Cost–Thecostoft ranspor tshouldbeconsi der ed.Thecheapestmeansshoul d
bechosen
 Natur eofgoods–Forexampl eperi
shabl esgoodsr equir
eaf astmeans, simil
arl
y
heav yandbul kygoodsr equi r
esameansoft ranspor tconvenientf orsuchgoods
egtrains.
 Reli
abi li
ty–r eli
abili
tyr eferst oassur ancet hatt hegoodswi l
lreacht heint ended
destinat i
onatt her i
ghtt i
meandi nther ightf or m.Themeanschosenshoul d
ensur er eli
abilit
y.
 Urgency–Forgoodst hatar eur gentl
yr equi red, t
hef ast
estmeansav ail
abl e
shoul dbechosen.
 Secur i
ty–Themeanschosenshoul densur et hatthegoodsont r
ansi taresecur e
againstl osst hef torphy sicaldamages
 Distance–Somemeansoft ransportaresui tablef orlongdi stanceswhi leothers
aresui tablef orshor tdi stances.I fgoodsar et obet ranspor t
edf orl ongdi stances,
ai
rorr ailwayt ranspor twoul dbeappr opr i
ate.
 Availabilityofmeans–Themeansoft ranspor ttobesel ectedshoul dbebased
onitsav ailabili
ty.
 Fl
exi bil
ity–Wher ef l
exi bil
ityisr equi
redt hent hemeanst hatwoul dpr ovidesuch
shoul dbechosen.Forexampl eamat atui susual lymor ef l
exiblethanan
aeroplane.
 Termi nal s–Somemeansoft ransportmayhav et heirterminalsneart he
tr
anspor terthanot hers.I nt hiscase, thet ranspor t
ershoul dchooset hemeans
whoset er minalsar econv eni entlyaccessi ble.

17. Expl ai
n5f actor
sthathavel
edtoi ncr
easedusesofcont ai
ner
isati
on
˗Lowi nsurancepremiums-goodst r
ansportedundert
hismodeat tr
actcheapi
nsur
ance
premiumsduet oconsoli
dati
on
˗Securit
yofgoods-goodsar epr
otectedagainstl
ossbytheftascontainer
sar
eseal
ed
bytheexpor ter(
consigner
)
˗Safetyofgoods-goodsar eprot
ectedagainstdamages,breakagesandhandli
ngi
s

Nov
els,
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reduced
˗Lar gecar r
yingcapaci t
y/spaci ous-container
sar elargeinsi
zeandt hushol dmor e
goodsatat i
me
˗Speci alcontainers-specialgoodsar epackedinspeci alcontai
nerstomai ntainthei
r
standar ds
˗Economyofspace-duet ostockingcont ai
ner
soccupysmal lspaceonthet r
ucks,
trai
nsorshi ps
˗Adequat ehandlingfacil
iti
es-handl i
ngequipmentar eusedatt heportsandl oading
point smakei teasier
˗Cheap-car r
ylargequant i
ti
esusi ngthesamet ransportfeesont her
oads, raill
inesand
onwat er
˗Impr ovedpor tfacil
i
ties-por t
saut hori
ti
eshaveimpr ovedtheirportf
acil
i
tiest hatall
ow
quickof floadingandunl oadingatt he
termi nus
˗Inl
andcont ainerdepot-est abli
shmentoft hecontainerdepotatEmbakasihas
i
ncr easedt heuseofcont ai
ner i
zati
on

18.Expl ai
nfivefactorst hatmayl imittheuseofpi peli
neasamodeoft ransportina
country. (10mar ks)
Easyt arget
sf orsabot age.Theyusual lycoverl
ongdi stanceinremot eareasorj ungles.
Expensi veforsmal lquant i
ti
es.Itisnoteconomi caltotransportsmal lvolumesofi t
ems.
Suitableforli
quidsandgases.Cannott r
anspor
tonepr oductatat i
met hispreventsits
populari
ty
Highcost sofconst r
uct i
on-i
niti
alcostsinvol
vedi nconstructi
onar eusual l
yv eryhigh.
Heav ylossesofl eakages- l
eakagesal ongthepipelinemaybedi sastrousandcanl eadto
hugelossesifnoti dentifi
edqui ckl
y.
Requi r
equal i
fi
edper sonnelandmoder nequipment .Thisistohelpi ncont rol
li
ngand
monitori
ngmov ement .Thesear equite
expensive.
Env i
ronment aldegradat i
on.Incaseofl eakageitcanhar m mar ineli
feandpeopl e

WAREHOUSI
NG.
1.
Highl
i
ght4r
equirementsthatareneededforasmoothfunct
ioni
ngofawar
ehouse
 Appropri
ateequipment
 Appropri
atestaff
 Properrecor
dingsy stem
 Properbuil
dingdesign
 Appropri
atespecialfaci
li
ti
esegref
ri
ger
ator
s

3.St
ate4consequencesthatmayariseduetopoorar
rangementofgoodsi
na
warehouse
 Possi bl
elossofgoodsthr
oughbreakage
 Underut i
li
zati
onofspace

Nov
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 Thef
tofgoods(
pil
ferage)
 Cont
aminati
onofgoods
 Ti
mei sl
ostl
ooki
ngf orgoodsinawar
ehouse.

4.Mr.Jumaisawhol esalerinBungomat ownwhoownsherownwar ehouse.Out

li
ne4
benef
it
sthatwil
laccruet oherfrom herwarehouse
 Rel
ievedofstoragecost sincur
redbyhiri
ngstorage
 Hecanuset hewar ehouseasl ongasisnecessar y
 Heisunderdirectcontrolofthewarehouse
 Heensuressecur i
tyofgoodsf rom t
heftorphysicaldamage.
 Hecanhandl ethegoodst hewayhewant s.

5.Out
li
ne4way sinwhichconsumer sarelikelytosufferi
nsi t
uati
onswherether
eisno
war
ehousing
 Consumer swillsuff
erfr
om theprobl em ofunstableandhighpri
ces
 Theconsumer swillsuf
ferf
rom theshor tageofgoodsast herewil
lbeno
conti
nuoussupply
 Consumer swillnothaveacontinuoussuppl yofseasonalproducedgoods
 Consumer smaygetdamagesast her ewil
lbenopr otect
ionfr
om bad
weather
 Consumer smaysuf f
erfr
om thepr oblem ofbuyingpoorquali
tygoods
 Consumer smaynotgetgoodst hatar ewellpackedorblended

6.St
ate4promi nentfeaturesofretai
lerswar ehouse
 Mai nlyownedbyl argescaleretai
lers
 Stockf astmov i
ngconsumergoods
 Theyhol dr eservestocktoensur edemandi sconst
ant
lymet
 Desi gnedtosui teownersspeci fi
cations
 Owner shav eful
lcontroloverwar ehouseoper
ati
on.

7.St
ate4r
olesthecust
omsof f
ici
alsi
nabondedwarehouse
 Veri
fyi
ngtheorigi
nofgoods
 Checki
ngthequalit
yofgoodst oavoi
ddumping
 Coll
ecti
ngcustomsdut y
 Checki
ngthelegali
tyofthegoods
 Checki
ngthequant i
tyofimport
s

8.Gi
ve4reasonsthatmakeswar ehousingav i
talai
dtotrade
 I
tensur essteadyflowofgoods
 Ensuresstabili
tyi
npr icesofgoods
 War ehousi
ngensur escont inuouspr oducti
on
 Goodsst oredinwar ehousesi mprov esinquali
ty
 War ehousi
ngencour agesspeci al
i
zat i
on
 Buyerscani nspectgoodsbef oretheycanbuyt hem
 Goodsst oredinwar ehousescanbepr eparedf
orsale

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 97
 i
sabokemi
cah@gmai
l.
com

St
atef
ourf
eaturesofpubl i
cwar ehouses (
4mks)
 Ownedbyi ndivi
duals
 Rentspacetot r
aders
 Goodsstoredtempor ary
 Opentoallmember softhepubl i
c
 Maybesituatedneartermi nal
s
 Goodscanbegr aded/packed
 Goodsareinsuredagai nstloss

St
ate4r easonswhyapr oducerwoul dnotneedal otofwar ehousi
ngf
aci
l
iti
es.

Ifthebusinessislocatedneart heconsumer s.

Wher ethegoodspr oducedar ehighlyperi
shable.

Wher ehisscaleofpr oductionislow.

Wher ethereareintermediariestotaket heroleofstorage.

Wher ethedemandofgoodsi shi
ghert hanwhati sproduced.

Ifdeali
ngwi t
hfastmov inggoods.

Wher egoodsar epr oducedonor der

9.Out
li
ne4benefit
sthatmayber eceivedbyabusi nesst
hatusesi
tsownwar
ehouse
 Businessmaintai
nscont inuoussupplyofgoods
 Goodsar ekeptsafelyegf r
om theft
 Costsincurr
edinrentingspacer educed
 Itwi
llcontr
oltheoper at
ionsofthewar ehouse
 Warehousecanbet ail
oredtomeeti tsneeds
 Iti
spossibletochoosedesi redlocat
ion

10.
Highl
i
ghtanyfourtrendsinwar
ehousi
ng
 Useofspeciali
zedhandl
ingmachines
 Useofstorageracks
 Envi
ronmentalpoll
uti
on
 Warehousedesignstoall
owmov ementf
orf
orkl
i
ftsandcr
anes.

11.
Ment
ion4featur
esofabondedwar ehouse
 Goodscanbest oredunti
ldutyispaid
 Goodscanber e-expor
tedwhileonbond
 Goodscanbesol dwhileonbond
 Releasewarr
antisrequir
edforgoodst obereleased
 Goodscanbepr eparedforsal
e(repackaged,
br andedorbl
ended)

12. Out
li
nef
ourf
eat
uresofabondedwar
ehouse (
4mar
ks)

 Goodscanbeboundedt i
lldut
yi spaid
 Goodsarer
eleasedonproductionofr el
easewar
rant
 Char
gesaremadeonal lgoodsst oredinthewar
ehouse
 Goodscanbesoldwhil
eunderbond

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 98
 isabokemi cah@gmai l
.com
 Goodscanbeinspect
ed, re-parked,bl
ended,br
anded,
label
edet
cwhi
l
eint
hewar
ehousi
ng
 Goodscanbere-exportedwhi l
eunderbond
 Theyar
eguardedbycust omsof f
ici
als
 Theyar
eownedbyt hegov er
nment
 Theyar
eusedforimpor ted/expor t
edgoods

13.
Expl
ainfi
vebenef i
tsofabondedwar ehousetot hegov er
nment
 Inspect ionofgoods-nat ureofgoodst hatent erandl eavethecount r
yare
inspect edt oensur eharmf ulgoodsdonot` enterintot hecountry.
 Qualityofgoods–I nspectiondonebyt hegov ernmentmai nt
ainst he
standar dsofgoodsent eri
ngt hecountryandensur esgoodqual it
y
 Quant ityofgoods–Gov ernmentcanmoni t
orandcont r
olamountofgoods
enteringt hecount ry.
 Sourceofr evenue–Cust omsdut ycol
lectedbygov er nmentactsasr ev
enue
forpromot i
ngot hersectorsoft heeconomy .
 Document ati
onandr egulation–Document sregar dingst or
ageofgoodsar e
verif
iedandgov ernmentcaneasi lyenforceallregulat i
onsregarding
impor tationofgoods.
 Thegov ernmenti sabletocheckoni ll
egalgoodsent er i
ngthecount r
y.

14.
Expl
ainf
iveway
sinwhi
chwar
ehousi
ngf
aci
l
itat
est
rade.

 Steady /cont inuousflow/ suppl yofgoods.War ehousingassi st

sinensur i
ngast eadyflowof
goodsi nt ot hemar ket
 Stablepr ices–War ehousi ngensur est hatt her eisnoexcessorshor t
ageandt hi sresult
sin
stablepr ices
Impr ove/mai ntai
nqual it
yofgoods- war ehousi ngpr ovidesst or
agef acil
i
ties
thatmai ntain/improv esi nthequal i
tyunt iltheyar edemanded
 Tomeetunexpect eddemand- unexpect eddemandcanbemetduet otheexi stenceof
warehousi nge. gintimeofdi saster/calami ty
Inspect ionofgoods- war ehousingenabl est raderst oinspectgoodsbef or etheybuyt hem
 Clearanceofgoods( pay mentofcust oms/ dut ies)-
war ehousingfaci
lit
atescl earanceof
i
mpor t
edgoodsf ort raders( i
nspectionofgoodsbyt hegov ernment)
 Storageofgoods- war ehousi ngenabl est het radert ostoregoodsashel ooksf orthemar ket
orduet omasspr oduct i
onoral lowscont inuouspr oduction
 Preparat i
onf orsale-goodsar eblended/ packed/ graded/sorted/br
andedwhi leint he
warehouse
 Protectionf r om damage/ keepinggoodsi ngoodcondi t
ion-warehousingpr otectsgoods
from thef t/seasonal

15.
Expl
ainfi
vebenef
it
ssmal lscal
ebusinessderi
vefrom t
hepresenceofawar ehouse
inanarea
 Ensur
esstabl
epricesforgoodsandservicesduetosteadysuppl
yofgoods
 Ensur
essteadysupplyofgoodsast hegoodsarestor
edwheni nplentyand
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 99
 i
sabokemi cah@gmai l
.com
rel
easedwhenneeded.
 All
owspr eparati
onofgoodsf orsal
esuchasbr andi
ngandgr adi
ng
 Protect
sgoodsf rom damageandadv erseweathercondit
ions
 Enablesthetradertoinspectgoodsbefor et
heycanbuy
 I
mpr ovesthequal i
tyofgoodssuchaswi neandtobacco
 Traderisabletomeetunexpect eddemandsinthemar ket
.

16.Highli
ghtf
iveway sinwhi chconsumer sbenefi
tfrom war
ehousi ngf acil
i
ties
pr
ovidedbyawhol esaler
 Consumersmaybenef itwhenquali
tyofgoodsisimpr ovedt hrough
packi
ng/blending
 Consumersar elikelytogetgoodssuppliedtothem whent heyneedt hem.
 Consumersmaygetav ari
etyofgoodsstoredbywholesal ersintheir
warehouses
 Consumersar elikelytogetgoodsthatarenotspoil
t/damaged.
 Consumersar elikelytobuygoodsi nconveni
entquant i
ti
es.
 Warehousingfacili
tiesareli
kelyt
ost abi
l
izepri
cestherebybenef i
tsthe
consumer.

17.
Statefourf uncti
onsofwar ehousing
 St orage
 Pr eparinggoodf orsale
 St abil
izespr i
ces
 Pr otectionofgoods/ securi
ty
 Hol dsgoodsupunt i
lcustom dutyispaidonimportedgoods
15. Underwhatci rcumstancescant helocati
onofawar ehousebeseent
obe
inappropriate
 Wheni tisnotaccessibl
e
 Wheni t’
splacedawayf rom theterminalorsour
ceofproduce
 Wheni tleadstohighoperationalcosts
 Wheni tdoesnothav etherighthandli
ngequipmentsandstaff
s

16. St at
ef ourr easonswhyi tissuitabletolocateabondedwar ehouseatthepoi
ntof
entr
yofacount ry
 Foreasyr e-expor ti
ng.
 Foreasyi nspect ionofi mpor ts.
 Topr eventt heent ryofhar mf ulgoods./dangerousgoods.
 Topr eventexi twi t
houtl egalauthorit
y.
 Foreasycol l
ectionofcust om dut i
es.
17. Out l
inef ourci r
cumst ancest hatwouldhi nderawar ehousef or
mf uncti
oni
ng
eff
ectively
 Ifitslocationi snotsui tableforcl i
ent/i
fiti
snotaccessi bl
et ousers
 Ifitcannotst oredi f
ferenttypesofgoods
 Ifitdoesn’ thav ecommuni cationnetwor k
 Ifitisnotwel lequippedt ohandl egoods/ i
tlacksappropri
atefacil
it
ies

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 100
 i
sabokemi cah@gmail.
com
 I
fiti
snotspaciousenought oall
oweasymov ement
 I
fitdoesn’
thavewelltr
ainedpersonnel
 I
fitdoesn’
tkeepproperrecordsofmov ementofgoods
 I
fitdoesn’
toff
ernecessaryprotecti
ontogoodsinit

18. St
atefourr
easonswhygoodsmaydel ayinawarehouse
 I
fthei
mporteri
snotawar eofthear
rivalofgoods
 I
fthei
mporteri
sstil
ll
ookingformoneyt osett
ledues
 I
fgoodsareyettobeinspect
ed
 I
fthei
mporteri
sstil
ll
ookingformarket

Hi
ghl
i
ghtfourwaysi
nwhichawar ehouseisuseful
toat r
ader. (
4mar
ks)
 stor
ageofgoodsunti
ltheyar eneeded
 Prot
ecti
onofgoodsfr
om v agar i
esofweather.
 Prot
ecti
onofgoodsfr
om pi l
ferage
 Provi
desroom f
orbul
kbr eaking,packi
ngandblending

Out
li
nef
ourci
rcumst
ancesunderwhi
chal
ocalpr
oducerwouldbui
l
dhi
sownwar
ehouse.
(4mks)

 Wher
ethepr
oducerneedst
oexer
cisef
ullcont
roloft
hewar
ehouse.

 Wher
ethepr
oducerwi
shest
osav
eoncost
sincur
redi
nhi
ri
ngapubl
i
cwar
ehouse.

 Wher
etheproducerneedst
odesi
gnt
hewar
ehouset
osui
tthegoodshe/
shedeal
s
wi
th/
ownspecif
icat
ions.

 Wher
ethepr
oducerdoesnotwantt
obesubj
ect
edt
olongpr
ocedur
est
hatar
efound
i
npubl
icwar
ehouses.

 Wheretheproduceri
sinvol
vedi
npr
oduct
ionofseasonalgoodsandmayneedt
o
st
orethem t
il
ldemandari
ses.

 Wher
ethepr
oducerpr
oducesgoodscont
inuousl
yonal
argescal
e.

19. Statefourfuncti
onsoft hepurchasesdepar
tmentofawar
ehouse
 Receiptofrequisi
ti
ons
 Purchasingallgoodsfortheor gani
zat
ion
 Maintaini
ngthesuppliersrecords
 Managi nganef f
ecti
vepur chasesmanpower
 Dispatchi
nggoodst ov ari
ousdepartments

20. St
atefouradvantagesofwarehousi
ngt oaret
ail
er
 Cont
inuoussupplyofgoodsforhiscustomers
 St
ori
nggoodswhosedemandi sseasonal
 Goodsarestoredawait
ingcoll
ecti
on

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 101
 i
sabokemicah@gmai l.
com
 Goodscanbepr epar
edforsalethr
oughbr eakingbulk,
sort
ing,
packing,
andblendi
ng
 Protect
inggodsf r
om physi
caldamage, pi
l
f erageandadversewealt
hcondit
ion
 Reli
evesretai
ler
softheneedt ocarr
ylargest ocksandtheycanalwaysreor
der,
thesehelpsthem tostar
tbusi
nesswi t
houtt oomuchcapi t
al

21.
LoboTr adersintendst oconsul tawar ehouse.Expl ainf i
vemeasur est hatLobo
woul dtaket oensur esmoot hf unct ioni ngoft hewar ehouse.
 Ensur ethatt hewar ehousei slocat edi naconv enient/accessi blepl ace
 Ensur ethatt hewar ehousei spr ov i
dedwi thadequat emat erialshandl i
ng
equipment /machi nes/workingmat erials/tools
 Ensur ethatt hewar ehousei sspaci ousenought oal l
oweasymov ement /accommodat ionof
goods/per sonnel
 Loboshoul densur ethatthewar ehousei sfi
t t
edwi t
hsaf etyequi pmentf orthe
facil
it
y /
per sonnel/goods/ ensur enecessar ypr ecaut i
oni st aken
 Ensur ethatt hewar ehousehasst or agef acilit
iesf orhol dingdi ff
er enttypesofgoods
 Ensur eadequat esecur i
tyforthegoodst obest ored/agai nstdamageofgoods/ personnel
/faci
lit
yi .
esecur i
tyofthear eat oensur egoodsar enotst olen
 Ensur ethatt hewar ehousehasqual if
iedper sonnel
 Ensur ethatt hereisapr opersy st em ofi nventor ycont rol/goodr ecor dingsy stem andrecordi
ng
system f orstock
 Ensur ethatt helaiddownl egalpr ocedur esar ef oll
owed
 Ensur ethatt herear eproperbui ldings/ structur esappr opr iatetot het y
peofgoodst obestored
 Ensur ethatt here’
sef fi
cienttranspor tsy stem/ av ail
abili
tyoft r
anspor tt omov egoodsi nand
outoft hewar ehouse
 Toensur ether eiscommuni cat i
onsy st em bet weent hewar ehouseandcl ientsorbywayof
exampl es

22.
Out
li
nef
ourbenef
it
sthatconsumer
sgetf
rom awar
ehousi
ng (
4mar
ks)

 Consumersareassur
edofast eadysuppl
yofgoods
 Theyareassur
edofqualit
ygoods
 Theyareassur
edofsteadysupplyofgoods
 Theyareassur
edofstablepr
ices
 Theygetgoodsinconveni
entquanti
ti
es
 Consumersareablet
ochooset heri
ghtgoodswhentheyar
ebr
aided,
blendedet
c
 Consumersareablet
ogetav ari
etyofgoods

23.Out
li
nef
ourf
act
orst
hatat
raderwoul
dconsi
deri
nlocat
ingawar
ehouse.
(4mar
ks)

 Thelocat
ionshouldbeideali
nter
msofaccessi
bil
i
ty
 Avai
labi
li
tyofsuit
abl
eland
 Nearthepointofsal
emar ket
 Nearadequatesecur
ity
 Governmentpoli
cy

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 102
 i
sabokemi
cah@gmai
l.
com
 Costofbui
l
ding

24.St
atef
ouradv
ant
agesofpubl
i
cwar
ehouset
oret
ail
ers. (
4mar
ks)

 Retail
erscanr entspacetost orethei
rgoods
 Retail
ershaveapl acetobr eak
 Goodscansel lst
oredwhi l
einpubl i
cwarehouse
 Goodsar einsuredagainstdamagecausedbyf i
re,
thef
tet
c.
 Protect
sagai nstadverseweat hercondi
ti
ons
 Ensurecontinuoussuppl yofgood

25.Out
li
nef
ourbenef
it
stoabusi
nesst
hatusesi
tsownwar
ehouse. (
4mar
ks)

 Thebusinessmai ntai
nsacont inuoussupplyofgoods
 Customersar eretainedast heyaresur eofget
tingt
hegoodsondemand
 Goodsaresaf ef r
om t hef
t
 Savi
ngsincreasesf ornotr enti
ngstoragefaci
li
ti
es
 Goodscanbepr ocessedi nthewar ehouse
 Canbetailoredtosui tonesspeci fi
cations
 Canbeconv eni
ent l
ylocated
 Moresecur efrontdamage
 Spaceisguar anteed

26.
Outli
necondi
ti
onsunderwhichawar ehousemaybeconsider
edtooper
ati
ng
eff
ici
ent
ly/ Expl
ainf
iveessent
ialqual
it
iesofagoodwarehouse

 Thewar ehouseshoul dbeconv enientlylocated/t ypeofwar ehouse

 Thewar ehouseshoul dbemanagedbyqual if
iedper sonnel
 Oper ationalpr ocedur esandgui delinesshoul dbei nplace
 secur i
tysy stemsshoul dbei npl acee. gcct valarms, fi
reexti
nguishers.
 shoul dhav esui tablebui l
dings/wel ldesigned
 appr opriateequi pmente. gcol drooms
 compl iancewi tht hel aw-Awar ehouseshoul dbeoper atedaccordingtothe
requirement soft hel aw
 Adequat espace-Awar ehouseshoul dbespaci ousenought oalloweasymov ement
andaccommodat i
onofgoodsandper sonnel.
 Pr operr ecordkeepi ng-Ther eshoul dbeapr operr ecordingsyst
em inawar ehouse
toensur ethatal lmov ementofgoodsi sproper l
ymoni tored.
 Goodt ranspor tsy stem-Awar ehouseshoul dbel i
nkedwi thagoodandappr opr
iate
transpor tnetwor ktof acili
tatemov ementofgoodsi nandoutoft hewarehouse.
 Goodcommuni cat i
onnet work-Awar ehouseshoul dhav eagoodcommuni cat
ion
net workt oorsy stem f oreasycont actwi t
hi t
scl i
entssuppl i
ers.
 Appr opriat
est af f–War ehousest affshoul dbewel lt
rainedandef f
ici
entforproper
managementandef ficientfunct ioningofawar ehouse.
 Pr operbui l
dingdesi gn-Awar ehouseshoul dbedesi gnedi nawayt hatit
accommodat est hei ntendedgoods.
Nov
els,
Updat
edCPA,
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&Pr
imar
yNot
es 0705525657 103
 i
sabokemi
cah@gmai
l.
com

Explainfi
veway sofi mpr ov i
ngt heeff
ici
encyofawar ehouse
Ensuri
ngt hatthereispr operadequat ehandl i
ngequi pment-tohandl egoodssaf elyand
easily
Ensuri
ngt hatthest affi
swel lt
rai
nedandmot ivated-soast oenhancet heirperformance
Toensuret hatlegalrequi r
ement saref oll
owedt oav oi
dconfli
ctwithlawenf orcers
Provi
sionofsuf fi
cientloadi ng/offl
oadi ngar eas-t oavoidcongestionanddel ays
Ensurethereisadequat esecur i
ty-t
oav oi
dt heftofgoodsandsaf etyofwor kers
Ensureproperuseofspace-bypr operar rangementofgoods
Ensurethereispr opersy stem ofinv
ent orycont roltomonitorstockmov ementst oavoi
d
theft
Ensurethereissaf etyequipment/per sonnel-t ot akecareofpests,fir
e, wat
erleaksto
safeguardgoodsf r
om damage

I
NSURANCE.
1.Descr
ibet
hepr
ocedur
est
hatshoul
dbef
oll
owedwhent
aki
ngani
nsur
ancepol
i
cy. (
10mks)

 Fi
l
li
ngapr
oposalf
orm

 Aper soni ntendi ngtotakeani nsurancepol i

cyfil
l
si napr oposalf ormf r
om t he
i
nsur ancecompany .Thef ormi sdesi gnedi nsuchawayt hati tguidestheappl i
cant
ont hedet ailsrequired.
 Deter mi
ningt hepr emium t obepai d
 oncet hecompanyr ecei
v est heformi tst udiesthef actsgiv eninandmakesdeci sion
onwhet hert oacceptt ocov ertherisk.Ift heapplicati
oni saccept edthei nsurer
calculat
est heamountofpr emium tochar get heapplicant.
 Pay mentoft hef ir
stpremi um
 Afterthei nsur ancecompanyhasaccept edt ocoverther i
skandpr emiumsar e
calculat
edt hei nsuredpay st hefir
stpr emi um.
 Issuingofcov ernot e(Binder )
 Thei nsuredi si ssuedwithacov ernot eaf terpayi
ngt hef i
rstpr emium.The
documentser v esasev i
dencet hattheper sont owhom i tisi ssuedisinsuredand
woul dbecompensat edincaseofal ossar isingfr
om t heinsur edrisk.
 Issuingoft hepol i
cy
 Thepol icyist heact ualdocumentofcont ractbetweent hei nsurerandthei nsur
ed.It
containst ermsandcondi tionsoft hei nsur ancecov er.Thedocumenti sissued
withinthirtyday sandoncei ssueditr eplacest hecov ernot e.

3.
Expl
ainfourwaysi
nwhi
cht
hei
nsur
ancei
ndust
rycont
ri
but
est
othedev
elopmentofKeny
a’s
economy. (10mks)

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 104
 i
sabokemi
cah@gmai
l.
com
 Cont i
nui tyofbusi ness
o Ev erybusi nessent er prisei sexposedt oav ar i
etyofr iskse. g.f i
re, thef t
e.t.c.Theoccur renceofsuchr isksof tenr esul tinf i
nanci allossest ot he
busi ness.I nsur ancepr ov idesadequat epr ot ect i
onagai nstsuchr isksi nt hat,
i
fat r
adersuf fer sl ossesasar esul tofi nsur edr isk, she/ hei scompensat ed,
thushe/ shei sabl et ocont inuewi t
hbusi nessoper at ions.
 Investmentpr ojects
o I nsur anceenabl esi nv est or st oi nvesti npr of itabl ey etr i
skybusi nesspr ojects
thatwoul dot her wi seav oi ded.
o Notal lt hemoneyr eceiv edaspr emi ums( byt hei nsur ancecompani es)is
usedupf orcompensat i
ont ot hosewhohav ebeenexposedt or iskand
suf feredl osses.Ther estoft hemoneyi si nv estedi not herbusi nessest oearn
prof it
s.
 Creationofempl oy ment
o I nsur ancedoespr ov i
deempl oy mentoppor tuni tiest omember soft hepubl i
c.
 Gov ernmentpol icy
o Thepr of i
tsear nedar easour ceofr ev enuef ort hegov ernmenti .e.i nsur ance
compani esar epr ofit-maki ngor gani zat ionswhi chgener ater evenuet ot he
gov er nmentt hr oughpay ment soft axes
 Creditfaci lit
ies
o Thei nsur ancei ndust ryhav eal soest abl ishedcr editorl endi ngf aci l
itieswhi ch
thebusi nesscommuni tyusesbybor rowi ng.Loansar emadeav ailabl etothe
publ icf ordi ffer enti nvest mentpr oject si ndi fferentsect or soft heeconomy
andal sof orper sonalr equi r
ement s.
 Dev elopmentofi nfrast ruct ures
o Thei nsur ancei ndust rypl ay sacr ucialr ol ei nt hedev elopmentofur ban
faci l
iti
esi nmaj or t owns.Bot hr esi dent ialandof fi
cebui l
dingshav ebeen
dev elopedbyi nsur ancef i
r ms.Thef irmsal sopar ti
cipat ei ndev el opment
proj ectsi nt hear easwher et heyoper ate.Theycont r i
but et odev elopmentofa
regi onbyconst ruct ingandi nfrast r
uct uralf aci li
ties
 Lif
epol i
ciescanbeusedassecur i
tyf orl oansf rom ei thert hei nsur ancecompanyor
otherf i
nanci ali nstitutions.
 Prov i
sionofl i
feandgener alinsur ancepol iciesencour agesKeny anst opl anahead
fortheirdependant st her ebyr educi ngt henumberofneedyf utur est udent s.
 Losspr event ion- Thei nsur ancecompani esencour aget hei nsur ednott ocause
accident st huschannel ingt heuncl aimedr esour cesi nt otheeconomy .
 Rev enuet ot hegov ernment -incomesr ealisedi nt hei nsur ancei ndust rysuchas
profit
smadebycompani esandsal ar i
est oempl oy eesar esubj ectedt ot axat ion.
Thispr ov idesr ev enuet ot hegov ernment .
 Creatingconf idencei ni nv estor s–i nsur anceser vicescr eat esconf i
dencei n
i
nv estor swhoar eabl et oi nv esti nr i
skybutpr of i
t abl ear easi nt hattheyar eassur ed
ofcompensat i
oni ncaseoft her iskst akingpl ace.

4.Di
scussvar
iousinsur
ancepol
ici
es/
cir
cumstancesunderwhi
chani
nsur
ancecompanywoul
dnot
compensatethei
nsuredi
ntheeventoft
heloss. (
10mks)

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 105
 i
sabokemi cah@gmai l.
com
 Wheni nsuredhadnoi nsurablei nteresti
nt hepr oper l
ydestroyedashewi l
lnotsufferany
fi
nanciall
oss.
 Whent heinsureddi dnotdiscloseal ltherelevantf acts.
 Whent hepr opert
yhasbeendest royedbyanactofGod, ast heri
sksar enotinsur
edwhent he
l
osswascausedbyani nsurablee. g.actofGod/ earthquake.
 Whent hepol i
cywasnoti nf orceatt hetimeofl ossi nsur
edwhent heinsuredpurposely
causesthel oss.
 Whent heinsurancecompanyi sinsolvent,henceenabl etoitsfi
nancialobl
igati
on.Latecl
aim
whereinsuredf ai
lstoclaim withinst i
pulat
ionper iod.
 Improperprocedur eswheret hei nsuredfail
st ofollowl ai
ddownpr ocedurewhen cl ai
ming.

5.Di
scussvari
ousi
nsur
ancepol
i
ciest
hatt
heownerofasuper
mar
ketmayfi
ndi
tusef
ulf
ort
he
busi
ness. (
12mks)

 Theft/bur glary:toprotectt heownerf rom lossesthatmaybemadet hrought heft/

bur glar
y.
 Fi
del i
tyguar anteed:tocov erl ossessuf feredthroughwor ker’
sdishonesty
 Wor kman’ scompensat ion:t hi
sistoassi stt
hewor ker
swhomaybei nj
uredint hebusi ness.
 Fi
re:t ocompensat etheownerf orlossesar isi
ngf rom f
ir
e.
 Mot orv ehicle:tocov erbusi nessv ehiclesincaseofacci dent
 Medi calcov erpolicy
:insur ancewi llcompensat ef ormedicalclai
msoft heempl oyees.
 Personalacci dentcov er:insur esaccidentt otheowneroft hesuper marketinthecour seofhi
s
duty.
 Good/ cashont ransi
t:insur esagainstl ossesofgoods/ cashwhi leontransi
t
 Plat
esgl osspol icy:i
nsur esagai nstbr eakagescausedbycl osureofbusinesstempor ary.
 Spri
nkl erleakagepol i
cy :cov ersaccidentaldamagecausedbyacci dent
alleakages of
spri
nkl ers.

6.Expl
ainf
ourbenef
it
soft
he‘
pool
i
ngofr
isks’
toani
nsur
ancecompany
. (
8mks)

 Pooli
ngofrisksenabl
esani nsurancecompanyt ocreateacommonpooloff undsf r
om the
regul
arpremiumsfrom diff
erentcli
ents.
 I
tenablestheinsur
ancecompanyt ocompensat ethosewhosuf f
erl
osswhent heri
sksoccur .
 Theinsur
ancecompanyi sabl etospreadrisksoveral ar
genumberofinsuredpeople.
 Surpl
usfundscanbei nvestedin,f
orexampl egivi
ngoutl oansorbuyi
ngsharesinrealestat
es
 I
tenablestheinsur
ancecompanyt omeeti tsoperat
ingcost sbyusi
ngthepoolfunds.
 I
tenablestheinsur
ancecompanyt icalcul
atepremiumst obepaidbyeachclient
.

7.
Expl
ainthefactorsthatmaymakei tnecessaryforaninsurancecompanyre-
ensur
e.
 Val ueofthepr oper
ty–whent hevalueofpropertyisgreatsuchasashi
pasinglei
nsur
ance
companymayf i
nditdi
ff
icul
ttobeartheloss.
 Hi ghri
skofl oss–whenchancesofl ossthroughtheinsuredri
sksar
ehi
ghitbecomes
necessar
yt ore-i
nsure

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 106
 isabokemi
cah@gmai l
.com
 Numberofr i
skscovered–whent heinsur
ancecompanyhasi nsuredmanydiff
erentri
sks,i
t
wouldbet oocostlytocompensatemanycl ai
msatonce,hencetheneedforre-i
nsurance.
 Needt ospreadtherisks–whent heinsur
ancecompanywi shestoshar
eliabi
l
ityintheevent
ofamaj orlossoccurri
ng.
 Governmentpol i
cy–t hegov er
nmentmaymakei tal
egalrequir
ementforaninsurance
companyt ore-i
nsure.

8.
Expl
aint hemeani ngoft hef oll
owingt er
msasusedi ni nsurance (10mks)
i
)Uber ri
maef idei-Iti sapr i
ncipl
et hatr equiresaper sont akingoutinsurancecov ertodisclose
allmat er
ialfact srelatingt otheper sonorpr oper tybei nginsuredwi t
hhonest y.
i
i)Indemni ty-i t’sapr inciplethatst atesinsur ancecont ractputsonei nthef i
nancialposit
ion
he/ shewasj ustbef oret her i
skinsur edagai nstt ookpl ace.
i
ii
) Thir
dpar tymot orv ehicleinsurance–Thi spol icycov erslossescausedbyt hev ehi
cleto
otherpeopl e, otherv ehiclesandpr oper ty.
i
v)Cont r
ibution.–Thi spr inci
pleoper at
esi nasi t
uat i
onwher etheinsuredhast akenapl ace
witht woormor einsur ancecompani escov er i
ngt hesamer i
sk.Intheev entoflossallthe
i
nsur ancecompani eswoul dcontri
but epr opor t
ionat elyi
nor dertoindemni fytheinsured.
v)Subr ogation-Thi spr i
nciplestatest hatwhat everr emainsoft heproper t
yinsuredaf t
erthe
i
nsur edhasbeencompensat edbecomest hepr oper tyoft heinsur
er.

9.Di
scussfourcircumst ancesunderwhichani nsur
ancecont ractmaybet erminated. ( 8mks)
 Whent heinsuredhasnotact edutmostgoodf ait
handi sdiscov eredhencemaki ngt he
contr
actinvali
d.
 Whent heriskinsuredhasoccurredandcompensat ionpai dt hi
sbr inginganendt ot he
contr
act
 Onmat urit
yoft hecontract
,thi
ssignifyi
ngtheendoft hepol i
cyagr eement.
 Ift
heinsureddeci dedtodisconti
nuet hecont
r actmaki ngthecont ractnolongert enabl
e.
 Whenacour toflawor dert
erminati
onoft hecont r
actthi srender i
ngi twil
landv oid
 Whent heinsurancecompanyi sf i
nall
ywoundup
 Duetof ai
luretorev i
ewthecontractthisl
eadingt olapseofpol icy.
 Wheret heinsuredceasestohav einsurabl
eint er
estint heproper tyincasepr opertyissol
d.

11. Explainfi
veway
sinwhi
cht
hei
nsur
ancei
ndust
rypr
omot
esgr
owt
hofbusi
ness
enterpri
ses

 I
nsurancei ndust r
ymobi li
zessav i
ngswhi chthebusi
nesscommuni tyborrows
tostart/runandgi veloanst opoli
cyhawker sear
ninginterest
.
 I
tcreat esconf i
denceamongt hebusinesscommuni tywhi chenablesthem to
takeri
sks.
 Vari
ouspol i
ciesprovidedbyt heindustr
ycanbeusedassecur i
tyt
oobt ain
bankloansf orbusi nessuse.
 I
tprovidescompensat i
ontot hebusinesscommuni t
yi ntheeventof
occurrenceofi nsuredrisk.
 Theyinv estinrealestateswhi chcanbeusedbybusi nesscommuni ty
.
 Theyadv i
ce/informt hebusinesscommuni t
yonthemostconv eni
entpol i
cies
pert
ainingt oinsuranceoft hei
rbusinessthatcansuittheirpur
posesher eby
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 107
 i
sabokemi
cah@gmai
l.
com
at
tract
ingmor
ecust
omers.

12. Hi
ghl
ightfi
vecir
cumstancesunderwhichaninsur
ancecompanymayunder
taker
e-
i
nsur
ance
 Whenv al
ueofpropert
yisgreatandri
sktoohi
gh
 Tospr eadther
isk
 Ifiti
sthegovernmentpoli
cy
 Whent henumberofr i
skscov er
edaremany
 Whenchancesofr iskoccur
ringarehi
gh

13. Expl
ainfi
vebenef it
st hatcouldbeenj oy edbyaper sonwhodeci dest otakeoutan
endowment
 Policyholdercanuset hepol i
cyascol l
ateralsecur i
tytoobt ainloansorcr edit.
 Policyholderpar t
akes/sharesi nt hepr
ofitoft hecompanybyear ning
bonuses/ i
nterests
 Incaseofdeat hbef oremat urit
yt hebeneficiari
esofpolicyhol derareent it
led
topr of
it
s/bonus/ sum assur ed.
 Thepol i
cyhol derenjoyst hesum assur edi fheisalivebymat uri
tydat e.
 Policyholderisent i
tl
edt oasur rendervaluewher econtractistermi natedby
theassured.
 Itcanbeusedbyt hepol i
cyholderasaf orm ofsav i
ngsf orf ut
ureinv estment.
 Thepol i
cyhol derisablet odecideont hedur ati
on/t
imef rame/ mat urit
ydat e
thusenabl etof i
titi
nhi sfuturefinanci
alpl ans.

FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530

14. Lopezwhor ecentlycompl etedbui l
dingahousehasi nsureditagai nsttheri
skof
fi
re.Explainfi
veci rcumst ancest hatmaypr ev entherf r
om bei ngcompensat edi nthe
eventoflossoccur ri
ng
 Whent hei nsur edhadnoI nsur abl
eint erestinthepr opertydest r
oyedasshe
woul dnotsuf ferfinancialloss.
 Whenshedi dnotdi scloseal ltherelevantf actsoft aki
ngt hepolicy.
 I fthepolicywasnoti nf orceatnat uraldi sasterast herisksar enoti
nsur able
egear t
hquakes
 Whent hepr opertyisdest r
oy edbynat uraldisasterasr i
skar enotinsur able
 Whent hel ossoccur r
edduet owill
fulact i
onoft hei nsured.
 Whent hei nsur ancecompanyi sinsolventhenceunabl et omeeti tsfi
nanci al
obligat
ions.
 WhenLopezf oll
owsi mpr operpr ocedur eswhencl aimingcompensat ion
 Whenshef ail
edt oclaim compensat ionwi thinstipulat
edt ime.

15. Hi
ghl
i
ght4f act
orsthatmakeariskval
idforinsurance
 Parti
esinvol
vedmusthavelegalcapacity
(roundmind,notbankr
uptand18
yearsorabove)
 Insur
edandinsurermustacceptthetermsandcondi t
ionsofthecontr
act
.
 Theremustbepay ment(
premium)andaconsi der
ati
on(compensati
on)

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 108
 i
sabokemicah@gmai l
.com
 Thebusi
nessmustbeforalegalpur
pose(notpr
ohi
bit
edbyl
aw)

16. Hi
ghl
i
ghtfourfeat
uresofinsur ableri
sks
 Ri
sksmustbeacci dent al
 Theriskmustleadtoal ossthatismeasurablei
nmonetaryter
ms
 Theinsuredmusthav einsur abl
einter
est
 Therehastobel ar
genumberofsi mil
arr
isks
 Thev al
ueoftheinsuredi tem shoul
dbeeasilydet
ermi
ned.
 Possibi
li
tyoftheri
skt akingplacemustnotbenearcert
ainty
.

17. Li
stf
ourt
ypesofl
i
feAssur
ancepol
i
cies

 Term assurance
 Annuit
ies
 Stat
utory(NSSF,NHI
F,WCPS)
 Wholeli
fe
 Endowment

Gi
vefourreasonst hatmakei nsurancecompaniesdecl
inetoinsur
eact
sofnat
ure.4mks

thel
ossmayaf fectmanypeopl eatago

theval
ueoft helossmaynoteasi lybedeter
mined

thel
ossi sunpredictable

ther
emi ghtbev eryfewpeopl ewill
ingtobeinv
olv
edtof or
m apool

i
tmaynotbeeasyt odet er
minepr emiumstobepaid

thepossibi
li
tyoft heriskoccurr
ingiscert
ain

18. Hi
ghl
i
ght4f
act
orst
hatdet
ermi
net
heamountofpr
emi
umsi
nli
feassur
ance

 Ageofassured
 Occupati
onoftheassured
 Resi
denceoftheassured
 Healt
hstatusoft
heassured
 Theamountofsum assured
 Thelengt
hoftheinsur
ancecont
ract
.

19. Jumawhol esalersownedamot orvehi

cleval
uedatKshs.2,
000,000whi
cht hey
comprehensivelyinsur
edforKshs.1,600,
000.Thevehi
clewasinvol
vedinan
acci
dentandwr i
tt
enof f
.DeterminetheamountofmoneyJumawhol esaler
sshoul
d
expectt
ogetf rom thei
rinsurer

Compensat
ion=sum assur
ed/i
nsur
edpr
emi
um xl
oss
Actualv
alue

1,
600,
000x1,
600,
000=1,
600,
00
2,
000,
00

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 109
 i
sabokemi
cah@gmai
l.
com

20.Expl
ainf
ivechar
act
eri
sti
csofpr
oper
tyi
nsur
ance. (
10mar
ks)

 Pr
emium char
gedidsdependentonthedegreeofr
isk/
numberofr
isks/
v alueof
pr
opert
y-hi
gherpr
emium wil
lbepaidforri
sksofhi
ghdegree/
number/valueand
vi
cever
sa.

 Iti
sacontr
actofi
ndemnit
y–theownersoft
heinsur
edproper
tyis
compensat
ed/r
est
oredfort
helossoft
heproper
tyuponoccur
renceoft
her
isk.

 I
tisashor
tter
m cont
ract–Theinsur
ancecont
ractendsaf
teraspeci
fi
cperi
odof
t
imeusual
lyoneyear
/mustberenewedfort
hepoli
cytoconti
nuebei
nginfor
ce.

 Pol
icycannotbeassignedtothenextofkint
oanotheri
ndivi
dual
-theowneroft
he
pol
i
cycannott r
ansferitincaseofsale/
changeofownershi
pofproper
ty.

 Ithasnosurrenderval
ue-shoul
dthei
nsuredter
minat
et hepoli
cybef
oret
hecont
ract
expir
es,he/
shei snotent
it
ledtoanyr
efundfr
om theinsurer
.

 Theremustbeaninsurabl
eint
erestint
heproper
tytobeinsur
ed.Thei
nsuredmust
beinaposit
iontosuf
ferfi
nanci
allossi
ntheeventoftheri
skcover
edhappeni
ngin
ordert
oclai
m compensati
on.

21.
Expl ainthepr ocedur ef oll
owedwhenmaki ngani nsuranceclaim
 Not ifyi
ngt hei nsur er–i mmedi atelyt heriskinsuredagainstoccursthei nsured
shoul dnot ifyt heinsur er.
 Fill
ingacl aimf or
m –af t
ernotif
icationt heinsurerissuestheinsuredwi thanof f
ici
al
claimf or
mt obef il
led.Det ai
lsrelatedt otheoccur renceofther i
skar egiven.
 Invest i
gat i
onoft hecl aim -Onr ecei vingthef i
ll
edcl ai
mf ormtheinsur erlaunchesan
invest i
gationconcer ni
ngt hecauseofoccur renceoft herisk
 Prepar ationoft heassessmentr epor t–Oncei tisestabl
ishedthatthecl aimisv al
i
d,
insur ancecompanyusesassessor st opr eparear eportconcerni
ngt heext endofthe
losssuf f
er ed.
 Pay mentoft hecl aim –onr eceivi
ngt hereporttheinsurancecompanymakes
arrangement st opayt hei nsured.

22.
Discussanyf i
vet y
pesofmar inei nsurancepol i
ciestakenbyashi p
 Mar inehullpol
icy–Thi spol icycoverstheshipagai nstlossordamageasa
resultofrisksatthesea.Ri sksi ncl
udest orms,fir
e, col
lision
 Mar inecargopolicy–Thepol i
cycov erscargoagai nstlossordamagewhi le
beingt r
ansportedbytheshi p.
 Por tpol i
cy-Thi spoli
cycov ersaspeci fi
edper i
lwhent heshipisei
therbei
ng
l
oadedof fl
oadedorser viced.
 Voy agepol i
cy-cov er
st heshi porcar goonapar ti
cularj our
neyegship
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 110
 i
sabokemi cah@gmai l.com
tr
ansportingcargofrom theportofMombasat oDaressal aam
 Timepolicy–cov erslossesarisi
ngwi thinaspeci f
iedper
iodoftime.It
usual
lycov erst
heshi pit
self.
 Mixedpol i
cy–Thi scoversshipsagainstl osseswhi l
eonaspecifi
edv oy age
andspecif i
edti
me.
 Fl
eetpolicy–cov ersafleetofshipsagai nstlossesunderonepolicy.This
maybet hecaseespeci allywheretherear emanyshi psbelongi
ngt othe
sameor ganizat
ion.
 Composi tepoli
cy–Appl ieswheresev eralinsurancecompanieshav einsured
aparti
cularshipagainstthesamer isk.

23.
Expl
ainf
ivefactor sconsideredbyt heinsur
erwhendet
ermi
ningpr
emi
umst
obe
char
gedonapol icy
 Healthoft heper son
 Frequencyofoccur renceofrisks
 Extendofpr ev
iousl osses
 Residenceoft hei nsured
 Occupationoft heinsured
 Valueoft hepr opertyinsur
ed
 Ageoft heper sonort hepr
oper t
yinquest
ion
 Periodtobecov er
edbyt hepolicy

24.
Discussthecharacter
ist
icsofGeneralinsurance
 Thepol i
cycannotbeassi gnedtoany bodyelse
 Thepol i
cyhasnosur renderval
ue
 Thepol i
cyisacont r
actofindemni t
y
 Itisnormallyashortter
m contractthatrequir
esperiodi
calr
enewal
 Requirestheinsuredtohaveinsurableinter
estintheproper
tybei
nginsur
ed
 Pr emiumschargeddependont hev al
ueoft hepropert
yandthedegr
eeofthe
r
isk.

25.
Out
li
nef
ivedi
ff
erencesbet
weenl
i
feassur
anceandpr
oper
tyi
nsur
ance

Li
fe Assur
ance Pr
oper
tyi
nsur
ance

a)
Risksar
eboundt
ohappen Ri
sksmayormaynotoccur

b)
Maybeusedasasecur
it
y Notusedasasecur
it
yforl
oan

c)Val
ueofthepoli
cyappr
eciat
esand Sum i
nsur
edr
emai
nsconst
atnt
sum assur
edpaidatmatur
it
ydate

d)
Thei
nsuredmayinsur
esamer
isk Thei
nsur
edisnor
mall
yrequi
redt
o
wi
thdi
ff
erentcompani
es i
nsur
eariskwi
thonecompany

e)
Notsubjectt
othepri
nci
plesof Subj
ect
edt
oal
li
nsur
ancepr
inci
ples
i
ndemnit
y,subr
ogat
ionandcontr
ibut
ion
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 111
 isabokemi
cah@gmail.
com
f)
Nolimi
toramountspeltoutona Coversval
uedependsont
hev
alueof
cover theproper
ty

g)
Clai
m guar
ant
eed Mayormaynotr
esul
tinacl
aim

26.
Expl
aindi
ffer
encesbet
weenwhol
e-l
i
fepol
i
cyandendowmentpol
i
cies
Whole-
li
fe Endowmentpol
i
cy

Compensat
ioni
saf
terdeat
hofassur
ed Compensat
ioni
saf
terexpi
ryofagr
eed
per
iod

Pr
emi
umsar
epai
dthr
oughoutt
hel
i
fe Premiumspai
donl
ydur
ingt
heagr
eed
peri
od

Benef
it
sgot
othedependant
s Theassuredbenefi
tsunl
essdeat
h
preceedsexpi
ryoft
heagreedper
iod

Aimsatfinanci
alsecur
it
yoft
he Aimsatfi
nanci
alsecur
it
yoft
heassur
ed
dependants anddependant
s

27.Explai
nanyf i
vecir
cumst ancesunderwhi chani nsurermaynotcompensat et
he
i
nsuredaftert
heoccur r
enceoft her i
sk.
 Whent helossisreportedaf t
er14day sfrom thet i
meofoccur r
ence.
 Whent helossiscatastrophic/bestalt
sal argenumberatt hesamet ime
 Whent helossisselfcaused/ int
entional.
 Wher ether
eisnocl oser el
ationshipbetweent her i
skinsuredandthecauseof
theloss.
 Whent heinsuredhadst oppedpay i
ngpr emiums.
 Whent heinsureddidnotf oll
owt her i
ghtprocedur esforcl
aiming.
 Whent heinsuredhadnoi nsurableinter
estint hepropert
yinsured.
 Whent heinsureddidnotdi scloseorobeyt hepr inci
pleofutmostgoodfait
h.

28.Expl ai
n5char acterist
icsofgener al i
nsurance
˗Premi um char gedisdependentont hedegr eeofr isks/numberofr i
sksorvalueoft he
proper t
yhigherpr emiumsar echargedf orhi
gherr isks)
˗Itisacont ractofindemni ty-compensat ionisdonef orthefi
nanciallosstotheowner
˗Itisashor tterm cont ract-insurancecont r
actendsaf teraspecifi
cper i
odandmustbe
renewedannual lytobei nforce
˗Policycannotbeassi gned-t heownercannott ransferthepolicytoanextofki n.I
ncaseof
sale,thecont r
actexpi res
˗Ithasnosur renderval ue-ifthepol i
cyholderter minatesthecont r
actprematurely,
hei s
notent i
tledofanyr efund
˗Ther emustbei nsurabl einteresti
nthepr operty-onecanonl yinsurehisownpr opertyand
notanot herper sons;ownermustsuf ferfi
nanciallossi ncaseofoccur r
ence
˗Ther eisamaxi mum l i
mi ttot heamountofcompensat i
onusual l
yuptothevalueoft he

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 112
 i
sabokemi
cah@gmai
l.
com
propertyinsured
˗Thepol i
cycannotbeusedasacol
lat
eral-hol
dercannotuseittoacquir
ealoanas
security
˗Cont r
actofcont ri
buti
onappl
i
es-i
ncaseofunderinsurancet
heinsurershar
estheloss
withthei nsur
ed
˗Uncer tai
nit
y-ther i
skmayormaynothappen,r
iskisnotguarant
eedofoccurri
ng
˗Principleofsubrogati
onappl
i
es-t
heinsuredshouldnotbenefi
tfr
om thescraporbenefi
ts
fr
om t hirdparti
es.

PRODUCTPROMOTI
ON.
1.Out
li
ne4unet hicalpracti
cesthatareassociatedwit
hproductpr
omot
ion
 Givefalsei nformati
onaboutapr oduct
 Notdiscl osingsideeffect
sofapr oduct
 Overpricingofgoods
 Cheatingoni ngredi
entsofgoods
 Advertisingwi t
hnegat i
veeffect
sont heenvir
onment
 Promot inggenui neproductsbutsellcount
erf
eit
s

2.St
ate4servi
cesofferedbyadv ertisi
ngagenci esinproductpromotion
 Theyhelpor ganizat
ionsindesi gningtheirtr
ademar ks,l
ogosand
adv
erti
singmat eri
als.
 Theybookspaceandai r
t i
mef ortheircustomersinv ar
iousmedia.
 Theyof f
eradv i
soryservicest otheircl
ientsonsell
ingtechni
ques
 Theyadv ert
iseonbehal foft hei
rclient
s.
 Theychooseonbehal foft heircli
entstheappropri
atemedi atobeused.

3.St
ate4recenttr
endsinpr oductpromoti
on
 Useofi nt
ernetinadv er
ti
sing
 Manyf .m.radi
ost ati
onsbeingused
 Useofadv erti
singagenciestomarketpr
oduct
s.
 Useofr oadshowsandconv oy
s
 Intensi
fi
cati
onofper sonalsell
i
ng
 Useofmobi l
ephones( sms)

4.St
ate4obj
ecti
vesofinsti
tuti
onal adverti
sement
 Promotesthenameoft hei nsti
tuti
on
 Tocountersti
ffcompet i
tion
 Toopenupnewmar ketterrit
ori
es
 Tocreateawarenessoft hei nsti
tut
ion

 St
ateany4curr
enttr
endsinproduct
ionpr
omot
ion.

Useofel
ectr
onicbi
llboar
ds.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 113
 i
sabokemi cah@gmail
.com

HIV/AI DSawar eness

Cateri
ngforther i
ghtoftheneedy.

Digi
taladver
ti
singscreens.

Useofwebsi t
es.

Roadshowsandconv oys.

Cateri
ngforther i
ghtoftheyouth.

Gendersensiti
vi
t yawareness

5.Out
li
ne4benef it
sthatconsumer sderi
vefrom adverti
sing
 Itcreatesawar enessofthepr oductandexistenceofpr oduct
 Itcautionstheconsumer saboutt hepossiblesideeffects
 Ital
soeducat estheconsumer sonhowt ouset heproducts.
 Prov i
desent ert
ainmentforconsumer s
 Givesinformat i
onaboutt hepricesoftheproduct .
 Consumer sgetinfor
mationaboutav ari
etyofgoods.
 Helpsconsumer stomakeagoodchoi ce

6.Hi
ghl
ight4r easonswhybusi nessesst i
lluseradiostopromot ethei
rproduct
s
i
nspi
teofot herhi ghlyadvancedmedi a
 Wi dergeogr aphicalcover
 Ser vesbot ht helit
erateandill
iteratemember soft hesociety
.
 Differentr adiochannel sareablet ocastindif
ferentlanguages
 Blindcangett hemessage
 Abl et oreachmanypeopl eatthesamet ime
 Radi oi saccessi bl
eev eninther emotear eas
 Allowsr epetit
ionofmessage
 Af f
or dable/ cheapertoadv ert
ise.

7.Whatar
et headv antagesofper sonal sell
i
ngasamet hodofsalespromotion
 Createsgoodr elat
ionshipbet weencust omersandsel l
ers
 Thesel l
erhasachancet oexpl ainfinerdet ai
l
soft heproduct
 Thesel l
ercancol l
ectinfor
mat ionr egardingthedemandoft heproduct.
 Sellercanper suadet hecustomert obuyt hepr oduct.
 Thebuy erisabletomakei nformeddeci sions
 Ittakescar eofbot hthelit
erateandi l
lit
erates
 Thesal espersoncandemonst ratet heoper at
ionsanduseoft heproduct
 Itgivesbuy eranoppor tunit
yt onegot iatethetermsofpur chase.

8.State4ci
rcumstancesunderwhi chapr oducerofaproductmayuseper
sonal
sell
i
ngmet hodtopromoteapr oduct
 Whenl aunchi
nganewpr oduct
 Whent heproducti
st ai
l
or edtomeetcust omersspeci
fi
cat
ions
 Wher ethemarketi
sconcent r
atedinonearea
 Wher edemonstrat
ionsisr equi
red
 Whent hevalueoftheproducti shi
gh
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 114
 i
sabokemi
cah@gmail
.com
 Whent
hebusi
nesscanaf
for
dtofi
nancethesal
esf
orce.

9.Out
li
ne4diff
erencesbet
weenf
reesampl
esandgif
ts
FreeSamples Gif
ts

Si
mil
art
othepr
oductbei
ngpr
omot
ed Notnecessar
il
yrel
atedt
othepr
oduct

Gi
venbef
oret
hepr
oducti
sbought Gi
venaf
terbuy
ingt
hepr
oduct

Gi
venf
ort
ri
alpur
poses Createsbr
andyl
oyal
ty/
ret
ainst
he
customers

I
nducespot
ent
ialcust
omer
stomakea Makesthecust
omer
stobuygoodsi
n
pur
chase l
argequant
it
ies

10.Give4ci
rcumstancesunderwhi chamanuf actur
erwoul
dusei
nfor
mat
ive
adv
ert
isi
ng
 Whenl aunchi
nganewpr oduct
 Whent herearechangesinpr i
ce
 Whent herearenewusesoft heproduct
 Toi nf
orm aboutf
eaturesofapr oduct.
 Toi nf
orm onwheretof i
ndt heproduct.

11.State4cir
cumst ancesunderwhi chonewoul dchoosetoadv er
ti
seapr oduct
t
hroughtel
ev i
sion
 Widecov erage–r eachesbothli
terateandil
li
ter
ate
 Audio-vi
sualenablescustomerst osee,hear–theadvert
isementappeals.
 Educatespot ent
ialcust
omer sonusageoft heproduct
 Possibl
et oil
lust
ratethebasicfeaturesofaproductanditsusage.
 Hardtoignor esi
ncei ti
sentert
aining.

12.
Stat
e4di sadvantagesofaf tersalesser vi
cesasamet hodofproductpr omoti
on
 Itisanext raexpenset ot hetrader
 Install
ati
on, maintenanceandr epai
rsmayr equirespeci
ali
stswhoar e
expensi v
et ohire.
 Thecust omeri stiedt oonet raderformaint
enanceandr epair
 Itmayencour agecar elessnesswhenhandl ingtheitemswhi chresul
tsto
l
osses
 Ther eiswast ageoft i
meandmoneyi ft
hebuy erandthetraderare
geogr aphical
lyfarapar t

13.
List4disadv
antagesofadvert
isement
stot
heconsumer
 I ncr
easeinpri
cesofproducts
 Leadst oimpulsebuyi
ng

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 115
 i
sabokemi
cah@gmai
l.
com
 Erodescult
ure
 Encouragesconsumpt i
onofhar
mfulproduct
s
 Doesn’ti
nform consumersofsi
deeff
ects
 Leadstoconsumpt ionofl
owquali
tygoods.

14.
Out
li
ne4featur
esofawel
lpr
eparedadv
ert
isement
 Legal
 Decent
 Honest
 Truthf
ul
 Mustnotcausegr
ave/
widespr
eadoffence.

15.
Highl
ightf
ivebenefi
tsaccr
uingt
oasel
l
erwhousest
heper
sonal
sel
l
ingmet
hod
topromoteherproducts

 Personalsel l
i
nggivesthesel l
eranoppor tunit
ytodemonst ratetheproducts
thattheyar esel
li
ng.
 Shecangetani mmedi atefeedbackandactoni t.
 Salespersonscanof f
ermor eelaborateexplanati
onsaboutt heproduct.
 Sell
erwillbeabletogetor dersdirect
lyfrom customers.
 Personalsel l
i
ngcompl imentsotherpr omotionalacti
vi
ti
es.
 Sell
erscangetanoppor t
unityt
oconv incethebuy erhencemakeasal e.
 Sell
erhasanoppor tuni
tytoobserv ethereactionofcustomert otheproduct
 I
mpr ovest herel
ati
onshi pbetweensel l
erandbuy er.
 Enablesthesel l
ertotargetthespecifi
cgr oupsinquestion.

16.
Advert
isi
nginnewspaperi soneoft hepopul arway sofpromotingsaleofgoods
inKenya.Highlightf i
v eli
mitati
onsofadv erti
singgoodsinanewspaper .
 Adv erti
sl imitedt othosewhoar el i
terateonly
.
 Demonst rationsmaynotbepossi ble.
 Adv erti
singcanbeexpensi vetot heuser .
 Reader smayi gnoretheadv ert
isement
 Someadv ertisement smaynotbeappeal i
ngastheyarenotcol our
ed.
 Reader si nterestedinspecificareasoft henewspaperegspor t
sand
entertainmentmayout looktheadv ert
isement.
 Newspaper sar enotaffordabletomanypeopl eandther
ef or
etheadvert
willonlyr eachpeopl ewhocanaf fordtobuy .
 Adv ertdoesnotl astlongsincenewspaper shaveshortl
ifespan/are
disposedof fv eryfast.

17.
Highl
i
ghtfiv
eethical i
ssuesthatshoul
dbepracti
cedinabusiness
 Ensurenodi scri
minationi
nbusinessi
nareassuchaspromoti
on,tr
aini
ng,
sal
ariesandassi gnmentofduties.
 Ensureprotecti
onoft heenvi
ronmenttoavoi
dpoll
uti
onanddegradati
on
oftheenvir
onment .
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 116
 isabokemi cah@gmai l.
com
 Ensuresr i
ghtsofempl oy eesareupholdespecial
lyi
nt er
msandcondi ti
ons
ofempl oyment /welfare.
 Avoidconsumerexpl oi
tationthroughpract
icessuchasov er
chargi
ng
them,falseadv ert
isement .
 Eli
minatesuseofunf airmeansofachi evi
ngbusinessobject
ivessuch
givi
ngorr ecei
v i
ngabr ibe/ hoar
dinggoodsawai t
ingthei
rpri
cestorise.

18.
Explainfi
veadv antagesofaf tersalesser vi
cestoabusinessusi
ngitasa
methodofpr oductpromot ion.
 I tisasour ceofadditionalrevenuet othef i
rm.
 Cust omer sar eassuredofl ongerser v
icesf r
om t
heproductduetorepair
s
andmai ntenance
 Cust omer sar eoff
eredassi stanceespeci al
lywhendeali
ngwitht
echnicalor
sophist
icat i
on.
 I mprovest heimageoft hebusi nessbycr eati
nggoodreput
ati
on.
 f ir
msest ablishcontactwi t
ht heircustomershencecangetfeedback.

19.FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530

20.Ani nternational companyi spl anningt olaunchitspr oductint helocal market.
Highli
ghtt hef actorst hatshoul dbeconsi deredbyt hecompanywhenchoosi ng
theappr opr i
atemedi at hr
oughwhi cht oadv erti
sethepr oduct
 Cost–Abusi nessf ir
m shoul dgof orthecheapermet hod.
 Nat ur eoft hepr oduct–Somepr oductsar ebet t
erpromot edt hrough
somemet hodst hanot her segt hoser equir
ingdemonst rati
onswi llbebest
promot edt hroughper sonalsel li
ng.
 Tar getgr oup–Thef irm shoul dchooseamet hodt hatonlytargetgr oupt o
av oidwast age.
 Thel aw–Af ir
m shoul dchooseonl ythosemet hodsal l
owedbyt helawof
thel and.
 Obj ect i
vesoft hepr omot i
onoff irm –Themet hodchosenhel pthef i
r mto
achi evet hesetgoal sf ort hepr oductpr omot i
onegt ocor r
ectadent ed
imageofapr oductitwi llbewi set ousepubl i
cr elati
onsmet hod.
 Met hodsusedbycompet ingbusi ness–Af ir
m shoul dchooseamet hod
ofpr oductpr omot i
ont hatwi llmakei tcompet efavourablewi t
hot herf i
rm.
 Av ailabil
ityofresour ces–Fi rmsshoul duset hephy si
calandhuman
resour cest hatar eav ailableinor dertoi mplementt hepr omot i
onmi xegt o
usesal esper sons, t
hef irm musthav eenoughr esourcedper sonsand
fi
nance.

21.
Out
li
nefi
veci
rcumst ancesunderwhichabusi nessper
sonmaychoosear adio
asameansofadv er
tisi
nghis/
herpromot ion
 Wherehe/ shewantstousedifferentl
anguagest or
eachdi
ff
erentpeopl
e.
 Whenshe/ hewantt ochoosethet i
met oadvert
isetor
eachtoaparti
cular
gr
oupofli
steners.
 Whenhe/ shewant stohaveawi decov er
agetoreachmanypeople.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 117
 i
sabokemi cah@gmai l
.com
 Whereonewant stousemusi corentert
ainmentt
oadv er
ti
seinorderto
att
ractpeople.
 Whenhe/ shewant stheadv erttoberepeatedsev
eralt
imestoreach
ti
mest oreachmor epeopl e.
 Wherehe/ shewant stheadv ertt
oreachthebli
ndasitrequi
resl
isteni
ng
only.
 Wherebot hli
terat
eandi ll
it
eratepeopleneedtobereachedbythe
advert
isement.

22.
Expl
ainfi
vebenef it
st hatsaf ari
com companywi l
lgetbypr omotingitsproducts
byarr
angingapr icewi nningcompet i
ti
ont hrought hemedi aasawayofsal es
promoti
on
 Itsti
mulatest hedemandf ortheproductt husincreasingsales.
 Itcanbeusedt oopenuporent ernewmar kethencemor esales.
 Itwil
lmaket hepr oductt ocompet eef f
ectivel
yinthemar ketbecauseof
theawar enesst ot hepeopl e.
 Itwil
linformt heuser saboutt hepriceoft hepr oducthencemor edemand.
 Itwil
lcreateormai ntaingoodcompanyi mageorr eputat
ionhencemor e
demandf orthepr oduct .
 Manycust omer swi l
lbuyt heproducthopi ngt owinet hepri
cehencemor e
sales.
 Thecompanywi l
lretainthemar ketforthepr oductsincetheuser sare
remindedoft hecont inuedexist
enceoft heproducti nthemar ket.

23.
Explai
nfi
v esalespromot i
onal methodswhi chmaybeusedbyt r
ader sto
incr
easethesal esvolumeoft hei
rproduct s
 Adv er
tisinggoodst ocreateawar eness/conv i
ncecustomer s.
 Brandinggoodst ocreatecustomer sloyalt
ygi vevari
ety
.
 Pricereduction/di
scounthencer educi ngcustomer sexpenditure.
 Freegiftshencecust omersgetext ragoods.
 Selli
ngqual i
tygoodswhi chwi l
lsatisfycustomer sneeds
 Organizingtradefairsandexhibiti
onst odisplayproductstocust omer
s.
 Creditfacil
it
ieshencecust omerswi llpaylater.
 Aftersalesser vi
ces-provi
dingfreeser vi
cesaf t
ergoodshav ebeenbought
.

24.
Bil
lboardsar
ebecomi ngapopul armet hodofpr oductpromotion.Explai
nfiv
e
li
mitati
onsofthi
smet hod
 Theycanbeeasi lyvandalized
 Theyar eexpensivetoi nstallandmai nt
ain
 Theydonott argetapar t
iculargr oupofconsumer s
 Theycanbedest r
oyedbyweat herbecauset heyareexposedt oelement
s
ofnat
uree.g.rain.
 Theycancauseobst ruct
iont omot ori
stsifnotweller
ected.
 Localauthori
ti
esusual l
yimposehi ghcharges.
 Theyar enotconv enienttopeopl ewithv i
suali
mpai r
ment

Nov
els,
Updat
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imar
yNot
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 i
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cah@gmai
l.
com

24. Expl
ainf
ivebenef
it
sofusi
ngsoci
almedi
ainpr
omot
ingapr
oduct
.(10mar
ks)

 Incr
easedbr
andAwareness-I
ncr
easebrandr
ecogni
ti
onsi
ncey
ouwi
l
lbe
engagi
ngwit
habroadaudienceofconsumer
s.
 Bett
ercust
omersati
sfacti
ons.Tr
adewi
llbeabletoseet
hecomment
sfr
om
thecust
omerwhichhe/shecanusetoi
mpr ov
et hepr
oduct
.
 I
mpr
ovet
hebr
andl
oyal
ty
 Sav
esont
hecostofsendi
ng,
recei
vi
ngandst
ori
ngi
nfor
mat
ion.
 Hel
ptor
educepaperwor
ksi
ncet
ransact
ionsar
edoneonl
i
ne
 Lar
geandsmallbusinessescant
ransactbusi
nesst
hrought
hesoci
almedi
a
wit
houtdi
scr
iminat
ion
 Fastwayofdoi
ngbusi
ness

DEMANDANDSUPPLY.

1.
Indi
catebywr
it
ingademandorsuppl
ywhet
hereachoft
hef
oll
owi
ngf
actor
sinf
luencedemandor
suppl
yofacommodit
y.
(
5marks)

a) Changesi
nthepr
icesofi
nput
s-Suppl
y

b) Changei
ntast
esandpr
efer
ences.-Demand

c) Changesi
ntechnol
ogy-Suppl
y

d) Changesi
nout
comes-Demand

e) Changesont
hepr
iceofot
herr
elat
edpr
oduct
s.-Demand

2.St
atet
hel
awr
elat
ingt
oeachoft
hef
oll
owi
ng.

Demand

i
tst
atest
hatt
hedemandwi
l
lbehi
ghwhent
hepr
icesar
elow

Suppl
y

I
tst
atest
hatt
hesuppl
ywi
l
lbehi
ghwhent
hedemandsar
ehi
gh

Demandandsuppl
y
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 119
 isabokemicah@gmai
l.
com
I
tst
atest
hatt
hedemandandsupplywi
ll
beatequil
i
bri
um oft
hesuppl
yanddemandcur
vemeet
.

3.
Ineachofthefol
l
owi
ngcases,
indi
cat
ewhet
hert
hesuppl
ywi
l
lincr
ease,
decr
easeorr
emai
n
const
ant.

a)
Ifthedemandf orcoffeeri
ses,thesuppl
yoft
eai
sli
kel
y
t
o .
..
.f
ail
s..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..

b)
Ifthepri
cesofcar sfal
l,t
hesuppl yofpet
rol
asl
i
kel
y
t
o .
..
..
.f
ail
s..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
.

c)
ifthedemandforbeefincreasesthesuppl
yofwool
isl
i
kel
y
t
o ..
..
.decr
eases.
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
.

4.St
atef
ourf
act
orst
hatmaycauseani
ncr
easei
nthesuppl
yofapr
oduct
. (
4mar
ks)

 Reducedt axati
onofpr oduct
ion
 Favorableweatherconditi
ons
 Reducedcost sofproduction
 I
ncreasedpr i
ceofpr oduct.
 I
ncreasei ndemand
 I
ncreasei nproduct
ion
 Special
izati
on
 Gov er
nmentpol i
cy
 Futureexpectati
ons.

7.Thef
oll
owi
ngdi
agr
am r
epr
esent
sdemandandsuppl
yofapr
oduct
.
(
5marks)

a
d

a)
Label
thel
i
nes(
a)and(
b)

a)
Demandcur
ve

b)
Suppl
ycur
ve

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 120
 i
sabokemicah@gmai l
.com
-Poi
ntCi
sthepoi
ntofequil
ibr
ium suppl
y(quant
it
y)andpr
ice.

-
Equi
l
ibr
ium pr
ice(
PE)andequi
l
ibr
ium quant
it
y(EQ)

8.
Stat
efourf
act
orst
hatmayl
eadt
oani
ncr
easei
nmar
ketsuppl
yofapr
oduct.
(4marks)

 I
ncreasei nthepri
ceoftheproduct
 Fai
li nthecostofproduct
ion
 Availabil
it
yofcheapcredi
t
 Gov ernmentpoli
cy.
 Decr easeinpri
ces
 Whent hedemandishigh
 Futur eexpect
edfal
linpri
ce

9. Thedi
agr
am bel
owshowsashi
fti
ndemandcur
vef
rom d0d0t
od1d1.

d0 d1

Pr
ice

d0 d1
Quant
it
y
I
dent
if
yfourf
act
orst
hathav
emadet
hedemandcur
vet
oshi
ftf
rom d0d0t
od1d1

 Fut
ureexpectati
onintheincr
easeofpri
ce
 I
ncreaseinpri
ceofcompl ementar
ygoods
 I
ncreaseinpopulat
ion
 Posit
ivet
astetowardstheproduct

10. Expl
ainf
ivef
act
orst
hatcoul
daf
fectt
hequant
it
iesofcabbagessuppl
i
edi
na
market (10marks)

 Technology-modernmet hodsmayi ncreaset heproduct ionofcabbages/poormet hodsmay

decreasetheproductionofcabbage.
 Priceofcabbages-Thehi gherthepr icemor ei ssupplied.Supplied,t
helowerthepricet
he
l
oweri ssuppli
ed.
 Gov er
nmentpol i
cy-favourable,unfav ourabl
epol i
cies-favourabl
epolici
esmay i
ncreasesthe
supplyofcabbages/unfavourablegov ernmentpol i
ciesmaydecr easehethesupplyof
rel
atedproductdecreasest hesuppl yofcabbages
 Priceofother
/rel
atedcommodi ties/relatedcommodi tiesaff
ectthesupply-
ifpr
icesofrelat
ed
productsincr
easesthesuppl yofcabbagesmaydecr ease/ifpri
cesofrelat
edproduct
decreasesthesupplyofcabbagemayi ncrease.

Nov
els,
Updat
edCPA,
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&Pr
imar
yNot
es 0705525657 121
 i
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.com
 Naturalfactors/ seasonal /cli
mat ic-f
avourabl efact orsl eadt oincr easeinsuppl yof
cabbages/ unfav our ablenatural/seasonal /cli
mat i
cf act orsmayl eadt odecreaseinsuppl yof
cabbage.
 Skil
l
s/ t
rainingoff armer s-
Bat t
erski l
ls/
trainingl eadst oi ncreasei nsupplyofcabbage/ poor/
ski
ll
s/t r
ainingl eadst olowsuppl yofcabbages
 Costofpr oduct ion- Highcostofpr oductionl eadst oadecr easei nsuppl yofcabbages/ l
ow
costsleadst oi ncr easeinsuppl yofcabbages.
 Expectedf uturechangesi npriceofcabbages- Expect edf ut ureincr easeindemandl eadst o
i
ncreasei nsuppl yofcabbages/ expectedf uturedecr easel eadst odecreasei nsupplyof
cabbages.
 Avail
abili
tyofi nput sforcabbagepr oduct i
on-i finput sar eav ai
labl emor emaybesuppl i
ed/if
avai
lablelesswi llbesuppl ied.
 Decisi
onsofcabbagepr oducer s-incaseofdeci siont opr oducemor ethant herewil
lbe
i
ncreasei nsuppl y/i ncaseofdeci si
ont opr oducel esst herewi llbeadecr ease/supplyof
cabbages

11. Thef
igur
ebel
owshowsadecr
easei
ndemandf
oracommodi
tyf
rom DDt
oD1D1

Pr
ice

D1 D

Po

D1

O Q1 Q0 Quant
it
y

St
atef
ourpossi
blecausest
hathav
eledt
othi
ssi
tuat
ion

 Risei npriceofcompl ement ar

ies.
 Af alli
nhousehol dincome.
 Fallinthepr i
ceofsubst it
utes.
 Expect edf al
linthepr i
ceoft heproduct
.
 Negat ivetastes/preferences/f
ashion.
 Decr easei npopulation.
 Unf avorabletermsofpay ment .

Nov
els,
Updat
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imar
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 isabokemicah@gmail
.com
 Unf
avourabl
egovernmentpolicy(
forexampl
e:-abanoncommondi
ty)
.
 Unf
aovourabl
eseasonalchanges.

12. Wr
it
ethet
ypeofdemandr
epr
esent
edbyeachoft
hef
oll
owi
ngst
atement
s

(
i)Demandf
oracommodi
tycausesanincr
easei
ndemandf
oranot
her
commodi
ty -Der i
veddemand

(i
i
)Demandforonecommodi
tycal
l
sfordemandofanot
hercommodi
ty-Joi
nt
demand/
compli
mentar
y

18. Thefi
gur
ebel
owshowsashi
fti
nthesuppl
ycur
veofagi
vencommodi
ty
.
Pr
ice

P Eo E1

So S1

O Qo Q1 Quant
it
y

Out
li
nef
ourf
act
orst
hatmayhav
ecausedt
heshi
fti
nthesuppl
ycur
vef
rom Sot
oSr

 Af allinthecostofpr oducti
on
 Fallinpr i
ceofpr oducedgoods
 Technol ogicalprogress
 Conduci v enaturalfactorse.g.goodweatherseason
 Gov ernmentpol iciese.g.reducedtaxandincreasedsubsi
des
 Futur eexpectationofaf allinpri
ce
 Entryofnewf ormsi ntheindustry
 Increasei nfactorofpr oduction
 Longert ime
 Lessst r
ikes
 Increasei npri
ceofj oi
ntl
ysuppl i
edgoodse.g.beefandhides

19. Zawadioperatesahardwarebusi
nessi
nherhometown.Outl
i
nefourmethodsshe
mayusetodeter
mi nepri
cesforhergoodsot
hert
hanthefor
cesofdemandofandsupply
.

 Bargaining/Haggli
ng
 Abidingbygov ernmentpoli
cy
 Tendering-off
ersareinvi
tedtoquoteforapri
ce.Goodsaresoldt
obuy er
switht
he
quotationthatbestmeetsZawadi’sexpect
ati
ons
 Biddersmakeof f
ersforgoodsandthebidderwit
hthehighestof
fert
akesthegoods
(sal
ebyauct i
on)

Nov
els,
Updat
edCPA,
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imar
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 isabokemicah@gmail
.com
 Retai
lpri
cemaintenance-sel
lgoodsaccor
dingtothedi
ctat
esoft
hepr
oducer
.
 Pri
cediscri
minat
ion

20.Thedi agram bel

owshowssuppl
ycurv
esoftwoproducer
sofmai
zeindi
ff
erent
countr
ies.Highli
ghtf
iver
easonswhypr
oducerPsuppl
i
ersmoremai
zethanpr
oducer Q
atthesamepr i
ce. (
10mar
ks)

25 Q P

Pr
ice20

(
Usd)

15

10

0 200 300 400 500

Quant
it
ysuppl
i
ed(
tons)

 Favorabl
ecli
mat eincountryPt hancount ryQ
 Useofmoder ntechnologyincount ryPt hanQ
 Moreaccesst osubsidiesi
ncount ryPt hanQ
 Avail
abil
i
tyoffactorsofproductionincount r
yPthanQ
 Theremightbepeaceandt ranquil
ityi
ncount r
yPthanQ
 Improvedinf
rast
ructureincount r
yPt hanQ
 Lowercostofproductionincount ryPthanQ

Expl
ain5f
act
orst
hatmaynegat
ivel
yaf
fectt
hedemandf
orapr
oducti
nthemar
ket


Negat i
vetasteandpref
erencest owardst hecommodi ty.

Lowpr icesofsubst
it
utes.

Incr
easei npri
ceofit
scompl i
ment aries.

Lowl evelsofpopul
ati
on.

Unfavourablegover
nmentpol i
ciese.g.increasedtaxes.

Incr
easei npri
ceoftheproduct.

Futur
eexpect ati
onofafalli
nthepr i
ceoft heproduct.
Nov
els,
Updat
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imar
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 i
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cah@gmai
l.
com

SI
ZEANDLOCATI
ONOFAFI
RM.
1. Hi
ghl
i
ghtf
ouradv
ant
agesofl
arge–scal
ebusi
nessor
gani
zat
ion. (
4mar
ks)

 Obt ai
nsdiscountbecauseofbul kbuying
 Abl etoadv ert
ise
 Incurslowcost sofproducti
on
 Offersbett ermanagementbecauseofspecial
izat
ion
 Allowsdiv ersi
ficat
ioninordert
oreduceri
sks
 Abl etocat erf
orstaffwelfar
e
 Lar geoutputduet omanychannel s

2.St
atedi
sadv
ant
agesofconcent
rat
ingi
ndust
ri
esi
nonear
eawi
thi
nacount
ry. (
4mar
ks)

 Leadstocongest
ion
 Causepoll
uti
on
 Incr
easesoci
alevi
ls
 Leadstowidespr
eadunemploy
ment
 Canleadtoeconomicdepr
essi
ondur
ingt
imesofwar
,cal
ami
ti
es

3.
Highl
i
ghtf
ourci
rcumst
ancesunderwhi
chaf
ir
m woul
dbel
ocat
edneart
hemar
ketf
ori
tspr
oduct
.
(
4mar
ks)

 Wher
ethef
ir
mi sproduci
ngperishabl
eproducts
 Wher
ethef
ir
mi sproduci
ngfragil
eproducts
 Wher
ether
awmat eri
alsar
echeapert otr
ansportt
hanfi
nalpr
oduct
s.
 Wher
ethemarketf
ortheproduceisconcentrat
edint
hearea.

4.Out
li
nef
ourway
sinwhi
chl
andi
nfl
uencest
hel
ocat
ionofi
ndust
ri
es. (
4mar
ks)

 Costofl and
 Availabili
tyofr oom f orexpansion
 Gov ernmentpol icyonl andutil
izati
on
 Thenat ureoft hel and
 Proximi ty,auxil
iaryserv i
ces
 Conv enience
 Getexactv al
ueofhi smoney
 Recei vegenui negoodsdi rectl
yfrom manufact
urer
 Cheap
5.Out
li
nef i
vebenef i
tst hatcount r
ywoul dgetbyencouragi
ngbusi
nessmentolocat
enewi
ndust
ri
es
i
nrur
alareas. (10marks)

 Thecount
rywi
l
lachi
evebal
ancedeconomi
cdev
elopment
Nov
els,
Updat
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&Pr
imar
yNot
es 0705525657 125
 i
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.com
 Creat
ionofj oboppor t
uniti
esinallregionsofthecount ry
 Reducingrural/urbanmi grati
on
 Technologyt r
ansfertoruralar
eas
 Locati
onofi ndustri
esinruralwil
lleadt oinf
rastruct
uraldevel
opment
.
 Mayleadt oest abl
ishmentofsubsi diary
 Mayleadt oexpandedut i
l
izati
onofr esources
 Mayleadt oev endistr
ibuti
onofsoci alameniti
es
 Mayachi eveamor eevendistri
buti
onofi ncomebet weenr egi
ons.

6.
Stat
efourci
rcumst
ancesunderwhi
chaf
ir
m woul
dbel
ocat
edneart
hemar
ketf
ori
tspr
oduct
s.
(
4marks)

 Getservicesfor24hour s
 Requi
ref astservi
ce
 Convenience/NextToAPer son
 Recei
vegenui ne/f i
rstcl
assgoodsdi
rect
lyf
rom manuf
act
urer
 Cheap/doesn’trequirel
abour
.

7.St
atef
ouradv
ant
agesofl
ocat
ingaf
ir
m neart
hesour
ceofr
awmat
eri
als. (
4mar
ks)

 Reducetransportcost
 Getquali
tyrawmat eri
als
 Enhancecontinuouspr oduction
 Avoidwastageofr awmat eri
als
 Reduceit
scostofpr oduction.

St
atef
ourexternaldiseconomi esofscal
ethataf
ir
m mayget (
4mks)
 Scramblef orrawmat er
ial
s
 Unavail
abili
tyoflandf orexpansi
on
 Scramblef oravail
ablelabour
 Compet i
tionforav ai
lablemarket
 Easytargetespeci al
l
yi nti
meofwar

8.
Ident
if
yfourpr
obl
emst
hatt
endt
oli
mitt
hegr
owt
hofsmal
l
–scal
eret
ail
busi
nessinr
ural
Keny
a.
(4marks)

 Lackofcapit
al
 Competit
iontechniques
 Lackofmarket
 Expensi
ve
 Poormanagement
 Poorinf
rast
ructure
 Lackofcommer ci
alser
vices.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 126
 i
sabokemicah@gmail
.com
9.Di
scussthefact
orst
hathav
eledtothesurvi
val
ofsmallscal
eret
ail
ersdespi
tecompet
it
ionf
rom
supermarket
s. (10mar
ks)

 Personal izedser vices:smal lscal er etai

lersprov ideper sonali
zedser vi
cesandar et heref
ore
abletoat tr
actandr etaincust omer swhi char enotof feredbysuper mar ket s.
 accessibi li
tyofsmal lscaleret ail
ers/conv enienceofl ocatingsmal lscaler etai
lersar e
conveni entlyinur bancent res.
 Creditfaci l
iti
essmal lscaleret ail
er sof f
ercredi tfaci
l
itiest osomeoft heircust omer swhi char e
notav ailablet ospeci fi
ccust omerneeds.
 Adapt ationt ospeci ficcustomerneedssmal lscal er
et ail
erseasilyadaptt ot hespeci fi
cclient.
 Theycansel lgoodsi nsmal luni tsthant hesuper market s.
 Runningcost sofsmal lscaler etail
er sarelit
tleandt hismakesi teasierfort hem t osur vi
ve
unli
kesmal lmar ketswhi chr equi rehugecapi taltooper ate.
 Management :Smal lscalebusi nessest her i
sksi nvolvedar elowwhi l
einsuper mar ketsare
great.
 Start
ing/i niti
alcapi talstar
tingsmal lscaleretai l
ersasui tableforpeoplef orm ofl owi ncome.
 Fl
exibili
ty -i
tiseasi erf orsmal lscal er et
ail
erst ochangef r
om onef orm ofbusi nesst oanot her
l
ocationt hani ti
sf orsuper mar kets.
FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530

10.
Discusst
heeconomi
cbenef
it
stoacommuni
tyt
hatmayr
esul
tfr
om t
heconcent
rat
ion

ofi
ndust
ri
esi
nanar
ea. (
10mar
ks)

 Empl oymenti sgener atedfort hebenef itoft hemember softhecommuni ty.

 Member sifthecommuni t
yt endst obewi l
lingtol earnski
ll
srequiredbytheindustri
es.
 Leadst oemer genceofauxi li
aryser vi
cei ndust ryi
.e.backinsurance
 Improv estandar dsofl i
vi
ngar el i
kelytobeexper i
encedinthear eaduetoriseofincome.
 Infr
astructureisl i
kelytoariset oservet hecommuni ty
 Industri
esdeal inginbypr oduct sar eli
kelyt oariseandt hecommuni tywoulduset hereby–
products
 Leadst odev elopmentofcompl ement aryi ndustri
es/auxi l
iar
yindustr
y
 Leadst oest ablishmentofi mpr ovedsoci alserv i
ces
 Leadst ointroduct i
onofmoder ntechnol ogywhi cht hecommuni tycanuti
li
ze.
 Provideswi demar ketforthelocalpr oducedgoods
 Mayl eadtoexpl oit
ationoflocalr esourceswhi chwoul dotherwisebeidl
e.

11.Hi
ghl
i
ghtf
ourmeasur
esagov
ernmentmayt
aket
oat
tractf
ir
mst
oanar
ea. (
4mar
ks)

 Provi
debusinessi ncent
ives
 Provi
decreditfacil
it
iestoinv
estor
s
 Provi
delandactr easonablecost
 Transport
 Communi cati
on
 Healthcases.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 127
 i
sabokemi
cah@gmail
.com
12.Out
li
nef
ouradv
ant
agesofl
argebusi
nessor
gani
zati
ons. (
4mar
ks)

 abl
et ogetdi scountsduetobul kpurchases
 Abletoest abli
shitsownretailoutl
ettopromoteit
sproduct
s
 Canaf f
ordt ohirequali
fi
edmanpowerandhi remachi
nes
 Couldenjoyl owcostofpr oducti
onduet ospreadi
ngofcost
sov
erl
argeOut
put
s
 Abletospr eadrisks
 Easiert
or aisecapital

13.
Stat
efourdi
sadv
ant
agesofl
ocat
ingabusi
nessawayf
rom ot
herr
elat
edbusi
ness. (
4mar
ks)

 Dif
fi
cul
ttoacquir
er el
ev antlabour
 Dif
fi
cul
ttoexchangei deas
 Dif
fi
cul
ttogetrawmat erial
s
 Lackofcompetit
ionleadt olowquali
ty
 Dif
fi
cul
ttogetmar ket
 Dif
fi
cul
tinexchangingt echnology
.

14.St
atef
ourdi
sadv
ant
agesofdel
ocal
i
zat
ionofi
ndust
ri
est
oacount
ry. (
4mar
ks)

 Governmentsubsidyandincenti
ver educe
 Dif
fi
culttoatt
ractpr
ofessi
onals.
 Securit
y
 Governmentmayhav etoraisetaxesonot herareast
ocovert
he
 shortfai
landthusburdenthepublic.
 Speciali
zedserv
icemaynotbel andr equi
redthatwhenf
ir
msar e
 concentrat
edinoneplace.

15..
Explainfi
vecircumstancest hatmayi nfluenceaf ir
mt olocat
eitsoperati
onsnear
thesourceofr awmat eri
als. (10marks)
 Wher ether awmat er i
alsarebul ky
 Handl i
ngcost sofrawmat erialsast hemov ementtot hef
irm wil
lbemi nimal
.
 Wher erawmat eri
alsar ehi
ghl yperishable
 Wher ethecompet i
tionofrawmat eri
alsishi ghtoensureaccess
 Wher ethegov ernmentpol icyrequi r
es/gi vesincentiv
esthatindust
rysetupnearsour
cesof
r
awmat eri
als.
 Pr oductofthemar ketisconcent r
atedneart hesourceofrawmat eri
als.

16.St
atef
ourf
act
orswhi
chi
nfl
uencet
hel
ocat
ionofbusi
nessent
erpr
ises. (
4mar
ks)

 Avai
labi
li
tyofmarket
 Avai
labi
li
tyofwaterandpower
 Securi
ty
 Communi cat
ion
 Costofland
 Governmentpoli
cy.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 128
 isabokemi
cah@gmail
.com
17.
Expl
ainf
ivemeasur
est
hatagov er
nmentmayt
aket oencour
ageest
abl
i
shmentofi
ndustr
iesi
n
rur
alar
eas. (10marks)

 Improvet ranspor tsy st

em t of acil
it
ateeasymov ementofgoodsandpeopl et houghindustr
ies.
 Taxreduct ion:indust ri
esi nr uralareasf rom pay i
ngcer taintaxest oreducet hecost
ofpr
oduct i
on, enablingt hem t osel lmor ecompet it
ivepr i
ces.
 Faci
lit
at eaccesst ocheapcr edi tf
orindust ri
esinr uralareas/provisi
onofl oansatlowi nt
erest
avai
lfinanceataf fordabl er ates.
 Provi
del andf orput t
ingupi ndust ri
esi nruralareasatr educedr ates.
 Provi
det r
aining/educat ionalf acil
iti
esi nruralareasf oedev elopmentofl abour.
 Subsidizingt hecostofpr oduct ionoft heindustriesint heruralareasbymel ti
ngpointofthe
costofpr oduct ion.
 Provi
depowerf orr unningt hei ndustri
es
 Provi
decommuni cat i
onser vicest oenabl eindustries
 Provi
dewat erforrunni ngt hei ndustry
 Provi
desoci alameni ti
esoft hosewor kingint heindustr y
 Provi
desecur i
tytosaf eguar dpr opertyforinvestors
 Sett
ingupser vi
cei ndust rytoser v
et heot herindust r
iesofbanksi nsuranceet c.
 Reducingl icensef eest husr educingt hecostofest abli
shing.

18.Gi
vef
ivebenef
it
sofexpandi
ngabusi
ness (
5mar
ks)

 Provi
decheapl abour
 Provi
deeff
icientcommunicat
ion
 Reducetherateoftaxat
ion
 Givesubsi
dies

19.
Highl
i
ghtf
iveadv
ant
agesofhav
ingabusi
nessent
erpr
isesl
ocat
edi
nanar
ea.
(10mks)

 Labour:Wheni ndustriesar ecloselylocat ed,apoolofl abourbothski

ll
edandunski l
ledis
avail
ed.
 Market:Theindust ri
esat tractl
ar gepopul ati
ont hatof
fermar ketfort
hepr oduct
sproducedin
theindustr
y.
 Inf
rastr
ucture:roads,rai l
wayusual lydev elopsintheareawi thconcentr
atedindust
ri
es.
 Communi cation:bylocat ingofi ndustr
iesi nonear ealeadstodev el
opmentoft el
ephone
amongot hers.
 Securit
y:wheni ndustriesar ecloselyrelated,thesearef ewsecuri
typroblemsexperiencedas
compar edtothedi sper sedindust r
ies.

20.
Expl
ainf
iveway
sinwhi
chlar
gescal
eor
gani
zat
ionar
eabl
etor
educet
hei
rcost
sofpr
oduct
ion.
(
10mar
ks)

 Largequantit
iesTheybuyi
nbul
k,hencet
heygetagoodquanti
tydi
scount,
hencer
educethei
r
purchaseexpenses
 TransportcostsTheybuyi
nbul
k,hencet
heyt
ranspor
ttheygoodsatonce,
whichr
educeson
tr
ansportcosts.

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 129
 isabokemi cah@gmai l
.com
 Ski
ll
edmanpowerTheyar eabletoempl oyskil
ledpersonnel
,whoprovi
desquali
ty
managementr educeonl osses,andhencemaxi mizeprof
it
s
 Useofmachi ner
y.Theyareabl etoaffor
dmachi nerywhi
chintur
nreduceonlabourcost
s,
hencer educi
ngproducti
oncost sResear ch
 Theyareabletocarryoutr esear
ch,hencepr oducingqual
it
yproduct
sandwiththeleast
wastage,hencereduci
ngonpr oducti
oncost.

21.
Giv
efourbenef
it
sofoper
ati
ngasmal
lscal
ebusi
nessov
eral
argescal
e. (
4mar
ks)

 easytorai
secapitaltostartthebusiness
 Thebusinessishighlyfl
exi
ble
 Quickdeci
sion-making
 Requir
eslesslegalproceduresduringformati
on
 Abletokeeptopbusi nesssecret
s
 Doesnothav etoomuchgov ernmentcont r
ol
 Exposedtofewerr i
sksduet othei
rsmal lsi
zes
 Theyarenotheav i
lytaxedcompar edtobigcompani
es

22.
Whatbenef
it
smayaccr
uet
omanuf
act
uri
ngf
ir
mthatusesmoder
ntechnol
ogy(
4mks)

 Incr
easel evelofoutput
 Improvementofser vicedeli
ver
y
 Savingonpr oducti
ont ime
 Standardizati
onofpr oducts
 Lowerpr oductionofwast e
 Reductionofwast e
 Betterqualit
ygoods.

23.
Stat
efoursoci
alr
esponsi
bil
i
tiest
hatamanuf
act
uri
ngf
ir
m shoul
dhaveonthecommuni
ty.
(4marks)

 Part
ici
pat i
oni ncommuni typrogrammers
 Applyi
ngappr opr i
at ewast edisposalmanagement
 Provi
dingaf fordabl epr oductstot hecommunity
 Conservationoft heenv i
ronment
 Communi t
ydev elopment
 Provi
sionofempl oy ment
 Toengagef ami lymember sinempl oymen
 Posit
ivecul turalpr acti
ce
 Encouragementf rom fami lymember sandfri
end
 Avai
labil
ityofi nfrast r
ucture
 Avai
labil
ityofmar ket
 Hobbiesint erestsandt alents
 Modernt echnol ogy

24.Hi
ghl
i
ghtf
ourf
act
orst
hataf
ir
m mayconsi
derwhendeci
dingont
hegoodst
opr
oduce.
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 130
 i
sabokemi
cah@gmai
l.
com
(
4mar
ks)

 Expect eddemand–wher edemandi slow, af i

rm wil
lonlypr oduceaf ewgoodsor
notpr oduceatal l
 Avai l
abil
ityofcapitalresources–thi
swoul dhel pdeci
deont helevelofproduct
ion
 Timeper i
od-thef i
rm mustconsiderwhet hershortorlongt erm productionis
requi r
ed
 Avai l
abil
ityoflabour-l
aboursupplyofther elevantski
ll
swoul dber equir
ed
 Costofpr oducti
on-thef i
rm mustconsiderdi r
ectandindirectcost
 Gov ernmentpol icy-
thef i
rm mustabidebyt her ul
esandr egul at
ionsofthecount r
y.
 Avai l
abil
ityofrawmat eri
als/f
act
orsofpr oduction
 Lev elofcompet iti
on
 Prof i
tabi
li
ty
 Effectofgoodsont heenv i
ronment
 Seasonal it
yinpr oduction
 Soci al
/cultur
alfactors
 Priceoft hegoods
 Lev eloftechnology

25. Out
li
nef
ourcr
it
eri
aofdet
ermi
ningsi
zeofaf
ir
m

 Numberofemployees
 Amountofcapit
ali
nvested
 Fl
oorareacov
eredbythepremi
ses
 Si
zeofthemarketserv
ed
 Methodsofpr
oducti
onused.

26. Highli
ghtf
ourci
rcumstancesunderwhi chanentr
epr
eneurmayest
abl
i
shhi
s
businesswher
eotherbusinessesal
readyexi
sted

 Soast
obenef
itf
rom alr
eadyav ail
ableimprovedinfr
astruct
ure
 Soast
obenef
itf
rom supporti
veser v
icessuchasbanki ng
 Soast
obenef
itf
rom j
ointresearchwi t
hotherbusinesses
 Soast
obenef
itf
rom alr
eadyav ail
ablemarket
 Soast
obenef
itf
rom thejoi
ntdisposalofwast eproductswithot
herf
ir
ms

27. Enumerat
efourbenef
it
sthatacount
rywoul
dgetasar
esul
tofl
ocat
ingf
ir
msaway
fr
om eachot
her

 Balancedregi
onaldevelopmentwil
lbereal
i
sed
 Rural-
urbanmigrati
oncontrol
l
ed
 Creati
onofempl oymentopportuni
ti
es
 Reductionofr
iskofwar s
 Promot i
onofexploi
tat
ionofresources

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 131
 i
sabokemi
cah@gmai
l.
com
28. Out
li
ne4r
easonswhyafi
rm mayr
emainsmal
l

 I
fthefi
rmisservi
ngsmal lmarket
 Smallf
ir
msareeasiertomanage
 Forqui
ckdeci
sionmaking
 Desi
retoavoi
ddiseconomi esofscal
e
 Smallf
ir
msarehighlyfl
exible

29. St
ate4reasonswhyafi
rm shoul
dcar
ryoutmar
ketr
esear
chbef
orer
eleasi
ngi
ts
pr
oduct
st othemar
ket

 I
tel
imi
nateswastef
uladvert
isi
ng
 Hel
ptoimprov
ethequalit
yofagi venproduct
 Afi
rmisabl
etocomeupwi t
hnewpr oduct
sasperthedemand
 Afi
rmisabl
etoreducethecostofpr oduct
ionegpackagi
ngcost
s
 Afi
rmisabl
etoidenti
fynewmar ketoftheproduct

30. Expl
ainf
ivebenef
it
sthatmayaccr
uet
oabusi
nessor
gani
zat
ionwhi
chexpandst
he
scal
eofit
soperati
on

 Thefirmi sablet oenj

oymar keti
ngeconi omiesduet ol ar
gev olumeofsales
 Enjoysfinancialeconomi esegeasyaccesst olargecr edi
t/avail
abi
li
tyofcoll
ateral
 Productioneconomi es–t hefir
m willaccesslargequant i
tiesthatat
tractquanti
ty
di
scount
 Spreadingrisksbydi ver
sifyi
ngoper ati
ons
 Thefirm canaf fordmoder nmachi nery
 Canpr ovidestaffwelfarefacil
it
iesforimprovedper formance
 Divi
sionofl abourdiff
erentpeopl eareassigneddi f
ferenttaskaccordingtoabili
ty

31. Di
scussanyf
ivedi
seconomi
esofscal
ethatabi
gfi
rm mayexper
ience

 Manager ialdiseconomi es–Duet oexpandedoperati

onsfir
msmaysuf ferf
rom
i
nher i
tancepr oblems
 Delayindeci sionmaki ng–duet oincreasedbur
eaucracy
/consult
ati
ons
 Highcost sofpr oductions-
 Highcost sofi nputs-duetoexhaustionoftheexi
sti
ngones.
 Mar keti
ngdi seconomi es–duetol i
mi t
edsizeofmarket
 Technologicaldi seconomies–duet ot heuseofout
datedabsolutet
echnol
ogy

32. Expl
ainf
iver
easonswhyt
hegov
ernmentdi
scour
agesl
ocal
i
zat
ionoff
ir
ms

 Concent r
ati
onoffi
rmsi noner egionmayhaveanegat
ivei
mpactonthe
envi
ronmentofther egion.
 Mayl eadtoregi
onalimbalanceindevelopment
 Contribut
etorur
alurbanmi grati
on
 Incr
easedpopulati
oni nthelocali
zedar
eamaysparkoffaser
iesofpr
oblemssuch

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 132
 isabokemicah@gmai l.
com
ascongestion,
increasedcr i
mer at
es
 Mayber i
skybecausei fanyundesirabl ethi
nghappenstot
heregi
onitmaydest
roy
thecountr
ieseconomi candi ndust
rialbase
 Afalli
ndemandf orproductsproducedbyl ocali
zedfi
rmswoul
dresul
tint
o
widespr
eadunempl oymentintheaff ectedarea.

33. Expl
ainf
iveway
sinwhi
cht
hegov
ernmentcanuset
oencour
agedel
ocal
izat
ionof
fi
rms. (10marks)

 Offer
ingfreeandcheapl and
 Reductionoft axes.Tor educecostofpr oductions
 Offer
ingsubsi dies.Tor educecostofpr oducti
ons
 Offer
ingdirectfinancialassistance.Shouldfacil
it
atesaccesst
ocheapcredi
tfor
fi
rmst oencour aget hem
 I
mpr ovementofi nfr
astructure.Roadstoeaset hemov ementofgoodsandpeoplei
n
rur
alareas,elect r
ici
tyforrunningthebusiness.
 Shouldenhancesecur
it
ytosaf
eguar
dthepr
oper
tyofi
nvest
orsandcr
eat
e
confi
denceinthem.
 Pr
ovi
dingcl
eanwat
erf
ori
ndust
ri
es
34.Expl aint hebenef i
tst hataccr uet oabusi nessthatexpandsi t
soper ati
ons
˗Firmsar eablet oenj oymar ketingeconomi es-largev olumesofsal esatcheapr ates
˗Adv erti
singeconomi es-f ir
mi sabl etofinanceadv ert
isingcampai gnst ocaptureawi der
mar ket
˗Financialeconomi es-t hefirm haswi deraccesst ocapi talsourcest hr
oughcr edit
˗Reducedoper ationalcost s-av eragecostofpr oduct i
onl ower sasout putincreases
˗Per sonneleconomi es/l abour-f i
rmi sabletoat tr
actpr ofessionalorqual i
fi
edper sonnel
forbet t
eroper ati
ons
˗Pur chasingeconomi es-t hef i
rmi sabletobuyi nbulkandenj oyhuget radeandquant ity
discountsonst ocks/r awmat erials
˗Technol ogicaleconomi es-t hef ir
m canaf fordmoder nt echnol ogyforimpr ovedqualit
ies
andquant iti
es
˗Staf fwelfareeconomi es-t hef i
rmi sablet oofferwelfar etot hestaffthatmot i
vatesits
wor kers
˗Manager ialeconomi es-t hef i
rmi sabletogetpr ofessional sinthemanager i
alpoststhat
i
mpr oveef fi
ciencyofpr oduct i
on
˗Spr eadingr i
sks-t hef i
rmi sabl et ospreaditsrisks
˗Resear checonomi es-t hef ir
m cancar ryoutresearchf orf uturedevelopmentoft hef i
rm

PRODUCTMARKET.
1.
Highl
i
ghtf
ourci
rcumst
ancesunderwhi
chbusi
nessent
erpr
isesmaychooset
omer
ge

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 133
 i
sabokemi
cah@gmai
l.
com
 Wher
eper
sist
entdecl
i
nei
npr
ofi
tabi
l
ityexi
st

 Wher
ether
eisi
ntent
iont
ovent
urei
ntonewl
i
ne

 Wher
ether
eisneedt
oexpandcapi
talbase

 Wher
ether
eisneedt
obr
ingonboar
dnewski
l
ls/
compet
ences

 Wher
ether
eisneedt
oshar
eresear
chi
nfor
mat
ion

 Cont
rolwi
dermar
ket
/i
ncr
easedsal
es

 Cont
rolout
put

 Tol
owercostofpr
oduct
s(e.
grawmat
eri
als,
l
abour
)

 Tocont
rolpr
ices

 Easi
ert
obor
row

 Easi
ert
ofaceemer
genci
es/
ri
sks

 Wher
ether
eist
oomuchcompet
it
ion

 Needt
odi
ver
sif
y

2.Expl
ainf
iveci
rcumst
ancesi
nwhi
chaf
ir
m mayacqui
remonopol
ypower
.(10mar
ks)

 Ifthef i
rm hasasecr etivepr oduct i
ont echni que-Thisdeni esot herfirmst heuseof
thetechnique/ product ion/ sal eoft hepr oduct .
 Ifthef i
rm hascont rolov erst rategicinput s/rawmat eri
als-Thi smakest hef i
rm have
thesol eaccesst oinput s/ rawmat erial
susedi nproduct ionoft hecommodi t
y
 Ifthev enturerequi r
esl argecapi tal/i
nv estmentofsubst ant i
alcapi talotherf ir
ms
maynotbeabl etor aiset hecapi t
alleav i
ngt hef i
eldt oonef i
rm.
 Ifthef i
rm enjoy sgreat er /subst ant i
aleconomi esofscal e-Thisenabl est hef i
rmt o
produceatal owercostt hanot herf i
rmst husedgi ngoutl essef fi
cientfirms.
 Ifthef i
rmi ssetupasast atemonopol y/givenexcl usiver ights/legalright sof
product i
onofapar ticularpr oductbyt hegov ernmentt husshut ti
ngout
 compet i
ti
onf rom compet itors.
 Iffi
rmsmer ge/ amal gamat e/ combi ne/jointoget her/buysot herst hrough
absor pti
on/acqui siti
ont obecomet heonl yfirm/supplier/ producer /eli
mi nat e
Compet i
ti
on/ chopscompet i
tion.
 Ifthemar keti sbestser vedbyonef i
rm mor eeconomi cal lyotherf i
r msent eri
ngthe
mar ketmaymakel ossesduet ol owsal eshencet hef irmr emai ndomi nant
 Ifthef i
rm haspat entr i
ght s/copy ri
ght /whichbar sot herf irmsf rom pr oduci ng/sel
li
ng
thepr oducts.

3. St
ate4f
eat
uresofol
i
gopol
yty
peofmar
ketst
ruct
ure
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 134
 isabokemi cah@gmail.
com
 Fewf i
rmsint hemar ket
 Pri
cerigi
dit
y
 Thereisint
erdependencei nrelat
iontopri
cing
 Theyexperiencekinkeddemandcur ve
 Theyconductal otofadverti
sing
 Fi
rmsar erelati
velyl
arge

4. Out
li
ne4f
eat
uresofmonopol
i
sti
ccompet
it
ion

 Largenumberofsel lers
 Perfectknowl edgei
nthemar ket
 Freeentryandexi ti
ntotheindust
ry
 Fi
rmssett heirownpri
ces
 Fi
rmsdi fferenti
atet
heirpr
oductsalt
houghser
vet
hesamepur
pose

St
ate4essential
featur
esofanymar ket.
 Presenceoft hecommodi ti
estobesold.
 Presenceofbuy ers.
 Presenceofsel l
ers.
 Existenceofagener al
l
yacceptedmedium ofexchange.
 Priceatwhi chgoodswillbeboughtandsol
d.

5. St
ate4condi
ti
onst
hatar
enecessar
yforpur
ecompet
it
ion

 Largenumberofsel l
ers
 Largenumberofbuy ers
 Homogenouspr oducts
 Not ranspor tcost
 Nogov ernmenti nter
vention
 Freeent ryintothemar ket
 Perfectknowl edgeoft hemar ket
 Freeexi toutoft hemar ket

6. Hi
ghl
i
ght4met
hodsusedbyamonopol
i
sti
cfi
rmt
odi
ff
erent
iat
eit
spr
oduct
s

 Brandi ng
 Packagi ngindi
ff
erentsizes
 Pricing
 Bl
endi ngintodi
ffer
entcolours
 Per suasiv
eadverti
sing
 Trademar ks

7. Out
li
ne4sour
cesofmonopol
ypower
s

 Ownership/
controlofimport
anti
nputi
npr
oduct
ion
 Si
zeofthemar ket
 Mergi
ngoft woormor efi
rms
 Hi
ghiniti
alcapi
tallayout
Nov
els,
Updat
edCPA,
KASNEB,
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imar
yNot
es 0705525657 135
 isabokemi
cah@gmai
l.
com
 Governmentpower
 Product
ionri
ght
s

State4reasonswhi
chmayi
nfl
uenceagov
ernmentt
oimpl
ementapol
i
cyof
delocal
i
zation
 t
opr
omot
ebal
ancedr
egi
onaldev
elopment
 t
oredi
str
ibut
eincomes
 t
oensur
ebet
teruseofr
esour
cesi
ndi
ff
erentpar
tsoft
hecount
ry
 t
ocr
eat
eempl
oymenti
ndi
ff
erentr
egi
onsoft
hecount
ry

toreducecongestioninurbancentreswheretopmanyformsarelocal

8. St
atef
ourway
sinwhi
cht
hegov
ernmentmayi
nfl
uencet
hepr
iceofacommodi
ty

 Thr
oughtaxati
on
 Thr
oughofferi
ngsubsi
dies
 Thr
oughi
mposi ngquotas
 Thr
oughpricecont
rol
s

9. Out
li
nef
ivedi
sti
nqui
shi
ngdi
ff
erencesbet
weenol
i
gopol
yandper
fectcompet
it
ion

Ol
i
gopol
y Per
fectCompet
it
ion

i
)Sel
l
ersar
efew i
)Sel
l
ersar
emany

i
i
)Thesel
l
erset
sthepr
ice i
i
)Thesel
l
erdoesnotsetpr
ices

i
i
i)Het
erogenouspr
oduct
s i
i
i)Homogenouspr
oduct
s/si
mil
ar

i
v)Bar
ri
erst
oent
ryandexi
t i
v)Nobarr
ier
stoent
ry/
exi
tfr
om t
he
market

v
)Pr
icewar
sexi
st v)Nopri
cewar s/
all
fir
mssel
latsame
unif
orm pr
ice

v
i)Not
ranspor
tcostar
eincur
red v
i)Tr
anspor
tcost
sar
eincur
red

v
ii
)Fact
orsofpr
oduct
ionar
emobi
l
e v
ii
)Fact
orsofpr
oduct
ionar
eimmobi
l
e

10. Expl
ainf
ivechar
act
eri
sti
csofper
fect
lycompet
it
ivemar
ket

 Therearemanysell
ersandbuyer
s
 Freeentr
yandexitoffi
rmsint
hemar
ket
 Sellhomogenousproduct
s

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 136
 isabokemi cah@gmai l
.com
 Bothsell
ersandbuyer shav eperfectknowl edgeofthemar ket
 Thereisfr
eemobi l
it
yoff act
orsofpr oducti
on
 Buyersandsell
ersarei nclosecont acthencenot ranspor
tcost
 Nodiscri
minati
onofbuy ersandsel lers
 Nogov er
nmentinterventionthroughpr i
cing

11. Li
stt
he4essent
ial
sofamar
ket

 Wil
li
ngbuy er
sandsell
ers
 Commodi t
ytobeboughtorsold
 Acceptabl
emedium ofexchangeegmoney
 Marketpri
ce

12. St
ate4char
act
eri
sti
csofamonopol
yMar
ket

 Onlyonesuppl
ierf
ortheenti
remarket
 Commodi t
ysuppli
eddoesnothaveclosesubsti
tut
es
 Newf i
rmsarenotall
owedtoenterthemarket
 Pri
cesarefi
xedbytheproducerorsuppl
i
er

13. Hi
ghl
i
ghtany5di
sadv
ant
agesofmonopol
i
es

 Consumer sar eexploitedbecausemonopolist

schargehi ghpr i
cesf ortheirgoods
andservices.
 Duet oabsenceofcompet i
ti
on,thel
owqualitygoodsar eproducedt husconsumer s
aresuppliedinfer
iorgoods.
 Consumer slackawi derangeofgoodst ochoosefrom sincet hereisonesuppl ieror
producer
 Whenpr oduct i
onisr educedsomewor kersarerenderedunempl oyed
 Monopolistsmayov erlooksomemar ketswhichseem lesspr ofit
ablet othem and
thusconsumer sarenotsuppl i
edwithgoodsorservices.
 Monopolistsmaycausear t
if
ici
alshort
agessoast omani pulateprices.

14)Out
li
nefivedi
ff
erencesbet
weenmonopol
i
sticcompeti
ti
onandmonopol
yty
pesof
market
s.10mks
monopoly monopol
ist
iccompet
it
ion

-mar ketsmadeup, ofonesuj pplier -mar ketmadeupofmany

/seller suppl ier
s
-Fi
r msmayear nsuper normalpr ofi
tsi
n -firmsear nnor malpr
ofi
tsi
nthe
thel ongrun l
ongr un
-productsar eheterogeneous/ notclose -product sarehomogenous
subst i
tutes /closesubst it
utes
-si
ngl efi
rmsmayhav econtrolov er -Nosi nglefir
m hascontr
olover
factorsofpr od. thef actorsof
-fi
rmi susual l
ylargeinsize -i
nv olvedfir
msusual l
ysmalli
n
-entryintothemar ketisrest
ricted size
pricediscri
mi nati
onispossibl e -ent rytothemar keti
sfr
ee

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 137
 isabokemi cah@gmai l.
com
-pri
cedi scr i
mi nati
onnot
possi bleesp.i nlongr u
16.Expl ainfivechar acteri
sticsofper fectcompet it
ionmar ketstr uct
ure
Largenumberofbuy ers/sel lerssucht hatact i
onofsi nglebuy er/sellercannotaff
ect
themar ket
Homogenei ty/uni formityoft hepr oduct-pr oduct sfrom differentproducersareidentical
i
nal laspect s
Wideknowl edgeoft hemar ket-ther eforenosi nglesel l
er/'buy ercanaffectthebusiness
atanypr i
ceot herthant heequi l
ibri
um pr ice
Freedom ofent ry/exi t-therear enobar ri
erst oent ryorexi ttoorf r
om themar ket
Uniformityofbuy er sandsel l
ers-t hereforenobenef i
tofsel li
ngorbuy i
ngfrom a
particularbuyerorsel ler
Nogov ernmentint erference-i nfor m oftaxes, subsi dies,quotas, pri
cecontrol/pri
ce
prevaili
ngi nthemar ketisdet erminedst ri
ctlybyi nterplayofdemandandsuppl y
Noexcessdemand/suppl y-buy ersar eablet obuyal ltheywant/sel l
ersareabletosel l
allt
heysuppl ytothemar ket
Not ransportcost sasbuy ersandsel l
ersar elocat edinonear ea

17.Expl ai
nfiv
ef eat
uresofmonopol y
Thereexistsonlyonesinglesel l
eroftheproduct
Nocl osesubstit
uteorri
v alsuppli
ersoftheproduct
Thedemandcur vesteeplyslopesf r
om lef
ttorightbecausemonopol
i
stcannothav
e
controlofbothpr i
ceandout putatt he
samet i
me
Pri
cedi scr
iminati
onispossi bl
e
Maypr oducelowqual i
typr oductsduetolackofcompet it
ion
Pri
cesar efi
xedbyt hesuppl i
er
Dif
ficultf
orotherfi
rms( supplier
s)toenterthemar ket

18.Expl
ainf
ivedi
ff
erencesbet
weenmonopol
yandol
i
gopol
ymar
ketst
ruct
ures.(
10mar
ks)

Monopol
y Oligopoly
i
.Themar ketisdomi nat
edbyf ewfirms
i
.Thereisonef i
rmintheindust
ry
i
i.Thereisexi stenceofnon-price
i
i.Therearenopr icewarshenceno
compet it
ion.
compet i
ti
on
i
ii.Thereishighl evelofint
erdependencei
n
i
ii
.Thef i
rmisi ndependenti
nrel
at i
ontothe
relat
ionto
outputand
prici
ngandout put.
pri
cingstrat
egies
i
v .Thesellersar epri
cetakes
i
v.Themonopol yisapricemaker
v.Thedi f
ferentiatedproductsareclose
v.Productshav enoclosesubst
itutes.
substit
utesof
vi
.Thef i
rmf acesadownwar dsloping
eachot her.
demandcur ve
vi.Thefir
mf acesaki nkeddemandcur ve.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
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es 0705525657 138
 i
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cah@gmai
l.
com
POPULATI
ONANDEMPLOYMENT.
1.
Listf
ourt
ypesofunempl
oymenti
naneconomyandgi
vet
hecausef
oreach(
4mar
ks)

 Cycl
icalemploymentduetorel
ati
vel
ylowgener aldemandf orgoodsandservi
ce
 Str
ucturalunempl
oymentduetotechnologicalunempl oyment
 Seasonalunemployment-
duetorel
ati
velylowdemandf orl
abouratcert
aint
imes ofthey
ear
 Fri
cti
onalunemploymentduetoti
mel agsi.etimet akeninchangingj
obs
 I
nvoluntaryunempl
oyment–want i
ngjobsatpr ev ai
li
ngwagesandcannotgett hem.

2.
Out
li
nef
ournegat
iveef
fect
sofanagei
ngpopul
ati
ont
oaneconomy
. (
4mar
ks)

 Deficiencyofaneconomi cal
lyact
ivelabour/l
owlaboursuppl
y
 Increaseinwel f
arecosts
 Needt oimportlabourthateff
ectthef or
eignexchanger
eserv
es
 Dependencyr at
ioincr
eases
 Rigidi
tytochange
 Fallinoldforgoodsandser vi
cesrequir
edbyt heyouth
 Lesspr ogressiv
e/lowsav i
ngsandlowi nvest
ments

3.
Expl
ainf
ivechal
lengest
hatmaybeexperi
encedbyacount
rywhosepopul
ati
oni
s
madeupofalargepropor
ti
onofyoungpeopl
e. (
10marks)

 Hi ghr ateofunempl oymentasdemandf orj obsout str

ipst heav ail
ablejob
opport uni
ti
es.
 Rat eofcr ime/ soci alevil
smayr ise.Ast hey outhr emai nidle,theyar el
ikelytor esort
tocrimeandot hersoci alev i
l
sast heyl ookf ormeansofsur vi
val.
 Const rai
ntsongoods/ ser vi
cesassoci atedwi t
hy oungpeopl easdemandout stri
ps
supply.
 Dependencyr atiowi llri
seaseconomi callyactivepopul ati
onwi l
lshoulderabi gger
burden.
 Reducedsav ings/ investment s.Inv estment swi lldecl i
neasar esultofhighr ateof
consumpt i
onbyy oungpeopl e.Thi smayl eadt ol owdev elopment .
 Lowpercapi tai ncome.Si ncet heNat i
onalI ncomewi l
lbespr eadov eral argenon-
contri
but i
ngpopul ationwhi chmayl eadt oal owst andar dofl i
ving.
 Pr oblem ofr aisinggov er
nmentr evenuewhi chmayf orcethegov ernmentt odi vert
resourcesmeantf orot hersect orst ocat erforthey oung.
 Lowl aboursuppl yasmanyy oungpeopl emaynothav eat tainedt hewor kingagenor
acquiredther equi redskillsandexper ience.
4.
Expl
ainway sinwhi cht hegov ernmentofKeny acanr educet hel evelofunempl oyment
(10mar ks)

 Di
versi
ficat
ionoft
heeconomybyencour
agi
ngtheest
abli
shi
ngofdi
ff
erent
i
ndustr
ies/sector
stocreat
eempl
oymentsOpport
uni
ti
es.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
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es 0705525657 139
 isabokemicah@gmai l.
com
 Transf
ormingagri
cul
tur
alsector/ruralsect
ortocur
bruralur
banmigrat
ion/accept
egsoftransf
ormati
onasanami ng( t
ocr eat
emorejobsandreduceunemploy
ment )

 Tr
ansformingeducati
on/trai
ningsect
ort
oimpr
oveonski
l
ls/(
thi
smakest
he
gr
aduates)acqui
rerel
evantski
lls.

 Est
abl
i
shingonemploymentpol
icybygover
nmentt
omakei
teasyf
orpeopl
etoget
j
obs/acceptegsofgov
ernmentpoli
cyasment
ion.

 Lending/setti
ngofaf undtoassi
stunempl
oyedt
ost
arti
ncomegener
ati
ng
acti
vi
ties/acceptegsoffundsasamention

 Expor
ti
ngLabourbyassi
sti
ngunempl
oyedpeopl
etoacqui
rej
obsabr
oad/count
ri
es
wit
hlabourdef
ici
ency
.

 Encour
agi
ngt
hei
nfor
mal/JuaKal
isect
ori
nor
dert
opr
omot
esel
fempl
oyment
.

 Delocal
izat
ion/decentr
ali
zat
ionpol
i
cyf
orbal
ancedr
egi
onaldev
elopment/r
educed
rur
alurbanirr
igat
ion.

 Popul
ati
onpol
i
cyt
ocont
rolgr
owt
h/hav
eal
abourf
orcet
hatt
heeconomycan
absor
b.

 Toimprov
einfr
ast
ruct
urei
nor
dert
osui
tabl
eeconomi
cact
ivi
ti
es/Acceptegsof
i
nfr
astr
uctur
easarari
ng.

 I
ncreasegov
ernmentexpendi
tur
etoexpandt
hesi
zeoft
heeconomy/t
ofi
nance
dev
elopmentproj
ect
s

 Eff
ecti
veusesofnatur
alr
esourcest
oincr
easepr
oduct
ionact
ivi
ti
esacceptegsof
nat
uralresour
cesasamentor.

 Income/wagepol
i
cyt
ohar
moni
ze/el
i
minat
edi
ff
erencesbet
weenr
egi
ons/
sector
s.

 Pr
ojectl
ocal/i
nfanti
ndust
ri
esagai
nstunf
aircompet
it
ion.

 Att
ract(
Local/for
eign)i
nvest
mentsthr
oughvi
sionincer
ti
ves/t
ogr
owt
he
economyaccepteg.sofi
ncenti
vesasexpl
anat
ion.

 Receivi
ngcoll
apsedindust
ri
es/pr
oject
sbyi
nject
or,
fundsIsel
l
ingt
hem /i
ncreased
producti
onacti
vi
ties.
FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530

5.
Highl
i
ghtf
ourpr
obl
emsofdev
elopmentpl
anni
ngt
hatacount
rymayexperi
ence
(4marks)

 I
nadequatedataoneconomicperf
ormance.
 Unr
eli
abledata/inaccur
atedat
awhichmaynotbeusef
ulf
orpl
anni
ng.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 140
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sabokemicah@gmai l
.com
 Lessqual i
fi
edper sonneltocopewi ththet
asksofdevel
opmentpl
anni
ng.
 Privatesectoractivi
ti
esar enoteasil
ycoor
dinated.
 Politi
calri
gidit
y/lackofpol i
ti
calwil
l.
 Inappropri
ateuseoft echnol
ogy.
 Inadequatef unds/capi t
al/resources.

6.Highli
ghtf
ourmeasur
est
hatagov
ernmentmayt
aket
oreducet
hemor
tal
ityr
ateina
country
. (
4mar ks)

 Avail
abili
tyofbet terhealthcare
 Foodsecur it
y
 Minimizinginternalconf l
ict
sandwar s.
 I
mpr ov i
ngenv i
ronment alSanitat
ion.
 Sensiti
zati
ononpubl i
ce. gonper sonalhygi
ene,
educati
onvacci
nat
ionHI
VAi
ds.
 Disasterpreparednesse. gfloods,f
ires,
coll
apsi
ngbuil
dings
 Applymeasur est oreducer oadaccidents
 Controluseofdr ugsandal cohol
 Controlcri
mes

7.Out
li
ne4negat
ivei
mpl
i
cat
ionsofr
api
dpopul
ati
ongr
owt
hinKeny
a

 Incr
easeddependencyr ati
o
 Reductioninsavi
ngsandi nvest
ments
 Leadst ounemployment
 Exert
spr essur
eonsoci alamenit
ies
 Mayl eadtooverexploi
tati
onofnaturalr
esour
ces
 Reducedpercapitaincome

8.St
ate4causesofseasonal
unempl
oymenti
nKeny
a

 Decli
neinthesupplyofcertainrawmat eri
als
 Temporaryemployment /
contractworkers
 Economicdepressi
on/decli
nei neconomi cactiv
iti
es
 Volunt
aryresi
gnati
onduet ogr eenerpastures
 I
nterdi
cti
onsi.
etempor arystoppageort erminat
ionofempl
oyment

9.St
ate4negat
ivei
mpl
i
cat
ionsofar
api
dlygr
owi
ngpopul
ati
on

 Strainontheresourcesduetoov
erpopul
ati
on
 Mayl eadtounempl oyment
 Lowst andardsofli
ving
 Lowi ncomepercapi ta
 Increasei
npov ert
ylevels

10.Gi
ve4r
easonswhyi
tisi
mpor
tantf
oracount
ryt
oknowi
tspopul
ati
onst
ruct
ure

 Todet
ermi
net
hel
i
feexpect
ancyoft
hepopul
ati
on

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 141
 isabokemicah@gmail.
com
 Toknowt hesizeofuneconomi cal
l
yactiv
epopulat
ion
 Toprovi
deinfrastructur
e
 Toplanforofferi
ngsecur i
ty
 Toplanforsocialameni ti
esegsecurit
yeducat
ion
 Toplanforrel
ev antjobcreati
on
 Toplanforregionaldevelopmentneeds

11.Out
li
ne4r
easonswhyanagei
ngpopul
ati
onmaynotbedesi
rabl
etoacount
ry

 Oldpeopletendtopr
ov i
delesslabourfor
ce
 Highdependencyrat
io
 Thesocietybecomeslessproducti
ve
 Mayr esul
ttoemploy
mentduet of al
li
ngindemandf
orgoodsandser
vicesr
equi
redby
theyouth

12.Out
li
ne4measur
est
akenbyt
heKeny
angov
ernmentt
ocont
rol
highr
atesof
unempl
oyment

 Cont r
olli
ngpopul ationgrowth
 Prov i
dingr elevanteducat i
on
 Usingappr opriatetechnology
 Expor t
inglabourt oothercount r
ies
 Diversi
f i
cationofeconomi cact i
vit
ies
 Maxi mum ut il
i
zat i
onofnat uralr
esources
 I
ncr easinggov ernmentexpendi t
ureonproject
sthatgener
atemor
ejobs
 Encour agingf oreigninvestment
 Promot ingt hei nfor
malsect or
 Cont r
olli
ngi nflati
on

13.Kenya’
spopulat
ionismai
nlycompr
isedoft
hey
out
hcompar
edt
oagei
ngpeopl
e.St
ate4
benef
itsofthi
spopulat
ion

 Ther
eisalargesupplyoflabour
 Ther
eisalargemar ket/
demandforproduct
s
 Ther
eishi
ghpr oductiv
ity
 Ther
eischanceofhi ghmobili
tyi
nlabour

14.Out
li
ne4negat
ivei
mpl
i
cat
ionsofunder
popul
ati
ononacount
ry

 Li
mitedlaboursupply
 Li
mitedmar ket
 Underuti
li
zati
onofr esour
ces
 Uneconomicaltoprovidegoodsandservi
ces
 Lackofspecial
izat
ion
 Reducedphaseofeconomi cdevelopment
Nov
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St
atef
ouremer gingi ssuesinpopulati
onandemployment (
4mks)
 TheHI V/Aidspandemi c
 Popul ati
ongr owt handcontrolpol
ici
es
 Fami l
ypl anningcampai gntocreateawar
eness.
 Teenagepr egnancies
 Provisionoff reebasichealt
hser vi
ces
 Foodsecur it
yissues
 Il
legalimmi grationint
othecount r
y
 Emphasi sonmat er
nalchil
dhealth.
 Emphasi soncer ti
fi
cateofgoodconductduri
ngrecr
uit
ment

16.Li
stf
ourf
act
orst
hatcont
ri
but
etoani
ncr
easei
nthepopul
ati
onofacount
ry

 I
mpr ovedhealt
hf aci
li
ti
es
 Decreasei
nmor t
alit
yrates
 I
mpr ovedstandardsofli
v i
ng
 I
mpr ovedfert
il
it
yr at
e
 Migrati
onfrom othercountri
es
 Earl
ymar r
iages

17.Expl
ainf
ivemeasur
est
hatKeny
amayt
aket
ocont
rol
unempl
oymentpr
obl
em

 Popul ati
oncont rolegf ami l
ypl anning
 I
ncr easedgov er
nmentexpendi turethushav i
ngmanypr oj
ectssetup
 Encour agingexpl oit
ati
onofnat uralresourcestoincr
easeproducti
onacti
vi
ti
es
 Expor ti
nglabourt ocount rieswi thlabourdef ici
ency
 Diversif
icationoft heeconomyt oreduceseasonalunempoy ment
 Ruraldev elopment
 Encour agef orei
gni nvestmenti nthecount ry
 Encour ageuseofl abouri ntensivemet hodinproducti
on
 I
mpr ovementoft heinfrastructuret ostimulateeconomicacti
vi
ties
 I
mpr ovementofeducat i
onsy st emst omakei tmoreappropr
iatetotheempl
oyment
needsoft heeconomy .

18.Expl
ainf
ivemeasur
esKeny
amayt
aket
ocont
rol
herr
api
dlygr
owi
ngpopul
ati
on

 Adoptingfamilyplanning
 Li
mi t
ingthenumberofchi ldr
enperwoment hroughlegi
slat
ion
 Raisi
ngmar ri
ageaget hroughlegislat
iontodiscourageearl
ymar r
iages
 Creat
ingawar enessamongci tizensaboutbenef i
tsofsmallfamil
ies
 Creat
ingeducat i
onoppor t
uni
tiesf orwomenasanal ter
nati
vetobr i
ngi
ngupchi
l
dren
 Raisi
ngthecostofr ai
singchil
dr enbyr ai
singthecostofchil
drensneeds

St
ate4Causesofunempl
oymenti
nKeny
a.

Nov
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 Hi
ghpopul
ati
ongr
owt
hrate.

 Lowdemandf
orgoodsandser
viceswhi
chl
eadst
ocl
osur
eofi
ndust
ri
es.

 Minimum wagel
aws:Peopl
ecannotbeempl
oyedatr
atesbel
owt
hesetmi
nimum
asitwoul
dbeill
egal
.

 Shortageofcapi talwhi chhindertheestabli

shmentandexpansi onofi
ndust
ries/
l
ackoff actorsofpr oduct i
on.
 Inappropr i
ateeducat i
onsy stem:Theeducat ionsy st
em doesnoti
nsti
l
lther
ight
skil
lsthatcanbeappl iedimmedi atel
yaf t
erleav i
ngschool.
 Choiceofpr oduct i
onmet hods:Choiceofcapi tali
ntensi
vemethodswherel
abouris
abundant .
 Seasonal it
yinpr oduct i
on/ poorcl
imat i
ccondi t
ions.
 Jobsel ectionduet opoorwages.
 Poorgov ernmentpol icyonj obcreation.
 Inappropr i
atelandt enur e.

20.Di
scussf
ivef
act
orst
hatdet
ermi
net
hef
ert
il
it
yrat
einacount
ry

 Cult
uralbeli
efsconcerningfamil
ysize
 Costofbringi
ngupf ami l
y
 Peaceandsecur it
y
 I
mpr ovedhealthandeducationservices
 Governmentpol i
cyonf amil
ysize
 Ageandsexst r
uctur
eoft hepopulation

21. Expl
ainf
ivet
ypesofunempl
oymentr
elat
edt
otheKeny
aneconomy
. (
10mar
ks)

 Resi dualunempl oyment- Thi soccur swher el aborisi ncapacitatedment all

yand
phy sicall
yhenceunabl etowor k
 Struct ur
al/Technicalunempl oyment-Thi soccur swherecapi tali
ntensivemet hods
ofpr oduct i
onar eusedandwor ker
sar elai
dof f
 Seasonalunempl oyment– I toccur sduet o seasonalchangesi ndemand and
product ion hencel aborisnotdemanded dur ing cert
ai nt imesofseasonse. g.
drought ,lowt ouri
sm seasonet c.
 Hidden/ disguisedunempl oyment-Thisoccur swhent hewor kersar esomanyt han
ther equi r
ednumberf oragi venj obhencet heycannotf ul
lyut i
li
zet heirskil
land
abili
ties
 Involuntary/ openunempl oyment–Theseoccur swhenpeopl ear elookingf orjobs
atexi sti
ngwagesr ate/salari
esbutt heycan’tgett hem
 Fri
ct ionalunempl oy ment–Theseoccur swher epeopl elosej obsandt heyt akeal ot
oftimet ogetnewj obs.
 Cycl i
calunempl oyment-Thi sismassunempl oy mentthatoccur sduet oreduct i
on
ofmar ketproduct salloverthewor ld
 Key nesian unempl oyment– caused when t he economyi s oper at
ing ata l ow
capaci tythannor malhencel eadingt ounderutil
izationofr esources.

Nov
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22. Pr
obl
emswi
thanagei
ngpopulat
ion

 Theyprov
ideal
essmobil
elabourfor
ce-Theolderaper
songet
s,thel
esswi
l
li
ng
theyar
etomovefr
om oneplacetoanotherorevent
ochangej
obs.

 Lowlaboursupply
-Oldpeopl
ear
elesspr
oduct
iveandt
huscannotpr
ovi
det
hemuch
neededlabourf
orce

 Highdependencyl
evel
s-t
heoldwil
lbel
essproducti
veandther
eforewil
lbehighl
y
dependentonthef
ewwor ki
nggr
oupwhowillthenbestr
ainedwhil
eprovi
dingfor
thei
rneeds.

 Thecount
rybecomesl
esspr
ogr
essi
vebecausei
tlackst
hei
nputofmor
eener
get
ic
yout
h.

 Mayleadtounempl
oyment
-thi
smaybeduet
othef
alli
ndemandf
orgoodsand
ser
vicesr
equi
redbyt
heyout
h.

23.Expl ainf ivecausesofUnempl oymenti nKeny a.

Rapi dpopul ati
ongr owt h–Ast hel abourf or ceent eri
ngt hel abourmar ketwi l
lber isi
ngat
higherr at ethant heeconomycanabsor b.
Useofi nappr opriatet echnology–wher eacount rywithhi ghlaboursuppl yresort stouse
ofcapi t
ali ntensi
vemet hodsofpr oduct i
on.
Rur altour banmi gration–Hi ghi nfluxinur banar easexpandt hewor kf orcethatcannot
beabsor bedbyt hel abourmar keti nt owns.
Inappr opr iateeducat ionsy stem .–Whent heeducat i
onsy stem doesnotequi p;the
yout h/learner swithski ll
sr equiredi nthelabourmar ket.
Lackofpr oductmar ket ,-l
ackofdemandorr educt i
oni ndemandf orpr oducts
discour agespr oductionwhi chleadst ounempl oyment .
Jobsel ection.–Wher ej obseeker spr eferwhi t
ecol larjobsmaki ngt hem nott ot akeup
theav ail
abl ebluecol l
arj obs.
Seasonal ityinproduct i
on.–Seasonalnat ur eofsomej obscr eateunempl oymentdur ing
theof f
-peakseasons.
Inadequat eco-oper antf act
or sinput s.–I nsuf f
iciencyoff actorsofpr oduct i
ont hatneed
tobecombi nedwi thlabourl i
mi texpansi onofj oboppor t
uni ti
es.Thi scauseunempl oyment.
Poorpl anni ngandmi smanagement–Mi smanagementofpubl icresour cesleadt o
collapseofmanyi nstitutionsresul ti
ngi nreduct i
onofempl oymentoppor tunit
ies.

Explai
nt hefoll
owi ngterminologiesasusedi npopulat
ion
Fer t
il
it
yrate
Thisistherateatwhi chonet housandwomengi vebir
thwithi
noney ear/Iti
sal
sot he
numberofchi ldreninav erageawomanwi l
lbearinherproduct
iveyears.
Ov erpopulation
Thisisthesituationwher ethesizeoft hepopulati
onistoomuchcompar edtot
hat
country‘
sresour ces/Thepopul ationistoohighthanwhatisneededt oprovi
delabourto
exploi
tnaturalandmanmader esourcesofthecount r
y/Theav ai
l
ablegoodsandser vi
ces
aretoolowt osuppor tthatpopul ati
on.

Nov
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Emigrati
on-Movingoutofanar ea.
Decl
iningpopul
ations-Referstoapopulati
onthathasbeenreduci
ngov erti
me.
Populati
onstr
ucture.-
Referstothecompositi
onofpopulat
ionaccordi
ngt oage,
sex,
i
ncomedi st
ri
buti
onandl ev
elsoflit
eracy

Expl ain5measur esusedt ocur br apidl

yincreasingpopulationinKeny a
˗Fami lyplanninginordert
or educet henumberofchi l
drenonewi l
lgetduringt hechil
d
bear ingper i
od
˗Rai singt hemar ri
ageaget hroughl egisl
ati
onsoast oreducet heferti
l
ityrat
e
˗Rai singt hecostofbr i
ngingupachi l
dhencemaki ngitdiff
icultt
ocat erfortheirneeds
whi chmakest hem toreducet henumberofchi ldren
˗Limi tingt henumberofchi l
dr ent ogivebirt
hperwomanv ialegisl
ation
˗Rai singt helevelofeducationt ochanget hecul tur
eandat tit
udesoft hesoci ety
˗Incr easingempl oymentoppor tunit
iesforwoment oengaget hem mor eatwor kasan
al
t ernat i
veofbr i
ngingupchi ldren
˗Cr eatepubl i
cawarenessaboutt hebenef i
tsofsmal l
erfami l
i
es

CHAI
NOFDI
STRI
BUTI
ON
1.Out
li
nef
ourbenef
it
sthatcust
omer
sgetf
rom smal
l–scal
eret
ail
ers. (
4mar
ks)

 Enjoyscr
editfaci
li
ties
 Provi
devari
et yofgoods
 Goodsarebr oughtclosertocust omers
 Theystor
egoodsf ortheconsumer s.
 Consumerscanmakespeci alorderforgoods.
 Enjoyper
sonalattentionfr
om t hem
 Stabi
li
zat
ionofpr i
ces.

2.St
atef
ouract
ivi
ti
escar
ri
edouti
nthepr
ocessofdi
str
ibut
ion (
4mks)

 Handling
 Storage
 Packing/packagi
ng
 Transportat
ion
 Grading
 Bl
endi ng
 Sorti
ng
 Breakingthebulk

3.St
ate4expensest
hatar
eincur
redi
nthepr
ocessofdi
str
ibut
inggoods

 St
oragecosts
 Tr
ansportcost
s

Nov
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 Adverti
si
ngcost s
 Packing&blending
 I
nsurancecosts
 Actualpur
chasingofst
ock

4.Out
li
ne4emer
gingt
rendsi
ndi
str
ibut
ion (
4mks)

 Buyersareabletov i
ewgoodsont heinternet
 Buyerscanmakeor der
sont heinter
net
 Buyerareabletotransf
erpay mentsforgoodsont hei nt
ernet
 Largescalebuyersaretendingtobuydi rect
lyfr
om themanufacturer
 Premisesarebeingconv er
tedintoexhibiti
ons
 Hawkinghasbecomeanor mi nmostur bancenter
s
 Singl
eshopsar ebeingconv er
tedtoself-serv
icemini-
supermakets.

2.
Highl
i
ghtf
ourbenef
it
sthataccr
uet
oacust
omerwhobuy
sdi
rect
lyf
rom amanuf
act
urer
(4marks)

 Consumerisli
kel
ytogetaftersalesser
vices
 Consumerisli
kel
ytogettechnicaladvi
ceofhowt ousethegoods
 Consumerisli
kel
ytogetthegoodsatr elati
vel
ylowpr i
ces
 Manufact
uresmayarrangethef i
ancéoft heconsumers.
 Consumerisassur
edthatwhathei sbuy i
ngisgenuine.

3.
Descr
ibef
iveci
rcumst
ancesunderwhi
chapr
oducerwoul
dsel
lhi
sgoodst
ohi
sconsumer
s
(
10mar
ks)

 Wher egoodsar eexpensiv eformi ddlemen( cannotaf f

ordtostockthem)
 Wher egoodsar eoftechni calnatureandt heproducermaywantt ohav edi
rect
 contactwit
ht hecustomer .
 Wher egoodsar eperishable( andproducerwant stodeliv
erthem f
asttohav edirectcontact
wit
ht hecustomer .
 Wher ethemar keti
slocalizedi ntermsofgeogr aphicall
ocati
on/wher ethe pr oducerisclose
tocustomers.
 wherethegoodsar eproducedaccor dingtoconsumer sspecif
icat
ions/specialgoods
 wheretheproducerr equiresimmedi atefeedback

4.Namefourchannel
stheamanuf
act
urerwoul
duset
odi
str
ibut
ehi
sgoodst
othecust
omer
(4marks

 Manuf
act
urer–consumer s
 Manuf
act
urer–retai
ler
s–consumer s
 Manuf
act
ure–agent–r etail
ers–consumer
s.
 Manuf
act
urer……..
wholesaler
…………consumer
 Manuf
act
urer………agent………………….consumer
Nov
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 Manuf
act
urer
………whol
esal
er………….ret
ail
er…………consumer

5.
Zangomanufacturer
swhohavebeenselli
ngthei
rproduct
sdir
ectl
yasret
ailer
shavedecidedt
o
di
str
ibut
ethepr
oduct sthr
oughwhol
esal
ers.Expl
ainf
ivebenef
it
sthatZangomanuf act
urersmayget
fr
om thi
snewarrangements. (10marks)

 Zangowil
lprov i
dewi t
hinformati
onregar di
ngthemar ketforthei
rgoods
 Thewholesal
er swil
lbreakonbehalfoft hemanuf act
urers.
 Zangowil
lsellhisstockfasteraswholesalersbuyinbulk
 Themanufacturer’
ssuppl yofgoodswillbestabil
i
zedaswhol esal
ersr
egul
atest
hesuppl
y
 Zangowil
lber eli
evedofv ari
ousri
sksrelati
ngtogoodst of al
linpri
ce,
demand,non-
prof
it
abl
ebutessent ialserv
ices.

7.Hi
ghli
ghtfourf
act
orst
hatshoul
dbeconsi
der
edi
nchoosi
ngamethodofdi
str
ibut
ingagr
icul
tur
al
product
s (4mar
ks)

 Natureoftheproduce
 Avail
abi
li
tyofmi ddl
emen
 Governmentpolicyonthedistr
ibut
ion.
 Costoftheproduce
 Di
stancebetweent heproducerandtheconsumer

8.
Expl
ainf
ourf
act
orst
hatmaybeconsi
der
edi
ndet
ermi
ningt
heappr
opri
atechannel
fordi
str
ibut
ing
goods (10marks

 Thenat ureofgoodswher eper i

shableadi rectchannelt oconsumer si smor e pref
erred
 Sizeoft hemar ketwher ethemar ketisl
arge, iftheconsumer sareconcent r
atedinonear ea.
 Cost swher ethecostofmar ketinganddi stri
but i
onar ehighmanuf acturerswilldi
sposegoods
throughi ntermedi ari
es.
 Lackoff acili
ti
es/ski l
lswher ethepr oducesl acksf acil
i
tieshewi llcalluponintermediari
es.
 Gov ernmentpol i
cy .I
fthegov ernmentpol icypr ohi
bits/requireduseofacer t
ainchannelthenit
hast obef oll
owed.
 Nat ureofmar ketdependingonconsumer ’
spr eferences/t asteitmayr equir
eaper sonal
attentionoft hepr oducer.
 Compet it
ion:Wher ecompetitionishighmanuf act
uremayhav etobecl osertotheconsumer .
 Bulkiness:I fthequant i
tyi
flargeal ongchanneli susedandv iceversa.
 Techni calgoodsneedt obesol ddirecttoconsumeri nordert oprovidenecessar yi
nformat i
on.
 Prof i
tabil
it
ywher eproducerwant stomaxi mi zeprof i
t.

9.
Giv
edi
sadv
ant
agesofl
ongchai
nofdi
str
ibut
ionofgoodst
oabuy
er (
4mar
ks)

 Increasedpr
ice
 Likehoodofdelay
 Chancesofdamagetogoodsduet
ohandl
i
ng

Nov
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 Feedbackt othemanuf
actur
er
 Per i
shablegoodsmaygobad
10.
Descr
ibefiv
echannelst
hatcanbeusedtodi
str
ibutel
ocal
l
ymanuf
act
uredgoods (
10mar
ks)

 Fr
om manufact
uret hroughownr etai
lout
letstoconsumer s’
 Manuf
act
urersselldirecttoconsumers
 Fr
om manufact
urert houghwholesaler
sthroughindependentret
ail
erstoconsumers.
 Fr
om manufact
urerst hroughwholesal
ersthroughindependentr
etai
ler
st oconsumers.
 Fr
om manufact
urerst hroughwholesal
erstoconsumer s.

11.
Stat
efourbenef
it
stoal
argeconsumerwhobuy
sdi
rect
lyf
rom t
hepr
oducer
.(4mar
ks)

 Theymaybeboughtatl owerprices
 Theymaybepr ovi
dedwi t
htransport
 Theymayr ecei
vecash
 Theymaybegi vengoodsoncr edit
 Theyhaveachancet osel
ectqualit
ygoods
 Theyarel
ikelyt
ogetgoodstoonesspeci f
icat
ions.

12.
Discussci
rcumst
ancesunderwhi
chawhol
esal
erbecomesessent
ial
int
hechai
nofdi
str
ibut
ion
(
10mar ks)

 Wheremar ketisspreadoutforthepr oducertoreachtheconsumer

 Wherethepr oducerdoesnothav eadequat ecapit
altosetupowndi stri
but
ionpoi nt
s.
 Managementpr oblems:Wher eitbecomesdi ffi
cultt
omanagepr oducers distr
ibuti
onoutl
ets.
 Poori
nfrastr
ucture:makingitdi
ffi
cul ttodistr
ibutegoods.
 Gover
nmentpol i
cy:Thismaysepar atet hefuncti
onswhichcanbebyt hewholesaler
.
 Wherethepr oducerlackst
ransportf acil
it
ieswhichcanbepr ovi
dedtoadv ert
ise
 Wherethepr oducerwantstogetinf ormat i
onaboutt hemarkethewillusethewhol esal
er.

13.
Expl
aint
hechannel
ofdi
str
ibut
ionf
ori
mpor
tedgoods (
10mar
ks)

 For
eignproducer…………………l ocalconsumer.
 For
eignproducer……….foreignagent/expor ter………….l ocalconsumer
 For
eignproducer……………l ocalagents/i mpor ter
s……………l ocalconsumer
 For
eignproducer’
s………. .f
oreignagent………l ocalagent/i mpor tmerchant……l
ocal
whol
esaler….
.Localr
etai
ler………..localconsumer
 For
eignproducer………..l
ocalr et
ail
ers…………..l ocalconsumer s
 For
eignproducer…………l ocalretai
ler
s………..localconsumer s
 For
eignproducer’
s………f oreignagent…………. .localagent/l ocalwhol
esaler
…….
.l
ocalconsumer

14.
Out
li
nef
ourbenef
it
stoal
argeconsumerwhobuy
sdi
rect
lyf
rom t
hepr
oducer
. (
4mar
ks)

 Li
nkage–wholesal
ersactasal i
nkbetweenthepr oducer
sandther
etai
l
ers.
 St
orage–offer
sstoragefaci
l
iti
estotheproducers.
 Br
eakingbul
k–buy sinlar
gequanti
ti
esfrom producersandsel
l
sthem i
ntosmal
l
erquant
it
ies

Nov
els,
Updat
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imar
yNot
es 0705525657 149
 i
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cah@gmai
l.
com
toretai
l
ers.
 Transport
ati
on–whol
esal
ershel
psi
ntr
anspor
ti
nggoodsf
rom pr
oducer
stor
etai
l
ers.

15.Hi
ghl
ightf
ourci
rcumst
ancesunderwhi
chamanuf
act
urermaypr
efert
osellgoodsdi
rect
lyt
othe
consumers (4mar
ks)

 Whengoodsareper i
shable
 Whenthemanufacturersi
sf inanciall
yst r
ongtoopenupretai
lout
side
 Whenthemanufacturerswishest ot akechargeofhemarketi
ngofthepr
oduce.
 Whenthemanufacturerwishest ohav edir
ectcont
actwi
ththeconsumer
.
 Whenthemarketfortheproducti sl i
mi t
ed
 Whenther
eisinef
fici
entinfrastructure.

17.Kabumanuf
act
urer
shavedeci
dedt
odistr
ibutet
hei
rgoodst
hroughwhol
esal
ers. Di
scussf
ive
benefi
tst
hatwoul
daccountt
oKabumanufactur
ers (10marks)

 Kabumanuf act uri

ngwillbepr ovidedwithinformati
onregardi
ngthemar ketf
or t hei
rgoods.
 Thewholesalerswi llbr
eakbul konbehal fofthemanuf act
urer
sKabumanuf act
urerswil
lsel
l
hi
sstockfasteraswhol esalersbuyi nbulk.
 Kabuwil
lber elievedoft r
anspor tofgoods
 Themanufact ur er
’ssupplyofgoodswi l
lbest abi
li
zedaswholesalersr
egulat
ethesupply.
 Kabuwil
lbepr ov i
dedwithst oragefacil
i
ties
 Kabuwil
lber elievedofv ari
ousr isksrel
atingtogoodstofalli
nprice.

18.a)MusiEnt
erpr
isesar
econsideri
ngt
omarketthei
rimpor
tedpr
oductsdi
rectto
consumers.Out
li
nef i
ver
easonsthatmaybei
nfl
uencingt
hem tomakethi
sdecisi
on.
(10marks)

 Itmayt hatt hegoodsar epr oducedaccor dingt ocustomerspeci fi

cat
ions
 Thef i
rm maybehav i
ngt heirownr etai
lout l
et/dist
ri
butionf acil
it
ies.
 Themar ketmaybel ocali
zed/ near(i
nt ermsofgeogr aphicallocati
on).
 Thegoodsmaybeexpensi veandmi ddlemencannotbeabl et ostockthem.
 Thegoodsmaybeofat echni calnat
ure/ r
equireaftersalesser vi
ces.
 Thegoodsmaybeper i
shable( andthef ir
m maywantt odeliverthem fasttothe
consumer ).
 Thef i
rm maywantt ohav edi r
ectcontactwi t
hcust omer s/getimmedi atefeedback/
creat
e
goodi mpr ession.
 Wher ecust omer sor derforgoodsdi rectf r
om t hetr
ader /f
irm
 Iftherearenomi ddlemen
 Wher egov ernmentpol i
cyr equiresgoodst obesol ddi rectl
ytoconsumer s.
 Wher et hegoodsi mpor t
edar einsmallquant i
ties.
 Wher et hesizeoft hemar ketissmal l
.
 Wher et hefirm wouldmaxi mi zeprofi
tsbysel l
ingdirectlytoconsumer s.
 Whent hereisstiffcompet i
tion.
 Wher et herestofdi stri
butorst i
mei nmi ddlemenmaket hepr i
ceofpr oducts
high/expensi ve
Nov
els,
Updat
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imar
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 i
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cah@gmai
l.
com

19.Expl
ainf
iveci
rcumstancest
hatwoul
dinf
luenceapr
oducert
ousewhol
esal
ersi
n
di
stri
but
ingfar
m produce

 Wher et hepr oducerl acksadequat estor age.Thewhol esalermayr eli

evet he
produceroft hest or agecost s.
 Wher egoodsr equi r
ebul kbreaking.Thewhol esalermayr e-packaget hegoods
i
nsmal lerquant i
tiesasr equiredbycust omer s.
 Wher et hereisneedt opr epar egoodsf orf i
nalsale.Thewhol esalermaypack,
brand, blend,gr adesor tandwei ghgoodst other eli
efoft hepr oducer.
 Wher et hemar keti swi deandt hegoodshav etobedi str
ibut edfar.The
wholesal erwi l
lr eacht heconsumermor eeasi ly
.
 Wher et hepr oducerwoul dwantf eedbackont hemar ketst atus.Thewhol esaler
mayr eachconsumer st hrought heretailersandgetf eedbackr egardingthe
productmor eeasi ly.
 Wher et hepr oducerwoul dwantt oengagewhol esalertoassi stwithadv erti
sing
soast osav eoncost s.
 Wher et hepr oducerwant st osellinbul ksi ncethewhol esal erscanaf fordt obuy
i
nl argequant i
ties.
 Wher et hepr oducerl ackst ransport,t
hewhol esalerwoul dr elievehim oft hecost .
 Wher ei tisthegov ernmentpol i
cytodi st ri
butethroughwhol esalersthent he
producerwoul dhav enochoi ce.
 Wher et hemar ketingr isksar ehighsincet hewhol esalerscanbearsomeoft he
ri
sks.
 Wher et hepr oducerwant st oconcent rat e/speciali
zei nproduct i
on,thent he
di
st r
ibut i
oncanbehandl edbywhol esaler s.
 Wher et hepr oducerneedst omai ntai
nf ewerr ecordsbydeal ingwi t
hwhol esal er
s
whoar ef ew.

20.
Stat
efourser
vicest
hatawhol
esal
ermayof
fert
oamanuf
act
urer
. (
4mar
ks)

 Li
nkst hemanuf acturerwiththeretai
lers
 Breaksbul konbehal fofmanuf acturer/pr
epari
ngf orsal
e
 Providesst orageonbehal fofamanuf actur
er
 Provideswor ki
ngcapi t
alwhent heypayf orgoods
 Assistsi ndistri
butionofgoods/ off
eringtransport
 Promot edthepr oduct sonbehalfoft hemanuf actur
er
 Reli
ev est hemanuf actureoffsomer i
skse. gpriceoffl
uct
uat
ions,expi
ryofgoods
 Offersv aluableinformat i
onaboutgoods

21.Hi
ghli
ghtf
ourci
rcumstancesunderwhi
chapr
oducerwoul
dpr
eferdi
str
ibut
inghi
s
goodsthr
oughawholesal
er

 Wheretheproducerdoesnothav
ehisownwarehousef
rom wher
ehecandi
str
ibut
e
goods
 Wheretheconsumerarefarawayfr
om t
hepr
oducerspremi
ses
Nov
els,
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 Wherethegoodstobedist
ri
butedarebul
kyandneedtobebrokeni
ntosmal
l
er
quant
it
ies.
 Whentheproduct
sarenewandr equi
republ
i
city
/adv
ert
isement
 Whenthecostisaf
for
dable

22.Hi
ghl
i
ghtf
ourr
olespl
ayedbyi
nter
medi
ari
est
oapr
oduceri
nthechai
nofdi
str
ibut
ion

 Reducest ransactionsbetweenpr
oducer
sandconsumer
s
 Breakingbul k
 Accumul atingbulk
 Providingfinances
 Passingr el
ev antinfor
mati
on
 Productpr omot i
on
 Transpor t
ationser v
ices
 War ehousing/ st
orageservi
ces

23.Out
li
nef
ourbenef
it
sofal
ongchai
nofdi
str
ibut
ion

 Addsv al
uetothefi
nalproduct
 Createsemploymentopport
unit
ies
 Spreadsri
sks
 Appropri
atef
orgoodswi thawidermar
ket

24.Stat
efourcir
cumst
ancesunderwhi
chi
nter
medi
ari
esmaybeel
i
minat
edf
rom t
he
di
stri
buti
onprocess

 Whendeal
ingi
nperishabl
egoods
 Whendemandofgoodsi sveryhigh
 Whengoodsareofhighquali
ty
 Whendeal
ingwit
hgoodst hatrequi
reor
der

25.I
dent
if
yfourmer
it
sofashor
tchannel
ofdi
str
ibut
iont
oapr
oducer

 Goodscanr eachtheconsumerfaster
 Producershasdir
ectcontactwit
htheconsumer
s
 Reduceschancesofgoodsget ti
ngspoil
t
 Producercangetfeedbackfrom t
hebuyers

26.I
dent
if
yfourexpensesawhol
esal
eri
ncur
soncehebuy
sgoodsf
rom apr
oducer

 Transportcost
s
 Storagecosts
 i
nsur ancecost
s
 Packingandblendi
ng
 Salariesandwages

Nov
els,
Updat
edCPA,
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&Pr
imar
yNot
es 0705525657 152
 isabokemi
cah@gmai l.
com
27.Descri
befi
vechannel
saphar maceut
ical
producerinBr
it
ainmayuset
odi
str
ibut
eit
s
product
sintheKenyanmarket

For
eignpr
oducer l
ocalconsumer

For
eignpr
oducer Ret
ail
er l
ocalconsumer

For
eignpr
oducer whol
esal
er l
ocalconsumer

For
eignpr
oducer whol
esal
er Ret
ail
er Localconsumer

For
eignpr
oducer Agent Whol
esal
er Ret
ail
er Localconsumer

For
eignpr
oducer Agent Ret
ail
er Localconsumer

For
eignpr
oducer Agent Whol
esal
er Localconsumer

28.Descr
ibef
ivechannel
sthatmaybeusedt
odi
str
ibut
eimpor
tedpr
oduct
s

For
eignpr
oducer l
ocalconsumer

For
eignpr
oducer For
eignagent
/expor
ter l
ocalconsumer

For
eignpr
oducer f
orei
gnagent l
ocalagent l
ocalconsumer

For
eignpr
oducer l
ocalr
etai
l
er l
ocalconsumer

For
eignpr
oducer l
ocalwhol
esal
er l
ocalr
etai
l
er l
ocalconsumer

For
eignpr
oducer l
ocalwhol
esal
er l
ocalconsumer

For
eignpr
oducer l
ocalagent l
ocalr
etai
l
er l
ocalconsumer

29.Di
scussf
ivei
mpor
tantr
olesofi
nter
medi
ari
esi
nthechai
nofdi
str
ibut
ion

 Reducingt ransactionsbet weenpr oducersandconsumers

 Breakingbul k–buyi nlargequant i
ti
esandsel li
nsmallquanti
ti
es
 Accumul at
ingbul k–buy i
ngi nsmallquanti
tiesf
rom manysmal lproducer
sand
offer
ingt helargeamountgat her
edt obuyers
 Risktakingegassocaut edwi t
hdamagedgoods
 Providingfinance–somepr oducerslackfi
nanceandotherresourcesrequi
redto
enablet hem selltofinalconsumer s
 Passingi nformation–gat herinf
ormat i
onfrom consumersandpassst oproducer
s
 Productpr omot i
on
 Transpor tandst orage
 Av ai
l
inggoodst oconsumer s
FORMOREHI GHSCHOOLRESOURCESCONTACT MRI SABOKE0714497530

30.Expl
aint
hemeani
ngoft
hef
oll
owi
ngi
nter
medi
ari
esi
nthechai
nofdi
str
ibut
ion
(
12mks)

 Br
oker
s-Ani
nter
medi
arywhor
epr
esent
sabuy
erorasel
l
eri
nnegot
iat
inga

Nov
els,
Updat
edCPA,
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&Pr
imar
yNot
es 0705525657 153
 isabokemicah@gmai l
.com
pur
chaseorasal
ewi
thoutwithoutphy
sical
l
yhandlingt
hegoodsi
nvol
ved

 Auctioneers–Thesear ebusinessor ganisat

ionsori ndi
vidual
swhodi sposeof f
goodsonbehal foft heirpr
incipals.Auct i
onsar eheldinpubl i
cwher eattending
member softhepubl i
cgivetheirbi dsandt heitem onsal egoest othehighest
bidderont hefallofthehammer .
 Clearingandf or
war dingagent s–Agent swhof acil
it
ateexpor tandimpor tofgoods
i
nar easofdocument ati
on,storage, customscl earance,coll
ectionofgoodsf r
om t
he
ship
 Whol esal
ers–Tr aderswhobuyi nl argequant i
tiesfrom producersandsel lat
relat
ivel
ylowquant i
tiestoothert raders
 Agent s–Intermedi arieswhosel lgoodsonbehal foftheirpri
ncipalf
orcommi ssi
on
basedonagr eedper centageandquant i
tyofgoodssol d

 Merchant
s-Int
ermedi
ari
eswhobuyandsel
lgoodsonthei
rownaccount
.Theyt
ake
r
isksastheyhandl
ethegoodsandmakespr
ofi
tsorl
osses.

31.Expl ain5f actorsthatmaybeconsi der edindet erminingt heappropr i

at echannelf or
distri
but i
onofgoods.
Nat ur
eoft hemar ket.–Inamar ketwher econsumer sar econcent ratedi nonearea, a
shor tchanneli sused.Ont heot herhandwher ecustomer sar espreadov erawi dearea,
alongchanneli sused.
Nat ur
eoft hepr oduct .–Heav yandbul kproduct saswel lasper i
shabl epr oductr
equi rea
shor tchannel
Gov ernmentpol icy–Af irm canonl yuseachannelt hatisal l
owedbyl aw.
Mar keti
ngr isk:-Whenpr oducer swantt oav oi
dr i
skinvol vedindist
ribution,thenal ong
channeli susedwher egoodsar esol dt hroughi ntermediaries.
Rol eoft hei nter
medi ari
es.–Af irm shoul dselectachannelt hatwoul dpr ovideservices
requiredbyt hegoods.
Compet i
tor s.–I faf i
rm wishest ohav edirectcompet it
ion, i
twil
luseachannelbei ng
usedbyi tscompet i
tors.Ont heot herhandi fi
twi shedtoav oi
ddirectcompet iti
onitwi l
l
selectadi ffer entchannel .
Resour ces:-Af irm withsmal lf i
nancialr esourcesr equiresashor tchannel .
Si zeoft hef i
rm.–Asmal lfirmr equir
esashor tchannel.
Val ueandt echni calnatureoft hepr oduct .–Ahi ghvaluepr oductrequi resashort
channel .Likewi sepr oductst hatr equirespeci ali
zedser vi
cesr equireashor tchannel.

32.Descr ibeanyfi
vechannelsthatcanbeusedt odist
ri
butel
ocal
l
ymanuf
actur
edgoods.
(10marks)
Localpr oducer
→Agent →Whol esaler
→Ret ailer
→Localconsumer
Localpr oducer
→Whosal er→Rt yai
ler
→l ocalconsumer
Localpr oducer
→ consumer
Localpr oducer
→ manuf actur
er‘
sRepr esentati
ve
Whol esaler→ Retai
l
er→l ocalconsumer
localproducer→ wholesal
er→l ocalconsumer
Nov
els,
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l
ocalpr
oducer
→ Ret
ail
er→ Localconsumer

NATI
ONALI
NCOME.
1.Expl
ainf
ivef
act
orst
hatmayi
nfl
uencet
hel
evel
ofnat
ional
incomeofacountr
y.
(10marks)

 Humanr esources/labour/wor ki
ngpopul
ati
on/manpower
Acountr
ywithskil
led/(hi
ghly)t
rained/largemanpowercanpr
oducequal
i
ty/
quant
it
y
goods/
serv
ices/cangener atehighincome.

Acountr
ywithunski
ll
ed/orunt
rai
ned/smallmanpowercanpr
oducel
owqual
i
ty/quant
it
y
goods/ser
vicescangener
atel
owincome.

 Naturalr
esour
ces/l
and./gi
ftsofnatur
e/acceptgi
ftofnat
ure
acount
ryendowedwit
hnat
uralr
esourcescanproducemor
egood/ser v
ices/cangener
ate
i
ncome.

ACountrynotwellendowedwi
thnat
uralr
esour
cesmaypr
oducel
essgoods/
ser
vices/can
gener
atelessi
ncome.

 (Levelof)technol
ogy
Hi
ghlev
eloftechnologymaypr
oducel
owqual
i
ty/quant
it
yofgoods/ser
vices/gener
atehi
gh
i
ncome.

Lowlev
eloft
echnol
ogymaypr
oducel
owqual
i
ty/quant
it
ygoods/ser
vices/gener
atel
ow
i
ncome.

 Capi tal(equipment)/man–mader esources/accepti

fmanmader esour
cese.g.
i
nfrastructurebui
ldi
ngs.
Avai
labi
lit
yofcapi t
al/manmader esources(goods)makesproduct
ioneasy/preser
ves
pr
oduction( resulti
ngini
ncreasednatur
alincome)/maygener at
ehighi
ncome.

Lackofcapi
tal/ormakespr
oduct
iondi
ff
erent/r
educespr
oduct
ion/maygener
atel
owi
ncome.

 For
eigninvestment
o I nvestment sfrom abroadmayi ncreasenaturalincomet ot hecount ry/increase
productionofgoods/ser vices/invest
ment sabr oadmayi ncr easenational
income.
o Reduct i
onoff orei
gninvest mentmayr educepr oductionofgoods/ser vices/
income.
 Goodgov ernance/pol i
ti
calstabil
ity
o Pr oduct i
onofgoods/ser vices/investments/i ncomei ncr easeasar esultof
goodgov ernance/pol it
icalstabil
i
tycreatesconf i
dencei ninv estors.
o Poorgov ernance/pol i
ticalinst
abil
it
yreducessav i
ngs/i nvest ment/damages/
investment/r educeincomes/pr oducti
onofgoods/ser vices.
 Cul
ture/ent r
epr eneurship
o Cul turethatencour ageshar ed/work/ent r
epreneur shi
pr educespr oductionof

Nov
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goods/ser
vices/maygeneratel
owincome.
o Cult
uret
hatencourageshar
d/work/entrepr
eneur
shi
preducespr
oduct
ionof
goods/ser
vices/maygeneratel
owincome.

2.
Outl
i
nefourreasonswhyanincreaseinpercapi
tai
ncomemaynotnecessar
il
yleadt
oa
ri
sei
nthestandardofl
i
vingoftheciti
zen (4mar
ks)

 Percapi
tai
ncomei
sanav
erageandhenceamer
est
ati
sti
cs.

 Percapi
taf
igur
esmaybehi
ghbuti
ncomemaybeunev
enydi
str
ibut
ed.

 Thosenoti
nvol
vedi
nthegener
ati
onoft
henat
ionali
ncomear
eal
soi
ncl
udedi
nthe
cal
cul
ati
on

 Gener
ati
onr i
seinthepr
iceofcommodi
ti
es!i
nfl
ati
onmayaf
fectt
hepur
chasi
ng
powerofthecit
izen.

 Hi
ght
axesmayer
odet
her
ealv
alueofpercapi
tai
ncome.

 Maybeobt
ainedt
hroughast
rai
nonpeopl
e’
sheal
th.

3.
(a)Usi
ngadi
agr
am expl
aint
heci
rcul
arf
lowofi
ncomei
nat
wosect
oreconomy

(
10mar
ks)

Recei
pts/
pay
ment
sforf
act
orsofpr
oduct
ion/r
ent/wages/sal
ari
es/pr
ofi
ts

i
nter
est
s
Expendi
tur
e/pay
ment
s/r
ecei
ptsongoodsandser
vices
Busi
nessfir
ms
Househol
d

 Fi
nishedgoodsandser
vices

 pr
ovi
si
onoff
act
orsofpr
oduct
ion/l
and/l
abour/capi
tal
/ent
repr
eneur
shi
p

 Househol
dssuppl
ythei
rresour
ces(
fact
orsofpr
ovi
sion)t
ovar
ious

ty
pesofbusi
nessesandr
ecei
vepay
ment
sont
hef
orm ofr
ent
,wagesand
prof
it

 Ont
heot
herhand,
busi
nessessel
lfi
nishedpr
oduct
stohousehol
dand

househol
dspayf
orthegoodsandser
vicesr
ecei
ved.
Thedestr
uct
ionmustbeshown

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 156
 i
sabokemi
cah@gmai
l.
com

4.
Stat
efourf
act
orst
hatmayi
nfl
uencet
hel
evel
ofnat
ional
income. (
4mar
ks)

 Availabil
ityofnat uralresour ces/naturalendowment
 Availabil
ityofski ll
edlabourf orce/
qual i
tyavai
labi
l
ityofski
l
ls
 Lit
eracyl evelsoft heci t
izensi ngeneral
 Levelofcount y’
si ndustrial
ization
 Dependencyr at
ioont heeconomi call
yact i
veport
ionofthepopul
ati
on
 Leveloft echnol ogy
 Popul ati
onsi ze( quantit
yofl abour)
 Entrepreneur i
alcul t
ure/levelofi nvest
ment /tr
ade
 Poli
ticalstabilit
y
 Socialcultural
 Inf
rast r
ucture
 Foreigninv estment s

5.
Out
li
nef
ourchal
l
engest
hatmaybeencount
eredwhenmeasur
ingnat
ional
income

usi
ngt
heout
putappr
oach. (
4mar
ks)

 Decidingonwhatgoodsandser vi
cest oincludeinmeasuringnati
onalincome.
 I
nadequat eout putdata
 Someact i
vit
iesearningincomeareconsi deredil
legalandnot
i
ncludedi nthemeasur ementofnat ionalincome.
 Determiningt hevalueofnati
onalout put
/duet ochangeinpr i
ces.
 Howt ovalueoutputinthesubsistencesect or
.
 Decidingont hepr i
cetousef ort
hegoodst hathavebeenkeptasst ock.
 Possibil
it
yofdoubl ecount i
ng/different
iatepri
mar yi
nputfrom i
nter
medi at
einput
 Problem ofv alui
nggovernmentout putast heyarenotsoldinthemarket.

6.Li
stfouri
temsthatar
econsi
der
edwhenmeasur
ingt
henat
ional
incomeusi
ngt
he
expendi
tur
eapproach

 Exports
 I
mpor ts
 Netincomefrom abroad(expor
ts-i
mport
s)
 Consumptionexpenditure
 Governmentexpendi
t ure
 I
nvestmentexpendit
ur eoncapit
algoods

7.St
ate4pr
obl
emsassoci
atedwi
thexpendi
tur
eappr
oachofdet
ermi
ningnat
ional
income

 Accuraterecordsofexpendit
urear
enotkept
 Doublecountingprobl
em
 Fl
uctuatingexchangerates
 Di
ffi
culttodiff
erent
iat
ebetweenf i
nalexpendi
tur
eandi
nter
medi
ateexpendi
tur
e
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 157
 isabokemicah@gmai l
.com
 Approxi
mationtodetermineexpendit
uresinsubsistencesector
 Probl
em ofvalui
ngil
legalacti
vi
ti
es
 Probl
em ofchangingpri
ces
 I
ndivi
duals/
fir
msmaynotgi vecomplete/
accurateinfl
ati
onaryti
mes

8.Highl
ightf
ourf
act
orst
hatmayl
eadt
oadecl
i
nei
nthel
evel
ofnat
ional
incomeofa
count
ry

 Lowpopul ati
on
 Lowl ev eloft echnology
 Inadequat efinance/capi
tal/r
esources
 Popul ationwi thhighnumberofunski ll
edlabour
 Polit
icali nstabil
ity
 Apopul ationwi thfewentrepreneuri
alski
l
ls
 Deepr oot edcorruptionpracti
ces

9.Stat
efourr
easonswhynat
ional
incomest
ati
sti
csi
snotagoodmeasur
eofst
andar
ds
ofl
iv
inginacount
ry

 Thedatabeingusedmaynotbeaccur ate
 Thenationali
ncomef iguresdonotref
lectt
hedistr
ibut
ionofi
ncome
 Peoplehavediff
erenttastesandneeds
 Fi
guresmaynotr eflectappreci
ati
onordepreci
ati
onofassets

10.Li
stf
ourusesofnat
ional
incomest
ati
sti
cst
otheKeny
angov
ernment

 I
ndicatorsofstandardsofli
vi
ng.
 Compar ingstandardsofli
vi
ngofdiff
erentcountri
es
 Assessingtheper f
ormanceoftheeconomyov erti
me
 Assist
ingthegov ernmenttopl
antheeconomy
 Usedbyent repreneurst
omakei nv
estment sdecisi
on

St
ate4assumptionsoft hecircul
arflowofincome

Theeconomyhasonl ytwopl ayer
s;fi
rmsandhouseholds

Therei
snotgov er
nmenti nvolvement

Therei
snoforeigntrade/t heeconomyi sclosed

Househol
dsuseal lthei
rincomest oacquiregoodspr
oducedbyfir
ms

Fir
msspendalltheirrevenuesonacqui si
ti
onoffact
orservi
cesf
rom househol
ds

11.Name4f
act
orsaf
fect
ingt
heci
rcul
arf
lowofi
ncome

 Savings-l
eakages
 Taxes-leakages
 Gov ernmentexpendi
tur
e
 I
nvest ments
 Foreigntrade

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 158
 i
sabokemi
cah@gmai
l.
com

Identi
fyfourfactorsthatmayl eadtoanincr
easei
nthel
evel
ofnat
ionali
ncomeofa
country. 4mks
avai
labi
lit
yofhumanr esources
avai
labi
lit
yofnat uralresour ces
hi
ghl evel
soft echnologyi npr oducti
on
goodgov ernance/ poli
ti
calst abi
l
ity
i
ncreasedf orei
gninv estment
goodent r
epreneurialculture.

Explainfiv
el i
mit
ationsofusi ngpercapi taincomeinmeasur i
ngpeoplestandardofl
iv
ing.
10mks

Att hepr obl
em ofhandl i
ngi l
legalacti
viti
esthatgeneratei
ncometother ecei
pt

lackofaccur atedataofpopul ati
on

lackofaccur atedataofnat i
onalpopul at
ion

timespentonpr oductionv ersusrecreation.

doesnott akeint
roconsi derationtheef f
ectsofproducti
onact
ivi
ti
esont heenvi
ronment
e.
genv i
ronmentdegr adati
onands
poll
ution

economi cgrowthdoesnotnecessar i
lymeasuresdev el
opment

Doesnotshowt hedistri
but i
onofgr assnat i
onaloutputamongthecit
izenofacountry

13.Explai
nfiv
eproblemsencounter
edinusi
ngnat
ional
incomest
ati
sti
csi
ncompar
ing
thest
andardsofl
i
vingindi
ff
erentcount
ri
es

 Differ
encesi nthecostofl ivingi nacount ry
---
-wherethecostofl ivi
ngislow,lowper
capitamaynotmeanl owst andar dsofliving.
 Differ
encesi nlevelofi nfl
ation- --Acount rywi t
hhighinflationmayhav ehighper
capitaincomebutt hel i
vingst andar dsisl ow.
 Distri
but i
onofincome- -
--Wher ei ncomei sfairl
ydistr
ibutedt hegapbet weent he
poorandt heri
chwi llbenar row.Suchacount rymayhav elowpercapi tabuthi gh
standar dsofli
ving.
 Differ
encesi npricesofgoodsandser vicesindi ff
erentcount ries-
---
-i
nacount r y
wher ethereispr i
cecont rolt henat i
onalincomemayappeart obelowerthani na
countrywher ethepr icesar edet erminedbyt hemar ketforces.
 Differ
entneedsandt astes- --Duet odif
ferentneedsandt astesoflivi
ngindifferent
countries,nati
onalincomest atisticsmaynotcompar e.
 Differ
entcur r
encies- --
-Differentcount r
ieshav edi f
ferentcurrencieswithdiff
er ent
valueswhi chmaybet edioust oconv ert
.
 Differ
entgoodsandser v
ices- --Usedi ncomput i
ngnat i
onalincomemaydi f
ferf r
om
onecount r
ytoanot her.

14.Expl
ainf
ivef
act
orswhi
chmayl
eadt
oadecr
easei
nthel
evel
ofnat
ional
incomeofa
count
ry

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 159
 isabokemi cah@gmai l.com
 Inadequateskill
ed/ humanr esource/l
abour- --
---Acount rywi t
hinadequat eski l
l
ed
l
abourcanpr oducepoorqual i
ty/l
owquant it
ygoods/ servi
cest husgener ati
ngl ow
i
ncome
 Inadequatenatur alresources- -
--Acount rywithi nadequatenat uralresourcescan
producelessgoodst husgener atelessi ncome
 Lowl eveloftechnol ogy---useofl owlev eloft echnologyleadst olowpr oduction
thuslowi ncome
 Inadequatecapitalleadst ol owpr oductionofgoods/ servi
cesl eadingt olessincome
 Polit
icali
nstabil
itywhi chscar esinvestor sl
eadi ngtol essinvestmentandl ow
i
ncome.
 Inadequateforeigni nvestmentduet olacki fenoughsubsi dies/i
ncent i
vest hus
reducingproduct i
onofgoodsandser vices
 Poorent r
epreneur i
alculturer educesproduct ionofgoodst husgener ati
ngl ow
i
ncome

15.Expl
ainf
iveassumpt
ionst
hatwoul
dmakest
wosect
oreconomyt
ohol
d

 Ther
eisnogov ernmentinfl
uence
 Fi
rmsspendal ltheiri
ncomei nhi
ri
ngf act
orsofpr
oducti
on
 Householdsuseal lthei
rincomeinbuy i
nggoodsandservices
 Theeconomydoesnotal lowgoodsandser vi
cesfr
om othercount
ri
es
 Thecountryhasonl ytwosectorf
irm andhouseholds

16.Expl ainfi
v ereasonswhyacount r y
’seconomyi sshowingslowincr
easei
nthei
r
Nat i
onal I
ncome
Poorsuppl yandl owpr oducti
vit
yoft helabourforce
I
nadequat ecapi talnecessaryfortheexploitat
ionofnatur
alresour
ces
Poornat uralresourceendowment
Thet echnologyusedmaybepoorandi nappropr
iate
Effectsofpoliti
calinstabil
it
y
Cit
izens‘slazinessandnegat i
veatti
tudet owardswork
Presenceofal argesubsistencesector
Lowl evel
soff oreigninvestment

17.Expl ainany5pr oblemsencount eredwhenmeasur i

ngnat i
onalincome

Transf erpay ment sposesapr oblem asi ti
sdiffi
cultt
oi mputethepr opor
ti
onofincome
constit
utedbyt hoset ransfer
s

Inaccur atedat a/inadequat edatawher ether
ecoul dbeunder esti
mat i
onor
overestimat ions

Pricef l
uct uationsmaydev al
ueorov erval
uetheincomef igur
es

Ignoringi l
legalgoods/ser vi
cesy ett heyconstit
utegeneratedincome

Subsi stencesect orgoodsandser vicesarenotmar ketedhenceunaccount edf
or

Differentiatingbet weenf inalexpendi tur
eandi nt
ermediateexpendituremaybediffi
cul
t
whichmayl eadt odoubl ecounti
ng

Lackofqual if
iedper sonnelt ocollectandcompi ledata
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 160
 i
sabokemicah@gmai l.
com

Lackofadequat
eresour
cestofinancet
hegat her
ingofrel
evanti
nfor
mat
ion

Valui
ngofgover
nmentoutput-manyservicesarenotsoldi
ntheopenmarket

18.Expl ai
nfactorsthatcont r
ibutetolowlev elofNat i
onalIncome.
Politi
calinstabil
i
ty–Whent hereisnopeacei nthecount r
ythepr oducti
onofgoodsand
ser v
icesi saffect
ed.
Lev eloftechnology–Theuseofl owl eveloftechnologyorout datedmet hodsof
product i
on.
Land–Wher eacount r
yisnotendowedwi thnationalresources.
Lowl aboursupply.Labourwi thlessskil
ls.
Inadequat ecapitalanduseofsi mpletoolsinproduct i
on.
Negat i
veatti
tudeofci t
izenstowar dswor k.
Inacount rywheret hesubsistencesectori sl
arge.
Thepr oducti
onofgoodsandser vicesmaybel owi nacount ryexperi
encingreduced
foreigni nvestment.

Discussf i
v ereasonswhypercapi taincomemaynotbeaper f
ectmeasur eofst andar dof
l
ivingbet weendi fferentcount r
ies
˗Differentcount riesusedi fferentcur renciesmeani nghi ghpercapi taincomei none
count r
ydoesnotmeani tsbet ter/l owpercapi tai ncomedoesnotmeanacount r
yi sworse
off(sincewhatagi venamountofmoneycanbuyi nonecount rymaynotbet hesame
quant i
tyitmaybuyi nanother )
˗Differentcount rieshav edi f
ferentl evelsofi nflati
on-hi ghpercapi t
ai ncomei nacount ry
wher einflationi shi ghmaynoti ndi catehi ghl i
vingst andar ds/l owerpercapi taincomei n
onecount rywher einflat
ionratei sl owerdoesnotmeant heyar ebadl yof f
˗Popul ationi ndi fferentcount r
ieshav edifferentt astes/pr eferences/di fferenceinbasket
ofcommodi ti
es
˗Higherpercapi tai ncomei nonecount rymaynoti ndicat eahi gherst andar dofl i
vingsince
tastes/pr eferencesi nthatcount rymaybeexpensi v e/l owpercapi taincomei none
count r
ymaymeani nexpensi vetast esofcommodi t
iesandhencenotnecessar il
ylower
standar dsofl iving
˗Differentcount riesmayhav edi fferentlev elsofaccur acyofdat a
Itsnoteasyt odet er
mi nethecount rywi t
hhi gher/l owerst andar dsofl i
vi
ngsi ncet hereare
highchancesofi naccur ate/unr el iabledat a/i nfor mat i
ononpopul ati
on, i
ncomes, GDPs
etc.
˗Differentcount riesdonothav esi mi larincomedi stri
but i
ons
Onecount rymayhav eamor eev en/unev eni ncomedi stribut i
ont hant heothermaki ngit
diffi
culttogaugewher eli
vingst andar dsar ehi gher/l ower
˗Differencei nl ev elofsacrifi
ce/ef fortindi f
ferentcount ri
es
Acount rywi thhi gherpercapi t
ai ncomemayhav esimpl yat tai
nedt hatduet osacrifi
ce/
hardwor k/ext raef f
ortandv icev ersaandcannotbepr esumedt ohav eahi gherstandar d
oflivi
ngt hanacount r
ywher ewor kf orceisl azy
˗Expendi tur eofdi ff
erentcount riesonspeci alneeds/emer genci es/cal ami ti
es/soci al
needsv aryAcount r
ymayhav eahi gherpercapi taincomebutwi thhugeexpendi tureon
war s,diseases, fami ne,naturalcal ami ti
es/soci alneedsandv icev ersa

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 161
 isabokemicah@gmai l.
com
˗Dif
ferentcountr
ieshav ediff
erentsizeofsubsi
stencesect ors/non-market
edout put/
unpaidgoods/ser vicesAcount rymayhav elowpercapi taincomethananotherbutwit
ha
l
argev ol
umeofnon- marketedout putandvi
ceversa
˗Expenditur
eofpr oductsnotmeantf ori
mmediatesatisfacti
on
Somecount rymayspendhugeamount sofmoneyonpr ojectsthatmaybecompl et
edin
yearsahead( makingitdif
fi
culttocompar ewelfar
eatpr esent)

NETWORTHOFABUSI
NESS.
1.Thefol
l
owingaccountbal
anceswer
eext
ract
edf
rom t
hebooksofKi
tut
r son30th
ader
November1995

Machi
ner
y 250,
000

Debt
or 62,
000

Cr
edi
tor
s 46,
000

St
ock 12,
680

Cashi
nhand 1,
500

Cashatbank 15,
000

Det
ermi
net
hecapi
t asat30thNov
al ember
1995

Capi
tal
=Tot
alasset
s–Tot
all
i
abi
l
iti
es

250,
000+12,
680+62,
500+15,
000+46,
520

=295,
160

2.Thef
oll
owi
ngbal
anceswer
eext
ract
edf
rom t
hebooksofWasot
rader
son

30thOct
ober1995.

Cash 20,
520

Bank 160,
230

Pr
emi
ses 800,
000

Debt
ors 40,
000

Cr
edi
tor
s 62,
000

2y
earl
oan 40,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 162
 i
sabokemi
cah@gmai
l.
com
St
ock 2,
500

Pr
epar
eabal
ancesheet (
5mar
ks)

3.
Thef
oll
owi
ngt
abl
econt
ainsi
nfor
mat
ionr
elat
ingt
oabusi
nessA,
BandC.Det
ermi
net
he

f
igur
esr
epr
esent
edbyW,
XandY.

Busi
ness Asset
s Capi
tal Li
abi
l
iti
es

A 620,
000 W 230,
000

B X 400,
000 120,
000

– C 800,
000 500,
000 Y Asset
s=
Capi
tal –li
abil
i
ties

(
a)Capi
tal =620,
000–230,
000

=390,
900

(
b)Asset
s =400,
000+120,
000

=520,
000

(
c)Li
abi
l
iti
es =800,
000–500,
000

=300,
000

4.
Int
hespacespr
ovi
ded,
indi
cat
ewi
tha(
+)or(
-)t
heef
fect
sofeachoneoft
he

f
oll
owi
ngt
ransact
ionsont
heasset
s,Li
abi
l
iti
esorcapi
tal (
4mar
ks)

Tr
ansact
ion Asset
s Li
abi
l
iti
es Capi
tal

a Boughtf
urni
tur
eoncr
edi
t

b.Pai
dcr
edi
tor
sbycash

c.wi
thdr
ewcashf
orper
sonal
use

d.Conv
ert
edaper
sonal
carf
orbusi
nessuse

Nov
els,
Updat
edCPA,
KASNEB,
Hi &A
ghSchool Ps
r
isetr
ma yNL
oi
a
t
eb
si
li
ty0705
C5
ap
2i
t
5a
6l
57 163
 isabokemicah@gmail
.com
a)Boughtfurnit
ure + +
b)Pai
dcredi t
orsoncash
c)Wit
hdrawcashf orpersonaluse - -
d)Conver
tedaper sonalcarf
or - - -
per
sonal use

+ +

5.
Thef
oll
owi
ngr
elat
etobusi
nessA,
BandC.Foreachoft
hebusi
nessdet
ermi
net
he

mi
ssi
ngf
igur
es:
M,N,
andP

Busi
ness Asset
s Capi
tal Li
abi
l
iti
es

A 30,
000 m 12,
000

B n 16,
000 13,
000

C 60,
000 48,
000 p

-M -Kshs18,
000

-N–Kshs29,
000

-P Kshs12,
000

6.
Stat
efourusesofbal
ancesheetf
orbusi
nessor
gani
zat
ions. (
4mar
ks)

7.
Foreachoft
hef
oll
owi
ngt
ypesofaccount
s,st
atei
nthespacespr
ovi
dedwhet
hery
oudebi
t

orcr
edi
tincr
easeordecr
easet
heaccount
. (
3mar
ks)

Ty
peofaccount Toi
ncr
ease Todecr
ease

a Assetaccount

b Li
abi
l
ityaccount

c.Capi
tal

8.
Thef
oll
owi
ngt
ransact
ionsr
elat
est
oTaj
i
raTr
ader
sfort
hemont
hofJanuar
y2001

Jan1st
art
edbusi
nesswi
thKshs.20,
000i
ncash

Deposi
ted15,
000f
rom casht
il
li
ntoabusi
nessBankaccount

Boughtgoodsoncr
edi
tfr
om Wemat
rader
sfor6,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 164
 isabokemi
cah@gmail.
com
Boughtf
urni
tur
ebychequesh3,000

Pr
epar ancesheetasat31stJanuar
eabal y2001

9.
Int
het
abl
ebel
ow,
det
ermi
net
hemi
ssi
ngf
ig.X,
YandZf
oreachofbusi
ness

Q,
RandS.

Busi
ness Asset
s Capi
tal Li
abi
l
iti
es

Q 250,
000 X 120,
000

R Y 1,
500,
000 Z

S 600,
000 100,
000 400,
000

(
3 mar
ks)
10. Thef
oll
owi
ngi
nfor
mat
ionr
elat
est
obusi
nessA,B,
CandD.

Busi
ness Asset
s Li
abi
l
iti
es Capi
tal

A 500,
000 x 300,
000

B Y 800,
000 1,
200,
000

C 300,
000 120,
000 z

D 700,
000 t 500,
000

Det
ermi
nef
igur
erepr
esent
edbyX,
Y,ZandT. (
4mar
ks)

11.
Thef
oll
owi
ngbal
anceswer
eext
ract
edf
rom t
heTangot
r sasat31stDecember2004
ader

Mot
orv
ehi
cle 80,
000

Pl
antandmachi
ner
y 70,
000

Loanf
rom Bank 60,
000

St
ock 25,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 165
 i
sabokemi
cah@gmail
.com
Debt
ors 30,
000

Cr
edi
tor
s 15,
000

Bank 20,
000

Pr
epar
eabal
ancesheetf
orTangoTr sasat1stDecember2004.
ader (
5mar
ks)

12.
Stat
etwochar
act
eri
sti
csofeachoft
hef
oll
owi
ngbal
ancesheetel
ement
s:

a)Asset
s

b)Li
abi
l
iti
es

(
a) Asset
s

-
Resour
ceownedandcont
rol
l
edbyt
hebusi
ness.

-
Musthav
ebeenacqui
redi
nthepast
.

-
Ani
tem ofv
aluet
hatcanbemeasur
edr
eli
abl
yinmonet
aryt
erms.

-Fut
urebenef
it
sassoci
atedwi
tht
henetexpect
edt
ober
ecei
vedby
busi
ness

ent
it
y.

-
Theyar
efi
xedorcur
rent
.

(
b) Li
abi
l
ity

-Apr
esentobli
gat
ionf
orabusi
nesst
oset
tl
easar
esul
tofpast
commitments.

-
Set
tl
ementwoul
dreducebusi
nessasset
s.

-
Amounti
nvol
vedcanbemeasur
edr
eli
abl
yinmonet
aryt
erms.

-
Owedt
oout
sider
s.

-
Theyar
elongt
erm orcur
rent
/shor
tter
m.

13.
Thef ol
lowingbal
anceswereext
ract
edf
rom t
hebooksofSakuTr
ader
son
31March2008
Fi
xedasset s 300,
000
Currentassets 123,700
Creditors 84,
500
5y earloan 125,000

Det
ermi
net
henetwor
thoft nessasat31stMar
hebusi ch2008
(
4marks)

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 166
 i
sabokemi cah@gmai l
.com
Det
erminationofnetwor thofSakutraders
Networth=Tot alassets-Totall
iabi
l
iti
es
X=-{300,000+123, 700)-(125,
000+84. 500)
X=423, 700-209,500
Networ t
h=214, 200 8x1/
2mar
ks

PUBLI
CFI
NANCE.

1. Explai nfiveconsi der ationst obemadebyagov ernmentwhendeci di

ngonagood
tax sy stem. (10mks)
 Equi table–f air
nessi npay mentoft ax.I
tshoul dnotstraint het axpay ers.
 Cer tain–shoul dbecl eari nter
msofamount ,ti
meandmanneri nwhichi tshouldbe
paid.
 Conv enient-Taxl ev iedshoul dbeconv enientt othecont r
ibut orandt hecol l
ect
or.To
thecont ributoritshoul dbel eviedatat i
mewhent hepay erhasmoney .
 Economi cal-thecostofcol l
ecti
ngandadmi nisteri
ngshoul dbel owert hanthe
revenuet obecol lect ed.
 Div ersity–Agoodt axsy stem shouldbedi versifi
edsot hati tmeet srev enue
requi rement soft hecount r
yandal sobei nli
newi ththepr i
nci pl
eofequi ty.
 Flexibi l
it
y–shoul dbecapabl eofchangi nginaccor dancewi thchangesi nNati
onal
income.
 Elast i
c–i tshoul dal lowt hegov er
nmentt oincreaseorr educer evenueasneed
arises.
 Abi li
tyt opay–At axsy st em shouldbedesi gnedi nawayt hatt heamountchar ged
isnott oohi ghtot heext endt hatthecont ri
butorisnotabl et opay .
 Simpl icity-Agoodt axsy stem shouldbesi mpleenought obeunder st
oodbyeach
taxpay er.

2.Expl
ainf
iver
easonswhyt
heGov
ernmenti
mposest
axoni
tsCi
ti
zens. (
10mks)

 Raiserev enue-thisisusedbyt hegov ernmenttoprovi

deessent i
algoodsand
servi
cest otheciti
zens.
 Discourageconsumpt i
onofhar mf ulproducts–suchasbeerandci garet
teby
heavil
yt axingthem
 Reducei nequal i
tyinincomedi str
ibution–Thi sisdonebyt axi
ngther i
chandusing
themoneyf obenefitthepoor
 Controlinflati
on-taxationreducest hemoneysuppl ythroughreducti
onofpeoples
i
ncomet her ebycontrolli
nginfl
ati
on.
 Correctunf avourablebalanceofpay ments–hi ghtaxonimpor t
edpr oductswould
discouraget heiri
mpor tati
onandl owt axonexpor ti
ngproductswillencouragemore
exportation.
 Discouragei mpor t
ationofcer t
ainpr oductsbychar gi
nghightaxont heir
i
mpor tation.Forexampl ehightaxoni mpor t
edsugaraimedatpr otecti
ngthelocal
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 167
 i
sabokemi
cah@gmai
l.
com
sugarindust
ri
es.
 Inf
luenci
nglocat
ionofbusi
nessesforexampl
ebyheavi
lytaxi
ngbusi
nesseslocat
ed
i
nt ownsthiswil
lmakeentr
epreneur
stoshif
ttor
uralar
eas. .

3.
Expl
ainf
iv ebenef itsoftaxati
ont otheKeny aneconomy (10mks)
 Torai ser evenuet of i
nancegov ernmentdev elopmentpr oj
ects
 Todi scour ageconsumpt i
onofhar mfulproduct se.g.ci
garet t
eswhi chcause
negat i
v eef fectsonheal thofthepeople.
 Todi scour agei mpor t
ationofcer t
ainproductsinor dertoboost ,l
ocalproduction
andlocali ndust ri
es.
 Tocor rectbal anceofpay mentdef i
citbytaxingimpor tsinor dertodiscour age
impor tation.
 Toreducei nequalit
iesinincomedi stri
buti
onbyt axi
ngt herichandf inancing
acti
vitiest hatbenef i
tsthepoormember soft hesociety.
 Toreducei nflati
onbyr educingpeoplesdisposabl eincome/ byr educingmoney
supply .
 Toencour agedel ocali
zationofindustr
iesbyt axingurbanbusi nessesmor e.

4. Expl ainfiv
edisadv antagesofpr ogressivetaxes (
10mks)
 Itmaydi scouragepeopl efrom workingasanyaddi tionali
ncomegoestothetax
 Investorsmaybedi scouragedfrom v enturi
ngintori
skybutmoreprof
it
able
businessesast hesewoul datt
ractmor etax.
 Iti
sbasedont heassumpt ionthatpeopl eearni
ngthesameamountofi ncomehave
similarneedsandabi l
it
ytopayt ax.Thi sisnotthecaseinreal
it
y.
 Itmayr educeout put.
 Itmaydi scouragev ert
icalmobili
tyofl abour.
.
 Retardscapitalf ormat i
on
 Scopeoft axev asion
 Itbreedscorrupt ion
 Hamper ssocialwel fare

5. Val ueaddedt axisoneoft heindirectt axesusedbyt hegov ernmentt oraiser evenue.

Expl
ainfi
v ebenef itsoft hi st axt otheeconomy .
 Mor er evenuei scol lect ed-Thet axisl eviedonawi der angeofessent ial
s
commodi ti
es/ product sthusahi ghamountofr evenuei scoll
ect ed.
 Canbeusedsel ect i
v ely-itcanbeusedsel ecti
velybyt hegov ernmentt oachi evea
certainobj ect i
vel ikedi scour ageconsumpt i
onofcer tainproduct ssuchasbeerby
imposi nghi ght axoni t
.
 Stimul ateef fort-incr easei nindirecttaxi sli
kel
yt ostimul at
eef fortaspeopl e
strugglet omai ntai nt heircurrentstandar dsofliv i
ngbywor ki
nghar dertor aise
additionalr evenue.
 Conv enient -itisconv enientbecausei ti snotpai dinlumpsum buti nsmal lbitsas
onebuy st hecommodi ty.
 Flexible-thet axi sf lexiblewhi chenabl est hegov ttoeitherraiseorr educet hetax
ratetosui tt hepr ev ailingeconomi csituat i
onint hecount ry
.

Nov
els,
Updat
edCPA,
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imar
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es 0705525657 168
 isabokemi cah@gmai l.
com
 Easiert
ocol l
ect-collectioni sdonebymanuf acturersandsel l
erswhot henr emitt
o
thegovt.t
hismakesi teasi ertocol l
ect.
 Paymentismadepr ompt ly–Gov ernmentcangett axr evenueimmediatelyproducts
arebought/produced.
 Lessexpensivet oadmi nister-Sinceitcanbecol l
ectedatt hepointof
product
ion,
maynotbeexpensi vet oadmi ni
st erasdi recttaxes.
 Taxpay mentisv oluntary–Pay mentofi ndirectt axisv ol
untarybecauseitispaid
mainlybythosewhoconsumet het axedcommodi ty.
 Notpossibletoev ade–I tisnotpossi bl
et oev adei ndirecttaxbecauseallthose
whobuyt hetaxedcommodi tyhav etopayt het ax.

6. Hi
ghl
i
ghtf
ivedi
ff
erencesbet
weendi
rectt
axandi
ndi
rectt
ax (
10mks)

Di
rectt
ax I
ndi
rectt
ax

(
i)
Taxr
evenuei
scer
tai
n (
i)
Uncer
tai
ntyi
ntaxcol
l
ect
ed

(i
i)Doesnotaf
fectpr
icesofgoodsand (
ii
)Af
fect
spr
icesofgoodsndser
vices
servi
ces

(
ii
i)Thesoci
etyort
axpay
ersar
econsci
ous (
ii
i)t
hetaxpayermaynotbeawar
eof
t
axbeingpai
d.

(
iv)Economi
cal
incol
l
ect
ion (
iv)Expensi
vei
ncol
l
ect
ion

(
v)Cannotbeav
oided (
v)Canbeav
oided

(
vi)
Candi
scour
agewor
k (
vi)
Encour
agespeopletowor
khardt
o
maint
aint
hei
rstandar
dsofli
vi
ng.

7. Expl
ainf
ivenegat
iveef
fect
sofhi
ght
axat
ioni
naneconomy (
10mks)

 Decr easeinprofit
sofbusi nesses-thismakest hebusi nessesunabletomeeti t
s
oper ati
onalexpensest husai di
ngt heirpoorper formance.
 Reduct ioninconsumer sincome-Theconsumer sdisposableincomewi l
lreduce
thusl oweringtheirstandardsofl i
ving.
 Discour agessavings–peopl ewi l
lbedi scouragedf rom savingthusreduci
nglevel
ofinv estmentsint hefuture.
 Increasescost sofpr oduction–Thi swi llf
orcepr oducerswhocannotmeett hecost
outofbusi nessorpasst hebur dent oconsumer sint er
msofhi ghpricedproducts.
 Increasedpr i
cesofgoodsandser v i
ces-Thismakest hem unaffor
dablebysome
consumer sthusreduct i
oni nconsumpt ion.

Nov
els,
Updat
edCPA,
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imar
yNot
es 0705525657 169
 isabokemi
cah@gmai
l.
com
8. Expl
ainf
ivemer
it
sofdi
rectt
axes (
10mks)

 Elast i
c–Canber aisedorr educedaccordingt otheneedsoft heeconomy .
 Fl
exi ble–I tcanbeexpandedt ocov erasmanyar easaspossi ble(
taxbase)t o
collectmor er ev enue.
 Simpl et ounder stand–i t ssimpl etounder standt obotht het axcollectorandt he
pay erint ermsofamountandt imeofcol l
ect i
on.
 Cer tain–Thet axcol l
ectioni scer t
ainintheamountofr ev enuet obecol lected
 Equi tabl e–Di rectt axi sequi tableasamountt obepai dincr easeswi t
hi ncreasei n
i
ncome.
 Doesn’ taf fectt hepr i
ceofgoodsandser vices–i t
snotpar tofthesel l
i
ngpr iceof
goodsandt heref orecantf uelinfl
ati
on.
 Desi rabl e–i tonl yaf f
ectsi ndividual
si nacer tainincomebr acketasi tdoesnot
affectal ltheci tizens.
 Promot esweal thr edistribut i
on–r educeshi ghdi ffer
encesbet weent her i
chandt he
poor .Hi ghi ncomeear ner sar etaxedmor e.
 Economi calincol lection–Mostoft hedirectt axesarecol lectedatsour ceandt he
costofcol lectingt hem i sf airl
ylow.Forexampl ePay -
As-You- Earn(P.A.Y.E)t axis
deduct edatt heendofev erymont hf r
om theempl oy
ee’ssal arybyt heempl oyerwho
actsasahonor aryt ax-collector.

9. Expl
ainf
ivedi
sadv
ant
agesofi
ndi
rectt
axes (
10mks)

 Mayf ueli nf lation–cont i

nuedi ncreasei nindirecttaxmayf uelinfl
ati
onasi tdirect
ly
i
ncr easest hepr icesofgoodsandser vi
ces.
 Canbeav oi ded–I ndir
ecttaxcanbeav oidedbypeopl ewhodonotconsumet he
taxedpr oduct .
 Uncer taint yi nr ev enuecollecti
on–Theamountt obecol l
ectedinindir
ecttaxmay
notbepr edi ct edbecausei tsnoteasyt oforecastsales.
 Expensi v ei ncol lecti
on–i ndirecttaxesar eexpensi veincollecti
onasmanyt ax
i
nspect orsar eempl oyed.
 Lackofcont ributorsawar eness–asi ndi
rectt axishiddenint hepri
cesofgoods
andser vices, manyofi t
scont ri
butorsar enotawar ethattheyarecontribut
ing
anythingt ot hegov ernment .
 Lessequi tabl e–Thebur denofi ndirecttaxf all
smor eheav i
lyonconsumer swi t
h
l
owi ncomescompar edtot hosewi t
hhi ghincomes.
 Mighti nt erf erewi thresourceallocation–I ndirecttaxincr
easest hepricesoft he
taxedgoodsr elati
vet oothers.Thismi ghtdi scourageconsumer sfr
om buyingt hem
therebyshi ftingconsumpt i
onandpr oduct i
onr esourcestowar dscommodi tiesthat
arenott axed.

10. Stat
efourtypesofdi
rectt
axes (
4mar
ks)
 I
ncomet ax
 Stampdut y
 Corporat
iontax
 Capit
algaintax

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 170
 i
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cah@gmai
l.
com
 Est
atedutytax
 Wealt
htax
 Capi
talt
ransfer(
gif
t)t
ax

11.
Statefourcir
cumst ancesunderwhi chthegov tmayfi
ndi
tnecessar
ytor
aiser
evenue
throughinter
nalborrowing
 I fexter
nalsourcesoff undsarenotav ail
able.
 I fthegovtwantst ostandoni tsown
 I fthegovtwantst ocontrolinf
lat
ion
 Whent hegovtwant stor educeexternaldebts.

Ci
rcumst
anceswhent
hegov
ernmentmaybor
rowf
rom i
nter
nal
sour
ces.

 I
fther
eisbudgetdef
ici
tint
hecount
ry.

 Whent
her
eisneedt
oimpr
ovei
nfr
ast
ruct
ure.

 Whent
her
eisneedt
oreducei
nfl
ati
on.

 I
fint
ernall
oansat
tractl
owi
nter
estr
atest
hanext
ernalones.

 I
ncaset
heext
ernall
oanshav
est
ri
ct/
toughcondi
ti
onsat
tachedt
othem.

 Whenr el
ief/emer gencyservi
cesarerequiredinthecount
ry.
St
ateany4sour cesoff inancetothecountygov ernment.
Fi
nesandpenal ti
es.
I
ncomef rom sal eofcountygovernmentownedpr operty
.
Recoveryofprincipalamountandi nt
erestofloans.
Chargesi.
e.receiptsbyt hegovernmentforservicesrender
ed.
I
ncomegener at edfrom touri
sm etc.

12. Outli
nefoursourcesofgov er
nmentrev
enue
 Taxes
 Fi
nesandpenal ties
 Ratesandr ent
s
 Profi
tsfr
om gov ernmentbusi
nesses
 I
nterestonloans
 Feesandlicenses
 Saleofshares/debentures
 Governmentbor rowing

13. Explai
nf i
vet ypesoftaxeslevi
edonbusi nessesinKeny a (10mks)
 I
ncomet ax–i tislevi
edonthei ncomesofi ndi
vidualsandbusi nesses
 Exciseduty–i ti
slevi
edongoodspr oducedwi t
hinacount r
y.
 Customsdut y–I ti
sat axl
ev i
edongoodswhi char ei
mpor t
edi nto/expor
tedt
o
othercountr
ies.
 Valueaddedt ax–i ti
sappli
edt oallgoodsatagi venpercentage.
Nov
els,
Updat
edCPA,
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imar
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es 0705525657 171
 i
sabokemicah@gmail
.com
 Capi
talgai
nstax–itisl
eviedoni
ncreasei
ntheval
ueofcer
tai
nty
pesofpr
oper
ty
whensoldatahigherpr
icethani
twasbought.

14. Expl
ainfi
vewaysinwhichthegover
nmentf
inancesi
tsexpendi
tur
e(10mks)
 Finesimposedbycourtonoff
ender
s

 Benef it
sandr atespaidforuseofgov ernmentpr opert
y
 Licensef eepaidbyt hosewhowantt ooper at
ebusinesses.
 Dividendsandpr of
it
sear nedfrom governmentdirecti
nvest
ments.
 Interestsearnedonl oansadv ancedbythegov ernmenttofi
rms.
 Proceedsf rom saleofgov ernmentproperty
 Gov ernmentbor rowinginter
nal l
yandexternal
ly
 Taxespai dbyi ndiv
idualsoror gani
zat
ionst ogovt.

15. Explainfiv
epr inciplesofgov ernmentexpendi ture (10mks)
 Maxi mum soci albenef i
t–Anypubl icexpendi turemustbespendi nsuchawayt hat
maj or
ityofthepeopl eareabl etor
eapmaxi mum benef i
tfr
om it.
 Economy–Publ icexpendi t
uremustbei ncuredi nthemosteconomi calwayby
avoidinganypossi blewasteormi suse.
 Elasti
city
/Flexibil
ity–mustbepossi blet oincreaseordecreasetheexpendit
ure
accordingtot hepr evail
ingcircumstances.
 Sanctions–Publ i
cexpendi turemustbesanct ionedorapprovedbyther el
evant
authorit
ysuchast hepar l
i
amentort hecount yassembly.
 Properf i
nancialmanagement -publi
cf undsshoul dbewellmanaged.Pr oper
recordsofexpendi tureshouldbekeptandaudi t
edasrequired.

16. Out
li
nef
ourway
sinwhi
chgov
ernmentexpendi
tur
emayst
abi
l
izet
heeconomyofa
count
ry.

 Prov i
sionofsecur it
y:Thiscreatesanenabl i
ngenv ironmentf oreconomicacti
vit
ies
 Creat i
onandmai ntenanceofadmi nist
rati
vedepar tments:Thesear ecreatedf or
effecti
v eoperati
onofacount ry’
seconomye. g.salari
es
 Socialser v
ices:Thi s enhances t he war fare oft he populati
on for ef f
ecti
v e
partici
pationineconomi cacti
vi
ties.
 Spendi ngoni nfrast
ructure-Itimprov esef f
iciencyinpr oducti
onand dist
ribut
ionof
goodsandser v
icesintheeconomy .
 Adv ancementofnon- inter
estear ning capitalt o entrepr
eneursdur i
ng economi c
recess
 Prov i
sionofbasi cgrowt handser vi
cest hroughsubsi dies.
 Promot i
nglocalindustri
es

17. Highl
ightfi
vereasonswhybudgeti
ngisi
mportanttoabusi
nessor
ganizat
ion (
10mks)
 Pl anni
ngact i
vit
iesi
sanecessar
yacti
vi
tywhi
chassi st
sor
gani
zat
ionstof ocusonfut
ure
operati
ons
 Budget ingisimport
anti
ncoordi
nati
ngoper
ationsinanor
gani
zat
ionfrom dif
fer
ent
departments

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 172
 i
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.com
 Budget i
ngassistsincommuni catingtheintendedoper at
ionsoftheorganizat
iontointer
ested
parti
es
 Budget ssetstandardsofperformancef ortheor gani
zati
onwhichthemanager sst
riveto
achieve
 Budget smot i
vatethemanager sast heywor ktoachievethetar
get
 Budget shelpstocontrolexpendit
ureast hosei mplementingi
tareexpect
edt ooperatewithi
n
i
t sl
imit
 Ithelpsthebusinesstoidentif
yitsareasofexpendi t
ure
 Awel lplannedbudgetcanbeusedasameansofat t
ract
ingexter
nalfi
nances
 Ithelpsthebusinessestimatether evenue

18. Di
scussthereasonswhyabusi nessor
ganizat
ionmayprepareabudget (10mks)
 Inordertodetermineorgani
zati
onsearni
ngs/sal
est
otalrecei
ptf
oragi v
enper
iodoft
ime
 Todet er
mineallexpenses/payments

 Todeterminethebal ancebet weent her

eceiptandpaymentanddiscoveri
fther
eisbal
ance
surpl
usordef i
citinabudget
 Deter
mineway sofget tingextr
ai ncomeifthereisadefici
tint
hebudget
 Enabl
etheor ganizati
ont ohaveaf orwardlooki
ngapproach
 Creat
estaffmot i
v at
ion/coordinati
onifallarei
nvol
ved
 Iti
srequi
redbyl ender soffi
nance/condi ti
onse.t
.c

19. Expl
ainf
ourway
sthatagov
ernmentcanuset
ofi
nanceabudgetdef
ici
t. (
8mks)

 (Inf l
ati
onaryfinanci ng)Borrowingfrom thecent ralbankthroughov erdraft
s/ shortter
m
l
oans/acceptuseofexampl est oexplain.
 Bor r
owingf r
om i nternati
onalmoneymar ket s/agenci es/fi
nanci alinsti
tutions/non-
banki ngfinancialinst i
tut
ionssuchasI BRD/I MF/ WorldBank/PBR/pr ovidesfunds/
rev enueforgov er nment/acceptuseofexampl es.
 Bor r
owingf r
om capi t
almar ketssuchasI CDC/i nsurancecompani es/AFC/NPCK/
pr ocedurebysel lingbonds.
 Bor r
owingf r
om domest i
cmoneymar ket ssuchascommer cialbanks/sel li
ngtreasur
ybi l
l
s
and/bonds/pr omi ssorynot es/I.
O.U.
 Bor r
owingf r
om ot hercountri
es/mul til
ater al/Bilater
alborrowingt hroughl oans/buy i
ng
goods/ser v
icesoncr edit.
 Bor r
owingf r
om member soft hepublicbysel l
ingt r
easurybills/bonds/pr omissorynotes.
 Gr ants/donat ions/f r
om donorcount ries/f i
nances/i ndi
viduals.
 Pr inti
ngmor ecur rencies
 Imposi ngcondi ti
ons/new/t axati
oninr elatedgoods/ser vices/incr easedgov ernment
rev enue/r ai
sef unds.

20. Expl
ainsi
xsour
cesofgov
ernmentr
evenuef
ordev
elopmentexpendi
tur
e.

 Taxati
on–Gov er
nmentlevi
sdif
fer
enttypesoftypesongoods/ser
vicesfr
om rai
sing
rev
enue/onincomes
 Rent/rat
es/l
easeincome/hi
ri
ngchargesrecei
vedfrom gov
ernmentproper
tysuchas

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 173
 i
sabokemi
cah@gmai
l.
com
l
and/ buil
dings
 Salesofasset s–t hisincludesasset slikeshar es/bui l
dings/v ehicl
es
 Loans–Thesear er ecei
v edf r
om developmentpar tners/internationallenders/world
bank/I.
M. F/l
ocallender s
 Divi
dends/pr ofi
ts–r eceivedf r
om gov ernmenti nvestment /busi ness
 Li
censes/f ees–l icensesf oroperati
ngbusi ness/fessf orgov er
nmentser vi
ces
 Loyalti
es–gener at edbyacount r
y’sresour cessuchasf orests/mi nerals.Nationalpar
ks
 Grants/donati
on/gi fts–f r
om thedev elopmentpar tners/otherwel lwi sher
s
 Loansr epayments/i nterest sonloansgi venoutbyt hegov ernmentagenci es
 Fi
nes/penal ti
esimposedbycour ts/gov ernmentagenci es

21. Out
li
nef
ivesour
cesofnon-t
axpubl
i
crev
enue

 Ext
ernalbor
rowi
nge.
g.f
rom I
MFandWor
ldBank

 Sol
i
citf
orf
orei
gngr
ant
s/donat
ions/
aidsf
rom donorcount
ri
es

 Reducegov er
nmentexpendi
turethroughcost
-cut
ti
ngmeasur es
 Sal
eandl easebackofpubli
cassets
 I
ntroduci
ngnewt axati
onofsel
ectedgoods
 Impulsesfrom publ
iccor
porat
ive/gover
nmentbusinesses.

 Fi
nes&penal
ti
esi
mposedonpeopl
esf
oundbr
eaki
ngt
hel
aw.

 Feef
rom di
rectser
vices.

 Escheat
s

 I
ncomef
rom gov
ernmentpr
oper
ti
ese.
g.par
ks/
lande.
t.
c

 Loanr
epay
ment
s/i
nter
estear
nedf
rom gov
ernmentownedf
inanci
ali
nst
it
uti
ons.

22.(
a)Expl
ainf
ivesour
cesofpubl
i
cfi
nances. 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
(10mar
ks) 
  
  
  
  

 
(i
) Taxesandl
evi
es

Thesearetaxesandl
evi
esonindi
vi
dualmembersofpubl
i
candbusi
ness
organi
zat
ionsoutoft
hei
rear
ningsandser
vicespr
ovi
dedbyt
hegover
nment
.

(
ii
) Di
vi
dendsf
rom par
ast
atalandi
nvest
ment
s

Thesearetheshar
esofpr
ofi
tsgi
vent
othegov
ernmentbypar
ast
atal
sinf
orm of
di
vidends.

(
ii
i) Bor
rowi
ngl
oansl
ocal
l
yani
nter
nat
ional
l
y

Locall
y,thegover
nmentborr
owst hr
oughthesal
eoftreasur
ybondsandbill
sas
wellasinfr
astr
uctur
ebonds. 
Int
ernat
ional
l
ythegover
nmentborrowsfrom
i
nternati
onalfi
nanci
ali
nst
it
uti
onssuchast heWorl
dBankandfri
endlycountr
ies.

(
iv) Feesf
orser
vicesr
ender
edt
oindi
vi
dual
sdi
rect
lybyt
hegov
ernmentf
orexampl
es

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 174
 isabokemicah@gmai
l.
com
regi
str
ati
onofbirt
h,mar ri
agesanddeat
hs,
busi
nessl
i
censi
ng,
bur
ialper
mit
,wor
k
permit
sandtransferofpropert
y.

(
v) Fi
nesandpenalti
eschar
gedont
hoseconsi
der
edt
ohav
ebr
eachedgov
ernment
l
awsfrom cour
ts.

Thesear
eimposedoni
ndi
vi
dual
sfi
rmsandcor
por
ati
onsf
oundgui
l
tyofbr
eaki
ng
thel
awsofland.

(
vi) Escheat
s

Propert
iesreposedbythegover
nmentfr
om membersofpubli
cforv
ari
ous
reasonse.g.whereonedieswit
houtawi
llandhav
enolegalhei
r.

23. Indicat orsofagoodt axsystem

 Equi t
y ;Taxbur denshoul dbedi st
ri
butedamongt hetaxpay ersaccor di
ngt otheir
abili
tyt opay
 Economy ;Coll
ect i
onandadmi nistr
ati
vecostoft hetaxshoul dnotexceedt ax
revenuecol l
ected
 Flexibilit
y;Taxsy stem shoul dbecapabl eofbei ngrevisedorchangedi nl
inewi t
ht he
changi ngeconomi ccondi t
ions.
 Diversit y
;Di f
ferentt ypesoft axsot hattaxburdenisondi fferentgroupsoft he
societ y.
 Elasticity;Taxrev enueshoul dbecapabl eofrespondingappr opriat
elytochangesi n
nationali ncome.
 Simpl icity;Thet axsy st
em shoul dbeunder stoodbyt axpay ersandt hecollect
ors.
Thismot i
vatesthem t o payt ax.
 Certain; Theoneexpect edtopayshoul dbeclearlyawar eofhowmuchhe/ shei s
pay i
ng.Thet axcol lector/
gov ernmentshouldal sobeawar eofhowmuchi tis
supposedt ocollectfrom tax

MONEYANDBANKI
NG.

1. Hi
ghli
ghtfouradv
antagesofusingat
elegr
aphi
cmoneyor
derasameansofremi
tt
ing
moneythoughthepostoff
ice. (
4mar ks)

 I
tisfast
ermeansofsendi ngmoney
 Thesendercanbecompensat edincaset
hemoneyi
slost
 I
tisfast
erwayofsendi ngmoney
 I
tisaconvenientwayofsendingmoney
 I
tcanbeeasilytracedwhenitget
slost

3. Expl
ainf
iveway
sinwhi
chbankscont
ri
but
etot
hedev
elopmentofKeny
a (
10mks)

 Pr
ovi
dingcapi
talt
oexi
sti
ngnewbusi
ness
Nov
els,
Updat
edCPA,
KASNEB,
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imar
yNot
es 0705525657 175
 i
sabokemi cah@gmail.
com
 Theycarryf easi
bili
tystudiesf orpotent
iali
nvest
ors
 Theyprovideadv isoryservicesonhowt osetupandr aninvestpr
ojects
 Theysuppor ti
nvestment sinar easwhichwouldotherwisenotbefinancedbyotherf
inanci
al
i
nstit
uti
onsduet or i
sksinv olv
ed
 Theygener aterevenuet othegov ernmenttopaytaxesordivi
dendstothe government
 Createempl oymentoppor tuniti
es
 Mobili
zati
onofsav ingsinvestment s

4. Statefourlimitat
ionsofbar tert r
ade (
4mks)
 Involv
edoubl ecoi ncidenceofwant swhi chisdif
fi
culttofi
ndinreall
i
fe
 Somei temscannotbeconv enientl
ydiv i
dedintosmal l
erunit
s
 Somegoodsar etooheav yhencedi ff
iculttotr
ansport
 Lacksst andardsmeasur eofv alue.
 Somecommodi t
iescannotbest oredf oralongperiod/peri
shabl
e.
 Dif
f i
culttodetermi nefairr
ateofexchange

5. Outli
nefivereasonswhybankscur r
entaccounti spopul
arwit
htrader
s ( 10mks)
 Thetraderscanwi t
hdrawmoneyatanyt i
mewi thoutnot
ice
 Chequesar eusedforpay mentsinsteadofcash
 Traderscanarrangeforov er
draft
sfacil
iti
eswitht hemanagementoftheBank
 Thebankcanpayonbehal fofthetr
adessuchasst andi
ngorder
s
 Thereisnomi nimum balancerequir
edi ntheaccount
 Purchasescanbemadepostdat edcheques

6. Explainserviceoffer edt ocommer cialbanksbyt hecent

ral
bankofKeny
a (
10mks)
 Acceptingdeposi tsf rom commer cialbank
 Adv i
cecommer cialbanksonf inancialmat t
ers
 Supervisestheoper ationstocommer cialbanks
 Facil
it
atesthecl earingofcheques
 Givesloanst ocommer ci
albanksoper ati
ons
 Saleoff or
eigncur rency

7. Li
stf
ourchar
act
eri
sti
csofmoney (
4mks)

 Di
v i
sibi
li
ty
 Portabi
li
ty
 Malleabil
i
ty
 Acceptabil
it
y
 Homogenei ty
 Stabil
it
y
 Durabil
it
y

8. Statef
ourmet hodsthatcentralbankmayuset ocontrolcr
edit (
4mar ks)
 Bankrates.Thi
sistherateatwhi chthecentr
albanklendstocommercialbanks.Itcanbe
vari
edtoencourageordi scouragecredi
t/rai
sing/l
oweringbankrat
e
 Openmar ketoperat
ion.Thecent r
al;
bankmaysel lorbuysecuri
ti
esi
nthemar ket.Sell
ing
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 176
 i
sabokemicah@gmail.
com
secur
it
iesr
educest
hemoneysupply(f
orlendi
ng)

 Specialdeposi
ts/compulsorydeposi
ts/mi
nimum reser
v erequi
rement
s.Thecentr
albank
requi
reotherfi
nanciali
nsti
tut
ionstohaveacert
ainpercentageofdeposi
tsdeposi
tedi
nthe
centr
albankwhi chcanbev ari
edtoencour
age/discouragecredit
s

 Cashr ati
o/l i
quidit
yrati
o.Ther ationofcash/deposi tsmaybecar r
iedtocont rolmoneysuppl y
creditwhichcanbei ncreasedt or educemoneysuppl y/canbedecreasedt oincreasemoney
supply.
 Mor alpersuasion/Liquidasset sper suasion.Thecent r
albankmayappeal /request /
persuade/r estrai
nleading/cr editrati
oning.
 Thecommer cialbanksmayber equiredbyt hecentralbanktoapproveloansonl yforspecial
typesofpr ojectse.g.agricul
ture,manuf acturi
nge.t.
c
 Directacti
on/di recti
ve/instr
uct i
ons
 Cent r
albankscanusei tsaut horitytodirect/i
nst
ructthefinanci
alI
nsti
tuti
onst ol endmor e/
l
ess/appl ycr edit
ssqueeze/cr editexpansionsmar ginsrequir
ements.

9. Descr i
bemet hodswhi chmaybeusedbycommer cialbankst otransfermoneyfor
cust
omer s.
 Standingor der–Ast andingor derisani nstructionbyi t
scustomer stobepayi
nga
certai
namountofmoneyt oanamedper sonori nstituti
onaf t
eragi venint
erv
alunti
la
specifieddat e
 Creditt r
ansfer–I ti
samet hodofpay ingmanypeopl eusingonecheque.Thepay er
compi lesal i
stofpay ees, theamountpay ablet oeach, t
headdr essandt heaccount
numberofeach.
 Telegraphict r
ansfer–Tel egraphictransferi samet hodofr emi t
tingmoneyof f
eredby
commer cialbankst oany bodywhowant stosendmoneyt oanother .Themoneyis
tr
ansf erredthroughcabl eort elephonefaci l
iti
es.
 Mobi l
ebanki ng–wher ecust omerscancar ryoutt ransactionsbyuseofmobi l
ephones.
 Travelerscheque–whi chassi stspeoplet ravell
ingabr oad
 Banker scheque–Thi sar eboughtbycust omer stopayt heircreditorswhocannotaccept
personalcheques
 Cheques–i sawr it
tenorderbyt hedrawert oabankt opayondemandaspeci f
ied
amountofmoneyt otheper sonnamedast hepay eeort othebear er.

10. Abusinessmanwishestoobt
ainaloanf
rom acommer ci
albank.Hi
ghl
i
ghtt
he
condi
ti
onst
hatheshoul
dsatisf
ybefor
ethebankcangranthi
mt heloan

 Coll
ateralsecurit
yv al
uedbyappoi ntedval
uers
 Accountf rom l
eadingbankatl eastsixmonthsold
 Bankst atementsfort helastsi
xmont hsbusyaccountt
odeter
minecr
edi
twor
thi
ness
 Quarantinetothef oll
owedi ncaseofdefaul
t
 I
ntendedpur poseoft hel oan
 Agreementont herepay ment
 Appraisalfee/charget odeterminecredi
twort
hinessbyabank

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 177
 i
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cah@gmai
l.
com

11. Highl
i
ghtfourr
easonswhyl
oansadv
ancedbycommer
cial
banki
nKeny
amaynotappeal
tomanypeopl
e (4
marks)

 Highr at
eofi nter
estchargedontheseloans
 Poorpr ofit
sasar esul
tofpooreconomy
 I
ndi v
idualsandf ir
msmayhav echeapersourceofloans
 I
nv ol
vel engthyformal
it
ies
 Manypeopl efeartheconsequencesoffail
i
ngt opayt hel
oans
 Manypeopl edonothav erecogni
zedpropertythattheycanof
ferassecur
it
yforl
oans

12. Expl ainfiveser v

icest hatthecent ralbankofKeny aof ferstocommer ci
albanks(
10
marks)
 Accept sdeposi tsforsaf ekeepi ng
 Licensi ngt heoper ationsofcommer cialbanks
 Super vi
sionofbanki ngoper ations
 Pr ov i
decl eari
nghosesf aci
lit
iesf orcheque
 Gi vingcommer ci
albanks, l
oansast het enderofthel astresort
 pr ov i
desadv isoryser v i
ces, banki ngeconomi cmat ters
 Cent r
albanki sasour ceofcur rencyf orcommer cialbankoper at
ions
 Buy i
ngandsel l
ingf orei gncur rencyf rom commer cialbanks
 Act sasamedi atorsf orcommer cialbanksi ncaseofdi sputebetweent hem
 Itr epatri
atesexcessf oreigncur rencyonbehal fofcommer cialbanks
 St atutorymanagementdur i
ngf inanci alcrisi
s

13. Expl
ainf
ourdi
sadv
ant
agesofusi
ngabankov
erdr
aftasasour
ceoff
inances(
8mks)

 Iti
sanexpensi v
esour ceoff i
nanceast hei nterestchar gesarev er
yhigh
 Frequentuseofov erdraftuseofov erdraftcouldbesi gnofpoormanagementhencei tmakei
t
dif
f i
culttoobt ai
ncr edi
t .Bankmayr ecal lt
heov erdraftanyt i
me
 Ov erdraftarenoteasi lyav ail
ableunl essonei swel lknown
 Int
er estrepaymentcannotbepl annedf orwi thcer t
ainty
 Limitedaccess-ov erdraftsisonlygi vent ocur r
entaccounthol dersonl
y
 Secur i
ty–t hel endersmayr equiresecur it
y /proper t
ypl edge
 Limitedamountar ehenceunsui t
abl eforlongt ermf i
nanci ng
 Repay mentpat ter
nsar eunpl annedhenceanydeposi t
smadei ntheaccountar
eassumedto
ber epay i
ngt heov erdraft
 Shor trepaymentper i
odwhi chaffectst hecashf low off i
rm adversel
y

14. Descr
ibefourwaysinwhichanon-bankf inancialinst
it
uti
onsdiff
erfr
om the commerci
al
banks
 Theydonotpr ovi
decurrentaccount(facil
it
ies)whi l
ecommer ci
albanksprovi
det
he
faci
li
ti
es.IncommercialbankscurrentA/ Chol dersusecheques/commercial
 bankissueschequeswhi l
eNBFIdon’ t

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 178
 isabokemi cah@gmai l
.com
 Theyprovi
delongterml oanswhi l
ecommer ci
albankspr ovideshor tter
ml oanwhil
e
commer ci
alprovi
deshor tt
er ml oan/ov erdraft/discounti
ngbi l
lsofexchangeNBFIdon’t
 Non-bankfinanci
ali
nstitut
ionsar enotregul atedsupervisedbycent ralbankwhil
e
commer ci
albanksareregulat edbycent r albanks/super vi
sed/banki ngact.
 TheNBIFslendmoneyf orspeci fi
cpur pose/speci f
icsectorwhi l
ecommer ci
albank
prov
idesgeneralfi
nance
 Commer ci
albankcreditwhi l
eNBI Fdon’tcr eatecredit
 Commer ci
albankmeansofpay ment/t ransferofmoneywhi l
eNBFI sdon’
t
 Commer ci
albankexchangef oreigncur r
encywhi leNBFIdon’ t
 Commer ci
albankprovidessaf e(forlaterbanker s)whileNBFIdon’ t
 Commer ci
albankgiveslettersofcr editinI TwhileNBFIdon’ t
 Commer ci
albankprovidesl ockersfacili
ties/saf ecustodyforv al
uableswhi l
eNBFIsdon’
t

16. Discussfivereasonswhybusi nesspeopl epr efertooperatebankcurr

entaccounts
 Onecangi vepostdat edchequesi fneedarises, t
husenabl i
ngclear
ingofdebt satafuture
date.
 Onecanmakewi thdrawal sasmanyt i
mesast heywi shthusenabli
ngthem toaccessmoney
whenneeded
 Onecangeti ssuesofr egularst
atement sthusenabl ingthem tobeawareoft hei
rbank
balances.
 Onecanwi thdrawl argesumsofmoneywi t
houtnot i
ce,whichconveni
entforthebusiness.
 Onecangetbankov er draftfaci
l
itywhenonedoesnothav eenoughcash.
 Onedoesnothav et omai ntainminimum bal anceunl i
keinotheraccount
shencecanuseal l
thefundsintheaccount .
 Safetyisenhancedasonepaycr editorsusingachequeanddoesnothav etogot othebank.

17. Wambuaintendstoimpor tacarfr

om Dubaiwhi
chcost
sKshs.20,
0000Dir
ams.If
4Dirams=1UsDol larandKshs70=1Dol l
ar,
cal
cul
atet
heamountinKeny
ashi
ll
ings
t
hatWambuawi llpayforthecar.
CarCosts20,000dir
ams
4di r
ams=1USdol l
ar
AmountofKshspaid
20,
000 =5,000USdollar
s
4
Amountpaid=Kshs350, 000

18. Highli
ght4f unct i
onsoft heCentr
al BankofKeny
a
 i
ssuingofcur rency
 Bankertothegov ernment
 Bankertocont roll
ercommer ci
al
 Lenderoflastr esort
 Control
li
ngcredi t
 Managementoff oreignexchangereserves
 Implementinggov ernmentmonetarypolicy
 Managementofpubl i
cdebts

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 179
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cah@gmai
l.
com

19. Out
li
net
hebenef
it
sthatbankcust
omerget
sfr
om oper
ati
ngacur
rentaccount
(
10marks)

 paycr
edi
tor
scheques,
hencesaf
etyanddoesnothav
etogot
othebank

 Theycangetbankov er draftfacil
i
tywhent heydonothav eenoughcash
 Theydonothav etomai ntai
nmi nimum balanceunlikeinotheraccountshencecanuseal lthe
fundsintheaccount
 Theycanwi thdrawlargesumsofmoneywi t
houtnot i
ceconvenientforbusiness
 Theycanmakewi thdrawsasmanyt imesast heywishthusenablingthem toaccessmoney
whenneeded.
 Theycangi vepostdat edchequesi fneedarises,t
husenablingthem tobeawar eoftheirbank
balances
 onecanwi thdrawlargesumsofmoneywi thoutnotice,whi
chi sconvenientfort
hebusiness
 Onecangetbankov erdr aftfacil
it
ywhenonedoesnothav eenoughcash
 Onedoesnothav et omai ntai
nmi nimum balanceunlikei
not heraccountshencecanuseal l
thefundsintheaccount s
 Safetyisenhanceasonepaycr edit
orsusi
ngachequeanddoesnothav etogot othebank

20. Expl
aint
he5ser
vicesof
fer
edbycommer
cial
bankst
othei
rcust
omer
s(10mar
ks)

 Safekeepi
ngofv
aluabl
esit
ems.Commer ci
albankact
sascust
odi
anofv
aluabl
eit
em f
ort
he
cl
ient
ssuchaswil
ls,t
it
ledeeds,
jewel
l
eryetc.

 Theylendmoneyt otheircli
entsinf orm ofl oans, ov erdr
aftsordi scountingbill
sofexchange
andpromi ssorynot es.
 Theyreceivemoneydeposi t
sf rom theirclientscommer ci
albanksoper ate3typesofaccounts
fort
hispur posenamel ysavings,currentandf ixeddeposi taccount .
 Theyfaci
litatetransferofmoneyt hroughcheques, credittransfersstandingorderset
c.
 Theyadvicet heircl
ientsonf inancialandi nv estmentmat t
er s.
 Theyfaci
litateinter
nat i
onalpay ment sthroughl ett
er sofcr edit.
 Theyactasmanagementt rusteesofpr oper t i
esofbusi nessofdeceasedcl ients.
 Theyactasr efereesf orthei
rcl i
entsdur i
ngacr editstatusi nquiri
ng.

21. Outl
i
nefourwayst
hatt
heWor
ldBankmayuset
oassi
stdev
elopi
ngcountr
iest
o
i
mprov
et hei
reconomy. (4marks)

 Pr
ovi
dingfi
nancest oreducebudgetarydefi
cit
s
 Pr
ovi
deloansf ordevel
opmentprojects.
 Pr
ovi
definancetocor r
ectandadversebalanceofpayment
.
 Pr
ovi
detechnicalexpert
isetosupportdevel
opment.

22. Expl
ainf
ourfunct
ionsofmoney . (8marks)
 Used/servesasamedium ofexchange.Moneycanbeexchangedforgoods/
servi
ces
removi
ngtheprobl
em ofbar
ter/canbeusedtobuygoods/servesasiti
sgeneral
lyaccept
ed

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 180
 i
sabokemicah@gmai l
.com
asamedi um ofexchange.
 Measur eofvalue:Val ueofgoods/ser vi
cescanbecompar ed/estimated/deter
mined/
calculat
ed/assi gned.
 Storeofv al
ue:valueofgoods/ser v
icescanbest or
edinform ofgoods/serv
icesare
recordedintermsofmoney .
 Standardofdef err
edpay ment s/moneyassistofconductbusinessoncredi
t/where
pay mentsaremadel ater.
 Unitofaccount.Val uesofgoods/ servi
cesarerecor
dedont er
m ofmoney .

Out
li
ne4ser
vicesof
fer
edi
nagencybanki
ngasat
rendi
nthebanki
ngsect
or.
(4mks)

 Cust
omerdeposi
ts
 Wi
thdr
awalf
rom ownaccount
 Tr
ansf
eroff
unds
 Pay
ingbi
l
ls
 Bal
anceenqui
ri
es
 Openi
ngnewaccount
s
 Fi
l
li
ngofl
oanappl
i
cat
ionf
orms
23. Thefoll
owingaresomeoftheaccountsavail
abl
etocustomersi
ntheKenyanbanki
ng
i
ndustr
y:Curr
entaccount,
savi
ngsaccountandFixeddeposi
taccount
.Gi
vetheaccountt
hat
cor
respondstoeachofthedescr
ipt
ionsgi
venbelow. (
4marks)

Descr
ipt
ion Ty
peofAccount

(
a)Accounthol
der
srequi
retodeposi
taspeci
fici
nit
ial SAVI
NGS
amountaswellasmai
ntainamini
mum balance

(
b)Accountholdermaydepositandwi t
hdrawmoney CURRENT
whenevertheywantwithoutmaintai
ningaminimum
bal
ance
(
c)Bankspayi nt
erestont
hedepositatcomparati
vely FI
XEDDEPOSI
T
hi
gherrates.
(
d)Moneymaybedeposi t
edatanyt i
meandi nt
eresti
s SAVI
NGS

ear
nedi
faspeci
fi
edbal
ancei
smai
ntai
ned

24. Out
li
nefourbenef
it
sthataccr
uet
oacust
omerwhousesaut
omat
edtel
l
ermachi
ne
(
ATM)banki
ngservi
ce. (
4marks)

 Savesti
me
 Wit
hdrawinganytime
 Conveni
entl
yplaced

Nov
els,
Updat
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KASNEB,
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imar
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 isabokemi
cah@gmail.
com
 Accesst oaccountbal
ances/extr
ainfor
mati
on
 Canpayut i
l
itybil
l
s
 Depositsanyt ime
 Si
nceATM car dscanbeusedtobuygoods/servi
ces
 Cheapert ooperate
 Safertouse
 Highlypor t
able
 Withdrawalscanbedonef oroneelsebehal
f

25. Descri
befourmeasur
est
hatt
hegov
ernmentmayputi
npl
acet
oreducet
heamount
ofmoneyi
nci
rcul
ati
on. (8mar
ks)

 Compul sorydeposi t
s/speci aldeposi t
s/ increasemi nimum r eser v
er equir
ement s.
TheCent ralbankmayr equiret hatcommer ci
albanksdeposi tacer tai
namountof
theircashwi ththecent ralbank.
 Selectivecr editcont rol/cr
edi trationing.Thegov ernmentt hrought hecent ralbank
mayr equirethatcer tai
nsect orsoft heeconomybeassi stedf inanciall
y.
 Openmar ketoper ati
ons.Thegov er nmentmayi nst ructthecent r
albankt osel l
gover nmentsecur iti
es/stocks/ bondsi nt heopenmar ker/stockexchange.
 Raisei nterestrat es-Hi ghi nterestr atesmaybeof feredforsav i
ngst oencour age
mor edeposi t
s.
 Raisecash/ li
quidi tyrati
ot her ebyleav ingcommer cialbankswi thlessmoneyt olend.
 Raisingt hebankr ateleadingt ocr edit/loansbecomi ngmor eexpensi ve.
 Raisingmar ginr equi r
ementt odiscour agebor rowi ng.
 Mor alsuasi onbygov ernmentappeal ingt ocommer ci
albankst oreducel endingto
thepubl ic.
 Reduci nggov ernmentexpendi t
urebysuspendi ngsomepr ojects.
 Raisingt axest or educedi sposabl ei ncomehencel owerpur chasingpower .
 Surplusbudget ingbyspendi nglesst hant heincomer ai
sed.

26. Out
li
nef
ourr
equi
rement
sforopeni
ngacur
rentaccountwi
thaCommer
cial
bank

 Personalident i
fi
cati
on.
 I
nit
ialdeposi trequi
red.
 Aletterofintroducti
onfrom anexi
sti
ngcust
omer
.
 Physicalcontactaddress.
 Beofmaj ori
tyage/abov e18year
sold.
 Passportsizephot ographs.

27. Atr
aderhasdeci
dedtotakeal
oantoexpandamanuf actur
ingbusiness.Giv
efour
reasonswhyiti
sbenefi
cial
toborr
owfr
om anon-bankf
inanci
alinst
itut
ion (
4marks)

 Gi
vesl
ongt
erml
oans

 Pr
ovi
desf
inancef
orcapi
taldev
elopment/speci
fi
cpr
oject
s

 Lowi
nter
estr
ates.
Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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sabokemicah@gmai
l.
com
 Assi
sti
nmanagementoftheproj
ect.

 Acceptl
owercol
l
ater
alv
alues.

 Gi
veal
ongergr
aceper
iod.
.

28. Explai
nfourser
vicest
hatt
heCent
ral
BankofKeny
amayof
fert
oabankert
o
commer
cial
banks (
8marks)

 Advi
sing/inf
ormation/educat
ion/publ
i
shi
ngj
our
nal
sforcommer
cialbanks or
fi
nancialmatt
ers.

 Bankertocommerci
albanks/accept
sdeposi
tsbybei
ngi
ncust
odyoft
her
eser
ves
recei
vedfr
om commercialbasi
s.

 Super
visi
ng/moni
tor
ingt
heoper
ati
onsofcommer
cialbanksbanki
ngact

 Pr
ovi
dingacentralcl
eani
nghor
sewher
ecommer
cialbanksset
tl
edebt
sduet
oeach
ot
her/forcheques.

 Bei
ngat
enderoft
hel
astr
esor
ttot
hecommer
cialbanks.

 For
eignexchange/buy/sel
lfor
eigncur
rencyt
o/f
orcommer
cialbanks.

 I
coreofcur
rencyf
orcommer
cialbanksoper
ati
ons/r
epl
acesol
dcur
rency/i
ssue
newnotes/coi
ns.

 Medi
ati
on/
arbi
tr
ati
oni
ncaseofdi
sput
es(
bet
weencommer
cialbanks)

 Li
censi
ng—t
heoper
ati
onsofcommer
cialbanks.

 Repatr
iat
ionofexcessf
orei
gncur
rency/pr
ofi
ts(
broad)onbehal
fofcommer
cial
banks.

 St
atut
orymanagementdur
ingf
inanci
alcr
isi
sIr
ecei
ver
shi
ps.

29. I dent
ifyfourbenef i
tsthataccruet oacustomerusingE-Banki
ng/
Mobi
l
ebanki
ng
ser
vices
 Thecust omercanusei ttobuyai rt
ime.
 Enabl ethecust omert opayut il
it
ybill
s.
 Fasti ntransactingbusiness.
 Cust omercanbeal er
tedonanydeposi t
sintheaccount
 Onemayaccessaccountbal ance
 Onemayr equestf ormini-
statement
 Onecant r
ansfermoneyf r
om t hebanktothemobilephone.

30. St
atef
ourmet
hodsusedbycommer
cial
bankst
olendmoney

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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sabokemi
cah@gmai
l.
com
 Ov erdraftfaci
lit
ies
 Per sonalloans
 Useofcr editfacil
i
ties
 Treasur ybill
s
 Discount ingbill
sofexchange/
promi
sor
ynot
e

32. Namef ourfact

orsinf
luenci
ngt
heamountofmoneyhel
dforpr
ecaut
ionmot
ive
 Levelofincome
 Familystatus
 Ageofi ndivi
dual
 Numberofdependant s
 Indi
vidualtemperaments
 Durationbetweenincomes

33. Discussf i
veci
rcumstancesunderwhi cht hegov ernmentmaybef orcedtoborrow
money
 Wher et herei
sabudgetdef i
cit–i ft heplannedexpendi tureexceedsplanned
revenue
 Wher et herei
sneedforr econst ruction–t hisusuallyhappensaf t
ertheeconomyi s
dev astatedbynatur
alcalami tiesorwar .
 Wher et herei
sneedtopr ov i
der eliefservicestothoseaf f
ectedbydisast
ers.
 Whent hereisneedtoimpr ovei nfrastructure–soast oenhancet hepeaceof
economi cdevel
opment /
distributionofgoodsandser v
ices.
 Wher et herei
sneedtomai ntainpr icestabili
ty–t hegov ernmentcouldborrow
throught hesaleoftr
easur ybillsandbondsi nor
dert oreducetheamountofmoney
incirculati
on.

Explainfiveway sinwhi chcommer cialbanksf aci

litatepaymentonbehal foft hei
r
customer s. (10mar ks)
a.Standingor ders.Acust omermaki ngr egularpay ment scoul dinstructt hebankt omake
thepay ment sf oranagr eeper iodoft imeunt ilhemakeschangest ot hei nstr
uct i
onin
writ
ing.
b.Creditt r
ansf er.Customerwi thsev eralpayment st omakeatacer taint imemaywr it
e
onlyonechequeandt henf i
llacr edittransferform whi chinstructsthebankwhoi stobe
paidandhowmuch.
c.Creditcar ds.Thecust omerobt ainsgoodswi t
houtpay i
ngf orthem i ncashf rom aret
ail
outl
ett hataccept sthecar ds.Thebuy ersignsav oucherwhi chislaterpr esentedtothe
bankbyt hesel lerforpay ment .
d.Cheques.Thebanki ssuest hecust omerswi thachequebookwhi cht heyusef or
payment s.
e.Mai ltr
ansf er.Thisiswher et hebankwoul dremi tthepay mentt hroughmai lonbehalfof
thecust omer .
f.Banker ‘
scheque/ bankdr af t
.Thi sisachequedr awnbyonebankt oanot hert hepeople
maki ngthepay mentbuy st hechequeandmakest hepay mentt ocredi torswhodon‘ t
acceptper sonalcheques.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 184
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sabokemi cah@gmai l
.com
g.Letterofcr edit
.Thisi swherebanksguar anteepaymenttoexpor
tersonbehalfofthei
r
cl
ientswhohav eimpor tedgoods.
h.Traveler‘scheques.Thi sisusedt oassistt
ravel
ersin/
outofthecountr
ytosettl
etheir
debtsint hecount rytheyar evi
sit
ing.
i
.Telegraphi ctransfer.Thisiswherebybankr emit
smoneybyuseofcabl es/t
elephoneon
behalfoft heircustomer s.

34. Expl
ainfi
veway
sthr
oughwhi
cht
heCent
ral
Bankcanr
educeexcesssuppl
yof
moneyi
ntheeconomy
. (10marks)

 Bankr
ates-
Incr
easi
ngt
heCent
ralbanki
nter
estl
endi
ngr
atest
ocommer
cialbanks
 Li
qui
dit
y/cashr
ati
o–i
ncr
easi
ngt
hecash/
li
qui
dit
yrat
io
 Compul
sor
ydeposi
t-i
ncr
easi
ngt
hecompul
sor
ydeposi
trequi
rement
s
 Openmar ketoper
ati
ons-sel
l
ingt
hegov
ernmentsecur
it
iest
othegener
alpubl
i
cand
i
nsti
tut
ions
 Sel
ecti
vecredi
tcontrol
-i
nstr
ucti
ontocommerci
albanksandot
herl
endi
ng
i
nsti
tut
ionstoadvanceloanstofewspeci
fi
csect
ors
 Di
recti
ves–instr
uct
ionstocommercialbanksandot
herl
endi
ngi
nst
it
uti
onst
o
i
ncreasethei
nter
estthatt
heyshoul
dchar ge
 Request
s/moralsuasi
on-
appeal
i
ngt
hecommer
cialbankst
ocont
ractcr
edi
t
act
ivi
ti
estospecif
icsect
ors
Expl
ainf
iveadv ant agesofM- pesa

Savesti
me–Mpesashopsar eavailableevery
wher e.

Withdr
awi nganyt i
me–asl ongast heshopsar eopened.

Convenientlyplaced–i nalltowns.

Accesst oaccountbal ances/ext rainformati
on–t hroughphone.

Canpayut i
li
tybill
s–e. g.elect
rici
tybill
s.

Candeposi tanyt ime–asl ongast heshopsar eopened.

M-pesacanbeusedt obuygoodsandser v
ices–i nashop/pet r
olst
ati
on.

Cheapert ooper ate–l esschar ges.

Safert
ouse–haspr ivatepi n/passwor d.

Withdr
awal scanbedonef oroneselfbehalf–wi thanID.

Candeposi tmoneyi nt hebankaccount–t hr
oughM- banking.

Canwithdr awmoneyf r om thebank–t hroughM- banking

Explain5servi
cesthattheCentralbankofKeny aoff
ert oCommer ci
albanks.

Lender sofl
astresort
;-Centralbankisthelastinsti
tutionwherecommer ci
albanks
obtainloansi
ftheyareunabletoget f
inanceselsewher e.

Abankt ocommer ci
albanks.–Ascommer cialbanksoperateaccountswit
ht hecentr
al
bank.

Clear i
ngofcheques;-Centr
albankf acil
i
tatestheclearingofchequesbetweendiff
erent

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
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 isabokemicah@gmail
.com
commer ci
albankst hr
oughi tscleari
nghouse.
Contr
oll
i
ngcommer cialbanks.–Bygi vi
ngthem i
nstr
ucti
onsonthelendingprocedures
andproperbankingpractices.
Contr
oll
i
ngofmonet arysystem.Bycont r
oll
i
ngthelendi
ngcapaci
tyofcommer ci
albanks
thusregul
ati
ngtheamountofmoneyi ncir
cul
ati
on.
Li
nktoexter
nalfinances.–I tlinksthecommerci
albankstoi
nter
nationalfi
nanci
al
i
nstit
uti
onandot hercentralbanks

Explainf ivecur renttrendsi nKeny a‘ sbanki ngsect or

˗Increased/wi despr eaduseofAut omat icTel l
ermachinesATMs/ATM car dshasenabl ed
bankst oof ferser vi
cest ocl ients/pur chasef rom designat
edr et ailoutlets(usingATM
cards/debtcar ds)
˗Networ kingofbr anches/comput eri
sedser v i
ceshasfaci
lit
at edabi l
i
tyt otransact
businessf r om anybr anchcount rywide/ f
asterpr ocessi
ngoft ransact ionse. g.cleari
ngof
chequest akel esst ime
˗Relaxat ionofcondi tionsr elati
ngtooper ationofbankaccount ssi ncef eaturesofspecifi
c
accountt y pesacr ossdi f
fer entbanksar enol ongerunif
orm( butkeeponchangi nginli
ne
withcompet iti
vemar ket)
˗Easiercr edi tconditions-v ari
etyofl oanpr oduct s/loanswithmi nimalr equirementsare
nowav ailabl e( toattractmor ecustomer s)
˗Cust omercar eservicest ocat erforcust omer swhomayr equi reper sonal i
sed/
specialisedadv ice/assi stance
˗Banki ngser vi
cesbyMi cro-FinanceI nst i
tuti
onst hroughprovisionofbasi cbanki ng
servi
cese. g.Faul uKeny a,Fr ontOfficenSer viceAct i
vi
ti
es(FOSA, KWFT)acceptexampl es
ofmi cro-f i
nance.

-Emer genceofAgencybanki ngwher ebysomef i

nancialinstit
uti
onsal l
owsomebusi nesses
topr ovidef inancialser v
iceson
theirbehal f( acceptbenef i
tsofagencybankingasexpl anat i
on)
˗Liberisat i
onoff oreignexchangedeal ings/li
censingoff orexbur eauxhasenabl
edclients
toaccessf oreignexchangeser vi
cesmor econvenient
ly/r eadil
y
˗E-banki nghasenabl edcl i
entstocar r
youtsomebanki ngt r
ansact i
onsbyuseof
comput ersonl i
ne
˗M- banki ng-cust omer scancar r
youtsomebanki ngtransact i
onsv iamobil
ephonese. g.
balancei nqui r
ies/sal arydepositalert
s/airt
imet opup/pay mentofbi l
ls/chequebook
order i
nget c.
˗Rest ructuring/r ationalizi
ngofoper ati
onsbymer gi
ng/cl osingsomebr anches/
i
ntroduci ngnewout l
ets/r etr
enching(toimproveser v
icedel i
very)nanceinst
it
uti
onas
expansi on)

Expl
ainthebenefi
tsofmobil
ephonebanking
˗Easeofuse-mobi l
ephonesareeasytooperateandaccesstheaccount
˗Speedytransf
erofmoney-moneyissentandr eceiv
edwi t
houtdel
ays
˗Securi
ty-iti
smoresecureandsafeasaphonei susedbyt heownerformonetar
y
tr
ansacti
ons
˗Cheaptouse-somebankschar gever
yli
ttl
ef eesfortheuseofbanki
ngservi
ces

Nov
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˗Facili
tatesloanf aci
li
ti
es-ownerscanaccessl oansthroughmobi lephones
˗Ut i
li
tybil
ls-easyt opaybill
sbythecustomers-wat er,
power ,air
ti
me
˗Ser vi
ceisav ail
ablefor24hoursconvenientf
ortheaccounthol der
˗Statementofaccount-accounthol derscanaccesst heirstat
ementf rom thephone
˗Pr ovi
dear ecord-t r
ansacti
onsthr
oughmobi lephonehav eev i
denceofr ecordsforany
futurereference
˗Banki ngservicesbecomecheaperint er
msofcost sandt imeatt hetouchoft hebutt
on,o
transportcosts
˗Instantfeedbacki savail
abl
eforanytransact
ion

I
NTERNATI
ONALTRADE.
1.Out
li
nefourbenef
it
st hatKenyaderi
vesbybei
ngamemberofpr
efer
ent
ial
TradeAr
ea PTA
(
4marks)
 Obtai
nsloanfr
om PTA
 Obtai
nswidemar ketforgoods

 Obt
ainl
oanf
rom PTAbank

 Pr
omot
esunder
standi
ngbet
weenst
ates

 Pr
omot
esunder
standi
ngbet
weenst
ates

 Reducedcust
omsdut
y.

 Obt
ainsgoodscheapl
y

 Shecangetgoodst
hatshecannotpr
oduce

 Ther
eisneedf
orf
orei
gnexchangewheni
mpor
ti
nggoodsf
rom PTAmember
s.

2.Expl
ainf
ivewaysi
nwhichacount
rybenef
it
sbypar
ti
cipat
ingi
nint
ernat
ional
trade
(10mar ks)
 Thecountr
yisabl
etoexpor
tsurpl
usgoods

 Thecount
ryi
sabl
etobuywhati
tdoesnotpr
oduce

 Thecount
ryi
sabl
etoear
nfor
eignexchange.

 Consumer
sint
hecount
ryenj
oyav
ari
etyofgoods

 Thecount
ryi
sabl
etoacqui
ret
echnol
ogyf
rom ot
hercount
ri
es

 Count
ry’
sci
ti
zensmayacqui
re/l
ear
nposi
ti
vehabi
tsl
i
fest
yle

 I
tenabl
esacount
ryt
ospeci
ali
zei
nfi
eldswher
eiti
sbestsui
ted

Nov
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 Pr
omot
esheal
thycompet
it
ionamongl
ocalandfor
eignmanuf
act
urer
s

 Acount
ryv
ari
abl
etogetgoodsev
endur
ingt
imesofcal
ami
ti
ese.
gfl
oods

 I
tcr
eat
esempl
oymentoppor
tuni
ti
esf
orci
ti
zens.

 I
tgener
atesr
evenuet
hrought
axes.

3.Gi
vefourr
easonswhyi tmaybenecessar
yforacount
ryt
ocont
rol
impor
ts (
4mar
ks)
 Toprot
ectinf
antfactor
ies
 Toavoiddumping

 Tocor
rectbal
anceofpay
mentdef
ici
t

 Tor
aiser
evenue

 Topr
otectexi
sti
ngl
ocali
ndust
ri
es.

4.Out
li
nefi
vetr
ansact
ionswhicharerecor
dedi
nbal
anceofpay
mentaccountofacount
ry
(10marks)
 Itr
ecor
dstangi
bles/v
isi
bleexport
s.

 I
trecor
dst
angi
ble/
visi
bleexpor
ts

 I
trecor
dsnont
angi
ble/
visi
blei
mpor
ts.

 I
trecor
dsnont
angi
blei
mpor
tsser
vices.

 I
nfl
owofl
oans/
grantbyf
orei
gngov
ernment
.

 I
nfl
owofpr
ivat
ecapi
tal

 Outf
lowofl
oansbyagov
ernmentt
oot
hercount
ri
es

 Monet
arymov
ementf
ormI
MF/wor
ldBank

5. Expl
ainf
ivemeasur
esthatacountr
ymayt aket
opr
omot
eherexpor
ts (
10mar
ks)
 Bypar t
ici
pat
ioni
nint
ernat
ionalt
radef
airs

 Byusi
nghercommer
cialat
tachest
opr
omot
ecount
ri
esofaccr
edi
tat
ion

 Bysubsi
dizi
ngpr
oduct
ionofexpor
t/gi
vi
ngboundar
iest
hroughexpor
tcompensat
ion.

 Bydi
ver
sif
yingherexpor
t/r
ely
ingondi
ff
erentpr
oduct
s

 Byent
eri
ngi
nto(
bil
ater
al)t
radeagr
eement

 Byl
ower
ingdut
iesoni
mpor
tedr
awmat
eri
alsmeantf
orexpor
t/cust
omsdr
awback

 Lendi
ng/maki
ngf
inanceav
ail
abl
eforexpor
tpr
oducer
s

 Reducebur
eaucr
acyi
nli
censi
ngofexpor
ttr
ade

 Byest
abl
i
shi
ngEPZ

Nov
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cah@gmai
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6.St
atef
ourmet
hodsofcont
roll
i
ngimport
s (
4mar
ks)
 Tar
if
fsoni
mport
s

 Subsi
diest
ocont
roll
ocalpr
oducer
s

 Exchangecont
rol

 Quot
as

 Tot
alban

 Longi
mpor
tpr
oducer
s

 Admi
nist
rat
ion

7.Explainthemeaningandsi gnif
icancei
neachoft hefoll
owingtermsasusedoft he foll
owing
termsasusedi nforei
gnt r
ade.Ter msoftrade,bal
anceofpayment ,
exchangerate,
balanceof
tradeandcommonmar ket
. (10mar ks)
 Ter msoft r
ade:therateatwhi chexport
sononecount ryexchangeswithi
mpor t
s.ToT=Pr i
ce
i
ndexofexpor
tsdetermi neswhetherthetradebetweenonecount r
yandanotherisfavour
able.

 Balanceofpayment :t
hedif
fer
encebetweenbot hcapi
talandcurrentexport
sandimpor
tsofa
country
.I ft
hevalueofexport
sishigher,thecountr
yexperiencesasurplusandvi
cever
sa.It
determineswhetheracountr
yisexperiencingsurpl
usinI

 Exchangerat
e:r
ateatwhi
chacountr
y’scurr
encyexchangeswithanot
her
.Thisrat
e
deter
minestheval
ueofexpor
tsandi
mpor t
s/showsitsindi
cat
ionofacount
ry’
seconomi
c
str
ength.

 Bal
ancetr
ade:t
hedif
ferencebetweenthev
alueofacount
ry’
svi
sibl
etangi
blei
mpor
tsandi
ts
val
ueofexpor
tsishi
gherthanimport
s.

 Det
ermi
neswhet
heracount
ryi
sexper
ienci
ngsur
plus/def
ici
ttr
ade

 Commonmar ket:anagreementbet
weencountr
iesthatall
owfreemovementofgoodsand
fact
orsofpr
oduction.Thi
sall
owsmobil
izat
ionofresources/t
radewi
thoutr
est
ri
cti
on.

8.Explai
nthesi gnif
icanceofeachofthefol
lowingdocument sasusedint
ernat
ional
trade.Bill
of
l
ading,proformai nvoi
ce,i
ndent,l
ett
erofcredi
t
 Bi l
loflanding:iti
sadocumentusedi ntransport
inggoodsbyship.I
tenablestheholderto
t
akepossessi onofgoods.I tenti
tl
estheholdertotakepossessi
ontogoodsimported.

 Per
for
mai
nvoi
ce-adocumentsenti
nadv
anceofgoodsbei
ngexpor
ted.

 Indent
-anor
derpl
acedwithagentofexpor
ter.I
tisusedtoassi
sttheexport
erofagentt
o
knowwheretobuygoods.Itusedtoassi
sttheagenttosel
ectonexport
ers.

 Let
terofcredi
t–anoff
ici
all
ett
erf
rom abankal
l
owi
nganot
herbanki
nfor
eigncount
ryt
opay
anexport
eronbehal
fofthei
mporter
.

St
atef
ourfact
orst
hatmayl
i
mitt
hesuccessoft
radeagr
eement
samongAf
ri
cancount
ri
es
 Lackofgoodwil
l
Nov
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 Simil
arproducts
 Bureaucracy.
 Dif
ferenceinheight
sandmeasur
es
 Poli
ti
cal
 Languagebar ri
er
 Cult
uraldiff
erence.

9.Hi
ghl
i
ghtfi
vewaysi nwhi
chabil
lofladingisuseful
toanimporterofgoods
 Heusesitasadocumentf
orfuturerefer
ence.
 Heusesthebi
llofl
adi
ngtocountercheckhisgoodsonarr
ival

 Hecanusei
ttogetmoneyf
orcl
ear
ing,
oncet
hegoodshav
ecome

 Hecanusi
tasapr
oofofbusi
nesst
ransact
ion

 Hecanuset
hebi
l
ltocl
aim compensat
ioni
ncaseal
lthegoodsi
ndi
cat
eddonotr
eachhi
m.

10.
Highl
i
ghtf
ourprobl
emsacount r
ymayexperiencebypar
ti
cipat
ingi
nint
ernat
ional
trade
(4marks)
 Causesexhaust
ionofnon-
renewabl
eresources

 Thr
eatt
ogr
owt
hofl
ocali
ndust
ryduet
oimpor
tat
ionofcheaperandbet
tergoods

 I
mpor
tanceofgoodst
hathav
eadv
erseef
fectonci
ti
zens,
li
keconsumpt
ionofhar
mful
i
mpor
tedproduct
s

 Er
osi
onofcul
tur
alv
alueduet
ocopi
ngofundesi
redf
orei
gnhabi
ts

 Pol
i
cebl
ackmai
lduet
opol
i
ticaldi
ff
erence

 I
ncr
easedi
nfl
ati
onduet
oimpor
tat
ionofexpensi
vegoods

 Mayl
eadt
oacount
ryexper
ienci
ngi
mpor
tedi
nfl
ati
on

 Mayleadtounfav
our
abl
ebal
anceofpay
ment
swher
ethev
alueofi
mpor
tsar
emor
ethant
he
val
ueofexport
s

 Acountryt
hatr
eli
esoni
mpor
tedpr
oduct
smayf
acepr
obl
emsofsuppl
ydur
ingt
imesof
emergency
.

 Mayl
eadt
odumpi
ngwhenl
ocalmar
keti
sfl
oodedwi
thcheapgoods.

11.
Out
li
nef
ourci
rcumstancesunderwhi
chaprof
ormainv
oicemaybeused (
4mar
ks)
 Whengoodsaresentonanagenttoshowsel
li
ngpri
ces

 Whent
hesel
l
erdoesn’
twantt
ogi
vecr
edi
ttot
hebuy
er

 Whenpay
mentf
orgoodsi
srequi
redi
nadv
ance

 Whent
hei
mpor
terwantwr
it
tencl
ear
ancebef
oregoodsar
esent

Nov
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 Whengoodsar
esentt
oat rader

 Whenanswer
ingani
nqui
ryl
ett
er

 Whent
heconsi
gneeofgoodswi
shest
odet
ermi
nepr
ofi
tabi
l
itybef
oresel
l
ing

12.
Expl
ainsi
xproblemsbei
ngfacedbyt heKeny
aExter
nal
TradeAut hor
it
y(KETA)
 Poorinfr
astr
uctur
ewhichdiscour
agesinv
est
orsmakeslocalgoodslesscompet
it
ion

 Hi
ghpr
oduct
ioncost
swhi
chmaymakel
ocalpr
oduct
sexpensi
ve

 I
nsecur
it
y:maydi
scour
agei
nvest
ors/
discour
aget
our
ism

 Cor
rupt
ion/embezzl
ementoff
undswhi
chmayaddt
oext
racost
stopr
oject

 Shor
tagesofener
gymayhampert
heoper
ati
onsoft
hei
nvest
ors

 I
nadequat
efundsmaymakei
tdi
ff
icul
tforKETA t
oachi
evei
tsai
ms

 Pol
i
ticali
nter
fer
encewhi
chhi
der
sthesmoot
hrunni
ngofKETA

 Compet
it
ionf
rom ot
hercount
ri
eswhi
chmakesi
tdi
ff
icul
tfort
heKeny
angoodst
osel
l
.

13.Explai
nt hefact
orsthatmayleadtodeter
ior
ati
ngter
msoft er
msoftradeforacount
ry
(
10mar ks)
 Hi ghpr i
cesofimports.Lowerpr
icesexport
scomparedtocount
ri
esexport
s.
 Adv ice/fal
li
nexchanger at
es/depreci
ati
onofl
ocalcur
rencywhi
chmakest hei
mpor t
s
expensive

 Appr
eci
ati
onoff
orei
gncur
rencywhi
chmakesi
mpor
tsmor
eexpensi
ve

 Low/f
alli
ndemandf
orcount
ry’
sexpor
tsmor
eexpensi
ve

 Competi
ti
on(fr
om simil
arpr
oductsofot
hercount
ri
esi
nthesamemar
ketwhi
chl
eadst
o
decr
easehencelowerexpor
tpr
ices

 Dev
aluat
ionofl
ocalcur
rencyt
husmaki
ngi
mpor
tsmor
eexpensi
vemaki
ngexpor
tscheaper

14.Expl ai
nt hef ol
lowingt ermsasusedi nint er nati
onal t
rade
a.LOCO–Meanst hepricequot edcov erst hegoodsast heyarei nt heexpor t
er’
spremises.The
i
mpor terhast omeett hecost sofmov i
ngt hegoodsf rom theexpor ter
’spremisestotheirdesti
nation
b.F.O. R–Thi smeanst hatthepr i
cequot edi ncludestheexpensesf ortranspor
tingthegoodsf rom
thesel ler
’swar ehouseupt othenear estr ailwayst ati
on.Thebuy ermeet srail
waychargesandal l
othercost s.
c.F.A.S-Pr icequot edincludet r
anspor texpensesupt ot hedocksaswel lasdockchar ges.Loading
ontot heshi pandanyot herexpensear epai dbyt heimpor t
er.
d.BillofLandi ng-Thi sisadocumentpr epar edwhengoodsor deredf orareloadedintotheship.It
servesasev idencet hatgoodshav ebeenr ecei vedbyt heshi powner .I
tusedbyt heimpor t
ertoclaim
thegoodswhent heyar r
iveatt heportofdest ination.
e.Indent–Thi si sanor dersentbyani mpor tert oanagenti ntheexpor ti
ngcountry.I
tcont ai
nsthe
detailsoft hegoodsr equired,t
hemet hodofpacki ng,t
het ransportingcompanyandt het ermsof

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payment.
f.l
ett
erofhypothecat
ion–Thisisal
ett
erwr
it
tenbyt
heexpor
tert
ohi
s/herbankaut
hor
izi
ngi
tto
resel
lthegoodsbeingexpor
ted.

St
atet
hreefunctionsofdepar t
mentsofinternat i
onaltradeint
hemi nistr
yofcommer ceandi
ndust
 Pr otectionofconsumeragai nstexpl oi
tati
on( hi
ghpricesandl owquali
ty)
 Car r
youtmar ketresearchondistributi
onofessent i
algoodsandser vi
ces
 Pr omot ionanddev el
opmentofi nternaltr
ade.
 Act sasamedi atorforcommer cialbanksincaseofdi sputebet weenthem.
 I trepatri
atesexcessforei
gncurrencyonbehal fofcommer cialbanks.
 St atutorymanagementdur ingfi
nanci alcri
sis.

15.
Expl ai
nf i
vedi sadv antagest hatacount rymayexper i
encef rom i
mposi ngtr
aderestri
cti
onson
tradingpar t
ner s.
 Ret ali
ati
onbyot hertradingpar tners/count riesl eadingt oreducti
oni nexpor
ts.
 Low/ f
oreignexchangeear ningsduet oreducedexpor ts.
 Cur tai
ledtr ansf eroft echnol ogy/factorsofpr oduct i
ont hatmayleadt opoorquali
ty
producti
on/ l
owqual i
tyofpr oducts/l
owout put.
 Lackofv ar i
etyof /l
imitedpr oduct swhi chr estrictsconsumer s’choice.
 Poori nternat ionalr el
ationswhi chmayl eadt oconf li
ctsamongconsumer s/maynotget
assist
ancei nt imesofcal ami ty/needs.
 Leadst oincr easedunempl oymentduet oreducedt radingacti
vit
ies.
 Maysuf ferbal anceofpay mentasar esul tofr educedi ncomeofexpor t
s.
 Reducedcompet i
ti
onl eadingt ol owqual it
ygoods/ serv i
ces/i
neffi
cientfi
rms/expl
oit
ati
onof
consumer s.

17.Di
scussfi
ver
easonswhyl
essdev
elopedcount
ri
esar
erel
uct
anti
nimpl
ement
ingf
reet
rade
agr
eement.

 Avoi
dunf
aircompet
it
ionfr
om devel
opedcount
ri
eswi
thsuper
iorpr
oduct
sasi
tmay
/coul
d
l
eadtol
ossofmarketfort
hei
rproduct
s.

 Preventdumpi ngofi nferiorgoodsbydev elopedcount ri

eswhi chmayhav eadv er
seeffects
ontheeconomy .
 Tosaf eguardlocalempl oy mentt hi
smaysuf ferduetof reeent ryofimpor ts.
 Reducebal anceofpay ment sdefi
cit
s;asaresultofpay mentf orimpor tsexceedingreceipt
s
form exports.
 Safeguardagai nstgov ernmentr evenueotherwiseearnedt hrought axati
onof
exports/i
mpor ts.
 Safeguardagai nstgov ernmentr evenueotherwiseearnedt hrought axati
onof
exports/i
mpor ts.
 Avoiderosionofcul t
uralv aluesari
singf
rom unrestr
ictedi nterrupti
oni nfreetrade
 Avoidov erexploitati
onofr esour
ceswhichmaybedepl eted/ exhaustedduet oincr
ease
demandi nfreetrade.
 Avoidimpor tedinflati
onwhi chmaybecausedbyi nfl
owofhi ghlypricedimpor ts.

Nov
els,
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 Preventent
ryofharmfulgoods/serv
iceswhichmayhaveadverseef
fect
sont
heheal
thof
thepeople/
acceptexampl esi
fhar
mf ulgoodsasexpl
anat
ion.

18.Expl
ainsi
xci
rcumst
ancesunderwhi
chacount
rymayr
est
ri
cti
nter
nat
ional
trade(
12
mks)

 Wher ethereisneedt opr otectlocal/infanti ndust rieswhichmaynotwi thstand

compet it
ionfrom establi
shedf orei
gni ndust r i
es.
 Wher ethereisneedt ocont roldumpi ngt opr ev entadv erseeffectsontheeconomy .
 Wher ebalanceoft r
ade/ pay mentcont i
nuest odet erori
atetoreducepay menton
i
mpor ts.
 Wher egoodsar ehazar dous/ harmf ulforconsumpt ioninordertoprotecttheheal th
ofconsumer s.
 Wher egoodsi nvol
vedar easecur i
tyrisktot hecount r
yt oensurepeaceandst abil
it
y.
 Wher eitisnecessarytocount ertheact ionsoft r
adi ngpartnersasar etali
ator
y
measur e.
 Wher ethereisneedt oav oidimpor t
edi nflationar isingfrom overpri
cedi mports.
 Wher eitispoli
ti
call
yexpedi enttodosoi nor dert opr omot egoodgov ernancei n
anothercountry.
 Wher ethereisneedt osaf eguar dlocalempl oymentwhi chmaybel ostthroughent ry
ofcheapi mpor t
s.
 Wher ethereisneedt oav oidov erdependenceoni mpor t
swhi chmayl eadt opolit
ical
bl
ackmai l.
 Wher ethereisneedt oav oidov erexploitationofr esourceswhi chmaycauset heir
depl
et i
on.
 Wher ethereisneedt obui l
dr eser v
esofst rat egiccommodi ti
est oavoidshor t
agesi n
meet i
nglocaldemands.

19.Statef
ouri
temst
hatusual
l
yappearont
hecr
edi
tsi
deoft
hecur
rentaccountofa
count
ry

 Recei
ptsf
rom expor
tofgoodsIv
isi
bleexpor
t

 Recei
ptsf
rom expor
tofser
vices/i
nvi
sibl
eexpor
ts

 Recei
ptf
rom i
nvest
mentabr
oad

 Def
ici
tbal
ance.

20.Expl
ainf
ivemeasur
est
hatt
hegov
ernmentmayt
aket
oimpr
ovet
hev
olumeofexpor
ts.

 Creati
onofexportprocessi
ngzones—wher etheproducer
s/expor
tersenj
oya
vari
etyofincept
ives/accepte.
g.ofinv
estorsasexplanati
on.
 Manuf act
ureunderbondtoencouragelocalmanufactur
erstopr
oduceexcl
usi
vef
or
export.

 Expor
tcompensat
ionschemes/subsi
desschemesbyr
efundi
ngaspeci
fi
c%ageof

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val
ueofgoods/ser
vicesexport
ed/meeti
ngpartoft
hecostofpr
oduct
ionf
or
expor
ter
s

 Pr
ov i
dingi
nfor
mationoninter
nati
onalmar
ket
sthr
oughpubl
i
cat
ions/semi
nar
s/
workshops/educati
onalt
ours.

 Fi
nanci
ngt
hosepr
oduci
ngf
orexpor
tsbyav
ail
i
ngcr
edi
t/l
oanst
oexpor
ter
s.

 Part
ici
pati
ngi
ninternat
ionalt
radef
air
s/exhi
bit
ion/showt
oexposet
heexpor
ter
s/
thei
rgoods/ser
vices.

 Useofcommerci
alat
tachesothergover
nmentagenci
est
opr
omot
eexpor
tsI
adver
ti
se/l
ookformarketsf
orexport
s.

 Reduct
ionofbur
eaucr
acy/r
edt
apet
hroughsi
mpl
i
ficat
ionofexpor
tpr
ocedur
es.

 Customsdr
awbacksbyr
efundi
ngt
axoni
mpor
tedr
anmat
eri
alsusedt
opr
oduce
export
s.

 Dev
olut
ionofcur
rencyt
omakeexpor
tscheaper/i
ncr
easeddemand.

 I
mprovedi
nfrast
ruct
uret
ofaci
li
tat
eexpor
tpr
oduct
ion/expor
ttr
ade/acceptegsof
i
nfr
ast
ruct
ureasament i
oned.

 Enteri
ngi
ntotradeagreement/b1oks/int
egr
ati
ongr
oupi
ngcooper
ati
ont
ogi
ve
prefer
ent
ialt
reatmenttocool
ingexpor
ts.

 I
mpr
ovi
ngqual
i
ty/st
andar
dizat
ion/packagi
ngt
omakeexpor
tsmor
eat
tr
act
ive.

 Exportcr
editguar
ant
eeschemet
oinsur
e/compensat
eexpor
ter
sagai
nstr
isks
when
sel
li
ngov er
seas.

 Taxrebates/lower
ingofdut
iesonexport
s/reduct
ionoftaxesoninput
s.usedto
producegoodsforexpor
ttomakethem cheaper/i
ncreasethei
rdemand/toreduce
costofproducti
on.

 Improve/adoptmoder
ntechnol
ogyi
nor
dert
oincr
easet
hev
olumeofgoodsf
or
export
s.

22.St
atef
ourf
ormsofeconomi
cint
egr
ati
ont
hatmayexi
stbet
weencount
ri
es.

 commonmar kets–.Thi
siswherecountri
esinaneconomi cintegrationall
owfr
ee
mov ementoffactor
sofproducti
onsuchasl abourcapi
talandentr epreneur
shi
p
amongt hemembercount ri
es
 FreeTradeAreas-wherebarri
erssuchast ar
if
fsandquot asareremov ed.
 CustomsUnjons-membercount r
ieschar
gecommonext ernaltar
iffs.

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 Economi
cUnion-wherecommoneconomici
nsti
tut
ionsl
i
kebanksar
esett
odeal
wit
hmonetar
ypoli
cy.

Outli
nef i
vecharacteri
sti
csofaneconomi cuni
onf
orm ofi
ntegr
ati
on.10mks

freetradeinallgoodsandser v
ices

freedom ofmi grati
on

singlecurrencyinuse

jointeconomi cinst
it
utionegcent r
albank

dev el
opmentofcommoni nfrastr
uctur
e

freeflowofcapi tal

commonenv ir
onment alregulati
ons

Nonat i
onaldiff
erencesint axati
on

23. Expl ai
nfiv
edi
sadv
ant
agest
hatacount
rywoul
dsuf
feri
fsher
est
ri
ctedt
radewi
th
othercountr
ies. (
10marks

 Reducedcompetit
ion-l
eadi
ngt
olowqual
i
tygoods/
ser
vicesi
nef
fi
cient
fi
rms/expl
anat
ionofconsumer
s.

 Reduced/ limitedconsumerchoi ce-trader est ri

ctionr educest hev ar i
etyof
goods/ ser vicesav ail
abl etoconsumer sleadi ngt ol owst andar dsofl iving.
 Retali
at i
on/ t
radingpar tner sar elikelyt oret aliateleadi ngt ol ossofbusi ness
betweencount ri
esi nv olved/ reducedexpor t/
impor ts.
 Reduced/ lowi nvestmentduet ol imitedt radingoppor t unities
 Blackmai lofgov ernmentbyi nf ant /
locali ndust riesseeki ngcont inued
protection/ duet ol ackofgr owt h/stagnat ion/ nott owi thdr awpr ot ection.
 Reduced/ limitedmar kethenceunderexpl oit
at i
onofav ail
abl er esour ces/reduced
product i
oncapaci ty.
 Misallocat ionofr esour ces/ inappr opriateal l
ocat ionofr esour ces-i tmayf or
cea
countryt ouseherr esour cesi nar easwher eshehasnocompar ativeadv antage/not
bestsui tedi n
 Cost l
ytot hegov ernment -Thi smayhappeni fmeasur esl ikesubsi diesar eused/ to
enhancer estrict
ionsbyencour agi ngi mpor tsubst i
tution/ meetpar toft hecosts.
 Reduced/ lossofgov er nmentr ev enueear nedf rom i mpor t/ expor tt axes.
 Reducedf oreignexchangeear ningsf rom goods/ servicesnotexpor ted
 Leadst oi ncr easedunempl oy mentduet or educedt r
adi ngact iviti
es.
 Poori nter nationalr el
at ionswhi chmayl eadt oconf li
cts/ fri
ct ion/ among
countries/ maynotgetassi st ancei ntimesofcal ami ties.
 Cont r
olledt r
ansf eroft echnol ogy /factorsofpr oduct iont hatmayl eadt opoorqual ity
goods/ lowqual i
tyofpr oduct s
 Reduced/ limitedsuppl yofgoodsandser viceswhi chmayadv er sel y
affectconsumer s( Acceptexampl esofadv erseef f
ect sasexpl anat i
on)
 Encour agessmuggl i
ng/ blackmar ketinghencel eadi ngt olossofr ev enue/ entryof
counter feitgoods/ ser vices.

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25.Outli
nefourbenef i
tst hatKenyader ivesfr
om beingamemberofPr efer
ent
ial
Trade
area
 Getawi dermar ket
 Dutyexempt ionsbenef it
s
 Obtai
nconcessi onar yloansfrom PTAbanks
 I
ncreasedi nvestmentoppor tuniti
es
 Obtai
nav ari
etyofgoods
 Peacefulco-existencei screated
 Thecommoncur renciesthusr educetheburdenofcur
rencyexchange

26.Gi
vefourdemeri
tsofeconomi cint
ergrat
iontoacountry
 Lossofacountry’
srevenue
 Maycompr omisehomet radeasmor eattenti
onisdi
rect
edtoint
ergar
ti
on
 Membercountrysaresubjectedt
oacompet i
ti
onwhi
chisexpensi
ve.
 Maycause/bri
nginsecuri
tyduetofreemov ement

27.St
atefourrolesofinter
nationalmonet ar
yfund
 Offerloanstomembercount ries
 Givetechnicaladvi
ceandsuppor t
 Maintenanceofst abl
eexchanger at
es
 Givemembercount ri
esdebtr eli
ef
 Providesuffi
cienti
nternati
onalliqui
dit
y
 Promot econsultat
ionandco- operati
on
 Assisti
ngmembercount r
ieswi t
hbalanceofpay
mentdef
ici
t

28.Outl
i
nef ourspecial concessionsofferedbyt
hegov
ernmentt
oencour
age
est
abl
i
shmentofi ndust r
iesi napar t
icul
ararea
 Offeringfreeorcheapl and
 Reduct ionoft axes
 Offeringsubsi dies
 Directf i
nancialassistance
 Impr ovementofi nfrastruct
ures

29.I
denti
fyfouradvantagesofexpor tprocessingzonestoacountry
 Itpr
ovidesemploy mentt otheciti
zens
 Theyst i
mulat
egr owt hinspeci
ficsectorsoftheeconomysuchasagr
icul
tur
al
acti
vit
ies.
 Theyleadtodev elopmentofgoodi nf
rastruct
urei
nthesezones.
 Theypr omoteexpor ttr
adewhichear nforeigncur
rency
.

30. EastAf ri
cacommuni tyhasnotr
eali
zedt
hebenef
itswhichaccr
uefr
om it
s
establ
ishment .Di
scussfi
vefactor
swhichmayhavecontr
ibutedt
oslowpaceinthe
achiev
ementofi t
sgoals
 Di f
ferencesinpoli
ti
cali
deol
ogi
es–Thismakesitdi
ffi
cultt
oharmoni
zetheir
economi cacti
vi
ti
es

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 Commonorsi milarproductsproducedhencenotmucht radecant akeplace
betweent hem
 Lackofcommoncur rencymakest r
adebetweent hepeopleofthethreecountri
es
di
ffi
cult
 Poorinf
r astr
ucturet hatleadst
opoorconnectivi
tybymeansoft r
ansport
 Highlevelofpov ertyamongmemberst atesmakei tdi
ff
icultf
orthem tobuygoods
fr
om neighbour i
ngcount ri
es
 Lackofcommonl anguageofcommuni cati
onthushamper ingsharingofideas

31. Discussf ivefact

orst hatmayl eadtodeteori
orati
ngt er
msoft r
adeofacount ry
.
 Hi ghpr icesofimpor t
s/lowerpri
cesofexpor t
scompar edtocountri
esexports
 Fal linexchanger ates/depr
eciati
onoflocalcurrencywhichmakesexpor t
s
expensi ve
 Appr eciati
onoff oreigncurrencywhichmakesi mpor t
smor eexpensi
v e
 Low/ f
alli
ndemandf oracount r
ysexports.
 Compet it
ion/si
mi l
arproduct sofothercountr
iesinthesamemar ketleadsto
decr easeindemandhencel owerpr i
cesofexpor t
s.
 Dev aluati
onoft helocalcurrency,thusmakingimpor t
smor eexpensi
v eandexpor
ts
cheaper .

32. A count rywasexper iencingbal anceofpay mentsurplus.Explainanyf i

vefactorsthat
mighthavecausedt hat.
 Increaseinexpor tearningswher ebyt hev
alueofexpor tisgreaterthanthevalueof
impor t.
 Decr easedimpor texpendi ture.Wher ebyt
hev al
ueofi mpor t
sisl essthanthevalue
ofexpor tearnings.
 Increasedforeignpr i
vatei nvestment swhichi
ncreasesi nfl
owoff orei
gncurr
ency
 Increasedforeignpubl i
cl oans/ grantswhichincreasesf orei
gnear ning
 Reducedout f
lowofcapi talwhi chr educesoutfl
owoff oreignexchangebypr ivate
investors.
 Reducedout f
lowofpubl iccapi talwher et
hegov er
nmentspendsl esson
loans/grantst oothercount ri
es.

33. Explai
nFi vereasonswhymanycount r
iestendtopr ef
erf
reetr
ade
 Enableacount rytoenj oyqualitygoodsandser viceduetoincreasedcompet i
ti
on
 All
ow specializat
ion/
count ri
est endt ospeci ali
zeinwhattheycanpr oducebest .
 All
owt hem accesswi dev ari
etyofgoods/ servi
ces
 All
ow wi dermar ketforgoods/ ser vi
cesproduced
 Freemov ementoff actorsofpr oductionf r
om countrytocount r
y.
 All
owcr eati
onofmanyj oboppor tunit
iesforinvestmenti
ndi f
ferentcountri
es
 Countri
esenj oycheapergoods/ ser vi
ces
 All
ow freeflow ofnewt echnologyi deasandski ll
samongdifferentcountr
ies
 Promot epeaceandunder st
andi ngamongcount ries

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34. Expl
ainf
ivecausesofper
sist
entbalanceofpaymentdi
sequi
l
ibr
ium i
nEastAf
ri
ca

 Falli
nvol
umeofexpor
ts–relyonpri
mary/
agri
cul
tur
alproductsusuall
yaf
fectedby
draughty
iel
dingl
owpr
oduct
ionhencelowexpor
tshencereducedforei
gnearning

 Deter
ior
ati
ngt
ermstr
ade–v alueofexpor
tsar
elowr
elat
ivet
othev
alueofi
mpor
ts
hencepaymoret
hanthef
oreignearned

 Lesscapi
tali
nfl
owcompar
edtooutfl
ow-theyusual
lyborr
owmoneyf r
om dev
eloped
count
ri
esatrepayathi
ghi
nter
estr
atescr
eatinganetcapit
aloutf
low.

 Devaluat
ionpol
i
cy–devaluati
onoflocalcur
rencymakesexpor
tscheapert
o
for
eigner
sandhenceanincreasei
nt hecosti
mportat
ion

 I
ncreasei
nimportv
olumeofcapit
algoodsandindust
ri
alrawmat er
ial
sfor
dev
elopmentpur
poses.Thi
sincr
easesexpendi
tur
eonf or
eigngood.

35.Explainf i
vemeasur esthatt
heGovernmentofKenyamayt aketocontr
olherpersi
stent
Balanceofpay mentdefici
t ;
 Incr easingthevolumeofexport
si e.bygi
vi
ngincent
ivestotr
aderssothattheycan
producemor eoutput
 Reduci ngthelevelofinputi
e.Byusi ngr
estr
ict
ivemeasuressuchasi nputduties
totalbanetc

 Bydiversif
yingt
herat
eofexpor
tsoft
hecount
rysot
hatwhensomef
ailot
her
scan
st
il
lsellintheworl
dmarket

 ThroughDev
aluat
ionoft
hecount
ry’
scur
rency
-thi
smakest
heexpor
tscheaperand
hencemorecompeti
ti
vei
nthemarket

 Bynegot
iat
ingf
orf
orei
gndebtr
educt
ion

 Byaddi
ngv
aluet
otheexpor
ts

36. Expl
ainf
ivemeasur
esofcor
rect
ingbal
anceofpay
mentdi
sequi
l
ibr
ium. 
  
  
  
(10mks)

 Devaluati
onofcurr
ency(lower
ingthecurr
encyval
ue)-Thisi
smakingexport
s
cheaperandimportsexpensi
ve. 
Thisincr
easesexpor
tsandr
educesimport
sthus
reducingdef
ici
tint
hebalanceofpayment .

 Importrest
ri
cti
ons-Thi
smaybedonebyimposi
ti
onofhi
ght
ari
ff
sonimport
sor
sett
ingimportquot
as. 
Thisl
i
mitsthev
olumeofi
mport
swher
ebyreduci
ngthe
negati
veofbalanceofpay
ments.

 Exportpromoti
on-Thi
sisaimedati
ncreasi
ngt hevol
umeofexportsfr
om t
he
countrythr
oughexpor
tscompensat
ionbyestabli
shi
ngexpor
tprocessi
ngzonesand
di
versifi
cat
ion.

 Byencour
agi
ngf
orei
gni
nvest
menti
ntot
hecount
ry-
Thi
spr
ovi
dest
hef
orei
gn

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cur
rencynecessar
yfort
hepaymentofi
mpor
ts.

 Restr
ict
ingout
fl
owofcapital
.-Thi
sisadel
i
ber
ateef
for
tbyt
heGov
ernmentt
o
rest
ri
ctoutf
lowofcapi
tal
.

37.Descr
ibef
ivedocument
susedi
nint
ernat
ional
trade

 i
nqui ry–l ettersentbyani mpor tertoanexpor t
eraski ngaboutthesuppl yof
goods/ t
er msofsal e
 Or der/i
ndent–Usedbyi mpor tert oasktheexpor tert osupplyhim withgoods
speci fi
ed
 Billoflading–Documentusedbyi mportert oclai
mf orthegoodswhent heyarr
iveat
thepor tofent ry.
 Let t
erofcr edi t-i t
’sissuedbyt hei mpor t
ersbankt ot heexport
ersbankt oassure
theexpor tert hatgoodwi l
lbepai dfor
 Impor tli
cence- Issuedbyt heaut horit
ytoper mitthehol dertobuygoodsf r
om abroad
.
 Freightnot e-Showst ransportati
onchar gesf orgoods
 Airwaybi ll-Issuedbyt heai rl
i
ne.I t’sadocumentoft itl
eusedbyimpor t
erwhen
claimingf orgoodsatt heport
 Cer ti
fi
cateofor igi
n–Showst hecount ryfrom whi chgoodshav ebeenbought
 Consul ari nv oice–I t’
sani nvoicesi gnedbyconsult oconf i
rmthatpriceschargedon
goodsar ef air
 Prof ormaI nv oice–I ssuedbyt heexpor t
eri fhewi shest obepaidbef oregoodsare
del i
vered
 Commer cialI nv oice–I ssuedbyt heexpor tertodemandpay mentforgoodssoldon
credi t

38.
Out
li
nesi
xbenef
it
sKeny
ader
ivesf
rom bei
ngamemberofEastAf
ri
cancommuni
ty.
(
12marks)

 Expandedmar ketforgoodsandser v i
ces–si nceitiscomposedofmany
countri
eswher eitcansel lsur
plusgoods
 Creati
onofempl oymentoppor tuniti
es–duet oincreasedtradi
ng/busi
ness
acti
vit
ies
 Fair
/l
owerpr i
cesofgoodsandser vices–duet oreducti
on/abol
ishmentof
tax/
compet it
ion
 Encourage/promot especiali
zation–i nar easwher ecountri
esenjoy
compar ati
veadv antage/l
owcostofpr oducti
on
 Incr
easedbar gainingpower–whi chmayi mprovetermsoft r
ade/bal
anceof
payment s
 Freefl
owofgoods/ serv
ices/f
act orsofpr oducti
on–duet omini
mal
rest
ri
ctions/f
lowoff act
orsofpr oduct i
on

39.Reasonswhyacount rymayrestr
icttr
adewithothercountr
ies
 Protectl
ocalinf
anti
ndustr
iesfrom est
abl
ishedforei
gnindust
ri
eswhi
chmay
enjoygreateconomi
esofscale.
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 Create/protectl ocalempl oymentbyencour agingproducti
on.
 Protectofcul tur e/
socialvaluesbymi ni
mizinginter
acti
onbyf or
eigners
 Protecti
ngst rat egicindustr
iesofacount r
ysoast oavoiddependenceonot her
countri
es.
 Preventdumpi ng/ i
mpor t
ationofsub-st
andar dgoodswhi chmaycr eat
eunf ai
r
compet it
ion.
 Expandingmar ketforlocalproduct
sbyl imiti
ngthenumberofext ernalsuppli
ers.
 Promot eselfr eliancet oavoidpol
it
icali
nterfer
enceorcr i
sis.
 Protectbalanceoft r
adebyensur i
ngexpor taremor ethanimportshenceleading
tofavorablebal anceoft r
ade.

40.Expl ainf i
ver easonsf orTr adeRest ri
cti
on.
Topr otectl ocali nfantindust rieswhi charenotabletocompet ewithest abli
shedf i
rms
fr
om ot hercount ri
es.
Topr otectst rategi cindust ri
est hatis,i
ndustri
esthatareextremelyimpor tantanda
count rycannotdowi thoutt hem.
Tocr eat eempl oymentoppor tuniti
esbyencour agi
ngest abli
shmentofl ocalindustri
es
andal soensur ingt hatt heexi sti
ngi ndustri
esconti
nuet oprovideemploy mentt othose
al
r eadyempl oy ed.
Topr ev entdumpi ngwher eacount r
ymayt r
ytodisposeof fit
ssub-standar dproductsby
selli
ngt hem cheapl ytoanot hercount ry.
Tor ectifyabal anceoft r
adedef ici
t.
Topr otectcul tureandsoci alv al
uesbycur tai
li
ngtheimpor tati
onofhar mfulculturesfr
om
othert radingcount ries.
Toexpandmar ketf orlocalpr oducts.
Topr omot esel f-
reliancet oensur ethatacountrydoesnotsuf feri
ncaseofapol it
ical
conf l
ictwi that radingpar t
ner .

I
NFLATI
ON.
1. St
ate4causesofhy peri
nf l
ati
on
 Devaluati
onofcur rency/l
ossofv al
ueofcur
rency
 Globalrecession-economi cdowntrendi
nothercount
ri
es
 Poli
ti
calinstabil
it
y/turmoilcausi
nguncer
tai
nti
es
 Naturalhazardsegdr oughtleadi
ngtolowproduct
ion

2.Hi
ghl
i
ght4way sinwhichi nf
lati
onbenefitsaneconomy
 Mi l
dinflat
iongivesincenti
vestoinvestorswhoi
ntur
ncr
eat
e
 Increasesproduction
 Sell
ersmayear nmor e
 Mot ivat
espeoplet owork
 Promot esbetteruseofav ail
abl
er esources

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 200
 isabokemicah@gmai l
.com
St
atef
ourfactorsthatmi ghtcausecost -pushi
nfl
ati
on.
 Riseinwagesandsal ar
ies.
 Increaseint axes
 Increaseinpr ofi
tmar gin
 Increaseincostofi nput sotherthanl
abour.
 Reduct i
oni nsubsidies.

3.I
ncreaseinmoneyci rculati
onist hemaj orcauseofi nfl
ation.Statefourmonet ary
pol
i
ciesthecent r
albankofKeny acanuset ocont roli
nflati
on
 I ncreasetherateofinterestonl endingt ocommer ci
albanks
 Sel li
nggov er
nmentsecur it
iesinopenmar ketoper at
ion(O.M.O)
 I ncreasecommer ci
albankscashorl i
qui di
tyrati
o
 I ncreasecompul sorydeposi t
sbycommer ci
albankswi t
ht hecentralbank
 I nsti
tuti
onofselectivecreditcontrolmeasur es
 Di recti
vestocommer cialbanksoni nt erestratestochar geonl ending.
 Request sbycent r
albankt ocommer cialbanks(mor alpersuasi
on)t owill
i
ngly
exercisecontr
olont heirlendingtocont roli
nfl
ation,

4.Hi
ghl
i
ghtfouradv erseef fect
sofi nf
lat
ion
 Leadst oreduct i
oni nprofi
ts
 Leadst owast ageoft imeaspeopl emov efrom oneplacetoanot heri
nsuchof
betterpri
cesofgoods.
 Leadst oconf l
ictsbetweenempl oyersandempl oyees
 Leadst odeclinei nstandardsofliv
ing
 Losst ocreditorsast heylendoutwhent hev al
ueofmoneyi shighandr ecei
ve
moneywhent hev alueislow.
 Leadst oretardationofeconomi cgr owth
 Leadst olossofconf i
denceinthemonet arysystem
 Discouragessav ingsaspeopl etendt ospendmostoft hei
rearningsleavi
ngli
tt
le
ornot hi
ngtosav e.

5.St
atef
ourcausesofdemandpul li
nfl
ati
on
 Increaseingovernmentexpendit
ure
 Effectsofcredi
tcreati
onbythecommer ci
albanks
 Increaseinmoneyi ncomes
 Gener alshor
tageofgoodsandser vi
ces
 Increaseinconsumer ’
sexpendi
ture

6.Year2017hasKeny aexperienceaper sistentriseinthegeneralpricel

evelsormostof
thecommodi t
ies.Expl
ainfi
vemeasur esthatt hegov er
nmentshoul dtaketocounter
thi
strend.
 Incr
easet herat
eofinterestonl endingt ocommer cialbanks
 Sell
inggov er
nmentsecur i
ti
esinopenmar ketoperation(O.M.O)
 Incr
easecommer ci
albankscashorl i
quidit
yrati
o
 Incr
easecompul sorydepositsbycommer cialbankswi t
hthecentralbank
 Inst
itut
ionofselect
ivecreditcontrolmeasur es
Nov
els,
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imar
yNot
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 i
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cah@gmai
l.
com

7.St
atef
ourcausesofCostpushi nf
lati
on
 Riseinwagesandsal ar
ies
 Incr
easeintaxes
 Incr
easeinprofi
tmarginsbybusi nesses
 Incr
easeincostofinputsotherthanlabour
 Reducti
oninsubsidi
esbyt hegov ernmentt
obusi
nesses

8.Descr
ibef i
vest atutorymeasur est hegov er
nmentmayuset ocur bi nf l
ation
 Cont r
ol l
i
ngwagesandsal aries-increasesi nsal ari
esandwagesbr i
ngsmor e
moneyi ntoci rculati
onwhi chi nt urnfuel sdemand- pul li
nflat
ion.Thegov ernment
controlst histy peofinfl
at i
onbyr estrictingi ncr easesonsal ar iesandwages.
 Pricecont rols-wher einflationi sprof i
tpusht hegov ernmentmaycur bitbyuse
ofpr i
cecont rols
 Restricti
ngi mpor ts–wher einf l
ati
oni scausedbyi ncreasesi npr i
cesofi mpor t
s,
theimpor ti
ngcount rycancont r
olthei nf l
ationbyr educi ngthequant i
tiesofsuch
impor ts,thiscanbedonebyl ookingf oral ternat iv
esour cesofsuppl y.
 Restricti
ngt er msofhi repur chaseandcr edi ttermsofsal e–Thegov ernment
canpl acecont rolsonhi repur chaseagr eementandcr editsal esi nordert o
reducedemandf orcommodi t
iessol d.
 Cont r
ol l
i
ngofexpor ts–i nfl
at ionmayst em f rom excessi veexpor tati
onofl ocal
ly
producedcommodi ti
es.Suchexpor tationcr eat esshor t
agesi nt helocalmar ket
therebyi ncreasi ngthepr i
ces, thegov ernmentcur bst hisinflat i
onbyr estri
ct i
ngor
banningexpor tati
onoft hesai dpr oduct s.

9.Br
iefl
yexplai nfivepositi
veeffectsofi nf
lati
ont oacount r
y
 Debt or smaypayl ess–debt orsmaypayf orthecommodi tiesinthef utureatt he
oldlowpr icesandnott hehi ghpriceswhi cht hecommodi tywouldbesel li
ng.
 Sell
er smayear nmor e–Sel l
ersmaybenef i
tfrom infl
ati
oni nthattheybuy
commodi ti
eswhenpr i
cesar elowandsel lthem laterwhenpr i
cesarehi gh
therebymaki ngmor epr ofi
t.
 Mot i
v ationtowor k–Aspr icesofcommodi ti
esgoup, peoplemaywor khar derin
ordert oear nmor esot hattheyar eabletobuyt hecommodi t
ies.
 Incr
easedpr oducti
on–Aspeopl ewor khar dinordert omai ntai
ntheirst andards
ofli
v ingt heyhadbef oreinfl
ationsetin,theypr oducemor egoodsandser v i
ces.
 Betteruseofav ai
l
ableresour ces–dur ingi nfl
ati
onaryt i
mespeopl et endt ouse
theav ail
ableresourcesinthemosteconomi calwayi nordertoav oidwast age.

10.
Expl
ainthemeaningofthefol
lowingtermsasusedinInf
lat
ion
 Mil
di nf
lat
ion-Atypeofi
nflat
ionwherethegener
alpri
cesofgoodsandser
vices
i
ncreaseslowlyatasi
ngledigitr
ateofl
essthan10%

 Hyperi
nfl
ati
on-Iti
sasi
tuati
onwherebyt
hegeneralpr
icesofgoodsandservi
ces
ar
e extremelyhi
ghwherebyther
ateisi
nthousandsandmi l
l
ionsper
centperyear

 Demandpul
li
nfl
ati
on-Comesaboutwhent
her
eisexcessi
vedemandf
orgoodsand

Nov
els,
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imar
yNot
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 isabokemicah@gmail.com
ser
vicesi
n theeconomycausingarisei
npricesInt
hissi
tuat
iont
her
eist
omuch
moneyintheeconomychasingveryfewgoodsandservi
ces

 Costpushi
nfl
ati
on-Itr
esult
sfrom anincr
easei
nthetotalproductioncostsof
goodsandservi
cesl
eadingtoanincr
easeinpri
cesofcommodi ties.Iti
sthehi
gh
cost
sofproduct
iont
hatpushesthepri
cesofgoodsandser v
icesup

 I
mpor t
edinflat
ion-Itresult
sfrom t
radi
ngwithforei
gner
swherebypri
cesoff
orei
gn
goodsaffectdomest i
cprices.Hi
ghpr i
cesoffor
eigngoods[
import
edgoods]
i
ncreasesdomest i
cpr i
cesofgoodsduet odomest i
cdemand

Explain5way sthroughwhi chi nfl

ati
onmaybecont rol
ledotherthant heuseofmonet ar
y
poli
cy .
Taxesshoul dber educedt or educedisposablei ncomehencel ower ingconsumpt i
on
expenditure.
Restri
cti
onofi mpor ts/imposeheav ytari
ffstomakepeopl eswi tcht heirspendingon
i
mpor t
stol ocall
ypr oducedgoodsi n
ordertocur bimpor tedi nfl
ation.
Pri
celegislati
on/pr icecont r
olasat empor arymeasur eofkeepingpr icesstable.
Useofwagepol icies/checki ngont r
adeuni onst oav oi
dincreaseinwages.
I
ncreasegener alpr oduct i
onofgoodsandser vicestoav oi
dshor tages.
Reducepubl icexpendi t
uresuchasconst r
uct i
onofr oads/ext ensiveel ectr
if
icati
on,fr
ee
publicgoodsandser vicestor educe
demandf orgoodsandser vices.
Appropriateregulationofpr i
nti
ngnationalcurrency .

11.Expl
ainf
ivemeasur
est
hatcanbet
akenbyagov
ernmentt
oreducecost push
i
nfl
ati
on. (
10mar ks)

 Imposepricecontr
ol-
onfuel
s,elect
ri
cit
y.Fi
xi
nganupperli
mitf
orpr
icesoff
uel
,
elect
ri
cit
ysoast ocontr
oli
ncreaseincostofpr
oduct
ion.
 Control
l
ingwages/sal
ari
es-har
monizingwages/sal
ari
esandchecki
ngontr
ade
unionpressur
etoavoi
dincreaseinwagesthatcoul
dleadtoi
ncreasei
nthecostof
product
ionleadi
ngtocostpushinfl
ati
on.
 Subsi
dizi
ngpr
oduct
ion–sot
hatpr
oducer
sincurl
essi
npr
oduct
ion
 Reduci
ngt
axonpr
oduct
ion-
taxi
mposedonr
awmat
eri
als
 I
mpr
oveef
fi
ci
encyofpr
oduct
ion

ECONOMI
CDEVELOPMENTANDPLANNI
NG.
1.
Highli
ghtf
ourpr
obl
emsencount
eredatt
hei
mpl
ement
ati
onst
ageofdev
elopment
pl
anning

Nov
els,
Updat
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imar
yNot
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 i
sabokemicah@gmail
.com
Reli
anceondonorf undi
ng
Lackofdomesticresources
Fai
luret
oinvol
velocalpeopleinplanni
ng
Lackofpol
it
icalwi
ll

2.Thegapbet weent herichandthepoori

nKeny
aissowi
de.Hi
ghl
i
ghtf
ourf
act
orst
hat
contr
ibut
et ot his
Dispar it
yinnaturalr
esour
ces
Inher i
tance
Corr upti
on
Differencesintalents
Nepot i
sm inempl oy
ment

2. St
atef
ourpr
obl
emst
hatapl
annermayencount
eri
ndev
elopmentpl
anni
ng

 Lackofadequat
einf
ormat
ion

 Bur
eaucr
ati
cri
gidi
ti
es

 I
nadeaquat
epol
i
ticalgoodwi
l
l

 I
nadequat
efi
nanci
alr
esour
ces

 I
nadequat
ehumanr
esour
ces

3. Out
li
nefourreasonsthatmakei
tnecessar
yforacount
ryt
ogeti
nvol
vedi
n
dev
elopmentplanni
ng

 Enabl
esappr
opr
iat
eal
l
ocat
ionofr
esour
ces

 Encour
agesst
imul
ati
onofef
for
t

 Enabl
epr
ojectev
aluat
ion

 Hel
pst
osuppor
tfor
eignai
dbar
gai
n

 Encour
agesl
ongt
erm deci
sionmaki
ng

 Hel
pst
oav
oidt
hedupl
i
cat
ionofpr
oject
s

 Pr
omot
ebal
ancei
nregi
onaldev
elopment

Changesthatmaytakepl
acei
nacount
ryt
oindi
cat
ethati
tisexper
ienci
ng
economicdevel
opment

 Shi
ftf
rom agr
icul
tur
alsect
ort
omanuf
act
uri
ngsect
or.

 I
ncr
easedent
repr
eneur
ialabi
l
ity
.

Nov
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imar
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l.
com
 Reduct
ionofi
l
li
teracyl
evel
.

 I
mpr
ovementi
nresear
chact
ivi
ti
es.

 I
ncr
easei
nski
l
ledmanpower
.

 I
mpr
ovedi
nfr
ast
ruct
ure.

 I
mpr
ovementi
nheal
thf
aci
l
iti
es.

 I
ncr
easedi
nlev
elofsav
ingsandi
nvest
ment
s

 I
mpr
ovedt
echnol
ogy
.

4. Hi
ghl
ightf
ourpr
obl
emsencount
eredi
nthepr
ocesssofi
mpl
ement
ingdev
elopment
pl
ans

 Shor
tageofqual
i
fiedmanpower
/per
sonnel

 Pol
i
ticali
nter
fer
ence/
lackofpol
i
ticalsuppor
torgoodwi
l
l

 Localpeopl
ear
enoti
nvol
vedi
npl
anni
ng

 Rel
i
ancei
ndonorf
undi
ng

 Nat
uralcal
ami
ti
es/
unf
oreseenoccur
rences

5. Outl
inef
ourst
ructur
alchangest
hatmayt
akepl
acewhenacount
ryi
sexper
ienci
ng
economi
cdevelopment

 Shi
ftf
rom agr
icul
tur
etomanuf
act
ure

 Reduct
ioni
nil
l
iter
acyl
evel
s

 I
ncr
easei
nski
l
ledmanpower

 I
mpr
ovementi
nheal
thf
aci
l
iti
es

 I
mpr
ovementi
ntechnol
ogy

 I
mpr
ovedi
nfr
ast
ruct
ure

 I
mpr
ovedbal
anceofpay
ment

6. Descr
ibef
ivef
eat
uresofanunderdev
elopedcount
ry

 Highl
evel
sofpover
ty-Mostunderdev
elopedcountr
iest
endtobepover
ty-
ri
dden
sucht
hatabigpopul
ati
onli
vesatthesubsist
enceorbel
owthepover
tyl
evel.

Nov
els,
Updat
edCPA,
KASNEB,
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&Pr
imar
yNot
es 0705525657 205
 i
sabokemi cah@gmai l
.com
 Dispari
tyi
nincomedi
str
ibuti
on-inmostunderdev el
opedt
herei
sasmallproport
ion
ofaf ewri
chpeopl
ewhil
et herestofthepopul
at i
onl
ivi
ngbel
owthepov
ertylevel
.

 Lowl
evel
sofsavi
ngsandi
nvest
ments–mostpeopl
ehav
eli
tt
leornot
hingt
osav
e.
Lowsavi
ngsi
ntur
nleadst
olowinv
estment
s.

 Highpopul
ati
ongrowthr
ate–Mostoft
hepopul
ati
onar
eil
l
iter
ateanddoesnot
valuef
amil
yplanni
ng

 Dominanceofsubsi
stencesect
or–Inunderdevel
opedcount
ri
est
het
radi
ti
onal
subsi
stencesect
ort
endst odominat
etheeconomy.

 Pr
oblem ofunempl
oyment-Thi
smaybeasar
esul
tofhi
ghgr
owt
hrat
esandhi
gh
i
ll
i
ter
acylevel
s.

 Underut i
l
izat
ionofnat
uralr
esources–Naturalr
esour
cesexist
ingi
nmanyunder
-
developedeconomiesremainunder-
expl
oit
edduetolackofeit
hercapi
talor
appropri
atetechnol
ogy.

7. Expl
ainf
ivepr
obl
emsencount
eredi
ndev
elopmentpl
anni
ngi
ndev
elopi
ngcount
ri
es

 Lackofaccur at
edata–Dev el
opmentpl
anningdependsonthequal
it
yand
rel
iabi
l
ityofthestati
sti
caldataonwhichi
tisbased,whensuchdatai
s
i
naccurate,t
hent hequali
tyofthepl
anisgr
eatlydi
minished.

 Lackofquali
fi
edpersonnel–Duetol ackofl
ocalqual
i
fiedper
sonnel
,many
l
essdevelopedcountr
iesrel
i
esonf orei
gnexpert
swhomaynotbehav i
ng
adequat
eknowledgeaboutthelocaleconomies.

 Transf
erofi
nappr
opri
atedev
elopmentplan–whenpl ansthatwor
kedinother
countr
iesar
etr
ansfer
redt
othelessdevelopedcount
ri
estheyendupfai
li
ng.

 Reli
anceondonorfunding-mostlessdev
elopedcountri
esbaset
heir
devel
opmentplansont heexpect
edaidfr
om moredev el
opedcount
ri
es.I
f
suchaidi
snotreleased,i
mplementati
onoftheproj
ectbecomesdif
fi
cul
t.

 Lackofdomesticresources–l
imit
ati
onofdomest
icr
esour
cessuchas
ski
ll
edpersonnel
,fi
nanceandcapit
alequi
pmentmayhamperi
mplement
ati
on
ofawelll
aidoutdev el
opmentpl
an.

 Fail
uretoi
nv ol
velocalpeopl
einpl
anning–ifthelocalpeopl
ewhoare
expectedt
oi mplementplansarel
eftoutdur
ingtheplanformul
ati
onst
age,
theymayfailtosupportthepl
anatimplementat
ionstage.

 Natur
alcal
amit
ies–Proj
ecti
mplementat
ionmaybef r
ust
rat
edbynat
ural
cal
amiti
essuchasout
breakofdi
sease,f
loodsordr
ought
.

 Over-ambit
iouspl
ans–Somepl
ansespeci
all
ythosemeantt
oent
icedonor
s
forf
undingmaybeunreal
i
sti
c
Nov
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 Lackofpoli
ticalgoodwil
l–i r
respect
iveofhowgoodapl
anisi
ftherei
sno
poli
ti
calgoodwillorpol
it
icalcommi t
menttoimpl
ementi
t,i
twi
llremai
na
paperplan.

9.Expl
ainf
ivef
unct
ionsoft
henat
ional
budgetasat
ool
ofpl
anni
ng;

 Outli
ninggov ernmentexpendi t
ure–I tdet ai
lsthev ari
ousexpendi t
ur eprogrammes
thegov ernmentpl anst ounder takeov eragi venper i
odoft i
me
 Outli
ninggov ernmentr ev enue–I tgivesdet ai
lsofthev ari
oussour cesofr evenuefor
thegov ernmentt ofinancei tsact iv i
ti
es
 Enabli
nggov er
nmentpl anni ng–Thegov ernmentusest hebudgett oplanf or
vari
ousact ivi
ti
esandpr ogr ammest hatl eadt oeconomi cgrowthanddev elopment
 I
ntroduci ngchangesi nt axat i
on–Thev ar i
oust axestobeappl ied,thetaxr at
eand
themodeofappl i
cationoft het axesar eout li
nedinthebudget
 Regulatingmoneysuppl y–I toutlinest hemonet arysystemst obei nsti
tutedbythe
governmentt or egulatemoneysuppl yint heeconomy
 Sti
mul atingeconomi cact ivities–I tisusedt oincr
easegov ernmentexpendi t
urein
theeconomywhi chwi l
lspureconomi cact i
viti
esinthecount r
y

10.Explai
nfact
orst
hatmayhi
ndert
hef
ormul
ati
onofagooddevel
opmentpl
ani
nKeny
a.
 
  
  
  
   (
10marks)

(
i) Lackofadequat
e/ accurate/
detai
l
eddat
a-r
ecor
dsar
erar
elykeptbysoci
ety
l
eadingtopoor/unrel
iablepl
ans.

(
ii
) Shor
tage/i
nadequatef
undsorcapit
al-t
hismakei
tdi
ff
icul
ttocol
l
ect/
comput
e
i
nfor
mationandrel
iabl
eprepar
eplans

(
ii
i) Copyi
ng/
transf
erofinappropri
ateplans-whichwi
llnotsui
tlocalci
ti
zens
/communi
tiesastheydif
ferincult
ure,devel
opment

(
iv) Exist
enceoflargesubsi
stencesect
orhencedi
ff
icul
ttogeti
nfor
mat
ionandmakes
thewholeprocessofplanni
ngunreal
ist
ic

(
v) Probl
em ofthepri
vat
esect
or-i
nmostcasestheymaypursuedi
ff
erentobj
ect
ives
fr
om thoseofthegover
nmentyetgov
ernmentdoesn'
thav
edir
ectcontr
ol

(
vi) Lackoftrai
nedstaf
ftoconductt
heplanni
ng-Expatr
iat
esareusedwhichis
expensiv
eandtheydonothaveadequateknowledgeaboutthel
ocaleconomi
es
theyarecal
ledupontopl
anfor.

11.Explai
nfiv
ebenef
it
sthatacount
ygov
ernmentmayder
ivef
rom pr
epar
ingapr
oper
dev
elopmentpl
an (10mar
ks)

 Appropri
ater
esour
ceall
ocat
ion–t
owher
eout
puti
shi
ghestt
oensur
emaxi
mum
ut
il
izati
onofr
esour
ces.

 Pr
ior
it
izi
ngofpr
oject
s–t
oensur
ethatmor
eimpor
tantpr
oject
sint
hecount
yar
e
Nov
els,
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gi
venpr
ior
it
y

 Tosti
mulateeffor
t\moti
vat
ionalt
ool–t
obeownedandsuppor
tedbyt
heci
ti
zenst
o
meetthei
robjecti
ves.

 To ensur
e bal
anced r
egi
onaldev el
opment– t
o make i
tpossi
blet
o di
str
ibut
e
dev
elopmenttoal
lpar
tsofthecounty.

 Toav
oiddupl
i
cat
ion–byensur
ingt
hatsi
mil
arpr
oject
sar
eputi
nthesamear
ea

 Forl
ongt
erm deci
sionmaki
ng–i
nar
eas/
sect
orsofi
nvest
ment
s

12. Expl ain5r easonsf ordev elopmentpl anning

Appr opri
at er esourceal l
ocationt oav oid/r educewastage
Sti
mul ationofef fortsbyshowi ngpossi bl
eachi ev
ement swhichmakespeoplet oapply
greateref forts
Suppor tsfor eignai dbargainbecauset hepl anisusedtoconv i
ncedonorstogive
resour ces
Projectev aluat i
on-asi mplement at i
onoft hepr oj
ectisdoneont hebasi
sofpr e-
determi nedcr iteriacontainedint hepl an
Longt erm deci si
onmaki ngbecauset heplancont ai
nsal ongtermviewformaking
decisions
Avoidingdupl icati
on-t oav oidestabl i
shmentofsi mil
arindustr
iesi
nsamel ocali
ti
es
Promot ingbal ancei nregionaldev elopment
byav oidingest abl
ishmentofi ndust r
iesi nsamel ocal
it
ies
Correctimper f
ectionsint hemar ket-l ikepresencemonopol iesandoli
gopoli
eswhi ch
contri
but et omi sall
ocati
onofr esour ces

ACCOUNTI
NGREVI
SION.
1. Thef ollowinginformat i
onrelat
estoRokitotr
ader
sfort earended31stDecember
hey
2011.
Sh.
FixedAsset s 5,000,
000
Cur rentasset s 650,000
NetPr ofi
t 300,000
Cur rentLiabili
ti
es 650,000
Sal es 2,000,
000
Closi ngstock 100,000
Openi ngStock 200,000
Gr ossPr ofi
tMar gi
nwas20%
Calculate
(a) Cur rentrati
o
(b) Gr osspr ofi
tmark-up
(c) Rat eofst ockturnover
(d) Capi talemployed

Nov
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14.(
i) Cur
rentRat
io.=

= = 1:
1

(
ii
) Gr
osspr
ofi
tmar
k-up

= x100%

(
a) Gr
ossPr
ofi
t=Mar
ginxsal
es

(
b) Costofsal
es = Sal
es–GrossPr
ofi
t
= 2,
000,
000–400,
000
= 1,
600,
000
= 25%or¼
ALTERNATI
VEI
Conver
tmargi
ntomar
k-up

ALTERNATI
VEII
Conver
tMargi
ntomar
k–up

3.Rat
eofSt
ockTur
nOv
er

= 150,
000

St
ockt
urnov
er=

= 10.
67t
imes
4.Capi
tal
Empl oy ed
= FixedAsset s+CurrentAsset
= 5,000,000+650,000
= 5,650,000
Or
Capi
tal
+Netpr ofi
t+CurrentLi
abil
it
ies
= (4,700,000+300,000)+650,000
= 5,650,000

2. (b) Asat1stJul y2008t hecashbookofEmor i enterpriseshowedt hef ol

lowi
ng
bal
ances: Cash sh. 20, 000andabankov erdraftsh.8,
600.
Duri
ngt heMonththef ol
lowingtransacti
onstookpl ace.
3/07/08: Naf
ul asettl
edheraccountofsh.16, 000bychequeofsh.15, 000
6/07/08: Pai
dr entbycashsh.8, 000
10/07/08: Deposi tedsh.6,000intothebusinessbankaccountf rom thecashti
ll
15/07/08: Set tledWakul isaccountofsh.20,000andheal lowedadi scountof
1%by cheque.
18/07/08: Deposi tedsh.28,000i nt
hebankf rom pr i
v atesources.
Nov
els,
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21/
07/
08: Cashsalessh.12, 000
24/
07/
08: Oti
enoadebt orsettl
edhisaccountbychequeofsh.8,
000hav
ing
been al lowedadi scountof20%.
26/07/08: Purchasedf urnit
ureofsh.5,
200payingbycheque.
28/07/08: Receivedsh.3, 600cashfrom Ndut
a.
30/07/08: Bankedt hecucr il
abl
ecashexceptsh.1,600.
Requir
ed:
Drawupat hr
ee–col
umncashbook. (
10mar
ks)

3.I
jarainvestimentoper atesawhol esal ebusi ness.Thef ollowi ngtr
ansact i
onst ook
placei nt heMont hofmay2010.
May3: Soldgoodsoncr edittoAy i
mbash.60, 000.
May8: Purchasedgoodsoncr editf rom mj uaj
istor essh.120, 000.
May12: Returnedgoodst oMj uaj
i storeswor t
hsh.6, 000.
May16: Purchasedgoodsoncr editf rom Mj uaj
istor essh.160, 000.
May22: Soldoncr edittoMaf alaretai l
er ssh.150,000.
May23: Boughtanewmot orv ehiclef rom Mashar iki mot or
swor thsh.
3,
200, 000.
May24: Ay i
mbar eturnedgoodswor thsh.10, 000.
May29: Soldequi pmentwor thsh.840, 000oncr edi tt ochaplimited.
Required:
Recor dt heabov etransact ionsint her el ev
antbooksofor i
ginalentryforIj
ara
Invest ment s (10mar ks)
3. (a) Thef ol lowi ngbal anceswer eobt ainedf rom t
hebooksofNakhul oTr aderson
st
31 Dec 2011
Shs.
Openi ngst ock 60, 000
Equipmentatcost 125, 000
Accumul ateddepr eciati
ononequi pment 16, 200
Purchases 161, 000
Sales 208, 000
Landandbui lding 100, 000
Discountr eceived 7, 500
Retur nsout war ds 25, 000
Retur nsi nwar ds 27, 000
Salaries 22, 000
Telephonechar ges 5,000
Wat erbi l
ls 2,100
Credit ors 15, 000
Debt or s 21,000
Electricityexpences 2,000
Bank 68,000
Cashi nhand 12,000
Drawi ngs 19,000
Insurancepai d 1000
Addi t
ional informat i
on
(i) Closi ngst ockwasv aluedatsh. 72, 000
(ii
) Tel ephonechar gespr epai dshs. 1100
(ii
i) Out st andingwat erbillshs.1300

Nov
els,
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(
iv) Depreci ationonequi pmenti s10%oncostcar
riedi
nwardsshs.
11,
000,
carr
iedout war dsshs.10,000
Prepar e;
Trading, prof itandlossaccountf earended31stDec2011.
ory
Nakhul oTr aders
Tr adingpr of i
tandlossAccount
Fort hey earended31stDec2011
Shs shs Shs shs
Openi ngst ock 60,000 Sales 208,
000
Purchases 161, 000 LessReturns 27,000 181,000
Addcomi nginwar d11, 000
172, 000
LessRet urnsout 25, 000 147,000
207,000
Lesscl osi
ngst ock
72,000
COS 135, 000
GPc/ d 46,000 181,000
181,000 GPb/ d 46,
000
Disrecei
ved 7,
500
Telephone 5,000 Netloss 1,300
Prepai d 1,100
3,900
Wat erbi l
ls 2, 100
Adddue 1,300
3,400
Depr eciati
ononequi p
12,500
Carriageout 54,800
10,000
Salaries
22,000
Electricit
yexpenses
2,000
Insurance
1,000

54,
800

4. (b) Thefol
l
owi
ngt
ri
albal
ancewasextractedfrom t
hebooksofBumal
atr
ader
s
on31st Dec2011
Tri
alBalance
BumalaTr aders
Dr(shs) Cr(
shs)
Sal
es 720,
000
Purchases 340,000
Returns 20,
000 18,
000
Rent 16,
000

Nov
els,
Updat
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&Pr
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Adverti
sing 24,
000
Commi ssion 9,
000
Debtors/credit
ors 54,
000 64,
000
Stock1/1/2011 60,
000
I
nsurance 30,
000
Drawings 40,
000
Furni
ture/fit
ti
ngs 100,
000
Cashinhand 15,
000
Premises 400,
000
Capit
al 288,
000
1,
099,
000 1,
099,
000
Additi
onali
nformat i
on;
(i
) Stockasat31stDecember2011shs52, 000
(i
i) Rentaccr uedshs.6, 000
(i
ii
) I nsurancepai dinadv ancedsh.4,000
(i
v) Commi ssiondueshs. 5,000
(v) Sal ari
esal ongshs. 21,000
Requi red;
(a) Tr adi ng,profi
tandl ostaccountfort earended31stDecember
hey
2011.
(b) Bal ancesheetasatt hatdate (12mks)
(
b) Bumal aTr aders
TradingPr ofi
tandLossAccount
Fort hey earended31/ 12/2011
Shs Shs shs
shs Sales 720,
000
Openingstock L.Ret
urns 20,
000 700,
000
60,000
Purchases 340, 000
Lessretur
ns 18, 000
322,000
G.A.S
382,000 700,000
Lessclosi
ngst ock GPb/ d 370,000
52,000 Commuss 9,
000
COS Adddue 5,
000 14,000
330,000
GPc/ d
370,000

700,000
Rent 16,000
Addcur v
ed 6,000
22,000
Adv ert
isi
ng 384,
000
24,000
Insurance 30,
000
LessAdv ance 4,
000
26,000

Nov
els,
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Salar
ies 21,
000
Profi
tc/d 291,000
384,000

Bul
alaTr
ades
Bal
ancesheet
Asat31/12/
2011

5. b)Thefoll
owingtr
ialbalancer el
atest oKituiMil
ler
sLt dasat31stDecember2011.
KituiMill
ersLtd
Tr i
alBal
ance
F.
A shs shs Shs shs
Formati
ve/Fitti
ngs 100, 000 Capit
al 288,000
Premiers 400,000 500,
000 LessDrawi ngs 40,000
CA Addnetpr ofit 248, 000 539,000
Debtors 54,000 291,000 539,000
Stock 52,000 C.C
I
nsureprepaid 4,000 Credi
tors 64,000
Commi ssdue 5,000 Rentaccured 6,
000
Cash 15,000 130,000 Salar
ies 21,000 91,
000

630,
000 630,
000

As31stDecember2011
Par
ti
cul
ars Dr Cr

shs shs

Capi
tal 283,
200

Dr
awi
ngs 8000

CashatBank 30,
000

Machi
ner
y 360,
000

Debt
ors 42700

Cr
edi
tor
s 20000

St
ock(
1.1.
2011) 40000

Sal
es 570000

Pur
chases 325000

Ret
urni
nwar
ds 10000

Ret
urnonwar
ds 15000

Car
ri
agei
nwar
ds 4000

Nov
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Car
ri
ageout
war
ds 5000

Rent 18000

Sal
ari
esandwages 40000

Di
scount
sRecei
ved 9000

Gener
alexpenses. 14,
500

897200 897200

St
ockasat31/
12/
2011wasv
aluedatshs.35,
000

Requi
red:

i
) Pr
epar
eat
radi
ng,
prof
itandl
ossaccountf
ort earended31stDecember
hey ,2011.

(8mar
ks)
st
i
i
) Dr
awabal
ancesheetasat31 December,2011. (
4mar
ks)
Kit
uiMi
ll
ersLtd
Tr
ading,
profi
tandLossAccount

Fort earended31stDecember2011.
hey

Shs Shs Sh shs

Openingstock 40,
000 Sales 570,
Add:purchases 325  Less : Ret
urns 000
LessReturns 000 i
nwar ds  560,
000
outwards  Netsales 
10,
0
Add :car
ri
age 150 00
i
nwards 0 31400
310, 0
C.O.g.
a.f
.s 000 35400
Less: cl osi
ng 0
stock 4,
00 35000 560,
00
C.o.g.
s 0  0
Grossprofi
tc/d 31900
0
24100 Gr
ossprofi
tb/
d 241000
Expenses 0 Di
scountr
ecei
ved 
Carri
age 560,
00
outwards 0 9000
Rent
Wages and
sal
aries
General 5000
expenses  250,
00
77500 0
Nov
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Netpr
ofi
tc/
d 180
00 17250
0
400
00 250,
00
0
14500

Kit
ui Mil
ler
sLtd
Balancesheet
st
Asat31 December2011
shs shs shs shs
Fi
xed
Asset
s 360,
000 Capi
tal 283200
Machiner
y Add:Net 172500
pr
ofi
t 455700
Current 35000 8000
Assets 42700 Less 447700
Stock 30000 Drawi
ngs
Debtors 107700 20000
Bank 467700 S.
T.L 467700
cr
edi
tor
s

6. b)On1stJanuar y2012,Ml achaket rader

shadcashi nhandKsh.10, 000andcashatbank
shs 15000.The f ollowi ngtransact i
onstookplaceduri
ngthemont h:
Jan2: Boughtgoodsi ncashsh.1500
Jan4: Paidsalariesbycashsh7500.
Jan5:Recei vedchequesf rom thefoll
owingdebtorsaft
erall
owing2%discountineach
case.Masy sh980, kipli
mosh. 1960.
Jan8:Set tl
edt hef ol
lowi ngaccount sbychequei neachcasededucting5%di scount
;
Jumash3000, Kasani shs1200.
Jan12:Boughtmachi nerywor t
hsh7000, pai
dsh5000bychequeandt hebalancetobe
paidlater
Jan20: Tooksh1000f orper sonalusefrom t
hebusinesscashtil
l
.
Jan25: Cashsal essh2000
Jan26: Receivedcashshs. 3000f rom Ki
oko,aDebtor.
Jan28: BroughtinSh2000cashf rom hi
spersonalsavi
ngs.
Jan29: Bankedal l cashexceptsh.1000
Requi r
ed:Prepareadul ybal ancedthr
eecolumncashbook. ( 12marks)
ThreeColumnCashbook

Da par
ti L Di
s ca Ban Dat Par
ti L Di
s Cas Ban
te cul
ar . c sh k e cul
ar . c h k
s f al
l sh shs f Re
ow s v shs shs

sh sh
s s

Nov
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201 201
2 2
Bal
a b 10, 150 Purc 150
Jan nce / 00 00 Jan hase 0
1 d 20 0  2 s
Mar
y  750
Jan 980 Jan Sal
ar 15 0 285
5 Ki
pli 40  4 i
es 0 0
mo 
Jan 196 Jan Jum 60 114
5 Sal
e 20 0 8 a  0
s 00
Jan  Jan Kasa 500
25 Ki
ok 8 ni C 0
o 30 100
Jan 00 Jan Mac 0
Capi C
26  12 hi
ner
tal c 600
600 y 0
Jan 20 Jan /
Cash 00 0
28 20 Dra d 21
 wi
ng 0 149
Jan 60 Jan s 100 50
29  29 0 
Bank 
239
40 170
Jan 239
29 Bal
a 00
17 40
nce
b 00
149
/ 0
50
d
Bal
a
nce
10
00

Dr
Cr

24x½=12mar
ks

8. Ekeruboshopsell
salli
tsgoodsatamar gi
nof20%fort
hey
earended30t
hApr
il
2006,thetr
adingact
ivi
ti
eswereasfoll
ows;
Purchases Shs.800,
000
Sales Shs950,000
Netprofi
t 5%ofsal es
Closi
ngstock Shs200,000
Calcul
ate; (
10
mks)
(
i) Thegrossprof
it
(
ii
) Theopeningst
ock
(
ii
i) Themar k-
uppercent
age

Nov
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(v
) Thenetpr ofi
t.
(
i) Grosspr
ofi
t=mar
gin= grossprof
it 100% (2mks)
Sal
es
20 950,000
100
Si
ncemar gi
n=20%Mar kup=1=¼=25%
5-1
Costofsal
es
Markup=G.P 100%
Ther
efore25%=G.P 100%
1costofsales

Hence25% costofsal es=G.P100

25%costofsales=190,000100
Costofsal
es =19,000,000
25 
(2mks)
=760,000 
Theref
oreopeni
ngstock+Pur chases–cl
osi
ngst
ock=costofsal
es.
O.S+800000-
200000=760,000
O.
S=760-600000
=160,000 (4
mks)
(i
v) Netprofi
t=5%ofsales
5 950000 (
2
mks)
100
=47,
500 10ti
cks=10mks
t
h
8. (
b)Thef
oll
owi
ngtr
ialbal
ancebel
ongst
oKi
pev
utr
adesasat30 June,2004

KI
PEVUTRADERS

Tr
ial
bal
anceasat
30t
hJune2004

Dr (
shs) Cr (
shs)

St
ockon30/
6/03 40,
000

Capi
tal 162,
300

Pur
chaseandsal
es 35,
000 70,
000

Dr
awi
ngs 6,
000

Fur
nit
ureandf
it
ti
ngs 20,
000

Mot
orv
ehi
cles 150,
000 12,
000

Debt
orandcr
edi
tor
s 8,
000 4,
800

Ret
urns 2,
000 800

Di
scount 900

Nov
els,
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Wagesandsal
ari
es 15,
000

Rent 3,
500

I
nsur
ance 2,
100

Commi
ssi
on 400

Bank 3,
000

cash 6,
000

252,
900 252,
900g

REQUI
RED

(
i) Pr
epar
eat
radi
ngpr
ofi
tandl
ossaccount

(
ii
) Pr
epar ancesheetasat30thJune2004
eabal (
12mks)

KI
PEVUTRADERS:

ancesheetasat30thJune2004.
Bal
Dr Cr
Fi
xedAsset s Capit
al 164,
000
Furnitur
eandf it
ti
ngs Addprofi
t 900
20,
000 164,900
Mot orvehi
cles Lessdrawings 6,000
150,000 Netcapit
al 158,
900
170,
000 Curr
entli
abil
iti
es
Currentassets.
Debt ors 8,
000 Cr
edi
tor
s 22,
100
Cashathand 6, 000
14,000 184,
000
184,
000

184,
000

4. (a) KI PEVUTRADERS
Tri
al anceasat30thJune2004:
bal
Dr Cr

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Openi
ngst ock 4,000 Sales 70,
000
Addpurchases 35,000 ½ Lesssalesr
etur
n 2,000
Costofgoodsas 39,0000 Netsales  ½ 68,000
Lessret
urnsout d ½ 4,
war 800 ½

34,200
Gr
osspr
ofi
tc/
d 33,800

EXPENSES:
DISCOUNT 900 Gr
osspr
ofi
tb/d33,
800 ½
Wages 15,
000 Adddi
scount 800
Rent 3,
500
Insur
ance 2,
100 34,
600
Commi ssi
on 400

21,
900
Netpr
ofi
tc/
d 12,
700

34,
600

Netpr
ofi
tb/
d. 34,600
12,
700½

Tot
al=(
8mks)

KI
PEVUTRADERS
BALANCESHEET
Asat30thJune2004
FIXEDASSATS Capit
al 162,300½
Mot orvehi
cles 150,000 Lessdrawings 6,
000 ½
Furnitur
e 20, 000½ Addprofit 12,
700
170,000 Netprofi
t ½ 169,
000
CURRENTASSETS ½
Stock 34,200 CURRENTLI
ABI
LITY:
Debt ors 8,000 Credi
tors 12,
000½
Cash 6,000
½
48,200 218,
200
½
218,
200

Tot
al=mks.

9. Pr
epar
eathreecol
umncashbookf rom t
hef ol
lowi
nginf
ormati
onforthemont hof
May2004andbalanceitof
f.
May1Balancesb/dcashsh50,000,Banksh180,000
May1Cashsalessh3,000
May2Paidthefol
lowingcr
edit
orsbycheque,NMwangish1, 500,
J. Mwaniki
sh16,
000,N Mugo sh1, 200af t
erdeducti
ng10% cashdiscounti
n

Nov
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eachcase.
May3Recei vedchequesf rom t
hef oll
owi ngdebt
orsaf t
erdeduct
ing5%
discounti
n eachcaseE.Gi t
hinjish24,
000,D.Nyamush9,000,E.
Mut uash1,400.
May5Pai df orr epai
rsincashsh16,000
May10Pai dJumai ncashsh9,500
May15Bankedsh6, 000from t
hecasht i
l
l
May15Recei v edcashf rom P.Kavunikish13,500infullset
tl
ementofhis
accountof sh15, 000.
THREECOLUMNCASHBOOK

DAT DA CASH BANK DAT DETAI

L DISCOUN CASH BANK
E E S T
RECEIVE
D

2004 Sh Sh Sh 2004 Sh Sh Sh

May Balb/
d 50000 180000 May N. 150 1350
1   2 Mwangi
Sal
es 1600 14400
3000 J.
1 E 1200 2 k 120
Mwani 1080
Gi
thi
nji  22800 i
May 16000
3 D. 450 8550 2 N. 
Nyamu Mugo
70 1330 9500
3 E. 5 Repai
rs
Mutua 6000 6000

1500 13500 Juma

3 Cash 10
C1   Bank
May C1 201850
15 P 15 35000 
Kavuni 
ki
15 20 1870
218680 218680
3220 66500 Bal
c/d 66500


10. Thef
oll
owingtri
albal
ancewasext
ract
edfr
om thebooksofBai
teTr
aderson31st
August
.2009.
Dr(sh) Cr(
sh)

Sal
es 350,
000
Purchases 160,000
Cashatbank 290,
000
Returninwar
ds 5,
000

Nov
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Carriagei nwards 20,000
Carriageout war
ds 14,000
Salariesandwages 10,000
Debt ors 56,000
Creditors 90,
000
Stock 35,
000
Machi nery 265,
000
Rent 25,
000
Discountr ecei
ved 18,
000
Li
ght ingandheat ing 12,000
Building 240,000
Adv erti
sing 13,000
Drawi ngs 3,000
Capi t
al
667,000
1,
150,
000
1,150,000
Additional i
nformat i
on;
st
a)St ockon31 August .2009wasv al
uedatsh50, 000.Requi r
ed;PrepareTr adi
ng
st
profitandl ossaccountf orthey earended31 August .2009.(12mar ks)
11. On1stJanuar y2012Mangat r
ader shad180, 000cashi nhandandabankcr edi
t
balanceofShs. 57,500.Dur ingt hemont ht hefol
lowingtransacti
ons
tookpl
ace.
3rdJan: Cashsal esShs.2, 800
th
4 Jan: Adebt orset tl
edhi saccentofsh.90, 00bycheque
10thJan: PaidSal ariesshs.40, 000i ncash.
12thJan: Tookcashsh.35, 000t oset tleonper sonal debt.
rd
23 Jan: Recei vedachequeshs.8460f r
om Our udistri
buti
onafterdeduct i
ng
6%cash discount .
24thJan: Deposi tsshs.10000i nt hebankf rom of fi
cecash.
th
25 Jan: Purchasedst ockwor t
hshs. 8950oncr editfrom Ngumodi st
ri
but ors
26thJan: Cashsal esbankeddi rectl
yshs. 38000
27th Jan: Achequer eceivedon4thf r
om adebt orswasdi shonored.Thebank
chargedhi m 2500.
29thJan: Settl
edcr editorsaccountshs.6000bchequel ess3%cashdi scount .
st
31 Jan:Bankal l cashexceptshs. 40,000
Requi red:Prepar edat hreecolumncashbookdul ybalanced (10mks)
b)

Dat Det
ail
s D.
A Cash Bank Dat
e Det
ail
s D.
R Cash Bank
e

201 2011
1

Jan Bal
ance 18,
000 Jan Bal
ance 57,
500
1 BF 1 BF

Sal
es 21,
800 Sal
ari
es 40,
000
3 10

Nov
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Debt
ors 90,
000 Dr
awi
ngs 35,
000
4 12

Our
u 540 5460 Bank 10,
000
23 24

Cash 10,
000 Bank 90,
000
24. 27

Sal
es 38,
000 Char
ges 2,
500
26. ”

Cash 103800 29 Redi

tor 180 5820
31.

31 Bank 108300

31 Bal
ance 40,
000 98880
c/d

540 20180 254700 180 201800 254700

0

Jan Bal
ance 40,
000 98800
31 b/d

12. b) Thef ol
lowingbalanceswereex
tract
edfrom thebooksofMut uaTrader
sfor
the yearended31Dec2010hav i
ngpr off
eredatradingaccount
.
Dr.(
sh) Cr.(Sh)
Grosspr of i
t 38100
Cash 105060
Mot orv an 603000
Capi t
al 653560
Equipment 200600
Furnitur e 94400
Creditor s 74300
Debt ors 75900
Discountr eceived 26400
Salaries 12400
Carriageout ward 14400
Rent :income 12600
Adv ertising 22200
I
nsur ance 9400
Bankov erdraf
t 412600
1,
217560 1,217560
Requi
red:
a)Pr epar eapr of
itandlossaccountofMutuaTrader
sfort heyearended31stDec2001
(
5mks)
b)Abal ancesheetasatt hatdat e. (
5mks)
MUTUATRADERS

Nov
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PROFI T&LOW ACCOUNT
FORTHEYEARENDED31DEC2001
Shs. Shs.
CarriageOut war ds 14400 GrossPr ofi
tb/f 38100
Salaries 12,400 DiscountRecei ved 26,400
Adv ertisi
ng 22200 Renti ncome 12,600
I
nsur ance 9400
NetPr ofi
t 18,700
77100 77100
MUTUATRADERS
BALACESHEET
ASAT31STDEC2001
FI
XEDASSETS SHS SHS SHS SHS
Mot i
vation 603100 Capital 653,560
Equipment 200600 Add: Netpr ofit 18,700
Furnit
ure 94400 898,
000 672260
CurrentAsset s CurrentLiabi l
it
ies
Stock 80200 Bankov erdr aft 412,600
Debtors 75900 Creditor
s 74,300
Cash 105060 486,900
261260
1,
159,160 1,159,
160
st
13.Thef ollowingTr i
al balancewasext ract
edfrom NDOLO’SSTORESon31 Dec2009.
Dr. Cr.
Shs Shs
Capital 250,000
Stock 25,000
Machi nery 250,000
Mot orvehi cles 87,000
Purchases 360,000
Sales 600000
Returnsi nwar ds 40,000
Returnsout war ds 20,000
Discountr eceived 5,
000
Carriagei nwar ds 2,
000
Carriageout war ds 3,
000
Baddebt s( writtenoff) 80,000
Gener alexpenses 88,000
Debt ors 18,000
Creditors 49,000
Rent
1,000 ……………………….
954,000 954,000
Additional information:-
Closingst ockwasv al
uedatsh.22,000.

Pr
epar
eNDOLO’SSTORES;Tr
adi
ng,pr
ofi
tandl
ossaccount
sfory
earendi
ng
31/
12/
2009.

NDOLOSTORES
Nov
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TRADI NG,PROFI
TANDLOSSACCOUNT
FORTHEYEARENDED31STDEC.
2003 .
Openi ngstock 25000 Sales 600000
Addpur chases 360000 l
essr
etur
ninw. 40000
56000
Addcar ri
agei nw. 2000
362000
Lessretur nout 20000 342000
Goodsav .forsale 367000
Lessclosi ngstock 22000
Costofsal es/Costofgoodssol d 345000
Grosspr ofitc/d 215000………………………………………………………
360000
560000
Generalexpenses 88000 Gr
ossprof
itb/d 215000
Carr
iageout. 3000 adddi
scountrecv. 5000
Rent 1000
Baddebt s 80000 172000
Netprofi
tc/d
48000 .
220000
Netpr
ofi
tb/
d
48000
14.On1stJune2009, MULIENTERPRI SEShadcashi nhandsh.87, 000andcashatbank
sh.250,000.
Duringthemont h,thef oll
owi ngtransacti
onst ookplace.
June 2, Sales(cash)sh.50, 000
June3, Paidsalariessh.101, 500bycheque.
June6, Receivedachequef orsh.76, 800f rom Mwel uaf t
erall
owing
hera cashdiscountof4%.
June12, Boughtof ficefurni
turebychequesh.85, 000
June16, Settl
ed Musau’ s accountof sh.40, 000 in cash,hav i
ng
deductedshs 800cashdi scount.
June18, Receivedachequef orshs150, 000inrespectofcashsales.
June21, Paidwagesshs24, 000i ncash.
June22, Withdrewshs30, 000f rom bankf oroff
iceuse.
June25, Withdrewshs5000cashf orprivateuse.
June28, Receivedshs16500cashf r
om Kasi vai nsett
lementofher
accountless shs660cash di scount.
June30, Depositedal lt
hemoneyi ntobankexceptshs25, 000
Prepar
eat hr
eecol umncashbookandbal ancei toff
. (
12marks)
MULIENTERPRI SES

THREECOLUMNCASHBOOK
Dat
e Det
ail
s Di
sc. Cash Bank Dat
e Det
ail
s Disc. Cash Bank
Al
l
owed Receiv
ed
2009 2009
Bal
b/d 87,
000√ 250,
000√ Sal
ari
es 101,
500√
1/6 2/6
2/6 Sal
es 50,
000√ 12/6 Fur
nit
ure
6/6 Mwelu 3,
200√ 76,
800 16/6 Musau 800 39,
200√
Nov
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18/
6 Sal
es 150,
000 21/
6 Wages 2,
400√
22/
6 Bank 30,
000√ 22/
6 Cash 30,
000√
28/
6 Kasi
va 660√ 16,
500√ 25/
6 Drawi
ngs 5000√
30/
6 Cash c 90300√ 30/
6 Bank c 90,
300√
30/
6 Balc/
d 25,
000√ 350,600√
3,
860 183,
500 567,
100 800 183,
500√ 567,
100√

15. Thef ollowi ngbal ancesr elatet

oMsaf iriTr sasat31stDecember
ader ,2012:
Sh.
Pur chases 900,
000
Stock,1/ 1/2012 230,
000
Buildings 1,
200,
000
Mot orvehi cl es 750,
000
Ret urnsout war ds 50,
000
Debt or s 190,
000
Credi tors 310,
000
Loanf rom IDB 600,
000
Cashathand 130,
000
Cashatbank 270,
000
Drawi ngs 100,
000
Capi tal 1,
840,
000
170,
000
Netpr ofit
Stock,31/ 12/ 2012 280,
000
Expenses( includingcarriageinwards,shs 250,
000
150, 000)
REQUIRED:
i
) Bal ancesheetasat31stDecember ,2011.
i
i)Cal culat e:
- Mark-up
percent age. (2mks
- Returnon
capit alemployed. (2mks)

Msaf
ir
itr
aders
ancesheetasat31stDecember2011
Bal

Asset
s Li
abi
li
ti
es
KSh Ksh
Fi
xedAsset s Capit
al1,840,000
Bui
ldi
ngs 1,
200,
000 Add:Netpr of
it170,000
Motorvehi
cle 750,
000 1,
950,
000 2,010,000
Less:Drawings 100, 000
1,910,000
CurrentAsset
s L/TLi abil
it
ies
Stock 280,
000 Loanfrom IDB600,000
Debtors 190,
000 Cur r
entLi abil
it
ies
Bank 270,
000 Credi
tors310,000

Nov
els,
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Cash 130,
000 870,
000
2,
820,
000 2,
820,
000

ii
)Mar k-
up
=Gr ossprof
itCostofsal
esGr ossprof
it=netprofi
t
+expenses=170, 000+100,000=sh270,000
Costofsales=op.stock+pur chases+carri
agein-ret
urnsout
wards–cl
osi
ng
stock=230,000+900,000+150, 000-50,000-280,
000=sh670,
000
Mar k-up=270,000x=40.298%
670,
000.
½mkx4t i
cks=2mks.

Retur
noncapit
alemployed:
=Netprof
it x100
Capitalemployed Capitalempl oyed = owner
's capi
tal+ L/
T
li
abil
iti
es.=1,
910,000+600, 000=sh2, 510,
000.
Retur
noncapit
alemploy
ed=170, 000 x100
2,
510,000=
6.
77%/ 6.8/
7.0%.

16.On1stJune2011, NyatiTrader shadcashi nhandofsh25, 000andsh56, 200atbank.

Duringmont h, t
hef oll
owi ngtransact
ionst ookplace:
2011
June2 Cashsal es,sh42, 000.
June5 Recei vedachequeofsh70, 500f r
om But al
aTr ader safterdeduct
inga
6% cashdi scount .
June8 Pai dsalaries,sh24, 000
in cash
June9 Ki vui t
uset tledhi saccountofsh45, 000i ncashandwasal lowedsh
l,
800cas di scount .
June12 Cashsal es sh46, 500.
June18 Pai dTui ei
'sdebtofshl 00,000bychequeaf terdeduct i
ng5%cash
discount.
June24 Wi thdrew sh26, 000 f r om thebankf orof fi
ce
use.
June30 Bankedal lthecashexceptsh25, 000.
Prepar ea3- columncashbookandbal ancei toffon30thJune,2011.
(
10mks)
NyatiTr ader s3-columncash
bookFort hemont hofJune
2011
Date Det ails Disc.All.Cash Bank Date Detail
s Di sc. Cash Bank
Rec.
2011 shs shs shs 2011 shs shs Shs
June1 Bal .b/d 25,000 56, 200 June8 Sal ari
es 24,
000
June2 Sal es 42,000 June18 Tul ei 5,000 95,000
June5 But alaTr4,500 70, 500 June24 Cash 26,000
June9 Ki v uit
u 1, 800 43,200 June29 Elect 8,
750

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June12 Sal
es 46,
500 June30 Bank 24,
950
June24 Bank 26,
000 June30 Bal
.c/d 25,
000 130,
650
June30 Cash 124,
950
6,
300 182,
700 251,
650 5,
000 182,
700 251,
650

Jul
y1 Bal
.b/
d 25,
000 130,
65C

17. Thef
oll
owi ngt r
ial balancer el
atestoNthoi’sent erpriseasat31stDecember2011
DR CR
Shs. Shs.
Dr awi ngs 60,000
Land+bui l
dings 700,000
Cashi nbank 115, 000
Stock1. 1.
2011 18,000
Pur chasesandSal es 500, 000 1,000,000
Debt orsandCr edi t
ors 46, 000 92,
000
Sal ariesandwages 85,000
Car riagei nwar ds 9,000
Car riageout war ds 12,000
Mot orv ehicles 400,000
Capi tal 909,000
Wat erandl i
ght i
ng 36,000
Insur ance 40,000
Ret ur ns 30,000 50,000
2,
051,000 2,
051,000
Stockon31stDecember2011wasv aluedatkshs.25,000.
Requi red;pr epar eNt hoi
’sTradingPr ofitandLossAccountf ort hey earended
st
31 December2011. (10marks)
NTHI O’STRADI NGPROFI T&LOSSA/ C
FORTHEYEARENDED31STDECEMBER2011
DR CR
Openi ngst ock 18,
000√ Sal es 1,
000,000√
AddPur chases 500,000√ Lessr eturnInwards 30,000√
Addcar riagei nwar ds 9,
000√ Netsal es 970,000√
527,000√
Lessr etur nout wards 50,
000√
Costofgoodsf orsal es 477, 000√
Less 25,
000√
Costofgoodssol d 452,000√
Grosspr of i
t 518,000√
970,000√ 970,000√
Expenses Grosspr ofi
tB/d 518,000√√
Salaries&wages 85,
000√
Carriageout wards 12,
000√
Wat er&Li ght ing 36,
000√
Nov
els,
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I
nsur
ance 40,
000√
173,
000√
Netpr
ofi
tC/
d 345,
000√
518,
000√ 518,
000√
20x½=10mks

19. Thef ollowi ngTr ialBal

ancewasextractedfr
om t hebooksofKi
sumuAutospar esasat
st
31 Oct2011
Ki
sumuAut oSpares
Tr
ial
Bal ance
st
Asat31 Oct2011
DR CR
Capi tal 653,560
Mot orv ehicle 603,000
Equi pment 200,600
Furni t
ur e 94,400
Debt or s 75,900
Credi tors 74,
300
Carriageonsal es 14,400
DiscountRecei v ed 26,400
Salar i
es 12,400
RentI ncome 12,
600
Sales 319,400
Purchases 300,000
Adv ertising 22,
200
Rates 9,
400
Stock1- 11- 2010 61,500
Bank 412, 600
Cash 105,060
TOTAL 1,498,860 1,498,860

Stockon31stOct ober2011wassh.80, 200

Required,
(
i)Pr epareTr ading,
Profi
tandLossaccountf ort heyearended31stOct2011
(
ii
)Pr epareBal ancesheetasat31stOctober2011 (
12mks)
KisumuAut oSpar es
Trading,profitandlossaccount
Forthey earended31stOct2011
Shs. Shs.
Openingst ock 61,
500√ Sal es
Addpur chases 319,400√
300,000√
COGAS
361,500√
Lessclosingstock 80,200
COGS
281,300√ 319,
400
Grosspr ofi
tc/d Grossprofi
tb/d

Nov
els,
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38,
100√ 38,100√
319,
400 Discountr
ecei
ved
26,400√
Carr
iageonsal
e Rentincome
14,
400√ 12,600√
Adverti
sing
22,
200√
Rat
es
9,
400√ 77,
100
Sal
aries
12,
400√
Netprofi
tdd
18,
700√

77,
100
14×½=7mks
KisumuAut oSpares
Bal
ancesheet
Asat31stOct2012
Fi
xedAsset s Shs.
Shs.
Mot orvehi
cles 603,000√ Capi
tal 653,
560√
Equipment 200,600√ Add.Netpr
ofi
t 18,
700√
Furnit
ure 94,400√
672,260
898,000 Currentl
iabi
l
iti
es
CurrentAsset
s Credit
ors 74,
300√
Stock 80,
200√ Bank 412,
600√
Debtors 75,900√
Cash 105,060√ 486,
900

261,
060
672,
260+672,
260+486,
900
1,
159,
060 1,
159,
060

20. Thef
oll
owingi nfor
mat i
onrel
atest
oBi
znaDi
str
ibut
orCompanyf ortheyearended
st
31 Dec2009
shs
Grosspr of
it 600,000
Openi ngstock 285,000
Sales 2,400,000
Purchases 1,830,000
Expenses 360,000
Closingstock 315,000
Fixedasset s 400,000
Debt ors 900,000

Nov
els,
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Bank 35,
000
Curr
entliabili
ti
es 438,
000
Requir
edcal cul
at e
i
)Mar gi
n (
2½mks)
i
i)Rateofstocktur nover (
2½mks)
i
ii
)Returnoncapi talemploy ed (
2½mks)
i
v)Currentrati
o (
2½mks)
a) .
i.Margin=Gr osspr of
it/sal
es×100√
=600,000/ √2,400,000×100=25%√√ (5×½=2½mks)
i
i). Rat eofst ockt urnover
=costofsal
es/
aver
agestock√√
=1,800,000/300,
000√√=6ti
mes√√

i
i
i). ROCE=Netprofi
t/
Capit
alempl
oyed×100√
=240,
000/
1,212,
000×100√√√
=19.
8%√√
(5×½=2½mks)

i
v). Cur
rentr
ati
o=Cur
rentAssets:
√√Cur
rentl
i
abi
l
iti
es
=1,250,
000√ : 438,000√
=2.85:
1√√ (5×½=2½mks)

21. b) On1stDecember2009, Kamauhadsh.55, 000inhandandsh.250, 000atbank.

Dur
ingt
hemonth,thef oll
owi ngt ransacti
onst ookplace.
December2cashsal esbankedsh.35, 260
3Boughtst ati
oneryincashsh.4, 500
8Pai dOdongoacr edit
orsh.94, 000bychequei nf ul
l set
tlementofhi saccount
af terdeduct i
on6%cashdi scount
12r eceivedachequef orsh58, 800from Waf ul
aaf t
erallowinghim acash
di scountofsh.1, 200
15pai dsal ari
essh.34,000i ncash
25Wi thdr ewsh.50, 000f rom bankf oroff
iceuse.
28Any ango, adebt orpaidheraccountofsh.75, 000bychequel ess10%cash
discount
30Deposi tedal lthecashi ntothebankexceptsh.13, 700
Prepar eat hreecolumncashbookandbal anceifof f. (10mks)
KAMAU
Threecol umncashbookf orthemont hofDec. 2009
Dr. Cr.
DATE Par ticul Di sc Cash( s Bank DAT Par ticular Di scou Cash Bank
ars ount hs) (shs) E s nt (shs) ( Shs)
all
ow
ed recei
ve
r
2009 2009
Dec1 Bal anc 55,000 250, 00 Dec. St ati
oner 4,500
edb/ d  0 3 y 
2 Sales 35,260 8 Ondongo 6, 000 94,000
 
12 Waf ula 1, 200 58,800 15 Salaries 34,000

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 
25 Bank 50,
000 25 Cash(
C1) 50,
000
(C1)  
28 Anyang 7,
500 67,
500
o  
30 Cash 52,
800 30 Bank(
C2) 52,
800
(C2)  
30 Bal
ance 13,
700 320,
36
c/d  0
8,
700 105,
00 464,
36 6000 105,
00 464,
36
 0 0 0 0
Jan1 Bal
anc 13,
700 320,
36
eb/d 0

22. b) Thef oll

owingt
ri
albal
ancewasext r
act
edfrom thebooksofMawegoTr s31st
ader
December2010.
MAWEGOTRADERS
TRIALBal anceasat31stDecember,
2010
Dr Cr
(shs) (shs)
Grosspr ofi
t 380,
000
Closingstock 274,
000
Capital 259,
000
Drawi ngs 83,
000
Creditors 93,
000
Premi ses 103,
000
Debtor s 123,
000
Cashatbank 33,
000
Bankl oan(2 50,
000
years)
Gener al 54,
000
expenses
Commi ssi
on 20,
000
received
Wagesand 132,
000
salari
es
802,
000 802,
000

Pr
epar
e:
i
) Profi
tandlossaccountfort earended31stDecember2010. (
hey 4mks)
st
i
i) Balancesheetasat31 December2010. (
6mks)

i
)

MawegoTraders
Pr
ofi
tandLossaccountf
ort
hey earended31/
12/
2010

Nov
els,
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EXPENSES SH SH shs
Gener
alexpenses 54,000 Grosspr
ofitb/d 380,
000
Wagesandsalari
es132,000 186,000 Add: Commi ssi
onr
ecei
ved 20,000
Netpr
ofi
tc/d 214,000 400,000
400,000 400,000
Netprof
itb/d 214,000
(8t
icksx½=4mks)

(
ii
) MawegoTr aders
BalanceSheet
Asat31stDecember2010
SH SH Shs Shs
FI
XEDASSET
Pr
emi
ses 103,
000 Capi
tal 259,
000
Add:
Netpr
ofi
t 214,
000
CURRENTASSETS 473,
000
St
ock 274,
000 Less:
Drawi
ngs 83,
000
Debt
ors 123,
000 Netcapi
tal 390,
000
Cashatbank 33,
000 430,
000 Longt
erml
i
abi
l
ity
Bankl
oan 50,
000
CURRENTLI
ABI
LITY
Cr
edi
tor
s 93,
000
533,
000 533,
000

st
23. b)Thef
oll
owi ngt ri
albal ancewasextr
actedf r
om thebooksofMzal
endoTr ader
sasat31
Dec2011.
MzalendoTraders
Trial
balance
Asat31stDec.2011
A/ CTi tl
e Dr(Sh) Cr(Sh)
Fixedasset s 292,600
Cur rentasset s 78,000
Renti ncome 23,
000
Discount s 3,000 2,
000
Gener alexpenses 89,000
Car ri
agei nwar ds 28,000
Pur chases/ sal
es 280,000 474,000
Retur ns 4,600 7,
000
Stock01/ 01/2011 46,000
Drawi ngs 33,000
Cur rentliabil
iti
es 53,
000
Capi tal 295,200

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854,
200 854,
200

ockon31stDec.2011wasSh.54,
St 000.

Requir
ed:
i
) Pr epar et rading,pr ofi
tandl ossaccount sf ort hey earendi ng31stDecember
2011. (8marks)
Calculate;
i
i) Rat eofr eturnoncapi tal empl oy ed.
(2marks)
i
ii
)Rat eofst ockt urnov er. (1mar k)
i
v)Gr osspr ofitmar ginasaper cent age. (1mark)
24. b) Thef ol
lowi ngt ransact i
onsr elatet oBusbul Tr
ader sforthemont hofDecember2011.
Dec1: St art
edabusi nesswi t
hSh. 200,000i nt hebankaccount .
Dec2: Boughtf urnituref orSh. 50,000andpai dbycheque.
Dec3: Sol dgoodsoncr edi ttoTi laSh. 20,000, KatuSh.10,000.
Dec4: Boughtgoodsoncr editfrom KahamaSh. 30,000,KangaSh. 40,000.
Dec5: Ret urnedf aultygoodst oKahamaSh. 5,000.
Dec6: Pai dKahamaonaccountbychequel ess10%cashdi scount .
Dec7: Recei vedf aultygoodsf rom Kat uSh. 2,000.
Dec8: Recei vedpay mentduef rom Ti l
aandKat ubychequel ess5%cashdi scount
.
Dec9: Cashsal esSh. 100, 000.
Dec10: PaidwagesSh. 20,000bycashandel ectri
citySh.10,
000bycheque.
Dec11: Deposi tedal lcashi nhandi nt
ot hebankaccount .
Required:
Prepareat hreecol umncashbookdul ybal anced (10marks)

25. (a) Thef ollowingTrial

Bal
ancer
elat
est
oKat
ibaTrader
sfortheyearended31stJanuar
y
2008
Capital 220,
000
Land&Bui ldi
ngs 140,
000
Machi nery 43,
200
Furni
tur e 40,
000
Debtor s 156,
000
Creditors 100,
000
Openingst ock 2,
200
Bank 120,
000
Cash 18,
000
Sales 30,
800
Salesr et
urns 800
Purchases 16,
000
PurchasesRet urns 2,
400
Gener alExpenses 2,
400
Carri
ageI nwards 800
Carri
ageOut wards 1,
800
RentRecei ved 5,
000
Commi ssionReceived 2,
000
Salar
iesandWages 12,
000

Nov
els,
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El
ect ri
city 1,400
I
nsur ance 3,000
Postage 600
Drawi ngs 2,000
BankLoan 200,000
TOTAL 560,200 560,200
st
Note: ClosingSt ockon31 Januar y2008wasv aluedatKshs.5, 000.
,Prepare:
(i
)Tr ading,ProfitandLossAccountf orthey earended31stJanuar y2008. ( 8mks)
(i
i
)Bal anceSheetasat31stJanuar y2008. (4mks)
KATI BATRADERS
TRADI NGPROFI TANDLOSSACCOUNT
FORTHEPERI ODENDED31STJANUARY2008
SHS SHS.
Openi ngStock 2,
200√ Sales
30,
800√
Pur chases 16,
000√ LessSal esRet ur
ns
800√
Add: CarrInw 800√
30,
000√
16,
800
Less: Purch.Ret 2,
400√ 14,
400√
CostofGoodsav ai
lforsal
e 16,
600√
LessCl osingSt ock 5,
000√
CostofGoodsSol d 11,
600√
Gr ossPr ofitC/d 18,
400√
30,
000 30,000
Gener alExpenses 2,
400√ GrossPr ofi
tb/ d
18,
400√
Car ri
ageOut war ds 1,
800√ Rentreceived
5,000√
Sal ari
esandWages 12,
000√ Commi ssi
onr ecei
ved
2,000√
Electr i
cit
y 1,
400√
Insur ance 3,
000√
Post age 600√
NetPr ofit 4,
200√√
25,
400√ 25,400
(24ti
cksx1/ 3=8mks)
(ii
)
KATIBATRADERS
BALANCESHEET
ASAT31STJANUARY2008

Fi
xedAsset s SHS. SHS.
LandandBui l
dings 140,
000√ Capi
tal 220,
000√
Machinery 43,
200√ Add:NetPr
ofi
t 4,
200√
Furni
tur
e 40,
000√ 224,
200
223,
200 LessDr
awi
ngs 2,
000√
Cur
rentAsset
s 222,
200

Nov
els,
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Stock 5,
000√
Debtor
s 156,
000√ LongTer m Li
abil
i
ties
Bank 120,
000√ BankLoan 200,
000√
Cash 18,
000√ CurrentLi
abil
it
ies
299,
000√ Credit
ors 100,
000√

522,
200 522,
200

27. Thef
oll
owi
ngi
nfor
mat
ionr
elat
est
oNdhi
war
esor
ttr
ader
sfort
hemont
hofNov
ember2009:
-
November, 1. start
edabusi nesswithshs160,000cash
2.Purchasesshs. 120,000
3.Madesal esincashshs. 126,
000
4.Paidforelectr
icit
yshs. 1000incash
5.Receivedrentofshs. 37500i ncash
6.Gavedi scountofshs. 6,
000incash
Required:- i )Posttheabov einformat i
onintherel
evantl
edgeraccount
sandbal
ance
them off
ii
i) Ext r
actatrialbalance

Dr. CAPI
TALA/
C Cr
.
Dec.31Bal
.b/
d160,
000 Dec.1A/C160,
000
JanBalb/
d160,000

Dr. CashA/
C Cr.
Dec.1Capi
tal 160,000 Dec.2Purchase120, 000
3sal
es 126,000 4el
ectr
ici
ty 1,000
5Rent 37,500 6comm. 6,000
7Balc/d 196,500
323,
500 323,500

Jan1bal
.b/
d 196,
500
Dr
. PURCHASEA/
C Cr
.
Dec.2Cash 120,000 Dec.30Bal
b/d120,
000
Jan.1 Bal
b/d120,
000

Dr
. SALESA/
C Cr.
Dec.30Bal
.b/
d 126,
000 Nov.3Cash126,000
Jan.1Bal
b/d126,000

Dr. ELECTRI
CITYA/
C Cr.
Dec.4Cash 1,000 Dec.30Balc/
d1,
000
Jan.1 Bal
b/d1,
000

Dr. RENTA/
C Cr.
Dec.30Bal
.c/
d 37,
570 Dec.5Cash37,
500
Nov
els,
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Jan.1Bal
b/d37,
500

Dr . DI
SCOUNTA/
C Cr
.
Dec.6Cash 6,000 Dec.30Bal
c/d6,
000
Balb/
d6,
000

NDHIWATRADERS
Tr
ial
bal anceasat31stDec.2008
Ti
tl
eofAccount
s Debi t Credit
Capital 160,000
Cash 196,500
Purchases 120,000
Sal
es 126,000
El
ectrici
ty 1,
000
Rent 37,500
di
scount 6,
000
323,500 323,500

28. OnMar
ch2007,
Dor
ishadcashi
nhandshs.
87,
000andcashatbankshs.
25,
000.Dur
ing
thi
s
month,thef oll
owi ngt ransact i
onst ookplace:
nd
March2 : Cashsal esshs. 60, 000
r
d
3: Pai dsal ariesshs. 101,500bycheque
7th: Recei vedachequeofshs. 76,
000f rom Henr yaf t
erall
owi
ngacashdi scountof
5%
13th: Boughtof ficefurni t
urebychequeshs. 86,000
th
17 : Settlemar it
alaccountf orshs.34,200i ncashhav i
ngdeduct edshs.
8,000cash
di
scount
20th: Recei vedachequef orshs.165,000i nrespectforcashsales
nd
22 : Paidwagesshs. 25,000i ncash
th
24 : Withdr ewshs. 32, 000f orbankf orofficeuse
25th: Withdrewshs. 4,000cashf orpersonal use
th
29 : Recei vedshs. 17,000cashf orm Al vi
ni nsettl
ementofhisaccountlessshs. 1000
cashdi scount
31st: Deposi tedallthemoneyi ntothebankexceptshs. 24,
600
Requir
ed: Pr epareat hreecol umncashbookdul ybal anced
Date Det ai
l L. Di s Cash Bank Date Det
ail
s L. Di s Cash Bank
s F al l
owe F pai d
d
1/3/
0 Bal 87,00 250, 00 3/ 3/07 Sal ari
es 10150
7 Sal
es 0 0 13/3/0 Fur nit
ur 0
2/3/
0 Henr y 4,000 60, 00 7 e 8,00 34, 20

Nov
els,
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7 Sal
es 0 76,
000 17/
3/0 Marit
a 0 0 86,
000
7/3/0 Bank 7 Wages 25,
00
7 Alv
in 1,
000 165,
0 22/
3/0 Cash 0
20/3/ Cash 00 7 Drawing 32,
000
07 32,
00 272,
80 24/
3/0 Bank 4,
000
24/3/ 5,
000 0 0 7 Balc/d 272,
8
07 Bal
b/ 16,
00 25/
3/0 00 379,
30
29/3/ 0 598,
80 7 24,
00 0
07 0 31/
3/0 0 598,
80
31/3/ 379,
30 7 360,
0 0
07 360,
0 0 00
00
24,
00
0

31. Apet t
ycashierofMugi rangot r
ader soperateshi
spet tycashbookonani mprestsystem
ofsh.2500.OnIFebr uary2009, hehadcashi nhandofSh.500andwasr ei
mbursedt he
di
ffer
encebyt hemaincashi ert
or estorehi
scashf l
oat.Thef ol
lowingtr
ansacti
onstook
pl
acedur i
ngthesamemont hofFebr uar
y2009:
Feb 2nd pai dt
axi faresh.150andwagessh250
4th Boughtf i
v ereamsofpaperf orsh25eachandst ampsf orsh.30
7th Pai dwagessh. 250andboughtenv elopesforsh.40
20t
h Boughtt eaf orstaffsh.70andpaidf orwaterbil
lssh.56
28th Pai dforel ect
rici
tysh.80andst ampssh. 40
Requir
ed:Prepareapet tycashbookusi ngthefoll
owinganalysiscolumns;
•Wages
•Traveli
ng
•Stat
ioner y
•Post
age
•Miscellaneous
PETTYCASHBOOK
Rece Date Det ai
ls Vouc Tot al Wages Tr aveli
n St ati
one Post a Mi scel
laneo
i
pts h g ry ge us
No.

2009
500 Feb Balb/d
2000 1 Cash
“1 Taxifare 150 150
“2 Wages 250 250
“2 Reamsof 125 125
“4 paper 30 250 30
“4 Stamps 250
“7 Wages 40
“7 Envel
ope 70 40 70
“20 Staf
ftea 56 56
“20 Waterbill 80 80
“28 El
ectrici
ty 40 40
Nov
els,
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“
28 St
amps 1091 500 150 165 70 206
1409
2500 “
28 Bal
c/f 2500

32. Recordthefol
lowingtransact
ionsintherelevantl
edgeraccount
s,balancetheaccount
andextractat
rial
balance
Date Transacti
on
1/4/2007 Mar yst
artedbusinesswi t
hshs.80,
000cash
2/4/2007 Boughtstati
oneryf orshs.
4,000andpaidi
ncash
3/4/2007 Openedabankaccountanddeposi tedshs.
50,000from thecashti
ll
4/420007 Boughtmot orvehicleworthshs.
250,000f
rom Lucymot orsoncredi
t
5/4/2007 Boughtpostagest ampsf orshs.
60incash

33. Thefollowingtr
ansact ionsrelatetoFur ahat rader sforthemont hofJul y,2008
July1 :Balancebr oughtdowncashsh. 16,250andBankShs. 19,847
July2 :Soldgoodswor thShs. 1,348t oPat elandr eceiv edacal culatorinexchange
July5 :Paidt ransportbychequeShs. 2,000
July6 :Issuedachequet oKer i
oTr ader sset ti
ngani nv oi
ceforShs. 10,
000
deduct
ing2%
cashdi scount
July10:TransferShs. 15000f rom casht i
lltobank
July12:Soldgoodsf orcashShs. 12, 000l ess2%cashdi scount
July13:Soldgoodst oOny angooncr editwor thShs. 15, 000
July14:Theowneroft hebusi nesswi thdr ewShs. 3000i ncasht obuyapr esentfor
hi
s
daught er
July16:Recei vedachequef r
om Kur i
aShs. 2,
500l ess5%cashdi scount
July22:Boughtf urni
turefrom BabuTr ader soncr editwor thShs. 16,500andcash
discountof10%i fpay menti smadewi t
hin2weeks
July24:Withdrewcashf rom bankf orof fi
ceuseShs8, 000
July26:Theownerbr oughti ntot hebusi nessShs. 9,000cash
July27:I
ssuedachequet oBabuTr ader sf oramountdue
July28:Soldgoodst oKur i
awor thShs. 5,000f orShs. 3,800andr eceivedpaymentby
cheque
July30:Bankedal l
cashandr emai nedwi thShs. 100i nt hecasht il
l
Requi
red;Pr epareFur ahaTr adersthr eecol umncashbookf ort hemont hofJul y
,2008
FURAHATRADERS

CASHBOOK

DATE PARTI
CULARS D.
A CASH BANK DATE PARTI
CULARS D.
R CASH BANK

Nov
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2008 2008
Jul
y1 Bal
anceb/
d 16520 19847 Jul
y5 Transport 2000
6 Keri
ot r
aders 200 9800
10 Cash 15000
12 Sal
es 240 11760 10 Bank 15000
16 Kuri
a 125 2375 Drawi
ng 3000
24 Bank 8000 14
26 Capi
tal 9000 Cash 8000
28 Sal
es 120 3800 24 Babutr
ader
s 1650 14850
30 Cash© 0 18320 27 Bank© 18320
37320 67302 30 Bal
ancec/d 1000 32652
Bal
anceb/
d 156 1000 32652 1850 37320 67302
5

34. Journali
zethefoll
owingtransactionswhi chtookpl aceint hebusinessofW.Wanj al
adur ing
themont hofJune2009: -
June1 Bal
anceB/ ff rom May2009wer e: -
Offi
cefurnit
ureshs. 50,000andmot orvehicleshs.100,000
June2Pur chasedof f
icefurnitureoncreditforshs.65,000f r
om Mwemaf urniture
June10 Soldanol dv ehicleoncredittoOmwami garagef orshs.200,000
June25. Discoveredt hatamot orvehiclethathadbeenboughtoncr editfrom
Kany er
emot orforKshs.750,000, hadbeenr ecordedi npurchases
account
June28 Soldanol dcomput ertoclassicacademyoncr editf
orksh.15, 000
June29: Soldanol dt ractorwhosebookv alueisKshs.200, 000for
Khs.250,000
toGoseta
thegeneralj
ournal
Dat
e Parti
cular
s Foli
os Dr (
sh) Cr( sh)

Nov
els,
Updat
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&Pr
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 i
sabokemi
cah@gmai
l.
com
2009June Furnitur
eA/ C G.
L 50,
000
Mot orvehicle G.
L 100,
000
(Arecor dofopeni ngbal anceofasset s)
2009June2 Furnitur
eA/ C G.
L 65,
000
Mwemaf urnit
ureLtd G.
L 65,
000
(Beingar ecordofof ficefurnit
ureboughton
creditfr
om Mwemaf urnit
ureLtd)
2009June Omwami garageA/ C G.
L 200,
000 200,
000
10 CMot orvehicleA/ C G.
L
(bei
ngar ecordofcr editsaleofmot orv ehi
clet
o
Omwami garage)
Mot orvehicleA/C G.
L 750,
000
2009June Purchases 750,
000
25 (Beingacor r
ecti
onofaner r
orofprinciple)
ClassicacademyA/ C G.
L 15,
000 15,
000
Comput eroffi
ce
2009June EquipmentA/ C
28 (Beingar ecordoft hecomput ertoclassic
academy ) G.
L 250,
000
Goset afarm A/ C 200,
000
TractorA/ C 50,
000
2009June Trainondi sposal ofoldt r
actor
29 (Beingar ecordofoldt ractortoGoset afarms
atapr ofit
)

35. On1stJune2009, Ny ami raTr ader shadcashi nhandshs. 87,

000andcashatbank
Shs.
250,000.
Duri
ngthemont h,thef oll
owingt ransact i
onstookpl ace:-
2009June2: -Cashsal esshs. 50, 000i ssuedRecei ptNo. 063
3:-Paidsal ariesandwagesshs. 101,500bycheque; chequeno.083
6:-Recei v
edachequef orshs.76,800f rom Kemunt o,afterall
owingheracash
discount
of4%i ssuedar ecei ptNo.064
12: -Settl
edOmwabo’ saccountofshs. 40,000i ncash,havingdeduct
edshs. 800
cash
discount .Receiv edr eciptno.0656
18: -Withdrewshs. 30, 000f rom bankf orof f
iceuse
21: -Receivedshs. 16,500cashf rom Manwar i
insettl
ementofhi saccountless
shs.
660
cashdi scount .Recei ptNo.065
22: -Boughtof f
icefur nit
ur ebychequeshs. 85,000.ReceiptNo.734
23: -Pai dwagesShs. 24,000i ncashr ecei ptNo.801
28: -Withdrewshs. 5000cashf orprivateuse
30: -Receivedachequef orshs.150,000i nrespectofcashsal es.ReceiptNo.066
Requi
red:Pr epar e:
-(i)Acashr eceiptsjournal
(i
i
i) Acashpay mentj ournal

Nov
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cah@gmai
l.
com
Cashreceiptj
our
nal
Date parti
cular
s Recei
pt Ledger Discoun cash Bank
2009 number fol
io t
al
lowed
June2 sal
es 063 50000
6 Kemunt
o 064 3200 76800
18 Bank C 30000
21 Manwor
i 065 660 16500
30 Sal
es 066 150000
3860 96500 226800

(
iv)

Cashpay mentj
our
nal
Date parti
cular
s Recei
ptnumber Ledgesf
oli
o Discountr
ecei
ved cash bank
2009
June3 Sal ar
y&wages 083 101500
12 Omwabo 0656 800 39200
18 Cash C 30000
22 Fur ni
ture 734 85000
23 Wages 801 24000
26 dr awings 5000
800 68200 216500
(
v)

36. Thef ol l
owi ngisatrialbalanceofJAOt r
adersasat31/12/
2009
Dr Cr
(Shs) (Shs)
Capital 170000
Openi ngst ock 60000
Equipmentatcost 125000
Purchases 161000
Sales 208000
Discount s 2000 8000
Retur ns 27000 25000
Salaries 20000
Telephonechar ges 5000
Wat erbi ll
s 2100
Credit ors 15100
Debt or s 21000
El
ect ricityexpenses 2000
I
nsur ancepai d 1000
426000 426000
Additional i
nformation
i. Cl osingstockwasv al
uedatShs.
72000
i
i.Tel ephonechar gespr epai
dwasShs.1000andoutst
andingwat erbi
l
lswasShs.
1300
ii
i.Depr eci
ationonequi pmentis10%p.aoncost
iv.Car ri
ageinwar dswasShs. 11000andcarri
ageoutwardsShs. 10000
Prepar etradingandpr ofitlossaccountf
ortheyearendi
ng31/12/2009

Nov
els,
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l.
com
JAOTRADERS
TRADI
NGANDPROFIT&LOSSACCOUNT
FORTHEYEARENDING31/
12/
2008
DR
CR
Openi
ngst ock 60000 Sales 208000
Addpurchases 161000 Lessret
urnsi
n 27000
Addcarri
age 11000
172000 181,
000
Lessretur
nsout (
25000) 147000
G.A.F.
S 207000
Lessclosi
ngstock (72000)
Costofsales 135000
Grossprofi
tc/d 46000
181000

Expenses 181000
Discountal l
owed 2000
Salaries 20000
Tel char ges 5000 Grossprofi
t 46000
Lesspr epaid 1000 4000 Discountr
ec 8000
Wat erbi ll
s 2100 Netlossc/
d 800
Addaccr ued 1300 3300
Electricityexpenses 2000
Carriageout 10000
Insurancepai d 1000
10
Deponequi l( /100x125000) 12500

54800

Netl
ossb/
d 800 54800

38. Thefoll
owingext r
act edfrom thebooksofMogusi iLtd.2005
March1. Creditpurchasesf rom ObwochaSi t1200
Agwat ash.3, 000andNy auambash. 2,500
March5 Creditsalest oOker oSit2,000,Mi chiekash. 4,
300andOmwengash.1500
March10 Creditpurchasesf rom Ony anchaSh. 2700
Obwochash6600andOmbaki sh.3300
“20 Retur nedgoodst oObwochash. 250andOny ancha703
26 Creditsalest oBundi sh.850.Tendush. 630andOkero-
sh.
900
“30 Goodswer eretumedby Bundish.I50andMi chi
ekasi
tl
30
Required: Ent ert heabov etransactionsint heirrelevantdaybooks
PURCHASESJOURNAL
Date Det ail
s I
nvoiceNo. Ledgerfol
io August
2005Mar ch Obwocha 1200
1 Agwat a 3000

Nov
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l.
com
“ “ 1 Nyanamba 2500
“ “ 1 Onyancha 2700
“ “ 10 Obwocha 6600
“ “ 10 Ombaki 3300
“ “ 10 19300
SALESJOURNAL
Dat
e Det
ail
s I
nvoi
ceNo. Ledgerf
oli
o August

2005 Okero 2000

March Micheka 4300
5 Omwega 1500
“ “ Bundi 850
5 Tendu 630
“ “ Okero 900
5 10180
“ “

PURCHASERETURNSJOURNAL
Date Det
ails Inv
oiceNo. Ledgerf
oli
o August
2005Mar
ch20 Obwocha 250
“ “ 20 Onyancha 700
950
SALESRETURNSJOURNAL
Date Detai
l
s Inv
oiceNo. Ledgerf
oli
o August
2005Mar
ch Bundi 150
30 Michi
eka 130
“ “ 30 280

39. Thef ollowi ngi nformat i

onwasex tr
act
edfrom Jar
ibut
r son31stDecember2009
ader
St ocktur nov er 5
Mar kup 25%
Costofsal es 60,000
Closi ngst ock 8,000
Required: i
)Netsales
i
i
i)Averagest ock
i
ii
)Openi ngst ock
iv )Netpur chases
Markup = GP
Costofsal es
¼= GP
60,000
4GP =60, 000
GP = 15, 000.
i
) Netsal es=Costofsal es+grossprof
it
60,000+15,000=75,
000

Nov
els,
Updat
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KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 243
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cah@gmai
l.
com
i
i
) Averagestock:stockturn=costofsal
es
Av
.st ock
5
/1+60,000
AV
5AV+60, 000
AV=12, 000
i
i
i) Openingstock.
AV=op. st+cl.st
ock
2
24,000=8000+opst ock
Op.stock=16,000
i
v)Costofsales
op.
st+p–cl s
60,
000=16, 000+p–8000
Purchases=42,000

40. Thefollowi ngt ri

albalancewasext ractedfr om Vumil
i
at r
adersas31stDecember2006
Dr Cr
Capi tal 125,
000
Pur chases 45,000
Car riageonsal es 2,
000
Stock 25,000
Sales 120,
000
Car riageonpur chases 1,
200
I
nsur ance 5,900
Salar ies 12,450
Discountal l
owed/Di scountreceived 3,400 1,
950
Debt or s/cr
editors 25,000 15,
500
Bank 14,500
Machi nery 128,000
262,450
262,
450
Addit
ional inf ormation:
-
closi ngst ock25, 000
-
Out standingsal aries450
-
Insur ance900hasbeenpai dinadv ance
-
Depr eciatemachi ner yby10%oncost
Required:i)t rading,profitandl ossa/c
i
i)Bal ancesheet
Vumili
aTr aders
Tradi
ng,profitandlossaccount
Fort heyearendi ng31stDecember2006.

Openi
ngStock 25,
000 Sal
es
120,
000
Add.Pur
chases 45,
000
70,000
Add.Carr
iageonpur
chases 1,
200
Costofgoodsold 71,200

Nov
els,
Updat
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KASNEB,
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&Pr
imar
yNot
es 0705525657 244
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cah@gmai
l.
com
Less.Cl
osi
ngst ock 25,
000
Costofsal
es 46,
200
Grossprof
itc/
d 73,
800
120,
000 120,
000
Expenses
Carri
ageonsal es 2,
000Grossprofi
tb/d 73,800
Discountall
owed/ 3,
400Add:Disrecei
ved 1,950
Insurancepaid 5,
900
LessPr epai
d 900
5,
000
Sal
ari
es 12,450
ADDOutst
andi
ngsal
ari
es450
12,
900
Machi
nery 12,
800
Tot
alExpenses 36,
100
Netpr
ofitc/
d 39,
630
75,
730 75,
730

Vumili
aTrader
s
Bal
ancesheet
ASAT31stDecember2006

Machiner
y 128,
000 Capit
al 125,000
LESSDeprec 12,
800 Add.NetPr
ofi
t 39,630
115,200 164,630
Stock 25,000
I
nsurancepr
epai
d 900
Debtor
s 25,000 cr
edit
ors 15,
500
Bank 14,500 out
standi
ngsal
ari
es 450

180,
600 180,
600

41. Thef
oll
owi
ngbal
ancesheetwaspr
epar
edbyt
heaccount
scl
erkofMapat
otr
ader
s:-

Mapatot r
ader
s
Balancesheet
Asat31stdec2009
Fi
xedasset s
Landandbui l
ding 300000 capi
tal 422930
Furnitur
eandf itt
ings 51500 +netprofi
t220500
Machi nery 140000 643430
Mot orvehicl
e 190000 -
drawi
ngs175000
681500 468430
Currentassets l
ongtermliabil
i
ties
Stock 124500 mor t
gageloan30000
Debt ors 103650 bankloan 400000
Cashatbank 54850 430000

Nov
els,
Updat
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KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 245
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cah@gmai
l.
com
Cashathand 3650 cur
rentl
i
abil
it
ies
286650 cr
edi
tor
s 99730
968150 968150
Requirement s:
Cal
culatet hef oll
owing
i
)Wor kingcapi tal i
i
)
Returnoncapi t
al i
i
i)
Currentrati
o
iv)Capitalempl oyed v
)
Borrowedcapi tal
i
)Wor kingcapi tal
Workingcapi tal=curr
entassets-
curr
entl
iabi
li
ti
es
CA=st ock+debtors+cashinhand+cashatbank
=124500+103650+54850+3650=sh286650
CL=cr edi
tors=99720
∴W. C=286650- 99720 =sh186, 920

i
i
)Ret
urnoncapit
al
Returnoncapi t
al=netprofi
tx100
Capitali
nvested
=220500x100
422930
=52%
i
i
i)Curr
entrati
o
i
v)Capi
talemployed
Capi
talemployed=capitalowned+l ongli
abil
i
ty
=468430+400000=868430
Or
=fixedasset s+workingcapital
=481500+186930=868, 430

v
)Borrowedcapit
al
Bor
rowedcapit
al=l
ongtermliabi
l
iti
es
=mor t
gageloans+bankloan
=300000+100000 =sh400000

42. Thef ol
lowinginf
or mati
onwasext ract
edfr
om booksofChungaTr
ader
sfort
heper
iod
endi
ng
31/
12/2000:-
Fi
xedasset s–350, 000
Drawings–50, 000
Credit
ors–50, 000
Cash–60, 000
Discountreceived4,000
Rent–12, 000
Bankov er
draft–10, 000
Debtors–20, 000
Stock(31/12/2000)-30,
000
Commi ssi
onr eceived–6,000

Nov
els,
Updat
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&Pr
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l.
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Grosspr ofit–80,000
El
ectricit
y–3, 000
Stock( 11/1/2000)–50,
000
Salar
ies–20, 000

a)Pr
( epar
e:- (
i)Thei
rpr
ofi
t&l
ossaccount

ChungaTraders
Pr
ofit&LossA/C
Fort
hePer
iodEnding31/12/
2000

Kshs Kshs
Sal
ary 20,
000 Grossprof
it 80,
000
Rent 12,
000 Di
scountrecei
ved 4,
000
El
ectr
ici
ty 3,
000 Commi ssi
onrecei
ved 6,
000
NetProf
it 55,
000

90,
000 90,
000

ChungaTrader
s
Bal
anceSheet
AsAt31/12/2000

Kshs. Kshs.
Capital- 395,000
Fi
xedAsst
s 350,
000 +NetPr ofi
t 55, 000
-Drawings 50,000
Cash 60,
000 ClosingStock400,000
Debtor
s 20,
000 Bankoverdraf
t10,
000
Stock 30,
000 Credit
ors 50,000

460,
000 460,
000

(i
)Worki
ngCapi
tal=CA-CL
=110,
000–60,
000 =50,
000
(
ii
)C.Employ
ed =FA+WC

=350,
000+94,
000 =444,
000

43. Thef ol
lowingbal
anceswer
eext
ract
edf
rom t
hebooksofNyamai
yaTr
ader
son
31stMay2009:-
shs.
Grossprof
it 400,
000
Equipment 900,
000

Nov
els,
Updat
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KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 247
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cah@gmai
l.
com
Furniture 500,
000
Provisionf ordepr eci
ati
ononf
urni
tur
e 65,
000
Power&l ight i
ng 24,
000
Commi ssionr ecei
ved 170,
000
Stock( 31.05. 09) 35,
000
Gener alexpenses 240,
00
Debtor s 350,
000
Provisionf orbaddebt s 3,
000
Creditors 550,
000
Discount sal l
owed 29,
000
Discount sr eceived 40,
000
Cashi nhand 150,
000

Addi
tionalinfor mation
(
i)Depr eciationt obepr ovi
dedasf ol
lows:–Equi pment20%oncost
–Furnit
ure10%onbookval
ue
(
ii
)Adj ustpr ov i
sionf orbaddebtstoshs.3500
(
ii
i)Commi ssionr eceivedi
nadv anceamount edtoshs.
10,000
st
Requi
red:Pr
epar e:-(i
)Pr ofitandl ossaccountfortheyearended31 May2009
st
(ii
)Bal ancesheetasat31 May2009

Nyamai
yaTr aders
Pr
ofit&LossAccountf ort heyearended31stMay2009
Depreci
ation:Equipment 180,000 Grosspr ofit 400,000
Furnit
ure 43,
500 Commi ssionrecei
ved 170,000
Power&l ightni
ng 24,000 Less: Advance 10,
000 160, 000
Generalexpenses 240,000 Discount srecei
ved 40,000
I
ncreaseinpr ovisi
onforbaddebts 500
Di
scount sall
owed 29,000
Netprof
itc/ f 83,000
600,000 600,000

Nyamai
yaTraders
ancesheetasat31stMay2009
Bal
Fi
xedassets Capi
tal 1,
000,
000
Equi
pment 900,000 ADD:netprof
it 83,000 1,
083,
000
LESS:Depr
eciat
ion 180,000
720,
000 Currentl
i
abi
l
iti
es
Advancecommi ssi
onr
ecei
ved 10, 000
Furni
tur
e 500,
000 Credit
ors 550,
000
LESS:Depr
eci
ati
on 108,500 391,
500

CurrentAssets
Stock
35,000
Debtors 350,
000
LESS: Pr
ovisi
on 3,
500

Nov
els,
Updat
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KASNEB,
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&Pr
imar
yNot
es 0705525657 248
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cah@gmai
l.
com
346,
500
Cashinhand
150,
000
1,
643,
000
1,
643,
000

44. Thef
oll
owi
ngt
ri
albal
ancewasext
ract
edf
rom t
hebooksofFul
aTr
ader
sonDec.31,
2005

FULATRADERS
TRIALBALANCE
ASATDEC.31,2005
Dr
. Cr
.
Shs. Shs.
Sales 600,
000
Gener alexpenses 60,
000
Rentexpenses 10,
000
Commi ssionrecei
ved 20,
000
Mot orv ehi
cle 600,000
Furniture 240,000
Cash 50,
000
Creditors 180,
000
Debt ors 120,000
Purchase 400,000
Salesr etur
ns 20,
000
capital 700,
000

1,
500,
000
1500,
000

Additi
onal i
nf or mation
I.StockatDec.31, 2005wasv aluedatshs. 60,
000
II.Depr eci at
iontobeprovi
dedasf oll
ows:
(a)Mot orv ehi cle20%perannum oncost
(b)Furniture10%perannum oncost
Requi r
ed: -
(i)Tr adingpr ofi
tandlossaccountf ortheyearendedDec.31,2005
(ii)BalancesheetasatDec.31, 2005
45. Thefollowi ngi nformati
onrelat
estoJoyTr adersfortheyearendedDec.31,
2006
Tur nov er 270, 000
Mar gin 40,000
Rat eofst ockturnover 6times
Expense 40,000

Cal
cul
ate: (
i)Grossprof
it
(
ii
)Costofsales
(
ii
i)Netprof
it
(
iv)Aver
agest ock

Nov
els,
Updat
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KASNEB,
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&Pr
imar
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cah@gmai
l.
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(v
)Mar k–up
46. Thef ollowi ngi nformat ionrelat
est oKipgaat r
adersfort
heyear2006:-
Kshs.
Turnov er 270,000
Mar gi n 40%
Rateoft urnover 6ti
mes
Expenses 40,
000
From thei nfor mat iongi venabove,
Calcul
at e: (i
)Gr ossprofit
(i
i)Costofgoodssol d
47. Thef ollowi ngi nformat ionrelat
est oLadophar maChemistasat30thNov ember2008
Dr(shs) Cr(
shs)
t
h
Stock( 30 Nov2007) 23910
Capi tal 30955
Drawi ngs 8420
Bank 3115
Cash 295
Debt or s 12300
Credi tors 9370
Mot orv ehicles 4100
Equi pment 6250
Sales 130900
Pur chases 92100
Retur nsi nwar ds 550
Car ri
agei nwar ds 215
Retur nout wards 307
Car ri
ageout wards 309
Mot orexpenses 1630
Rent 2970
Telephonechar ges 405
Wages 12810
I
nsur ance 492
Officeexpenses 1377
Sundr yexpenses 284
171532 171,532
th
Stockasat30 Nov ember2008wasshs27475

Requi
red:pr
epare
i
)Thetradi
ng,
profi
tandl
ossaccount
i
i ancesheetasat30thNov
)Abal ember2008

LADOPHARMACHEMI ST
TRADINGRPOFI TANDLOSSA/ C
th
Fort
hey earended30 June2008
Shs. Shs.
Openingstock 23,910 Sal
es 130,
900
Purchase 92,100 Ret
urninwards 550
Ret
ur nsoutwards 307 91,973
Carri
ageinwards 215 130,
350

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 250
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cah@gmai
l.
com
115,
918 Gr
osspr
ofi
tb/
d 41,
907
Sl
owingstock 27,
475
Costofsal
es 88,
443
Grossprof
itc/
d 41,
907
130,
350

Carr
iageoutwards 309
Moorexpenses 1,630
Rent 2,970
Tel
ephonechar ge 405
Wages 12,810
I
nsurance 492
Off
iceexpenses 1,377
Sundryexpenses 284
Netprofi
tc/d 21,630
41,907 41,
907

lODAPHARMACHEMI ST
BALANCESHEET
Asat30thJune2008
Capit
al 30, 955 Fixedassets
Netprofi
t 21,
630 52,630 Equipment 6,
250
Drawings 8,
420 Mot orvehi
cle 4,100 10,350
44,
165
Currentl
i
abi
l
iti
es Currentasset
s
Credit
ors 9,370 Stock 27,
475
Debt or
s 12,300
Bank 3,
115
Cash 295
43,185
53,535 53,535

48. Thef
oll
owingisat r
ial
bal
anceofJAOt
rader
sasat31/12/2009
Dr Cr
(Shs) (Shs)
Capital 170000
Openingstock 60000
Equipmentatcost 125000
Purchases 161000
Sales 208000
Discounts 2000 8000
Returns 27000 25000
Salari
es 20000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 251
 i
sabokemi
cah@gmai
l.
com
Telephonecharges 5000
Wat erbil
ls 2100
Creditors 15100
Debt ors 21000
El
ect ri
cit
yexpenses 2000
I
nsur ancepaid 1000
426000 426000
Addi tional informat ion
(i) Closingst ockwasv aluedatShs. 72000
(ii
) Tel ephonechar gesprepai dwasShs. 1000andout st
andingwaterbill
swas
Shs.1300
(ii
i
) Depr eciati
ononequi pmenti s10%p. aoncost
(iv
) Car riagei nwar dswasShs. 11000andcar ri
ageout wardsShs.
10000
Pr epar etradi ngandpr ofitlossaccountf ortheyearending31/ 12/2009
JAOTRADERS
TRADI NGANDPROFI T&LOSSACCOUNT
FORTHEYEARENDI NG31/ 12/2008
DR CR
Openi ngst ock 60000 Sales 208000
Addpur chases 161000 Lessreturnsin 27000
Addcar ri
age 11000 181,000
172000
Lessr et urnsout (25000) 147000
G.A.F.S 207000
LESScl osingst ock (
72000)
Costofsal es 135000
Grosspr ofi
tc/ d 46000
181000
181000
Expenses
Discountal lowed 2000
Salaries 20000 Grosspr ofit 46000
Tel char ges 5000 Discountr ec 8000
Lesspr epai d 1000 4000 Netl ossc/ d 800
Wat erbi lls 2100
Addaccr ued 1300 3300
Electricityexpenses 2000
Carriageout 10000
Insurancepai d 1000
10
Deponequi l(/ 100x1 25000) 12500
54800
54800
Netl ossb/ d 800

49. Thef
oll
owingtr
ial
balancer
elat
est
oJakoburaSt
ores
DR CR
Gr
ossprofi
t 85,
000
Debtor
s 95,
500
Motorvehi
cle 150,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 252
 i
sabokemi
cah@gmai
l.
com
Furniture 30,000
Bank 62,000
Stock 52,500
Prov i
sionf ordepr eciat
ionon
Mot orv ehicle 16,
000
Prov i
sionofdepr eciati
onon
Furniture 2,
620
Salaries 64,
000
Buildi
ng 180,000
Gener al expenses 45,
200
Creditor s 75,
000
Commi ssionreceived 42,
800
Equipment 55,
200
El
ect ricit
y 15,
420
Capi t
al 528,
400
749,
820 749,
820

Addi tional i
nf ormat i
on
(i)Prof i
tmar ginwas20%
(ii
)St ockasat1stJanuar ywasv al
uedatKsh.48,000
(ii
i)Depr eciationwaspr ovidedasf ol
lows:
(a)Mot orv ehicle25%p. aoncost
(b)Fur niture7%p. aoncost
(iv)On31stDec2006, equipmentwasv al
uedatKsh.48, 576andgener alexpenses
out standingwer eKsh.1, 200
(v)Abi ll
ofKhs. 340whi chwaspai dforapri
vateresidencewasi ncl
udedinthe
electricit
y
account.
Requi red: -
. Pr epareat radi
ngpr ofitandlossaccountfort hey earended31stDec2006
JAKOBURATRADERS
PROFI TANDLOSSA/ CFORTHEYEARENDED
31/ 12/ 006
SHS SHS SHS SHS
Openi ngst ock 48000 sal es 425000
purchases 344500
Costofgoodsav ai
lablef orsal es 392500
Lesscl osi ngst ock 52500
Cost sofgoodssol d 340000
Grosspr of i
tc/ d 85000
425000 425000
sal
ar i
es 45200 Grosspr of i
tb/d 85000
Addgener al expansesaccr ued 1200 46400 commi ssi on 42800
el
ect ri
city 15240
Lessdr awi ng 340 15080
depreciat ion
Mot orv ehi cles150000x25/ 100 37500
Furniture30000x7/ 100 2100

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 253
 i
sabokemi
cah@gmai
l.
com
Equi
pment (
55200-
48576) 6624
Netprof
itc/d 20096
127800 127800

50. Thef
ollowingi nformat i
onrelat est oOdongoTr
ader
sfort
hey
earended31.
Dec.2008.
Land shs. 50,000
Capital shs. 94, 000
Machi nery shs. 20,000
Mot orv ehicl
es shs. 30,000
10y earbankl oan shs. 20,000
5y earAFCl oan shs. 10,000
Stock shs. 10, 000
Debt ors shs. 6,000
Creditors shs. 6,000
Accruedexpenses shs.2,000
Cashatbank shs.10,000
Cashi nhand shs.2,000
Drawi ngs shs.4,000

Requi
red:
i
)Abalancesheetasat31stDec.2008
i
i)Cal
cul
ate-borrowedcapit
al
-
currentrat
io
-capital
owned
Odongotrader
s

ancesheetasat31stDec2008
Bal
F.A
Land 50,000 Capit
al 94,
000
Machi nery 20,000 Lessdr awings 4000
M/ vehicl
es 30,000 100000 90,
000
Currentasset
s Longterml iabi
li
ti
es
Stock 10,000 10yrsloan 20,000
Debt or
s 6,000 5yrsAFCl oan 10,000
Cashatbank 10,000 30,
000
Cashathand 2,000 28,000 Shorttermloan
Credi
tors 6000
Expenseoccur r
ed 2,000√ 8,
000

128,000 128,
000
i
i)calculat
e-Borr
owedcapi tal=l ongter
ml i
abi
l
iti
es
=20, 000+10, 000
=30, 000 - curr
entrat
io
Currentassets:cur
rentliabil
it
ies
28,
000: 8000
28:8
7:2 -
capi
talowned
C=A- L

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 254
 i
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cah@gmai
l.
com
=128,000-38,
000=90,
000
Or
Capi
tal-
drawings
94,
000-4000=90,
000

51.Thef
oll
owingTri
albal
ancewaspr
epar
edf
rom t
hebooksofPakaTr sasat31st
ader
December1995.

Tr
ialbalanceDecember31st1995
Dr. Cr.
Kshs Kshs
Sales 900,
000
Purchases 600,000
Returnsi nwards 80,000
Returnsout wards 20,
000
Carri
agei n 40,
000
Carri
ageout 3,
000
Stock( Jan) 100,000
Rent 60,000
Creditors 170,000
Debtor s 120,000
I
nterestexpenses 18,000
Gener alexpenses 7,000
Capital 178,000
1,
268, 000
Creditors 240,
000
6226000 6226000

Addi
ti
onal i
nformat ion
st
St
ockasat31 Decemberwas100, 000
i
. Pr epareTr ading,profi
tandLossaccountf ort
heper
iodended31December1999
i
i. Cal cul
ater eturnoncapi t
al,
currentrati
oanddebt
or’
srat
io (
10mar
ks)
PakaTr aders
Tradi
ngPr of
itandLossAccount
Asat31December1995

Dr Kshs Cr
. Kshs

OpeningStock 100,
000 Sal
es 900,
000
Purchases 600,
000
Purchasesret
urns 20,
000
Sal
esRet
urns 80,
000
Tr
anspor
tat
ioni
n 40,
000
820,
000
Cl
osingSt
ock(
135,
000)
G.
P.c/d 235,
000
920,
000
Expenses

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 255
 i
sabokemi
cah@gmai
l.
com
Carr
iageout 3,
000
Rent 60,
000
I
nter
estExpenses 18,
000
GeneralExpenses 7,
000
N.P.
C/d147,000
235,
000 235,
000
b) N.
P.Bb/
d 147,
000

52. Thefoll
owi ngtri
albalancewasext r
actedfrom thebooksofMari
ngotr son31st December2001
ader
st
MaringotradersTr
ialBalanceasat31 December2001
GrossProfit 380,
000
Closi
ngstock 274,000
Capit
al 259,
000
Drawings 83,000
Credi
tors 93,
000
Premises 103,000
Debtors 123,000
Cashatbank 33,000
Bankloan( 1yr) 50,
000
Generalexpenses 54,000
Commi ssionreceived 20,
000
Wagesandsal ari
es 132,000
802,000 802,
000
Prepare
a) ProfitandlossAccountfort heyearended31stDecember2001
b) Balancesheet

Mar
ingoTraders
Pr
ofi
tandlossaccountasat31December2001
Dr Kshs Cr. Kshs

Salari
esexpense 132,
000 Grosspr
ofi
t 380,
000
Generalexpense 54,
000 Comm.Receiv
ed 20,
000
N.P.c/d 214,
000

400,
000 400,
000

N.
P.c/
f214,
000

Mari
ngoTrader
s
BalanceSheetAsat31December2001
Dr Kshs Cr. Kshs
Premises 103,
000 Capital 259,
000
Netpr of
it 214,
000
Drawings (83,
000)
C.Asset
s C.Liabil
it
ies
Stock 274,
000 Creditor
s 93,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 256
 i
sabokemi
cah@gmai
l.
com
Debt
ors 123,000 Bl
oan 50,
000
Cashatbank 33,000
533,000 533,
000

53. Thef
ollowinginf
ormati
onwasextr
actedfr
om t
hebooksofSar
aiTr
ader
sfort
hey
ear ended
30April2003
Sales 480,
000
Openi ngst
ock(1.
5.02) 80,
000
Grosspr of
iti
scal
culat
edat25%

i)Pr
epareatradingaccountf
ortheperi
odended30Apr
il2003
ii
)Calcul
atetherateofst
ocktur
nov er (
10mar
ks)
SaraiTr
aders
Tr ngAccountAsat30thApr
adi i
l2003
Dr Kshs Cr. Kshs
Openingstock 80,
000 Sales 480,000
Purchases 400,000
480,000

Cl
osi
ngst
ock (120,000)
360,000
N.
Pc/
d 120,000
480,000 480,
000

(
ii
)Rat
eofst
ockt
urnov
er= C.O.S
Av
eragest
ock

Averagestock=80,
000=120,0000=100,
000
2
C.O.
S =360, 000
RateofStocktur
nover=360,
000=3.
55
100,
000

54. Thef oll

owinginformat
ionr
efer
stoteat r
ader
sfort
hey
earended31/
12/
04
Sales 800,000
Expenses 10,
000
Commi ssionreceiv
ed 15,000
Purchases 700,
000
Openi ngstock 250,000
Mar gin 20%

Pr
epar
etr
adi
ng,
prof
it&lossa/cfort
heyearended31/
12/
04
TeaTraders
Tr
adi
ng,Prof
it&LossAccount

Nov
els,
Updat
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KASNEB,
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&Pr
imar
yNot
es 0705525657 257
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cah@gmai
l.
com
Fort
hey
earendi
ng31/
12/
04
Kshs Kshs

OpeningStock 25,
000 Sal
es 800,
000
Addpurchases 700,
000
GoodsAv ail
abl
e 725,
000
Cl
osingstock 85,
000
Costofsales(20/
100x800,
000 640,
000
GrossProfi
t 160,
000
800,
000 800,
000

55. Thef ollowingbal anceswereext

ract
edf r
om booksofMot
opTr
ader
sfort
hey
ear
ended31/ 12/2004
Rent 48,
000
Li
ght ing 7,
200
Wat er 9,
220
Salaries 75,
000
Commi ssionr eceiv
ed 8,
500
Discountal lowed 4,
600
Discountr eceived 8,
500
Grosspr ofit 320,
000
Gener alExpenses 98,
000
Stock 5,
250
Mot orVehi cle 2,
300,
000
Furniture&equi pment 650,
000
Debt ors 270,
000
Creditors 396,
400
Bank 200,
000
Cash 50,
000
Capital 3,
000,
000

Prepar e:
Profitandlossa/cf
ort heyearended31/12/2004
Balancesheetasat31/ 12/2003 (
12mar
ks)
MolopTraders
Profi
tandlossAccountfortheyearending31/12/04
Expenses 48,000 GrossProfi
t 320,
000
Li
ght i
ng 7,200 Commi ssi
onrecei
ved 9,
870
Wat er 9,220 Di
scountrecei
ved 8,
500
Salari
es 72,500
DiscountAl l
owed 4,
600
Gener alexpenses 98, 000
NetPr of i
t 338,370 338,
370

MolopTrader
s
Bal
ancesheetasat31/12/04
Fi
xedasset
s Kshs Kshs Kshs
Fur
nit
ure 650,
000 Capit
al 3,
000,
000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 258
 i
sabokemi
cah@gmai
l.
com
Mot
orv
ehi
cle 2,
300,
000 Addpr
ofi
t 98,890
3,098,
850
Cur
rentl
i
abi
l
iti
es
Currentasset
s
Stock 25,
250
Debtors 270,
000 Cr
edi
tor
s 396,
400
Bank 200,
000
Cash 50,
000
3,
495,250 3,
495,
290

56. Thefoll
owingbalanceswer eextr
act
edf
rom t
hebooksofChomboWhol esal
ersf
or
theyearended31Dec2005.
Shs.
Sales 500,000
Purchases 320,000
Openingstock(1.1.
2005) 80,000
Closi
ng31.12.2005 40,000
Debtors 140,000
Credit
ors 90,000
Cal
culat
e
a) mar gi
n
b) Currentr
ati
o
c) Rateofstockt ur
nover (4mar
ks)

(
a)Mar
gin=G.PX100 = 500,
000-
(320,
000-80,000-
40,
00)
Sal
es 500,000

=140,
000x100=28%0r28
500,
000

(
b) Cur
rentr
ati
o = CA = 180,000=2:
1
CL 90,000
(
c) Rat
eofst
ockt
urnov
er = Costofsales = 360,
000
Aver
agestock 80,
000+40,
000

= 3t
imes (
4mar
ks)

57. Mal
amuTradershadt hefoll
owi anceasat31stDecember2008
ngbal
Sh
Buil
ding 540,000
Bankloan 472,500
Debtors 116,900
Credi
tors 227,000
Furni
ture 408,170
Gr
osspr ofi
t 520,600
Motorvehicl
e 900, 000

Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 259
 i
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cah@gmai
l.
com
Discountallowed 142, 000
Li
ghting 25,200
Int
erestonl oan 1,
200
Closi
ngst ock 72,500
Rentreceived 120,000
Repaironbui ldi
ngs 60, 000
Repaironf urnit
ure 72, 030
Repaironmot orvehi
cles300, 000
Generalexpense 102,
100
Capit
al 1,400,000
Pr
epare:
(a)Profi
tandlossaccountf
ort earended31stDecember2008
hey
(b)Balancesheetasat31December2008

Mal
amuTr
ader
s

Fort
hey
earended3l
stDec,
2005
Expenses Sh Sh

Discountal l
owed 142,
000 GrossProfi
t 520,
000
Lighti
ng 25,
200 Rentrecei
ved 120,
000
Inter
estorl oan 1,200 Netlossc/
d 61,
930
General expenses 102,
100
Repairsonbui ldi
ng 60,
000
Repairsorrfurnit
ure 72,
030
Repairsonmot orvehi
cle 300,
000

702,
530 702,
530

MALAMUTRADERS
BALANCESHEET
ASAT31stDEC2008

Sh Sh Sh Sh
Fi
xedAsset
s Capi
tal 1,
400,
000
Bui
ldi
ng 540,
000 Lessl
oss 6,
930

1,
338,
070
Furnitur
e 408,
170 l
oan 472,
500
Mot orVehi
cle900,
000 948,
170
CurrentAsset
s
Stock 72,
500 CurrentLi
abi
l
iti
es
Debt ors 116,
900 189,
400 Credit
ors 227,
000

2037,
570 2,
037,
510

150x100
Nov
els,
Updat
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KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 260
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com

(
b) On1stJanuar
y2017,
Majengotr
adershadksh.240,000cashi
nandBankcredi
tbal
anceofkshs
270,
000. Dur
ingt
hemonth,t
hefol
lowi
ngtransact
ionstookpl
ace.
(10marks)

Jan2: Cashsal eofkshs200, 000

5: Debt orset tl
edhisaccountofksh1, 000,000bychequel ess5%cashdi scount
.
 
  
15: Pai dsalarieskshs50, 000incash
 
  
20: Settl
edcr editorsaccount sofKshs100,000bychequel ess2%cashdi scount.
21: Receivedachequef orkshs84,000f r
om chari
tytrader
saf t
erdeduct
ing6%cash
discount.
 
  
 24: Deposi tedKshs100, 000from off
icecash
 
  
 25: Cashsal eKshs200, 000bankeddi rectl
y.
t
h
 
  
 26: Achequer eceiv
edonJanuar y5 f r
om adebtorwasdi shonoured.
 
  
 27: Purchasedgoodswor thkshs20,000oncr edi
t.
 
  
 31: Bankedal lthecashexceptKshs80, 000
Requi r
ed: Prepareat hreecolumncashbookdul ybalanced.

MAJENGOTRADERS
THREECOLUMNCASHBOOK
FORTHEMONTHOFJANUARY2017

DR(
Recei
pts) (
Pay
ment
s)CR

Dat
e Par
ti
cul
ars Di
sc Cash Bank Dat
e Par
ti
cul
ar Disc Cash Bank
al
l s Rec

2017 240,
00 2017 BALANCE 270,
000
0 B/D
JAN BAL.B/
D JAN1 50,
000
200,
00 st sal
ari
es 2,
000
1ST  SALES 50,
000 950,
000 98,
000
0
15th cr
edi
tor
s
2   DEBTORS
ND
 
5,400 100,
000
TH CHARITY 20th  bank 210,
00
5 9,
500
TRADERS 84,
600 100,
000 t
h 0
ST 24 di
shonore
21
CASH(
C) 200,
000 dcheques
26th
bankc  
 80,
00 226,
600
 
 24T SALES 31st 0
H  
  
210,
00 Bal
ance
CASH 440,
00 0
55,
400 c/d
25TH 0  
2,000 1,
55,
600
ST  
  
  
  
  
  
   1,
544,
60 440,
00
31 0
 
  
  
   0

 
  
  
 Bal
anceb/
d  
  
  
  
  
  
 80,
000 266,
600

Descr
ibet
hepr
ocedur
eofbal
anci
ngt
hel
edgeraccount
s.

Nov
els,
Updat
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KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 261
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cah@gmai
l.
com
(
i) I
dent
if
yt heaccountt
itl
eandcalcul
atet
het
otal
soneachsi
deoft
hel
edgeraccounti
.e.
t
hedebittot
alsandcreditt
otal
s.

(
ii
) Cal
cul
atet
hedi
ff
erencesbet
weent
hedebi
tandt
hecr
edi
ttot
als

(
ii
i) Recordthedi
ff
erencesont
hesi
dewi
tht
hesmal
l
ert
otal
sasbal
ancecar
ri
eddown
(bal
ancec/d)

(
iv) Obtai
nthetotal
sofeachsideaft
erenter
ingt
hebalancec/d.Ift
herecordi
ngand
cal
culat
ionsarecor
rect
,thedebi
ttot
alshoul
dequaltothecredi
ttot
als.Writ
ethe
tot
alsatthesameanddoubleunderscor
e.

(
v) Fi
nall
yrecor
dthebalanceontheopposi
tesi
deoft
hebal
ancec/
dbel
owt
het
otal
sas
bal
ancebroughtdown.(Bal
anceb/d)

Thefoll
owingbal anceswer eextractedfrom thebooksofJumaTr sasat31stDecember
ader ,2016.
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
(10mar
ks)

SHS
Landandbui ldi
ngs 200,
000
Capital 370,
000
Prepai drent 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 50,
000
Mot orVehi cl
e 150,
000
10y earbankl oan 100,000
3y earsICDEl oan  
 50,
000
Stock( 31/12/15)  
 50,
000
Debt ors  
 30,
000
Creditors  
30,000
Accruedexpenses  
10,000
Cashatbank 50,000
Cashi nhand 10,000
Drawi ngs  
20,000

Prepare:
i
. Abalancesheetasat31stDecember2016.
ii
. Determine:
 Wor kingcapital
 Ca pi
talempl oyed
 Bor r
owedcapi taL
 
   
  
  
  
  
  
  
  
 
  
  
   
  
  
  
 
Jumat raders

 
  
  
  
  
  
  
  
  
Balancesheet
st
 
  
  
  
Asat31 December2016

Asset
s  
  
  
  
  
 
  
  
  
  
  
  
  
shsshs Capi
tal
andl
i
abi
l
iti
es 
  
  
shsshs

Fi
xedasset
s Openi
ngcapi
tal
  
  
  
  
  
  
 370,
000

Landandbui
l
ding 
  
  
  
 200,
000 Lessdr
awi
ngs 
  
  
  
  
  
  
  
  
20,
000

Pl
antandmachi
ner
y  
  
50,
000 Cl
osi
ngcapi
tal
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 350,
000 
  
Nov
els,
Updat
edCPA,
KASNEB,
HighSchool
&Pr
imar
yNot
es 0705525657 262
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Mot
orv
ehi
cles 
  
  
  
  
 150,
000 400,
000
Longt
erml
i
abi
l
iti
es
Cur
rentasset
s
10y
earbankl
oan 
  
  
  
100,
000
Debt
ors 
  
  
  
  
  
  
  
  
  
  
 30,
000
3y
earI
CDEl
oan 
  
  
  
  
50,
000 50,
000
St
ock 
  
  
  
  
  
  
  
  
  
  
  
  
50,
000
Shor
tter
mli
abi
l
iti
es
Pr
epai
drent 
 
  
  
  
  
  
  
 10,
000
Cr
edi
tor
s  
  
  
  
  
  
  
  
  
  
  
 30,
000
Cashatbank 
  
  
  
  
  
  
 50,
000
140,
000 Accr
uedexpenses 
 
   
 
   
10,
000 40,
000

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
540,
000

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 540,
000

Wor
kingcapi
tal
.

Cur
rentasset
s–cur
rentl
i
abi
l
iti
es

140,
000–40,
000= 
1000,
000

Bor
rowedcapi
tal

Longt
erml
i
abi
l
iti
es=150,
000

Capi
tal
empl
oyed

Wor
kingcapi
tal
+fi
xedasset
s i
.e100,
000+400,
000=500,
000

Thef
oll
owi
ngt
ri
albal
ancewasext
ract
edf
rom t
hebooksofCar
sonTr
ader
son31December

2005af
terpr
epar
ingt
het
radi
ngaccount
.

Dr Cr

Capi
tal
130,
000

Dr
awi
ngs 27,
000

Debt
orsandcr
edi
tor
s 25,
350
22,
500

St
ock31Dec.2005 25,
000

Wagesandsal
ari
es 31,
650

Nov
els,
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Gr
ossPr
ofi
t 58,
920

Di
scount 3,
540 3,
300

Adv
ert
isi
ng 3,
130

Baddebt
s 1,
100

Gener
alexpenses 5,
100

Rat
es 2,
750

Cashi
nland 800

Cashatbank 3,
300

Mot
orv
ehi
clesatcost 11,
000

Pr
emi
ses. 75,
000

214,
720 214720

Thef
oll
owi
ngaddi
ti
onal
inf
ormat
ioni
spr
ovi
ded.

(
a)Wagesdueshs.5,
400

(
b)Rat
espai
dinadv
anceshs650

(
c)Mot
orv
ehi
clest
obedepr
eci
ated20%oncost
.

Youar
erequi
redt
opr
epar
e

(
i)Prof
itandl
ossaccountf
ortheyearended31Dec.2005 (6mks)
(i
i)
Bal sasat31stDec.2005
ancesheet (4mks)

Car
sonTr
ader
s.

Pr
ofi
tandLossA/
Cfort earended31stDec.2005.
hey

Expenses sh. Sh.

Wagesandsal
ari
es 31,
650√ Gr
osspr
ofi
t 58920√

Add:Accr
uedwages 5,
400√ Di
scountr
ecei
ved 3300√

37,
050

Rat
es 2750√

Less:
Prepai
drat
es 650√

2100

Depr
eci
ati
onnetv
eh. 2200√

Di
scountal
l
owed 3540√

Nov
els,
Updat
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Adv
ert
isi
ng 3130√

Bal
ancedebt
s 1100√

Gener
alexpensed 5100√

Netpr
ofi
t 8000√

62220 62220

i
i
) Car
sonTr
ader
s

ancesheetasat31stDec.2005.
Bal

Fi
xedAsset
s sh. Sh. Sh. Sh.

Pr
emi
ses 75000√ Capi
ta 130000

Mot
orv
ehi
cles 11000 Add:Netpr
ofi
t
8000√
Less:
depr
eci
ati
on 2200 8,
800
138000
83,
800
Less:Dr
awi
ngs
Cur
rentAsset
s 27000√
St
ock 25000√ 111,
000
Debt
ors 25350√ Cur
rentLi
abi
l
iti
es
Pr
epai
drat
es 650√ Cr
edi
tor
s 22500√
Cashatbank 3300√ Accr
uedwages 5400√
Cashathand 800√ 55100 27900
138,
900

138900

b)Thef ollowi ngtransacti

onsr el
atest oKonat eTr adersf
ort hemonthofDecember2010.
st
Dec1 St artedabusi nesswi t
hsh.200, 000intheBankaccount .
2ndBoughtf ur
nitureforsh, 50,000andpai dbycheque
3rdSoldgoodsoncr edi
tt oTilashs, 20,
000;Katu10,000
th
4 Boughtgoodsoncr editfrom Kahamash30, 000;Kangashs.40,
000
5thReturnedfaultygoodst oKahamash5, 000
6thPaidKahamaonaccountbychequel ess10%cashdi scount
.
7thReceivedfaultygoodsf rom Kat ushs.2000
8thRecei
v edpay mentduef rom TilaandKat ubychequel ess5%cashdi scount
.
t
h
9 Cashsal esshs.100, 000
10thPai df
orwagesshs.20, 000bycashandel ectr
icit
yshs.10,
000bycheque.
th
11 Deposi tedallt
hecashi nhandi nt
ot hebankaccount .
Requi
red:

Nov
els,
Updat
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Pr
epar
eat
hreecol
umncashbookdul
ybal
anced (
10mks)

Konat
eTr
ader
s

Thr
eecol
umncashbook

Asat31stDec2010

Dat
e Det
ail
s L.
F D.
A Cash Bank Dat
e Det
ail
s LF DR Cash Bank

1st/
12 Capi
tal 200000 1st Fur
nit
ure 50000
/12
3/
12 Pur
chases 40000
2/
12

8/
12 Ti
l
a 1000 19000 Kahama 2500 22500
6/
12
Kat
u 400 7600 Wages 20000
10/
12
9/
12 Sal
es 100000 El
ect
ri
cit
y 10000
11/
12
31/
12 Cash c 80000 Bank c 80000
31/
12
Bal
ance c/
d 184100
31/
12
1400 100000 306600 2500 100000 306600

Kapt
agatt
rader
shadt
hef
oll
owi
ngasset
sandl
i
abi
l
iteson31stDecember
i ,2017

Sh.

Creditors 280,
000
Equipment ’
s 1,
920,
000
Furnit
ure 103,
550
Stock 800,
000
Debtor s 240,
500
Bank ov er
draf
t 401,
950
Cashi nhand 291,
000
Capital ?

Duri
ngthefi
rstweekofJanuar y2018, t
hefol
lowingtransacti
onst ookplace.
2018
Jan 1.Boughtmor egoodsfrom NCPBoncr editforsh.330,800
2.Purchasedacomput erandaccessori
esbychequesh. 50,000
4.Paidcr edi
torsbychequesh.200,
000
5.Recei vedsh140,500bychequefrom debtors.
6.Kapt agattr
adersputinanextrash.
500,000i nt
othebusi ness,sh.
300,
000bychequeand
sh.
200,
000incash.
7.Kapt
agattraderspaidtheoutst
andingbankov er
draftusingthecash

Nov
els,
Updat
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f
rom t
hecasht
il
l

Requi
red.
a)
.Ascer
tai
nKapt
agatt
rader
scapi
t asat1stJanuar
al y,2018 (
4mar
ks)

Capit
al =Assets–li
abil
it
ies
=(1,
920,
000√+103,
550√+800,
000√+240,
500√+291,
000√)-
(
280,
000√+401,950√)
=2,
673,
100√
8√*
½=4mar
ks

b)
.Dr
awupKapt agattr
ader
sBalancesheetasat7thJanuar
y2018af
tert
heabov
e
t
ransact
ionshavebeencomplet
ed. (
6mar
ks)

Kapt
agatt r
aders
Balancesheet
Asat7thJanuary2018.
√
Sh. Sh.
F.
Asset
s Capi
tal
2,
673,
100√
Equipment’
s 1,920,
000√ Add.I nvest
ments 500,
000√
Furnit
ure 103,550√ 3,
173,
100
Comput er 50,000√
2,
073,550
C.Assets C.Liabi
li
ti
es
Stock 1,
130,
800√ Credit
ors 410,
800√√
Debtor
s 100,000√
Cash 279,
550 √√ 1,510,
350
3,583,
900 3,
583,
900

Thef
oll
owi
ngbal
anceswer
eext
ract
edf
rom t
hebooksofMut
eit
r son31st
ader

December
,2017.

Shs

Gr
osspr
ofi
t 800,
000

Gener
alexpenses 180,
000

Bui
l
dings 1,
250,
000

Equi
pment 380,
000

Capi
tal 1,
400,
000

Fur
nit
ure 117,
000

I
nsur
ance 48,
000

St
ock 25,
000

Nov
els,
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Commi
ssi
oni
ncome 125,
800

Di
scountal
l
owed 55,
000

Di
scountr
ecei
ved 56,
200

BankOv
erdr
aft 79,
000

Sal
ari
esandwages 320,
000

Cr
edi
tor
s 90,
000

Car
ri
ageout
war
ds 60,
000

Debt
ors 65,
500

Car
ri
agei
nwar
ds 34,
500

Cash 51,
000

Pr
epare:
a)
.Profi
tandlossaccountfort
heper
iodended31stDecember
,2017.
st
b)
.Balancesheetasat31 December,2017. (
10mar
ks)

Muteit
rader
s
Pr
ofi
tandLossaccount
Fortheyearended31/12/
2017√
Shs Shs
Gener alexpenses 180,
000 √ Gr
ossprof
itb/
d
800,
000√
Insurance 48,
000 √ Commi
ssionincome 125,800 √
Discountal l
owed 55,
000 √ Discountrecei
ved 56,
200√
Salari
esandwages 320,
000√
Carri
ageout wards 60,
000√
NetPr ofit 319,
000√
982,
000 982,
000

Mar
king10√*
½=5mar
ks

Muteit
rader
s
Bal
ancesheet
Asat31/
12/2017
Fi
xedAssets Shs Shs
Bui
ldings 1,250,000√ Capi
tal 1,
400,
000√
Equipment 380,000√ AddNetPr
ofi
t 319,
000√
Furnit
ure 117,000√ 1,
719,
000
1,747,000
Currentasset
s Currentli
abil
i
ties
Stock 25,
000√ Credit
ors 90,
000√
Debtors 65,
000√ BankOv er
draf
t 79,
000√
169,
000
Cash 51,
000√ 141,000
1,888,
000 1,
888,
000
Nov
els,
Updat
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Discussf iveer ror st hatmaynotbenot icedinat ri

albalance.( 10mar ks)
(i
)Er rorofomi ssi on
Thi si saner rorwher eat ransact ioni scompl etelyomittedf r
om t hebooks.Noent ri
eswer emadeat
allfort het ransact i
on.I tis
asi ft het ransact ionhasnotexi sted.
(i
i)Er rorofcommi ssion
Int hiscase, doubl eent rywasobser vedbutt het r
ansact i
onwaspost edt oawr ongaccountoft he
samecl ass.Forexampl e
goodssol dt oJohnwascor rect lycr editedt oRev enue(Sal es)accountbutdebi tedtoJane‘s
account .
(i
ii
)Er rorofpr inci ple
Doubl eent ryobser v edbutanent rymadei nthewr ongcl assofaccount .Forexampl e,paymentby
chequef orv ehi cler epai rs
cor rectlycr edi tedt obankaccountbutdebi tedt ovehicl
eaccounti nstead.Int hi
scase, notonlythe
accounti swr ong
(vehi cleinst eadofv ehicler epai rs)butal sothecl assofaccounti sdifferent.Vehicl
eaccounti sa
real account( asset )wher eas
vehi cler epai r saccounti sanomi nal account( expense) .
(i
v)Er rorofor iginalent ry
Thet ransact i
onwascor rect l
yr ecor dedaccor dingtothedoubl eentrysy st
em butwi ththewr ong
amount .Forexampl e,
pay mentoft elephoneexpensesi ncashofshs560wascr editedt ocashaccountanddebi tedt o
telephoneexpensesaccountbut
byshs600i nbot haccount s.
(v)Compl eter ev ersalofent r
ies
Foragi vent ransact i
on, theaccountt obedebi tedwascr editedandt heaccountt obecr edi
tedwas
debi ted.Forexampl e,
goodssol dt oNadi af orshs500wasdebi t
edt oRev enue( Sales)accountandcr edit
edt oNadi a‘
s
account ,bot hbyshs500.
(vi
)Compensat inger rors
Error sont hedebi tsi deoft hel edgerhav ebeensetof fbyer ror sonthecr editsideoftheledger.For
exampl e,v ehi cleaccount
(debi tbal ance)andcommi ssi onr eceivedaccount( creditbalance)wer ebot hunder st
atedby
shs200.
(vi
i)Er r
orofdupl ication
At ransact ionwasr ecor dedt wi cei nt heledger .Doubleent rywasobser vedi neachcase.

Explai
nf i
vetypesofthedocumentsthatmakesBooksofAccount s.
(i
)Invoi
ce–Thi sisadocumentsentbyt hesell
ertot hebuyerdemandingpay mentforgoods
suppli
ed.Itshowsdetail
sof
goodssol d/boughoncr edi
t/sour
cedocumentf orsale.
(i
i)DebitNote–Adocumentsentbyt hesel
lertothebuy ertocorr
ectundercharge.Usedwhenthe
i
nv oi
ceshowsal esser
amountt hanwhatisactuall
yowed/additi
onal i
nvoice/whenempt ycont
ainershavenotbeen
retur
ned( andhencetobe
charged).
(i
ii
)CreditNote–Adocumentsentbyt hesell
ertothebuy ertocorr
ectanov er
charge/Iti
sused

Nov
els,
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whengoodsar ereturnedto
thesel l
er/becauset heyaredefecti
ve/nott heonesor dered/theywer enotrequir
ed.
(i
v )Receipt–Thi sisadocumenti ssuedbythesel l
ert othebuy erwhenpay mentismadef orgoods
/ser vi
cesi ncash.
(v)Consi gnmentnot e–t osupporthirecarr
iageser vices/showst r
ansportcharges.
(vi)Bankdeposi tsli
ps–Ev i
denceofpay i
ngmoneyi nt obank/sour cedocumentf orcashreceipt
.
(vii
)Bankst atement–asummar y/det ai
l
soft r
ansact i
onbetweent radersandbank.
(vii
i)Stat
ementofaccount–Thi sisadocumentsentbyt hesellert
othebuy ershowingdetai
l
sof
transacti
onsf oronemont h
wi t
har unni ngbalanceshownwi theachentry/cl osing/openi ngbalance.
(i
x )Paymentv oucher–Adocumentusedt ov ali
datepay mentf orservi
ces/goodsr ender
ed.Itis
usedbyacashi erand
signedbyt heser vi
cepr ovi
der/pay ee/reci
pi ent/document i
nggoodsf orpettycashbook.
(x)Remi ttanceev idencenot e–Thi sisadocumentt hataccompani esachequei ssuedfor
set t
lementofadebt .Itpr
ovides
i
nf ormationont hepay ment.

Thef oll
owingt ransact i
onstookplaceinthebusinessofDar asi
l
eTrader
sinKi
sumuy
ear2013.
July1st:Start
edbusi nesswi thcapit
alincashKshs. 150,
000.
July2nd: Openingabankaccountanddeposi tedKshs.30,
000.
July3rd:Boughtbui ldingsincashKshs.60,000.
July4th:Borrowedal oanincashKshs. 20,
000.
July5th:Boughtst ationerybychequewor thKshs.6,000.
July6th:Repaidpar toft heloanbychequeKshs. 10,000.
Required:
(i
)Recor dtheabov et ransacti
onsintheirv
ariousledgeraccount
s.(
6mks)
(i
i
)Pr epareat r
ialbalance.(4mks)

On1stJanuar y2015, Ngunj i

rihadshs.15,
000i nhandandbankov erdr
aftofsh.25,
000.
Duringt hemont ht hef ol
lowingt r
ansacti
onst ookplace:
Januar y2:Cashsal esdirectlybankedsh40,360
―4; Boughtst ockofgoodsi ncashsh.2,
400
―6: Receivedachequeofsh. 97,
800from Karanjaafteral
lowinghim acashdiscountofSh.2,
200.
―9: PaidMung‘ athia,acr edit
orsh.65,
800bychequeaf terdeduct
ing6&cashdi scount.
―14; Paidsalar iessh.8,000i ncash.
―17: Mwat ela, adebt orset t
lehisaccountofsh.75,000bychequel ess10%cashdi scount
.
―24; Withdrawsh. 30,000f rom bankforoffi
ceuse.
―28: Boughtst ati
oner yincashsh. 10,
000.
―31; Withdrawsh. 7,000f rom bankforpri
vateuse.
Requi r
ed
Prepar ethethr eecol umncashbookdul ybalanced. (10mar ks)

THREECOLUMNCASHBOOK
DrCr
Disc. Disc.
L. Cash Bank Cash Bank
Dat
e Det
ail
s All Dat
e Det
ail
s L.
F Rec.
f Sh. Sh. Sh. Sh.
Sh. Sh.

Nov
els,
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1/1/2015 25,
00
1/1/201
4/1/2015 0
5
Bal
anc 15,
00 9/1/2015 Balance 65,
80
2/1/201
e 2,
20 0 40,
360 14/1/201 Purchases 0
5 2,
400
Sal
es 0 30,
00 97,
800 5 Mung‘athi
a 30,
00
6/1/201 B/f 8,
000
Karanja 7,
50 0 67,
800 24/1/201 Salari
es B/f 4,
200 0
5 C 10,
000
Mwat el 0 ___
__ ___
___ 5 Cash C __
___ 7,
000
17/1/20 b/ 24,
600
a __
__ 45,
00 205,
66 28/1/201 Stati
oneri
e C/d 4,
200 77,
86
15 d ___
___
Bank 9,
70 0 0 5 s 0
24/1/20 45,
000
Bal
anc 0 24,
60 77,
860 31/1/201 Drawings ___
__
15
e 0 5 Balance __
31/1/20
31/1/201 205,
6
15
5 60

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