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565/2 -BUSINESS STUDIES -Paper 2

June - 2024
Time: 2 hrs 30min

AIC SCHOOLS JOINT MOCK EXAMINATION – 2024

Kenya Certificate of Secondary Education.
INSTRUCTIONS TO CANDIDATES:

(i) This paper consists of six questions

(ii) Answer any five questions
(iii) All questions carry equal marks
(iv) Candidates should check the question paper to ascertain all pages are
printed as indicated and that no questions are missing

For Examiner’s Use Only

Question Maximum Score Candidate’s Score

20

20

20

20

20

Total score 100

1
1. a.) Every business aims to succeed in today’s dynamic and competitive
market place. Explain five causes of business success. (10 marks)

b.) Explain five problems encountered when measuring National income

using the output approach. (10 marks)

2. a.) Explain five advantages of transporting oil products by use of a

pipeline. (10 marks)

b.) The following information was extracted from the books of Tembo
Traders for the year ended 31 December, 2014

Tembo traders
Trail balance
Dr Cr
Particulars Shs shs
Land and building 50,000
Capital 94,000
Plant and machinery 20,000
Motor vehicles 30,000
10 years bank loans 20,000
6 years ICDC loan 10,000
Stock 10,000
Debtors 6,000
Creditors 7,000
Rent owing 1,000
Cash at bank 10,000
Cash in hand 2,000
Drawings 4,000
132,000 132,000
Required:
(i) Prepare a balance sheet for the year ended 31st December 2014.
(7 marks)
(ii) determine
(a) working capital. (1 mark)
(b) Capital employed. (1 mark)
(c) Borrowed capital (1 mark)

2
3. a.) Outline five differences between a private limited company and a public
corporation. (10 marks)

b.) Explain five functions of public finance. (10 marks)

4. a.) Explain five trends in office management. (10 marks)

b.) Slice Traders owns a metal fabrication business. The following balances
were extracted from the ledgers of the business for the year ended 30 th
April 2019.

Carriage inwards 27,900

Carriage outwards 29,400
Purchases 60,000
Sales 120,000
Stock (30th April 2019) 26,500
Sales Returns 18,500
Stock (31st March 2018) 35,600
Purchases Returns 4,500
Rent 26,000
Discount received 6,800
Salaries 14,400
Discount allowed 36,900
Electricity 32,400

Required:
Prepare trading, profit and loss a/c for the year ended 30 th April 2019.
(10
marks)

3
5. a.) Discuss five features that differentiate commercial banks from non- bank
financial institutions. (10 marks)

b.) Explain five circumstances under which producers may sell goods
directly to the consumers. (10 marks)

6. a.) With a well labelled diagram, explain the effect of increase in demand on
equilibrium price and quantity. (10 marks)

b.) Explain five measures that can be taken to curb the problem of
unemployment in Kenya. (10marks)