TRIAL 1 EXAMINATION 2025

NAME……………………………………………………………………………………….

SIGN………………………..

INDEX NO……………………………………………. ADM NO……………………

565/1

BUSINESS STUDIES
PAPER 1
TIME: 2 HOURS
INSTRUCTIONS OF CANDIDATES
a) Write your name, school and index number in the spaces provided above.
b) Write the date of examination and sign in the spaces provided above.
c) Answer ALL the questions.
d) ALL answers must be written in the spaces provided in this booklet.
e) Do not remove any pages from this booklet.

FOR OFFICIAL USE ONLY

QUESTIONS 1 2 3 4 5 6 7 8 9 10 11 12 13
MARKS

QUESTIONS 14 15 16 17 18 19 20 21 22 23 24 25
MARKS

GRAND
TOTAL

KAPSABET BOYS HIGH SCHOOL Prefer Calling Amobi Group Examiners @ 0743 333 000 or 0706 851 439 For Marking Schemes
QUESTIONS
1. State four external factors that may positively influence the operations of a business (4mks)
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2. Outline four circumstances under which producers may prefer to sell goods directly to the
consumers. (4mks)
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3. Name four ways through which consumers can be cheated in their dealings with traders (4mks)
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4. The following information relates to Tamu Traders for the year ended 31 st Dec. 2011
Sh
Fixed Assets 5,000,000
Current Assets 650,000
Net profit 300,000
Current liabilities 650,000
Sales 2,000,000
Closing stock 100,000
Opening stock 200,000
Gross profit margin 20%

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Calculate; (4mks)
a) Current ratio

b) Gross profit mark up

c) Rate of stock turn over

d) Capital employed.

5. Outline four circumstances under which a credit note may be issued. (4mks)
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6. The equation given below relate to quantity demanded and the quantity supplied at equilibrium
price.
Qde = 4P + 50
Qse = 8P + 30
Determine the equilibrium price and quantity (4mks)

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7. Kendi started a shop dealing in ladies clothing but failed after two years. Outline four factors that
many have caused this failure (4mks)
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8. Name the type of warehouse described below

Statement Type of warehouse
a) Goods can be stored before payment of custom duties
b) Individuals can hire storage facilities
c) Goods are stored from several manufacturers
d) Specialised goods are stored

9. State four ways in which the nature of goods would influence the choice of transport (4mks)
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10. Outline any four circumstances under which human wants may be fully satisfied (4mks)
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11. Highlight four ways in which business studies is useful to a community (4mks)
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12. State the books of original entry in which the following documents are used. (4mks)
a) Incoming invoice
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b) Incoming receipt
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c) Outgoing credit note
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d) Outgoing invoice
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13. State the type of ledger into which the following accounts would be found. (4mks)
Account Relevant ledger
a) Capital ………………………………………………………..
b) Mueni (debtor) ………………………………………………………..
c) Kariuki (supplier) ……………………………………………………….
d) Bank ………………………………………………………

14. Outline any four advantages of operating in an open office layout. (4mks)
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15. George operates a petrol station in Nakuru. He insured his stock worth Ksh 2.4 million for ksh 2
million. Later in the year stock worth ksh 600,000 was destroyed by fire. Calculate the amount he
was compensated and give a reason. (4mks)

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16. State four characteristics of money (4mks)
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17. Name the rewards for the following factors of production (4mks)

Factor of production Reward

a) Employee

b) Machine

c) Minerals

d) Farmer

18. Outline four challenges that may be experienced by a country whose population is made up of a
large proportion of young people (4mks)
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19. Highlight any four characteristics of perfect competition type of market structure (4mks)
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KAPSABET BOYS HIGH SCHOOL Prefer Calling Amobi Group Examiners @ 0743 333 000 or 0706 851 439 For Marking Schemes
20. State the line of communication involved in each of the following. (4mks)
a) The manager of ABC company Ltd talking to the manager of XYZ company Ltd
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b) A secretary asking for time off from her boss
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c) The production manager giving instructions to the secretary of the sales manager
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d) The store keeper giving explanations to the chief accountant
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21. State the effect of each of the following transactions on the balance sheet totals by writing increase
or decrease or no effect in each case. (4mks)
Transaction Effect
a) Bought machinery on credit
b) Withdrew cash from the bus for personal use
c) Purchased stock in cash
d) Paid outstanding loan by cheque

22. Outline the assumptions that the circular flow of income in a closed economy work under (4mks)
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23. The following balances were extracted from the books of Wanji traders for the year ended 30 th June
2005. (4mks)
Sh
Debtor 120,000
Creditor 60,000
Machinery 450,000
Cash in hand 70,000
Cash at bank 180,000
5 years bank loan 270,000
Stock 60,000

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Prepare a balance sheet of Wanji traders as at 30th June 2005.

24. Outline four reasons for maintaining a cash book in a business enterprise. (4mks)
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25. Highlight four factors that should be considered when choosing a method of promoting a product.
(4mks)
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KAPSABET BOYS HIGH SCHOOL Prefer Calling Amobi Group Examiners @ 0743 333 000 or 0706 851 439 For Marking Schemes
TRIAL 1 EXAMINATION 2025

BUSINESS STUDIES
565/2
PAPER 2
TIME: 2½ HOURS
NAME……………………………………………………………………………………….
SIGN………………………..

INDEX NO……………………………………………. ADM NO……………………

565/2
BUSINESS STUDIES
PAPER 2
TIME: 2½ HOURS

INSTRUCTIONS TO CANDIDATES
1. Write your name, school and index number in the spaces provided above.
2. Write the date of examination and sign in the spaces provided above.
3. This paper consists of 6 questions.
4. Answer any five questions.
FOREXAMINER’SUSEONLY
QUESTION MAXIMUM SCORE CANDIDATE’S SCORE
1 20
2 20
3 20
4 20
5 20
6 20
Total score

KAPSABET BOYS HIGH SCHOOL Prefer Calling Amobi Group Examiners @ 0743 333 000 or 0706 851 439 For Marking Schemes
QUESTIONS
1. a) Outline any five differences between private limited liability company and public limited liability
company. (10mks)
b) Describe five accounting documents used in home trade. (10mks)

2. a) The table below shows the demand and supply schedules for product A in a week.
Price(sh) Quantity demanded Quantity supplied
(‘000’ tonnes) (‘000’ tonnes)
35 5 80
30 10 65
25 20 55
20 25 40
15 30 35
10 40 20
5 55 5
Use the information in the table above, draw the demand and supply curve showing the market
equilibrium for the produce. (10mk)
b) Explain five benefits that a firm may enjoy by preparing a business plan. (10mks)

3. a) Traders are required to observe ethical practices when carrying out product promotion. Explain
five reasons for observing such ethical practices (10mks)
b) Explain five benefits that may be realized by a country as a result of government policy to relocate
Industries to rural areas. (10mks)
4. a) Outline any five factors to consider while locating a ware house. (10mks)
b) On 1stSeptember 2015, Miriam had sh 55,000 in hand and sh. 250,000 in bank. During the month
the following transactions took place.
Sep 2: Cash sales banked sh 35,260
Sep 3: Bought ribbons in cash sh 4,500
Sep 8: Paid Wangila, a creditor sh 94,000 by cheque in full settlement of his account after deduction
6% cash discount.
Sep 12: Received a cheque for sh 58,800 from Wetu after allowing her cash discount of sh 1,200
Sep 15: Paid salaries of sh 34,000 in cash
Sep 25: Withdrew sh 50,000 from bank for office use.
Sep 28: Anyango a debtor paid her account of sh 75,000 by cheque less 10% cash
discount.

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Sept 30: Deposited all the cash into the bank except sh 13,700
Prepare a three column cash book and balance it off. (10mks)

5. a) Explain any five uses of National Income Statistics (10mks)

b) The following trial balance related to Tai Traders as at 31st December 2022
TAI TRADERS
TRIAL BALANCE
AS AT 31ST DECEMBER 2022
Details Dr (Ksh) Cr(Ksh)
Stock 10,000
Bank 3,500
Purchases 15,000
Sales 28,000
Returns 800 1,100
Rent 580
Insurance 950
Creditor 450
Carriage in 1,200
Discounts 300 1,620
31,750 31,750
Additional information
- Closing stock was valued at Ksh 2,500
- Carriage out was Ksh 1,200
Required: Prepare trading profit and loss account. (10mks

6. a) Explain any five reasons why one would prefer to transport goods on road than rail. (10mks)
b) On 1st January 2022 Makena started a business with sh 120,000 cash and sh 300,000 in the bank.
The following transactions were done in the month of January 2022.
January 3: Bought goods worth sh 60,000 by cheque
January 10: Sold goods worth sh 35,000 cash
January 14: Bought goods worth sh 90,000 cash from Odero
January 18: Paid wages sh 18,000 by cash
January 20: Withdrew sh 40,000 from bank for office use.
Required;
Record the above transactions in the relevant ledger account, balance them off and extract a trial
balance. (10mks)

KAPSABET BOYS HIGH SCHOOL Prefer Calling Amobi Group Examiners @ 0743 333 000 or 0706 851 439 For Marking Schemes