Download SUBA- MBITA JOINT 565/2 BUSINESS STUDIES PAPER 2

SUBA- MBITA JOINT
565/2
BUSINESS STUDIES
PAPER 2
MARKING SCHEME
1.
2.
a) Discuss five factors that influence choice of product promotion.
- Cost of using the medium
- Literacy levels of the target group
- Geographical coverage of the medium
- Quality of advertisement
- Appeal of the medium to the target group
- Accessibility of the medium by the target group
- Urgency of the information to be passed.
5x2=10mks
b) Explain any FIVE use of National income statistics.
- To provide information on the relative size of the various sections of the
economy and their contribution.
- To provide a breakdown on consumer expenditure, govt. expenditure, levels of
instrument and total tax’s paid to the government.
- To provide information on the performance of the economy over a period of time.
- A measure of the standard of living of the people in a country.
- To provide information on the types of factor incomes within the economy.
- To determine the level of economic development.
-To address income disparities.
- To aid government in planning.
5x2=10mks
a) Explain FIVE causes of balance of payment disequilibrium.
- Fail in volume of exports
- Deterioration in the country’s terms of trade.
- Increase in the volume of imports.
- Restriction by trading partners.
- Less capital inflow compared to outflow.
- Over-valuation of domestic currency.
- Devaluation of currency by a trading partner.
- Difference in the price of imports and exports.
- Unfavourable terms of trade.
- Natural calamities e.g drought.
- Oversetiance on foreign borrowing.
- An economic order favouring developed countries.
5x2=10mks
©2015 SUBA – MBITA Sub County Academic Committee
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565/2 Business Studies Marking Scheme
b) The following information was extracted from the final accounts of Suba traders on 31st sept
2012.
Sh.
Sales
150,000
Purchase
65,000
Stock(2/9/2011)
18,000
Fixed assets
100,000
Current assets
45,000
Current Liability
37,000
Total expense
10,000
st
Stock (31 sept 2012)
12,500
Calculate the following financial ratio;
i) Margin
Margin = gross profit x 100
Net sales
Gross profit = sales – cost of goods sold
= sh. 150,000 – sh(18,000 + 65,000 – 12,5000)
= sh.150,000 – sh. 70,500
= sh. 79,500
Sh 79500
x100
Margin =
sh150000
= 53%
ii) Mark up
Mark up = gross profit
x 100
Cost of goods sold
sh 79500
x100
=
sh 70500
= 112.77%
= 113%
iii) Return on capital
Net profit x 100
Capital employed
Net profit = gross – total expenses
= sh. 79,500 – sh. 10,000
= sh. 69,500
iv) Working capital ratio
v) Rate of stock turn over.
©2015 SUBA – MBITA Sub County Academic Committee
2
565/2 Business Studies Marking Scheme
3.
a) Explain FIVE ways in which commercial banks facilitate transferring of money from one place
to another.
- Standing order
- Through credit transfer
- Bank draft or bankers cheque
- Credit cards
- Travellers cheque
- Telegraphic transfer
- Mobile banking
b)Explain FIVE feature of oligopoly market structure
- There are a few large sellers in the market.
- The firms produce homogeneous or similar products
- There is interdependence among the firms
- There is rigidity of price
4.
a) Explain five problems that may interfere with the effectiveness of face to face
communication.
- If these is noise in the environment
- Negative attitude between the two parties
- Language barrier between the two parties
- Lack of concentration by the parties
- Age difference between the parties
- Physical distance between the parties
- Poor timing of the message
Any 5x2=10mks
b) The cash book of angaine wholesalers showed a cash balance of Sh. 10,000 and bank balance
of Shs. 5,000 on September 1, 2013. The following transactions took place during that month.
6th Bought goods Sh. 2,000 in cash
8th Paid Auma Sh 10,000 by cheque less 10% cash discount
12th Sold goods Sh.5,000 by cheque
15th Deposited Sh 2,000 cash into business bank account.
20th Withdraw Sh 1,000 from the bank account for personal use.
26th Received cash Sh.4,500 from Keino after deducting 10% discount
30th Paid usage Sh. 1,000 by cheque.
Required;
Prepare a three column cash book to record the above transactions and balance it
completely.
Date
Details F Disc
Cash
Bank
Date Details
F Disc
allow
Rec
st
th
1 sep
Bal b/d
10000 5000 6
Purchase
12th sep Sales
5000 8th
Auma
1000
th
th
15 sep Cash
c
2000 15
Bank
c
26th sep Keino
250 4500
20th Drawing
30th Wages
30th Bal b/d
250 14500 12000
1000
1st oct
Bal b/d
10500
Cash
Bank
2000
9000
2000
10500
14500
1000
1000
1000
12000
1000
©2015 SUBA – MBITA Sub County Academic Committee
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565/2 Business Studies Marking Scheme
5.
a) Explain FIVE principle of public expenditure.
- Maximum social benefit
- Elasticity
- Economy
- Sanation
- productivity
- Equity
- Surplus
b) Explain FIVE feature of chain stores.
- They are owned by the same firm or organization
- They sell the same line of goods
- They have standard prices for all their goods in all the branches
- The shops have a similar designed and operate under one name
- They are managed from a central place
6.
a)Explain Five circumstances under which a public limited company would be dissolved.
- Failure to commence business within one year after registration
- Insolvency or bankrupts where the company cannot pay its debts
- Through a decision by the shareholders to voluntarily wind up
- When there is amalgamation
- When membership fall below the minimum that is required by law
- Deregistration by the registrar of companies due to failure to comply with the law
- Accomplishment of purchase or expiry of period of operation
b) Explain FIVE causes of unemployment.
- High population growth rate
- Low demand for goods and services
- Minimum-wage laws
- Shortage of capital
- Inappropriate education system
- Inappropriate choice of production methods
- Employment time lags
©2015 SUBA – MBITA Sub County Academic Committee
4
565/2 Business Studies Marking Scheme