Name………………………………………………… Admission Number…………………….

Stream ………………………
BUSINESS STUDIES Date……………………………………….
Paper 1
Mar 2024
2 hours.

LESSON STUDY END TERM 1 EXAMINATIONS.

FORM 3
PAPER 1
2 HOURS
Instructions to candidates

a) Write your name and admission number in the spaces provided above.
b) Sign and write the date of the examination in the spaces provided above.
c) Answer all the questions.
d) All answers should be written in the spaces provided in this question paper.
e) This paper consists of 8 printed pages.
f) Candidates should check the question paper to ascertain that all pages are printed as indicated and that no
questions are missing.
g) Candidates should answer the questions in English.
For Examiner’s Use only
Question 1 2 3 4 5 6 7 8 9 10 11 12 13

Marks

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

Marks

Total Score
1. The following are descriptions of features of office layout. Identify the type of office layout that
relates to the description in the spaces provided. (4 marks)
Description Office layout

(a) Centralized supervision of workers

(b) Private use of office machines.

(c) Staff are located in one place.

(d) Partitioning of rooms

2. Outline four characteristics of goods. (4 marks)

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3. List four sources of business idea. (4 marks)

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4. Highlight four features of perfect competition market. (4 marks)

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5. Give four measures that the government may take to create employment for the youth.

( 4marks)

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6. Identify the level of production in which the following workers belong. (4 marks)
Workers Level of production

(a) Maize farmer

(b) Teacher

(c) Carpenter

(d) Nurse
7. State four internal environment factors that may lead to the success of a business. (4 marks)

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8. Outline four channels of distribution that a local farmer may use to distribute her farm

produce locally. (4 marks)

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 9. Outline four circumstances under which a proforma invoice may be used. (4 marks)
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10. In the table below, indicate the document used for each of the following purposes. (4 marks)
Purpose document

(a) To reply to a specific letter of inquiry

(b) To alert the buyer that goods ordered are on the way

(c) Issued when empty containers were issued

(d) To contract for the transportation of goods

11. Give four advantages of warehousing to a trader. (4 marks)

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12.Outline four features of parastatals. (4 marks)

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13. State four considerations that a seller should take into account before giving credit to a customer
(4 marks)

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14. Give four features of economic resources. (4 marks)

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15. The following are some of the documents used in home trade. Cash sale receipt, invoice, statement
of account, debit note. Match each document with the appropriate description
provided in the table below. (4 marks)

Description Document

(a) Shows a summary of the transactions in a business for a

given period.
(b) Gives the total amount of money to be paid for goods
delivered on credit.

(c) Shows description of goods bought and total amount paid

(d) Shows a correction of an undercharge on the invoice.

 16.In the table given below, give the appropriate type of advertising which suits the

description. (4 marks)
Description Type of advertising

(a) Persuades the consumer to buy a product

(b) Promotes a particular brand of product

(c) Creates awareness about a product

(d) Promotes the name of the manufacturer

17. Indicate the principle of insurance indicated by the statements given below. (4 marks)

(a) There is a close relationship between causes of loss and actual risk insured

……………………………………………………………………………………………

(b) Compensation is paid up to the amount of loss suffered

……..……………………………………………………………………………………..

(c) The insurer takes over the residual of the property insured after compensation

………..…………………………………………………………………………………..

(d) A person can only insure such property whose destruction would result in financial loss to him

or her.

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14. Agrochemical company has been releasing toxic wastes into the lake. Outline four measures you can
take to stop the firm from such malpractice. (4 marks)

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19.Outline four demerits of using carts as a means of transport in towns. (4 marks)

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20. Highlight four measures that the government in Kenya has put in place to protect

consumers from exploitation by the businessmen. (4 marks)

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21. From the table below, identify if the change in the factors would lead to an increase in demand or
decrease in demand. (4 marks)

Change in factor Effect

(a) Increase in consumers income

(b) Increase in taxation

(c) Decrease in price of complementary

good

(d) Decrease in price of a substitute

commodity
 22. Highlight four benefits of localization of firms. (4 marks)

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23. Give four basic features of a market. (4 marks)

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24. Give four factors to consider in the choice of means of communication. (4 marks)

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25. Give four elements of transport. (4 marks)

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Name………………………………………………… Admission Number………………………. Stream
…………………………………….
BUSINESS STUDIES Date……………………………………….
Paper 1
MAR 2024
2 hours.

END TERM 1 EXAMINATIONS.

FORM 3
PAPER 1
2 HOURS
Instructions to candidates

h) Write your name and admission number in the spaces provided above.
i) Sign and write the date of the examination in the spaces provided above.
j) Answer all the questions.
k) All answers should be written in the spaces provided in this question paper.
l) This paper consists of 8 printed pages.
m) Candidates should check the question paper to ascertain that all pages are printed as indicated and that no
questions are missing.
n) Candidates should answer the questions in English.
For Examiner’s Use only
Question 1 2 3 4 5 6 7 8 9 10 11 12 13

Marks

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

Marks
 Total Score

1. The following are descriptions of features of office layout. Identify the type of office layout that
relates to the description in the spaces provided. (4 marks)
Description Office layout
(a) Centralized supervision of workers Open
(b) Private use of office machines. Enclosed
(c) Staff are located in one place. Open
(d) Partition of rooms Enclosed

2. Outline four characteristics of goods. (4 marks)

i. Are tangible
ii. Quality can be standardized
iii. Can be stored
iv. Can be separated from the provider / owner
v. Some are perishable / durable
vi. Goods are paid for ownership
3. List four sources of business idea. (4 marks)

i. Print Media e.g. News Paper / Journals / Magazine

ii. Electronic media e.g. televisions / computer
iii. Vocational training
iv. Hobbies / talents
v. Listening to what people say
vi. Unutilized waste materials
vii. Observing established entrepreneurs / experience / role models
viii. Research
ix. Shows and exhibitions
x. Spotting a market gap / niche
xi. Brainstorming
xii. Business seminars / workshops
4. Highlight four features of perfect competition market. (4 marks)

i. Large amount of buyers and sellers

 ii. Buyers and sellers have perfect knowledge of the market conditions
iii. No government interference in the market
iv. No transport cost are incurred.
v. Free entry and exit to firms
vi. Homogeneity of products vii. Perfect mobility of factors of production viii.
Uniformity of buyers and sellers
ix. Both buyers and sellers are price takers
x. No excess / shortage of supply or demand

5. Give four measures that the government may take to create employment for the youth.

(4 marks)

i. Giving loans to start a business

ii. Changing education system to equip youth with employment skills
iii. Partner with private sector to create employment
iv. Diversification of economic activities
v. Adopt labour intensive policies in production
vi. Increase government expenditure on initiatives like kazi kwa vijana
vii. Delocalization of industries in rural areas
viii. Exporting excess labour
6. Identify the level of production in which the following workers belong. (4 marks)
Workers Level of production

(a) Maize farmer Primary

(b) Teacher Tertiary

(c) Carpenter Secondary

(d) Nurse Tertiary

7. State four internal environment factors that may lead to the success of a business.

(4 marks)

i. Functional / good business structure

ii. Employment of qualified / skilled / experienced /adequate personnel
iii. Proper / proportionate allocation / availability of financial resources/ capital
iv. Adequate finances
v. Innovativeness / creativity / invention / research and development
vi. Positive business culture
vii. Good objectives / setting good objectives
viii. Motivated /supportive owners
ix. Appropriate technology
 8. Outline four channels of distribution that a local farmer may use to distribute her farm

produce locally. (4 marks)

(start with local farmer)

9. Outline four circumstances under which a proforma invoice may be used. (4 marks)
i if the seller does not want to give credit to the buyer
ii if the seller want to sell goods through an agent
iii in order to get clearance for imported goods
iv to show the buyer how much he would pay if goods are sold to him
v as a polite request for payment before goods are sent to the buyer

10. In the table below, indicate the document used for each of the following purposes. (4 marks)
Purpose document

(a) To reply to a specific letter of inquiry Quotation

(b) To alert the buyer that goods ordered are on the way Advice note

(c) Issued when empty containers have been returned Credit note

(d) To contract for the transportation of goods Consignment note

11. Give four advantages of warehousing to a trader. (4 marks)

i Ensure continuity of supply / steady supply of goods
ii It facilitates preparation of goods for sale
iii Creates time utility
iv Ensure stability of prices of commodities
v May add value to some goods
vi Enables trader to look for market / sell goods
vii Ensure seasonally demanded goods are stored
viii Ensures safety of goods
12. Outline four features of parastatals. (4 marks)
i. Provide essential services
ii. Is managed by government appointees
iii. Has limited liability
iv. Not profit motivated / service oriented
v. Formed for specific functions
vi. Attached to a government ministry
vii. Any surplus earned is surrendered to the government
viii. Is formed by an act of parliament
ix. Its mainly funded by the government
13. State four considerations that a seller should take into account before giving credit to a customer
(4 marks)
i. Reliability of customer
ii. Whether customer has resources to pay the debt
iii. Prevailing economic conditions
iv. The credit period
v. Amount of stock available

14. Give four features of economic resources. (4 marks)

i. They are scarce / limited

ii. Can be combined / complementary
iii. Are unevenly distributed iv. They have utility
v. They have monetary value
vi. They are transferrable / can change ownership
vii. Are capable of alternative uses.
15. The following are some of the documents used in home trade. Cash sale receipt, invoice, statement
of account, debit note. Match each document with the appropriate description
provided in the table below. (4 marks)

Description Document

(a) Shows a summary of the transactions in a business for a Statement of account

given period.

(b) Gives the total amount of money to be paid for goods Invoice
delivered on credit.

(c) Shows description of goods bought and total amount Cash sale receipt
paid

(d) Shows a correction of an undercharge on the invoice. Debit note

16. In the table given below, give the appropriate type of advertising which suits the
 description. (4 marks)
Description Type of advertising

(a) Persuades the consumer to buy a product Persuasive / competitive

(b) Promotes a particular brand of product Product

(c) Creates awareness about a product Informative

(d) Promotes the name of the manufacturer Institutional

17. Indicate the principle of insurance indicated by the statements given below. (4 marks)

(e) There is a close relationship between causes of loss and actual risk insured

Proximate cause

(f) Compensation is paid up to the amount of loss suffered Indemnity

(g) The insurer takes over the residual of the property insured after compensation

Subrogation

(h) A person can only insure such property whose destruction would result in financial loss to him

or her. Insurable interest

18. Agrochemical company has been releasing toxic wastes into the lake. Outline four measures you can
take to stop the firm from such malpractice. (4 marks)
i. Boycotting the products from the company
ii. Reporting to relevant authorities e.g. Nema
iii. Reporting to police
iv. Educating community on their rights
v. Carrying out protests against the firms vi. Approaching the firm to stop the
malpractice
19. Outline four demerits of using carts as a means of transport in towns. (4 marks)

i. Prone to delays
ii. Movement of carts may be affected by extreme / adverse / poor weather
iii. Unsuitable to transport goods over long distances
iv. Lack of security of goods
v. Minimal safety to goods transported
vi. Cannot carry heavy / bulky / large volumes of goods
vii. May cause obstruction to other road users
viii. May cause road accidents
ix. Unsuitable for use at night
20. Highlight four measures that the government in Kenya has put in place to protect
consumers from exploitation by the businessmen. (4 marks)

i. Setting standards / KEBS

ii. Weight and measures act / department
iii. Food, drugs and chemical substance act
iv. Public health act
v. Rent restrictions / tribunal act
vi. Licensing of firms /trade licencing act
vii. Trade description act
viii. Hire purchase act ix. Sale of goods act
x. Price control act
xi. Consumer protection act
xii. Anti-counterfeit act
xiii. Transport licensing act xiv. Consumer education.
21. From the table below, identify if the change in the factors would lead to an increase in demand or
decrease in demand. (4 marks)

Change in factor Effect

(a) Increase in consumers income Increase
(b) Increase in taxation Reduction
(c) Decrease in price of complementary Increase
good
(d) Decrease in price of a substitute Reduction
commodity

22. Highlight four benefits of localization of firms. (4 marks)

i Growth of pool of labour

ii Enhances interdependency among firms
iii Growth of support industry
iv Creates employment
v Improved infrastructure
vi Large market for finished product
vii Joint research is possible
viii Waste disposal is easier
ix Market for locally produced goods / raw materials
x Growth of social amenities
xi Enhances security
23. Give four basic features of a market. (4 marks)
i Availability of buyers
ii Availability of sellers
iii Availability of goods / services
iv Availability of medium of exchange
v Platform for conducting transactions / place /situation of interaction
vi Freedom to buy and sell

24. Give four factors to consider in the choice of means of communication. (4 marks)

i. Confidentiality / secrecy of message

ii. Accuracy /precision of message
iii. Urgency / speed
iv. Need for feedback
v. Cost
vi. Nature of message
vii.Need for future response viii. Reliability / certainty of the message ix. Availability of the
means
x. Intended / desired impression
xi. Government policy
xii. Business policy
xiii. Type / nature of audience
xiv. Size of recipients xv. Distance of recipients
xvi. Security of message
xvii. Safety of message
25. Give four elements of transport. (4 marks)
i Methods of propulsion
ii Way
iii Terminal
iv Unit of carriage