ZERAKI ACHIEVERS 11.

0 EXAMINATIONS 2023

565/1 FORM 1 BUSINESS STUDIES PAPER 1

FORM ONE MARKING SCHEME

1. State four benefits of learning business studies to a Kenyan student.

a) To relate knowledge, skills, and attitudes to day to day.
b) Skills necessary to start a business.
c) Appreciate role of business in provision of goods and services.
d) Appreciate need for good business practices.
e) Self-discipline and positive attitude towards work.
f) Understand the role of government in business activities.
g) Understand the role of communication and information technology.
h) Develop positive attitude towards the environment.

2. Highlight four measures a business may make to ensure that its environment is
conducive to its business activities.

a) Ensuring the business operates in surrounding that are clean and attractive to customers.
b) Ensuring that legal requirements and conditions have been fulfilled i.e., relevant permits and licenses
have been obtained.

c) That all government taxes are paid promptly

d) Suppliers to the business paid promptly for their services.
e) Ensuring the goods and services priced in relation to their quality.

3. State four factors to consider when evaluating a viable business opportunity.

a. Potential profits
b. Availability of market
c. Availability of raw materials
d. Amount of capital required
e. Level of competition
f. Security
g. Government policy
h. Level of development of infrastructure.
i. Future growth
j. Acceptance by the community
k. Cost of capital
l. Ability to manage
 4. Identify the documents that each of the following descriptions refer to.
Description Document

i)Used to inform buyer that seller has Acknowledgements note

received the order

ii) Used to ask about the availability of Letter of inquiry

goods

iii) Usedto organizefor transportation Consignment notes

of goods between seller and buyer

iv) Used to show goods sold on credit Invoice

5. Characteristics of services
a) They are intangible and invisible as they are not in material form.
b) They can’t be stored for future use-perishable.
c) Quality can’t be standardized.
d) They are inseparable from the provider.

6. State reward for each factor of production. (4marks)

a) Capital -interest
b) Land-rent /rates/royalties/lease fees
c) Entrepreneurship -profit
d) Labour-wages/salaries /professional fees/commission

7. Identify four component of business studies

(a) Economic
(b) Accounting
(c) Commerce
(d) Entrepreneurship
(e) Office practice

8. Four sources of business idea.(4mks)

(a) Magazines
(b) Television
(c) Shows and exhibition
(d) Career training
(e) Hobbies
(f) What people say
(g) Surveys
(h) Market gaps
(i) Newspapers

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 9. State the documents used for the following functions 4mks
(a) To inform a buyer that his or her account has been reduced by certain amount----------------credit
note
(b) To require a supplier to provide a particular service to a customer--------------local service order
(c) To determine/ascertain the credit worthiness of customer------------------ credit status inquiry
(d) To show that transport has been hired to deliver specified good to a particular buyer--------
consignment note

10. Reasons why cash payment would be preferred to cheque payment.

(a) cash is a legal tender but cheque is not.
(b) where the debt to be paid is a small amount
(c) one need not have a bank account
(d) personal cheques can easily be dishonored
(e) bank charges are incurred when cashing a cheque.
(f) takes longer to obtain cash on a cheque/process is longer/takes time.

11. Difficulties faced in satisfaction of human wants. (4 marks)

a) unlimited in number/too many.
b) they are insatiable.
c) they are complimentary.
d) vary in urgency and intensity.
e) lack of resources.

12. Factors under economic environment that positively affects the business.
a) Decrease in tax
b) Increase in consumer's disposable income
c) Decrease in prices of goods and services.
d) Decrease in price of complimentary goods.
13. Measures that a firm should take to improve the performance of its labour force.
a) Better renumeration
b) Better equipments for working
c) Offer promotion for hard working person
d) Training
e) Free holiday
f) Good working environment

14. State four responsibilities of a business to its customers

a) Respond to their complaints
b) Proper labelling and packaging
c) Avoid misleading advertisement
d) Right quantity
e) Fair pricing
f) Offering safe products
g) Offering advices.
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 15. Reasons why businesses exist
a) To provide goods and services
b) To create employment
c) To earn profit
d) As an outlet of new innovation
e) To be as own boss
f) To utilize extra resources
g) To offer special services
h) To utilize spare time

16. Importance of entrepreneurship in the society.

a) Creation of employment
b) Formation of capital
c) Raising standards of living
d) Encourages the use of local resources
e) Improving infrastructure
f) Savings on imports
g) Reducing foreign dominance of the economy
h) Promotion of technology/promotion of innovation, research and development
i) Promotion of entrepreneurial culture/helps in the creation of role models
j) It contributes to government revenue
k) It promotes economic growth
l) It may promote self-actualization and esteem

17. Gaps in the market that give rise to business opportunity.

a) Unavailability of products-This is where goods and services needed by the consumers

are not available at all in the market.
b) Poor quality products-A business opportunity exists if one offers better quality goods
and services than those of the existing businesses.
c) Insufficient quantities-This is where the goods supplied are not enough to meet the
demand/need of the consumers.
d) Unaffordable prices-A business opportunity exists where one would charge affordable
prices.
e) Poor services-A business opportunity exists where customers are not served well.

18. State the various reprographic techniques that can be carried out in an office
a) Carbon copying
b) Stencil duplication
c) Photocopying
d) Spirit duplicating
e) Ink duplicating

19. Outline the factors that have to be taken into consideration when deciding on a type of
office layout to use
a) The cost of construction and maintenance
b) The number of staff to be accommodated in the office
c) The climatic condition of the area
d) Government directive if any
e) The nature of work to be carried out in that particular office
f) The nature and rank of staff to be accommodated in that particular office
g) The floor space available for the office
h) The need to maintain a good work flow among the workers

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 20. State the best type of machine one would use to perform the following tasks
Functions Type of machine

(a) To create postage impressions on envelopes Franking machine

(b) To fold documents put them in envelope and seal them Composite machine

(c) To destroy sensitive but unwanted documents Paper shredder

(d) To run 300 copies of an exam for students in a school Printing machine

21. E-Commerce is a recent trend in business. Outline the advantages of using this method in
carrying out business activities. (4 marks)

a) One can have a wide variety of goods and services from all over the world
b) It reduces the cost of travelling to the market or in search of product
c) It is fast as deals can be made within a short period of time
d) A seller can advertise goods to many consumers over a wide area
e) Paper work and the many documents used on other trade are removed or reduced as selling
and buying is on-line
f) A lot of information about the market can be accessed on the internet

22. Disadvantages of itinerant Traders

a) The traders get tired because of moving from one place to another while carrying goods.
b) The business is affected by bad weather conditions
c) The traders sell a limited range of goods
d) It is difficult to transport goods from one place to another.
e) Do not offer guarantee, in case items are to be found defective
f) They are constantly in conflict with the local government.

23. Differences/Distinction between a tied shop and single shop

Single shop Tied shop

-Owner is free to stock whatever he/she wishes -Dealership can be withdrawn if operators stock
competing products

-Owned by individual or a group of people -The owner is normally the manufacturer

-Sells products from different manufacturers -Sells products from a single manufacturer

-Design of shop according to owners wish -Shops usually have the same design

-Prices of goods determined by shop owner or -Prices of goods set by the manufacturer
different manufactures
-Operators not trained by manufacturers -Operators are usually trained by manufacturer

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 24. Reasons for issuing a credit note to a buyer.
a) Arithmetical errors like wrong addition
b) Price overcharges
c) Inclusion of wrong or unordered items in the invoice
d) Failure to deduct the allowable discounts
e) Return of goods (damaged goods)
f) Failure to note the return by the buyer of packing cases or containers used to deliver goods to
him/her
g) Use of wrong price list.

25. Similarities between a Bill of Exchange and a promissory note:

i) Both act as evidence of the acknowledgement of a debt
ii) Both may be discounted or endorsed before maturity
iii) Both are negotiable i.e. can be transferred from one person to another
iv) Both are legally binding
v) Both allow for adequate time within which to organize for the payment of the value of the bill or
note.

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