Name…………………………………………………………………. Index No…………………/…….

School………………………………………………………… Candidate’s Signature………………………

565/1
BUSINESS STUDIES
PAPER 1
TIME: 2 HOURS

GEKLINK JOINT EVALUATION EXAMINATION

565/1
BUSINESS STUDIES
PAPER 1

INSTRUCTIONS TO CANDIDATES:

 Write your name, class, index number, school and date in the spaces provided above.
 Answer ALL the questions in the spaces provided.
 All questions MUST be answered in English.
FOR EXAMINERS USE ONLY
Question 1 2 3 4 5 6 7 8 9 10 11 12 13
Score

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

TOTAL MARKS

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1. State four reasons that cause people to start a business (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
2. Outline four characteristics of basic wants (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
3. List four clauses contained in the memorandum of association. (4mks)
a) …………………………………………………………………………………………..
b) …………………………………………………………………………………………..
c) …………………………………………………………………………………………..
d) …………………………………………………………………………………………..
4. Outline four factors that an entrepreneur should consider when evaluating a business
idea
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………

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5. State four advantages of using a photocopying machine to reproduce a document in an
office. (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
6. State four advantages of using credit cards to buy goods and services (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
7. State four disadvantages of written communication. (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
8. State four ways in which consumers may protect themselves against exploitation from
dishonest traders (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………

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 c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
9. State four ways of transferring deposits through commercial banks (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
10. Outline four circumstances that would make it ideal to use pipeline to transport oil(4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..………………………………………………………………………
11. Name four incentives that the government can use to attract new industries in rural areas
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………

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12. Highlight four ways in which transport promotes growth of trade (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
13. State four differences between a public warehouse and private warehouse (4mks)
Private warehouse Public warehouse

14. State four factors an insurer would consider when determining premiums before insuring
a person. (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
d) …………………………………………………………………………………………..
15. For each of the following cases, name the motive of holding money.
Case Motive

a. To meet daily meals for the family

b. To meet unforeseen circumstances

c. To take advantage of anticipated future fall in prices

d. To pay daily transport to work.

16. Outline four disadvantages of using posters as advertisement media (4mks)

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 a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
17. State three disadvantages of monopoly (3mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
18. The following balances were extracted from the books of Maneno traders for the year
ended 31st December, 2018
shs
Sales 500,000
Purchases 320,000
Stock (1.1.18) 150,000
Stock (31.12.18) 100,000
Debtors 80,000
Creditors 90,000
Carriage inwards 10,000

Calculate:
a. Margin (2mks)

b. Current ratio (1mk)

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 c. Rate of stock turnover (2mks)

19. The following balances were extracted from the books of Boma Traders for the year
ended 31st December, 2017.
Shs.
Sales 400,000
Purchases 300,000
Capital 420,000
Motor van 250,000
Debtors 70,000
Creditors 50,000
Furniture 70,000
Discount allowed 80,000
Return inwards 100,000
Prepare a trial balance for the year ended 31st December 2017. (4mks)

20. The diagram below shows a demand curve for a firm operating in a given type of market
structure

7
 Price D

D
Quantity
i. State the name of such demand curve (1mk)
…………………………………………………………………………………………
………...………………………………………………………………………………
ii. Indicate on the diagram the equilibrium price and quantity for the firm (2mks)
iii. State the significance of the point labeled X (1mk)
…………………………………………………………………………………………
………...………………………………………………………………………………
21. List four characteristics of money (4mks)
a) …………………………………………………………………………………………
………...………………………………………………………………………………
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
22. State the kind of utility created under the following situations. (4mks).
(a) Processing sugarcane to sugar ………………………………………………………….

(b) Buying cereals from the market ………………………………………………………..

(c) Keeping umbrellas for the rainy season ………………………………………………..

(d) Going abroad for further studies ……………………………………………………….

23. Highlight four functions of Non-Banking financial institutions. (4mks)

a) ………………………………………………………………………………………….
………...………………………………………………………………………………...
b) …………………………………………………………………………………………
………...………………………………………………………………………………

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 c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..……………………………………………………………………
24. State four importance of a balance sheet. (4mks)
a) ………………………………………………………………………………………….
………...………………………………………………………………………………...
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………..
.………...……..…………………………………………………………………………
25. Highlight four benefits Kenya is likely to get from exploitation of oil discovered in
Turkana area. (4mks)
a) ………………………………………………………………………………………….
………...………………………………………………………………………………...
b) …………………………………………………………………………………………
………...………………………………………………………………………………
c) …………………………………………………………………………………………
………...….……………………………………………………………………………..
d) …………………………………………………………………………………………
…………………………………………………………………………………………..