NAME…………………………………………………………………INDEX NO………………………

SCHOOL…………………………………………………………… CANDIDATE’S SIGN………….

DATE…………………………….

565/1
BUSINESS STUDIES
PAPER 1
JULY, 2023 TIME: 2
HOURS

NJARAKU JOINT EXAMINATION

Kenya Certificate of Secondary Education (K.C.S.E)

565/1
BUSINESS STUDIES
PAPER 1
JULYUST, 2023
TIME: 2 HOURS

INSTRUCTIONS TO CANDIDATES

a) Write your name and index number in the spaces provided.

b) This paper consists of 25 questions.
c) Answer all questions in the spaces provided.
d) This paper consists of 12 printed pages.
e) Candidates should check the question paper to ascertain that all the pages are printed as indicated and
that no questions are missing.
f) Candidates should answer the questions in English.
FOR EXAMINERS USE ONLY

Questions 1 2 3 4 5 6 7 8 9 10 11 12
Mark

Questions 13 14 15 16 17 18 19 20 21 22 23 24 25
Mark

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1. Define the following terms as used in business studies (4mks)
a) Economics .
…………………………………………………………………………………………………………
…………………………………………………………………………………………………………
b) Commerce.
…………………………………………………………………………………………………………
…………………………………………………………………………………………………………
c) Accounting.
…………………………………………………………………………………………………………
…………………………………………………………………………………………………………
d) Office practice.
…………………………………………………………………………………………………………
…………………………………………………………………………………………………………
2. Outline four forms of after sale services given to a customer. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
3. Name any four AIDS to trade. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
4. Classify the following resources as human, manmade or Natural. (4mks)
Resources Classification
a) Tyres ………………………………………………………
b) Air ………………………………………………………
c) Expertise ………………………………………………………..
d) Solar energy ……………………………………………………….

5. Most organizations in Kenya today prefer landscape office layout. Outline any four advantages of
such a plan. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
6. Highlight any four functions of commercial attaches. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
7. Motorcycles (Bodaboda) are gaining popularity as a means of transport in the rural areas. Give four
reasons for this. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………

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 c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
8. Maziwa Traders are facing very stiff competition in the market. Advise them on four methods they can
use to differentiate their products from those of other producers in the market. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
9. Give any four differences between a bank loan and bank overdraft. (4mks)
Bank loan Bank overdraft

10. Outline four reasons why a wholesaler may prefer to sell goods through a retailer instead of
selling directly to customers. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
11. Kalau Traders are very new in the market however they have discovered that they can only increase
their sales through personal selling. Highlight four circumstances that could have forced them to use it:
(4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
12. Mathafu Traders had shs. 60,000 on 1 st Jan 2015. At the end of the year, the following balances were
available;- (4mks)
Capital 31/12/15 shs. 800,000
Additional investment shs. 50,000
Drawings shs. 8,000
st
Determine the profit for the years ended 31 Dec 2015.

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13. The county Government of Nyandarua wants to construct a warehouse for farmers. Guide her on any
Four issues she should consider when locating the warehouse. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
14. The diagram below illustrates the population size in a Nation.

Identify FOUR Implications of the population size in B to the nation. (4mks)

a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
15. Outline Four reasons which make business organizations to spend a lot of money preparing
balance sheets for their businesses every year. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
16. Kasuku merchant on 1st Feb 2015 bought 150 milk cans at gross price of sh. 80 each from Tumaini
wholesalers. A Trader discount of 20% was allowed and 3% cash discount if settlement was done
within 14 days.
Determine what Kasuku merchant paid if payment was made on 12th Feb 2015. (5 mks)

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17. Identify the information that would be extracted from the following source documents.
(a) Invoices………………………………………………………………………………………………
(b) Receipts………………………………………………………………………………………………
(c) Payment vouchers……………………………………………………………………………………..
18. Chelagat has just won a piga Jeki lottery of sh.500 000 and wants to start a business, state four factors
to consider when deciding on the type of goods and services to start providing (4 marks)

a. ……………………………………………………………

b. ……………………………………………………………..

c. ………………………………………………………………

d. ………………………………………………………………..

19. Geta Wholesalers had shs. 5000 in their bank account on 1 st May 2014.
On 2nd they sold stocks for shs. 10,000 cash.
On 3rd they received a cheque worth shs. 8000 from a debtor.
On 4th they bought goods worth shs. 7000 on credit.
On 5th they paid for stocks delivered for sh. 4000 through a cheque.
Required:
Prepare Geta Wholesalers cash in bank ledger account.
Dr Bank A/C Cr

20. State four limitations of using the income approach in measuring the income of a country
(4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………

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21. State four advantages of sole proprietorship (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
22. In the space provided identify the type of demand described:- (Complementary, competitive,
composite, derived demand) (4mks)
a) Increased demand for pens leads to increased demand for ink……………………………………..
b) Increased price for coffee affects the demand for Tea………………………………………………
c) The demand for sugar affects the demand for sugarcane……………………………………………..
d) Increased prices for steel as a result of increased demand for it from the construction, building and
manufacturing industries……………………………………………………………………………..
23. Outline four ways through which partnership may be formed (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
24. Identify THREE reasons which make people to be involved in Business activities. (4mks)
a) …………………………………………………………………………………………………………
b) …………………………………………………………………………………………………………
c) …………………………………………………………………………………………………………
d) …………………………………………………………………………………………………………
25. Rurii Traders had the following information in their books of account.
Fixed assets shs. 200,000
Stocks shs. 60,000
Current liabilities shs. 30,000
Net profit shs. 50,000
Determine:-
a) Rate of return on capital employed. (2mks)

b) Current ratio (2mks)

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