1. a) Explain five ways in which the internal environment may contribute to the success of a

     business enterprise.                                                                                                (10 marks)

  • Highlight five channels of distribution that a Kenyan manufacturer would use to ensure their goods reach consumers in another country.                                                           (10 marks)
  • a) Some developed countries have a huge population made of ageing persons. Explain  

    five problems this situation could present to such countries.                                 (10 marks)

b) The following information was obtained from the Books of Muthaura traders,

                               Sales       Kshs. 270,000

                               Margin             40%

                               Turnover          6 times

                                Expenses Kshs, 40,000

From the above information,


  1. Gross profit                                                                                                          (3 marks)
  2. Cost of goods sold                                                                                                (2 marks)
  3. Average stock                                                                                                      (3 marks)
  4. Net profit                                                                                                             (2 marks)
  • a) Describe five accounting documents used in home trade.                                      (10 marks)

b) Explain five demerits a country may suffer when the Government becomes a major

    investor in business                                                                                                  (10 marks)         

  • a) Explain five challenges that may be experienced by a new entrepreneur intending to  

    start a business in Kenya.                                                                                        (10 marks)

b) Explain five reasons why per capita income is not an indicator of a better living

     standard in a country.                                                                                            (10 marks)

  • a) Outline five merits of Indirect taxes                                                                       (10marks)

b) Explain five problems that the insurance industry is facing in Kenya today.       (10 marks)

  • a) There has been a decline in the demand for bananas in a certain market.

            Explain five factors that may have caused this trend                                            (10 marks)

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b)         On 1st January 2021, Tom Owino Traders had Kshs. 6520 cash and Kshs. 9847 at     

              the Bank.

            During the month, the following transactions took place;


                        2              Paid transport by cheque shs. 2,000

            3          Issued a Cheque to AFC settling an invoice for shs. 10,000 deducting 2%                           cash  cash discount

            4          Sold goods for cash shs. 4,000 less 2% cash discount

            5          Banked shs. 1,000

            6          Received a Cheque from Kamau shs. 2,500 less 2% cash discount

            8          Paid Water bill in cash shs. 590

            9          Withdrew cash from Bank for Office use shs. 800

           10         Received a Cheque of shs. 5,000 from a debtor less 5% cash discount 

           11         Received cash of shs. 900 from John and gave a cash discount of 2%.

           12         Banked all the cash except shs. 100

Required: Prepare a duly balanced three column Cash Book                                     (10 marks)                  



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