QUICK QUESTIONS WITH ANSWERS FOR REFERENCE

On 31st December 2013 Kiu Traders had made a turnover of Sh.80,000 for the fear and had a closing stock of SH.10,000. If the business was working at a margin of 20%, draw its trading account for the period ending 31st, December 2013 (4mks) Virus-free. www.avast.com

Meaning of insurance terms Surrender value Amount of money that is refundable to the insured by insurer incase the insured has terminated the contract before maturity. Beneficiaries People named named in a life assurance policy to be paid in event of death of the assured. Re – insurance An insurance company insuring the same property it has covered with another insurance company called the  re – insurer. Cover note a document issued by an insurance company to insured when the insured has paid the first premium while awaiting the policy to be processed. Virus-free. www.avast.com

The table below shows descriptions of different types of partners. Identify type of partners that match the description Virus-free. www.avast.com

Give four reasons why some traders prefer to operate supermarket business Increase sales Lower operational costs Enjoy economies of sale Time is saved Virus-free. www.avast.com

Outline four features  of monopolistic  competition  Many sellers and buyers Products are differentiated No barriers to entry No firm has to control over factors of production Products are not perfect substitutes No interdependence in pricing between the firms Virus-free. www.avast.com

Outline four source documents used in recording transaction. Invoice Debit note Credit note Receipts Payment voucher Cash sale slip Virus-free. www.avast.com

Match the following description of errors with the type  of   errors  made when keeping books  of accounts (4mks) Virus-free. www.avast.com

The following account balances were extracted from the migingo traders on 30th April 2002 solution Virus-free. www.avast.com

Outline four emerging trends in office management  Use of computers Using open plan office Merging duties of staff members Adapting customer care centers Use of modern communication methods Opening up offices away from town centers Virus-free. www.avast.com

Show the accounts to be debited or credited for the following transactions Answer Virus-free. www.avast.com

On 1st March 2006 the cash book of Kericho traders showed cash and bank balances of sh. 15000 and sh 147000 respectively. The following transactions took place during the month May 3 cash sales sh 120, 000 May 11 paid sh. 7,500 cash in respect to wages May 16 received a cheque of sh. 250,000 from a debtor May 26 withdrew sh. 25,000 from bank for office use. May 29 paid sh. 97,000 cash to creditor Prepare a two column cash book                (4mks) Solution Virus-free. www.avast.com

Match the following description of errors with the type  of   errors  made when keeping books  of accounts answer Virus-free. www.avast.com

Describe four channels used when importing commodities.    Virus-free. www.avast.com

State four reasons why short message service (SMS) is replacing letters as a way of communication Cheap to use SMS services Faster than letters Can be sent to many at once Realiable-delivery reports are given Virus-free. www.avast.com

Give four reasons for the increased use of mobile phones in banking. (4mks) Fast in transacting business Reduce s paper work May be used to pay utility bills One can access account balance Safe to use (use of secret pin) i.e. reduce risk of carrying cash May be used to buy airtime Easy transfer of funds from one account to another Easy to  monitor ones financial transactors details Easy transfer of money from account to phone for other transactions. Virus-free. www.avast.com

State four functions of commercial attaches   Look for market for Kenyan goods abroad Organize trade tours for Kenyan traders Inform local producers of standards required and procedures in foreign countries Help in identifying agents in foreign countries for local producers Organize training for local businessmen abroad Avail information about selling opportunities in foreign countries Virus-free. www.avast.com

Give three reasons why the per capita income of a country may not change. When total output and total population increase at the same rate When total output and total population decrease at the same rate When total output and total population remain constant Virus-free. www.avast.com

State four merits of storing goods in a public warehouse  Goods can be sold without physical movement Traders do not incur costs of constructing their own warehouses Goods can be used as collateral to get short term loans Goods are insured Enables large scale buyers to accommodate bulk from small scale sellers Additional services e.g. repairs are provided Virus-free. www.avast.com

State four circumstances under which it may be appropriate to use personal selling as a form of product promotion Its not easy to ignore like other methods Its more persuasive Immediate feed back about the product is got Seller is able to direct effort to a specific group Consumers are shown how to use a product Demonstration can be done Suitable for both the literate and illiterate Virus-free. www.avast.com

Benefits that may accrue to a firm as a result of growth of the industry. Easier access to labour- where many firms are located in one area a pool of labour of various skills is usually available. Therefore firms relocating to the area find it easy to obtain. Improved/efficient infrastructure- usually where many firms are located, infrastructure would be highly developed e.g. roads, power, water and communication facilities. Firms relocating in that area thus enjoy the services of infrastructure already in place. Firms may be able to dispose off their waste product easily Ready market may be available from the surrounding firms Readily available services such as banking, insurance and medical care Adequate supply of power due to large volume of consumption e.t.c Virus-free. www.avast.com