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NAME…………………………………….ADM .NO………………INDEX NO………..…

SCHOOL………………………………………………STREAM……………………………

SIGNATURE…………………………………………..……….DATE………………….…

KENYA CERTIFICATE OF SECONDARY EDUCATION

CaSPA ELDORET DIOCESE

BUSINESS STUDIES
Paper 2
TIME: 21/2 hours

TERM 2 2025

Instructions to Candidates

(a) Write your name and index number in the spaces provided above.
(b) Sign and write the date of the examination in the spaces provided above.
(c) This paper consists of 6 questions.
(d) Answer ANY FIVE questions in the spaces provided
(e) This paper consists of 3printed pages. 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

Maximum Candidates
Question score score
20
20
20
20
20

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1. (a) Explain FIVE roles of innovation and technology in entrepreneurial success. (10 marks)
(b) Explain FIVE challenges in measuring national Income in developing countries like Kenya.
(10 marks)

2. (a) Explain FIVE factors influencing the choice of a mode of transport. (10 marks)
(b) The following trial balance was prepared from the books of John Traders for year ended 31st
December 2024. (10 marks)

Mugambi Traders
Trial balance
As at 31/12/2024

Details Dr Cr
Ksh. Ksh.
Land and Building 5,000,000
Capital 9,400,000
10 years bank loan 2,000,000
3 years SACCO loan 1,000,000
Stock 1,000,000
Debtors / Creditors 600,000 800,000
Cash at bank 1,000,000
Cash in hand 200,000
Drawings 400,000
Plant and Machinery 2,000,000
Motor vehicle 3,000,000
13,200,000 13,200,000

Prepare:
i. A balance sheet for the year ended 31/12/2024
ii. Determine :
Working capital
Capital Employed
Borrowed Capital

3. (a) Explain FIVE consequences of a high national debt in a country. (10 marks)
(b) Explain FIVE factors that may lead to shifting of supply curve to the right. (10 marks)

4. (a) Discuss FIVE measures that are adopted by the government to protect consumers against
exploitation. (10 marks)
(b) Explain FIVE circumstances under which a country may restrict international trade. (10 marks)

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5. (a) Explain FIVE reasons why a proper office layout boosts productivity. (10 marks)
(b) Factors hindering economic development in Kenya. (10 marks)

6. (a) Explain FIVE circumstances under which partnership be dissolved. (10 marks)
(b) On 1st of April 2018, Machofi Traders had the following balances:
 Bank 15,000(Cr)
 Cash 25,000(Dr)

The following transactions took place during the month of April 2018.
April:
3rd: Paid wages in cash sh. 15,000
th
5 : Bought goods worth sh. 750
th
6 : Received cheques from the following debtors after allowing a 2% discount in each
case. Rioki sh. 980, Kombo sh. 1,960
th
8 : Chebe paid a cheque for sh. 1,000
th
11 : Bought machinery by cheque for sh. 5,000
13th: Cash sales paid directly to the Bank sh. 4,000
15th: Withdrew cash sh. 1,000 for private use
20th: Cash sales sh. 20,000
21st: Banked cash amount sh. 1,000
24th: A cheque recorded from Chebe on 8th of April was dishonored
27th: Received sh. 3,000 from Kiko a debtor
30th: Bank all the available cash except sh. 1,000

Prepare Machofi Traders Three column cash book for the month of April, 2018 .
(10 marks)

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