565/1 · BUSINESS STUDIES · Paper 1 · Nov. 2025 · 2 hours
Instructions: Answer all the questions in the spaces provided. (The source scan has its pages out of order; questions are given here in number order. The numbers of questions 8–10 are cut off in the scan.)
1. State four internal environmental factors which influence the performance of a business. (4 marks)
2. Outline four advantages of using aeroplanes for transport. (4 marks)
3. Highlight four factors that may lead to a shift of the supply curve as shown in the following diagram. (4 marks)
4. Outline four ways of controlling cost-push inflation. (4 marks)
5. State four functions of an office. (4 marks)
6. Outline four circumstances under which a co-operative society may be dissolved. (4 marks)
7. Highlight four problems that may be encountered when measuring national income using the output approach. (4 marks)
8. Fill in the missing figures in the following table. (4 marks)
| Fixed assets | Current assets | Capital | Liabilities |
|---|---|---|---|
| 490 300 | (a) … | 825 700 | 537 500 |
| 1 250 000 | 675 200 | (b) … | 779 800 |
| (c) … | 920 600 | 1 460 800 | 315 300 |
| 820 500 | 636 700 | 911 900 | (d) … |
9. State four features of indirect production. (4 marks)
10. Highlight four qualities of money. (4 marks)
11. Highlight four factors that may be considered when choosing the location of a warehouse. (4 marks)
12. The following trial balance was incorrectly prepared by Salma Traders.
Salma Traders — Trial Balance as at 31/12/2024
| Details | Dr (Ksh) | Cr (Ksh) |
|---|---|---|
| Bank | 128 700 | |
| Creditors | 72 450 | |
| Capital | 125 650 | |
| Cash | 46 200 | |
| Furniture | 89 800 | |
| Bank loan | 56 900 | |
| Unpaid rent | 9 700 | |
| 254 000 | 275 400 |
Required: Prepare the correct trial balance as at 31/12/2024. (4 marks)
13. Outline four measures that the Kenyan government may take to improve its earnings from exports. (4 marks)
14. Highlight four merits of the Short Message Service (SMS) when communicating. (4 marks)
15. Explain four reasons for the continued existence of small firms in the Kenyan economy. (4 marks)
16. State four ways in which the government regulates business activities in Kenya. (4 marks)
17. Highlight four demerits of personal selling. (4 marks)
18. Outline four circumstances under which a buyer would pay for goods by use of the mobile payment system. (4 marks)
19. State the effect of the following transactions on the capital of a business. (3 marks)
(a) The owner sold his personal car and invested the money in the business.
(b) The owner took part of the goods from the business for personal use.
(c) Stock purchased at Ksh 10 000 was sold at Ksh 8 000.
20. Outline four factors that an entrepreneur should consider when evaluating a business idea. (4 marks)
21. The following information was extracted from the books of Tanashati Traders on 31st December 2024.
| Details | Ksh |
|---|---|
| Purchases | 54 700 |
| Sales | 101 600 |
| Returns outwards | 4 100 |
| Opening stock | 45 900 |
| Closing stock | 9 300 |
Required: Prepare Tanashati Traders' trading account for the year ended 31st December 2024. (5 marks)
22. Highlight four measures that the government may take to encourage the establishment of firms in rural areas. (4 marks)
23. Outline four reasons that may make a manufacturer sell goods directly to a consumer. (4 marks)
24. State four characteristics of itinerant traders. (4 marks)
25. Highlight four disadvantages of public limited companies. (4 marks)