565/2 · BUSINESS STUDIES · Paper 2 · Nov. 2025 · 2½ hours
Instructions: Answer any five of the questions in the space provided after question 6. Each question carries 20 marks.
1. (a) Explain five challenges that people face when satisfying their wants. (10 marks)
(b) Discuss five features of monopolistic competition. (10 marks)
2. (a) Explain four differences between a public limited company and a public corporation. (8 marks)
(b) The following transactions were carried out by Karibu Traders in the month of January 2024.
| Date | Transaction |
|---|---|
| 1st Jan | Started business with sh. 8 000 cash in hand and a bank overdraft of sh. 16 500. |
| 2nd Jan | Sold goods worth sh. 12 000 in cash. |
| 3rd Jan | Received a cheque of sh. 41 650 from Kabu after allowing a 2% cash discount. |
| 4th Jan | Received sh. 18 600 cash from a debtor. |
| 5th Jan | Transferred sh. 9 000 cash to the bank account. |
| 6th Jan | Paid rent by cheque sh. 11 500. |
| 7th Jan | Paid Jomvu Traders sh. 5 820 by cheque after receiving a 3% discount. |
| 8th Jan | Sold goods worth sh. 7 000 in cash. |
| 9th Jan | Paid electricity sh. 1 600, water sh. 700 and postage sh. 200 in cash. |
| 10th Jan | Received cash in settlement of a sh. 6 000 debt after granting a 2% discount. |
| 12th Jan | Paid wages by cheque sh. 4 400. |
Required: Prepare Karibu Traders' three-column cash book. (12 marks)
3. (a) Explain five demerits of raising government revenue through the use of direct taxes. (10 marks)
(b) Explain five benefits of conducting online office meetings. (10 marks)
4. (a) Highlight five differences between property insurance and life assurance. (10 marks)
(b) The following information was extracted from the books of Manu Traders on 31/12/2024:
| Items | Sh |
|---|---|
| Sales | 650 000 |
| Purchases | 541 000 |
| Closing stock | 91 000 |
| Margin | 20% |
Required: (i) Prepare Manu Traders' trading account. (8 marks) (ii) Determine Manu Traders' average stock. (2 marks)
5. (a) Explain five disadvantages of television advertising. (10 marks)
(b) Explain five circumstances under which the government may restrict the importation of goods. (10 marks)
6. (a) Explain five ways in which the government can reduce unemployment in Kenya. (10 marks)
(b) Discuss five benefits that a county government can gain from the preparation of a five-year development plan. (10 marks)