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Form 3 Business Studies Paper 2 End of Term 3 Examination 2022

Class: Form 3

Subject: Business Studies

Level: High School

Exam Category: Form 3 End Term 3 Exams

Document Type: Pdf


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Exam Summary

TIME 2½ Hrs.
Name…………………………………….………… Index No……………………/……….
Candidate’s Signature………………
Instructions to candidates
 This paper consists of six questions.
 Answer any five questions.
 All questions carry equal marks.
 This paper consists of 3 printed pages.
 Candidates should check the question paper to ascertain that all the pages are printed as indicated and that no questions are missing.
 Candidates should answer the questions in English.

1. (a). Explain five external factors that an entrepreneur needs to consider when evaluating a
business opportunity. (10 marks)
b). Outline five differences between a partnership and a cooperative forms of business
units. (10 marks)

2. a). Explain five positive implications of overpopulation to a country. (10 marks)
b). The diagram given below shows changes in the supply curve.
Explain five factors that may have led to the change from S1S1 to S2S2. (10 marks)

3. a). Explain five limitations of using billboards as medium of advertising. (10 marks)
b) Explain five internal economies of scale that a firm can enjoy as its scale of production increases. (10marks)

4. a) Highlight four documents that are sent to the seller by the buyer in home trade.
(8 marks)
b) On May 1, 2021, Mjanja Shop had cash in hand sh.87,000 and cash at bank sh.250,000. During the month, the following transactions took place:
May2: Cash sales sh.60,000
3: Paid salaries sh.101,500 by cheque
7: Received a cheque of sh.76,000 from Henry after allowing him a cash discount of 5%
13: Bought office furniture by cheque sh.86,000
17: Settled Martha’s account for sh.34,200 in cash, having deducted sh.800 cash discount.
20: Received a cheque for sh.165,000 in respect of cash sales.
22: Paid wages sh,25,000 in cash.
24: Withdrew sh.32,000 from the bank for office use.
25: Withdrew sh.4000 cash for personal use
29: Received sh.17,000 cash form Martin in settlement of his account less sh.1000 cash discount.
31: Deposited all the money into the bank except sh.24,000.
Prepare a three-column cash book duly balanced. (12 marks)

5 a) Differentiate between life assurance and property insurance (10marks)
b) Explain five circumstances under which personal selling may be most appropriate. (10 marks)

6. a) Explain five circumstances that would influence a producer to use wholesalers in distributing his produce. (10 Marks)
b) The following balances were extracted from the ledger accounts of Bidii traders for the year ended 31st December 2020.
Capital 940, 000.
Bank 100, 000
Accrued expenses 20, 000.
Debtors 60, 000
Creditors 60, 000
Stock 100, 000
10 Years Bank loan 200, 000
3-year ICDC loan 100, 000
Vehicle 300, 000
Plant and machinery 200, 000
Land 500, 000
Drawings 40, 000
Cash 20, 000
Prepare Bidii traders trial balance for that year ended 31st December 2020. (10 Marks)


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