WEDNESDAY: 3 August 2022. Morning paper. Time Allowed: 2 hours.
Answer ALL questions. Each question is allocated two (2) marks.
1. Proximity to the market involves knowing where____________________
A. Employees are located
B. Suppliers are located
C. Customers are located
D. Labour is located (2 marks)
2. Which of the following is not a statutory equipment to open a business?
A. Title deed
B. Business company name
C. City council business permit
D. Fire safety certificate (2 marks)
3. What benefit do online businesses enjoy?
A. They need to be close to the competition
B. They do not spend a lot to run the business
C. They need to be close to raw materials
D. They do not need to be close to the market (2 marks)
4. Which of the following location factors would be the most important to a mining company prospecting to excavate diamonds from a potential new site?
A. Location of customers
B. Effective infrastructure
C. Availability to expand
D. Availability of raw materials (2 marks)
5. Which of the following businesses is most likely to be located close to its customers?
A. Mpesa shop
B. Online shop
C. Google
D. Facebook (2 marks)
6. A business enterprise can relocate some of its operations from one country to another due to the following factors except.
A. Cost
B. Availability of raw materials
C. The availability of labour
D. The location of competitors (2 marks)
7. A business providing a parcel delivery service locates close to the motorway network to ensure efficient package distribution. Which of the following best describes this location factor?
A. Being close to competitors
B. Ability to access government assistance
C. Effective infrastructure
D. Preference of the founder (2 marks)
8. Which of the following businesses is most likely to be located close to its raw materials?
A. Milk processing plant
B. Supermarket
C. Fashion shoes retailer
D. Online travel agent (2 marks)
9. Apart from business growth, there are a number of other good reasons for selling products internationally. Which of the following are valid reasons?
A. To spread risk
B. The firm has excess production capacity
C. To extend the product life cycle
D. To avoid paying taxes (2 marks)
10. _______________is a process wherein parties select and impartial and neutral person to assist them resolve their differences?
A. Mediation
B. Negotiation
C. Arbitration
D. Collaboration (2 marks)
11. The following are factors to be considered while selecting a form of business organisation EXCEPT.
A. Degree of risk
B. Capital requirements
C. Nature of business activity
D. Location (2 marks)
12. In a partnership under the Partnership deed, the partners:
A. Have limited liability for the obligations of the partnership
B. Have joint liability for the obligations of the partnership
C. Have joint and several liability for the obligations of the partnership
D. Have no liability for the obligations of the partnership (2 marks)
13. The following are characteristics of entrepreneurial ventures EXCEPT?
A. Are innovative and growth oriented
B. Are not creating jobs for themselves but are wealth driven
C. Create wealth that is sustainable for future generations to come
D. Promote products from other companies (2 marks)
14. A business arrangement where one party allows another party to use a business name and sell its products or services is known as ______________________
A. A cooperative.
B. A franchise.
C. An owner-manager business.
D. A limited company (2 marks)
15. Which of the following is not a reason for business failure?
A. Lack of market research
B. Poor financial control.
C. Poor management.
D. Use of business plan (2 marks)
16. Which one of the following is a potential risk associated with starting your own business?
A. Being your own boss
B. Less time to spend with family and friends
C. Making sales and establishing a share of the market
D. Satisfaction from developing your own idea for others to benefit from (2 marks)
17. Define copyright.
A. Having a right to copy certain works
B. Symbols or words registered to represent a company or product
C. Rules recognised by a country
D. Ownership to control of rights to the use and distribution of certain works (2 marks)
18. The following are examples of business risks EXCEPT?
A. Unexpected financial loss due to an economic downturn
B. Retaining customers
C. Court action
D. Market share reducing due to new competitors (2 marks)
19. All of the following are characteristics of sole proprietorships EXCEPT that;
A. There is a single owner
B. Profits are taxed twice
C. Liability is unlimited
D. They may have a difficult time raising funds to expand the business (2 marks)
20. All of the following are characteristics of corporations EXCEPT that
A. The powers of directors are immerse and cannot be challenged by shareholders
B. Liability is limited
C. The enjoys a separate legal entity
D. The business may gain access to funds by issuing more stock (2 marks)
21. In a partnership, the owners
A. Are sheltered somewhat from unlimited liability
B. Always split profits and losses 50-50
C. Share profits on agreed ratio.
D. Cannot be sued separately in the event of a business failure (2 marks)
22. Succession planning ensures ______________________.
A. Business continuity
B. Employees are disadvantaged
C. The organisation increases its operational costs
D. The organisation recruits externally (2 marks)
23. A major advantage of the Companies form of business organisation is:
A. Reduction of double taxation.
B. Limited owner liability.
C. Legal restrictions.
D. Ease of organisation (2 marks)
24. Which of the following would not be a use of working capital in business?
A. Buying raw materials
B. Paying overheads
C. Business expansion
D. Meeting short term financial needs (2 marks)
25. Which of the following statements defines a code of ethics?
A. Rules and regulations that govern a country
B. Moral behaviour expected by the society
C. Guiding principles that help professionals and companies conduct business with honesty and integrity
D. Basic and fundamental beliefs that guide or motivate actions or attitudes (2 marks)
26. Which of these factors does not determine amount of capital required in a business?
A. history of the business
B. Size of the business
C. Existing levels of competition
D. Customers demand (2 marks)
27. Internal Sources of Capital are those that are______________
A. Generated through outsiders such as suppliers
B. Generated through loans from commercial banks
C. Generated through issues of shares
D. Generated within the Business (2 marks)
28. Equity Shareholders are also known as _________?
A. Owners of the company
B. Partners of the company
C. Executives of the company
D. Guardian of the company (2 marks)
29. Money obtained by the issue of shares is known as_____________
A. Debts
B. Loans
C. Reserve Funds
D. Share Capital (2 marks)
30. Which of the following is an external source of Finance?
A. Retained Earnings
B. Equity Shares
C. Preference Shares
D. Debentures (2 marks)
31. The funds needed for buying current assets are_______________
A. Lease financing.
B. Working capital requirement.
C. Fixed capital requirement.
D. Plowing back profits (2 marks)
32. Which of the following is NOT factor to consider in choosing a source of finance in business?
A. Cost
B. Risk
C. Bank account
D. Long-term versus short-term borrowing (2 marks)
33. Which among these is not used to determine the credit worthiness of new borrowers?
A. Capacity
B. Capital
C. Conditions
D. Credit (2 marks)
34. Retained earnings is________________________
A. Permanent source of funds
B. Temporary source of funds
C. Fixed source of funds
D. Expensive source of funds (2 marks)
35. Which of the following is not a combination of Venture capital financing?
A. Seed funding and Bridge funding
B. Startup capital financing and Expansion funding
C. First stage/series financing and Seed funding
D. Equity financing and debt financing (2 marks)
36. Trade credit is granted to customers who have reasonable amount of_________________
A. Funds in their account
B. Financial standing and goodwill
C. Weaknesses
D. Zero balance in their account (2 marks)
37. __________ is the process of raising capital for a new venture from a large audience, typically through the Internet.
A. Cryptocurrency
B. Blockchain
C. Tokens
D. Crowdfunding (2 marks)
38. Which one of these is not a crowdfunding method?
A. Equity-based crown funding
B. Debt-based crowdfunding
C. Money based crowdfunding
D. Donation-based crowdfunding (2 marks)
39. Which among the following sentences clearly define a succession plan?
A. A formal process of preparing to fill a role that may fall vacant in future
B. Process of acquiring new staff member
C. Process of creating new position
D. Managing performance (2 marks)
40. Which is not a recognised form of business continuity planning?
A. Contingency planning
B. Building planning
C. Scenario planning
D. Financial planning (2 marks)
41. What does the acronym SMART stand for?
A. Suitable, measurable, actionable, rewarded and timely
B. Specific, measurable, actionable, resourced and timely
C. Standardized, measurable, achievable, rewarded, and timely
D. Specific, measurable, achievable, realistic and timely (2 marks)
42. Which one define a risk?
A. Predictable happenings
B. Danger of loss
C. Favorable outcomes
D. Chances of profit (2 marks)
43. The major types of business risk include all of the following except:
A. Price risk
B. Diversification risk
C. Market risk
D. Credit risk (2 marks)
44. Which of the following is not a method of managing business risks?
A. Diversification
B. Insurance
C. Risk investment
D. Risk acceptance (2 marks)
45. The cost of risk may include all of the following except:
A. The cost of insurance.
B. The cost of raw materials.
C. The cost of increased precautions to control losses.
D. The cost of investments in information to reduce risk (2 marks)
46. A trademark protects? ______________________
A. An invention
B. A work of art
C. Logos, names and brands
D. The look, shape and feel of a secret (2 marks)
47. If you write an original story, what type of intellectual property gives you the right to decide who can make and sell copies of your work?
A. Copyright
B. Patents
C. Registered designs
D. Trademarks (2 marks)
48. Imagine a sports team sets up a company to sell its own range of clothes. What type of intellectual property can the team use to show that the clothes are made by them?
A. Copyright
B. Geographical indications
C. Patents
D. Trademarks (2 marks)
49. _______________ is the process of searching for prospective employees and stimulating them to apply for a job in an organisation.
A. Advertising
B. Selection
C. Recruitment
D. Shortlisting (2 marks)
50. The following are sources of internal recruitment except?
A. Promotions
B. Advertisement
C. Transfer
D. Deployment (2 marks)
