W1-2-60-1-6
JOMO KENYATTA UNIVERSITY
OF
AGRICULTURE AND TECHNOLOGY
University Examinations 2012/2013
FIRST YEAR FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE AND BACHELOR OF INFORMATION TECHNOLOGY
HBC 2105: BUSINESS STUDIES
DATE: AUGUST, 2012 TIME: 3 HOURS
INSTRUCTIONS: This paper contains FOUR questions. Answer ALL Questions. Use essay format to present your answers
Question One
a) Define the term business studies and indicate the significance of a course unit in business studies to commerce/business students at university level. [1 mark]
b) “Businesses in Kenya must be registered with the Registrar of Business name.” Explain why registration is a requirement and suggest any two seasons that may lead to rejection of application for registration. [2 marks]
c) Distinguish between liquidation and receivership with respect to business. [1 marks]
d) “Maiyo and Lari place to start a business for themselves. They are considering opening a high quarterly fast food café to serve food to an urban population and students of a nearby college.”
Required:
i. Advice Maiyo and Lari on any two advantages of organizing their business as a sole proprietorship. [2 marks]
ii. If Maiyo and Lari want to form their business as partnership, define for them a partnership Deed indicating why each content/clause is significant. [4 marks]
Question Two
a) Discuss the basis and relevance of the statement that “businesses that adopt/adapt new technologies and other responses in their operations tend to survive but those that do not scan their environment to develop appropriate responses tend to perish.” [4 marks]
b) Define the terms information technology (IT) and give two examples of the application of IT in business. [2 marks]
c) Discuss any five contributions of information technology to the operations development of business. [10 marks]
d) Outline any four possible abuses of information technology in business and suggest strategies to manage the abuses. [4 marks]
Question Three
a) Explain what you understand by the terms:
i. trade credit
ii. retained earnings
Explain their importance on sources of business finance. [1 mark each]
b) Distinguish between ordinary and preference shares in relation to limited liability companies. [2 marks]
c) “Microfinance institutions (MFI) provide financial credit to small and medium scale enterprises (SMFs) that would not qualify for conventional commercial bank bars.”
Required:
i. Some 60% of SMFs fail within 2-6 months of their operations. Discuss any four factors that lead to high failure rate of SMFs in Kenya. [4 marks]
ii. Suggest any four reasons why commercial banks do not lend credit to SMFs.
[2 marks]
iii. Discuss any five factors that adversely affect the management of MFIs and suggest important strategies. [10 marks]
