KCSE Past Papers 2020 Business Studies Paper 1 (565/1)

KCSE Past Papers 2020 Business Studies Paper 1


1. List four external environmental factors that may influence the operations of a business.(4 marks)

2. State four characteristics of direct production.(4 marks)

3. Name the document described in each of the following statements:(4 marks)

(a) Used to demand for payment before goods are delivered

(b) Used as a reply to a specific letter of inquiry

(c) Informs the buyer that goods ordered for have been dispatched

(d) Used to correct an overcharge

4. Highlight four reasons for government involvement in business. (4 marks)

5. State four factors that may lead to a shift in demand as shown in the diagram below. (4 marks)

6. Outline four circumstances under which a trader would prefer to transport goods by air. (4 marks)

7. The following information was obtained from the books of Sindo Limited on 31 December 2015:


Details Ksh
Capital 24,000
Stock 1,500
Debtors 2,000
Machinery 20,000
Cash 4,000

Determine the total liabilities of the business. (3 marks)

\ 8. Highlight four services that commercial banks offer to their customers. (4 marks)

9. Outline four reasons that may make Kenya restrict trade with other countries. (4 marks)

4. Classify the following resources as natural, man-made or human: (4 marks)


Resource Classification
(a) Architect
(b) Boat
(c) Soda ash
(d) Driver

11. List four sources of capital that may be available to a sole proprietorship.

(4 marks)

12. Highlight four circumstances under which a firm may be located near the source of raw materials.

(4 marks)

13. The following information was extracted from the books of Kombo Traders on 30 April 2018:


Details Ksh
Land and buildings 150,000
Creditors 1,500
Motor car 120,000
Cash 25,500
Capital 311,000
Bank 4,000
Sales 5,000
Purchases 18,000


Prepare Kombo Traders Trial Balance.

(5 marks)

14. Outline four reasons that would make an entrepreneur prepare a business plan.

(4 marks)

15. Identify the office equipment described in each of the statements below:

(4 marks)


Description Equipment
(a) Used to make postage stamp impressions on envelopes
(b) Used to transmit verbal messages
(c) Used to store confidential documents and valuable items
(d) Used to record and store information in audio tapes

16. State four sources of government revenue. (4 marks)

17. Outline four measures which may be taken by a government to address the problem of underdevelopment. (4 marks)

18. Highlight four benefits of personal selling to a trader. (4 marks)

19. Outline four channels that may be used for distributing imported goods. (4 marks)

20. State four merits of a bonded warehouse to the government. (4 marks)

21. ldentify the source documents from which the information posted in the following journals would be extracted: (4 marks)


Journal Source Document
(a) Sales Returns Journal
(b) Purchases Journal
(c) Cash Receipts Journal
(d) Sales Journal

22. State four ways through which leakages of national income may happen in a four-sector economy.

(4 marks)

23. State four benefits of using computers in an office.

(4 marks)

24. Identify the factor of production that relates to each of the following resources:


Resource Factor of production
(a) Supervision
(b) Tractor
(c) Trees
(d) Owner

25. List four sources of business ideas.



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