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INTRODUCTION TO LAW AND GOVERNANCE  APRIL 2022 PAST PAPER

TUESDAY: 5 April 2022. Morning paper.                                                                                             Time Allowed: 3 hours.

Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.

QUESTION ONE

1.           With specific reference to the sale of goods law;

Identify three reasons why it is important to determine when property in goods passes.                              (3 marks)

List five remedies available to a buyer in a sale of goods contract.                                                                (5 marks)

2.           Define the meaning of the term “tribunal”.                                                                                                    (2 marks)

Describe five types of jurisdiction of Courts in your country.                                                                    (10 marks)

(Total: 20 marks)

 

QUESTION TWO

1.            In relation to negotiable instruments, discuss five duties of a collecting bank.                                              (5 marks)

Highlight five circumstances under which a partnership might be dissolved by the Court.                           (5 marks)

2.            Identify two types of defamation.                                                                                                                  (2 marks)

Explain four ingredients to be proved in the defense of fair comment in an action for defamation.              (4 marks)

Explain two defenses other than fair comment that are applicable in the tort of defamation.                         (4 marks)

(Total: 20 marks)

 

QUESTION THREE

1.             Define a “code of ethics”.                                                                                                                            (2 marks)

Discuss four ways through which a code of ethics can be enforced in a place work.                                 (8 marks)

2.           Outline four ways in which a surety might be discharged from a contract of guarantee.                                               (4 marks)

3.           In relation to the law of property, explain the meaning of the following terms:

Fee simple.                                                                                                                                                    (2 marks)

Fee tail.                                                                                                                                                          (2 marks)

Describe two ways in which absolute proprietorship is created.                                                                                   (2 marks)

(Total: 20 marks)

 

QUESTIONS FOUR

1.           Discuss five potential disadvantages of litigation over alternative forms of dispute resolution.                                  (10 marks)

 

2.           Describe five ways in which an offer might be terminated.                                                                                        (10 marks)

(Total: 20 marks)

 

QUESTION FIVE

1.             Outline two types of on-site legal audit processes that might be used during data collection.(2 marks)

Highlight two disadvantages of a legal audit.                                                                                             (4 marks)

Outline four attributes required of a legal auditor.                                                                                      (4 marks)

2.            Examine four salient features that define the Supremacy of the Constitution of a country.                        (8 marks)

Highlight two ways in which a Kadhis Court might apply Islamic law.                                                     (2 marks)

(Total: 20 marks)

 

QUESTION SIX

1.            Describe six rights of a principal whose agent makes a secret profit or takes a bribe from a third party with whom he contracts on behalf of the principal.                                                                                                                         (6 marks)

2.          Distinguish between “statutory corporations” and “limited companies“.                                                                      (6 marks)

3.          With reference to the Law of Insurance:

Outline six basic principles that must be met in insurance.                                                                           (6 marks)

Identify two types of marine policies.                                                                                                           (2 marks)

(Total: 20 marks)

 

QUESTION SEVEN

  1. With reference to negotiable instruments, explain four parties to a bill of exchange.                                                    (8 marks)
  2. With reference to administrative law:

State six principles of natural justice.                                                                                                            (6 marks)

Highlight three principles that will guide the Court in determining the presence of bias in the decision of an administrative body.                                                                                                                     (6 marks)

(Total: 20 marks)

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COMMUNICATION SKILLS APRIL 2022 PAST PAPER

MONDAY: 4 April 2022. Afternoon paper.                                                                                          Time Allowed: 3 hours.

Answer any FIVE questions. ALL questions carry equal marks. Do not write anything on this paper.

QUESTION ONE

1.          You have been nominated by your organisation to make a media announcement of a new product. Propose five factors that you might consider when choosing the media for press release.                                            (5 marks)

2.          Explain five disadvantages of using questionnaires to collect information.                                              (5 marks)

3.           With relevant examples, analyse five characteristics of a good sales speech.                                        (10 marks)

(Total: 20 marks)

 

QUESTION TWO

1.             Explain the meaning of “interpersonal communication”.                                                                (2 marks)

Analyse four reasons why good interpersonal communication is essential at the workplace.                                (8 marks)

2.           Examine five benefits of forming departmental committees as a strategy to improve internal communication in an organisation.                                                                                                                                                         (10 marks)

(Total: 20 marks)

 

QUESTION THREE

1.           Discuss five functions of non-verbal communication.                                                                                    (5 marks)

 

2.          Assess five benefits of conducting businesses through video conferencing in the 2l stcentury.          (5 marks)

 

3.          Examine five types of unethical behaviour in communication.                                                                   (10 marks)

(Total: 20 marks)

 

QUESTION FOUR

(a)           Propose five strategies that could be used to overcome sender-oriented barriers in a telephone conversation.

(5 marks)

(b)           Explain five disadvantages of written communication.                                                                                    (5 marks)

 

(c)           Discuss five reasons why organisations prefer to use oral presentations than poster presentations when holding

conferences.                                                                                                                                                                (10 marks)

(Total: 20 marks)

 

QUESTION FIVE

1.          Highlight five uses of social media applications in business communication.                                          (5 marks)

 

2.          Explain the meaning of the term “memorandum“.                                                                            (2 marks)

Outline three purposes of a memorandum.                                                                                         (3 marks)

 

3.          Describe the five steps of the listening process.                                                                                              (10 marks)

(Total: 20 marks)

 

QUESTION SIX

1.           Summarise six features of a good business proposal.                                                                                                    (6 marks)

 

2.         Explain six areas that should be included in a formal report.                                                                                          (6 marks)

 

3.           Discuss four steps that an organisation could take to enhance ethical communication.                                         (8 marks)

(Total: 20 marks)

 

QUESTION SEVEN

1.           Highlight four key elements that should be considered when writing a paragraph.                                                 (4 marks)

 

2.           Summarise four commonly used methods of upward communication in business.                                                (4 marks)

 

3.          Assess six factors that could contribute to ineffective group communication.                                                         (12 marks)

(Total: 20 marks)

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FINANCIAL ACCOUNTING APRIL 2022 PAST PAPER

MONDAY: 4 April 2022. Morning paper.                                                                                          Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Show ALL your workings. Do NOT write anything on this paper.

QUESTION ONE

1.          Highlight five elements of financial statements.                                                                                                              (5 marks)

2.          Fatuma Ali commenced business as a retail chemist on 1 January 2021 with an initial capital of Sh.30,000,000 which she paid into her business bank account.  She hired a shop manager at an annual salary of Sh.2,000,000. In addition, the shop manager is to receive a commission of 10% of the gross profit. During the year ended 31 December 2021, Fatuma Ali did not maintain proper books of account.  After an examination of the available records the following information was extracted:

Bank statement for the year ended 31 December 2021:

 

Additional information:

  1. All sales were for cash and sales are banked daily subject to the retention of a cash float of Sh.100,000.

The following payments were made out of the cash sales:

Sh. “000”

Manager’s salary                                           1,980

Drawings                                                      4,000.

Payments to suppliers                                  1,390

General expenses                                             840

  1. As at 31 December 2021, cheques sent to suppliers amounting to Sh.2,500,000 had not been presented to the bank for payment.
  2. As at 31 December 2021, invoices from suppliers amounting to Sh.8,600,000 had not been paid.
  3. As at 31 December 2021, inventory was valued at Sh.36,500,000.
  4. Depreciation per annum is to be provided on the motor vehicle at the rate of 25% on cost and on the shop fittings and equipment at 10% on cost.
  5. During the year ended 31 December 2021, Fatuma Ali took goods which cost Sh.100,000 for her personal use.

Required:

Statement of profit or loss for the year ended 31 December 2021.                                                             (8 marks)

Statement of financial position as at 31 December 2021.                                                                            (7 marks)

(Total: 20 marks)

 

QUESTION TWO

Jack and Nina were operating a shop dealing in designer bags as partners sharing profits and losses in the ratio of 2:1 respectively.  On 31 March 2021 they admitted Maria to the partnership.  The partnership deed provides for interest on capital at the rate of 10% per annum.

The balances as per the partnership’s book of account as at 30 September 2021 were as follows:

Additional information:

  1. On admission of Maria, the profit sharing ratio changed to Jack 2/5. Nina 2/5, Maria 1/5. For purpose of admission, goodwill was valued at Sh. I 2,000,000 and was written off the books immediately.
  2. Sales for the period to 31 March 2021 were equal to two third of sales from 1 April to year end.
  3. On 1 April 2021, Maria paid Sh.5,000,000 which comprised her fixed capital of Sh.3,500,000 and her current account contribution of Sh.1,500,000.
  4. Apportionment of gross profit was to be made on the basis of sales while for expenses is based on time, unless otherwise indicated.
  5. On 30 September 2021, inventory was valued at Sh.5,100,000
  6. Allowance for depreciation on motor vehicles, and furniture and fittings is at the rate of 20% and 5% per annum respectively, based on cost.
  7. Salaries included the following partner’s drawings during the year:

Sh.

Jack                          600,000

Nina                         480,000

Maria                       250,000

  1. As at 30 September 2021, rates paid in advance amounted to Sh.260,000 while electricity accrued amounted to Sh.60,000.
  2. Doubtful debts (for which full provision was required) as at 31  March 2021  amounted to Sh.120,000 and Sh.160,000 as at 30 September 2021.
  3.   Consultancy fees included Sh.200,000 paid in respect to the acquisition of office building.  These fees are to be capitalised as part of the building. The building is estimated to have a useful life of 25 years.

Required:

Statement of profit or loss for the year ended 30 September 2021.                                                          (10 marks)

Statement of financial position as at 30 September 2021.                                                                             (6 marks)

Partners’ current accounts.                                                                                                                                       (4 marks)

(Total: 20 marks)

 

QUESTION THREE

The treasurer of Kite Golf Club has provided the following receipts and payments for the year ended 31 October 2021:

Additional information:

  1. As at 1 November 2020, the following assets were identified at cost:

Sh. “000”

Clubhouse and course                     400,000

Fixtures and fittings                           70,000

Course equipment                             160,000

  1. Depreciation rates per annum were as follows:

Asset                                               Rate

–      Fixtures and fittings           10% on cost

–      Course equipment              20% on cost

  1. Course equipment was disposed of during the year for a scrap value of Sh.2,500,000. The equipment was purchased for Sh.7,000,000 and had an accumulated depreciation charge of Sh.5,600,000 as at 1 November 2020. No depreciation is charged in the year of disposal.
  2. As at 1 November 2020, insurance pre-paid amounted to Sh.4,500,000.
  3. The insurance expense paid for the year covers the period to 31 July 2022. The Insurance for the period to 31 July 2021 amounted to Sh.6,000,000.

 

Required:

Bar income statement for the year ended 31 October 2021.                                                                          (4 marks)

Income and expenditure statement for the year ended 31 October 2021.                                                  (8 marks)

Statement of financial position as at 31 October 2021.                                                                                   (8 marks)

(Total: 20 marks)

 

QUESTION FOUR

Green Traders and Gold Traders are two businesses dealing with the sale of household furniture. The following financial statements were extracted from their books for the year ended 31 December 2021:

Required:

1. Compute the following ratios for each company:

Gross profit margin.                                                                                                                                 (2 marks)

Net profit margin.                                                                                                                                      (2 marks)

Return on capital employed.                                                                                                                   (2 marks)

Return on assets.                                                                                                                                       (2 marks)

Current ratio.                                                                                                                                               (2 marks)

Assets turnover.

Inventory turnover.                                                                                                                                   (2 marks)

Trade receivable days.                                                                                                                              (2 marks)

Trade payable days.                                                                                                                                  (2 marks)

2. Comment on the profitability for each company.                                                                                             (2 marks)

(Total: 20 marks)

 

QUESTION FIVE

1.            In relation to public sector accounting:

Explain the term “encumbrance (obligations)”.                                                                                (2 marks)

Highlight four characteristics of a government business enterprise.                                          (4 marks)

 

2.           Describe the following types of preference share capital:

Cumulative preference shares.                                (2 marks)

Participating preference share capital.                                (2 marks)

Redeemable preference shares.                                (2 marks)

 

3.           On 30 September 2021, the cashbook (bank column) of Legume Traders showed a debit balance of Sh.530,000 while the bank statement balance on the same date had a balance of Sh.608,500.

On investigation, the following discrepancies were discovered:

 

  1. A cheque received from a debtor for Sh.92,000 and debited in the cashbook was refunded by the bank stamped “Insufficient funds” on 28 September 2021.
  2. A receipt from a debtor of Sh.65,000 was entered as a payment in the cashbook.
  3. Bank charges amounting to Sh.9,500 were reflected in the bank statement only.
  4. Cheques totalling to Sh.299,000 had been issued to suppliers, but not yet been presented to the bank for payment.
  5. A standing order placed for rent of Sh.230,000 was effected in the bank as per the bank statement.
  6. Cheques amounting to Sh.206,000 were received and debited in the cash book. These cheques had not yet been credited into the bank statement.
  7. A customer made a direct deposit of Sh.187,000 into the business bank account.

Required:

An updated cashbook as at 30 September 2021.                (4 marks)

Bank reconciliation statement as at 30 September 2021.                (4 marks)

(Total: 20 marks)

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PRINCIPLES OF MARKETING AND COMMUNICATION APRIL 2022 PAST PAPER

TUESDAY: 5 April 2022. Morning paper.                                                                                            Time Allowed: 3 hours.

This paper is made of a hundred (100) Multiple Choice Questions. Answer ALL the questions by indicating the letter (a, b, c or d) that represents the correct answer. Do NOT write anything on this paper.

 

  1. Which of the following statements is NOT true about marketing?

(a)           Marketing aims at finding and sustaining customers by creating a competitive advantage.

(b)           Marketing is successful if it satisfies customers profitably.

(c)           Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual  (customer) and organisational objectives.

(d)           Marketing is not governed by ethics.                                                                                                             (1 mark)

 

  1. In organisations, the people with needs or wants are also known as:

(a)           Customers.

(b)           Audiences.

(c)           Target groups.

(d)           Beneficiaries.                                                                                                                                                  ( I mark)

 

  1. Obtaining a desired object from someone by offering something of value in return is also known as:

(a)           Exchange process.

(b)           Transaction.

(c)            Market distribution.

(d)           Monitoring and evaluation.                                                                                                                           ( 1 mark)

 

  1. Marketing approaches made from customer’s perspectives and not factory capabilities are also known as:

(a)           Consumer oriented.

(b)           Production concept oriented.

(c)           Sales oriented.

(d)           Profit oriented.                                                                                                                                               ( I mark)

 

  1. Which of the following statements BEST describes the marketing mix?

(a)           It is a set of controllable tactical marketing tools that the firm blends to produce customer centered solutions in the market.

(b)           There is hardly any difference between product and price.

(c)           The marketing program does not have to blend the marketing mix elements together.

(d)           There has been a trend to represent the marketing mix from a customer’s views to the sellers view.     ( I mark)

 

  1. Hospitals, schools, churches and prisons comprise of:

(a)           Consumer markets.

(b)           Institutional markets.

(c)           Reseller markets.

(d)           Business to business markets.                                                                                                                          (1 mark)

 

  1. Which is true about undifferentiated markets?

(a)           Businesses appeal to several markets and develop different messaging for each group.

(b)           They focus on mass market commodities.

(c)           Most customers in this segment use social media.

(d)           Related campaigns do in-depth research to understand different customer preferences.                              (1 mark)

 

  1. Which of the following statement is NOT true about market segmentation?

(a)           It involves identifying and classifying people into homogeneous groupings.

(b)          It involves determining which categories are viable target markets.

(c)          It enables increased efficiency by determining needed efforts in tandem with area characteristics.

(d)          There are two major segmentation strategies.                                                                                    (1 mark)

 

  1. Which of the following is NOT a participant in the organisational buying process?

(a)           Influencer.

(b)          Gatekeeper.

(c)           Decider.

(d)          Seller.                                                                                                                                                            (I mark)

 

  1. Which of the following is a type of online research?

(a)          Focus group discussion.

(b)          Oral interviewing.

(c)          Moderated virtual surveys.

(d)          Face to face interviews.                                                                                                                            (1 mark)

 

1 1 .      The following are steps involved in marketing research EXCEPT:

(a)          Determining the scope of the research.

(b)          Creating research design.

(c)          Prospecting.

(d)          Sample selections.                                                                                                                                     (1 mark)

 

  1. Which of the following is NOT a research design approach?

(a)          Experimental.

(b)          Streamlined instant messaging.

(c)          Observational.

(d)          Survey.                                                                                                                                                          ( I mark)

 

  1. is the process of interpreting a message in the communication channel.

(a)           Feedback.

(b)          Encoding.

(c)          Encrypting.

(d)          Decoding.                                                                                                                                                      (1 mark)

 

  1. Which of the following is an element of services marketing mix?

(a)           Place.

(b)          Promotion.

(c)          Process.

(d)          Packaging.                                                                                                                                                     (1 mark)

 

  1. Which of the following is NOT a pricing objective?

(a)          To lead market share.

(b)          Return on investment.

(c)          To maximise profits.

(d)          To control product placement.                                                                                                               (1 mark)

 

  1. Which of the following is NOT a demographic segmentation criteria?

(a)          Gender.

(b)          Age.

(c)          Values.

(d)          Profession.                                                                                                                                                   (1 mark)

 

  1. Which of the following is TRUE about product distribution?

(a)          Number of intermediaries indicates length of a channel.

(b)          A direct marketing channel has two intermediary levels.

(c)          An indirect marketing channel contains no intermediaries.

(d)          A greater number of levels means channel simplicity.                                                                   (1 mark)

 

  1. Which of the following is a set of the product development process?

(a)           Penetration.

(b)           Screening.

(c)            Diversification.

(d)           Product extension.                                                                                                                                           (1 mark)

 

  1. Which of the following is a barrier of effective communication?

(a)          information overload.

(b)          Eye contact.

(c)          Right posture.

(d)          Listening.                                                                                                                                                     (I mark)

 

  1. Which of the following is NOT involved in managing a meeting?

(a)          Setting ground rules.

(b)          Moderating participation.

(c)          Managing conversations.

(d)          Rioting.                                                                                                                                                         ( I mark)

 

  1. The first step of the selling process involves:

(a)          Presentation.

(b)          Follow up.

(c)          Prospecting.

(d)          Closing.                                                                                                                                                        (1 mark)

 

  1. The introduction section of a customer service charter comprises:

(a)          Mission statement.

(b)          Services rendered.

(c)          Organisation contact.

(d)          Service costs.                                                                                                                                             (1 mark)

 

  1. Which of the following is NOT negative consequence of conflicts?

(a)          Fosters realisation of set goals.

(b)          Can lead to distorted judgment.

(c)          Can tamper with team cohesion.

(d)          Can threaten relationships.                                                                                                                     (I mark)

 

  1. Which of the following is TRUE about sustainable marketing?

(a)          It involves promoting environmental and social responsible products, practices and brand values.

(b)          Related programs are short term.

(c)          Not all aspects of the brand might support sustainability.

(d)          The company does not prioritise reducing carbon emissions and waste recycle.                   (1 mark)

 

  1. The following are characteristics of weak brands EXCEPT:

(a)          Negative image.

(b)          Influence purchase.

(c)           Loss of market share.

(d)          Inconsistency.                                                                                                                                            ( I mark)

 

  1. Kinesic communication is characterised by use of:

(a)          Time.

(b)          Touch.

(c)          Body movements.

(d)          Interpersonal communication.                                                                                                               (1 mark)

 

  1. Which of the following is NOT a function of a committee member in meetings?

(a)          Reporting on tasks identified from previous meetings.

(b)          Participation in membership.

(c)          Attending meetings.

(d)          Record apologies of absentee members.                                                                                             ( I mark)

 

  1. Which of the following is NOT a common communication problem in organisations?

(a)          Cultural differences.

(b)          Language barriers.

(c)          Information overflow.

(d)          Tolerating diversity.                                                                                                                                  (1 mark)

 

  1. Which of the following statements is TRUE about price skimming?

(a)           It involves setting high prices when a product is introduced in the market gradually lowering the prices with competition surge.

(b)          It involves undercutting competitors.

(c)          It involves price discrimination.

(d)          It involves economy pricing.                                                                                                                  (1 mark)

 

  1. Marketing strategy that involves the company focusing on a UNIQUE and exclusive target market for all its initiatives is also known as:

(a)           Undifferentiated marketing.

(b)          Concentrated marketing.

(c)          Niche marketing.

(d)          Focused marketing.                                                                                                                                    (1 mark)

 

  1. Which of the following is the most IMPORTANT attribute of a salesman?

(a)          Thorough knowledge of the product, company and customer.

(b)          Resilience.

(c)          Determination.

(d)          Negotiation skills.                                                                                                                                      (1 mark)

 

  1. Which communication channel would NOT be ideal for a grassroots community campaign?

(a)          Community radio.

(b)          Barazas.

(c)          Market day community engagements.

(d)          Twitter feeds.                                                                                                                                              (I mark)

 

  1. Which of the following is NOT TRUE about Grape Vine?

(a)          It is a channel for instilling team work.

(b)          It is an informal channel of communication in organisations.

(c)          It is initiated by Heads of department.

(d)          It is recognised as a communications channel.                                                                                 (1 mark)

 

  1. Which of the following is NOT an ideal attribute of an online e-commerce website?

(a)          Secure payment network.

(b)          Aesthetically appealing.

(c)          Strong call to action.

(d)          Medium speed loading time.                                                                                                                   ( I mark)

 

  1. Which of the following is a demerit of webinars?

(a)          High drop out rates.

(b)          Wide reach.

(c)          Seamless recording.

(d)          Convenience attendance.                                                                                                                          (I mark)

 

  1. Which of the following is NOT a disadvantage of face to face interviews?

(a)           High personnel costs.

(b)          High interview bias.

(c)          Capturing verbal and nonverbal cues.

(d)          Sample size limitation.                                                                                                                             (I mark)

 

  1. Which of the following is a benefit of market planning?

(a)           Ensuring that programs are executed within stipulated budgets.

(b)           Backstopping any uncertainties in execution of programs.

(c)           Avoiding waste resources.

(d)           All of the above.                                                                                                                                              (1 mark)

 

  1. Which of the following is NOT a strategy for eliciting customer feedback on social media?

(a)          Hold social media contests.

(b)          Send direct messages requesting for feedback.

(c)          Post link to a survey.

(d)          Conduct face to face interviews.                                                                                                           (1 mark)

 

  1. What should NOT be done when dealing with difficult customers?

(a)          Practice active listening.

(b)          Empathise.

(c)          Be defensive.

(d)          Acknowledge fault if deserved.                                                                                                             (1 mark)

 

  1. Which of the following conclusive section is found in reports?

(a)          Abstract.

(b)          Recommendations.

(c)          Executive summary.

(d)          References.                                                                                                                                                  (1 mark)

 

  1. The opening of a formal report accomplishes the following EXCEPT:

(a)          Summarises the salient points of the report.

(b)          Gives a logical conclusion.

(c)          Introduces the report.

(d)          Draws inferences from the report.                                                                                                        (I mark)

 

  1. Which of the following statements is NOT TRUE about the communication process?

(a)          Communication is successful if transmitted.

(b)          Communication is cyclical.

(c)          Feedback and noise are elements of the communication process.

(d)          Communication begins with a source with a message targeted at the receiver.                        ( 1 mark)

 

  1. The following are formal communication modes except:

(a)          Letters.

(b)          Memo.

(c)          Circulars.

(d)          Grapevine.                                                                                                                                                   (I mark)

 

  1. The touch element of nonverbal communication is also known as:

(a)          Kinesics.

(b)          Proxemics.

(c)          Paralanguage.

(d)          Haptics.                                                                                                                                                        ( I mark)

 

  1. Which of the following is NOT a tactic for harnessing non verbal communication?

(a)          Maintaining eye contact during communication.

(b)          Fidgeting and yawning.

(c)          Appropriate use of hand signals.

(d)          Dressing informally.                                                                                                                                 (1 mark)

 

  1. Which of the following is NOT a promotion strategy in the marketing mix?

(a)          Advertising.

(b)          Public relations.

(c)          Channel distribution.

(d)          Personal selling.                                                                                                                                         ( I mark)

 

  1. Which of the following is a correct description of informal meetings?

(a)          There are no minutes taken during the meeting.

(b)          There is a set agenda sent to members before meeting begins.

(c)          They involve presenting large scale operational issues.

(d)          Annual shareholder meeting is an example of a formal meeting.                                                (1 mark)

 

48.   Which of the following is NOT an example of marketing service agencies?

(a)          Advertising agencies.

(b)          Marketing consultancy firms.

(c)          Consumers.

(d)          Promotional agencies.                                                                                                                               (1 mark)

 

  1. Which of the following are NOT internal publics?

(a)           Employees.

(b)          Board of Directors.

(a)           Citizen action groups.

(d)          Interns.                                                                                                                                                          (1 mark)

 

  1. Which of the following is NOT a tangible product attribute?

(a)          Quality.

(b)          Price.

(c)           Features.

(d)          Design.                                                                                                                                                          (1 mark)

 

5 1 .       Which of the following is a MAIN DISTINCTIVE feature of a supermarket?

(a)          Rapid turnover.

(b)          Low price.

(c)          Open display.

(d)          Economies of scale.                                                                                                                                  (1 mark)

 

  1. Choose from the list below the statement that gives the BEST description of secondary data?

(a)          Data gathered from secondary sources in a market environment.

(b)          Information collected for a specific purpose from the market.

(c)          Firsthand information gathered from the market environment.

(d)          Information that already exists collected for other purposes.                                                      ( I mark)

 

  1. Which of the following statements gives the BEST description of observational research?

(a)          Observing the geographical markets within a marketing environment.

(b)          Observing relevant people, actions and situations in the environment.

(c)          Observing the marketing activities in a day-to-day market environment.

(d)          Observing the markets and the relevant goods and services periodically.                                 (I mark)

 

  1. From the list below, choose the statement that DOES NOT represent the objectives of advertising:

(a)          To create desire for a product.

(b)          To alter perceptions about a product.

(c)          To improve customer service.

(d)          To provide reassurances.                                                                                                                         (1 mark)

 

  1. Which of the following statements BEST describes customer satisfaction?

(a)          The extent to which a product’s perceived performance matches a buyer’s expectations.

(b)          The extent to which a product’s performance matches the buyer’s price offered.

(c)           The extent to which a product’s performance matches the consumer’s earned income.

(d)          The extent to which a product’s performance matches the consumer’s emotional buying.   (I mark)

 

  1. Which of the following is NOT an aspect of marketing process?

(a)          Finding out customers.

(b)          Assessing customer needs.

(c)          Customer behaviour change.

(d)          Placing goods with customers.                                                                                                               (I mark)

 

  1. Which of the following statements BEST describes the definition of a product broadly?

(a)          Anything that can be offered to a market for acquisition to satisfy a want or need.

(b)          Anything tangible that can be offered to a market to satisfy a want or need.

(a)          Anything that can be offered to a market in a differential form to satisfy a need.

(d)          Anything that can be offered to a market after going through production process.                (1 mark)

 

  1. Which of the following statements, BEST describes the term “product line”?

(a)           A group of products produced by a manufacturing firm.

(b)          A group of products that are used together in production.

(c)           A group of products that are closely related in production.

(d)          A group of closely related products under the same brand.                                                          (l mark)

 

  1. Which of the following statements, BEST describes the product life cycle concept?

(a)          The channel through which a product follows over it’s lifetime.

(b)          The patch of growth and development of a product over it lifetime.

(c)          The course of a product’s sales and profits over it’s lifetime.

(d)          The direction and depth of a product over its lifetime.                            ( 1 mark)

 

  1. Choose from the list below the statement that DOES NOT describe maturity in a typical product life cycle.

(a)           Period when sales fall off and profits drop.

(b)          Period of slowdown in sales growth.

(c)           Period when profits level off or decline.

(d)          Period of increased competition in the industry.                                                                              (1 mark)

 

  1. Which of the following statements defines customer value-based pricing?

(a)           Using costs to set the price of a product.

(b)          Using competitors pricing to set price of a product.

(c)           Using the buyer’s perception of value to set price.

(d)          Using value added features to set the price.                                                                                       (1 mark)

 

  1. Cost-based pricing involves setting prices based on:

(a)           Right combination of quality and good service.

(b)          Costs of producing, distributing and a fair rate of return.

(c)          A standard mark-up to the cost of the product.

(d)          Competitor’s strategies, prices, costs and market offerings.                                                         (1 mark)

 

  1. Which of the following is NOT a pricing objective?

(a)          To achieve an expected profit.

(b)          To increase the market share.

(c)          To increase the share value.

(d)          To survive competition.                                                                                                                           (1 mark)

 

  1. A channel level might be described as:

(a)           A set of intermediaries that performs some work in bringing the product to the final buyer.

(b)          A value delivery network in specific industries.

(c)          A set of intermediaries involved in the production of good and services.

(d)          A set of markets engaged in the distribution network of manufactured goods.                       (I mark)

 

  1. Which of the following is a function of channel members in the distribution channel?

(a)          Risk taking.

(b)          Product pricing.

(c)          Market segmentation.

(d)          Product differentiation.                                                                                                                            ( 1 mark)

 

  1. The use of words and numbers in written or spoken form is termed as:

(a)          Active communication.

(b)          Verbal communication.

(c)          Non-verbal communication.

(d)          Passive communication.                                                                                                                           (1 mark)

 

  1. The first stage in the communication process is:

(a)           Message.

(b)          Sender.

(c)           Encoding.

(d)          Decoding.                                                                                                                                                      (1 mark)

 

  1. Oral channels of communication are considered appropriate when the sender:

(a)          Needs a permanent record.

(b)          Needs to address a widespread audience.

(c)          Needs an immediate response.

(d)          Needs to give detailed information.                                                                                                     (1 mark)

 

  1. Horizontal communication occurs mainly between:

(a)           Employees and senior management.

(b)          Management and supervisors.

(c)           Employees of the same status.

(d)          Employees working in different departments.                                                                                  (1 mark)

 

  1. Which of the following is NOT an example of business written communication?

(a)          Voice mail greeting.

(b)          Annual reports.

(c)           Procedure manual.

(d)          Customer order.                                                                                                                                         (I mark)

 

  1. Which of the statements below gives the BEST advantage of upward communication?

(a)           Provides input for decision making.

(b)          Provides feedback from employees.

(c)           Provides instructions to employees.

(d)          Provides advice to employees.                                                                                                              (1 mark)

 

  1. Which of the following is a format used when writing business letters?

(a)           Electronic mails.

(b)          Text massaging.

(c)          Fully-blocked style,

(d)          Sales letters method.                                                                                                                                (1 mark)

 

  1. Which of the following statements describes an advantage of written communication?

(a)          It creates a permanent record of communication.

(b)          It saves on the cost of business operations.

(c)          It requires no skill or competence in writing.

(d)          The feedback is obtained easily.                                                                                                           (I mark)

 

  1. Choose from the list below the aspect that is NOT considered as a rule for effective writing:

(a)          Clarity.

(b)          Convenience.

(c)           Completeness.

(d)        – Courtesy.                                                                                                                                                     (1 mark)

 

  1. Which of the statements below BEST explains the purpose of an annual business report?

(a)          To provide recommendations.

(b)          To provide ideas and opinions.

(c)          To provide facts about business.

(d)          To provide information.                                                                                                                          (I mark)

 

  1. Which of the following is NOT an item or a sub-title of a business report?

(a)           A preface.

(b)          Identity of the writer.

(c)          Terms of reference.

(d)          A summary.                                                                                                                                                 (I mark)

 

  1. Which of the following statements BEST describes the objective of a memo?

(a)          To communicate internal matters of the organisation to outsiders.

(b)          To communicate with other employees of the organsiation.

(c)          To communicate the managers opinion in an organisation.

(d)          To communicate to middle level managers in an organisation.                                                    (I mark)

 

  1. Choose from the list below the aspect that is NOT a section in a memo:

(a)           Introduction.

(b)          Subject.

(c)           Heading.

(d)           Message/body.                                                                                                                                            ( I mark)

 

  1. The purpose of graphic communication is to:

(a)           Show the channels of communication.

(b)          Show and compare changes and relationships.

(c)           Show the organisation culture and values.

(d)          Show the flow of communication in a business.                                                                              (I mark)

 

  1. Which of the following statements DOES NOT explain the benefit of visual presentation:

(a)           Complex facts and figures are easily absorbed.

(b)          Enables quicker understanding.

(c)           Leads to lower retention rate.

(d)          Stimulates the interest of audience.                                                                                                      (l mark)

 

  1. Which of the statements below describes a flow chart?

(a)           A board that shows the planning of activities in an organisation.

(b)          A chart that shows the flow of communication in an organisation.

(c)           A chart that shows the relationship between departments.

(d)          A diagram showing the sequence of decisions or instructions in a process.                            ( 1 mark)

 

  1. An accurate transcript of the main discussions and decisions made and is presented after the meeting is over is known as?

(a)          Forum of discussion.

(b)          Vote of thanks.

(c)          Minutes of meeting.

(d)          Agenda of meeting.                                                                                                                                    (1 mark)

 

  1. What is the name given to the person who takes minutes in a meeting?

(a)          Chairman.

(b)          Reporter.

(c)          Secretary.

(d)          Committee member.                                                                                                                                  (1 mark)

 

  1. Which statement describes an interview protocol?

(a)          A list of questions prepared to get the information an interviewer needs from interviewee.

(b)          A list of items prepared to be presented during an interview to the interviewee.

(c)          A list of questions presented to the interview board for interviewees to answer.

(d)          A list of questions given to the interviewer to make a summary and present.                         ( 1 mark)

 

  1. Which of the following statements BEST describes open questions for an interview?

(a)          Narrowly focused questions requiring the respondent to give brief answers.

(b)          Lead in questions that introduce one of the major topics of the interview.

(c)          Questions that guide respondents toward providing certain type of information.

(d)          Broad-based questions that require interviewee to provide ideas, opinions or perspective.                               ( I mark)

 

  1. Which of the following is NOT a characteristic of effective informative speaking?

(a)           Intellectually stimulating.

(b)          Relevant.

(c)          Biased.

(d)          Creative.                                                                                                                                                        (I mark)

 

  1. Which of the following statements gives the BEST meaning of understanding in communication?

(a)          Decoding a message accurately to express the intended emotional meaning.

(b)          Decoding a message and making some responses that reflect empathic response.

(c)          Decoding a message accurately to reflect the meaning intended by the speaker/sender.

(d)          Decoding a message in order to reflect the wishes of the speaker/sender.                                ( I mark)

 

  1. The following are barriers to effective listening EXCEPT:

(a)           Pre judgement.

(b)           Selective listening.

(c)           Establish eye contact.

(d)           Selfishness.                                                                                                                                                     (I mark)

 

  1. The following are visual aids used when making a presentation EXCEPT:

(a)           Projector.

(b)           Flip charts.

(c)           Video clips.

(d)           Telephone.                                                                                                                                                   ( I mark)

 

  1. Which of the following statements describes vertical communication?

(a)           Communication that moves between individuals at different levels in an organisation, in an upward or downward direction.

(b)           Communication that takes place between employees in different departments.

(c)           Communication that takes place between employees of the same status.

(d)           Communication that takes place through channels outside the normal lines.                          (I mark)

 

  1. Which of the following is the MOST preferred method of communication when time zones differ?

(a)           Electronic mails.

(b)           Telephone.

(c)           Postal mails.

(d)           Fax.                                                                                                                                                                (1 mark)

 

  1. Which of the following is NOT a key feature of online meetings platform?

(a)           Video conferencing.

(b)           Streamlined instant messaging.

(c)           Desktop sharing.

(d)           Face to face engagements.                                                                                                                       (I mark)

 

  1. What constitutes an important part of communication casting?

(a)           Talking as much as you can.

(b)           Talking about others.

(c)           Listening to others.

(d)           Always knowing what to say next.                                                                                                        (1 mark)

 

  1. What do you call the act of putting a message received in your own words?

(a)           Clarifying.

(b)           Paraphrasing.

(c)           Repeating.

(d)           Probing.                                                                                                                                                           (1 mark)

 

  1. Which of the following is a bad listening habit?

(a)           Not interrupting the speaker.

(b)           Listening to what one has to say before speaking.

(c)           Nodding one’s head to show that you are listening to what is being said.

(d)           Jumping to conclusions.                                                                                                                          ( I mark)

 

  1. In an organisation set-up, which of the following is NOT a type of communication?

(a)           Horizontal communication.

(b)           Curve communication.

(c)           Downward communication.

(d)           Upward communication.                                                                                                                          ( 1 mark)

 

  1. What needs to be complete for there to be effective communication?

(a)           The documentation.

(b)           An agreement.

(c)           Both the sending and receiving of the message.

(d)           The person’s sentence.                                                                                                                              (1 mark)

 

  1. What form of communication DOES NOT involve use of words?

(a)          Gestures.

(b)          Telepathy.

(c)          Sign language.

(d)          Non-verbal communication.                                                                                                                    (1 mark)

 

  1. Which of the following statements BEST defines the term “verbal communication”?

(a)          When someone is talking and someone else is listening.

(b)          Talking to someone.

(c)          When more than one person is talking.

(d)          Nodding one’s head to show that you are listening.                                                                          (1 mark)

 

  1. What is the term used to describe emotion in one’s voice?

(a)          Sarcasm.

(b)          Tone.

(c)          Verbal communication.

(d)          Sentiment.                                                                                                                                                    (I mark)

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ELEMENTS OF TAXATION APRIL 2022 PAST PAPER

MONDAY: 4 April 2022. Afternoon paper.                                                                                          Time Allowed: 3 hours.

This paper is made up of a hundred (100) Multiple Choice Questions. Answer ALL the questions by indicating the letter (a, b, c or d) that represents the correct answer. Do NOT write anything on this paper.

RATES OF TAX (Including wife’s employment, self-employment and professional income rates of tax).

Year of income 2021.

Assume that the following rates of tax applied throughout the year of income 2021:

  1. Which one of the following statements explains the meaning of Pay As You Earn (PAYE)?

(a)            Tax charged on locally manufactured goods.

(b)           Tax levied on goods imported into a country.

(c)            Tax charged on incomes earned by limited company.

(d)           Tax charged on the incomes of an individual.                                                                                      ( 1 mark)

 

  1. What is the meaning of the term “Tax”?

(a)            It is compulsory contributions by persons to the state to enable it meet its obligations and service delivery.

(b)           It is a voluntarily contributions by persons to the state to enable it meet its expenses.

(c)            It is a compulsory contribution by individuals to registered organisations for purpose of saving.

(d)           It is a contribution by persons to the state for the purpose of development of health system.                            (1 mark)

 

  1. Under classification of taxes, identify which one of the following is NOT used for tax classification:

(a)            By base.

(b)           By rates.

(c)            By volume.

(d)           By effect.                                                                                                                                                            ( I mark)

 

  1. Which of the following factors DOES NOT influence tax shifting?

(a)            Elasticity of demand and supply.

(b)           Purpose of the product.

(c)            Nature of the market.

(d)           Geographical location.                                                                                                                                        (1 mark)

 

  1. Which of the following statements DOES NOT explain the meaning of a resident in regard to an individual for tax purposes?

(a)            A person who has no permanent home in Kenya and was in Kenya during the year of income under consideration for any period.

(b)           A person who has a permanent home in Kenya and was in Kenya during the year of income under consideration.

(c)            A person who has no permanent home in Kenya but was in Kenya for an aggregate of 183 days or more during the year of income under consideration.

(d)           A person who has no permanent home in Kenya but was in Kenya for a period averaging to more than 122 days for the year of income under consideration and two preceding years.                                                (1 mark)

 

  1. Which one of the following is NOT a way of tax avoidance?

(a)            Claim allowable deductions.

(b)           Claiming investment allowances.

(c)            Overstating the allowable expenses.

(d)           Investing in countries with low tax rates.                                                                                                           ( 1 mark)

 

  1. Which one of the following factors DOES NOT influence taxable capacity?

(a)            Level of income.

(b)            Distribution of wealth.

(c)            Size of population.

(d)            Education level of the community.                                                                                                                     (1 mark)

 

  1. An optimal tax system is the one that fulfills most of the principles of taxation. Which one of the following principles is NOT among the four principles advocated by Adam Smith?

(a)            Canon of equity.

(b)           Canon of simplicity.

(c)            Canon of economy.

(d)           Canon of certainty.                                                                                                                                             ( 1 mark)

 

  1. Which one of the following is NOT a purpose of levying tax?

(a)            To raise the revenue.

(b)           To stabilise the economy.

(c)            To protect local industries.

(d)            To increase population.                                                                                                                                       ( 1 mark)

 

  1. The following are functions of a revenue authority EXCEPT.

(a)            File tax on behalf of the tax payer.

(b)           Training the tax payers and recruiting of tax agents.

(c)           Enforcing measures to collect the tax evaded.

(d)           Act as agent of the government in relation to tax collection.                               (1 mark)

 

  1. All of the following are measures used by the customs and excise duty departments of your country to prevent dumping EXCEPT.

(a)            Establishment of the advisory committee to recommend to the minister the imposition of antidumping or countervailing measures on investigated products imported into the country.

(b)           Prohibition and restriction of all imports from time to time.

(c)            Pre-shipment and pre-verification of exports done by qualified and reputable inspection firms and institutions of regular off-shore inspections.

(d)           Collusion between customs officers and importers are policed strictly and heavily penalised.                ( I mark)

 

  1. Which of the following strategy CANNOT be used by revenue authority to enhance tax compliance?

(a)            Creating awareness by the revenue authority on the roles of taxes and the civic duty to pay taxes.

(b)           Increasing the rates of various taxes for example customs duty and VAT.

(c)           Enhancing efficiency in tax collection for example requiring PIN in some transactions.

(d)           Providing more tax incentives for example tax reliefs and allowances.             (1 mark)

 

  1. Binding assessments are assessment which are final and conclusive. Which among the following is NOT a binding assessment?

(a)            Assessment determined by local committee.

(b)           Assessment made and no appeal has been made.

(c)            Assessment made and no objection has been raised within the statutory period.

(d)           Assessment awaiting determination by local committee.                                                                                                                                                                    (1 mark)

 

  1. Leah Kerubo obtained a loan amounting to Sh.3,000,000 from the employer, Letto Limited at an interest rate of 8% per annum while the market rate was 12% per annum. What is the fringe benefit tax per month?

(a)            Sh.3,000.

(b)           Sh.10,000.

(c)            Sh.12,000.

(d)           Sh.6,000.                                                                                                                                                          ( 1 mark)

 

  1. Which one of the following is NOT a disadvantage of indirect taxes imposed in your country?

(a)            Lack of civic consciousness.

(b)           Feed inflation.

(c)            Uncertain revenue.

(d)           It is imposed on wide range of businesses.              (1 mark)

 

  1. Which one of the following circumstances DOES NOT qualify for a refund of value added tax (VAT) paid?

(a)            VAT paid on bad debts.

(b)            VAT paid in error.

(c)            Death of the tax payer soon after VAT payment.

(d)           Overpayments resulting from the withholding VAT system.                    (1 mark)

 

  1. Which one of the following is NOT a characteristic of tax?

(a)            It has a direct reward.

(b)           It is usually levied where there is an income.

(c)            Tax rates differ from one country to another.

(d)           There are penalties due to failure to pay tax.                          (1 mark)

 

  1. Which of the following statements is NOT true about stamp duty?

(a)            It is levied by the government on certain transactions and documents.

(b)           The rate of stamp duty on properties in urban areas is 4% and 2% in rural areas.

(c)            It is paid in advance and the tax payer does not get a direct reward.

(d)           Its purpose is to legalise the transaction.              (I mark)

 

  1. The following instruments are chargeable to stump duty. Which is NOT?

(a)            Title deeds.

(b)           Mortgage agreements.

(c)            Insurance policies.

(d)           Letter of allotment of shares.                                                                                                                             ( 1 mark)

 

  1. Which one of the following is NOT a cause of tax evasion?

(a)            High tax rates.

(b)           Adequate collection points.

(c)            Complexity of tax system.

(d)           Low levels of income.                                                                                                                                        ( I mark)

 

  1. The following are methods of tax evasion EXCEPT?

(a)            Under declaration of the taxable income.

(b)           Claiming expenses one is not entitled to.

(c)            Investing outside the country.

(d)           Overstating the allowable expenses.                                                                                                                   (1 mark)

 

  1. Which of the following is NOT a criteria of taxing income in Kenya?

(a)            The income must have been earned in Kenya.

(b)           The services must have been rendered in Kenya.

(c)            The payment of services must have been rendered in Kenya.

(d)           The tax payer must have a permanent residence.                                                                                                (1 mark)

 

  1. Resident in relation to a body corporate means the following EXCEPT?

(a)            The company was incorporated in Kenya under the Kenyan laws and regulations.

(b)           The management and control of the business was exercised in Kenya during the year of income under consideration.

(c)           The management and control of the business was not exercised in Kenya during the year of income under consideration.

(d)           The body corporate has been declared by the cabinet secretary of finance to be a resident through the Kenyan gazette.                                                                                                                                                 (1 mark)

 

  1. The following are advantages of withholding tax EXCEPT?

(a)            Enhances compliance.

(b)            It protects the health of citizens.

(c)            It is economical.

(d)           It reduces chances of tax evasion.                                                                                                                       (1 mark)

 

  1. The following are sources of government revenue EXCEPT?

(a)            Donations and grants.

(b)           Fines and penalties.

(c)            Insurances.

(d)           Taxes.                                                                                                                                                                 (I mark)

 

  1. Which one of the following building is NOT considered for investment allowance purposes?

(a)            Residential building.

(b)           Commercial building.

(c)            Hotel building.

(d)           Educational building.                                                                                                                                          (1 mark)

 

  1. The following documents must accompany a self-assessment return, EXCEPT?

(a)            A set of audited final accounts.

(b)           Tax computation schedule.

(c)            Documents to support withholding tax.

(d)            Single business permit.                                                                                                                                       (1 mark)

 

  1. The following are obligations of a registered person for value added tax (VAT) EXCEPT?

(a)            To file VAT returns on due dates.

(b)           To enforce payment of VAT charged.

(c)            To keep proper books and records.

(d)            To issue a tax invoice after each supply.                                                                                                             ( I mark)

 

  1. It is mandatory to have personal identification number (PIN) for the following transaction EXCEPT?

(a)            Land transactions.

(b)           Registration of motor vehicle.

(c)            Application of insurance cover.

(d)           Registration of birth.                        (I mark)

 

  1. The following information should be contained in a VAT tax invoice EXCEPT?

(a)            The name of person serving the customer.

(b)           Name, address and VAT registration number of the person making supply.

(c)            The serial number and date of the invoice.

(d)           Total value of supplies and total amount of VAT charged.                   (1 mark)

 

  1. Which one of the following is NOT a drawback of investment allowances?

(a)            Enjoyed mostly by manufacturers thereby discriminating other economic players.

(b)           Enjoyed mostly by the poor thereby reducing the gap between the rich and the poor.

(c)            Investors close shop and move to other destinations once the tax incentive cease.

(d)           Results in loss of revenue for the government as it reduces tax payable.                   ( I mark)

 

  1. Which of the following omissions DOES NOT constitute an offence under the pay as you earn (PAYE) regulations?

(a)            Failure to deduct PAYE.

(b)           Failure to file returns.

(c)            Failure to remit PAYE deducted by 20th of next month.

(d)           Failure to have operational PAYE system.                    (1 mark)

 

  1. The following are circumstances under which a late objection could be accepted by the commissioner EXCEPT?

(a)            When the tax payer is sick to the extent to which he/she cannot handle his/her tax matters.

(b)            When the tax payer was out of the country.

(c)            When the tax payer is held in a police custody.

(d)           When the tax payer has no power in the office.      ( 1 mark)

 

  1. The following are areas the commissioner of domestic taxes can get information regarding chargeable income EXCEPT?

(a)            Self-confession.

(b)           Public media.

(c)            Act of God.

(d)            Informers such as friends.                    (1 mark)

 

  1. The following are offences under the value added tax (VAT) Act EXCEPT?

(a)            Failure to register when eligible.

(b)           Failure to supply taxable goods.

(c)            Failure to issue a tax invoice.

(d)           Failure to keep proper records.                   (1 mark)

 

  1. Which among the following actions that the revenue authority should undertake to recover overdue tax?

(a)           Holding property of the tax payer as security for the unpaid tax.

(b)           Ask the bank to freeze the bank accounts of defaulters.

(c)            Issue of distrait order where the assets of the tax payer are auctioned to recover the tax due and payable.

(d)           The commissioner can jail the tax payer for the tax due and payable.                   (1 mark)

 

  1. Which one of the following is NOT a type of tax assessment?

(a)            Self-assessment.

(b)           Default assessment.

(c)            Amended assessment.

(d)           Appealed assessment.              ( 1 mark)

 

  1. Housing benefit might be taxed under certain circumstances. Among the following, which one DOES NOT qualify for housing benefit not to be taxed?

(a)            Housing was provided for better performance of duties for example caretaker of a building.

(b)           Housing was necessary for such kind of employment for example school matron.

(c)            Housing was provided for security reason for example soldiers in barracks.

(d)           Housing was provided due to position or rank.        ( I mark)

 

  1. Which one of the following is NOT an option available to the Commissioner upon receiving a valid objection?

(a)            Amend the assessment in light of the objection.

(b)            Keep the documents and not respond to the tax payer.

(c)            Amend the assessment in light of the objection with some adjustment.

(d)           Refuse to amend and confirm the assessment.                                                                                                    ( 1 mark)

 

  1. The following changes must be notified the Commissioner within 14 days by the tax payer EXCEPT?

(a)            Change of address of the place of the business.

(b)            Additional premises to be used for the purposes of the business.

(c)            Additional machinery and motor vehicle for business use.

(d)            Change of business or trading name.                                                                                                                  (1 mark)

 

  1. Which one of the following statement DOES NOT explain when valued added tax (VAT) is due and payable?

(a)            When the goods are manufactured and packed ready for distribution.

(b)            When goods or services are supplied to the customer.

(c)            When an invoice is issued in respect of the supply.

(d)            When part or full payment for the supply is made.                                                                                             (1 mark)

 

  1. The following conditions must be fulfilled for passage to be excluded from taxation of an employee’s income EXCEPT?

(a)            The employee must not be a citizen of Kenya.

(b)            The employee must be recruited or engaged from outside Kenya.

(c)            The employee must get travel allowances from the employer.

(d)            The employee must be solely in Kenya for the purpose of serving the employer.                                              (I mark)

 

  1. The income of a taxable person can be assessed on another person under the following circumstances EXCEPT?

(a)            When a taxable person is insane.

(b)            When a taxable person is a minor.

(c)            When a taxable person is deceased.

(d)            When a taxable person is illiterate.                                                                                                                      ( I mark)

 

  1. Agricultural employees housing benefit is 10% of employment income.  Which of the following circumstances can lead to change the rate to I5%?

(a)            If the director is not a whole time service director.

(b)            If employee is housed in a leased building.

(e)            If employee is housed outside the farm or plantation.

(d)            If employee has his own house.                                                                                                                         (1 mark)

 

  1. Which one of the following is NOT a circumstance under which a taxpayer may be exempted from paying instalment taxes?

(a)            Total tax payable in any year of income is below Sh.40,000.

(b)            Income other than employment income is less than one third of total income.

(c)            Tax payer is subject to turnover tax.

(d)            Individual’s only source of income is employment, and all taxes have been paid in full through PAYE tax.                                                                                                                                                                   (I mark)

 

  1. Which of the following class of asset matches its rate of investment allowance?

(a)            Hotel building – 25% first year of use.

(b)            Telecommunication equipment – 10% per year reducing balance.

(c)            Ship or aircraft -10% first year of use.

(d)           Motor vehicle – 12.5% per year reducing balance.                                                                                              (1 mark)

 

  1. Tera Limited started operations in 2020 after incurring various capital expenditures among them a Toyota pick-up which was purchased at a cost of Sh.2,400,000 on 1 August 2020. What was its wear and tear deduction for the year 2021?

(a)            Sh.600,000.

(b)            Sh.450,000.

(c)            Sh.1,200,000.

(d)            Sh.300,000.                                                                                                                                                        (1 mark)

 

  1. The following arguments are in favour of introduction of capital gains tax (CGT) in an economy EXCEPT?

(a)            It ensures that there is equity in taxation.

(b)           It helps in curbing inflation.

(c)            It increases chances of tax avoidance.

(d)           Increases government revenue.                   ( I mark)

 

  1. Which one of the following is NOT a limitation of value added tax (VAT)?

(a)            High tax avoidance and evasion where invoicing is not strictly enforced.

(b)           Enforcement of VAT is simple and easy to audit.

(c)           Its discriminatory where some goods and services are not vatable.

(d)           It requires many statutory records which are complicated to process.                   ( 1 mark)

 

  1. For the purpose of computing housing benefit, employees are classified into three categories. Which one of the following is NOT one of the categories?

(a)            Ordinary employee and a whole time service director.

(b)           Agricultural employee.

(c)           Directors other than whole time service director.

(d)           Ordinary employee and low income employee.                ( 1 mark)

 

  1. Which of the following are direct taxes?

(i)            Income Tax.

(ii)           Capital gain tax.

(iii)          Corporate tax.

(iv)          Value added tax.

 

(a)            i, ii, iii and iv.

(b)           i and iii only

(c)            i, ii and iii only.

(d)            i and iv only.                        ( I mark)

 

  1. Which of the following actions is practiced by tax evaders?

(a)            Claiming investment allowance.

(b)           Operating with income that are tax exempt.

(c)            Use of debt capital where interest is tax allowable instead of equity capital.

(d)           Overstating expenses.                 (1 mark)

 

  1. Hezron Kamau is a sole trader preparing accounts annually to 31 December. He used his motor car for business purposes throughout the whole year ended 31 December 2021. The car had cost him Sh.3,136,000 in the year 2021.  What is the wear and tear allowance that he could claim in respect of the motor car for the year ended 31 December 2021?

(a)            Sh.3,136,000.

(b)            Sh.3,000,000.

(c)            Sh.750,000.

(d)            Sh.784,000.                                                                                                                                                  (1 mark)

 

  1. Manula Transport Ltd. provides for the wear and tear allowance on all assets. During the year ended 31 December 2021, the company purchased a saloon car for director at a cost of Sh.3,400,000. What is the wear and tear allowance for the acquired salon car for the year ended 31 December 2021?

(a)             Sh.750,000.

(b)           Sh.850,000.

(c)            Sh.340,000

(d)            Sh.1,275,000.                                                                                                                                                 ( I mark)

 

  1. The following are factors that determine the extent to which the incidence of tax could be shifted EXCEPT?

(a)           Type of government.

(b)           Type of market.

(c)           Type of tax.

(d)           Geographical coverage of tax.                          (1 mark)

 

  1. Which of the following is NOT a role of the revenue authority in your country?

(a)            Administers and enforces written laws and specific provisions concerning assessment, collection and accounting for all revenue.

(b)            Educate taxpayers thus increasing the role of compliance.

(c)            Introduce new taxes to increase collection of revenue.

(d)            Facilitate distribution of income through socially acceptable ways by effectively enforcing tax laws affecting income in various ways.                                                                                                                      (1 mark)

 

  1. A company prepared financial statements for the year ended 31 December 2021. By which date should the company pay its corporation tax liability for the accounting period of ended 31 December 2021 to avoid incurring interest and penalties?

(a)            By 20 January 2022.

(b)           By 30 April 2022.

(c)            By 30 June 2022.

(d)           By 31 January 2022.                                                                                                                                          (1 mark)

 

  1. A company had the following expenses from its accounts for the year ended 31 December 2021:

Sh.

Legal fee in respect to debt collection                                  80,000

Depreciation of machinery                                                 120,000

Staff entertainment                                                              90,000

Gift of food to clients                                                          60,000

How much should the company add back to its accounting profits to arrive at its tax adjusted profit?

(a)            Sh.270,000.

(b)           Sh.260,000.

(e)            Sh.180,000.

(d)           Sh.210,000.                                                                                                                                                        (1 mark)

 

  1. Ruth pays Sh.8,000 to her registered pension scheme, while her employer contributes Sh.10,000. Which of the following statements is TRUE?

(a)            Ruth’s taxable employment income is reduced by Sh.18,000.

(b)            Ruth has a taxable benefit of Sh.10,000 and her taxable income is reduced by Sh.8,000.

(c)            Ruth has a tax-exempt benefit of Sh.10,000 and her taxable income is reduced by Sh.8,000.

(d)            Ruth has a taxable benefit of Sh.18,000.                                                                                                            (1 mark)

 

  1. A sole trader who is registered for value added tax (VAT) made sales at standard rate valued at Sh.100,000 exclusive of VAT. In February 2022, a trade discount of 20% is applied to the value of Sh.100,000. How much VAT must the sole trader charge on the sales?

(a)            Sh.16,000.

(b)           Sh.19,200.

(c)            Sh.12,800.

(d)           Sh.O.                                                                                                                                                                  (I mark)

 

  1. In regard to value added tax (VAT) which of the following statement is TRUE?

(a)            When a trader ceases to make taxable supplies, they must notify the commissioner of domestic tax within 30 days and the company will be deregistered from the day of notification.

(b)           Trader making taxable supplies with a turnover below the VAT registration threshold can voluntarily register for VAT at any time.

(c)            Traders can voluntarily deregister if at any time their turnover was below the VAT deregistration threshold in the last 12 months.

(d)           Traders do not pay VAT on purchases if they are not registered for VAT.                                                       (1 mark)

 

  1. Imran is an employee of Tibabu Hospital which prepares accounts annually to 31 May each year. Imran is entitled to a bonus on 31 May 2021 in relation to the accounting period ended 31 May 2021. The bonus was paid to him on 30 June 2021 but expensed in the company accounts on 15 May 2021, on which date was the bonus credited as being received by Imran for tax purposes?

(a)            31 December 2021.

(b)            31 May 2021.

(c)            15 May 2021.

(d)            30 June 2021.                                                                                                                                                 (1 mark)

 

  1. Which one of the following is NOT a limitation of a single tax system?

(a)            It reduces the amount of revenue collected.

(b)            Does not promote capital accumulation because of diversity of taxes in all income and savings.

(c)            It encourages inequalities.

(d)            It is based on estimates and therefore cannot meet the need of modern government.             (1 mark)

 

  1. What is the tax position of benefit in kind received from employer?

(a)            It is allowable deduction up to Sh.36,000 per annum.

(b)            It is a taxable benefit up to Sh.36,000 per annum.

(c)            It is a tax-free benefit.

(d)           It is a tax-free benefit if it does not exceed Sh.36,000 per annum.                     (1 mark)

 

  1. Abdul received pension income of Sh.360,000 during the year ended 31 December 2021. He also received savings interest of Sh.40,000 in the year ended 31 December 2021. How much is the taxable  income for the year 2021?

(a)            Sh.400,000.

(b)            Sh.O.

(c)            Sh.360,000.

(d)            Sh.60,000.                                                                                                                                                      ( 1 mark)

 

  1. David Mulei gave a business gift to a client. The cost of the gift was Sh.8,500, which would normally sell for Sh.10,200.  The amount was exclusive of VAT@16%.  How much output VAT should David include in the VAT returns in respect of the gift?

(a)            Sh.1,632.

(b)            Sh.1,360.

(c)            Sh.O.

(d)           Sh.272.                                                                                                                                                           ( I mark)

 

  1. What is the minimum turnover limit for a taxpayer wishing to register for value added tax (VAT) purposes?

(a)            Sh.5,000,000 inclusive of VAT per annum.

(b)            Sh.5,000,000 exclusive of VAT per annum.

(c)            Between Sh.5,000,000 and Sh.5,000,000 per annum.

(d)            Sh.5,000,000 exclusive of VAT per month.                     (1 mark)

 

  1. Faith Molaa is employed by Atta Flour Ltd. She was provided with a car by the employer to use for official business and private purposes.  The car had cost the company Sh.800,000 in the year 2020.  The car has an engine capacity of 2,200cc.  What is Faith’s taxable benefit in respect to the use of the motor car for the year ended 31 December 2021?

(a)            Sh.192,000.

(b)           Sh.103,200.

(c)            Sh.800,000.

(d)           Sh.88,800.                                                                                                                                                    (1 mark)

 

  1. Which of the following is NOT an appellant body for tax purposes?

(a)             Commissioner.

(b)            Local Committee.

(c)             Tax tribunal.

(d)             High Court.                       ( I mark)

 

  1. Chale Ltd.’s trading profit for the period ended 31 December 2021 has been arrived at after deducting the following items:

Sh.

A loss on sale of van used in business                              200,000

Legal fees relating to trading transactions                          150,000

A donation to a political party                                              40,000

What amount should be added back to the trading profit when calculating the tax adjusted profits?

(a)            Sh.390,000.

(b)           Sh.190,000.

(c)            Sh.240,000.

(d)           Sh.3 50,000.    ( I mark)

 

  1. Which one of the following is NOT treated as an employee taxable income when computing pay as you earn (PAYE)?

(a)            End of year bonus paid to all employees.

(b)           Leave allowance.

(c)            Benefits in kind amounting to Sh.24,000 in a year.

(d)           Sales commission paid to salesman.                                                                                                                ( 1 mark)

 

  1. After how long will input tax under VAT become forfeited if it is NOT claimed?

(a)            3 months.

(b)            12 months.

(c)            6 months.

(d)            9 months.                                                                                                                                                           ( 1 mark)

 

  1. Rodgers Mwema earned an annual salary of Sh.420,000 and received free meals from the company amounting to Sh.72,000 during the year ended 31 December 2021.  What is Rodger’s total taxable income for the year ended 31 December 2021?

(a)            Sh.420,000.

(b)           Sh.492,000.

(c)            Sh.72,000.

(d)           Sh.456,000.                                                                                                                                                       (1 mark)

 

  1. The following are obligations of a registered person for value added tax (VAT) purposes EXCEPT?

(a)            Display VAT certificate of registered in a clearly visible place with the business premises.

(b)           Charge VAT in all the supplies made.

(c)            Issue serial numbered tax invoices or cash sale receipts generated by ETR.

(d)           File correct VAT returns within the stipulated period.                                                                                       (1 mark)

 

  1. Kisuki Ltd. had the following expenses in their financial statement for the accounting period ended 31 December 2021:
  2. Entertainment for directors.
  3. Motor vehicle purchased for business.
  4. Entertainment for customers.
  5. Meals to employees of the company.

On which of the above items could be treated as allowable expenses?

(a)            1,2,3 and 4.

(b)            1,2 and 3 only.

(c)            3 and 4 only.

(d)           2,3 and 4 only.                                                                                                                                                   (1 mark)

 

  1. Alex Lugali is a registered VAT trader dealing in standard rate supplies. In the month of July 2021, he made sales of Sh.800,000 and purchased stock from an unregistered supplier for VAT purposes for Sh.460,000. Both amounts are exclusive of VAT. What is the VAT payable or claimable by Alex Lugali for the month of July 2021?

(a)            Sh.54,400.

(b)            Sh.128,000.

(c)            Sh.73,600.

(d)            Sh.O.                                                                                                                                                                 ( 1 mark)

 

  1. During the year ended 31 December 2021 Kilome Trading Ltd. incurred the following expenses:

Sh.

Staff refreshments                                                             118,400

Penalty for the late renewal of licence                                   5,400

Maintenance cost                                                                 32,000

What is the total allowable expenses for Kilome Trading Ltd. for income tax purposes in respect of the expenses incurred during the year?

(a)            Sh.118,400.

(b)            Sh.123,800.

(c)            Sh.150,400.

(d)            Sh.156,400.                                                                                                                                                       ( I mark)

 

  1. Which of the following benefits provided by an employer to an employee is NOT exempted from tax?

(a)            Benefit in kind not exceeding Sh.36,000.

(b)           Insurance premiums paid by employer on behalf of the employee.

(c)            School fees paid by employer on behalf of employees children and treated as disallowable expense in the company’s books of accounts.

(d)           Employer contribution to a registered pension scheme on behalf of an employee.                ( I mark)

 

  1. What is the due date for payment of the first instalment of a company income tax for a company which prepared accounts to 31 December 2021?

(a)            31 December 2021.

(b)           20 January 2022.

(c)            20 April 2022.

(d)           30 June 2022.       ( 1 mark)

 

  1. Peter had the following results in respect of the year ended 31 December 2021:

Sh.

Commercial rental business profit                                     252,000

Commercial farming business loss                                   550,000

What is the taxable income if any chargeable to Peter for the year ended 31 December 2021?

(a)            Sh.252,000.

(b)            Sh.298,000.

(c)            Sh.O.

(d)            Sh.802,000.                                                                                                                                                  (1 mark)

 

  1. John Busira received a monthly residential rental income of Sh.10,000. During the year ended 31 December

2021, his gross rental income was Sh.120,000.

Determine his tax payable for the year of income 2021:

(a)            Sh.12,000.

(b)            Sh.36,000.

(c)            NIL.

(d)            Sh.24,000.                                                                                                                                                    (1 mark)

 

  1. Which one of the following conditions is CORRECT with respect to medical benefit?

(a)            It is a tax-free benefit to employee provided the employee is employed on permanent basis.

(b)            It is a tax-free benefit to employee provided the employee contributes to the scheme.

(c)            It is a taxable benefit.

(d)            It is a tax-free benefit provided the scheme is not discriminatory.         ( I mark)

 

  1. Eunice Lambela received a basic salary of Sh.900,000 and a house allowance of Sh.100,000 in the year 2021. The employer paid on her behalf insurance premiums amounting to Sh.60,000. While Eunice also paid an equal amount. What is the taxable income chargeable to tax on Eunice for the year 2021?

(a)            Sh.900,000.

(b)           Sh.1,000,000.

(c)            Sh.1,060,000.

(d)           Sh.1,120,000.                                                                                                                                                 ( 1 mark)

 

  1. Which of the following taxes is an example of indirect taxes?

(a)            Value added tax.

(b)           Corporation tax.

(c)            Withholding tax.

(d)           Income tax.                          (1 mark)

 

85.During the year ended 31 December 2021, Miika wholesalers made the following tax payments to the revenue authority.

  1. Pay as you earn (PAYE) Sh.162,000.
  2. Value added tax (VAT) Sh.230,115.
  3. Corporate tax Sh.55,600.
  4. Advance tax Sh.22,000.

Determine the amount of tax paid as indirect taxes.

(a)            Sh. 392,115.

(b)            Sh.230,115.

(c)            Sh.77,600.

(d)            Sh.162,000.                                                                                                                                                       (1 mark)

 

  1. Solomon Keita is a sales executive with a XYZ company, He was paid an annual basic salary of Sh. 216,000 and an entertainment allowance of Sh. 60,000. He incurred total cost of Sh. 18,000 entertaining customers. What is the total amount of Keita’s employment income assessable to tax for the year ended 31 December 2021?

(a)            Sh. 276,000.

(b)            Sh.216,000.

(c)            Sh.294,000.

(d)            Sh.258,000.                                                                                                                                                       ( I mark)

 

  1. For the financial year ended 31 December 2021, James Saida incurred the following expenses in relation to his business:
  1.  Repair of a leaking roof costing Sh.10,000.
  2. Renovation of the office premises costing Sh.20,000.
  3. Lorry maintenance expenses of Sh.15,000.

What is the amount of James Saida’s deductible expenses for the year ended 31 December 2021?

(a)            Sh.25,000.

(b)            Sh.45,000.

(c)            Sh. 30,000.

(d)            Sh.35,000.                                                                                                                                                        ( I mark)

 

  1. Which of the following is NOT true about tax point in relation to VAT?

(a)            Earlier of when the goods are supplied or service rendered.

(b)            Earlier of when the invoice is issued_

(c)            Earlier of when an order is received.

(d)            Earlier of when payment partly or whole amount.                                                                                            ( 1 mark)

 

  1. Benard Kaka is a music composer, during the year ended 31 December 2021 he earned royalties amounting to Sh.  600,000 from his music composition.  He had incurred Sh. 250,000 on producing the music album during that year. What is the amount of withholding tax payable on the royalties in the year ended 31 December 2021 given that Benard is a Kenyan resident?

(a)            Sh. 17,500.

(b)            Sh. O.

(c)            Sh. 30, 000.

(d)           Sh. 42, 500.                                                                                                                                                       (1 mark)

 

  1. Mr. Mutua received a basic salary of Sh. 650,000 in the year 2021. He also received a medical allowance of Sh. 100,000. He received a pension income of Sh. 240,000 per annum from a previous employer. How much income is taxable on Mutua for the year 2021?

(a)            Sh. 650,000.

(b)           Sh. 750,000.

(c)            Sh. 990,000.

(d)            Sh.890,000.                                                                                                                                                       (1 mark)

 

  1. Sylvia Adhiambo is registered for VAT. On 1 October 2021, she imported a machine at a cost of Sh.400,000. She paid freight charges of Sh.50,000, insurance on transit of Sh.30,000 and import duty of Sh.20,000. Determine the amount that is chargeable to VAT on the above machine?

(a)            Sh.400,000.

(b)           Sh.500,000.

(c)            Sh.480,000.

(d)           Sh.430,000.                                                                                                                                                       (1 mark)

 

  1. Which of the following explains the tax position for earnings of a person with disability with exemption certificate from revenue authority?

(a)            His/her earnings up to Sh.50,000 per month is exempted from tax.

(b)            His/her earnings not exceeding Sh.I50,000 per month is exempted from tax.

(c)           His/her earnings are fully exempted from tax.

(d)            His/her earnings not exceeding Sh.100,000 per month is exempted from tax.                                                  ( 1 mark)

 

  1. Which one of the following is NOT a relief against gross tax liability?

(a)            Insurance relief.

(b)           Personal relief.

(c)            Affordable housing relief.

(d)           Bad debt relief.                                ( I mark)

 

  1. Individuals in Kenya are required to file self-assessment returns every year. The due date for the submission of the self-assessment returns for the year ended 31 December 2021 is on or before?

(a)            31 January 2022.

(b)           30 April 2022.

(c)            30 June 2022.

(d)           31 July 2022.                                ( I mark)

 

  1. Which of the following transactions DO NOT require Personal Identification Number (PIN)?

(a)            When registering a motor vehicle.

(b)           When applying for Value Added Tax (VAT).

(c)            When applying for insurance cover.

(d)           When applying for adoption deeds.                                ( I mark)

 

  1. Which one of the following is NOT a condition for a valid objection?

(a)            It must mention the officer who did the assessment.

(b)           It must be made in writing.

(c)            It must specify the ground for objection.

(d)           It must be made within 30 days from the date of service of an assessment.                                (1 mark)

 

  1. What is the tax position on house furniture provided by an employer to an employee provided with a furnished house by employer?

(a)            It is a tax-free benefit.

(b)           The taxable amount is 2% per month on the cost of furniture.

(c)            The taxable amount is I% per month on the cost of the furniture.

(d)           The taxable amount is the value of the furniture.                                ( I mark)

 

  1. What are the rates applicable in the capital gains tax (CGT)?

(a)            5% not final tax.

(b)            10% final tax.

(c)            5% final tax.

(d)            10% not final tax.                                 ( 1 mark)

 

  1. Interest paid on loan acquired to purchase, construct or renovate own residential house is allowable up to a set limit of?

(a)            Sh.240,000 per annum.

(b)            Sh.96,000 per annum.

(c)            Sh.300,000 per annum.

(d)            Sh.150,000 per annum.                (1 mark)

 

  1. Penina Dale has residential rental property, during the month of 31 December 2021 she received rental income amounting to Sh.800,000.  She incurred the following expenses during the month of December: Repair and maintenance cost of Sh. 200,000, advertisement cost of Sh.80,000 and installed a fire exit at a cost of Sh.50,000. Determine the tax payable if any on residential income in the month of December 2021?

(a)            Sh.80,000.

(b)           Sh.141,000.

(c)            Sh.240,000.

(d)            Sh.156,000.                                                                                                                                                      ( I mark)

 

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FOUNDATIONS OF ACCOUNTING APRIL 2022 PAST PAPER

MONDAY: 4 April 2022. Morning paper.

Time Allowed: 3 hours.

This paper is made up of a hundred (100) Multiple Choice Questions. Answer ALL the questions by indicating the letter (a, b, c or d) that represents the correct answer. Do NOT write anything on this paper.

  1. If shares are sold by a company for more than their par value, they are said to have been issued at a:

(a)           Discount.

(b)           Premium.

(c)           Bonus.

(d)           Surplus.                                (1 mark)

 

  1. Working capital is:

(a)            Current assets minus current liabilities.

(b)           Total assets minus total liabilities.

(c)           Current assets minus total liabilities.

(d)           Total assets minus current liabilities.                                (I mark)

 

  1. Invoices received for goods purchased on credit from suppliers would first be entered in the:

(a)            Purchases day book.

(b)           Sales day book.

(c)           Purchases account.

(d)           Sales account.                                                                                                                                                      ( I mark)

 

  1. The total of the discount column on the credit side of a three-column cash book is taken to the:

(a)            Debit of discount-allowed account.

(b)           Debit of discount-received account

(c)           Credit of discount-allowed account.

(d)           Credit of discount-received account.                                (1 mark)

 

  1. A trader buys goods for Sh.5,000 less 20% trade discount. How much does the trader pay?

(a)           Sh.5,000.

(b)           Sh.4,500.

(c)            Sh.4,000.

(d)           Sh.3,600.                                 (I mark)

 

  1. Returns inward appearing in the trial balance is deducted from:

(a)           Purchases.

(b)           Sales.

(c)           Returns outward.

(d)           None of the above.                                 (1 mark)

 

  1. Which of the following accounts is not a personal account?

(a)           XYZ Ltd.

(b)           Mrs. Atieno.

(c)            Returns inward.

(d)           KamashTrading Ltd.                                 (1 mark)

 

  1. A company’s sales for the year amounted to Sh.39,000 and its cost of sales was Sh.21,000 and operating expenses Sh.5,000. What is the net profit?

(a)            Sh.18,000.

(b)           Sh.55,000.

(c)            Sh.13,000.

(d)           Sh.16,000.                (I mark)

 

  1. Voting rights at company meetings are normally held by:

(a)           Ordinary shareholders.

(b)           Preference shareholders.

(c)            Debenture holders.

(d)           Ordinary and preference shareholders.                                                                                                                (1 mark)

 

  1. Depreciation is provided on:

(a)            Current assets.

(b)           Intangible assets.

(c)            Property, plant and equipment.

(d)           Liabilities.                                                                                                                                                            (1 mark)

 

  1. A credit balance in the bank account in a firm’s ledger indicates a:

(a)            Long-term liability.

(b)           Current asset.

(c)            Current liability.

(d)           Fixed asset.                                                                                                                                                          (1 mark)

 

  1. A manager is entitled to a commission of 5% of profit. Calculate the manager’s commission, if the profit is Sh.2,100,000.

(a)            Sh.100,000.

(b)            Sh.105,000.

(c)            Sh.111,000.

(d)            Sh.115,000.                                                                                                                                                         (1 mark)

 

  1. Profit = Capital at the end + ? — Capital introduced — Capital in the beginning:

(a)            Sales.

(b)           Drawings.

(c)            Net Purchases.

(d)            Gross profit.                                                                                                                                                         (1 mark)

 

  1. Outstanding income is:

(a)            An asset.

(b)            A liability.

(c)            An expense.

(d)            An income.                                                                                                                                                          (1 mark)

 

  1. Choose the correct chronological order of ascertainment of profits.

(a)            Operating Profit, Net Profit, Gross Profit.

(b)            Operating Profit, Gross Profit, Net Profit.

(c)            Gross Profit, Net Profit, Operating Profit.

(d)            Gross Profit, Operating Profit, Net Profit.                                                                                                          (1 mark)

 

  1. Net sales during the year 2021 is Sh.285,000. Gross profit is 25% on sales. Find out the cost of goods sold?

(a)            Sh. 285,000.

(b)            Sh. 213,750.

(c)            Sh. 71,250.

(d)            Sh. 0.                                                                                                                                                                   (1 mark)

 

Use the following information to answer question 17 and 18: Cost of new machine purchased = Sh.120,000

Installation expenses = Sh.30,000

Estimated life of machine = 5 years

Residual value after 5 years = Sh.25,000

 

  1. Calculate depreciation on the machine:

(a)            Sh.24,000.

(b)            Sh.54,000.

(c)            Sh.30,000.

(d)            Sh.25,000.                                                                                                                                                            (1 mark)

 

  1. The company started production with this machine from 1 October 2021. The company closes its accounts on 31 December every year. Find the adjusted value of the machine on 31 December 2021.

(a)            Sh.143,750.

(b)            Sh.125,000.

(c)            Sh.175,000.

(d)            Sh.300,000.                                (1 mark)

 

  1. A trial balance will not show:

(a)            A casting error in cash account.

(b)           The omission of a transaction from the day books.

(c)            An entry on the wrong side of an account.

(d)           A reversal of figures in a balance carried forward.                                (1 mark)

 

  1. The following entry appeared in the last statement of financial position of a company:

Machinery cost Sh.I0,000.

Accumulated depreciation Sh.4,000.

It is the practice of the company to depreciate machinery at the rate of 20% per annum on reducing balance basis. The figure that will appear for accumulated depreciation in the next statement of financial position will be:

(a)            Sh.1,200.

(b)           Sh.4,800.

(c)            Sh.5,200.

(d)           Sh.6,000.                                (1 mark)

 

  1. A credit balance in a partner’s current account is part of the firm’s:

(a)            Current liabilities.

(b)           Capital.

(c)            Long-term liabilities.

(d)           Assets.                                (1 mark)

 

  1. Which of the following describes the practical framework of bookkeeping?

(a)            Classifying, recording and summarising.

(b)           Reporting, analysing and interpreting.

(c)            Classifying, analysing and interpreting.

(d)           Recording, summarising and reporting.                                (1 mark)

 

  1. Which of the following principles assumes that a business will continue for a long time?

(a)            Historical cost.

(b)            Periodicity.

(e)           Objectivity.

(d)           Going concern.                                (1 mark)

 

  1. The following balances refer to Ron and Sons Ltd:

Machinery Sh.20,000, cash in hand Sh.2,000, land and buildings Sh.200,000, bank loan Sh.50,000, creditors Sh.5,000, debtors Sh.10,000. What is the company’s capital?

(a)            Sh.55,000.

(b)            Sh.177,000.

(c)            Sh.232,000.

(d)           Sh. 287,000.                                (1 mark)

 

  1. Which of the following items is not found in the current accounts of partnership business?

(a)            Drawings.

(b)           Goodwill.

(c)            Interest on capital.

(d)           Partners’ salary.                                (1 mark)

 

  1. Alex bought furniture on credit from Chanel Furniture Limited, which of the following journal entries will be made for this transaction in Alex’s books?

(a)            Debit furniture credit cash.

(b)           Debit purchases credit Alex.

(c)            Debit Alex credit purchases.

(d)           Debit furniture and credit Chanel Furniture Limited.   (1 mark)

 

  1. Long-term liabilities normally include:

(a)            Proprietor’s capital.

(b)           Loan secured by debentures.

(c)            Bank overdraft.

(d)           Trade creditors.                                                                                                                                                    ( I mark)

 

  1. The main purpose of the day books is to:

(a)            Speed up the location of errors.

(b)            Provides a check on ledger postings.

(c)            Summarises entries of a similar type.

(d)            Provides totals for control accounts.                                                                                                                    (1 mark)

 

  1. Goodwill is a:

(a)            Fictitious assets.

(b)           Tangible assets.

(c)            Intangible assets.

(d)            Expenses.                                                                                                                                                             ( I mark)

 

  1. Copies of credit notes issued would be entered in the:

(a)            Returns inward day book.

(b)            Sales day book.

(c)            Returns outward day book.

(d)           Purchases day book.                                                                                                                                            ( I mark)

 

  1. Debentures are normally listed in the company’s statement of financial position under:

(a)            Issued capital.

(b)            Reserves and provisions.

(c)            Long-term liabilities.

(d)            Current liabilities.                                                                                                                                                 (1 mark)

 

  1. A firm’s liabilities include:

(a)            Prepaid rent.

(b)            Trade debtors.

(c)            Bank overdraft.

(d)           Trade investments.                                                                                                                                               (I mark)

 

  1. Which of the following require knowledge of subjects other than accountancy?

(a)           Recording of financial transactions.

(b)           Calculation of profits and losses.

(c)           Summaries of financial position.

(d)           Guidance on financial policy.                                                                                                                               (1 mark)

 

  1. The totals of the purchases journal are posted to the:

(a)            Debit of purchases account.

(b)           Debit of the personal accounts concerned.

(c)            Credit of sales account.

(d)           Credit of the personal accounts concerned.                                                                                                          (1 mark)

 

  1. Discount allowed will appear on the:

(a)            Debit side of trading account.

(b)           Credit side of the statement of profit and loss.

(c)            Credit side of the sales account.

(d)           Debit side of the statement of profit and loss.                                                                                                      (1 mark)

 

  1. In the three-column cash book at the end of the accounting period:

(a)                Cash, bank and discount columns are balanced.

(b)               Cash and bank columns are balanced and the discount columns are totalled.

(c)                The cash column is balanced, and bank and discount columns are totalled.

(d)               Cash, bank and discount columns are totalled.                                                                                                     (1 mark)

 

  1. The primary objective of the trading account is to show the:

(a)                Overall trading profit or loss for the period concerned.

(b)               Net trading profit or loss for the period concerned.

(c)                Profit or loss on the turnover of goods sold in the period.

(d)               Difference between income earned and expenditure incurred in the period.                                (1 mark)

 

  1. The main purpose of a bank reconciliation statement is to:

(a)            Ensure the cash book (bank columns) and the bank statement show the same balance.

(b)            Explain the difference between the cash book balance and the bank statement.

(c)            Ascertain the correct balance at the bank.

(d)            Update the cash book.                                                                                                                                            ( 1 mark)

 

  1. A statement of affairs is similar to a:

(a)            Bank statement.

(b)            Statement of account.

(c)            Bank reconciliation statement.

(d)            Statement of financial position.                                                                                                                               ( I mark)

 

  1. A business operates its petty cash by using the imprest system. At the beginning of the month, the petty cashier was given Sh.100,000 out of which she spent Sh.80,000. How much will she be reimbursed?

(a)            Sh.20,000.

(b)           Sh.80,000.

(c)            Sh.100,000.

(d)            Sh.180,000.                                                                                                                                                           ( 1 mark)

 

  1. The purchases day book records are:

(a)             Payments to customers.

(b)            Credit purchases from suppliers.

(c)             Credit purchases of fixed assets.

(d)            All purchases of goods for resale.                            (1 mark)

 

  1. Real accounts records deal with:

(a)            Intangible assets.

(b)            Creditors and debtors.

(c)            Commodities.

(d)            Liabilities.                            (1 mark)

 

  1. A bank statement is a:

(a)            Copy of the customer’s account in the books of his bank.

(b)            Copy of the bank’s account in the books of the customer.

(c)            Certified statement of the balance of the bank account.

(d)            Warning to the customer that he has overdrawn his account.                             (1 mark)

 

  1. The right side of a ledger account is:

(a)            The balance of an account.

(I))           The debit side.

(c)            The credit side.

(d)            Blank.                             (1 mark)

 

  1. The purchase of a motor car on credit from Toy Automotive Company for use in a firm should be recorded as:

(a)                Debit maintenance of vehicle expense, Credit Toy Automotive Company.

(b)               Debit purchases, Credit Toy Automotive Company.

(c)                Debit motor vehicle, Credit Toy Automotive Company.

(d)                Debit motor vehicle, Credit Cash.                                 (1 mark)

 

  1. Determine the balance carried forward in the following ledger account:

Cash Account

Sh.                                                                           Sh.

Capital           40,000                   Drawings                                      10,000

Sales              15,000                   Purchases                                      20,000

Balance carried forward

(a)          Sh. 10,000.

(b)          Sh. 25,000.

(c)          Sh. 30,000.

(d)          Sh. 55,000.                                                                                                                                                              (1 mark)

 

  1. Which of the following entries will be entered in the general journal?

(a)           Sold goods on credit.

(b)           Goods purchased and paid by cash.

(c)           Investment made by the owner.

(d)           Purchase goods on credit.                                                                                                                                        (1 mark)

 

  1. In the first month of operations, the total of the debit entries to the cash account amounted to Sh. 3,000 and the total of the credit entries to the cash account amounted to Sh.1,800. The cash account has a:

(a)         Sh.1,800 credit balance.

(b)        Sh.3,000 debit balance.

(c)        Sh.1,200 debit balance.

(d)        Sh.1,800 credit balance.                                                                                                                                          (1 mark)

 

  1. Current liabilities are such obligation which are to be satisfied:

(a)            Within two years.

(h)           Within one year.

(c)            Within three years.

(d)           Less than five years.                                                                                                                                             (1 mark)

 

  1. Sales are equal to:

(a)           Cost of goods sold + gross profit.

(b)           Cost of goods sold — Gross profit.

(c)           Gross profit = cost of goods sold.

(d)            Purchases.                                                                                                                                                            (1 mark)

 

  1. A ledger is called a book of:

(a)            Primary entry.

(b)           Original entry.

(c)            Final entry.

(d)           None of the above.                                                                                                                                               ( I mark)

 

  1. A ledger account is prepared from:

(a)            Events.

(b)           Transactions.

(c)            Journal.

(d)           None of the above.                                                                                                                                               (1 mark)

 

  1. The debit balance of a personal account indicates:

(a)            Amount receivable.

(b)           Amount payable.

(c)            Cash in hand.

(d)           None of the above.                                                                                                                                               ( I mark)

 

  1. The balance of cash account indicates:

(a)            Net income.

(b)           Cash in hand.

(c)            Total cash received.

(d)           Total cash paid.                                                                                                                                                    (1 mark)

 

  1. The trial balance shows:

(a)            Both debit and credit balance.

(b)           Only debit balance.

(c)            Only credit balance.

(d)           None of the above.                                                                                                                                               (1 mark)

 

  1. The balance on the debit side of bank column in cash book indicates:

(a)            Total amount withdrawn from bank.

(b)           Total amount deposited in the hank.

(c)            Cash at bank.

(d)           Loan paid.                                (1 mark)

 

  1. The balance of the cash column of the cash book is always:

(a)            Debit.

(b)           Credit.

(c)            Both (a) and (b).

(d)           Neither (a) nor (b).                                (1 mark)

 

  1. The balance of petty cash book is:

(a)            A liability.

(b)           An expense.

(c)            A gain.

(d)           An asset.                                ( I mark)

 

  1. The petty cash book is used for recording:

(a)            Loan payment.

(b)           Sales receipts.

(c)            Huge cash payment.

(d)           Petty cash payments.                ( I mark)

 

  1. The cash book in book keeping records:

(a)            All receipts and payments in cash.

(b)            All cash and credit sale of goods.

(c)            All credit and cash purchase of goods.

(d)           All cash and bank transactions.             (l mark)

 

  1. Cash discount is provided on:

(a)            Prompt payment.

(b)            Large quantities.

(c)            Purchase.

(d)           None of the above.                      (1 mark)

 

  1. The debit balance as per the bank column cash book of ABC Traders on 31 December 2021 was Sh.1,500,000. As at 31 December 2021, cheques deposited, but not cleared, amounted to Sh.100,000 and cheques issued but not presented amounted to Sh.150,000. Balance as per the bank should be:

(a)            Sh.1,750,000.

(b)            Sh.1,550,000.

(c)            Sh.1,650,000.

(d)            Sh.250,000.                                                                                                                                                       ( I mark)

 

  1. A business has assets of Sh.100,000 and liabilities of Sh.20,000. What is the amount of capital the business has?

(a)            Sh.120,000.

(b)           Sh.80,000.

(c)            Sh.100,000.

(d)           Sh.20,000.                                                                                                                                                         ( I mark)

 

  1. Capital will reduce by:

(a)            Purchase of goods on credit

(b)           Selling the goods for cash

(c)            Furniture purchase for personal use

(d)            Purchase of goods in cash.                        (I mark)

 

  1. Liabilities increase by:

(a)            Purchasing goods on credit.

(b)           Rent due.

(c)            Taking of bank loan.

(d)           All of the above.                      ( I mark)

 

  1. Business transactions are recorded:

(a)            In chronological order.

(b)           Weekly.

(c)           At the end of month.

(d)           Per annum.                                                                                                                                                          (1 mark)

 

  1. The credit balance of bank account indicates:

(a)            Bank balance.

(b)           Amount payable to bank.

(c)            Amount payable by the bank.

d) None of the above. (1 mark)

 

  1. Which of the following accounts will invariably have a debit balance?

(a)           Account receivable.

(h)           Account payable.

(c)            Current account of partner.

(d)           Bank account.                                                                                                                                                      (1 mark)

 

  1. Which of the following accounts will invariably have credit balance?

(a)            Current account of proprietor.

(h)           Account receivable.

(c)            Account payable.

(d)           None of the above.                                                                                                                                              ( I mark)

 

  1. Personal account of a customer is likely to have:

(a)            Only debit entries.

(b)           Only credit entries.

(c)            Both debit and credit entries.

(d)           No debit or credit entries.                                                                                                                                    ( I mark)

 

  1. Ledger is a book in which:

(a)            Real and nominal accounts are maintained.

(b)           Real and personal accounts are maintained.

(c)            Real, personal and nominal accounts are maintained.

(d)           Personal and nominal accounts are maintained.                                                                                                   (I mark)

 

  1. Which of the following is a book of prime entry and part of the double-entry system?

(a)            The trial balance.

(b)           The petty cash book.

(c)           The sales day book.

(d)          The purchase ledger.                                                                                                                                     (1 mark)

 

  1. Nominal account having debit balance represents:

(a)            Income/gain.

(b)           Expenses/loss.

(c)            Cash.

(d)           Assets.                                                                                                                                                                 (I mark)

 

  1. When the total of debit and credit are equal, it represents:

(a)            Debit balance.

(b)           Credit balance.

(c)            Nil balance.

(d)           Current balance.                                                                                                                                                   (1 mark)

 

  1. Which of the following account is increased by credit entries?

(a)            Sales return account.

(b)           Bank overdraft

(c)            Goodwill account.

(d)           Purchases account.                                                                                                                                               (1 mark)

 

  1. The process of transferring the debit and credit items from a journal to their respective account in the ledger is referred to as?

(a)            Balancing.

(b)           Posting.

(c)            Arithmetic.

(d)            Entry.                                ( I mark)

 

  1. The liabilities of a firm are Sh.300,000 and capital is S11.700.000. What is the value of the assets?

(a)            Sh.700,000.

(b)           Sh.1,000,000.

(c)            Sh.400,000.

(d)            Sh.300,000.                                                                                                                                                        ( I mark)

 

  1. Which of the following will cause the owner’s equity to increase?

(a)            Expense.

(b)           Drawings.

(c)            Revenue.

(d)           Loss.                                                                                                                                                                 (1 mark)

 

  1. Total assets of a business are Sh.1,300,000 and net worth is Sh.800,000. What is the value of liabilities?

(a)            Sh.2,100,000.

(b)           Sh.500,000.

(c)            Sh.800,000.

(d)           Sh.460.000.                                                                                                                                                      (1 mark)

 

  1. A sole proprietor made sales worth Sh.120,000. He incurred Sh.50,000 for the sale. How much gross profit did he earn?

(a)            Sh.50,000.

(b)            Sh.70,000.

(c)            Sh.120,000.

(d)           Sh.170,000.                                                                                                                                                      (1 mark)

 

  1. A trail balance is prepared:

(a)            After preparation financial statements.

(b)           After recording transactions in subsidiary hooks.

(c)            After posting to ledger is complete.

(d)            After posting to ledger is complete and accounts have been balanced.                  (1 mark)

 

  1. A trial balance shows the:

(a)            Final position of accounts.

(b)            Standard position of accounts.

(c)            Working position of accounts.

(d)            Current position of accounts.                  (I mark)

 

  1. Trial balance is considered as the connecting link between accounting records and preparation of financial statements. It provides a basis for:

(a)            Auditing accounting reports.

(b)           Accuracy of the ledger account.

(c)            Further processing of accounts.

(d)           All of the above.                      (1 mark)

 

  1. Agreement of trial balance is affected by:

(a)            One sided errors only.

(b)           Two sided errors only.

(c)            Both (a) and (b).

(d)            Debit side errors only.                        (1 mark)

 

  1. What will be the effect on trial balance if Sh. 2,000 received as rent and correctly entered in the cash book, but not posted to rent account’?

(a)            Debit side of trial balance will exceed by Sh.2,000.

(b)            Debit side of trial balance will decrease by Sh.2,000.

(c)            Credit side of trial balance will decrease by Sh.2,000.

(d)           Credit side of trial balance will exceed by Sh.2,000. (1 mark)

 

  1. Minimum number of members in the case of a public company is:

(a)            4.

(b)           5.

(c)            6.

(d)           7.                                                                                                                                                                         ( I mark)

 

  1. Asha’s Accessory Shop started the year with total assets of Sh.210,000 and total liabilities of Sh. 120,000. During the year, the business recorded Sh.330,000 in revenues, Sh.165,000 in expenses. The net income reported by Asha’s Accessory Shop for the year was:

(a)            Sh.120,000.

(b)            Sh.150,000.

(c)            Sh.195,000.

(d)           Sh.165,000.                                                                                                                                                         ( I mark)

 

  1. Rodgers Company compiled the following financial information as at 31 December 2021:
  • Sales revenue Sh.1,120,000
  • Ordinary share capital Sh.240,000
  • Buildings Sh.320,000
  • Operating expenses Sh.1,000,000
  • Cash Sh.280,000
  • Dividends Sh.80,000
  • Inventory Sh.40,000
  • Accounts payable Sh. 160,000
  • Accounts receivable Sh.120,000
  • Retained earnings, 1 January 2021 Sh. 600,000

What is the value of Rogers Company’s assets as at 31 December 2021?

(a)            Sh.1,880,000.

(b)            Sh.1,360,000.

(c)            Sh.640,000.

(d)            Sh.760,000.                                                                                                                                                         ( I mark)

 

  1. As at I January 2021, Atieno’s shop had a balance in its retained earnings account of Sh.100,000. During the year Atieno’s shop had revenues of Sh.80,000 and expenses of Sh.45,000. In addition, the business paid cash dividends of Sh.20,000. What is the balance on retained earnings as at 31 December 2021 for Atieno’s shop?

(a)            Sh.100,000

(b)            Sh.115,000

(c)            Sh.135,000

(d)            Sh.155,000.                                                                                                                                                         (1 mark)

 

  1. Use the following information for Light Ltd. for the year ended 30 September 2021 to answer question 90 — 92:

Calculate Light Ltd.’s net income:

(a)            Sh.7,500,000.

(b)            Sh. 9,000,000.

(c)            Sh.8,000,000.

(d)            Sh. I ,400,000.                                                                                                                                                     (1 mark)

 

  1. Calculate Light Ltd.’s retained earnings:

(a)            Sh.8,000,000.

(b)           Sh.1,800,000.

(c)            Sh.1,400,000.

(d)           Sh.300,000.                                                                                                                                                          ( I mark)

 

  1. Calculate Light Ltd.’s total assets:

(a)            Sh.8,000,000.

(b)           Sh.36,000,000.

(c)            Sh.15,000,000.

(d)           Sh.30,000,000.                                (1 mark)

 

  1. The art of recording all business transactions  in a systematic manner in a set of books is referred to as:

(a)            Accounting.

(b)            Bookkeeping.

(c)            Ledger.

(d)           Journalising.                                                                                                                                                         ( I mark)

 

  1. The person, firm or institution who does not pay the price in cash for the goods purchased or the services received is called:

(a)            Creditor.

(b)           Proprietor.

(c)            Debtor.

(d)           Merchant.                                                                                                                                                             ( I mark)

 

  1. Cash, goods or assets invested by the proprietor in the business for earning profit is called:

(a)            Profit.

(b)           Capital.

(c)            Non-current assets.

(d)           Current assets.                              (1 mark)

 

  1. The concession given on cash transactions is called:

(a)            Trade discount.

(b)            Cash discount.

(c)            Cash sale.

(d)           Cash purchases.                              (1 mark)

 

  1. Jared Kigen sold goods to Norton Mosomi on 19 October 2021  for Sh.60,000. The credit terms are 21/2% cash discount if payment is received within 14 days. If payment was received on 25 October 202 1 , then the correct amount and the discount received respectively would he:

(a)            Sh.60,000 , Sh.250.

(b)           Sh.61,500 , Sh.60,000.

(c)            Sh.58,500 , Sh.1,500.

(d)           Sh.46,000  Sh.24,000.                                                                                                                                         ( I mark)

 

  1. Carriage outward in accounting is included as:

(a)            Direct incomes.

(b)           Cost of sale.

(c)            Expenses.

(d)            Production cost.                               (1 mark)

 

  1. A company that issues shares to raise funds results in:

(a)            Decrease in cash.

(b)            Increase in cash.

(c)            Increase in equity.

(d)            Increase in liabilities.                               (1 mark)

 

  1. When the purchase value of assets is more than net book value of an asset it is known as?

(a)            Appreciated liabilities.

(h)           Appreciated revenue.

(c)            Depreciation.

(d)            Appreciation.                               (I mark)

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FUNDAMENTALS OF BUSINESS MATHEMATICS APRIL 2022 PAST PAPER

TUESDAY: 5 April 2022. Afternoon paper                                                                                           Time Allowed: 3 hours.

This paper is made up of a hundred (100) Multiple Choice Questions. Answer ALL questions by indicating the letter (a, b, c or d) that represents the correct answer. Do NOT write anything on this paper.

 

  1. Gloria Anyango spends 45% of her income to pay school fees for her children and 15% on rent The rest of her income which amounts to Sh.45,000 is spent on food.

Determine the amount paid as school fees.

(a)           Sh.16,875.

(b)           Sh.112,500.

(c)           Sh.33,750.

(d)           Sh.50,625.                                                                                                                                                       (1 mark)

 

  1. Express 0.084 as a percentage.

(a)           0.00084%.

(b)           8.4%

(c)           84%

(d)           0.84%                                                                                                                                                            (1 mark)

 

  1. Calculate 66 2/3% of 1,200.

(a)            18

(b)           800

(c)          794.76

(d)          80,000                                                                                                                                                             (1 mark)

 

  1. A job is completed by 6 persons in 21 days. Determine the number of days 18  persons will  take to complete the same task.

(a)          7 days.

(b)           5.1 days.

(c)           63 days.

(d)           126 days.                                                                                                                                                        ( 1 mark)

 

  1. If the price of an article is increased by 25%, the new price is Sh.1,750.

Determine the original price before the price increase.

(a)            Sh.2187.50

(b)           Sh.1,400

(c)           Sh.1,312.50

(d)           Sh.1,725                                                                                                                                                          (1 mark)

 

  1. Convert 60% to a fraction?

(a)           2/3

(b)           2/5

(c)           3/5

(d)           3/10                                                                                                                                                                  (1 mark)

 

  1. Anne, Ben and Carol are operating a partnership business. They share profits in the ratio of 3:5:2. In the year 2021, the partnership made a profit of Sh.2,560,000.

Calculate Anne’s profit share.

(a)          Sh.1,280,000

(b)          Sh.768,000

(c)          Sh.256,000

(d)          Sh.1,024,000                                                                                                                                            (I mark)

 

  1. Round-off 34.478 to the nearest whole number.

(a)          34

(b)          35

(c)          34.5

(d)          36                                                                                                                                                                   ( 1 mark)

 

  1. John Mativo leaves Sh.210,000 inheritance to his two sons, Alfred and Ben so that Ben gets Y4  of what Alfred gets. Calculate the amount received by Alfred?

(a)           Sh. I 20,000

(b)           Sh.157,500

(c)           Sh.52,500

(d)           Sh.90,000                                                                                                                                                        ( 1 mark)

 

  1. Which of the following is not a measure of central tendency?

(a)           Mean

(b)           Mode

(c)           Absolute deviation

(d)           Median                                                                                                                                                          (I mark)

 

  1. Which of the following is not a method of data collection?

(a)           Interview

(b)           Primary data

(c)           Observation

(d)           Questionnaire                                                                                                                                              (1 mark)

 

  1. Which of the following is a discrete data value?

(a)           Number of cars

(b)           Distance

(c)           Length

(d)           Weight                                                                                                                                                             (I mark)

 

  1. is data that has already been collected.

(a)           Secondary data

(b)           Discrete data

(c)           Primary data

(d)           Published data                                                                                                                                             (1 mark)

 

  1. One of the disadvantages of observation method of data collection is that;

(a)           Firsthand information is collected

(b)          Lacks reliability

(c)           Its time consuming

(d)           It is not accurate                                                                                                                                        ( 1 mark)

 

  1. A sampling method in which all items in the population have an equal chance of being selected is referred to as?

(a)            Probabilistic sampling

(b)           Random sampling

(c)           Census

(d)           Stratified sampling                                                                                                                                    (1 mark)

 

  1. From the following data relating to ages of eight women at Faulu College, determine the medium age: 60, 48, 52, 72, 66, 41, 80, 38

(a)          72

(b)          52

(c)          56

(d)          66                                                                                                                                                                   (1 mark)

 

  1. In a final examination in statistics, the mean score of a class of 50 students is found to be 65 marks with a standard deviation of 10 marks.

Determine the coefficient of variation.

(a)            15.38%

(b)           20%

(c)           6.5%

(d)           55%                                                                                                                                                                 (1 mark)

 

  1. From the following data sets, determine the modal value: 12, 14, 12, 16, 18, 16, 20, 18, 20, 14

(a)           20

(b)           16

(c)           None

(d)           All                                                                                                                                                                   (1 mark)

 

  1. In a ready to wear garment shop the most typical shirt size will be determined using?

(a)           Arithmetic mean

(b)           Mode

(c)           Median

(d)           Harmonic mean                                                                                                                                          (1 mark)

 

  1. The distribution of wages paid to foremen is given as follows:

Wages Sh.”000″                 10-20                     20-30                      30 and above

Frequency (t)                     10                           25                            15

Calculate the mean wage paid to the foremen.

(a)           Sh.24,500

(b)           Sh.16,670

(c)          Sh.26,000

(d)           Sh.25,000                                                                                                                                                        (1 mark)

 

  1. Which one of the following measure of central tendency is not rigidly defined?

(a)           Arithmetic mean

(b)           Median

(c)            Mode

(d)           Geometric mean                                                                                                                                         ( I mark)

 

  1. A list of the entire population from which items can be selected to form a sample is called?

(a)            Sampling frame

(b)           Census

(c)           Statistics

(d)           Parameter                                                                                                                                                     ( 1 mark)

 

  1. A sampling technique where every Kth item will be selected to be included in the sample is referred to as?

(a)           Quota sampling

(b)           Stratified sampling

(c)           Multi-stage sampling

(d)           Systematic sampling                                                                                                                                 (1 mark)

 

  1. Which name is given to a smoothed frequency polygon?

(a)            Ogive curve

(b)           Frequency curve

(c)           Frequency histogram

(d)          Relative frequency polygon                                                                                                                    (1 mark)

 

  1. Which of the following statements is true about graphs?

(a)          The independent variable should always be placed on the horizontal axis.

(b)          The dependent variable should always be placed on the horizontal axis.

(c)          The independent variable should always be placed on the vertical axis.

(d)          None of the above.                                                                                                                                     (1 mark)

 

  1. A trader imported goods from Canada at a cost of 15,000 Canadian dollars. He paid freight charges and insurance in transit of 10% of the purchase value of the goods. He also paid Sh. 200,000 in import duty. Calculate the value of the goods in Shillings.

(1 Canadian Dollar = Sh. 89)

(a)          Sh.1,668,500

(b)          Sh.1,468,500

(c)          Sh.16,500

(d)          Sh. I ,485,000                                                                                                                                             (I mark)

 

  1. A businessman offers a commission of Sh.200 for every sales worth Sh.2,300. Philip Ngeno made sales worth Sh.52,900. Calculate the total commission received by Philip Ngeno.

(a)          Sh.2,300

(b)          Sh.10,580,000

(c)          Sh.460,000

(d)          Sh.4,600                                                                                                                                                       (1 mark)

 

  1. An American tourist converted 8,600 dollars to Kenya Shillings at an exchange rate of Ksh.110 per United States dollar. Calculate the amount received by the tourist in Kenya shillings.

(a)          Sh.946,000

(b)          Sh. 78.18

(c)          Sh.  100

(d)          Sh.  100,000                                                                                                                                                 (1 mark)

 

  1. A business person imported a car from Japan at a cost of Kenya shillings 3,000,000. If the prevailing exchange rate was Ksh. 80 per Japanese Yen, calculate the cost of the car in Japanese Yen.

(a)          Yen 320,000,000

(b)          Yen 37,500

(c)          Yen 6,400

(d)          Yen 75,000                                                                                                                                                  (1 mark)

 

  1. A manufacturing company pays its workers Sh.1,200 for every unit produced. On a given day Thomas Korir produced 5 units. Calculate the amount paid to Thomas Korir.

(a)           Sh.1,200

(b)           Sh.6,000

(c)           Sh.7,200

(d)           Sh.3,600                                                                                                                                                          (1 mark)

 

  1. An employee earns a taxable income of Sh.80,000 per month. The tax rate is 15% per month. Calculate the net pay.

(a)          Sh.I2,000

(b)          Sh.80,000

(c)          Sh.68,000

(d)          Sh.92,000                                                                                                                                                     (1 mark)

 

  1. Juma Barasa bought a piece of land for Sh.850,000. The land is expected to appreciate in value at the rate of 5% per annum. Calculate the value of the land after 3 years.

(a)           Sh.127,500

(b)           Sh.977,500

(e)           Sh.722,500

(d)           Sh.850,000                                                                                                                                                      (1 mark)

 

  1. A manufacturer bought a machine for Sh.250,000. The machine has a useful life of 8 years with no scrap value. Calculate the annual rate of depreciation for the machine.

(a)           10%

(b)          20%

(c)          25%

(d)          12.5%                                                                                                                                                           ( I mark)

 

  1. Duncan Mulwa paid Sh.15,000 to purchase a bicycle after receiving a discount of 20%. What is the gross price of the bicycle?

(a)          Sh.18,000

(b)          Sh.75,000

(c)          Sh.18,750

(d)          Sh. I 2,000                                                                                                                                                   (1 mark)

 

  1. Samuel Mwangi bought an article for Sh.9,600 and later sold it at a loss of 20% of the selling price. Determine the selling price of the article.?

(a)          Sh.7,680

(b)          Sh.11,520

(c)          Sh.11,200

(d)          Sh.8,000                                                                                                                                                       ( I mark)

 

  1. James Olekina sells his products for Sh.30 per unit. He allows his customers a trade discount of 10% and a further cash discount of 7.5% for cash purchase.  Cynthia Kwamboka buys 110 units, calculate the net amount paid by Cynthia Kwamboka.

(a)           Sh.2,887.50

(b)          Sh.2,747.25

(c)          Sh.2,970

(d)          Sh.3,059.50                                                                                                                                                 (I mark)

 

  1. An allowance offered to buyers by sellers to encourage prompt payment is called?

(a)          Trade discount

(b)          Cash discount

(c)          Quantity discount

(d)          Prompt discount                                                                                                                                         ( I mark)

 

  1. Payment earned by an agent for selling on behalf of another person is called?

(a)          Discount

(b)          Basic pay

(c)          Commission

(d)          Profit                                                                                                                                                             (1 mark)

 

  1. Sarah Kinyua bought a watch for Sh.1,200 and later sold it for Sh.800. Determine the percentage loss.

(a)          662/3%

(b)          50%

(c)          33 I3%

(d)          50%.                                                                                                                                                              (1 mark)

 

  1. A trader gains 8% by selling a product for Sh.2,700. What did the product cost him?

(a)          Sh.2,484

(b)          Sh.2,500

(c)          Sh.2,916

(d)          Sh.216                                                                                                                                                           ( I mark)

 

  1. An article costing Sh.675 is sold at a profit margin of 25%. Find the selling price of the article.

(a)          Sh.900

(b)          Sh.168.75

(c)          Sh.225

(d)          Sh.843.75                                                                                                                                                     (1 mark)

 

  1. Given that mark-up of a product is 2 /3, determine the margin.

(a)            1

(b)           2/5

(e)           3/5

(d)           3

( 1 mark)

  1. Matthew Tsofa deposited Sh.150,000 in a bank that paid a simple interest of 15% per annum for 2 years. Calculate the interest receivable after the 2 years.

(a)          Sh. 45,000

(b)          Sh.22,500

(c)          Sh.I95,000

(d)          Sh.  105,000                                                                                                                                                  (1 mark)

 

  1. Compute the compound interest on Sh.20,000 at an interest rate of 8.5% for 2 years.

(a)          Sh.23,544.50

(b)          Sh.3.400

(c)           Sh.3,544.50

(d)          Sh.23,400                                                                                                                                                     ( I mark)

 

  1. Find the principal which amounts to Sh.68,000 at simple interest rate of 12% per annum in 3 years.

(a)           Sh.59,840

(b)          Sh.18,000

(c)          Sh.188,889

(d)          Sh.50,000                                                                                                                                                     (I mark)

 

  1. Find the time in years it will take for a certain amount X invested at a compound rate of interest of 10% per annum to triple.

(a)           11.52 years

(b)          3 years

(c)          2.72 years

(d)          3.3 years                                                                                                                                                       (1 mark)

 

  1. A father leaves an estate to be divided among his three sons Ali, Baba and Chacha. All gets I /3 of the estate, Babu gets 1/4 while Chacha receives 1/, of the remainder. What is the total value of the estate if Chacha’s share amounted to Sh.240,000.

(a)          Sh.576,000

(b)          Sh.1,000,000

(c)          Sh.1,152,000

(d)          Sh.411,429                                                                                                                                                  (1 mark)

 

  1. Determine the value of y given that 2,8 and 32, y are in proportion.

(a)          8

(b)          256

(c)          320

(d)          128                                                                                                                                                                (1 mark)

 

  1. The factorisation of 6x + 18y is.

(a)          3 (2x + 6y)

(b)          6(x + 9y)

(c)          6(x + 3y)

(d)          3 (2x + 9y)                                                                                                                                                   (1 mark)

 

  1. The factorisation of 6xy +4x + 6- 9x is.

(a)          (3x-2)(2y-3)

(b)          (3x+2)(2y -3)

(c)          (3x+2)(2y +3)4

(d)          (3x-2)(2y +3)                                                                                                                                             (1 mark)

 

  1. A box contains 3 yellow balls and 5 green balls. 1 ball is selected at random from the box. What is the probability that the ball is yellow?                                                                                                          ( I mark)

 

  1. Differentiate the following function: Y=4×3 + x2 +6x+10 with respect to x.

(a)             12×2+2x+6

(b)            4×2+2x+6x

(c)             12×2+2x+6x

(d)            12×2+2x+16                                                                                                                                                  (1 mark)

 

  1. Find the inverse of the following matrix;

(1 mark)

 

  1. Define the following notation as used in matrices; A-1

(a)           Inverse of a matrix

(b)           Compliment of a matrix

(c)           Equality of a matrix

(d)           None of the above                                                                                                                                            (1 mark)

 

  1. Two matrices can be added or subtracted if and only if

(a)          They are of the same size.

(b)          The number of columns in the first matrix is equal to the rows in the second matrix

(c)          The number of rows in the first matrix is equal to the columns in the second matrix

(d)          The number of columns in the second matrix is equal to the rows in the first matrix          (1 mark)

 

  1. If the probability of picking a blue pen from a pack is 0.25, how many pens are in the pack if there are 20 blue pens?

(a)          45

(b)          80

(c)           60

(d)          40                                                                                                                                                                    (1 mark)

 

  1. A column vector matrix is a matrix which;

(a)          Has no columns

(b)          Has one row

(c)          Has no rows

(d)          Has one column                                                                                                                                          ( I mark)

 

  1. A minima turning point has a gradient of;

(a)            1

(b)           cc

(c)           0

(d)           -1                                                                                                                                                                     (1 mark)

 

  1. Which of the following is not a form of a turning point?

(a)           Minima

(b)           Point of infraction

(c)           Maxima

(d)           Gradient                                                                                                                                                           (1 mark)

 

  1. Integrate the following function 4×3 .

(a)           4×4+ e

(b)           4X4

(c)           X4 + C

(d)           12X2                                                                                                                                                                (1 mark)

 

  1. Convert a profit margin of 20% to markup.

(a)           40%

(b)           25%

(c)            10%

(d)           33.33%                                                                                                                                                             (1 mark)

 

  1. How many terms are there in the expression 5xy2-F6x-4y+10?

(a)           2

(b)           1

(c)           4

(d)           5                                                                                                                                                                      (I mark)

 

  1. The coefficient of 9×3 is?

(a)           3

(b)           27

(c)           6

(d)           9                                                                                                                                                                      (1 mark)

 

  1. The value of 3×2 — 2x + 3 when x-3 is?

(a)           3

(b)           24

(c)           21

(d)           -24                                                                                                                                                                   (1 mark)

 

  1. The number — 10.36 lies on which side of the number line?

(a)           Center

(b)           Left

(c)           Right

(d)           Either side.                                                                                                                                                       (1 mark)

 

  1. The number line for natural numbers

(a)           Extends indefinitely on both sides

(b)           Extends indefinitely to the left from zero

(c)           Extends indefinitely to the right from zero

(d)           Lies between -1 and 1                                                                                                                                      (1 mark)

 

  1. -1 0 is than 10 and -12 is  than -8.

(a)           Greater and greater

(b)           Smaller and greater

(c)           Smaller and smaller

(d)           Greater and smaller.                                                                                                                                         (1 mark)

 

  1. Expand (x + I) (x – 2).

(a)               -x+2

(b)          x2- x – 2

(c)          x2 + x – 2

(d)          x2+ x + 2                                                                                                                                                      ( I mark)

 

  1. Factorise x2 – 5x + 6.

(a)          (x + 2) (x + 3)

(b)          (x – 2) (x + 3)

(c)          (x – 2)(x – 3)

(d)          (x + 2) (x – 3)                                                                                                                                             (1 mark)

 

  1. Simplify (x + 6)2 + (2x -1)1

(a)          4x – I 1

(b)          4x + 11

(c)           11

(d)          4x + 13                                                                                                                                                          (1 mark)

 

71.                                                                                                                                                              (I mark)

 

  1. The profit equation of a food processing plants described as J1=16x 2×2- 14 in Sh. “000”. What is the initial cost of the project?

(a)          Sh.0

(b)          Sh.I4,000

(c)          Sh. I 6,000

(d)          -Sh.2,000                                                                                                                                                      (1 mark)

 

  1. Find the derivative of 3/2 x2 -1.

(a)          9/2 x3- lx

(b)          3x

(c)          3x- 1

(d)          3x – x                                                                                                                                                             ( I mark)

 

  1. Find the range of values of x which satisfy the following inequality. -3x -4 > 2.

(a)          x > -2

(b)          x > -2/3

(c)          x < -2

(d)          x < -2/3                                                                                                                                                         (1 mark)

 

  1. Find the range of values of x which satisfy the following inequality ’15- x-/4> 2.

(a)          x < – 40

(b)          x <40

(c)          x > – 40

(d)          x > 40                                                                                                                                                            (1 mark)

 

  1. A quadratic equation can be solved using any of the following approaches except?

(a)          Graphical approach

(b)          By factorising

(c)          By substitution method

(d)          By completing the square method                                                                                                         ( I mark)

 

  1. The profit function of a certain production process is expressed as y = 11 Oq — q2 — 1000. Determine the number of units required to maximize profit.

(a)           55 units

(b)           10 units

(c)            100 units

(d)           110 units                                                                                                                                                         (1 mark)

 

  1. Solve the following simultaneous equations.

12x + 8y = 48

16x— 12y =-4

(a)           x = 4

y = 0

(b)           x = 2

y= 3

(c)           x = 3

y = 2

(d)           x = 0

y = 6                                                                                                                                                                (1 mark)

 

  1. A teacher is twice as old as his student. In twenty years time, he will be 1.5 times as old. What is the difference in their ages today?

(a)            10

(b)           40

(c)           20

(d)           30                                                                                                                                                                    (1 mark)

 

  1. Determine the equation of the straight line which passes through points A (1,6) and B (2, 10).

(a)           y = 5.75 + 0.25x

(b)           y = 2 + 4x

(c)           y = 2     4x

(d)           y = 4.4 + 1.6x                                                                                                                                                  (1 mark)

 

  1. A worker is paid Sh.500 for each day he worked. A penalty of Sh.250 is imposed for each day the worker is absent. The worker was paid Sh.7,750 after 20 days. For how many days was he absent?

(a)           9

(b)           5

(c)           3

(d)           15                                                                                                                                                                    (1 mark)

 

  1. A maximum turning point on a curve may be determined using?

(a)          Integration

(b)          Differentiation

(c)          Quadratic Formula

(d)          Factorisation                                                                                                                                                (I mark)

 

  1. Given that x = 3 and y = 2.

Evaluate x2 — x3y + 6.

(a)           – 45

(b)           – 39

(c)           – 51

(d)           – 3                                                                                                                                                                    (1 mark)

 

  1. A matrix B [3       1           is such that determinant is I. Find out the value of y.

2      y

 

(a)           — 1/3

(b)           3

(c)           5

(d)           1                                                                                                                                                                      (1 mark)

 

  1. Given that

Which of these matrices is compatible for multiplication?

(a)           B x A

(b)          B x C

(c)           A x B

(d)          C x B                                                                                                                                                              (1 mark)

 

  1. A matrix obtained by interchanging the rows and columns of a matrix is known as?

(a)          Inverse of a matrix

(b)          Transpose of a matrix

(c)          Square matrix

(d)          Diagonal matrix                                                                                                                                          ( I mark)

 

  1. A square diagonal matrix with all elements in the primary diagonal being equal is called?

(a)          A scalar

(b)          Column vector

(c)          Null matrix

(d)          Row vector                                                                                                                                                   (1 mark)

 

  1. What is the probability of success if the probability of failure is 0.05?

(a)          0.45

(b)          0.50

(c)          0.95

(d)          1.05                                                                                                                                                               (1 mark)

 

  1. Which of the following is not a probability value?

(a)          0

(b)          -1

(c)          0.456

(d)            1                                                                                                                                                                      (I mark)

 

  1. What is the probability of a sure event?

(a)           I

(b)          2

(c)          0

(d)          00                                                                                                                                                                    (1 mark)

 

  1. Two events are said to be independent if;

(a)          The two events cannot happen together.

(b)          The two event can happen together.

(c)          The occurrence or non-occurrence of one event affects the occurrence or non-occurrence of the other.

(d)          The occurrence or non-occurrence of one event does not affects the occurrence or non-occurrence of the other.                                                                                                                                                           ( 1 mark)

  1. Two events are said to be mutually exclusive if;.

(a)          The two events cannot happen together.

(b)          The two events can happen together.

(c)          The occurrence or non-occurrence of one event affects the occurrence or non-occurrence of the other.

(d)          The occurrence or non-occurrence of one event does not affect the occurrence or non-occurrence of the other.                                                                                                                     ( 1 mark)

 

  1. The probability of producing a defective unit by machine A is 0.15. If the machine produces 760 units, how many defective units will be produced?

(a)           646

(b)            15

(c)            85

(d)            114                                                                                                                                                                  (1 mark)

 

  1. The number of units in a sample are referred to as.

(a)           Outcomes

(b)          Sample events

(c)           Sample space

(d)          Probability space                                                                                                                                        (I mark)

 

  1. Under the additional rule of probability, the events must be

(a)           Dependent

(b)          Equally likely

(c)           Mutually exclusive

(d)          Collectively exhaustive                                                                                                                            ( I mark)

 

  1. Probability can assume any value between

(a)           0 and 1

(b)          -1 and  1

(c)           I and 2

(d)          -1 and 0                                                                                                                                                        (1 mark)

 

  1. The probability of an event A happening given that event B has already happened is referred to as?

(a)           Joint probability

(b)          Conditional probability

(c)           Equally likely probability

(d)          Impossible probability                                                                                                                             (1 mark)

 

  1. Two events are said to be equally likely if;

(a)           They can happen together

(b)          They have to occur

(c)          They have the same probability of occurrence

(d)          They cannot happen together.                                                                                                                 (1 mark)

 

  1. Three unbiased coins are tossed simultaneously. Find the sample space.

(a)           6

(b)          9

(c)          8

(d)          3                                                                                                                                                                      (1 mark)

 

  1. A single possible outcome of an experiment is called?

(a)          Simple event

(b)          Compound event

(c)          Equally likely event

(d)          Mutually exclusive event                                                                                                                         (1 mark)