December 22, 2022

WEDNESDAY: 7 December 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.  In the context of financial assets and financial liabilities: Provide an overview of what comprises a “financial asset” and a “financial liability”. (2 marks) With reference to the measurement and recognition of financial assets, recommend guidance to preparers of financial statements who reclassify financial assets under the following categories: • Reclassification of a financial asset out of the amortised cost measurement category and into the face value through profit or loss measurement category. (2 marks) • Reclassification of a financial asset out of the amortised cost measurement category and into the fair value through other comprehensive income measurement category. (4 marks) 2. With reference to International Financial Reporting Standard (IFRS) 11 – Joint Arrangements: Summarise TWO characteristics of a joint arrangement. (2 marks) Describe the TWO types of joint arrangements. (2 marks) Explain the salient provisions on what a joint operator recognises in relation to its interest in a joint operation. (2 marks) 3. With reference to International Public Sector Accounting Standard (IPSAS) 19 – Provisions, Contingent Liabilities and Contingent Assets: Distinguish between “provisions” and “contingent liabilities”. (2 marks) Summarise the circumstances for recognition of a provision. (2 marks) Indicate the accounting treatment for “contingent liabilities” and “contingent assets”. (2 marks) (Total: 20 marks) QUESTION TWO Marula Farmers Cooperative Society Ltd. deals in the marketing of two brands of coffee; Safi and Mzuri on behalf of the members. As per the society’s bylaws, the society is allowed to retain 20% of sales from Safi and Mzuri for operations and pay the balance to the members. The following trial balance was extracted from the books of the society as at 31 December 2021: Additional information: 1. Bora Limited markets Safi and Mzuri brands for Marula Society. On 31 December 2021, Bora Limited sold Safi and Mzuri brands for 175,000 United States (US) dollars and 115,300 US dollars respectively. Bora Limited remitted the above amounts to Marula Farmers’ Wakulima Bank account on 15 January 2022. Marula Farmers Cooperative Society does not maintain a US dollar account in Wakulima Bank. 2. The exchange rates for the two currencies were as shown below on the respective dates: Sh./1 US dollar 31 December 2021                  105 15 January 2022                      100 3. Audit fee of Sh.6,000,000 is to be provided for. 4. Staff salaries and wages amounting to Sh.3,200,000 had not been paid as at 31 December 2021. 5. Interest on members deposits is to be provided at Sh.6,086,000. 6. As per the relevant Ministry regulations, cooperative societies are required to transfer 20% of their net earnings to a statutory reserve. Required: Prepare the following financial statements for Marula Cooperative Society Ltd. for the year ended 31 December 2021: 1. Safi brand marketing account, showing the profit or loss. (3 marks) 2. Mzuri brand marketing account, showing the profit or loss. (3 marks) 3. Statement of profit or loss for the year ended 31 December 2021. (6 marks) 4. Statement of financial position as at 31 December 2021. (8 marks) (Total: 20 marks) QUESTION THREE 1.  On 1 January 2022, H Limited acquired 80% of the 4 million, Sh.10 ordinary shares of S Limited issued at par value. The acquisition consideration comprised of three new ordinary shares issued by H Limited in exchange for every five shares acquired in S Limited. Additionally, H Limited will pay further consideration on 31 December 2022 of Sh.11 per share acquired. H Limited’s cost of capital is 10% per annum and the discount factor at 10% for one year is 0.9091. At the date of acquisition, the fair values of ordinary shares in H Limited and S Limited were Sh.15 and Sh.12 respectively. The following statements of profit or loss for the year ended 30 September 2022, relate to the two companies: Additional information: 1. At the date of acquisition, the fair value of S Limited’s net assets approximated their carrying values with the exception of an item of plant and equipment which had a fair value of Sh.24 million above its carrying amount. The remaining economic useful life of the plant and equipment at the date of acquisition was six years. Depreciation is charged to cost of sales. 2. Sales from S Limited to H Limited in the post-acquisition period amounted to Sh.30 million. S Limited reported a gross profit margin of 25% on these sales. H Limited’s inventory includes one fifth (1⁄5) of these goods as at 30 September 2022. 3. H Limited’s policy is to value the non-controlling interests at fair value at the date of acquisition. For this purpose, S Limited’s share price at acquisition date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. 4. H Limited’s investment income is dividend received from its investment in a 40% owned associate which it has held for several years. The associate reported a profit after tax of Sh.30 million for the year ended 30 September 2022. 5. As at 30 September 2022, no impairment of goodwill was considered necessary. 6. Assume that profits and losses accrued evenly throughout the year. 7. As at 1 October 2021, the retained earnings of S Limited were Sh.16 million. Required: Calculate the goodwill arising on the acquisition of S Limited. (4 marks) Consolidated statement of profit or loss for H Group for the year ended 30 September 2022. (8 marks) Note: All workings should be done to the nearest Sh.“000”. 2. Sayari Limited obtained a 10% loan note amounting to Sh.24 million on 1 January 2021 to finance the construction of a new factory. As the funds were not all required immediately, Sayari Limited invested Sh.10 million in 6% bonds until 31 May 2021.

THURSDAY: 8 December 2022. Afternoon 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. Ethical responsibilities arise not as a result of legal requirements but as a result of moral imperative for companies to operate in an ethical and fair manner. In light of the above statement, summarise SIX elements of business ethics in management of companies. (6 marks) 2. Highlight FOUR factors that influence the choice of debt finance by a company. (4 marks) 3. Your client, Alfred Otieno, wishes to invest Sh.500,000 for two years (with interest compounded) but with the right to withdraw at a moment’s notice. The following investment options are available: Option I: Invest with Nyumba Building Society currently offering an interest rate of 14% per annum after tax with interest paid half yearly. Option II: Invest with Kijiji Bank Ltd. at an interest rate of 17% per annum with interest paid annually. Option III: Invest with Faida Bank Ltd. which is offering 16% per annum, interest paid every three months. Required: Using suitable computations, advise your client on the best investment option he should consider. (6 marks) Calculate the effective rate of interest for option I. (2 marks) Identify TWO situations that could affect your recommendation in (c) (i) above. (2 marks) (Total: 20 marks) QUESTION TWO 1.  Dopco Ltd. has provided the following summary of statement of financial position for the year ended 30 September 2022: Required: Determine the value of each ordinary share using the Net Asset value basis of valuation. (5 marks) Outline THREE reasons for valuing securities of a company. (3 marks) 2. The following information relates to security X and security Y returns for the year 2021: Required: Determine the expected returns for security X and security Y. (2 marks) Determine the standard deviation for each security. (4 marks) Determine the covariance between security X and security Y. (4 marks) Determine the correlation coefficient between security X and security Y. (2 marks) (Total: 20 marks) QUESTION THREE 1. Identify FIVE ways to achieve personal financial freedom. (5 marks) Baraka Traders Ltd. has a minimum cash balance limit of Sh.100,000. The standard deviation of the daily cash flows is Sh.25,000. The interest rate of the marketable securities is 9.2% per annum. The transactional cost for each sale or purchase of security is Sh.200. Assume a 365-day year. Required: Using Miller-Orr cash management model, determine: Target cash level. (2 marks) Upper cash limit. (2 marks) Average cash balance. (2 marks) The spread. (1 mark) 3.  Jawabu Ltd. is evaluating a project with an expected useful life of 6 years and the following characteristics: 1. Fixed capital investment of Sh.4,000,000. 2. The initial investment in net worth working capital is Sh.400,000. At the end of each year, net working capital must be increased so that the cumulative investment in net working capital is one-sixth of the next year projected sales. 3. The fixed capital is depreciated on cost at the following rates: 30% in year 1, 35% in year 2, 20% in year 3, 10% in year 4, 5% in year 5 and 0% in year 6. 4. Sales are Sh.2,400,000 in year 1, they grow at 25% annual rate for the next two years and then grow at 10% annual rate for the last three years. 5. Fixed cash operating expenses are Sh.300,000 for year 1-3 and Sh.260,000 for year 4-6. 6. Variable cash operating expenses are 40% of sales in year 1, 39% of sales in year 2 and 38% of sales in year 3 – 6. 7. The corporate tax rate is 30%. If taxable income on the project is negative in any year, the loss will offset gains elsewhere in the corporation, resulting in a tax savings. 8. Fixed capital investment will be sold for Sh.300,000 when the project is complete and recapture its cumulative investment in networking capital. Income taxes will be paid on any gains on disposal. 9. The project required rate of return is 12%. Required: Determine the suitability of the project using the Net Present Value (NPV) method. (8 marks) (Total: 20 marks) QUESTION FOUR 1. Explain THREE factors that influence the dividend policy of a firm. (6 marks) 2.  Outline FIVE factors that influence the price of a listed company’s share. (5 marks) 3. The following are the summary statement of profit and loss and statement of financial position for Miranda Ltd. for the year ended 31 October 2022. Additional information: 1. Return on investment (ROI) is 4.8%. 2. All sales are on credit and the company operates a very strict credit control system. 3. A suggestion has been made that a relaxation of credit policy would increase sales by 40%, if the company were to introduce a 2% discount (at present no discount is given) on accounts paid within 10 days. 4. It is envisioned that 70% of the customers would take advantage of the discount and the average collection period of the remainder would be half of what it is at present. 5. Bad debts would remain at 2% of firm’s credit sales. 6. Investors required rate of return is 10%. Assume 360 days in a year. Required: The current average collection period. (1 mark) The new level of profits after change in credit policy. (6 marks) Explain the effect of the new level of investment in account receivable. (2 marks) (Total: 20 marks) QUESTION FIVE 1. Explain the term “crowdfunding”. (2 marks) Explain TWO benefits of digital finance as part of financial inclusion. (2 marks) 2. Discuss THREE activities that are prohibited under Islamic Finance. (6 marks) 3. Kanga Ltd. expects earnings before interest and tax (EBIT) of Sh.7,500,000 in the current financial year. The company pays interest of 8% per annum on a long term loan of Sh.25,000,000. The company has 1,200,000 ordinary shares and the corporate tax rate is 30%. The

THURSDAY: 8 December 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. Highlight FIVE rules relating to the naming of companies. (5 marks) 2. Describe the effect of the principle elucidated by Lord MacNaghten in the case of Salomon-V-Salomon. (7 marks) 3. Explain the difference between a “company limited by shares” and a “company limited by guarantee.” (4 marks) 4.  Identify FOUR features of an unlimited company. (4 marks) (Total: 20 marks) QUESTION TWO 1. The articles of association form the framework within which the company and its members relate. Highlight FIVE limitations that must be observed when altering the articles of a company. (5 marks) 2. In relation to corporate restructuring: Define amalgamation as a corporate restructuring strategy. (2 marks) Highlight THREE elements of corporate restructuring. (6 marks) 3. With specific reference to company secretaries: Identify the circumstance under which a private company is required to have a company secretary. (1 mark) Describe the ways in which a private company that does not have a company secretary undertakes service of documents and authorises matters that require a company secretary. (6 marks) (Total: 20 marks) QUESTION THREE 1. Describe SEVEN reasons why a shareholder’s membership in a company might be terminated. (7 marks) 2. Highlight THREE items that form the content of a members’ register in a company. (3 marks) 3. Brian is a preference shareholder in Duniani Company limited. He is entitled to a dividend of 11%. The company has however been suffering losses and has passed a resolution in a general meeting to reduce the dividends on preference shares to 7%. Advise Brian on: His rights as a preference shareholder. (6 marks) Whether the company can vary the dividends he may be given. (4 marks) (Total: 20 marks) QUESTION FOUR 1. Describe the general contents of a company’s annual return. (6 marks) 2. Explain the following types of share capital: Paid-Up Capital. (2 marks) Issued Share Capital. (2 marks) 3. Summarise the following in relation to company administration: THREE objectives of administration. (3 marks) THREE persons who are entitled to make an application to the Court for an administration order. (3 marks) Highlight FOUR powers exercised by an administrator appointed by the Court. (4 marks) (Total: 20 marks) QUESTION FIVE 1. In Re Yorkshire Wool Combers Association Limited, a floating charge is described as one that hovers over the assets of the company as compared to a fixed charge. With reference to the above statement: Describe THREE circumstances that will cause the crystallisation of a floating charge. (4 marks) Outline TWO characteristics of a fixed charge. (2 marks) 2. Madax Transporters Limited registered a charge on its fleet of motor vehicles in favour of Kopesha Bank to secure a borrowing of Kenya Shillings Fifty Million (Sh. 50,000,000). Madax Transporters Limited has defaulted on the loan repayment. Outline FOUR options available to Kopesha Bank as the chargee. (4 marks) 3. Highlight SIX instances when one person can form quorum in a company meeting. (6 marks) 4. Makato Limited will be holding its Annual General Meeting (AGM) in thirty (30) days’ time. The meeting is set to be held at the Kasarani Gymnasium from 10.00 a.m. Outline FOUR items to be indicated in the notice to be shared with the members of the company. (4 marks) (Total: 20 marks) QUESTION SIX 1. You have been invited to speak at the board induction meeting of Ciffina Limited where three new directors have been appointed. In relation to the above statement, outline FIVE statutory duties of a director. (5 marks) 2. Discuss THREE remedies available to a lender who has acted in good faith and without knowledge that the company has borrowed money beyond its powers. (6 marks) 3. The role of a financial auditor is played by a person with the relevant competencies and independence to make appropriate judgement. Identify FOUR persons who are disqualified from appointment as financial auditors. (4 marks) 4. Highlight FIVE types of returns that must be delivered to the Registrar of Companies by a foreign company. (5 marks) (Total: 20 marks) QUESTION SEVEN 1. Directors are required to prepare a directors’ report to accompany the annual financial statements presented to members at an Annual General Meeting (AGM). Describe FIVE matters that must be captured in a directors’ report. (10 marks) 2. Identify FIVE instances when a court may appoint one or more competent inspectors to investigate the affairs of a company. (5 marks) 3. Highlight FIVE documents that a liquidator must lodge with the Registrar of Companies when making an application for voluntary winding up of a company. (5 marks) (Total: 20 marks)

WEDNESDAY: 7 December 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. State FOUR disadvantages of implementing information systems in an organisation. (4 marks) 2. Explain FIVE computer hardware components that are required when establishing a multimedia platform for e commerce. (5 marks) 3. Using an example, explain how one would use “Goal seek” function in a business. (5 marks) 4. Explain THREE problems that could be encountered when using a computerised accounting software. (6 marks) (Total: 20 marks) QUESTION TWO 1. Outline the output products that result from the following systems development lifecycle stages: System initiation. (2 marks) Requirement analysis. (2 marks) Systems design. (2 marks) System integration. (2 marks) Systems testing. (2 marks) 2. Explain TWO limitations of using “Internet of things” (IoT) technology. (4 marks) 3. Explain THREE ways in which e-commerce could be used to optimise business opportunities in a large hotel. (6 marks) (Total: 20 marks) QUESTION THREE 1.  Differentiate between “Intranet” and “Extranet” as used in computer networks. (2 marks) Outline FOUR limitations of using “extranet” as a computer network in an organisation. (4 marks) 2. Organisations use different types of information systems. Required: List THREE types of information systems used by management. (3 marks) State the input, processes and output of information systems used by management. (3 marks) Explain FOUR enterprise information system characteristics that support unstructured decision making in organisations. (4 marks) 3. Veronica stored word processing files in a flash disk when working from a home desktop computer. She has realised that the files could no longer open at her place of work. Required: Suggest FOUR reasons why some files may not open despite being visible on the flash disk. (4 marks) (Total: 20 marks) QUESTION FOUR 1. Differentiate between an “accounting package” and a “spreadsheet” based on the following features: Report generation. (2 marks ) Audit trail. (2 marks) 2. Giving an example, explain the purpose of a mobile browser. (3 marks) 3. Explain how cloud computing supports e-commerce operations. (4 marks) 4. Explain FOUR social issues that may arise from the use of information systems. (4 marks) 5. Assess FIVE ways in which general ICT controls ensure the reliability of data generated by information systems. (5 marks) (Total: 20 marks) QUESTION FIVE 1. List FOUR types of software used to enable e-commerce business. (4 marks) 2. Highlight FOUR types of skills that a system analyst is required to have in order to effectively carry out his/her tasks. (4 marks) 3. Assess FOUR methods of controlling unethical behaviour in ICT. (4 marks) 4. Kibao Masetu, a system analyst, used the prototyping method to develop an information system for Petoka Ltd. Explain FOUR advantages of using this method. (8 marks) (Total: 20 marks) QUESTION SIX 1. Highlight TWO features of a presentation program that are not available in a word processing program. (2 marks) Explain THREE contexts in which one would need to use a presentation program instead of a word processing program. (3 marks) 2. Enumerate FIVE reasons why an organisation might opt to use subcontractors for its information system needs. (5 marks) 3. Outline FOUR benefits of conducting a feasibility study during systems development. (4 marks) 4. Explain THREE factors to consider when choosing an operating system for a computer. (6 marks) (Total: 20 marks) QUESTION SEVEN 1. Explain TWO characteristics of a “peer to peer” computer network. (2 marks) 2. Highlight TWO legal issues and two ethical issues that may arise by use of information systems in a large-scale chain-based supermarket. (4 marks) 3. Suggest TWO strategies that a country could adopt to minimise the digital divide. (4 marks) 4. Simon has established an accounting firm in a busy town and employed seven assistants. However, the office space is not enough to accommodate all the staff and he has approached you for assistance. Required: Explain THREE modern ICT technologies that Simon could adopt to maximise employees’ productivity despite space constraints. (6 marks) Explain TWO possible disadvantages that Simon could face in adopting any of the technologies in 4  above. (4 marks) (Total: 20 marks)

WEDNESDAY: 7 December 2022. Morning Paper. Time Allowed: 3 hours. Answer any FIVE questions. ALL questions carry equal marks. Show ALL your workings. Do NOT write anything on this paper. QUESTION ONE 1. State FOUR characteristics of a good measure of dispersion. (4 marks) 2. Explain the meaning of the following terms as used in set theory: Venn diagram. (2 marks) Complement of a set. (2 marks) Union of a set. (2 marks) 3. The management team of Stage Supermarket is interested in determining whether there is any relationship between the distance from customers’ residences to the supermarket and the number of visits made to the supermarket in a particular period. The following results were obtained: Required: Determine whether there is any relationship between the number of visits made to the supermarket and the distance from customers’ residences to the supermarket. (8 marks) Calculate the decrease in the number of visits to the supermarket with each unit increase in distance of customers’ residences from the supermarket. (2 marks) (Total: 20 marks) QUESTION TWO 1. Shoetec Ltd., a manufacturer of stylish shoes, estimates that at full scale production, it would sell between 2,000 and 3,000 pairs of shoes. The total monthly revenue in thousands of shillings over this range is represented by the function TR = 3×2 + 7x. The firm estimates that the marginal cost (MC) in thousands of shillings could be represented by the function MC = 5×2 – 3x – 2 and fixed cost (FC) will be Sh.1,000 per month. Where x is the monthly output in thousands of pairs of shoes. Required: Derive the average cost and average revenue functions of the firm. (4 marks) Calculate the profit maximising output. (4 marks) Calculate the price charged upon maximising profit and how much each pair of shoes would cost. (2 marks) 2. An examination was administered to a group of students and the results were as summarised below: A candidate fails the examination if he/she obtains less than 40% in the examination. In order to pass with distinction, the candidate must obtain at least 75% in the examination. Required: Calculate the mean and standard deviation of the distribution of marks assuming that the marks scored are normally distributed. (10 marks) (Total: 20 marks) QUESTION THREE 1. Distinguish between the following terms as used in probability: “Conditional probability” and “marginal probability”. (4 marks) “Discrete probability distributions” and “continuous probability distributions”. (4 marks) 2. The banking industry in a given country is controlled by three banks Faida Bank, Akiba Bank and Ahadi Bank. As at 31 December 2020, Faida Bank controlled 30% of the market share, Akiba Bank controlled 50% of the market share and Ahadi Bank controlled 20% of the market share. A survey was conducted on the market shares of the three banks as at 31 December 2021 and revealed the following: 1. Faida Bank had retained 80% of its market share and lost 15% and 5% to Akiba Bank and Ahadi Bank respectively. 2. Akiba Bank had lost 10% and 20% of its market share to Faida Bank and Ahadi Bank respectively. 3. Ahadi Bank had lost 5% of its market share to Faida Bank and 5% to Akiba Bank. 4. There were no significant changes in the banking habits of the customers during the year ended 31 December 2021. Required: Determine the transition matrix from the above information. (2 marks) Determine the market shares of the three banks as at 31 December 2021. (3 marks) The steady state market shares of the three banks. (7 marks) (Total: 20 marks) QUESTION FOUR 1. The Production Manager of Mechtex Ltd., a manufacturer of machines, is investigating a claim by customers about machine A and machine B that it manufactures. The claim is that machine A has a longer useful life than machine B. A sample of 60 machine As taken from the market reveals that the machine has a mean useful life of 28,000 hours with a standard deviation of 900 hours. A sample of 80 machine Bs has a mean useful life of 30,000 hours with a standard deviation of 1,000 hours. Required: Advise the Production Manager of Mechtex Ltd. if there is a significant difference in the useful lives of the machines. (8 marks) Use a significance level of 5%. 2. The following data relate to the number of computers sold each day over the last 240 working days by a leading computer firm. Required: The modal number of computers sold. (2 marks) The quartile deviation of the number of computers sold. (6 marks) The quartile coefficient of skewness of the number of computers sold. Interpret your results. (4 marks) (Total: 20 marks) QUESTION FIVE 1. Highlight FOUR advantages of decision tree analysis as a tool for decision making. (4 marks) 2. State FOUR characteristics of the binominal distribution. (4 marks) 3. The management of a wall paint manufacturing company is faced with the problem of choosing one of three products to add to its existing product line. The potential demand for each product may turn out to be good, moderate or poor with probabilities estimated as 0.75, 0.15 and 0.10 respectively. The estimated profit or loss under the three states of demand with respect to each product is outlined below: Required: Advise the management on the choice of product based on the expected monetary valve (EMV) criterion. (4 marks) Compute the expected opportunity loss for each decision. Which decision would you recommend based on the expected opportunity loss? (4 marks) Compute the expected value of perfect information. (4 marks) (Total: 20 marks) QUESTION SIX 1.  Explain THREE roles of quantitative analysis in the decision making of organisations. (6 marks) 2.  The data below relate to the profits of Soko Yetu Groceries (in thousands of shillings) over a period of four years. Required: Determine the trend equation using the least squares method. (8 marks) Calculate the seasonal index for each quarter using the multiplicative model. (6 marks) (Total: 20 marks) QUESTION SEVEN 1. Explain THREE

TUESDAY: 6 December 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. Enumerate FIVE functions of the World Trade Organisation (WTO). (5 marks) 2. Describe THREE ways that banks create credit. (6 marks) 3. List FOUR characteristics of economic resources. (4 marks) 4. Outline FIVE ways in which a government could interfere with the price mechanism. (5 marks) (Total: 20 marks) QUESTION TWO 1. List FOUR components of disposable national income. (4 marks) 2. Explain SIX problems that an economist could encounter when comparing welfare between different countries. (6 marks) 3.  Outline FIVE factors that determine the level of demand in an economy. (5 marks) 4.  Identify FIVE reasons why unemployment is a major policy issue in developing countries. (5 marks) (Total: 20 marks) QUESTION THREE 1. Enumerate FIVE factors that could limit consumer sovereignty. (5 marks) 2. With the aid of a well labelled diagram, explain the THREE stages of production according to the law of diminishing marginal returns. (9 marks) 3.  Explain THREE limitations of the consumer price index. (6 marks) (Total: 20 marks) QUESTION FOUR 1. Using a well labelled diagram, distinguish between “price floor” and “price ceiling”. (8 marks) 2. Explain THREE factors that influence the level of interest rates in an economy. (6 marks) 3. State SIX policy measures that a country could adopt to avoid the risk of not being able to honour her foreign debts. (6 marks) (Total: 20 marks) QUESTION FIVE 1. Explain the following types of inflation: Cost push. (2 marks) Credit. (2 marks) Demand pull. (2 marks) 2. State SIX policy measures that could be adopted by developing countries to encourage industrial development. (6 marks) 3. Enumerate FOUR factors that could determine the effectiveness of trade unions. (4 marks) 4. Outline FOUR features of isoquant curves. (4 marks) (Total: 20 marks) QUESTION SIX 1. Outline FOUR disadvantages of a controlled market system. (4 marks) 2. The demand and total cost function for a certain firm are represented as follows: Required: The marginal cost function. (2 marks) The marginal revenue function. (2 marks) The average variable cost function. (2 marks) The profit maximising level of output. (2 marks ) The maximum profit. (2 marks) 3. Discuss THREE motives of holding money as advanced by the Keynesian liquidity preference theory. (6 marks) (Total: 20 marks) QUESTION SEVEN 1. Outline SIX characteristics of a good economic development plan. (6 marks) 2. The following data relates to the national income of a certain country in billions of shillings: Required: The equilibrium level of national income. (3 marks) The equilibrium level of consumption expenditure. (3 marks) The multiplier. (2 marks) 3. Explain the law of variable proportions. (2 marks) Enumerate FOUR assumptions underlying the law of variable proportions. (4 marks) (Total: 20 marks)

TUESDAY: 6 December 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 reference to the law of contract, state FOUR circumstances under which a court might nullify or mitigate the hardship created by an exemption clause. (4 marks) 2. Explain FOUR benefits of carrying out a legal audit in a corporation. (4 marks) Describe TWO rules of statutory interpretation. (4 marks) 3. Discuss FOUR ways in which the right to lien as a remedy of unpaid seller might be lost. (8 marks) (Total: 20 marks) QUESTION TWO 1. In relation to the law of Torts, explain the following terms: Standard of care. (2 marks) Res ipsa loquitor. (2 marks) Strict liability. (2 marks) 2. Distinguish between “law” and “morality”. (4 marks) 3. Subordinate courts are bound to apply the decisions of superior courts in subsequent similar cases where they have been pleaded as law. Describe FIVE exceptions to this rule. (10 marks) (Total: 20 marks) QUESTION THREE 1. In relation to the law of contract: Define the term “consideration”. (2 marks) Outline FOUR circumstances in which a contract might be frustrated. (4 marks) 2. Identify TWO differences between a “natural person” and an “artificial person”. (4 marks) 3. Discuss FIVE types of precedents. (10 marks) (Total: 20 marks) QUESTION FOUR 1. Outline FIVE conditions that are necessary for agency by ratification to arise. (5 marks) 2. Identify FIVE characteristics of unincorporated associations. (5 marks) 3. Using THREE examples, distinguish between a “negotiable instrument” and a “negotiable document of title”. (6 marks) In relation to the court system, highlight the jurisdiction of the International Court of Justice. (4 marks) (Total: 20 marks) QUESTION FIVE 1. Define the term “corporate governance”. (2 marks) Outline SIX principles of corporate governance. (6 marks) 2. State FOUR disputes that are not eligible for alternative dispute resolution mechanisms. (4 marks) 3. Explain FOUR rules governing presentation of a bill of exchange for payment. (8 marks) (Total: 20 marks) QUESTION SIX 1. In relation to intellectual property, identify TWO types of works that are eligible for copyright protection. (2 marks) Highlight FOUR advantages of tribunals. (4 marks) 2. With reference to the law of property, describe THREE forms of interest in land. (6 marks) 3. Describe FOUR characteristics of tenancies. (8 marks) (Total: 20 marks) QUESTION SEVEN 1. With reference to professional ethics: Outline FOUR ethical principles that underpin all professional codes of conduct. (4 marks) Distinguish between “morality” and “etiquette”. (4 marks) 2. In relation to the law of insurance, describe FOUR conditions which must exist for an insurer to be entitled to contribution. (4 marks) 3. Explain FOUR remedies in administrative law. (8 marks) (Total: 20 marks)

MONDAY: 5 December 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. State FOUR characteristics of non-verbal communication. (4 marks) 2. Explain FOUR benefits of effective listening. (8 marks) 3. Analyse FOUR factors that make business letters valuable communication tools in an organisation. (8 marks) (Total: 20 marks) QUESTION TWO 1. Outline FOUR preparatory duties performed by a secretary before a meeting is convened. (4 marks) 2. You have been appointed as a communications manager in an organisation. Explain FOUR ways in which you could use the 7Cs of communication. (8 marks) 3. Discuss FOUR causes of informal communication in an organisation. (8 marks) (Total: 20 marks) QUESTION THREE 1. Highlight FOUR characteristics of a good presenter. (4 marks) 2. Explain the strategies that could be applied to overcome the following barriers to communication: Use of jargons. (2 marks) Difference in perception. (2 marks) Distortion. (2 marks) Information overload. (2 marks) 3. You have been asked to design a questionnaire to collect information on staff motivation in your organisation. Highlight EIGHT guidelines that you would take into account to ensure employees fill the questionnaire. (8 marks) (Total: 20 marks) QUESTION FOUR 1. Explain the meaning of the term “ethical communication”. (2 marks) Discuss FOUR reasons why ethical communication is essential in an organisation. (8 marks) 2. You have been invited to give a public speech in a youth seminar. Analyse FIVE techniques you could use to arouse the audience at the introduction stage of the speech. (10 marks) (Total: 20 marks) QUESTION FIVE 1.  Highlight FIVE factors that could be considered when designing a brochure for an organisation. (5 marks) 2. Identify FIVE ways in which wireless technology has enhanced modern communication. (5 marks) 3. Describe FIVE factors that might be considered when communicating with people from different cultures. (10 marks) (Total: 20 marks) QUESTION SIX 1. Highlight FOUR common complaints on the use of emails at the workplace. (4 marks) 2. With reference to meetings: Explain THREE differences between “minutes” and “resolutions”. (6 marks) Discuss FIVE strategies that could be applied in an organisation to overcome barriers associated with ineffective meetings. (10 marks) (Total: 20 marks) QUESTION SEVEN 1. State FOUR objectives that could be achieved by using upward communication channels. (4 marks) 2. Highlight FIVE factors that might be considered when replying to a request for credit from a loyal customer. (5 marks) 3. Outline FIVE uses of bullets in a business letter. (5 marks) 4.  Summarise SIX factors that might be put into consideration when writing a business report. (6 marks) (Total: 20 marks)

MONDAY: 5 December 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. The following balances were extracted from the books of Jiwe Traders for the month of November 2022: Required: Sales ledger control account for the month ended 30 November 2022. (6 marks) Purchases ledger control account for the month ended 30 November 2022. (5 marks) 2. Ujenzi Enterprises is a small retail firm. The trial balance of the firm failed to agree on 30 June 2022. The difference was transferred to a suspense account and financial statements prepared. On detailed review of the books, the following errors were revealed: 1. The purchases daybook had been undercast by Sh.1,200,000. 2. Purchases on credit from Demario Ltd. for Sh.600,000 had been posted to their account as Sh.6,000,000. 3. A purchase of a machine worth Sh.8,400,000 had been posted to repairs of machinery account. 4. A customer returned goods worth Sh.1,200,000. This transaction had been entered in the sales returns daybook and posted to the debit of the customer’s account. 5. Sh.7,200,000 owed by Jeru Ltd., a customer, had been omitted when drawing up a schedule of debtors from the ledger. 6. A cash discount of Sh.240,000 had been correctly entered in the cashbook, but has not been posted to the customer’s account. Required: Journal entries to correct the above errors. (Narrations not required). (6 marks) Suspense account duly balanced (including the opening balance). (3 marks) (Total: 20 marks) QUESTION TWO 1. Explain the following terms as used in company accounts: Discount on shares. (2 marks) Allotment of shares. (2 marks) Share premium. (2 marks) 2. The following information was extracted from the books of Viki Ltd. as at 30 September 2021 and 30 September 2022: Additional information: 1. Profit after tax for the year ended 30 September 2022 was Sh.84,000,000. 2. Interest expense for the year ended 30 September 2022 charged to the statement of profit or loss was Sh.12,000,000. 3. All the taxes and interest for the year ended 30 September 2022 were paid. Total tax for the year ended 30 September 2022 amounted to Sh.48,000,000. 4. Proposed dividends for the year ended 30 September 2022 amounted to Sh.24,000,000. 5. Land and buildings were acquired during the year ended 30 September 2022 at a cost of Sh.360,000,000. 6. During the year ended 30 September 2022, some motor vehicles which had a net book value of Sh.60,000,000 were disposed of for Sh.72,000,000. 7. Motor vehicles are depreciated at 10% on reducing balance. Required: Statement of cash flows in accordance with the requirements of “International Accounting Standard (IAS) 7, “Statement of Cash Flows”, for the year ended 30 September 2022. (14 marks) (Total: 20 marks) QUESTION THREE Kate, Mercy and Nickson have been trading as partners under the name Komon Partnership. The partners share profits and losses in the ratio of 4:3:2 respectively. On 1 November 2021, an employee, Oliver, was admitted as a partner. He was to bring Sh.1,750,000 as capital and Sh.1,680,000 as his share of goodwill. The partners do not intend to open a goodwill account. The admission of Oliver has not been fully recorded in the books of account other than the cash record. The following trial balance was extracted from the books of Komon Partnership as at 31 October 2022: Additional information: 1. The new profit or loss sharing ratio was agreed at 4:3:2:1 for Kate, Mercy, Nickson and Oliver respectively. 2. On 31 October 2022, inventory was valued at Sh.5,780,000. 3. As at 31 October 2022, accrued salaries and wages and accrued advertising expenses amounted to Sh.1,790,000 and Sh.1,680,000 respectively. 4. As at 31 October 2022, prepaid insurance amounted to Sh.660,000. 5. It was further agreed that since Oliver was a former employee, he would be entitled to a salary of Sh.853,000 per annum with effect from 1 November 2021. 6. The partners resolved that they would receive an interest of 10% per annum on their respective balances of fixed capital at the beginning of the year. 7. Depreciation is to be provided per annum on cost as follows: Asset Rate per annum Furniture and fittings 12% Motor vehicles 25% Required: 1. Statement of profit or loss and appropriation account for the year ended 31 October 2022. (10 marks) 2. Partners’ current accounts. (4 marks) 3. Statement of financial position as at 31 October 2022. (6 marks) (Total: 20 marks) QUESTION FOUR Blaze Sports Club is a members only club. The club generates income through member subscriptions, bar sales and sale of sports shoes. The following information relates to Blaze Sports Club for the year ended 30 September 2022: Additional information: 1. The building was constructed by the club and completed on 30 September 2021. It was commissioned on 1 October 2021 and was estimated to have a useful life of 40 years. 2. Life membership subscriptions are brought into income equally over 10 years in a scheme that begun a few years ago. Since the scheme began, the subscription of Sh.3,000,000 per person has been constant. Prior to the year ended 30 September 2022, eleven (11) life membership subscriptions had been received. 3. As at 30 September 2022, closing bar inventory was valued at Sh.12,750,000 and Sh.1,200,000 was due to the bar suppliers. 4. Four annual subscriptions of Sh.300,000 each had been promised relating to the year ended 30 September 2021, but had not yet been received. Annual subscriptions promised, but not paid, are carried forward for a maximum of 12 months and written off thereafter. 5. As at 30 September 2022, inventory of sports shoes was valued at Sh.13,500,000 while the sports equipment had a net book value of Sh.10,500,000. During the year ended 30 September 2022, sports equipment with a net book value of Sh.200,000 was sold. Required: 1. Bar statement of profit or loss for the year ended 30 September 2022. (4 marks)

FINANCIAL ACCOUNTING DECEMBER 2022 PAST PAPER – Click to view COMMUNICATION SKILLS DECEMBER 2022 PAST PAPER – Click to view INTRODUCTION TO LAW AND GOVERNANCE DECEMBER 2022 PAST PAPER – Click to view ECONOMICS DECEMBER 2022 PAST PAPER – Click to view QUANTITATIVE ANALYSIS DECEMBER 2022 PAST PAPER – Click to view INFORMATION COMMUNICATION TECHNOLOGY DECEMBER 2022 – Click to view COMPANY LAW DECEMBER 2022 PAST PAPER – Click to view FINANCIAL MANAGEMENT DECEMBER 2022 PAST PAPER – Click to view FINANCIAL REPORTING AND ANALYSIS DECEMBER 2022 PAST PAPER – Click to view AUDITING AND ASSURANCE DECEMBER 2022 PAST PAPER – Click to view MANAGEMENT ACCOUNTING DECEMBER 2022 PAST PAPER – Click to view PUBLIC FINANCE AND TAXATION DECEMBER 2022 PAST PAPER – Click to view LEADERSHIP AND MANAGEMENT DECEMBER 2022 PAST PAPER – Click to view ADVANCED FINANCIAL REPORTING AND ANALYSIS DECEMBER 2022 PAST PAPER – Click to view ADVANCED FINANCIAL MANAGEMENT DECEMBER 2022 PAST PAPER – Click to view ADVANCED TAXATION DECEMBER 2022 PAST PAPER – Click to view ADVANCED AUDITING AND ASSURANCE DECEMBER 2022 PAST PAPER – Click to view ADVANCED MANAGEMENT ACCOUNTING DECEMBER 2022 PAST PAPER – Click to view ADVANCED PUBLIC FINANCIAL MANAGEMENT DECEMBER 2022 PAST PAPER – Click to view BUSINESS DATA ANALYTICS DECEMBER 2022 PAST PAPER – Click to view

TUESDAY: 6 December 2022. Afternoon Paper. Time Allowed: 2 hours. Answer ALL questions by indicating the letter (A, B, C or D) that represents the correct answer. The paper is made up of fifty (50) multiple choice questions. Each question is allocated two (2) marks. 1. The type of approach based information technology audit where the auditor is provided with detailed information regarding the organisation that is to be audited is referred to as? A. Black box audit B. White box audit C. Grey box audit D. Blue box audit 2. IT security audit is important for the following reasons EXCEPT? A. To keep the organisation updated with security measures B. To identify physical security vulnerabilities. C. To identify security opportunities before the hackers D. To help in formulating new security policies for the organisation 3. Which of the following is the second phase in the penetration testing process of the Information System audit? A. Gaining system access B. Scanning C. Planning and Reconnaissance D. Persistent Access 4. The type of auditing technique where the auditor verifies accounting transactions with documentary evidence is referred to as? A. Vouching B. Confirmation C. Reconciliation D. Testing 5. The motivation of internal threat that involves stealing information for another organisation is referred to as? A. Fraud B. Sabotage C. Espionage D. Revenge 6. The physical control that requires employees to tap their ID pass on a reader that will unlock the gate and allow them to pass through is referred to as? A. Turnstiles B. Electronic Doors C. Mantraps D. Security Guards 7. Which of the following is NOT a penetration testing method? A. External testing B. Triple blind testing C. Internal testing D. Blind testing 8. A cyber security attack that involves the creation of a false stream or modification of the data stream is referred to as? A. Active attack B. Passive attack C. Cryptographic attack D. Encryption 9. A cyber security methodology that combines best practices and technology to prevent the exposure of sensitive information outside of an organisation is referred to as? A. Email security B. Sandboxing C. Intrusion prevention system D. Data loss prevention 10. Robust network security will protect against all of the following EXCEPT? A. Worms B. Viruses C. Intrusion D. Spyware 11. A social engineering attack technique where the attacker uses a false promise to lure users into a trap that steals their personal information is referred to as? A. Baiting B. Scareware C. Pretexting D. Phishing 12. During network security penetration testing, the results of the penetration test are compiled into a report detailing all of the following EXCEPT? A. None sensitive data that was accessed B. Specific vulnerabilities that were exploited C. Sensitive data that was accessed D. The amount of time the pen tester was able to remain in the system undetected 13. The type of audit report which shows that the company is not compliant with any of the GAAP’s guidelines for financial reporting and thus portrays gross misstatements on their assets and liabilities is referred to as? A. Disclaimer report B. Adverse audit report C. Qualified report D. Clean report 14. In the structure of the auditor’s report, the auditor’s opinion section will include the following details EXCEPT? A. Auditing timespan B. Financial records C. A statement on the company’s compliance with GAAP guidelines D. Auditing cost 15. Which of the following is the step that involves prioritizing the incident and providing initial support to incident management? A. Incident detection B. Incident starter C. Prioritisation and support D. Investigation and diagnosis 16. The area of IT service management where the IT team returns a service to normalcy after disruption as fast as possible is referred to as? A. IT incident plan B. IT incident management C. IT incident control D. IT incident monitor 17. The information systems security goal which ensures the accuracy and reliability of the information stored on the computer systems is referred to as? A. Integrity B. Confidentiality C. Availability D. Conformity 18. With reference to the organizational information assets and classification, when the loss of confidentiality, integrity or availability is be expected to have a limited adverse effect on organizational operations, the impact is considered to be? A. Low B. Moderate C. High D. Average 19. The process of organising data into categories that ensure easy retrieval, sorting and storage of data is referred to as? A. Data cleansing B. Data classification C. Data modification D. Data preprocessing 20. In order to keep customer dissatisfaction at bay and reduce recovery timescales, every business needs to incorporate the following EXCEPT? A. Plan an effective response B. Ensure effective communication C. Identify potential risks and vulnerabilities D. Build a data processing structure 21. Which of the following is NOT one of the four P’s of business continuity planning? A. Providers B. Plans C. People D. Premises 22. Which of the following is the second step in the development of an effective business continuity plan? A. Identification of threats B. Adoption of controls for prevention and mitigation C. Conducting a business impact analysis D. Identification of risks 23. Which type of backup subscription service will allow a business to recover quickest? A. A cold site B. A warm site C. A hot site D. A mobile or rolling backup service 24. An activity that can help to examine the impact of different disasters on an organisation’s safety, finances, marketing, business reputation, legal compliance and quality assurance is referred to as? A. Business impact analysis B. Risk analysis C. Business process D. Disaster recovery 25. Which of the following CANNOT be classified as a component of disaster recovery plan? A. Policy statement B. Key personnel and disaster recovery team C. Directions on how to reach the recovery site D. A list of hardware and systems that staff will use in the recovery 26. A location that can be used by an organisation to recover and restore its data, technology infrastructure and operations when the primary data centre is unavailable

TUESDAY: 6 December 2022. Morning Paper. Time Allowed: 3 hours. Answer ALL questions. This paper has two sections. SECTION I has twenty (20) short response questions of forty (40) marks. SECTION II has three practical questions of sixty (60) marks. Marks allocated to each question are shown at the end of the question(s). Required Resource:  A computer  Simulator (Packet tracer/GNS 3) SECTION I 1. Data transmission is the transfer of data from one digital device to another. Which mode of transmission allows data in both directions on a signal carrier, but not at the same time? (2 marks) 2. Which algorithm determines Discrete Fourier Transform of an input significantly faster than computing it directly? (2 marks) 3. Which of the following is a digital modulation scheme that conveys data by changing, or modulating, two different phases of the carrier wave. (2 marks) 4. What is the name given to an Integrated Services Digital Network (ISDN) configuration intended primarily for use in subscriber lines similar to those that have long been used for voice-grade telephone service? (2 marks) 5. Which encoding technique ensures the signal level is checked twice for every bit time, both initially and in the middle ensuring the clock has double transfer rate? (2 marks) 6. A hardware device that allows your computer to communicate with an Internet service provider over a landline connection by converting an analog signal to a digital signal for the purpose of granting access to broadband Internet is known as? (2 marks) 7. What is the name given to a value that represents the number of bits in a transmission message used by Information Technology (IT) professionals to detect high-level errors within data transmissions? (2 marks) 8. The network layer is the part of the Internet communications process where these connections occur, by sending packets of data back and forth between different networks. The largest frame or packet that can be transmitted across a data link is referred to as? (2 marks) 9. Open system Interconnection(OSI) Model is a conceptual framework used to describe the functions of a networking system. What is the name given to a layer responsible for taking an IP packet and preparing it for transmission over the communications medium? (2 marks) 10. What is the name given to data transmitted between network points as a unit complete with addressing and necessary protocol control information? (2 marks) 11. Fiber patch cords are required for interconnecting infrastructure devices. Which type of patch code is shown in the diagram below? 12. Optical fiber are mostly used for communication over short distances. The fiber that consists of a larger core that uses LED emitters to send light pulses at different angles is known as? (2 marks) 13. What is the name given to the number that identifies the logical circuit between the router and the frame relay switch? (2 marks) 14. Which wireless network type uses transmitters to provide wireless service over a larger geographic area such as a city or specific district? (2 marks) 15. What is the name given to a standalone device, like a home router, where the entire Wireless Local Area Network (WLAN) configuration resides on the device? (2 marks) 16. What is the name of a spread-spectrum modulation technique primarily used to reduce overall signal interference in telecommunications? (2 marks) 17. Frequency channel is regarded as the band used by one customer, among the given total frequency spectrum. What is the name of the modulation technique that rapidly switches a signal among frequency channels? (2 marks) 18. Which technology allows one to make voice calls using a broadband Internet connection instead of a regular (or analog) phone line. (2 marks) 19. Which terminology refers to fiber-optic infrastructure that is not yet put into use by a service provider which requires the customer rather than the service provider to maintain and operate the equipment for use to access the Internet and communications? (2 marks) 20. What is an end-to-end protection scheme used in connection oriented circuits in different network architectures to protect against inevitable failures on service providers’ network that might affect the services offered to end customers? (2 marks) SECTION II 21. Create a word processor document named Question 21 and use it to save screenshots to demonstrate how you perform task 1 to 5 below: Required resources:  Windows/Linux computer.  Simulator (Packet Tracer/GNS3) Using the provided simulator, setup a wireless Local Area Network topology as shown below: Access the Graphical User interface of the Router and perform the following: 1. Change network mode to display legacy. (Capture a screenshot of the configuration). (4 marks) 2. Configure the SSID to display as JumbaNet. (Capture a screenshot of the configuration). (4 marks) 3. Configure the standard channel to be 6 but within 2.4gz (Capture a screenshot of the configuration). (4 marks) 4. Configure the security mode to be WPA2 personal with advanced encryption standard (AES) (Capture a screenshot of the configuration). (4 marks) 5. Configure the passphrase to be Talent2@22 (Capture a screenshot of the configuration). (4 marks) Upload Question 21 document. (Total: 20 marks) 22. Create a word processor document named Question 22 and use it to save screenshots demonstrating how you perform task 1 to 5 below: From the scenario given in question 21 above, perform the following tasks: Enable guest profile with default SSID on 2.4 GHz. (4 marks) Prevent listed hosts on a network from accessing the wireless network. (3 marks) Display mac address filter list. (3 marks) Enable beamforming to the PC and the Laptop. (6 marks) Display web and remote access configuration settings. (4 marks) Upload Question 22 document. (Total: 20 marks) 23. Create a word processor document named Question 23 and save screenshots demonstrating how you perform task 1 to 5 below: From the scenario given in Question 21 above, perform the following tasks: Configure private Network Address of 172.16.0.0/24 dynamically. (6 marks) Capture screenshots showing configuration settings of the PC and the laptop. (4 marks) Create a connection between the PC