PRESIDENT’S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

FORM ONE TERMINAL EXAMINATION

 BUSINESS STUDIES: MAY 2026

FORM ONE 

Time: 2:30 Hours

INSTRUCTIONS

1. This paper consists of sections A, B, and C with a total of ten (10) questions.
2. Answer all questions.
3. Section A and C carry fifteen (15) marks each, while Section B carries seventy (70) marks.
4. All writing must be in blue or black ink.
5. Cellular phones and any unauthorized materials are not allowed in the assessment room.

SECTION A: (15 MARKS)

1. For each of items (i) – (x), choose the correct answer from among the given alternatives and write its letter in the box provided.

i. Which of the following is an example of a service business?

1. A bakery
2. A furniture store
3. A hospital
4. A car dealership

ii. What does the term "consumer" mean in business?

1. A person who supplies raw materials
2. A person who sells goods to traders
3. A person who buys and uses goods and services 
4. A person who works in a factory

iii. Which factor of production refers to human effort in business activities?

1. Capital
2. Labour
3. Land
4. Entrepreneurship

iv. The reward for capital in business is known as:

1. Profit
2. Rent
3. Interest
4. Salary

v. Which of the following is NOT a business resource?

1. Land
2. Labour
3. Capital 
4. Weather

vi. What is the main reason for preparing a business plan?

1. To attract customers
2. To guide business operations
3. To make more profit 
4. To avoid competition

vii. The term "partnership" in business refers to: 

1. A business owned by one person
2. A business owned by two or more people
3. A government-owned business
4. A nonprofit organization

viii. Which of the following is an external source of finance for a business?

1. Retained profits
2. Sale of assets
3. Bank loan 
4. Owner’s savings

ix. Which factor influences demand for a product?

1. The amount of capital invested
2. The price of the product
3. The number of suppliers
4. The size of a shop

x. Which of the following is an example of a primary industry?

1. Banking
2. Farming
3. Textile manufacturing
4. Transport services

2. Match the following terms with their correct definitions.

SECTION B: (70 MARKS)

Answer all questions.

3. (a) Define the term "Business Studies."

(b) Mention any four (4) characteristics of Business Studies.

4. (a) What is the importance of studying Business Studies?

(b) Explain three (3) ways Business Studies relates to other disciplines.

5. (a) Define "wants" and "needs."

(b) Give four (4) examples of needs and four (4) examples of wants.

6. (a) What is "Trade"?

(b) Identify two (2) differences between "wholesale trade" and "retail trade." (c) Provide two (2) examples of wholesalers and two (2) examples of retailers.

7. (a) Mention three (3) types of business organizations.

(b) Describe any two (2) advantages of operating as a sole proprietorship.

8. (a) What is the meaning of "Entrepreneurship"?

(b) Mention four (4) roles of an entrepreneur in business development.

9. (a) Explain three (3) challenges faced by small businesses.

(b) Suggest two (2) ways to overcome these challenges.

SECTION C: (15 MARKS)

Answer the following essay question.

10. Write an essay on the role of Business Studies in daily life using the following guidelines:

1. Definition of Business Studies
2. Three (3) ways Business Studies is useful in daily life
3. Two (2) challenges of learning Business Studies
4. How to overcome the challenges
5. Conclusion

PRESIDENTS OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

PRESIDENTS OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

FORM ONE TERMINAL EXAMINATION

BUSINESS STUDIES

TIME: 2:30HRS MAY: 2025

INSTRUCTION

1. This paper consist of section A, B, and C.
2. Answer all questions in section A, B and C.
3. Answer all question in the space provided.
4. Cellular phoned, calculators and any computerized material are not allowed in the examination room.
5. All writing must be in blue/black ball pen except drawings which must be in pencil.
6. Write your examination number at the top right corner of every page.

SECTION A: 

OBJECTIVE QUESTIONS (15 Marks)

1. For items (i)-(x) write the correct answer from alternatives given in spaces provided

(i) Which of the following is the primary goal of a business?

1. To provide free goods and services
2. To generate profit
3. To employ all people in the community
4. To minimize innovation

(ii) The process of transforming raw materials into finished products to satisfy human needs and wants is known as:

1. Distribution
2. Exchange
3. Consumption
4. Production

(iii) Which of the following is an example of a free good?

1. Computer
2. Sunlight
3. Cloth
4. Pen

(iv) Which factor of production involves innovation, risk-taking, and organization?

1. Land
2. Labour
3. Capital
4. Entrepreneurship

(v) The ability to produce new and unique ideas is:

1. Innovation
2. Creativity
3. Risk-taking
4. Perseverance

(vi) A business owned, managed, and controlled by one person is a:

1. Partnership
2. Sole proprietorship
3. Company
4. Cooperative

(vii) Which of the following is a disadvantage of a sole proprietorship?

1. Easy to form
2. Quick decision making
3. Unlimited liability
4. Direct relations with customers

(viii) The ability to influence people towards the accomplishment of common goals is:

1. Management skill
2. Negotiation skill
3. Leadership skill
4. Communication skill

(ix) Which type of entrepreneurship focuses on providing innovative solutions to social problems?

1. Business entrepreneurship
2. Intrapreneurship
3. Social entrepreneurship
4. Commercial entrepreneurship

(x) The theory of entrepreneurship that views innovation as a key tool is:

1. Need achievement theory
2. Risk bearing theory
3. Innovation theory
4. Status withdrawal theory

Answers

2. Match the terms in Column A with their correct descriptions in Column B.

Answers

SECTION B: 

SHORT ANSWER QUESTIONS (40 MARKS)

3. a) Explain four business processes with examples.

b) Describe four purposes of a business.

4.(a) Differentiate between ‘needs’ and ‘wants’, giving three examples of each.

b) Explain why Business Studies is important for individual development.

5. (a) Identify and explain four resources used in production.

(b) Describe five features of a sole proprietorship.

6. (a) Explain five advantages of a sole proprietorship.

(b) Outline the steps involved in forming a sole proprietorship.

7.(a) Define entrepreneurship and an entrepreneur.

(b) Describe five characteristics of an entrepreneur.

8. (a) Explain three types of entrepreneurship.

(b) Describe four entrepreneurial skills.

9. (a) Explain five factors that facilitate entrepreneurship.

(b) Briefly explain four theories of entrepreneurship.

SECTION C: ESSAY QUESTION (30 MARKS)

10. (a) Discuss the challenges faced by sole proprietorships and suggest solutions for each.

(b) Evaluate the importance of entrepreneurship in the economic development of a country