JOMO KENYATTA UNIVERSITY
OF
AGRICULTURE AND TECHNOLOGY
TVET INSTITUTE
UNIVERSITY EXAMINATIONS 2023/2024
WRITTEN ASSESSMENT LEVEL 5
CBM 5005 BUSSINESS ASSETS AND LIABILITIES MAINTANANCE
DATE: APRIL 2024 TIME: 3 HOURS
INSTRUCTIONS TO CANDIDATE
1. This paper consists of THREE sections A, B and C
2. Answer ALL questions in section A and B any TWO in section C in the answer booklet
provided.
3. Marks for each question are indicated in brackets.
4. Do not write on this question paper.
5. Answer the questions in English.
This paper consists of SIX printed pages. Candidates should check the question paper to
ascertain that all pages are printed as indicated and that no questions are missing.
SECTION A
ANSWER ALL THE QUESTIONS (20MKS)
1. What is the primary purpose of assessing assets requirements in preparing a
business assets and liabilities plan?
a) To analyze existing liabilities
b) To establish asset usage
c) To identify potential sources of funding
d) To evaluate market trends
2. Which of the following activities is involved in analyzing records of existing
assets and liabilities?
a) Identifying new business opportunities
b) Assessing market demand
c) Evaluating financial statements
d) Reviewing customer feedback
3. What is the significance of establishing asset usage in the context of preparing a
business assets and liabilities plan?
a) To ensure compliance with legal regulations
b) To optimize resource allocation
c) To minimize tax liabilities
d) To attract potential investors
4. What does "acquisition and settlement of liabilities" refer to in the context of a
business assets and liabilities plan?
a) Selling off existing assets
b) Procuring new assets
c) Paying off debts and obligations
d) Acquiring intellectual property rights
5. What is the main objective of preparing a business assets and liabilities plan and
budget?
a) To generate maximum profit
b) To minimize operational costs
c) To assess financial performance
d) To manage assets and liabilities effectively
6. What is the primary objective of implementing an internal control system on
assets and liabilities?
a) Maximizing profit margins
b) Ensuring compliance with legal regulations
c) Increasing market share
d) Expanding the product line
7. What does "undertaking asset requisition" involve in the context of assets and
liabilities internal control?
a) Requesting approval for asset purchases
b) Selling off existing assets
c) Conducting physical inventory counts
d) Analyzing financial statements
8. Which activity is included in performing asset maintenance as part of assets and
liabilities internal control?
a) Monitoring cash flow
b) Repairing and servicing equipment
c) Negotiating with suppliers
d) Conducting market research
9. What is the purpose of carrying out physical controls in assets and liabilities
internal control?
a) Identifying potential investment opportunities
b) Ensuring the accuracy and integrity of asset records
c) Conducting employee training programs
d) Evaluating customer satisfaction
10. What does "undertaking disposal of assets" entail in assets and liabilities
internal control?
a) Acquiring new assets
b) Selling off obsolete or surplus assets
c) Monitoring inventory levels
d) Reviewing financial statements
11. What is the initial step in maintaining assets and liabilities records?
a) Updating inventory transactions
b) Carrying out stock taking
c) Identifying organization inventory and liabilities
d) Formulating inventory and liabilities policy
12. What does formulating an inventory and liabilities policy involve?
a) Updating inventory transactions
b) Tagging inventory items
c) Preparing discrepancies report
d) Establishing guidelines for managing inventory and liabilities
13. What is the purpose of tagging inventory items?
a) Identifying organization inventory and liabilities
b) Updating inventory transactions
c) Carrying out stock taking
d) Facilitating tracking and management of individual assets
14. When should discrepancies report be prepared?
a) After formulating inventory and liabilities policy
b) Before updating inventory transactions
c) Following stock taking activities
d) Before identifying organization inventory and liabilities
15. What is the primary objective of updating inventory transactions and liabilities?
a) Identifying organization inventory and liabilities
b) Tagging inventory items
c) Maintaining accurate and up-to-date records of asset movements
d) Preparing discrepancies report
16. What is the purpose of obtaining asset usage feedback in preparing a business
assets report?
a) To identify asset discrepancies
b) To assess liabilities management
c) To understand how assets are utilized and perform
d) To formulate inventory and liabilities policy
17. What feedback is crucial for assessing liabilities management in the context of
preparing business assets report?
a) Asset maintenance feedback
b) Asset usage feedback
c) Liabilities management feedback
d) Asset requirements feedback
18. What is the primary objective of identifying asset discrepancies in the process of
preparing business assets report?
a) To obtain asset maintenance feedback
b) To update inventory transactions
c) To ensure accuracy and integrity of asset records
d) To obtain asset usage feedback
19. When should asset requirements be obtained in the preparation of business
assets report?
a) After obtaining asset maintenance feedback
b) Before obtaining liabilities management feedback
c) After identifying asset discrepancies
d) Before preparing and sharing the business asset report
20. What is the final step in the process of preparing and sharing the business asset
report?
a) Obtaining liabilities management feedback
b) Identifying asset discrepancies
c) Obtaining asset usage feedback
d) Sharing the compiled report with relevant stakeholders
SECTION B
ANSWER ALL THE QUESTIONS (40MKS
1. Define
(a)Busines Assets
(b) BusinessLiabilities.. (2 marks)
2.List five intangible assets(5Marks)
SECTION C
ANSWER 2 QUESTIONS (40MKS)
2. (a)Briefly describe the five types of assets commonly found in businesses. Provide
examples for each type. (10marks)
(b)How can businesses manage their inventory effectively to optimize asset
utilization and minimize costs? (10 marks)
(a)What internal controls should businesses implement to safeguard their assets and
prevent fraud? (10 marks)
8.(a)Discuss the significance of liquidity ratios in assessing a company’s ability to
meet short-term obligations. (10 marks)
(b)Discuss the importance of maintaining accurate records for both assets and
liabilities.? (10 marks)
9(a)Describe the role of liabilities in a company’s financial structure. How do liabilities
affect the overall financial health of an organization? (10 marks)
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