I a) Methods used by central bank to increase money supply
Reducing bank rates
Reducing liquidity ratio
Buying government securities
Reductions on compulsory deposits
Opening credit to all sectors in the economy
Directives to increase credit lending
Moral persuasions to banks to increase credit lending
b) Principles of insurance
2) Negative effects of inflation
Lowering standard of living
Discouraging savings
People loose confidence in the currency
Leads to balance of payments problems
Leads to high unemployment
Carson Traders.
Profit and Loss A/C for the year ended 31st Dec. 2005.
| Expenses sh. Sh. Wages and salaries 31,650√ Add: Accrued wages 5,400√ 37,050 Rates 2750√ Less: Prepaid rates 650√ 2100 Depreciation net veh. 2200√ Discount allowed 3540√ Advertising 3130√ Balance debts 1100√ General expensed 5100√ Net profit 8000√ 62220 | Gross profit 58920√ Discount received 3300√ 62220 |
ii) Carson Traders
Balance sheet as at 31st Dec. 2005.
| Fixed Assets sh. Sh. Premises 75000√ Motor vehicles 11000 Less: depreciation 2200 8,800 83,800 Current Assets Stock 25000√ Debtors 25350√ Prepaid rates 650√ Cash at bank 3300√ Cash at hand 800√ 55100 138,900 | Sh. Sh. Capita 130 000 Add: Net profit 8000√ 138000 Less: Drawings 27000√ 111,000 Current Liabilities Creditors 22500√ Accrued wages 5400√ 27900 138900 |
12 ticks x 1/3
3 a) Documents used in recording transactions
Invoice
Debit note
Credit note
Statements of accounts
Receipts
Bank statements
b) Factors that influence entrepreneurial practices
Positive/ good societal attitude
Government support
Good peer influence
Proper education and training
High number of successful entrepreneurs
High number of financial institutions
High level of personal motivations
4) a Benefits of matatu reforms
Less congestions
Reductions in accidents
Adequate insurance
Passengers confidence and safety
More revenue to the government
Order in the terminals as illegal touts evacuated
Less pollutions
4b) to be drawn
5 a) – Suitable location to receive and issue goods
- Proper buildings suitable to the type of goods to be stored
- Equipment and facilities for handling goods such as forklifts
- Safety equipment for protection of goods against water and sunshine and personal protection
- Accessibility to its users near transport system
- Enough space for easy movement and accommodation of goods
- Well trained staff for proper management
- Requirement of the law
b) – Increase government expenditure to stimulate aggregate demand, hence the level of production
– Encourage local private investment to increase productivity
– Diversify the Kenyan economy
– Protect local industries from foreign competition in order to maintain employment level
– Find market for locally produced goods through aggressive export promotion in order to expand production capacities of local industries
6 (a) Five channels for distribution of imported manufactured goods .
- Foreign manufacturer ® local consumer
- Foreign manufacturer ® Foreign agent/exporter ® local consumer.
- Foreign manufacturer ® Foreign agent ® local agent ® local consumer.
- Foreign manufacturer ® local agents/importers ® local consumer.
- Foreign manufacturer ® Foreign agent ® local agent/import merchant ® local wholesaler ® local consumer.
- Foreign manufacturer ® Foreign agent ® local agent® local wholesaler ® local retailer ®local consumer.
- Foreign manufacturer ® local agent/import merchant ® local wholesaler ® local retailer ® local consumer.
- Foreign manufacturer ® local retailer ® local consumer.
- Foreign manufacturer ® local wholesaler® local consumer.
- Foreign manufacturer ® local wholesaler ® local retailer® local consumer.
- Foreign manufacturer ® foreign agent ® local wholesaler ® local consumer.
- Foreign manufacturer ® Foreign agent ® local wholesaler® local retailer ® local consumer.
- Foreign manufacturer ® own retail outlet ® local consumer.
(b) Konate Traders
Three column cash book
As at 31st Dec 2010
| Date | Details | L.F | D.A | Cash | Bank | Date | Details | LF | DR | Cash | Bank | |
| 1st /12 3/12 8/12 9/12 31/12 | Capital Tila Katu Sales Cash | c | 1000 400 1400 | 100000 100000 | 200000 19000 7600 80000 306600 | 1st /12 2/12 6/12 10/12 11/12 31/12 31/12 | Furniture Purchases Kahama Wages Electricity Bank Balance | c c/d | 2500 2500 | 20000 80000 100000 | 50000 40000 22500 10000 184100 306600 |