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Credit creation is the ability of commercial banks to lend more money in form of loans, than they receive in form of deposits. It works because when a customer is given a loan he/she does not withdraw everything. The bank can safely and comfortably lend the same money to another person while maintaining a small reserve for the previous client.
maalimA answered the question on March 28, 2019 at 13:55
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Define the term central bank
Date posted: March 28, 2019. Answers (1)
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Date posted: March 28, 2019. Answers (1)
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Date posted: March 28, 2019. Answers (1)
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Date posted: March 28, 2019. Answers (1)
- Ayub's capital at the beginning of the trading period was sh.300000. During the year he invested additional capital of sh.26000 in form of cash. He...(Solved)
Ayub's capital at the beginning of the trading period was sh.300000. During the year he invested additional capital of sh.26000 in form of cash. He also took sh.40000 in cash and stock valued at sh.25000 from the business for his personal use
Determine Ayub's capital at the end of the trading period
Date posted: March 28, 2019. Answers (1)
- The following information refers to tea traders for the year ended 31/12/04
Sales ...(Solved)
The following information refers to tea traders for the year ended 31/12/04
Sales 800,000
Expenses 10,000
Commission received 15,000
Purchases 700,000
Opening stock 250,000
Margin 20%
Prepare trading, profit & loss a/c for the year ended 31/12/04
Date posted: March 27, 2019. Answers (1)
- The following is a balance sheet of Bambu traders as at 31st December 2000
Bambu Traders
Balance sheet as at 31st December 2000
a) Sales during the year...(Solved)
The following is a balance sheet of Bambu traders as at 31st December 2000
Bambu Traders
Balance sheet as at 31st December 2000
a) Sales during the year amounted to Kshs 2,000,000
b) Stock on 1 January 2000 was Kshs. 100,000
c) Gross profit margin was 20%
Calculate
i) Current ratio
ii) Gross profit mark up
iii) Rate of stock turnover
Date posted: March 27, 2019. Answers (1)
- The following balances were extracted from the books of Vuno Traders for the
year ended 31st March 2001
Gross profit 186,200
Carriage...(Solved)
The following balances were extracted from the books of Vuno Traders for the
year ended 31st March 2001
Gross profit 186,200
Carriage outwards 13,500
Rent received 34,300
Office expenses 19,600
Salaries 57,000
Prepare a profit and loss for the year ended 31st March 2001
Date posted: March 27, 2019. Answers (1)
- The following transactions relates to Tajira Traders for the month of January 2001
Jan 1 started business with Kshs. 20,000 in cash
Deposited 15,000 from cash till...(Solved)
The following transactions relates to Tajira Traders for the month of January 2001
Jan 1 started business with Kshs. 20,000 in cash
Deposited 15,000 from cash till into a business Bank account
Bought goods on credit from Wema traders for 6,000
Bought furniture by cheque sh 3,000
Prepare a balance sheet as at 31st January 2001
Date posted: March 27, 2019. Answers (1)
- The following figures obtained from the records of Buka Enterprises for the year ended 30th June 2000
Sales 500,000
Cost...(Solved)
The following figures obtained from the records of Buka Enterprises for the year ended 30th June 2000
Sales 500,000
Cost of goods sold 280,000
Calculate the gross margin.
Date posted: March 27, 2019. Answers (1)
- Cumvi Traders had a capital of sh 180,000 as at 31.12.1998
Additional information
a) during the year the owner converted her private car worth 90,000 for business...(Solved)
Cumvi Traders had a capital of sh 180,000 as at 31.12.1998
Additional information
a) during the year the owner converted her private car worth 90,000 for business use
b) Goods worth sh. 50,000 were taken from the business for her own use
c) Net profit for the year was sh 140,000
Calculate capital as at 31 Dec. 1999
Date posted: March 27, 2019. Answers (1)
- The following balances were obtained from the books of Rah traders
Opening stock 50,000
Sales 360,000
Gross...(Solved)
The following balances were obtained from the books of Rah traders
Opening stock 50,000
Sales 360,000
Gross profit 25% of sales
Closing stock 70,000
Calculate
a) Cost of goods
b) Rate of stock turnover
Date posted: March 27, 2019. Answers (1)
- The following information was obtained from the books of Kina Traders on 30th June 1998
Opening stock 8,000
Purchases bank ...(Solved)
The following information was obtained from the books of Kina Traders on 30th June 1998
Opening stock 8,000
Purchases bank 53,000
Sales 62,900
Return outwards 2,700
Closing stock 12,700
Prepare Kina Traders balance a/c for the year ended 30th June 1998
Date posted: March 27, 2019. Answers (1)
- The following information relates to Mali traders for the year ended 31st Dec 1998.
Capital 1.198 250,000
Additional...(Solved)
The following information relates to Mali traders for the year ended 31st Dec 1998.
Capital 1.198 250,000
Additional investment 68,000
Drawing 92,000
Profit 180,000
Calculate the capital of Mali traders as at 31st Dec 1998
Date posted: March 27, 2019. Answers (1)
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State four uses of balance sheet for business organizations.
Date posted: March 27, 2019. Answers (1)
- The following information was extracted from the books of Peshau Traders as at April
1998
Cost of goods sold 65,000
General expenses ...(Solved)
The following information was extracted from the books of Peshau Traders as at April
1998
Cost of goods sold 65,000
General expenses 280,000
Capital for the period was 20% 10,000
Calculate rate of net profit to capital
Date posted: March 27, 2019. Answers (1)
- The following account balances were extracted from the books of Kiboko enterprises
on 30th June 1997.
Opening stock 65,000
Sales ...(Solved)
The following account balances were extracted from the books of Kiboko enterprises
on 30th June 1997.
Opening stock 65,000
Sales 280,000
Purchases 190,000
Purchases returns 10,000
Sales returns 4,200
Closing stock was Kshs. 70,000 as at 30th June 1997.
Prepare the trading a/c for period
ended 30th June 1997.
Date posted: March 27, 2019. Answers (1)
- The following information was extracted from the books of Kwaso traders on 31st August 1997.
Gross profit 130,800
Carriage of...(Solved)
The following information was extracted from the books of Kwaso traders on 31st August 1997.
Gross profit 130,800
Carriage of sales 4,700
Commission received 8,000
General expenses 18,200
Insurance 4,000
Prepare a profit and loss A/C
Date posted: March 27, 2019. Answers (1)
- The following balances were extracted from the books of Waso traders on 30th October 1995.
Cash 20, 520
Bank ...(Solved)
The following balances were extracted from the books of Waso traders on 30th October 1995.
Cash 20, 520
Bank 160,230
Premises 800,000
Debtors 40,000
Creditors 62,000
2 year loan 40,000
Stock 2,500
Prepare a balance sheet
Date posted: March 27, 2019. Answers (1)
- During the month of July 1995 Kungu made sales worth Kshs.60,000. His margin on sales was 20%, calculate;
a) The cost of goods sold
b) The gross...(Solved)
During the month of July 1995 Kungu made sales worth Kshs.60,000. His margin on sales was 20%, calculate;
a) The cost of goods sold
b) The gross profit
Date posted: March 27, 2019. Answers (1)