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- There is no interest charged when goods are taken on credit but loan have to be paid with interest.
- No collateral is required when taking goods on credit but a loan requires collateral.
- Acquiring a bank loan involves long procedures while trade credit does not involve long procedures.
- Money borrowed from a bank can be channeled to other uses but not so with goods taken on credit.
- To get a loan a firm must have a healthy bank account which I not possible hence firms will go for trade credit.
- The collateral pledged for a loan may not be used by the firm during the loan period but that does not occur when taking goods on credit.
sharon kalunda answered the question on September 4, 2019 at 12:21
- The table below shows source document state the book of original entry in which the information from these source documents would be recorded.(Solved)
The table below shows source document state the book of original entry in which the information from these source documents would be recorded.
Date posted: September 4, 2019. Answers (1)
- Funny Traders, had the following assets and liabilities as at 1st January, 2015 ...(Solved)
Funny Traders, had the following assets and liabilities as at 1st January, 2015
Sh
Furniture + equipment........................... 350,000
Debtors .........................................45,000
Cash............................................ 7,000
Creditor......................................... 48,000
For the year ended 31st December, 2015 there was:
(i) Additional capital introduced amounting to sh34,000.
(ii) Drawings made during the year amounting to sh20,000.
(iii) Net profit amounting to sh34,000.
Determine the capital of the business as at 31st December, 2015.
Date posted: September 4, 2019. Answers (1)
- Indicate the form of external environmental factor described by the statement below.(Solved)
Indicate the form of external environmental factor described by the statement below.
Date posted: September 4, 2019. Answers (1)
- The following balances were extracted from the books of Sitaki Mambo traders as at 31st December, 2015
...(Solved)
The following balances were extracted from the books of Sitaki Mambo traders as at 31st December, 2015
Sh.
Cash at bank................................... 12,500
Cash in hand ....................................7,500
Wages due .......................................3,500
Creditors .......................................11,500
Loan from bank ...................................60,000
Motor vehicles ...................................100,000
Equipment + Machinery .............................50,000
Stock ............................................25,000
Debtors ...........................................30,000
Prepare a balance sheet for Sitaki Mambo traders as at 31st December 2015
Date posted: September 4, 2019. Answers (1)
- Using the following transactions, state the name of the account to be debited and the account to be credited.
Transaction ........................................A/c debited.......................... A/c Credited
(i) Made...(Solved)
Using the following transactions, state the name of the account to be debited and the account to be credited.
Transaction ........................................A/c debited.......................... A/c Credited
(i) Made cash sales of sh 2,000
(ii) Purchased machine by cheque
(iii) paid a creditor sh3,000 cash
(iv) withdraw sh10,000 for business Use.
Date posted: September 4, 2019. Answers (1)
- Hellen the new manager, outshine Company limited, is considering turning the office layout from being an open office layout to a landscape layout. Outline four...(Solved)
Hellen the new manager, outshine Company limited, is considering turning the office layout from being an open office layout to a landscape layout. Outline four changes she can adopt.
Date posted: September 4, 2019. Answers (1)
- The following information relates to Malindi Traders for the year ended
31st December 2015.
...(Solved)
The following information relates to Malindi Traders for the year ended
31st December 2015.
Shs
Total current assets ......................587,500
Total Fixed assets ........................720,000
Total current liabilities ..................32,500
Total long term liabilities................. 357,500
Net Profit ..................................50,000
Capital...................................... 625,000
Sales....................................... 1,000,000
Opening stock................................. 50,000
Closing stock .................................25,000
Margin....................................... 20%
Calculate:
(i) Working capital
(ii) Current ratio
(iii) Mark-up percentage
(iv) Rate of stock turnover
(v) Return on capital
Date posted: September 4, 2019. Answers (1)
- State FOUR Ways in which advertising agencies assist in sales promotion.(Solved)
State FOUR Ways in which advertising agencies assist in sales promotion.
Date posted: September 4, 2019. Answers (1)
- Kisii Traders had the following balances as at 31st December 2014.
...(Solved)
Kisii Traders had the following balances as at 31st December 2014.
Shs
Bank Loan 3 years........................... 472,500
Buildings ....................................540,000
Creditors ....................................227,000
Debtors .......................................116,900
Furniture ......................................408,170
Gross profit ...................................520,600
Motor vehicle ...................................900,000
Discount allowed ................................142,000
Lighting........................................ 25,200
Interest on loan ................................1,200
Closing stock ...................................72,500
Rent Received ..................................120,000
Repairs on buildings .............................60,000
Repairs on furniture .............................72,030
Repairs on motor vehicle .........................300,000
General expenses ..................................102,100
Capital ..........................................1,400,000
Prepare:
(i) Profit and loss account for the year ended 31st December 2014.
(ii) Balance sheet as at 31/12/2014.
Date posted: September 4, 2019. Answers (1)
- State FOUR economic effects of taxation to a country's economy.(Solved)
State FOUR economic effects of taxation to a country's economy.
Date posted: September 4, 2019. Answers (1)
- In each of the following cases, state the type of inflation described.
a) The unrest in Libya has resulted to an increase in the price of...(Solved)
In each of the following cases, state the type of inflation described.
a) The unrest in Libya has resulted to an increase in the price of oil.
b) The price of bread has gone up to Shs.60 due to Increase in the price of Wheat.
c) A lot of Money in circulation has led to the general increase of price.
d) A rise in price due to uneven growth in Some sectors of the economy.
Date posted: September 4, 2019. Answers (1)
- The following are types of internal and external environments (Solved)
The following are types of internal and external environments. Technological, Business structure, Demographic and physical.In the table below , write the type of environment that suits the description.
Date posted: September 4, 2019. Answers (1)
- Record the following transactions in a two column cash bookand balance it off as at January 12th2008 January 1 Started business with capital sh. 10,000...(Solved)
Record the following transactions in a two column cash bookand balance it off as at January 12th2008
January 1 Started business with capital sh. 10,000 cash and sh. 25,000 bank overdraft
January 2 bought stock in cash sh. 6,000
January 3 cash sales sh. 2,500
January 7 bought stock worth sh. 5,000 on credit
January 12 withdrew cash from bank for office use sh. 4,000
Date posted: September 4, 2019. Answers (1)
- Atemo is the head of the marketing team at ABC Company that has recorded tremendous increase in volume of sales over the last four years....(Solved)
Atemo is the head of the marketing team at ABC Company that has recorded tremendous increase in volume of sales over the last four years. Highlight four attributes that she possess.
Date posted: September 4, 2019. Answers (1)
- The following balances were extracted from the books of Asena Enterprises on 30th June, 2006. ...(Solved)
The following balances were extracted from the books of Asena Enterprises on 30th June, 2006.
Shs.
Gross profit........................... 120,000
Rent Income ............................100,000
Dividends received..................... 200,000
Salaries................................ 300,000
Carriage outwards........................ 10,300
Discount allowed .........................21,000
Prepare Asena's Enterprises profit and loss account for the year ended 30th June,2006.
Date posted: September 4, 2019. Answers (1)
- Study the diagrams below and answer the question that follows:-
State the factors that may cause the above change from diagram (i) to (ii)(Solved)
Study the diagrams below and answer the question that follows:-
State the factors that may cause the above change from diagram (i) to (ii)
Date posted: September 4, 2019. Answers (1)
- The following information was extracted from MaweMbili traders for the year ended 31st December, 2015
...(Solved)
The following information was extracted from MaweMbili traders for the year ended 31st December, 2015
KSH
Machinery ..................460,000
Cash in hand................ 80,000
Debtors ....................130,000
Creditors ...................60,000
Prepaid salaries............ 20,000
4 year loan .................280,000
Accrued rent ................30,000
Required:
Prepare a balance sheet of Mawembili traders as at 31st December, 2015
Date posted: September 4, 2019. Answers (1)
- The following transactions took place in the business of Darasile Traders in Kisumu year 2013.July 1st: Started business with capital in cash Kshs.150,000.July 2th: Opening...(Solved)
The following transactions took place in the business of Darasile Traders in Kisumu year 2013.
July 1st: Started business with capital in cash Kshs.150,000.
July 2th: Opening a bank account and deposited Kshs.30,000.
July 3th: Bought buildings in cash Kshs.60,000.
July 4th: Borrowed a loan in cash Kshs.20,000.
July 5th: Bought stationery by cheque worth Kshs.6,000.
July 6th: Repaid part of the loan by cheque Kshs.10,000.
Required:
(i) Record the above transactions in their various ledger accounts.
(ii) Prepare a trial balance.
Date posted: September 4, 2019. Answers (1)
- The following information relates to Murang‘a traders for the year ended 30th September 2006.
Prepare the business trading account for the year ended 30th Sep 2006.(Solved)
The following information relates to Murang‘a traders for the year ended 30th September 2006.
Prepare the business trading account for the year ended 30th Sep 2006.
Date posted: September 4, 2019. Answers (1)
- The following information relates to Kuwa‘s business for the year ended 31st May 2010.
Net profit Sh.20,000
Working capital Sh.30,000
Return on capital 20%
Employed
Determine the value of:
(a) Capital...(Solved)
The following information relates to Kuwa‘s business for the year ended 31st May 2010.
Net profit Sh.20,000
Working capital Sh.30,000
Return on capital 20%
Employed
Determine the value of:
(a) Capital employed.
(b) Fixed assets.
Date posted: September 4, 2019. Answers (1)