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-Bank rate policy- by varying the bank rate the central bank gives an indication to the commercial banks as to the rate and interests to charge to their customers. To reduce money supply, bank rate is raised and vice versa
- Cash/liquidity ratio- by varying the liquidity ratio, the central bank can increase or decrease the money supply. To reduce money supply, central bank raises the ratio so that banks keep less for lending and vice versa
- Open market operations- involves buying and selling of government securities. To reduce money supply, the central bank sells treasurer bills and treasury bonds and vice versa
- Special /compulsory deposits- this is a requirement by central banks that commercial banks keep specific amount in the central bank as deposit. To reduce money supply the compulsory deposit is raised so that banks have less to lend to their customers
Selective lending credit control- central can identify sectors that should receive lending from commercial banks. Sectors that are not included have to get funding from other sources which limits money getting into circulation
- Direct action/ supervision- central bank can direct the commercial banks and ensure that they follow the laid down procedures in lending.
Moral persuasion- under special circumstances, the central bank nmay persuade the commercial banks to regulate their lending habits.
- Margin requirement-
- Lending ceiling-
marto answered the question on September 13, 2019 at 11:32
- On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh 24,300.(Solved)
On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh 24,300.During the month, the following transactions took place
March 3 cash sales paid directly into the bankKsh 16,500
4 bought goods for Ksh 15,000 and paid by cheque
6 cash sales Ksh. 50,000
9 received a cheque of ksh 18,000 from Amolo in full settlement of his debt
13 paid insurance premiums of Ksh 16,000 in cash
15 paid Kamotho by cheque Ksh 9,700 in full settlement of his account less 3% cash discount
21 withdrew Ksh 30,000 from bank for office use
24 received a cheque of Ksh23,750 from Rotich in full settlement of his account less 5% cash discount
25 paid wages in cash Ksh 20,000
30 banked all cash except Ksh 3,000
Required: prepare a three column cash book
Date posted: September 13, 2019. Answers (1)
- The following trial balance was extracted from the books of J.B. Traders as at 31st Dec. 2014.Stock on 31/12/2014 was valued at sh. 13,000Required: Prepare...(Solved)
The following trial balance was extracted from the books of J.B. Traders as at 31st Dec. 2014.
Stock on 31/12/2014 was valued at sh. 13,000
Required: Prepare a Trading Profit and Loss account for the period ended 31/12/2014
Date posted: September 5, 2019. Answers (1)
- Luanda Traders had the following balances at 1st Jan 2015 Cash Sh. 180,000 (Dr.) Bank Sh. 67,000 (Cr.) During the month of Jan 2015, the...(Solved)
Luanda Traders had the following balances at 1st Jan 2015 Cash Sh. 180,000 (Dr.) Bank Sh. 67,000 (Cr.) During the month of Jan 2015, the following transaction took place;
Jan 2 cash sales Sh. 14,500
Jan 6 Mwangi a debtor settled his account of Sh. 45,000 by cheque less 5% cash discount
Jan 8 Sold goods on credit with Sh. 25,000
Jan 14 Paid salaries in cash 50,000
Jan 18 Settled Laboso‘s account of 60,000 by cheque less 3% cash discount.
Jan 21 Received a cheque of 84,000 from Rotich after deducting 10% cash discount
Jan22 Cash purchases paid by cheque sh. 65,000
Jan 24 Cash sales worth 340,000 directly banked Sh. 300,000 cash into the account
Jan 28 Took cash 39,000 for children‘s school fees
Jan 31 Banked all cash except Sh. 36,000
Prepare a dully balanced three column cash book
Date posted: September 5, 2019. Answers (1)
- Outline three ways through which the competitive environment would positively influence a business enterprise.(Solved)
Outline three ways through which the competitive environment would positively influence a business enterprise.
Date posted: September 5, 2019. Answers (1)
- Outline four fiscal measures that are used by government to control inflation.(Solved)
Outline four fiscal measures that are used by government to control inflation.
Date posted: September 5, 2019. Answers (1)
- Outline four factors that can hinder timely implementation of a development plan.(Solved)
Outline four factors that can hinder timely implementation of a development plan.
Date posted: September 5, 2019. Answers (1)
- Outline the procedure of balancing a ledger account.(Solved)
Outline the procedure of balancing a ledger account.
Date posted: September 5, 2019. Answers (1)
- Give four reasons why free trade is not suitable to a developing country.(Solved)
Give four reasons why free trade is not suitable to a developing country.
Date posted: September 5, 2019. Answers (1)
- The following information was extracted from the books of Bizna Traders for the month ended 29th February 2016.
Required :
Prepare a profit and loss account for...(Solved)
The following information was extracted from the books of Bizna Traders for the month ended 29th February 2016.
Shs.
Rent received ...........................4,000
Discount allowed .........................10,155
Discount received ........................5,144
Gross profit............................. 23,005
Carriage outwards........................ 6,000
Salaries ................................19,637
Depreciation expenses ...................2,000
Required :
Prepare a profit and loss account for the business for the month ended 29th Feb.2016
Date posted: September 5, 2019. Answers (1)
- On 1st April 2015, Nyamothe Retailers has sh.20,000 in cash and sh.45,000 at bank. During the month of April the following transactions took place :
Required...(Solved)
On 1st April 2015, Nyamothe Retailers has sh.20,000 in cash and sh.45,000 at bank. During the month of April the following transactions took place :
April 2nd Credit sales to Juma sh.5,000
April 12th Cash sales directly banked sh.15,000
April 16th Paid rent 8,000 and wages 2,000 all in cash
April 18th Credit purchases from Kamau 20,000
April 20th Paid telephone bills by cheque shs.12,000
April 29th Deposited all the cash into bank except sh.1000
Required :
Prepare dully balanced two column cash book.
Date posted: September 5, 2019. Answers (1)
- The following balances were extracted from the books of Murungari General stores.
Required :
Prepare a balance sheet as at 30th April 2014.(Solved)
The following balances were extracted from the books of Murungari General stores.
shs.
Premises ..............................................350,000
Creditors .............................................150,000
5yrs bank loan........................................ 100,000
Motor vehicle .........................................200,000
Bank overdraft ........................................250,000
Stock .................................................170,000
Debtors ................................................120,000
Cash ..................................................60,000
Prepaid rent ..........................................22,000
Capital ..................................................?
Required :
Prepare a balance sheet as at 30th April 2014.
Date posted: September 5, 2019. Answers (1)
- Highlight four circumstances for using the short message service (SMS) to communicate.(Solved)
Highlight four circumstances for using the short message service (SMS) to communicate.
Date posted: September 5, 2019. Answers (1)
- The following transactions took place in the month of January 2015 for Karuku Retailers.
Jan 12th Sales to Juma worth shs.200,000 invoice no. 231
Jan 20th Sales...(Solved)
The following transactions took place in the month of January 2015 for Karuku Retailers.
Jan 12th Sales to Juma worth shs.200,000 invoice no. 231
Jan 20th Sales to Kiama worth sh.150,000
Jan 26th Sales to Mercy worth sh.125,000
Required : A sales journal for Karuku.
Date posted: September 5, 2019. Answers (1)
- The following statements refer to different office layouts. Identify the type of office layout explained in the following statements.
a) All staff members operate from...(Solved)
The following statements refer to different office layouts. Identify the type of office layout explained in the following statements.
a) All staff members operate from the same room
b) Senior managers are assigned separate rooms from where they coordinate activities.
c) High class office designed to enhancing the image of the organisation.
Date posted: September 5, 2019. Answers (1)
- Identify the type of goods described by the following statements given in the table.(Solved)
Identify the type of goods described by the following statements given in the table.
Date posted: September 5, 2019. Answers (1)
- The following information was extracted from the books of Ambwere Trader for the year ended 31st Dec 2015.
Cost of sales ......................................1,200,000
Stock as at 1.1.2015...(Solved)
The following information was extracted from the books of Ambwere Trader for the year ended 31st Dec 2015.
Cost of sales ......................................1,200,000
Stock as at 1.1.2015 ..............................160,000
Stock as at 31.12. 2015 .............................240,000
Calculate the rate of stock turn over
Date posted: September 5, 2019. Answers (1)
- The following balances were extracted from the books of Mungoma Traders as at 31st Dec 2015.
Prepare a balance sheet for Mungoma Traders as at 31st...(Solved)
The following balances were extracted from the books of Mungoma Traders as at 31st Dec 2015.
Motor Vehicles.................................... 80,000
Plant and Machinery............................... 70,000
Loan from bank ....................................60,000
Stock .............................................25,000
Debtors ...........................................30,000
Creditors .........................................15,000
Cash at Bank .......................................20,000
Prepare a balance sheet for Mungoma Traders as at 31st Dec.2015.
Date posted: September 5, 2019. Answers (1)
- For each case of the following cases, name the motive for holding Money(Solved)
For each case of the following cases, name the motive for holding Money
Date posted: September 5, 2019. Answers (1)
- State the document to be applied in each of the following statements.(Solved)
State the document to be applied in each of the following statements.
Date posted: September 5, 2019. Answers (1)
- For each of the following transaction, indicate in the spaces provided the account to be debited the account to be credited and the ledger in...(Solved)
For each of the following transaction, indicate in the spaces provided the account to be debited the account to be credited and the ledger in which it is maintained.
Date posted: September 5, 2019. Answers (1)