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
(Solved)
Define the term central bank
Date posted:
March 28, 2019
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Outline the advantages of running a fixed deposit account to an account holder
(Solved)
Outline the advantages of running a fixed deposit account to an account holder
Date posted:
March 28, 2019
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Answers (1)
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Highlight the factors that influence the supply of money in circulation.
(Solved)
Highlight the factors that influence the supply of money in circulation.
Date posted:
March 28, 2019
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Outline the adverse effects of high taxation
(Solved)
Outline the adverse effects of high taxation
Date posted:
March 28, 2019
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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...
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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State four uses of balance sheet for business organizations.
(Solved)
State four uses of balance sheet for business organizations.
Date posted:
March 27, 2019
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Record the following transactions in ledger accounts.
a) Received Ksh. 20,000 cash in respect of rent paid
b) Purchased goods worth 30,000 on credit from crown traders.
(Solved)
Record the following transactions in ledger accounts.
a) Received Ksh. 20,000 cash in respect of rent paid
b) Purchased goods worth 30,000 on credit from crown traders.
Date posted:
March 27, 2019
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Answers (1)
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For each of the following transactions state the account to be debited and credited.
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For each of the following transactions state the account to be debited and credited.
Date posted:
March 27, 2019
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Balance the following ledger accounts.
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Balance the following ledger accounts.
Date posted:
March 27, 2019
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Answers (1)
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The following balances were extracted from the books of Dipa traders as at 31st December 2000.
Prepare a trial balance as at 31 December 2000.
(Solved)
The following balances were extracted from the books of Dipa traders as at 31st December 2000.
Prepare a trial balance as at 31 December 2000.
Date posted:
March 27, 2019
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Answers (1)
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The following trial balance of Onyati was incorrectly prepared in 30th June 1995. Prepare the correct Trial Balance.
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The following trial balance of Onyati was incorrectly prepared in 30th June 1995. Prepare the correct Trial Balance.
Date posted:
March 27, 2019
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Answers (1)
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Outline the characteristics of debentures.
(Solved)
Briefly outline the characteristics of debentures.
Date posted:
March 26, 2019
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Answers (1)
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State five types of bills of exchange.
(Solved)
State five types of bills of exchange
Date posted:
March 26, 2019
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Answers (1)
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State five disadvantages of using a money order as a means of payment.
(Solved)
State five disadvantages of using a money order as a means of payment.
Date posted:
March 26, 2019
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Answers (1)
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List the various types of cheques.
(Solved)
List five types of cheques.
Date posted:
March 26, 2019
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Answers (1)
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Outline the the circumstances that will make a cheque to be marked RD by a bank before being returned to the depositor.
(Solved)
Outline the the circumstances that will make a cheque to be marked RD by a bank before being returned to the depositor.
Date posted:
March 26, 2019
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Answers (1)
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State five components of a crossed cheque.
(Solved)
Components of a crossed cheque.
Date posted:
March 26, 2019
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Answers (1)
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State the various documents that information is obtained from when preparing a statement of account
(Solved)
State four documents that information is obtained from when preparing a statement of account.
Date posted:
March 26, 2019
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Answers (1)