-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
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On 1st march 2017 Kamau had cash in hand Ksh 7,800 and a bank overdraft of Ksh 24,300.
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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Outline the procedure of balancing a ledger account.
(Solved)
Outline the procedure of balancing a ledger account.
Date posted:
September 5, 2019
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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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
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Answers (1)
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Record the following transactions in the cash book of Kamau Traders for the Month of May 2016 and balance it .
2016
Jan 1 : Cash in...
(Solved)
Record the following transactions in the cash book of Kamau Traders for the Month of May 2016 and balance it .
2016
Jan 1 : Cash in hand shs 10,000. Cash at Bank shs 20,000.
Jan 10 : Paid Lucy shs 8,800 and Toms shs 11,000 after deduction 12% cash discount in Each case.
Jan 30 : Banked all the cash leaving ksh 1,200 in the cash book.
Date posted:
September 5, 2019
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Answers (1)
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State four features of consumer goods and services
(Solved)
State four features of consumer goods and services
Date posted:
September 5, 2019
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Answers (1)
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The following information relates to Mungoma Traders for the year ended 31st Dec 2015
(Solved)
The following information relates to Mungoma Traders for the year ended 31st Dec 2015
Gross profit............................... 140,000
Salaries ...................................20,000
Electricity charges..........................8,000
Discount Allowed............................ 6,000
Discount Received............................ 26,000
Prepare a profit and Loss Account for Mungoma Traders for the year ended 31st Dec 2015.
Date posted:
September 5, 2019
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Answers (1)
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The following balances were extracted from the books of Ongware traders as at 31st December 2015.
Calculate :
i) Current ratio
ii) Cost of goods sold
iii) Mark up
iv)...
(Solved)
The following balances were extracted from the books of Ongware traders as at 31st December 2015
Sales during the year amounted to Ksh.2,000,000
Stock on 1st Jan. 2015 was shs.100,000
Stock on 31st Dec. 2015 was shs.200,000
Creditors shs.250,000
Bank overdraft shs.400,000
Cash in hand shs.150,000
Gross profit margin was 20%
Calculate :
i) Current ratio
ii) Cost of goods sold
iii) Mark up
iv) Rate of stock turnover
Date posted:
September 5, 2019
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Answers (1)
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Prepare a duly balanced three column cash book from the following information extracted from the books of Omwami traders.
Jan 1st Balance b/d cash sh.4,000, Bank...
(Solved)
Prepare a duly balanced three column cash book from the following information extracted from the books of Omwami traders.
Jan 1st Balance b/d cash sh.4,000, Bank Sh.27,000
Jan. 4th Settled Olweny creditors account of shs.8000 by cheque having deducted 6% cash discount
Jan 8th Received shs.6,000 cash from Mutoma traders
Jan 16th Deposited shs.4,500 to bank account
Jan 24th Withdrew shs.9200 from bank for private use
Jan 29th Received shs.19950 from Kahawa by cheque after allowing 5% discount
Jan 31st Banked all the cash leaving shs.1500 in the office
Date posted:
September 5, 2019
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Answers (1)
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The following balance were extracted from the books of Nyachenge discount centre for the year ended 31st December 2010.Prepare a balance sheet as at 31st...
(Solved)
The following balance were extracted from the books of Nyachenge discount centre for the year ended 31st December 2010
Cash ...........................................................20,520
Bank ...........................................................160,230
Premises .......................................................800,000
Debtors .........................................................40,000
Creditors....................................................... 40,000
2 year loan..................................................... 62,000
Stock ............................................................2500
Prepare a balance sheet as at 31st December 2010.
Date posted:
September 5, 2019
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Answers (1)