- They are not popular among investors hence the company is not sure of raising adequate capital
- Debentures holders earn a fixed rate of interest regardless of the profits made by the company.
- They attract high interest making them an expensive source of finance.
- Some are redeemable which can inconvenience the company as it refunds the capital.
- Some are secured against the assets of the company which can easily be lost incase of inability to pay.
- Debenture holders can sue the company if not paid their interest leading to liquidation of the company.
- Debentures holders do not participate in decision making hence they do not assist the company (in decision making) no matter how good they may be.
Kavungya answered the question on September 27, 2019 at 08:45
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State the Precautions that a drawer can take in order to ensure that his cheques do not bounce.
(Solved)
State the Precautions that a drawer can take in order to ensure that his cheques do not bounce.
Date posted:
September 27, 2019
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Answers (1)
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List the ways in which the use of containers is sea transport enhances security of cargo.
(Solved)
List the ways in which the use of containers is sea transport enhances security of cargo.
Date posted:
September 27, 2019
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Answers (1)
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Anyango is employed as a saleslady by Biashara Traders. She is paid a basic salary of Sh.3,000 per month and a commission based on her...
(Solved)
Anyango is employed as a saleslady by Biashara Traders. She is paid a basic salary of Sh.3,000 per month and a commission based on her sales as follows:-
1.5% on the first Sh.100,000
2% on the next Sh.50,000
2.5% on the next Sh.75,000
3% on any sales above Sh.225,000
During the year 2009, Anyango received a monthly income of Sh.41,575.
Calculate her total sales for the year 2009 (show all your calculations).
Date posted:
September 26, 2019
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Answers (1)
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The following diagram shows the equilibrium price of good X as set by the forces of demand and supply.
Suppose the government sets the maximum price...
(Solved)
The following diagram shows the equilibrium price of good X as set by the forces of demand and supply.
Suppose the government sets the maximum price at Sh.100 which is below the equilibrium price, highlight four effects of such a move.
Date posted:
September 26, 2019
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Answers (1)
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Give four reasons why plastic money is increasingly being used in business transactions.
(Solved)
Give four reasons why plastic money is increasingly being used in business transactions.
Date posted:
September 26, 2019
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Answers (1)
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The following information was extracted from the books of KM Stores.
Rate of stock turnover 3 times
Opening stock Sh.80,000
Closing stock Sh.100,000
Mark-up 20%
Determine the...
(Solved)
The following information was extracted from the books of KM Stores.
Rate of stock turnover 3 times
Opening stock Sh.80,000
Closing stock Sh.100,000
Mark-up 20%
Determine the gross profit.
Date posted:
September 26, 2019
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Answers (1)
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Indicate the term described by the following statements.
a)Inability of a business to meet its financial obligations.
b)A company that acquires 51% or more shares of...
(Solved)
Indicate the term described by the following statements.
a)Inability of a business to meet its financial obligations.
b)A company that acquires 51% or more shares of another company.
c)A business that takes over another business by buying off all its assets and liabilities.
d)A business grants another right to manufacture and distribute its branded products using its name.
Date posted:
September 26, 2019
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Answers (1)
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The following are some of the source documents used in accounting; credit note issued, cash sale receipt, credit note received and invoice issued. Match each...
(Solved)
The following are some of the source documents used in accounting; credit note issued, cash sale receipt, credit note received and invoice issued. Match each of the following books of original entry with the relevant source document.
a)Sales returns book
b)Sales day book
c)Purchases returns book
d)Cash book
Date posted:
September 26, 2019
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Answers (1)
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The following trial balance was extracted from the books of Mawego Traders 31st December 2010.
Prepare:
i)Profit and loss account for the year ended 31st December 2010.
ii)Balance...
(Solved)
The following trial balance was extracted from the books of Mawego Traders 31st December 2010.
Prepare:
i)Profit and loss account for the year ended 31st December 2010.
ii)Balance sheet as at 31st December 2010.
Date posted:
September 26, 2019
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Answers (1)
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On 1 -8-2010, Onyango bought goods on credit quoted at sh 200,000.Terms of sale were 20% trade discount and 10% cash discount if payment was...
(Solved)
On 1 -8-2010, Onyango bought goods on credit quoted at sh 200,000.Terms of sale were 20% trade discount and 10% cash discount if payment was made on 29 – 8- 2010
Calculate the amount paid if payment was made on 26 – 08 – 2010.
Date posted:
September 26, 2019
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Answers (1)
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The following account balances were obtained from the books of Kaswanga Traders on 30th June 2011.
Sh
Land and buildings - 200,000
Current assets - 420,000
Furniture - ...
(Solved)
The following account balances were obtained from the books of Kaswanga Traders on 30th June 2011.
Sh
Land and buildings - 200,000
Current assets - 420,000
Furniture - 60,000
Motor car - 240,000
Capital - 480,000
Current liabilities - 440,000
Required : Prepare a trial balance for Kaswanga Traders as at 30th June 2011
Date posted:
September 26, 2019
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Answers (1)
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Record the following transactions in a two column cash book of Magunga Traders and balance it off.
2012
January 1 – Balance b/d - cash...
(Solved)
Record the following transactions in a two column cash book of Magunga Traders and balance it off.
2012
January 1 – Balance b/d - cash sh 10,000
- bank sh 25,000
January 2 – Bought stock in cash sh 6,000
January 7 – Cash sales shs 2,500
January 12 – With drew cash from bank for office use sh 4,000
January 1st – Paid wages in cash sh . 3,000
January 31st – Received sh 4,500 from Otaro, a debtor by cheque
Date posted:
September 26, 2019
.
Answers (1)
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The following Trial Balance was extracted from the books of Kisumu Auto spares as at 31st Oct 2011
Stock on 31st October 2011 was sh. 80,200
Required,
(i)Prepare...
(Solved)
The following Trial Balance was extracted from the books of Kisumu Auto spares as at 31st Oct 2011
Stock on 31st October 2011 was sh. 80,200
Required,
(i)Prepare Trading ,Profit and Loss account for the year ended 31st Oct 2011
(ii)Prepare Balance sheet as at 31st October 2011
Date posted:
September 26, 2019
.
Answers (1)
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Using a diagram, describe the effects of outward shift in supply curve on equilibrium price and quantity.
(Solved)
Using a diagram, describe the effects of outward shift in supply curve on equilibrium price and quantity.
Date posted:
September 26, 2019
.
Answers (1)
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Outline four distinctions between monopolistic competition and oligopoly.
(Solved)
Outline four distinctions between monopolistic competition and oligopoly.
Date posted:
September 26, 2019
.
Answers (1)
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Name the office machines used to perform the following functions.
a)To fold documents, place them in the envelope and seal.
b)Used to transmit printed messages...
(Solved)
Name the office machines used to perform the following functions.
a)To fold documents, place them in the envelope and seal.
b)Used to transmit printed messages such as Letters ,maps diagrams and photographs
c)Reproducing documents from a master copy(stencil)
d)Printing postage impressions on the envelopes
Date posted:
September 26, 2019
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Answers (1)
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Classify the following accounts as either real or nominal.
a)Delivery van
b)Purchases
c)Insurance premium
d)Commission income
(Solved)
Classify the following accounts as either real or nominal.
a)Delivery van
b)Purchases
c)Insurance premium
d)Commission income
Date posted:
September 26, 2019
.
Answers (1)
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Outline four features of demand deposit account.
(Solved)
Outline four features of demand deposit account.
Date posted:
September 26, 2019
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Answers (1)
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Tumetoka Mbali Traders maintains a petty cash book on imprest system with a float of kshs. 18,000. Reimbursement is usually made on the first day...
(Solved)
Tumetoka Mbali Traders maintains a petty cash book on imprest system with a float of kshs. 18,000. Reimbursement is usually made on the first day of the week. The following payments were made on the first week of June 2012
June 1st: Received Shs. 2,000 for reimbursement
3rd :Bought stamps for shs. 400
4th :Bought stationery for shs. 1,000
5th : Bought sugar for shs. 580 and paid postage shs. 850
6th : Bought tealeaves for shs. 500 and stationery for shs. 650
7th : Paid ostrich a creditor shs. 5,500
7th :Received cash for reimbursement
Required;
Prepare a petty cash book duly balanced using the following analysis columns, stationery, postage, travelling, staff tea, miscellaneous and ledger accounts.
Date posted:
September 26, 2019
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Answers (1)
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Highlight five reasons why a country would be reluctant to adopt free trade policy with her trading partners.
(Solved)
Highlight five reasons why a country would be reluctant to adopt free trade policy with her trading partners.
Date posted:
September 26, 2019
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Answers (1)