-Operated under high risk of bad weather-Limited ability to carry many goods-High chances of insecurity/theft/fraud6.(i) High interest rates charged(ii) Can only be used in selected (stores) businesses(iii) One might be tempted to overspend7. (i) Banking
(ii) Insurance(iii) Transport(iv) Communication(v) Advertising.8.(i)Lack of standard measure of value.(ii)Indivisibility of commodities.(iii)Problem of storage.(iv)Requires double coincidence of wants.(v)Some commodities are bulky / difficult to carry.(vi)Lack of unit of account.(vii)Lack of standard of deferred payment9.10. . General line wholesalersTruck mobile wholesalersRack jobbersCash and carry wholesalers11. (a) Consignment note and delivery note is: consignment note is used when the supplier (b) Credit note and debit notehires the services of a transporter to deliver goods to the buyer while a delivery note is used when the supplier uses his own transport to deliver goods to the buyerCredit note is prepared by the seller and issued to the buyer to effect decrease ininvoice value (in case of over charge) while debit note is used to increase the invoice value (correct undercharge)TransactionAssets Capital Liabilities (a) Additional investment in cashincreaseincreaseNo effect(b) Purchase of stock by creditincreaseNo effectincrease(c) Pre-paid loan in cashdecreaseNo effectdecrease(c) Took a loan to pay another loanincreaseNo effectIncrease/decrease
12.Discount 3/100x 4000= Shs.1204000 – 120 = Shs.388013.(a) Gives a description of the goods and the prices at which the seller can supplythe goods to the buyerb) Accompanies the goods and it contains the list of goods deliveredc) To inform the buyer that goods have been dispatchedd) To correct an under- charge13. i) When the seller requests the buyer to make payment of goods before deliveryii) When the seller doesn’t want to give out goods on creditiii) When the importer of goods want to get customs clearance before the goods are sentiv) When the seller wants to show the buyer the amount he/she would have to pay for if he/she buys goods on approvalv) When the seller employs agents to sell goods for him/her.14.i) Seller enjoys a higher sales turn overii) Seller enjoys higher profits due to interest on hire purchase sales iii) Seller can re-posses item incase of default in payments iv) Capital from down payments enables the seller to continue in trading v) Seller can sell his trade debts to a factor which provides him with working capital15.- Buyer is able to start using the item before completing all the payment-The buyer is able to buy expensive goods that may otherwise be unaffordable-The buyer is able to plan for the payment of the regular installments-The buyer is free to return the goods before completion of payment of goods if dissatisfied16.-Must be signed by the drawer or creditor-Must be accepted by the debtor in order for it to be valid-Must be accepted unconditionally/ willing fully-Must bear appropriate revenue stamp17.
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