State four features of an underdeveloped economy.

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9. Outline four roles played by micro-finance institutions in the banking industry.
i. Providing small loans (micro-credit): They offer financial assistance to low-income individuals and small businesses who may not qualify for traditional bank loans.
ii. Promoting savings: They encourage and facilitate savings among the poor, often with flexible deposit options.
iii. Financial inclusion: They extend financial services to unbanked and underserved populations, integrating them into the formal financial system.
iv. Supporting entrepreneurship: By providing capital and financial literacy, they help individuals start and grow small businesses, fostering economic development.

10. Highlight four circumstances under which a trader may use a cheque to make payments.
i. When making payments for large amounts of money where carrying cash would be risky or inconvenient.
ii. When cash payment is not allowed or preferred by the recipient, such as for certain business transactions or utility bills.
iii. When the drawer has a bank account with sufficient funds and wishes to maintain a clear record of transactions.
iv. When the drawer does not have physical cash readily available but has funds in their bank account.

11. Prepare a trial balance as at 31st July 2021.

Identify each account and its normal balance (Debit or Credit).
- Purchases: Debit
- Capital: Credit
- Cash at Bank: Debit
- Advertising: Debit
- Furniture: Debit
- Debtors: Debit
- Cash in hand: Debit
- Bank loan: Credit
List the accounts and their balances in a trial balance format.
$\textbf{Nyangweso Traders} \\ \textbf{Trial Balance as at 31st July 2021}$ $\begin{array}{|l|r|r|} \hline \textbf{Account Name} & \textbf{Debit (KSh)} & \textbf{Credit (KSh)} \\ \hline \text{Purchases} & 9,000 & \\ \text{Capital} & & 23,000 \\ \text{Cash at Bank} & 41,750 & \\ \text{Advertising} & 750 & \\ \text{Furniture} & 13,000 & \\ \text{Debtors} & 5,500 & \\ \text{Cash in hand} & 12,500 & \\ \text{Bank loan} & & 59,500 \\ \hline \textbf{Total} & \textbf{82,500} & \textbf{82,500} \\ \hline \end{array}$
The total debits equal the total credits, so the trial balance is balanced.

State four features of an underdeveloped economy.

Step-by-step solution

Identify each account and its normal balance (Debit or Credit).

List the accounts and their balances in a trial balance format.

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