Business studies simplified notes 2 - 22 January 2011 - KCSE REVISION E LEARNING
KCSE REVISION
your slogan
Friday, 31/10/2014, 7:40 AM


Welcome Guest | RSS
Main Registration Login
Site menu

Section categories
FORM ONE TERM ONE GRAMMAR [1]
FORM TWO TERM ONE GRAMMAR [2]
FORM THREE TERM ONE GRAMMAR [8]
FORM FOUR [1]
TERM ONE GRAMMAR
KISWAHILI [8]
PAST MOCK PAPERS
MATHS [0]
BIOLOGY [3]
CHEMISTRY [0]
PHYSICS [0]
GEOGRAPHY [0]
HIISTORY [31]
CRE [17]
AGRICULTURE [34]
BUSINESS STUDIES [15]
MUSIC [0]
FRENCH [0]
GERMAN [0]
COMPUTER STUDIES [7]

Main » 2011 » January » 22 » Business studies simplified notes 2
5:52 PM
Business studies simplified notes 2

 

THE DEFICIT CAN BE FINANCED IN THE FOLLOWING WAYS;

·         Borrowing from another country.

·         Receiving gifts and donations.

·         Deferring payment through the IMF.

·         Selling foreign investments.

·         Using foreign exchange reserves.

·         Devaluing an own currency.

·         Importing on credit.

 

To correct an adverse balance of payment.

·         It can be done by controlling imports and boosting export of goods and services.

·           Imports may be controlled through licensing imposing heavy import duties or total ban. To improve (promote) exports. Through exports compensation; a scheme where an from the government. The government of Kenya offers 10%. Customs drawbacks; this is a case where a refund of charges of the custom duties paid on certain imported goods which are to be re exported is done by the government.

Establishment of export promotion bodies e.g. K.E.T.A (Kenya External Trade Authority) for details refer to page 19 of volume one of these in diplomatic missions abroad headed by commercial attaches. Forming trade consuls to advise the mother country on international trade matters. Through deflationary policy; reducing the value of an own currency. Encouraging foreign investment.  Giving bounties; A subsidy given by a government to exporters as an incentive to promote their participation in export trade.  It may be given in form of funds or tax relief.

 

·         Setting up an export guarantee department; the department offers insurance cover to exporter’s goods. The insured pays lower rates. The cover is meant for bad debt, delayed payments and charges of the government’s policy in the importing country.

·         Using government promotions; by appealing to, and persuading producers and manufacture to and persuading producers and manufactures to enter external trade.

·         Using government promotions; by appealing to, and persuading producers and manufactures to enter external trade.

 

Factor that may cause an adverse balance of trade.

·         Low exports

·         Increase in imports

·         Unfavorable terms of trade.

·         Shortage of capital

·         Climatic situation.

·         Devaluation policy by other countries.

·         The flow of capital goods.

·         Structural disequilibruim resulting from fundamental changes in growth of a country.

 

INTERNATIONAL TRADE PROCEDDURE AND DOCUMENTATION

For a trader to import goods, first he has to make inquiries from potential exporters, information can as well be got from reference documents/books relevant to business matters like;

a)      Trade journals

b)      Catalogue

c)      Business directories.

·         Other sources of information are mass media, exporter must get an import license from the government. Obtaining an import license (F.A.A.L) an import license in Kenya is known as Foreign Exchange Allocation License. (F.E.A.L) before apply for a license the importer  must first obtain a proforma has to show: prices description of the goods qualities ,place of shipment and the names off the parties involved. Seven copies of proforma invoice together with the original and sent to the department of trade and supplies (DTS). A banker cheque of 1.5% off the value of goods shown in the proforma invoice is also attached

·         The application is varified by the import management committee. (I.M.C) at the department of trade and supplies. If approved the I.M.C forwards six copies of the F.E.A.L. forms to the central bank of Kenya.  DTS retains one copy. Also sent to the bank are two copies and the original of the proforma invoice including the banker cheque. If the bank authority is satisfied it is license. Three copies including the bank authority is satisfied it is then allocated  a number become a license.  Three copies are then sent to the importer. Two copies are sent to the Society General Surveillance (S.G.S)

·         The importer then qualifies to place to an order with overseas supplier. The importer then sends an indent (order). The importer then sends an indent are; description of goods, duality and prices expected data of delivery, terms of sale packing instruction, marking and labeling of the consignment and means of transport. The port of destination and terms of payment are included.

·         There are two types of indent; closed indent- sent direct to the importer of the importer’s own choice direct. The importer of the importer’s own choice. The importer’s agent who selects a suitable exporter on behalf of the importer.

Category: BUSINESS STUDIES | Views: 772 | Added by: mikenjue | Rating: 3.3/3
Total comments: 0
Name *:
Email:
Code *:
Our poll
Rate my site
Total of answers: 225

Statistics

Total online: 0
Guests: 0
Users: 0

Entries archive

Copyright MyCorp © 2014
Make a free website with uCoz