Correct Answer: C. Limitation in scope

Correct Answer: B. D27,000

Explanation

Starting inventory + purchases - ending inventory = cost of goods sold. 2000 + 28000 - 3000 = 27,000

Explanation

(a) The advantages of limited liability company:

(i) It has the ability to raise large capital through the issue of shares and debentures.

(ii) The shareholders enjoy limited liability

(iii) There is continuity of existence/legal entity.

(iv) It enjoys large scale operation

(v) It can employ experts/specialists.

(vi) Investors are protected through the rules and regulations issued by the security and exchange commission.

(vii). Employees can become co-owner through the acquisition of shares.

(viii) Easy transferability of shares by shareholders.

(b)(i) Ordinary Shares :Ordinary shares are parts of the capital of a limited liability company held by the owners of the company. They are known as equities. The holders are the risk bearers of the company. The dividend attached to ordinary shares depends upon the amount of dividend declared by the board of directors. They rank last in the payments of dividend. The holders enjoy all the rights and privileges of the company.Vote and be voted for.

(ii)Cumulative Preference Share:The holders of cumulative preference are not owners of the company because their shares are redeemable. The holders enjoy fixed rate of dividend which must be paid before the ordinary shareholders are paid any dividend. Cumulative shares preference entitle the holders to arrears of dividends if insufficient profits were made that the company could not pay dividend. The holders do not enjoy all the rights and privileges of the company.

(iii)Debenture: These are long term loan capital given under a company's seal. Debentures attract fixed rate of interest which must be paid whether the company makes profit or not. Debenture may be secured on the assets of the company (mortgage debenture). The debenture holders are not members of the company but creditors to the company. They do not enjoy any right and privileges of the company.

Correct Answer: B. ocean liners

Correct Answer: C. advertising

Correct Answer: B. payments of commision and salary

Explanation

(a) The characteristics of a co-operative society include:

(i) Membership is open to everybody in the particular environment.

(ii) It protects its members from the exploitation of open market forces.

(iii) The sharing of profits is based on members' patronage.

(iv) The practice of democracy is observed in the running of the society, i.e. it adopts one man one vote process of decision making.

(v) Thrift saving is encouraged among its members.

(vi) Capital is paid back to those who wish to withdraw from the organisation

(vii) Management of its activities and accounts is done committee.

(viii) It can raise extra capital through loans.

(b)Types of co-operative society are:

(i) Consumer cooperative society is formed by consumers who pool their resources together to enable them buy goods directly from manufacturers at cheaper rate.

(ii) Producer co-operative society is formed by producers of similar goods who come together in order to promote the production and sale of their products. Members of this society, like farmers other producers contribute money in order to buy or hire equipment, machinery and raw materials to enable engage in large scale production.

(iii) Credit and thrift co-operative society is formed to encourage members to sat money which is later lent to them at reduced rate of interest. This saves the members the problem of borrowing from banks at higher rates of interest.

(iv) Multi-purpose co-operative society combines different activities such as marketing consumer goods, production of goods and giving of credit and loan etc. The term multi-purpose, gives the society scope to engage in any form of co-operative venture that members consider profitable and that is in the interest of the society and its members.

(v) Retail co-operative society is a type of co-operative society where retailers come together to buy goods in bulk, for onward sale by the members to consumers.

(vi) Wholesale co-operative society is a type of co-operative society where wholesalers pool their resources together to buy in bulk from manufacturers.

Correct Answer: D. government would loss control of the economy

Correct Answer: D. Direct Access Storage Device

Correct Answer: C. ordinary shares