Topic outline
Unit 1: Ledgers and Trial Balance
Key unit competence
To be able to prepare ledger accounts and trial balance.
Introduction
It’s likely that you have heard the saying, “It costs money to make money.”
A businessperson contributes money and, ideally, makes good use of it to
create even more value.
You were introduced to Accounting prime books in Senior Five unit 10, for
you to acquire the necessary skills from this unit; whenever you attempt
a question in arithmetic, you try to verify whether your answer is correct.
Similarly, an accountant also wants to be sure that the ledger accounts she
or he has prepared are correct regarding the amount, side, balance, etc. To
determine whether the debit or credit amounts recorded in the ledger are
correct, you must prepare the trial balance. This unit will teach you how toprepare ledgers and a trial balance.
Introductory Activity
In Senior 5 unit 10, you studied accounting prime books, in which you
recorded a variety of transactions carried out by various businesses as
well as those for your club activities in different prime books (Purchases
journal, Sales journal, Sales returns journal, Purchases returns journal, Cash
book and General journal). As a result, it is important to continue posting
transactions to the respective accounts for the business’s financial status
to make more sense and assist the entrepreneur in making an appropriate
decision.
Use your previous experience and accounting skills to answer the following
questions.
a) Where do you think the information from journals is posted?
b) Why is posting accounting information important in business?
c) On 1st. June.2023, John started a business with 200,000FRW, of which
100,000FRW was at the bank account.
2nd June.2023 he purchased a machine to use in his business and paid cash80,000FRW.
Required:
i) Journalize the transactions above.
ii) Post the information to the appropriate ledger.iii) Prepare a trial balance for John’s business.
1.1. Ledger
Learning Activity 1.1
The average businessperson has so many matters to attend to, and his/her
transactions are so numerous that it is impossible to remember everything
that happens chronologically in journals. Using your prior knowledge
related to transactions.
a) What is meant by a term ledger and posting?b) Show the different classifications of ledgers.
1.1.1. The meaning and types of ledgers
A ledger is a collection or a set of accounts of a business. While the
journal records all transactions chronologically, ledger accounts classify the
transactions and record those of similar nature in one account. The process
of transferring information from the books of original entry to the ledger
accounts is called posting.
For instance, all transactions related to cash movement must be recorded
together under one statement called “Cash account”,
There are several types of ledgers in accounting. In this unit, focus is put on
three types of ledgers which include:a) General ledger: is a ledger that contains all accounts of the business
except sales and purchases. E.g., assets, liabilities, incomes, expenses,
and capital.
b) A sales ledger/ Debtors ledger is a collection of all accounts of people
or businesses to whom the business has sold goods on credit (debtors).
c) Purchases ledger/Creditors ledger is collection of accounts of people
or businesses from whom the business has bought goods on credit(creditors).
Skills Lab Activity
Case study:
Mupenzi, a businessman that deals in fruits, visits an organization that
offers rural business owners small grants to expand their businesses. The
review panel conducted a short interview to gather some information
about Mupenzi’s business to determine if he qualifies.
Panel: How much have you spent on equipment and materials for your
business so far?
Mupenzi: It’s quite some amount. More than 100,000.
Panel: How much have you sold this last quarter?
Mupenzi: Business hasn’t been good because of the heavy rains. A bit
lower than last year.
After the interview, Mupenzi learnt that he did not qualify for the grant.1. Why do you think Mupenzi failed to get the grant?1.1.3. Preparation of ledgers
2. What should Mupenzi have done differently to qualify him for thegrant?
After recording accounting transactions in appropriate accounting prime
books i.e.: general journal, purchases journal, sales journal, return inwards
and return outwards journals, as well as different forms of cash books in
chronological order, the next important step is to post accounting information
from different prime books listed earlier to respective ledgers. It is in the
ledger, that all transactions of similar nature are recorded together under one
account.
The table below summarises how and what to post from prime books toledgers
A. Purchases ledger/ Creditors’ ledger
The creditors’ ledger accumulates information from the purchases journal.
The purpose of the creditors’ ledger is to provide knowledge about which
suppliers the business owes money to, and how much. This is achieved by
posting information from the purchases journal to creditors’ ledger.
Normally, every account should be balanced off at the end each month.
Balancing an account off is the adding of both the debit and credit sides
in order to make the two sides equal. When balancing off an account the
following steps are put into consideration:
Step 1: Add the two sides separately to find out the total of each
Step 2: Subtract the smaller side total from the bigger side
Step 3: Record the differences on the smaller side and call it balance carried
down (bal c/d) or balance carried forward (bal c/f) using the last date of the
month.
Step 4: Now both sides are equal.
Step 5: Put balance c/d on the opposite side (bigger side) of the account and
call it balance brought down (bal b/d) or balance brought forward (bal b/f),
using first date of the next month or period
Example 1:
Given the following Akeza’s purchases journal, post the information to the
creditors’ ledger.UNIT 1
AKEZA’S PURCHASES JOURNAL FOR THE MONTH OF MARCH 2023
Note: The total of credit purchases is debited in the purchases account
which is opened up in the general ledger.
Example 2:
Given the following Kimironko wholesalers’ purchases returns journal, post
the information to the creditors’ ledger.
KIMIRONKO WHOLESALERS’ PURCHASES RETURNS JOURNAL FOR THEMONTH OF NOVEMBER 2022
Note: The total of purchases returns is credited in the return outwards
account which opened in the general ledger.
B. Sales ledger/Debtors’ ledger
The debtors’ ledger accumulates information from the sales journal. The
purpose of the debtors’ ledger is to provide knowledge about which customer
owes money to the business, and how much. This is achieved by postinginformation from the sales journal to debtors’ ledger.
Example 3:
Given the following Alain’s sales journal, post the information to the debtors’ledger.
ALAIN’S SALES JOURNAL FOR THE MONTH OF JANUARY 2016
Note: The total of credit sales is credited in the sales account which
opened in the general ledger.
Example 4:
Given the following Gakuba’s sales returns journal, post the information to
the debtors’ ledger.
GAKUBA WHOLESALERS’ SALES RETURN JOURNAL FOR THE MONTH OFJANUARY 2013
Note: The total of sales returns is debited in the return inwards account
which opened in the general ledger.
C. General ledger
The general ledger contains all other accounts that are not kept in any other
ledger e.g., buildings, furniture, and stock account.
Note: personal accounts of debtors or creditors who do not arise out of sale
or purchase of goods on credit are kept in the general ledger e.g. debtors as
a result of sale of fixed assets on credit and expenses creditors.
Let us first of all post the totals of purchases journal, purchases return journal,sales journal, and sales returns journal used above:
It is good time to remember that the records in the cashbook are posted to
the general ledger, creditors’ ledger, and debtors’ ledger depending on what
transaction took place.
Notes:
◾ When transactions are recorded in the cashbook, cash and bank
accounts are not opened up in the ledger. Because the recording of
transactions in the cash book takes the shape of a ledger account.
The cash book serves the purpose of a ledger account as well as a
journal for cash and bank accounts.◾ Contra entry transactions are not posted to the ledger because theirExample 5:
double entry is completed within the cashbook.
◾ Discount allowed and discount received are posted to discount
allowed account and discount received account respectively in the
general ledger
◾ While posting information from any type of cash book,
i) Details from the debit side are names of accounts to be opened
in the ledger and credited; and
ii) Details from the credit side are names of accounts to be opened
in the ledger and debited.
◾ The balance brought down (bal b/d) or balance brought forward (balb/f) is posted to the capital account in the general ledger.
Given the cash book below of Kigali Traders Ltd, post the information to the
respective ledgers. Personal accounts appearing in the cash book below are
for businesses that one-time transacted goods on credit with Kigali TradersLtd.
Exercise:
Following the clear steps of balancing accounts, balance off accounts in allthe above ledgers.
1.2 Trial Balance
Learning Activity 1.2
1. At the end of every month, Mukamana draws a list of accounts to
check whether her records are properly recorded with arithmetical
accuracy or otherwise; she passes necessary accounting records
to correct detected errors in her books of accounts in case they
are not appropriately recorded.
i) Referring to what Mukamana does at the end of e each month,
what do we call that exercise in accounting?
ii) What do you understand by the term trial balance?
2. Do you think it is important to extract a trial balance? Justify your
answer.
1.2.1. Meaning of a trial balance
A trial balance is a list of the debit and credit balances extracted from the
ledgers at a particular date.
It is referred to as a tool to prove the arithmetical accuracy of the entries
made in the ledger. If the records have been correctly maintained based on
a double entry system, the totals of the credit and debit would be equal to
each other.
1.2.2. Importance of a trial balance
◾ It is used as proof of the arithmetical accuracy of the entries made
in the ledger.
◾ The trial balance helps to know the assets and liabilities of a business
by just looking at it.
◾ Easy preparation of final accounts to determine the profit or losses
of the business.
◾ One may rely on the results derived from the trial balance when the
total of debits equals the total of credits.
◾ Arithmetical errors made during recording and posting of transactionsare easily detected by preparing a trial balance.
1.2.3. Preparation of a trial balance
Trial Balance is not an account. It is only a list or schedule of balances of
ledger accounts. it I prepared following the steps below:
Step 1: Post all the journal entries to the appropriate ledgers.
Step 2: Balance off all ledger accounts and determine the credit or debit
balances for each ledger account.
Step 3: List all the accounts with their debit or credit balances. Ensure the
debit balances are in one column and the credit balances are in another.
Step 4: Add up all the credit balances and add up all the debit balances.
Step 5: The total of the debit balances should be equal to the total of the
credit balances. If the totals are unequal, recheck the process to identify and
correct the errors.
Note: The accounts having a debit balance are entered in the debit amount
column, and the accounts having a credit balance are entered in the credit
amount column.Format of a trial balance
Note: All expense and asset accounts normally have debit balances and are
listed in the debit column, and all liability and income accounts normally have
credit balances and are listed in the credit column.
Let us use the example on page 4 to make a list of accounts of Akeza’sbusiness as at the end of March, 2023
Note: when details about opening and closing stock balances are given, the
opening stock balance is used in the trial balance while the closing stock
balance is used to prepare the income statement and balance sheet.
Example 7:
The following balances were extracted from Claudine Enterprises’ books as ofDecember 2020. Extract the trial balance.
Application Activity 1.2
The following balances were extracted from the books of Umucyo BusinessClub as at the end of December 2020. Prepare the trial balance.
Additional information:The closing stock as at 31st December 2023 was 28, 000FRW.
End of Unit Assessment
I. Project Activity
Given the following prime books extracted from XL business club’s
accounting books as at 30th November 2023, post the information torespective ledgers and there after extract a trial balance
XL BUSINESS CLUB
General journalFOR THE MONTH OF NOVEMBER 2023
XL BUSINESS CLUB
Return inwards journal
FOR THE MONTH OF NOVEMBER 2023
2. Explain the following terms:
i) Ledger
ii) Trial balance
3. Why is important to prepare trial balance.
4. Explain the steps that are taken to prepare a Trial Balance
5. Explain the term ‘Posting’?
6. The following information was extracted from the books of Kezalimited on 31st December 2020.
Required: Prepare the Keza limited’ trial balance as on 31st December 2020
Files: 2Unit 2: Financial Statements
Key Unit Competence
To be able to prepare a balance sheet, income statement, and cash flow
statement.
Introduction
Business enterprises in today’s world take it as a requirement to ascertain
their performances at the end of every year (trading period). This can only be
attained by preparing different financial statements (final accounts).
The knowledge and skills acquired from the previous unit will enable you to
better understand the source of information used in financial statements.
This unit will enable you to prepare a balance sheet, income statement and
cash flow statement.
Introductory Activity
Read the scenario below and use it to answer the questions that follow.
James is a local entrepreneur in Huye town. He is so passionate and
committed to solving community problems in his hometown and the
nation at large. This made him start a crafts business. He travels to villages
and collects crafts from women groups to sell in his shop. His shop is
strategically located to attract tourists visiting Nyungwe Forest. James
has a book to record all daily sales, supplies, and operating expenses. He
thought it was the best way to keep track of all business transactions.
He desired to expand the business and believes that 5 million Francs would
be enough. His sister Uwera, a student of entrepreneurship, advised him to
approach investors and banks and pitch his business to convince them to
provide funding to enable him meet the business’s growth needs.
The investors only gave him 10 minutes to explain the profitability of his
business, the net financial position, and the financial projections he needed
for the next two years, but this presented a challenge because the book
he kept could not easily provide this information in the given time, so hefailed to convince the investors and missed out on the funding.
James realised he needed to organise the financial information he was
keeping in a specific order so that he could make quick decisions and make
it more presentable and easier to explain to investors.
Questions.
1. What types of documents would James have used to organise his
business’s financial data before presenting it to investors?
2. Do you think it was necessary for James to prepare those
documents? Justify your answer
3. What key information should be included in those documents?
2.1. Meaning and importance of Financial Statements
Learning Activity 2.1Study the quote below and respond to the questions that follow
Questions.a) What does the quote above mean to you as a student of2.1.1. Meaning of Financial Statements
entrepreneurship?
b) Why does the author of the quote emphasise the reliability of the
financial statements?
c) What do you mean by financial statements?
d) Why should entrepreneurs prepare financial statements for theirbusinesses?
Financial statements are the reports prepared by a company’s management
to present the financial performance and position at a point in time. External
users of accounting information like investors and creditors are more interestedin financial statements than books of accounts.
2.1.2. Importance of Financial Statement
Other importance of financial statements may include.
◾ To determine whether a business can pay back its debts.
◾ To track financial results on a trend line to spot any looming profitability
issues.
◾ To derive financial ratios from the statements that can indicate the
condition of the business.
◾ To investigate the details of certain business transactions, as outlinedin the statements’ disclosures.
Application Activity 2.1
JYAMBERE cooperative is a cooperative of 3,000 rice farmers that was
established in 2016. The cooperative collects and sells the members’
produce at a competitive price, allowing them to generate a lot of revenues
of over 50,000,000FRW every month. The money generated is used to
meet all the necessary costs. Their annual incomes and expenses reports
portray a lot of profits made by the cooperative. Using the scenario of the
JYAMBERE cooperative,
a) What do we call those reports in business?b) Why is it important to make those financial reports?
2.2. Types of financial statements
Learning Activity 2.2
a) Refer to your school business club and identify some items that may
be considered as expenses, revenues, assets, and liabilities.
b) Which financial reports does your business club prepare when
preparing for a general business club assembly? What do they include?
There are four main types of financial statements: Income Statement, Balance
Sheet, Cash Flow Statements and Statement of Owners Equity.
a) Income statement: this is a financial statement that reports a company’s
financial performance over a specific accounting period. Financial
performance is assessed by giving a summary of how the business incurs
its revenues and expenses through both operating and non-operating
activities. This statement is composed of two sections namely trading
account, and profit & loss account.
• Trading account
A trading account is an account which is prepared to determine the
gross profit or the gross loss of a trading business. It involves the
treatment of:
– Sales
– Stock (opening and closing stock balances)
– Purchases– Direct expenses i.e. purchase wages, carriage inwards
• Profit and loss account
The profit and loss account is prepared to determine the net profit
or loss after all expenses have been charged. It is prepared after the
trading account is completed. It is prepared in the following flow:– It starts with the gross profit figure from the Trading Account.
– It then lists any items of additional revenue raised by the as well
as any expenses incurred by the business not directly linked to
trading. Business. The sum of a gross profit or loss and additional
revenues is called “Gross income”,
– It shows the net profit (or loss) for the reporting period (the net
profit equals the gross income minus all expenses.b) Balance sheet/statement of financial position: this is a statement which
reflects the financial position of the firm at the end of the financial year.
The balance sheet helps to ascertain and understand the total assets,
liabilities and capital of the business. One can understand the strength
and weakness of the business with the help of the balance sheet.
The balance sheet is composed of the following three main parts:
– Assets
– Liabilities
– Capital
Assets
These are possessions owned by the business and have got money value.
They are grouped into fixed assets and current assets.
While fixed assets are the possessions of the business which are of a durable
nature bought for use in the business for a long period of time usually above
one year. E.g. land, equipment, machinery, motor vehicle etc. current assets
are possessions or properties of the business which last for a short time and
can easily be changed into cash. Current assets keep on being converted
from one form to another e.g. stock of goods, debtors, and cash at hand,
cash at bank, prepaid expenses or expenses paid for in advance, outstanding
income etc.
Liabilities
These are debts or amount of money that the business owes the outsiders.
They are claims of outsiders on the business’ assets. Properties/possessions
that are used by the business and which must be paid back in future. They
are grouped into long term liabilities and short term liabilities.
While long term liabilities refer to debts of the business that are expected to
be paid after a long time usually after one-year e.g. bank loans, debentures,
short term liabilities/current liabilities are debts of the business to be paid
within a short time usually within a year.
Owner’s equity
This is defined as the proportion of the total value of a company’s assets thatcan be claimed by its owners.
Mr. DUSABE and his wife KEZA are in agribusiness. They grow tomatoes on
a small farm. They paid labourers 4,500,000 FRW, transported tomatoes
to the market at 1,000,000 FRW, bought seeds at 200,000 FRW, and leased
land for 1,000,000 FRW. This season, the harvest was good with 45 Tons
of tomatoes harvested.
a) How much did DUSABE and KEZA pay for their farming activities?
b) How much did DUSABE and KEZA earn from sales of their Tomatoes,
if 1 kg of tomatoes was sold at 200 FRW?
c) What is the difference between their income received and expenses
incurred from selling tomatoes in their farming activities?
d) What do you understand by an income statement?e) Why is an income statement important for a business?
After extracting a trial balance, the next step is to determine the profit the
business has made during the trading period. This is done by preparing two
accounts, namely:
◾ Trading account where the value of the gross profit is determined by
deducting the cost of goods sold from net sales, i.e., gross profit = net
sales – the cost of goods sold.
◾ Profit and loss account where the value of net profit or net loss is
calculated by deducting expenses from the gross income, i.e., Gross
income – Total expenses.Where Gross income = gross profit or loss + additional revenues
a) Trading account
It is an account prepared to determine the gross profit or loss of the business
concern. It shows the revenues from sales, the cost of those sales or goodssold, and the gross profit
Items found in a trading account
◾ Sales: refer to the revenues collected from goods sold by the
business. It is revenue earned from goods sold. They are entered into
the trading account to calculate gross profit or loss.
◾ Sales return goods that were previously sold but have been returned
to the business.
◾ Net sales = sales – return inwards/ sales return
◾ Opening stock: unsold goods in the business available at the beginning
of the new trading period
◾ Purchases: goods bought by the business for resale
◾ Purchases return: goods previously bought by the business for sale
but have been sent back to the suppliers. This value is treated in the
trading account and is subtracted from the purchases to get the net
purchases i.e., net purchases = purchases – return outwards/purchase
returns
◾ Carriage inwards: refers to the cost of transporting the goods or
bringing the goods up to the premises. It forms part of the goods
bought and hence added to purchases in the trading account.
◾ Net purchases = purchases + carriage inwards – purchases return
◾ Closing stock: goods not sold by the business at the end of a trading
period. It’s included in the trading account, and it is subtracted from
the goods available for sale to get cost of sales◾ Drawings of goods: sometimes an entrepreneur may take physical
items out of the business for private use; this must be subtracted
from the goods available for sale in the trading account. It should be
noted that only drawings in the form of goods must be treated in the
trading account.
◾ Gross profit: excess of net sales over the cost of goods sold or cost of
sales. It also refers to the total profit obtained by an enterprise before
paying off the operating expenses. Thus
◾ Gross profit = net sales – the cost of sales
◾ Gross loss: this is the excess of the cost of sales over the net sales
of the business.
Format of a trading account
There are two formats used to prepare a trading account. i.e.
◾ Horizontal
◾ Vertical formatHowever, this unit will use the vertical format only.
Example
a) The following information was extracted from the books of Kalisa Limited.
Opening stock------------------------154,000 FRW
Purchases------------------------------1,800,000 FRW
Sales------------------------------------2,500,000 FRW
Return inwards-----------------------55,000 FRW.
Return outwards---------------------48,000FRW
Closing stock--------------------------80,000 FRW
Wages on purchases------------------30,000FRW
Carriage on purchases----------------20,000FRW
Required; Prepare KALISA’s trading account for the month ending 31st
December 2020 using a vertical method.
b) Profit and loss account
This is the final account or statement prepared by the business at the end
of the trading period to determine the business’s net profits or net losses.
It begins with the gross profit or loss transferred or brought down from thetrading account.
Elements of a profit and loss account
◾ Gross profits/loss: this is transferred from the trading account as
balance b/d
◾ Supplementary income refers to all income or revenue that the
business earns from sources other than sales. A company may earn
income from other sources apart from sales, which are treated in
the profit and loss account by adding them to gross profit. Examples
include; the discount received, the commission received, rent
received, and bad debts recovered. Etc.
◾ Operating expenses are the costs incurred by the business on services
that help in the regular operation and running of the company. Such
expenses include; transport, electricity, rent, insurance/premium,
carriage outwards salaries, water bills, postage discount allowed,
advertising, and communication. In the profit and loss account the
total operating expenses are subtracted from the total income or
gross income to get net profit or a net loss.
◾ Net profits/loss: excess of gross profits over the business’s expenses
at a given period. Therefore, Net profit= gross profit + supplementary
income – total expenses.
There are two formats used to prepare a profit and loss account i.e.
◾ Horizontal
◾ Vertical formatHowever, in this unit will use the vertical format only.
Required: Prepare the profit and loss account for the year ended 31st December2020 using vertical format.
Note: when both the trading account and profit and loss account are prepared
within one statement, the statement is referred to as “Income statement” or“Trading, profit & loss account”.
Application Activity 2.3
The following is the Trial Balance of the company M&N Ltd for the year
ended 31 December, 2017:M&N Ltd Company Trial Balance as on 31.12.2017
Additional information:
Closing Inventory 8,000 FRWRequired: Prepare the company’s income statement using a vertical format.
2.4. Preparation of a balance sheet
Learning Activity 2.4
Nyirawimana’s business had the following transactions during the
last month:
• Started business with cash 2,000,000 FRW.
• Purchase goods for cash 500,000 FRW and for credit from Uwineza
600,000 FRW.
• Purchased office equipment for cash 80,000 FRW.
• Paid office rent 10,000 FRW.
• Sold goods for cash 1,000,000 FRW
• Sold goods on credit to Kalisa for 160,000 FRW
• Bought insurance on cash for 50,000 FRW
• Salary due to her employee was 15,000 FRW
• The stock at the end of the month was 300,000 FRW
Questions
Using Prior knowledge on prime books you acquired from Unit 10 in Senior 5,
a) Identify what the business owns as at the end of the month.
b) Identify what a business owes to outsiders at the end of the month.
c) What do we call what a business owns?
d) What do we call what a business owes to outsiders?
e) How is a balance sheet different from an income statement?
f) What do you understand by the term balance sheet?
g) Why do you think it is important for a business to prepare a balance
sheet?
The balance sheet is prepared following the preparation of the income
statement. A balance sheet is not an account, therefore, not part of the
double entry, but it is prepared based on the ACCOUNTING EQUATION, which
states that: Assets =capital + liabilities
Parts of a balance sheet
There are three major parts of a balance sheet. i.e., Assets, Liabilities, CapitalAssets
These are possessions of the business and have got money value.
They are grouped into two.
◾ Fixed assets
◾ Current assets
Fixed assets: These are the business’s durable possessions, usually above
one year. E.g., land, equipment, machinery, fixtures and fittings, motor
vehicles, etc.
Current assets: Possessions or properties of the business which last for a
short time and are usually changed into cash. Current assets keep being
converted from one form to another, e.g., stock of goods, debtors, cash at
hand, prepaid expenses or expenses paid in advance, outstanding income,
etc.
Liabilities
These are debts or money that the business owes the outsiders. They are
claims of outsiders on the business’ assets. There are two types of liabilities:
◾ Long term liabilities◾ Short term liabilities
Long-term liabilities: These are debts of the business that are expected
to be paid after a long time, usually after one-year, e.g., bank loans or
debentures.
Short-term liabilities/current liabilities: These are business debts to be
paid within a short time, usually within a year. e.g., trade creditors, bank
overdrafts, outstanding expenses, prepaid income, etc.
Capital
These are the resources invested by the owner or the entrepreneur in the
business. Capital is also known as owner’s equity. To start any business, a
person requires capital in the form of money or other physical resources. The
capital increases or decreases over time.
There are two formats used to prepare a balance sheet i.e.
◾ Horizontal
◾ Vertical formatHowever, this unit will use the horizontal format only.
There are two ways of arranging items in the balance sheet: Order of
permanency, which involves recording items that the business will keep
for a long time first. E.g., fixed assets, current assets on the debit side and
capital, long-term liabilities, and current liabilities on the credit side.
Order of liquidity; items that the business will keep items for a short time
are written first. E.g., Current assets, then fixed assets on the debit side and
current liabilities, long-term liabilities, and capital on the credit side.
Example
The following balances were extracted from the books of UWERA’s businesson 31st Dec 2021
The following additional information was available:
Inventory as of 31st December 2021 was valued at 4,500 FRW
Required.
Prepare Uwera’s balance sheet as of 31st Dec 2021 using the order permanencyand horizontal method.
Application Activity 2.4
The following information was obtained from the books of savannabusiness club as of 31 March 2022.
Required.
Prepare savanna’s balance sheet using a horizontal format.
2.5. Cash Flow Statements
Learning Activity 2.5Analyze the case study and answer the questions that follow.
Mr. MUTWARE has been in business for the last year. At the end of the
year, he received financial statements from his accountant, a graduate
from one of the reputable business colleges in Rwanda. The following washis income statement as at December 31, 2022.
Mutware is confused by this report because he was told that he made a
profit of only 160,000FRW and needs more explanations.
a) Identify what money was spent on and how much?
b) Identify where the business got money from and how much it got?
c) Calculate the difference between money received and expenses
incurred. Is there any difference in the business’ profit?
d) What is a cash flow statement?e) Why do you think it is important for a business to prepare a cash flow statement?
2.5.1. Meaning of cash flow statement
This statement shows the cash inflows and outflows of the business. The
cash flow statement is composed of four components.
Cash inflows show activities that result in cash coming into the business
enterprise, i.e., sources of cash. For example, balance b/d, cash sales, debtors,
share capital, interest earned, and loans. At the same time,
Cash outflows show activities that result in cash going out of the business
enterprise, i.e., uses of cash. For example, cash purchases, salaries, drawings,
licences, rent, taxes, etc.
Balance brought forward (b/f)
Net cash position
2.5.2. Importance of Cash flow statement
◾ It helps to identify the source of cash inflows in the business and how
cash was used.
◾ It helps management properly plan cash to avoid excess cash or
deficits.
◾ It reports the total amount of cash used in long-term investment
activities such as purchasing fixed assets.
◾ It shows the amount of cash received from various financing sources,
such as long-term loans and the sale of shares.
◾ It helps management to avoid liquidity problems by anticipating when
cash is expected to flow in and plan payments accordingly.
◾ It helps investors understand how a company’s operations arerunning, where its money is coming from, and how it is spent.
2.5.3. Preparation of Statement of Cash Flows
While preparing the cash flow, we will look at each section of the statement
of cash flows and put them all together. There are two methods of cash flow
statements.
Direct method
The direct method for creating a cash flow statement reports major classes ofgross cash receipts and payments (Cash inflow and cash outflow)
Example
Prepare Dudu’s cash flow for the month of January, February, March, and April
2006, given the following information below:
◾ Cash balance b/d or b/f in January was 15000, 000FRW.
◾ Monthly rent income was 5000, 000FRW.
◾ Monthly credit sales to be paid in the next month were 4000,000
FRW.
◾ Sold a business van in February 14,500,000 FRW
◾ Monthly commission received was 3000,000 FRW.
◾ Monthly cash sales of 10,000,000 FRW
◾ Monthly cash purchases of 12,000,00 FRW
◾ Bought a truck in January for 800,000 FRW
◾ Monthly salaries and wages 5000,000 FRW
◾ Bought machinery worth 15,000,000rwf, payment of 8,000,000
FRW was made in January and the balance was paid in two equalinstalments during the months of February and March.
SolutionDUDU’S CASH FLOW STATEMENT FOR JANUARY, FEBRUARY, MARCH AND APRIL
Exercise
Given the information below on central trading company ltd (for the month
of April, May & June)
◾ On 1st April 2005 Central Traders Company Ltd had a cash balance of
10,000,000FRW.
◾ It expected monthly cash sales of 5000,000 FRW.
◾ Credit sales were 3,500,000FRW per month, and the payments would
be made in the following months.
◾ Monthly rent income from some of its properties was expected to be
1,000,000 FRW
◾ Monthly purchases were 6,000,000 FRW.
◾ Monthly salaries and wages bills were projected at 800,000 FRW.
◾ A loan from Umwalimu Sacco was 10,000,000 FRW.
◾ Interest Monthly payment of 100,000 FRW on loan.
◾ Monthly raw material for 5000,000 RFW.
Required: Prepare the central trading company’s cash flow statement forApril, May, and June.
Application Activity 2.5
Melissa soft drinks dealers started business on 1st/august/2019 with
50,000,000FRWand a loan of 40,000,000FRW from BPR bank. All
the money was kept in the bank. Interest on the loan per year is
16% on a reducing balance basis over five years. The following arethe projected estimates (in FRW) for the first two years.
You are required to prepare a cash flow statement for the first two yearsof operation.
Skills Lab Activity
From your business club activities, collect data from the transactions
carried out in the last year, then use it to calculate.
a) The Net profit/loss linking to the trading, profit, and loss account.
b) Balance sheet and make a report on how you will improve the financial
status of the school business club.End of Unit Assessment
I. Project Activity
Search for financial statements of a given business, interpret them,
and provide advice on what the business can do to improve financially.
II. Other Assessment Questions
1.
a) Which financial statement displays the revenues and expenses of
a company for a period?
i) Income statement
ii) Balance sheet
iii) Cash flow statement
iv) Statement of owners’ equity
b) What is the primary purpose of financial accounting?
i) Organise financial information
ii) Provide useful financial information to outsiders.
iii) Keep track of company expenses,
iv) Minimise company taxes
c) Which of these is not included as a separate item in the accounting
equation?
i) Assets
ii) Revenues
iii) Liabilities
iv) Stockholders’ equity
d) Which financial statement uses the expanded accounting equation?
i) Income statement
ii) Balance sheet
iii) Cash flow statement
iv) Owners’ equity
e) The account format that displays debits, credits, balances, and
headings.
i) General journal
ii) General ledger
iii) T account
iv) Ledger account
f) Asset accounts have what type of balance?
i) Credit
ii) Debit
iii) Contra
iv) All of the above.
g) Which account increases equity?
i) Expenses
ii) Withdrawals
iii) Stock
iv) Revenues
2. The following is the trial balance of KAMI Ltd as at 31 December
2012. Prepare the company’s trading, profit and Loss account anda balance sheet for the year ended 31 December 2012.
Closing stock is FRW 12,000
3. The following information was obtained from the books of Kanezaand Kamali Ltd Company as at 31 March 2010.
Unit 3: Environment Impact Assessment
Key unit competence
To be able to use EIA to manage the environmental effects of business
activities.
Introduction
You were able to evaluate the impact of economic activity on the environment
in unit 4 of socioeconomic development in S.5 You pointed out that all
economic operations, such as creating infrastructures (such as roads, pipelines,
mines, and tourism facilities, etc.), can have an impact on the surrounding
natural environment in one way or another. This is clear when we look at the
effects of large-scale development, such as open-pit mines, hotels that can
accommodate thousands of people, and large hydroelectric dams, frequently
negatively impact the environment.
Because there is such a strong connection between the natural and human
environments, it is crucial to consider how economic activities, initiatives, and
planned developments might affect the environment’s quality and people’s
well-being.
So, this unit is created to support you in being accountable and ensuring
that all environmental matters are considered early in the project planning
process. It will also help you acquire the knowledge, skills, attitudes, and
values you need to produce relevant EIA reports for the projects you intend
to start.
Introductory Activity
EIA Case Study
The government of Rwanda, through Rwanda Environment Management
Authority (REMA) and EIA guidelines, expects entrepreneurs to be cautious
and careful with goods produced, the technology used, the materials used
for the production, and their probable impact on the human health and
the environment. If the product/project does not meet the standard’s
requirements, it is not permitted for further production, and the owner will
have to change the technology and the structure of the product.
With the ever-increasing urbanisation and population growth rates, the
economic activities, if not well addressed, are bound to negatively impact
on the environmental attributes of the project areas and its surroundings.
Kigali, the country’s capital city, continues to have the most economic
activities and population. With the above economic situation, the economy
and the environment are bound to be affected negatively and positively
and thus entrepreneurs intending to start any project have to prepare
appropriate Environmental Impact Assessment reports showing the most
sustainable and cost-effective way of mitigating any negative impact that
may arise as a result of the implementation of the proposed project.
Questions
Referring to the above case study, answer the following questions.
a) What do the Environmental Impact Assessment guidelines expect
entrepreneurs to be observant of?
b) In what ways can the projects started in Kigali affect the economy
positively?
c) What are likely negative effects of the business activities or projects
to the environment and Kigali community at large?
d) What strategies would you propose to the entrepreneurs in Kigali to
mitigate the likely challenges because of the projects started?
e) Write a simple Environmental Impact Assessment report of the
business idea you intend to start in your community
3.1. Meaning of EIA and its importance
Learning Activity 3.1
Use the background knowledge from the introductory activity above to
analyse the photo below and answer the questions that follow.Source: www.sciencephoto .comWhile entrepreneurs are undertaking economic activities or setting projects,3.1.2. Importance of Environment Impact Assessment
they must be cautious to reduce adverse effects on the environment andhuman beings. This can be done by replacing and/or modifying plannedactivities to reduce negative impacts.Questionsa) What do you see in the photo?b) What do you understand by the term Environmental ImpactAssessment?c) Explain the major purpose of Environmental Impact Assessment.3.1.1. Meaning of EIAEnvironmental Impact Assessment (EIA) is the systematic method fordetermining, forecasting, and assessing the environmental effects ofsuggested actions and projects.Prior to making substantial decisions and commitments, this method is used,with a focus on preventing, minimising, and offsetting the significant negativeeffects of proposed activities.
i) Enabling incorporation of environmental considerations in design and
site selection for a project or development activities.
ii) Providing information beneficial to decision making.
iii) Enhancing responsibilities of relevant parties in the development
process.
iv) Mitigating and minimising environmental damage.
v) Avoiding costs and delays in implementation of projects that would
arise from unanticipated environmental problems.
vi) Making development projects more financially and economically
efficient.
vii) Making an active contribution to sustainable development.Application Activity 3.1
Assume you intend to start one of the projects above.
1. How do you think soil pollution may affect people’s health in
cities?
2. Show how carrying out an EIA process before starting your project
will benefit?
3.2. Roles and responsibilities of stakeholders
Learning Activity 3.2
Scenario
Fig 3.2 Industrialization activities lead to waste disposal which contaminates theenvironment. Source; www.ipsnews.net
Due to the different economic, political, social, and environmental changes
in today’s economy, there’s a need for proper planning for any economic
activity to be implemented. Entrepreneurs are expected to follow proper
EIA guidelines to avoid environmental, human, and economic risks.
The government of Rwanda through REMA ensures the protection and
sustainable management of the environment and encourages optimal use
of natural resources. Different stakeholders have different functions to
perform to execute proper EIA procedures.
a) From the above scenario, identify at least two stakeholders in EIA?
b) As a student of entrepreneurship, you have been approached by
MUTESI Chantal who is planning to start a project of brick laying in her
society. Advise her on the following.
i) What measures should she take to mitigate the likely
environmental challenges caused by her project?
ii) Why does she need to do EIA for her project?
Rwanda is very reliant on its natural resources, particularly its Land, water and
forests. For income and food security, over two thirds of the people work in
agriculture, forestry, transport and tourism.
For any economic activity to be carried out in the current economy, good
planning is required due to the various economic, political, social, and
environmental changes. Businesses must adhere to proper EIA criteria to
reduce hazards to the environment, people, and the economy. Priorities for
adaptation and resilience in Rwanda are based on the 2011 green growth and
climate strategy.
Thus, various stakeholders have a part to play in the EIA process. The roles of
stakeholders are listed below.a) REMA (Rwanda Environment Management Authority)
Mandated by law, REMA has a responsibility to organise the EIA procedure
by undertaking screening, guiding developers on assessment procedures,
conducting public hearings, reviewing EIA reports based on the terms
of reference (TOR) and taking decisions on approval or disapproval of
proposed projects. The Authority is also responsible for monitoringimplementation of environmental protection measures.
Roles of REMA
i) Receive and register EIA Applications (project briefs) submitted by
developers,
ii) Identify relevant Lead Agencies to review Project Briefs and provide
necessary input during screening, iii. Review Project Briefs and
determine project classification at screening stage,
iii) iii. Transmit Project Briefs to relevant Lead Agencies and concerned
Local Governments to provide input on Terms of Reference (TOR),
iv) Publicise Project Briefs and collect public comments during
development of TOR,
v) Approve EIA Experts to conduct EIA studies.
b) Developers
The developer has direct responsibility for the project and should provide
necessary information about the project at all stages of the EIA process.
Developers hire experts to undertake EIA studies on their behalf and
answer questions about potential impacts and proposed mitigation
recommendations at public hearings. Developers have the responsibility
to implement the environmental management plan including mitigation
measures as proposed in the EIA report and carry out subsequent
environmental monitoring and auditing.
Roles of Developers
i) Prepare and submit EIA applications (in form of Project Briefs) to
REMA,
ii) Hire experts to undertake EIA studies on their behalf,
iii) Prepare and append an addendum (Environmental Impact Report
Addendum) to the EIA report (if necessary),
iv) Submit the EIA report, Environmental Management Plan and the EIA
Report
v) Addendum (if applicable) to the Authority,
vi) Participate in public hearings and implement terms and conditions (if
any) REMA attached to approval of their projects.
c) Lead Agencies/Line Ministries
Lead agencies such as government ministries or departments +Lead
agencies have the responsibility to take part in EIA of projects under their
sectors. They provide valuable technical information to EIA experts duringEIA studies and are involved in the review process.
Roles of Lead Agencies/ Line Ministries
i) Participate in screening at the request of REMA,
ii) At the request of REMA, review Project Briefs to advise on Terms of
iii) Reference, iii. Ensure that their own projects adhere to EIA
requirements,
iv) Ensure that private-sector projects in fields over which they have
jurisdiction comply with EIA requirements,
v) At the request of REMA, they can serve on REMA’s Technical &
executive committee.
Application Activity 3.2
Concerns regarding how business owners involve the broader population
in the planning and execution of their projects have emerged in your
neighbourhood.
Explain how you would involve the community in the EIA process given
the project you plan to launch in your neighbourhood.
3.3. Environment Impact Assessment procedure
Learning Activity 3.3
For an EIA report to be finally submitted to the authorities (REMA offices of
a given district), there is a process that developers must go through. Given
your knowledge and background about EIA so far and for the project you
intend to start.What activities should one focus on during the EIA procedure?
Environment Impact Assessment in Rwanda consists of the following
procedures.
Project Brief Submission and Registration. As a first step in the EIA process,
a developer proposing to start a project shall notify REMA in writing by
submission of a Project Brief. The purpose of a Project Brief, which is to
provide information on the proposed activity so as to enable REMA and Lead
Agencies establish whether or not the activity is likely to have significant
impact on the environment, and thus determine the level of EIA necessary.
Scoping and consideration of alternatives. The responsibility for scoping is
done by developers (or their EIA experts) in consultation with Lead Agencies
and all relevant stakeholders. Scoping is intended to establish important
issues to be addressed in the environmental impact and eliminate the
irrelevant ones. After scoping, REMA approves the terms of reference that
would be used for carrying out the environmental impact study.
Baseline data collection and Analysis of Initial State. Baseline data describes
the status of the existing environment at a location before intervention of
the proposed project. Site-specific primary data on and around a proposed
site should be collected by experts conducting the environmental impact
study to form a basis for future environmental monitoring.
Impact prediction and analysis of alternatives. Impact prediction is a
way of forecasting the environmental consequences of a project and its
alternatives. This action is principally a responsibility of an EIA expert. For
every project, possible alternatives should be identified, and environmental
attributes compared. Alternatives should cover both project location and
process technologies. Alternatives should then be ranked for selection
of the most optimum environmental and socio-economic benefits to
the community. Once alternatives have been analysed, a mitigation plan
should be drawn up for the selected option and is supplemented with
an Environmental Management Plan (EMP) to guide the developer in
environmental conservation.
Public hearing. After completion of the EIA report, the public must be
informed and consulted on a proposed development. REMA may, if it deems
necessary, conduct a public hearing before EIA reports are appraised by its
technical committee. Any stakeholders likely to be affected by the proposed
project are entitled to have access to unclassified sections of the EIA report
and make oral or written comments to REMA. REMA shall consider public
views when deciding whether or not to approve a proposed project.
Decision-making. During the decision-making and authorization phase,
EIA documents submitted to the Authority are reviewed by two decisionmaking committees: a technical committee and an executive committee
constituted by REMA. If the project is approved, the developer will be issued
with an EIA certificate of authorization, which permits implementation of
the project in accordance with the mitigation measures in the EIA report and
any additional approval conditions.
Environmental Monitoring. Monitoring should be done during both
construction and operation phases of a project. It is done not just to ensure
that approval conditions are complied with but also to observe whether the
predictions made in the EIA reports are correct or not. During implementation
and operation of a project, monitoring is a responsibility of the developer
and REMA.
Application Activity 3.3
As an entrepreneurship student, the Sector Education Officer for your sector
has requested you to screen one of the major projects in your community.What aspects of the screening would you prioritise, and why?
3.4. Components of EIA report
Learning Activity 3.4
Your sector is running a youth empowerment program aiming at making
youths start sustainable projects in their communities. One of the conditions
is that for every group of youth to qualify for the program is to develop an
EIA report of the project that will be supported.
Using the information about the EIA report. write a simple EIA report forthe project you would present to the sector to win the above support.
According to REMA, the EIA report should entail the following:
i) Executive summary of the EIA report which should be brief and focus
on following matters:
◾ Name and location of the project.
◾ Name of the developer
◾ Name of the agency preparing EIA report.
◾ Main impacts identified.
◾ Mitigation recommendation
◾ Environmental monitoring plan
ii) Objectives of the project, including ideas, intentions, and particular
objectives.
iii) Description of the proposal and its alternatives. In this part, it is necessary
to describe in detail the proposed project and its alternatives including
those not subjected to pre-feasibility study or feasibility study.
iv) Discussion on the proposal and its relation to relevant policies, laws,
and programs (sectoral and regional). In this section, the proposal must
be shown to be in line with policies, laws, institutional framework, and
development strategy of Rwanda.
v) Impact assessment that includes assessment of all impacts to the local
population and measures to avoid and mitigate impacts.
vi) Evaluation and comparison of alternatives and selection of one
that is environmentally suitable that shows impacts with largest
effects, measures for avoiding, mitigating and managing them and
environmental improvement opportunities.
vii) Impact management and environmental monitoring plan (EMP).
This is a plan for monitoring and management of impacts during the
implementation and operation of the project, where the responsibilitiesbetween the state and investor are differentiated.
Skills Lab Activity
Create an EIA report for your respective projects in the student businessclub or an identified business nearby
End of Unit Assessment
I. Project Activity
REB in partnership with Educate! is running a youth empowerment
program aiming at making youths start strong viable and sustainable
projects in their districts. They will choose the best 5 projects to be
supported.
Prepare an EIA report for the project you would present to win the
above support.
II. Other Assessment Questions
Part A (Multiple choice questions)
Choose the most appropriate answers.
1. EIA is defined as (select one):
a) A process of identifying, predicting, and evaluating the likely
impacts of a proposed project or development to define
mitigation actions to reduce negative impacts and to provide
positive contributions to the natural environment and wellbeing.
b) A report written by government representatives on the planned
development impacts of environment, socio-economic issues,
and culture.
c) Project life-cycle assessment.
2. What is essential in an EIA? (Select all that apply):
a) That it allows decision makers to assess a project’s impacts in all
its phases.
b) That it allows the public and other stakeholders to present their
views and inputs on the planned development.
c) That it contributes to and improves the project design, so that
environmental as well as socioeconomic measures are core
parts of it.
3. What is the purpose of the “screening” step of EIA? (Select all that
apply).
a) To assess the quality of the project design.
b) To facilitate informed decision making by providing clear,
well structured, factual analysis of the effects and consequences of
proposed actions.
c) To determine whether a full EIA is needed
4. Which type of project usually requires an EIA? (Select all that
apply):
a) Small housing building.
b) Dams and reservoirs.
c) Industrial plants (large scale).
d) Community Garden development.
e) Irrigation, drainage, and flood control (large scale).
f) Mining and mineral development (including oil and gas).
g) Port and harbour development.
h) Development of wells in the community.
i) Reclamation, resettlement, and new land development
j) Thermal and hydropower development.
k) Outdoor recreation.
5. EIA is usually required for a development project when (select
all that apply):
a) Large changes are expected in the environment.
b) Limited impacts are expected in the environment.
c) A small area is expected to be affected by the project
d) There are potentials for transboundary impact.
e) Many people are likely to be affected by the project.
f) No cumulative impacts are expected.
g) There are protected areas in the project area of influence.
6. What specific aspects does a good EIA report and review include?
(Select all that apply);
a) Assessment, mitigation measures and related plans.
b) Terms of reference (TOR).
c) A generalised set of assumptions about the project benefits
described in highly technical terms.
d) A satisfactory prediction of the adverse effects of proposed
actions and their mitigation using conventional and customised
techniques.
e) Information that is helpful and relevant to decision making.
7. What kind of monitoring is referred to when we speak of
monitoring a development project (select all that apply?)
a) Monitoring indicators that measure the impacts on theenvironment and communities because of the development project.
b) Ensuring the fulfilment of all the commitments made in the
approved EIA.
c) Keeping track of changes that may happen in the environment
and communities because of the project and other local and/or
global changes, such as changes in livelihoods due to economic
crisis or migration, differences in water availability due to
drought, etc.
d) Keeping track of the political context, to ensure that the project
retains its licence.
Part B (True/False questions)
8. Frequency of monitoring will be determined by the nature of the
project.
9. A good quality EIA might still lead to the planned development
not being permitted to go ahead based on the identified impacts.
True or false?
10. The EIA Report is compiled by the designated government agency.True or false?
Unit 4: Business plan bitch
Key unit competence
To be able to pitch a business plan
Introduction
You were introduced to a business plan in O level and the business model
canvas in S5 . The knowledge and skills you attained from there will enable
you to plan and prepare the projects of your own choice. This unit will enable
you to confidently pitch the businesses you want to start in your communities.
This unit will as well equip you with confidence to present your projects to
attract investors for funding your projects.
Introductory Activity
EAST AFRICAN YOUNG ENTREPRENEURS’ PROJECT SHOW
Muhoza and Mazimpaka were delighted to attend the East African
Young Entrepreneurs’ Project Show (EAYEPS) held in Tanzania in 2020
representing young Rwandan entrepreneurs. Participants included youths
from Kenya, Tanzania, Uganda and Burundi. The event was sponsored by
many international companies including MTN, Airtel, Mango, East African
Breweries, safari com, RDB etc.
Muhoza presented the Huza App project whose aim is to connect local
and international farmers with customers without physical interface
(online). She started this business while in senior 5 after realising that most
remote farmers have less access to bigger markets in Rwanda, from time
to time the business expanded to even support urban and international
agriculturalists.
Muhoza’s project was unique because it favoured both customers with or
without the internet since it provided a USSD (customers can use mobile
phones to access services of the business) as well as a web-based platform
(can use computers or smartphones.)
Before the actual event, Muhoza prepared 2 pages of her business project
and shared them with her mentors, families, and friends for feedback.
From the feedback, she managed to write a good presentation about her
business and started to practise. This practice involved pitching to her
ENTREPRENEURSHIP FOR GENERAL EDUCATION | Senior 6 66
mentors and friends and gradually growing her presentation and pitching
skills.
This made Muhoza pitch her project excellently and became the lucky
winner of the show and was awarded a cheque of $20,000 to expand
her project. The second, third, fourth, and fifth were given $5000, $4000,
$2000, and $1000 respectively and the rest were not awarded any prize.
Questions
a) How is pitching a given project important to entrepreneurs? Refer to
the above case study.
b) What do you think enabled Muhoza to emerge as the winner?c) What steps did she use to prepare her business plan pitch?
4.1. Meaning and Importance of business plan pitching
Learning Activity 4.1
Patrick and Grace are having a conversation. Read it and answer the
questions that follow.
Patrick: I fear talking to people. I don’t know why.
Grace: But Patrick! You easily talk to me and your peers.
Patrick: I know, but I can’t easily talk to elders and leaders, yet I need to
tell the leaders of my sector about my business. You never know if they
can connect me to potential funders.
Grace: That’s a good idea, tell me about your business.
Patrick: It is a simple business, I create charcoal from used papers and sell
it to people around my community.
Grace: So, is that hard to explain to elders and leaders in your sector? I think
if you start talking first with friends and family, you will gain confidence.
Also, it can help to attract many customers and secure funds for investors.
Patrick: Thanks for your advice, Grace. I am really looking forward to
getting people who can fund my business.
a) From this statement said by Patrick in the dialogue above, “…I need to
tell the leaders of my sector about my business”. What do you think
pitching means? Relate your answers to the whole dialogue as well.
b) Why was Patrick interested in talking about his business to elders andleaders?
4.1.1. Meaning of a pitch
In business, a pitch refers to the presentation of ideas designed to attract
investors, get feedback to improve your business. Generally speaking,
consider pitching as a motivating action for your company. You might be
making a pitch for new clients, investments in your organisation, or even new
employees to come on board. The goal is to inspire the audience to join you
by sharing your vision for your work with them.
4.1.2. Importance of Pitching
It’s important to remember that a pitch to an investor may not strictly seek
startup capital. For example, a business may need an investment when it has
an unexpected but very profitable order beyond its current capacity. Such
a pitch is easier to make because investors feel far more secure with the
purchase order in hand.
◾ Business funding: a good business plan pitch enables an entrepreneur
to get funds for either starting up a business or expanding the already
existing one.
◾ Attracting investors: a good business plan pitch helps an entrepreneur
to persuade potential investors for both technical and financial
support.
◾ To share a clear picture of business: It enables the audience to
understand the business’ nature of operation and strategy
◾ Attracting customers: A well and persuasive presented pitch attracts
potential customers.
◾ Business positioning: Business plan pitching offers an opportunity
for creating a good impression to investors and potential clients.
◾ Boosting network: A well-presented business plan pitch persuades
the targeted audience. In this process, the entrepreneur increases the
level of his or her network.
◾ Communicate the brand message: A good pitching positions the
business brand well. Therefore, offering a good platform for sharing
the brand message with the targeted clients.
Application Activity 4.1
Your close friend has got a chance to pitch his or her business idea during
the Business Expo happening at Kigali Arena in two weeks’ time, but he/
she is hesitant. Write a letter explaining to her/him why she should go
ahead and pitch her business.ENTREPRENEURSHIP FOR GENERAL EDUCATION | Senior 6
4.2. Preparation of a project pitch
Learning Activity 4.2
Using the project of your choice that you can start after school, prepare a
business idea pitch that you will present to the class. Relate to the previous
case study to easily help you tackle the activity. What would you do as youprepare to pitch your business idea?
4.2.1. Preparation required
Preparation required for the pitch at this stage are as follows:
i) Content preparation: A good pitching effort requires great supporting
documents. Once you have the basics down, it’s pretty easy to prepare
all of these documents as needed. A good business pitch requires a
business plan conveying a few things quickly: the mission and vision,
the problem you solve, the solution you provide, and the people you
do it for.
ii) Materials needed for the presentation like powerpoint presentation,
projectors, invitations to your audience, venue or place for pitching
iii) Psychological preparation: Business plan pitching has to be planned
well by the owners of the business venture. There are specific steps
that should be followed in order to have the best persuasive pitching.
Your business pitch should be clear, concise, and persuasive. It should
explain what your company does, what problem it solves, and why it’s
a good investment.
4.2.2. Steps involved in preparation of business plan pitch
i) Analysis of the audience: Knowing the audience, one is going to
present the business plan pitch to determine the presentation, content
selection, pitching techniques, approaches, and anticipation of the
questions likely to be asked.
ii) Select a topic: Select a topic based on the problem to solve, and the nature
of the audience/ potential investors. The topic should be phrased in a way
that will persuade the audience.
iii) Define the pitching objective: The right business plan pitching objectives
enable the team to convince potential investors. This means that one must
have in mind why they are pitching their business idea, and work towards
delivering a successful pitch that can make them raise the capital needed.
iv) Prepare the body of the business plan pitch: The content of the business
plan pitch is expected to be organised in a sequential way. This therefore
calls for having a clear and understandable body of it. The smarter and well
organised the content presentation, the better the chances of winning the
attention of the investors.
v) Anticipate the questions from the audience: While preparing for the
business plan pitching, one must anticipate the possible questions likely to
be asked by potential investors. Then, list them down and brainstorm the
appropriate answers to the questions. This will enable one to avoid being
caught unawares.
vi) Prepare the suggestions and conclusion: It is good if you list various
suggestions that make the business venture unique. The suggestions must
reflect the new thing the business venture will bring to the community.
Suggest to the investors the possible solutions to the problem to be solved
and how they will benefit from the investment.
vii) Practice pitching of business plan (Micro- pitch): The team that intends
to pitch, should get the time and practice pitching the business plan. This is
important because it increases one’s confidence and having an opportunity of
getting feedback from teammates prior to the actual day of pitching.
4.2.3. The key items to cover in business plan pitch
A business venture owner to be able to persuade potential investors must
take note of the following in his or her business plan pitch:
i) Business idea and goals: A business plan pitch must address the
business idea to be pitched for. This should be clear and precious so
that potential investors are able to understand it. It must also contain
SMART goals. These two aspects are very fundamental in the business
pitching process. With no clear business idea and goals, it means the
presentation content will be irrelevant to the audience.
ii) Problem identified: The business plan pitch is developed around
the identified problem. The business venture, therefore, comes to
provide a solution. This is what the investors love to hear. The problem
identified must be affecting the community, not a specific individual.
The business idea being pitched should be worth investing in.
iii) Solution: The business plan pitch should clearly show the innovative
and creative solution that the business venture will execute in
addressing the problem at hand. The solution should be unique and easy
to implement. The more convincing solution increases the chances of
persuading potential investors to invest their funds into one’s business.
iv) Target Market: A pitching team must understand the target market.
This calls for serious research and study, and where possible the
projected market share percentages. This is very important because it
will provide a guide on the financial projections. The profitability levels
of the business form part of the convincing parts of the business plan
pitch content. The beachhead market and general market segmentation
targeted should be catered for.
v) Marketing strategy: The business plan pitch should show and describe
clearly the market strategy to be used. This determines the profitable
probability level of the business venture to be invested in. The investor
would like to know the marketing strategy to be employed. Therefore,
it is very important to take time and make clear research and study
the marketing strategy. One may have a wonderful business idea, but
if the marketing strategy is poor, chances of profiting from the venture
become low, hence discouraging potential investors.
vi) Industry Analysis: There must be a part of industry analysis in the
business plan pitch deck. For example, if the business idea deals with
Renewable energy, therefore, make research on the energy sector and
have data to use in the presentation.
vii) Management Team: The capability of the team that will be engaged
in managing the business venture is very important. Include this on
the pitch deck. Potential investors wish to know if they invest in the
project, will the team manage to handle the funds and generate profit.
viii) Competition: Knowing and understanding the competitors is very vital
to the success of a business. Therefore, potential investors would like
to know if you really know the competitors. In a business plan pitch, it
is very necessary to mention the competitive advantage that favours
the business. The competitors’ weaknesses and strengths should be
analysed so that one is able to provide a unique solution that would
out-compete them.
ix) Current status, amount of money requested, and the projected use
of funds: This is a very important section of the business plan pitch.
The potential investors need to know the financial abilities of the team
in order to make informed financial decisions. The financial status ofthe business venture should be honestly shown.
Application Activity 4.2
During the vacation, you are contacted by a women’s association that
has a start-up business specialising in Biogas production. The business
aims at supplying this biogas to all low-income earning homesteads in the
village, at an affordable fee. However, they would like to raise capital from
potential investors to be able to do so.
Questions
a) Prepare a one-page guide that you will give to the association
highlighting the steps they would follow and the key items they
would consider to have a successful pitching and win the interest of
the investors.
4.3. Activities performed during pitching
Learning Activity 4.3
Referring to the case study about East African Young Entrepreneurs Project
Show (EAYEPS) in the introductory activity, analyse it again to suggest
techniques you think Muhoza used to pitch her project successfully andemerged a winner of the show.
4.3.1. Techniques used to pitch the business project
Capital is a driving factor in the growth and development of a business.
Therefore, it is very important to master the best ways and techniques of
persuading potential investors. The following are some of the techniques onecan use in a business plan pitching:
i) Writing only key points: It is very important to write points of the
pitch presentation points. Avoid congesting the pitch deck with a lot of
information.
ii) Avoid reading directly the content: Reading the business plan pitch
deck content in front of potential investors must be avoided. Speak to
the audience more about the product and services. This helps them to
gauge the confidence and mastery level of the person advancing for
the business venture they would invest in.
iii) Using visualisation, pictures, symbols, colours, tables: These attract
the attention of the investors and carry in a summarised and precise
way much information needed by the investors. The visual impression
is very important and selects wisely good colours
iv) Make it short, concise, and come to the point: Time management
while pitching is very crucial. In most cases, the potential investors
have no time for a lengthy presentation. It is, therefore, important to
make the business plan pitch short in order to fit into the tight schedule
of the audience. It should not be more than 10 minutes. The lesser time
spent during the presentation the better.
v) Reacting positively to questions: When conducting business plan
pitching, one must stay calm and professionally respond to any
question asked with the highest level of humility. Observing ethical
considerations as one is pitching is very important.
vi) Using body language, voice, and appearance: The salesman or the
team representative pitching must have all the needed communication
skills, the most outstanding are the use of body language, voice, and
appearance. Sometimes people underscore the importance of the
way they appear, while pitching, but this communicates a lot to the
audience. Use the easiest language. The voice must be appropriate.
Practising before the actual pitching time helps to perfect this.
vii) Trying to convince: Business plan pitching is all about persuading the
investors to buy the idea and accept to provide funding. Make sure
that this golden rule never goes out of the mind from the start of
the pitching up to the end. Pitching is all about convincing potential
investors to fund the business idea implementation.
4.3.2. The Real Pitching Process
For a successful pitching activity, one needs to put more focus on the following:
a) Greeting & thank audience for the attendance
b) Start with the Problem / gap identified after market analysis
c) Business idea and goals (Solution)
d) Target market
e) Benefits to the investors & society
f) Amount of money requested, projected use of it, and the anticipated
Returns
g) The call to investors
h) Thank the audience
4.3.4. Activities performed after pitching
a) Receive feedbacks
b) Integrate the suggestion & recommendations
In a nutshell, when preparing for a business plan pitching session, it
is important to know that there are three main stages one should go
through while planning to pitch for a business as shown in the belowtable:
Application Activity 4.3
Reflect on the problem you identified in the introductory activity, and the
solutions. Incorporate the above techniques and present your businessidea pitch.
End of Unit Assessment
I. Project Activity
You have been selected to represent your Sector as a S.6 leaver student
in the community to participate in Rwanda young entrepreneur’s
projects competition sponsored by RDB and Serena hotel and the
competition is to take place in 2 months’ time from now. This is the
only chance for you to get capital from sponsors / interested investors
for the project that you have been dreaming of for many years.
Required
a) Use your project and describe the steps you will follow to prepare
pitch for your project
b) Show the key items you will consider while preparing pitch for
your project
c) What techniques will you use to emerge the winner of the
competition so that you get capital for your project?
Make a simple report summarising how you will pitch the project youpresent during the competition.
II. Other Assessment Questions
1. In the community there are many start-ups that are competing
for a grant. Now, as a senior 6 student who has studied
business plan pitching, you have realised that one of the
start-ups has little or no knowledge of business plan pitching,
yet with a wonderful business idea that would change the
livelihood of many homesteads. By coincidence, this start-up
approaches you for help. The client, Twifashe Ltd, a start-up
that developed a state-of-the-art water filtration system that
is portable and uses solar energy for boiling the water in one
of the sections. The filtration device is designed to be used by
low-income earners who have no access to clean water and
like taking tea. The product depends on solar energy for boiling
water. While the start-up is self-assured that it will be able
to persuade clients to purchase its device, the owners are in
serious need of funds in order to start production and attain
economies of scale.
Required
The role of someone with Business plan pitching knowledge and
skills is to prepare a business plan pitch deck that Twifashe Ltd
can use to persuade investors to support the company.
a) Explain the meaning of a business plan pitching
b) Analyse the purpose of a business plan pitching to the growth
and development of a business.
c) dentify a given business idea and prepare a business plan pitch
deck for it.
2. Explain the steps involved in the preparation of a business planpitching.
URL: 1Unit 5: Taxes and Customs Procedures
Key unit competence
To be able to interpret tax computations and declare goods/services from
customs.
Introduction
You were introduced to taxes and customs procedures in O-level, this implies
that the knowledge, skills, and values acquired in relation to taxes will help
you to understand the concepts throughout the unit. This unit will concentrate
more on the different types of taxes collected locally and on cross-border
trading activities and their computations.
Introductory Activity
Read the following extract and answer the questions that follow.
A tax is a fee without a direct exchange requested to the members of the
community by the State according to the law, to financially support the
execution of the government tasks and taking into account the contributive
capacities of the payer.
Taxation in Rwanda dates way back to 1912 when property tax was
introduced. Since then, different taxes have been born and reformed to
broaden the tax base, reduce tax rates, and reduce tax evasion among
others.
Comprehensive tax reforms as approved by the cabinet (april 21st 2023)
Cabinet approved comprehensive tax reforms following directives issued
by the President of the Republic in January 2023, and in line with the revised
Medium-Term Revenue Strategy (MTRS) passed in May 2022.
Focusing on Corporate Income Tax (CIT), Value Added Tax (VAT), and Excise
Duty, the tax reforms will reduce tax rates, broaden the tax base, improve
tax compliance, and curb tax evasion while ensuring that tax revenues
increase by 1% of GDP by FY 2025/26. Additionally, a review has also
been conducted of the existing taxes and fees collected by decentralized
entities.
Key Changes to the Tax Code
VAT: Government will exempt VAT on rice and maize flour for both domestic
trade and imports. The move is expected to improve food security and the
school feeding program.
Corporate Income Tax: The Government is reducing the corporate income
tax statutory rate from 30% to 28% with an eventual target of 20% in the
medium term. This will improve Rwanda’s competitiveness and position
the country as a preferred African investment destination.
Excise Duty: To boost Rwanda’s tourism and MICE industry, the Government
has adopted changes on the taxation of high-end products, especially
beverages. For instance, under the new reforms wine will be taxed up to
FRW 50,000 of value meaning that the excise duty cannot exceed FRW
35,000 per liter (70% of FRW 40,000).
Property tax and rates on land tax: According to the approved tax reforms,
the new rate applied on land tax has been set between FRW 0 to 80
FRW per square metre from the initial FRW 0 to FRW 300 rate. A second
residential house will be taxed at 0.5% of the combined market value of
the house and land. The Tax rate for commercial buildings is reduced from
0.5 % to 0.3% of its market value on both building and land. Tax charges
on commercial buildings are capped at FRW 30 billion.
Tax on sale of immovable property: This levy will be applied at 2% of
the property value for registered taxpayers and 2.5% for non-registered
taxpayers. The first five million of the sale of every immovable property
will be tax-exempt.
Trading License: Businesses and traders will pay a single trading licence
tax, that combines market and public cleaning fees. Businesses with more
than one branch will pay only one licence per district.
Waived fees: Some fees previously charged by decentralised entities (on
documents, or services) have been scrapped. The government has put in
place a number of measures to ensure that the proposed changes lead to
a stable revenue growth path in the medium term.
Note to editors: The MTRS aims to implement several reforms that
contribute towards the sustainable development of the country by
mobilising adequate domestic resources (taxes) while creating a modern,
equitable, and efficient.
Questions
a) Given that taxes in Rwanda date back to 1912, why do you think
people and businesses have to pay taxes?
b) Mention some of the taxes that have been reformed according to the
extract.
c) Name any other taxes being paid in Rwanda that are not identified
above in the extract.
d) Classify the above taxes identified in c & d as direct or indirect taxes.
5.1. Meaning of concepts and classification of taxes in Rwanda
Learning Activity 5.1
Analyse the following dialogue and use it to answer the questions
thereafter:
Paul: Hello Juliet, do you have some time?
Juliet: Yes.
Paul: Thank you. Since you work with Rwanda Revenue Authority, I need
some help from you.
Juliet: I have heard of the tax reforms. But before you tell me about tax
reforms, what is the meaning of a tax, and what types of taxes are paid
in Rwanda?
Paul: Ooh, a tax is a mandatory financial charge imposed by the government
on individuals and businesses to fund public expenditures and programs.
Juliet: Thank you, Paul. But may you also talk about the types of taxes.
Paul: Okay. Let us start with the simple ones. There are taxes paid on:
land, employees, goods and services, exports and imports, among others.
Next time when we have enough time, I will tell you more about taxes in
Rwanda.
Juliet: Alright, thank you so much. This was very informative. But before
you go, what are direct and indirect taxes?
Paul: Okay, Direct taxes are taxes paid on profit or any income. For
example: Pay As You Earn (PAYE), Corporate Income Tax (CIT), Capital Gain
Tax, Personal Income Tax (PIT), Rental Income Tax, etc… Indirect taxes are
levied on consumption of good and services. Basically, in Rwanda we have
two types of indirect taxes: Value Added Tax (VAT) and Excise Duty
Juliet: Thank you so much, this has been very helpful.
Paul: It has been a pleasure meeting you, Juliet.
Questions
1. According to the dialogue, what do you think a tax is?
2. With examples, make the difference between direct tax and
indirect tax
5.1.1. Meaning of concepts
Tax is a mandatory financial charge imposed by the government on individuals
and businesses to fund public expenditures and programs. It can also refer to
a fee without direct exchange requested to the members of the community
by the State according to the law, to financially support the execution of the
government tasks.
Taxation refers to the act of levying or imposing taxes by the tax authority.
It can also be defined as a legally compulsory transfer of money from the
public to the government mainly as a source of government revenue. It is
also defined as the compulsory payment to the government for the payment
or provision of voluntary consumption of goods and services.
Customs are government agencies responsible for regulating and facilitating
the movement of goods across borders. They are a crucial part of international
trade, as it ensures that goods entering or leaving the country comply with
relevant laws and regulations, including those related to tariffs, duties, taxes,
and safe standards.
5.1.2. Classification/ types of taxes imposed on business in Rwanda
In Rwanda taxes are classified as below:
A. Direct taxes
Direct taxes are taxes charged on the income or profits of the person to the
government.
It is the tax where the liability as well as the burden to pay resides on the
same individual and . In general, direct taxes are levied on profit and income.
Examples of Direct taxes
i) Corporate income tax: Is a tax that must be paid by an entity or
a corporation based on the amount of profit generated. Corporate
income tax is deducted by the state on industrial and commercial
income achieved by the firms working as commercial companies.
The corporate income tax is paid by:
◾ Companies established in accordance with Rwandan law or foreign
law;
◾ Cooperative societies and their branches;
◾ Legal persons and public institutions with autonomy of management
As of April 21st 2023 the Government reduced the corporate income
tax statutory rate from 30% to 28% with an eventual target of 20%
in the medium term. This will improve Rwanda’s competitiveness and
position the country as a preferred African investment destination.
ii) Trading license
◾ It is a tax paid by everyone who commits himself to do income-
generating activities, organizations with legal personality, or
organizations subject to corporate income tax.
◾ It is paid before starting activities.
◾ It is paid every year not later than 31st March with ongoing
business.
Businesses and traders pay a single trading license tax that combines
market and public cleaning fees. Businesses with more than one branch
pay only one license per district.
iii) Personal income tax is a tax imposed on the income earned by
individuals. It is a direct tax levied by the government on various
sources of income, such as salaries, wages, self-employment earnings,
rental income, investment gains and other forms of personal income.
For example PAYE (Pay-As-You-Earn
Broadly, PIT is charge on the following sources of income:
◾ Income generated from performing services (including
employment)
◾ Activities of a craft person, singer, artist or player
◾ Sports, cultural or leisure activities
◾ Income of Rwanda permanent establishment
◾ Income from the use, lease and disposal of movable assets by
Rwandan business
◾ Sale, lease and free transfer of immovable Rwandan business
assets
◾ Farming, fishing and forestry
◾ Usufruct (right of use of asset) and other rights attached to
Rwandan Business assets
◾ Income from investment in share (i.e., dividends)
◾ Sales or transfer of shares and debentures (capital gains tax)
◾ Change of partnership profit into shares, such that a partner’s
interest increases
◾ Distributions of partnership profits to partners
◾ Income from lending and deposits(interest)
◾ Transfer, sales and lease of intellectual property
◾ Other income generating activities that are not classified as exempt
iv) Withholding tax: This is a tax that is deducted or withheld from an
individual’s income or payment by a third party and paid directly to the
government on their behalf.
Withholding taxes are composed of: Pay as you earn, dividends,
interests, performance payments made to an artist, musician, or an
athlete;
Apart from the withholding tax on salary (PAYE) paid according to
above mentioned, others are paid on a rate of 15%;
The rate of the tax withheld on commodities from abroad is 5%.
This tax can be exonerated (temporary exemption) to taxpayers in
detention of a quitus fiscal.
A quitus fiscal is a certificate issued by RRA. It is issued to taxpayers
who have manifested high integrity in their transactions.
A withholding tax on public tenders is 3%.
Note: Those who have the obligation to withhold withholding taxes
are required to pay withheld taxes within 15 days counted from the
day of withholding.
v) Rental income tax:,
Rental income tax is paid by any individual who earns income from
renting out fixed assets located in Rwanda, including land, buildings,
and improvements.
In Rwanda, rental income tax is calculated progressively by revenues
brackets as follows: 0% on the bracket lower than 180,000 Rwf ; 20%
from 180,001 Rwf to 1,000,000 Rwf ; 30% above 1,000,000 Rwf.
vi) Property tax and rates on land tax -the rate applied on property and
land is as follows:
◾ Land tax is FRW 0 to 80 FRW per square meter.
◾ A second residential house will be taxed at 0.5% of the combined
market value of the house and land.
◾ The Tax rate for commercial buildings is 0.3% of its market value
on both buildings and land.
◾ Tax charges on commercial buildings are capped at FRW 30 billion.
Other types of taxes that are not levied in Rwanda:
◾ Inheritance tax is determined by who owns the property after the
decedent. It is also known as death tax.
◾ Gift tax is when someone transfers certain valued property to another
person. It could be cash or in-kind.
B. Indirect tax
A tax imposed on consumption, sales, shipping, or production, rather than
directly on the property or income of the consumer. Indirect taxes are
generally included in the price of goods and services. In this case, the burden
of the tax is on final users of the product or service, the consumer.
Examples of Indirect tax;
i) Value Added Tax (VAT)
VAT was introduced in Rwanda in 2001. VAT is a tax on the consumption
of goods and services. It is indirectly paid by the final consumer of the
goods or services. However, it is paid on their behalf by taxpayers on
the value added at each stage of production.
In Rwanda, the normal rate of VAT is 18%. There is also a zero rate
(0%) and exemptions applicable for certain types of goods and
services. A taxpayer must register for VAT if his turnover is above FRW
20,000,000 for any twelve-month period or above FRW 5,000,000 for
three consecutive quarters. In addition, any taxpayer may choose to
register voluntarily for VAT if he doesn’t meet the threshold
VAT-registered taxpayers are required to have at least one Electronic
Invoicing System (EIS), such as an Electronic Billing Machine (EBM) in
each of their sales locations, and use these to provide EIS invoices for
all sales transactions.
In addition to other products, on April 21st 2023, the government
exempted VAT on rice and maize flour for both domestic trade and
imports. The move is expected to improve food security and the school
feeding program.
ii) Customs duties: This is the tax imposed on imports and exports. They
include:
◾ Import duty: This is the tax imposed on imported goods to;
a) Get government revenue
b) Discourage imports so as to protect domestic industries
c) Discourage imports so as to conserve foreign exchange
◾ Export duty: This is a tax imposed on exports to raise revenue and
discourage the exportation of certain goods in order to satisfy the
local market demand.
◾ Excise duty: Excise tax is imposed on specified goods /service
produced locally or imported to be consumed in the country. Excise tax
was established in Rwanda in 1960 and is levied on locally produced
beers, lemonades, mineral water, juices, liquors, wines, fuel, vehicles,
powdered milk, as well as on cigarettes, etc… and their imported
counterparts if appearing on the list published in the consumption
tax law. Excise tax is also levied on telephone communication since
year 2007.
Application Activity 5.1
Read the following business activities in Rwanda and name the types of
taxes they pay
5.2. Role of taxes, and computation of VAT and personal
income tax
Learning Activity 5.2
Paying taxes plays a great role in the social and economic development of
the country. Using the specific examples from the photo below, explain the
contribution of taxes to Rwanda’s social economic development.
5.2.1. Role of taxes
Taxes paid by entrepreneurs, corporations, organizations play several
important roles in the economy and society. Here are some key roles of taxes:
To an entrepreneur
◾ Paying taxes by the entrepreneur helps the business activity to
operate smoothly, as it does not face penalties and associated costs
from the RRA for non-payment.
◾ When an entrepreneur pays taxes, it improves his/her reputation or
public image which may result into increased customers and better
services from the government
◾ To avoid inconveniences of closure of the business and its associated
costs: when an entrepreneur fails to pay assessed taxes, his/her
business is subject to penalty or even closure in some cases.
◾ Entrepreneurs benefit from infrastructures to successfully operate
such as roads to move raw materials, finished goods, workers; security
for their enterprises, goods, among others, which are provided by the
government.
◾ Paying taxes means contributing money to government agencies or
departments such as Development Bank of Rwanda (BRD), Business
Development Fund (BDF), which support entrepreneurs to operate
business activities through soft loans and other financial support.
To the government
◾ Source of government revenue: taxes are the main source of
government revenue to finance its public expenditure. Thus taxes
enable the government to pay it workers, construct roads, maintain
security, provide health care, education among others
◾ Taxes benefit the Rwandan government to meet its objectives and
goals such constructing affordable houses to the citizens which helps
improve the standards of living
◾ Taxes help government to finance its policies especially on poverty
alleviation through programs such as ―GIRINKA, ―VUP, ―UBUDEHE
among others
◾ Taxes enable the government to regulate the prices of goods and
services in the country hence ensuring a low cost of living and
maintaining the standards of living of the citizens
◾ Taxes enable the government to maintain a balance between the
poor and rich. The government uses the taxes from business people
to provide services needed by the poor, which otherwise the rich
could not provide.
◾ Taxes enable the government to promote its industrialization policy
through reducing products from other countries that would otherwise
out compete the home industries.
◾ Taxes enable the government to ensure that the citizens have enough
products. This can be through taxes charged to reduce products
moving out of the country or removing taxes on goods needed in
the country. This helps maintain a high standard of living
To the Society
◾ There is reduced rates of poverty among the community due to a
significantly equal distribution of income through various activities
and projects set by the government
◾ Improved wellbeing among the vulnerable and elderly as they benefit
from the different government financed through taxes
◾ Reduced infant mortality rates and increased life expectancy due to
improved access to health facilities and services
◾ Increase in the percentage of the population that completes secondary
and TVET education, reducing the literacy levels, improving on the
peoples‘ skills through programs such as 12YBE.
◾ Increased community/social solidarity, general happiness, life
satisfaction, and a significant more trust among the community
members and for public institutions.
◾ Taxes are charged on products which are harmful to discourage their
usage hence controlling the over-exploitation of resources hence
protecting the environment which is vital for the existence of society
5.2.2 Computation of VAT
Example 2
UTEXRWA Industry bought cotton from a local farmer worth FRW 1,200,000 to
manufacture 170 blankets. All the blankets were sold to a wholesaler based
in Kigali City at a cost of FRW 4,000,000. The same blanked were supplied at
FRW 8,000,000 to Lemigo Hotel for its daily hotel services. You are required
to compute the following with consideration that invoices are VAT inclusive:
◾ VAT payable by UTEXRWA Industry◾ VAT payable by the wholesaler
Solution:
◾ At UTEXRWA level, VAT = (4,000,000 x 18) / 118 = 610,169.49
◾ At the level of the wholesaler, we must consider two VATs: VAT on
purchase and VAT on sale:
AT on purchase = (4,000,000 x 18) / 118 = 610,169.49
VAT on sale = (8,000,000 x 18) / 118 = 1,220,338.98
Thus, VAT due from the wholesaler is 1,220,338.98 – 610,169.49 = 610,169.52
Example 3
A students’ business club has sold goods to XY enterprise at 100,000 FRW
VAT exclusive.
Calculate:
a) VAT to be paid
b) The price VAT inclusive
Solution
a) VAT received= 18,000FRW
b) The price VAT inclusive=100,000FRW+18,000FRW=118,000FRW
5.2.3. Computation of personal income tax
The tax rates and income tax brackets can vary depending on the country
and its tax system.Personal income tax in Rwanda is calculated as below ;
Note: During 2023 as per income tax law in force (Law No
027/2022 of 20
October 2022, the tax rates on employment income are as follows;
◾ RWF 0 to 60,000 - 0%
◾ RWF 60,001 to 100,000 - 20%
◾ RWF 100,001 and above - 30%
From 2024 and the following years as per the new tax policy(April 2023), the
tax rates on employment income will be as follows;
◾ RWF 0 to 60,000 - 0%
◾ RWF 60,001 to 100,000 - 10%
◾ RWF 100,001 to 200,000 - 20%◾ RWF 200,001 and above - 30%
A professional income tax or PAYE (Pay-As-You-Earn)MONTHLY TAX RATES
Example 1
AKAGERA BUSINESS GROUP has made a list of employees indicating their
monthly income:
AKALIZA gets FRW 250,000
AKIMANA gets FRW 360,000
ANGELINE gets FRW 100,000
ASSOUMPTA gets FRW 24,000
Required: Compute the following:
i) The amount of professional income tax to be deducted on the salary
of each employee.ii) The total amount of tax on all employees to be paid
Skills Lab Activity
From what you have learnt;
1. Identify taxes that your club will pay based on the project
activities?
2. Assuming that your future back home business employs an
accountant who will be paid 300,000FRW per month, How muchtax is to be paid to the government every month?
Application Activity 5.2
1. The following figures relate to the monthly salaries of
DUKUNDANE company ltd employees for 2019:
a) Director Kagabo John earns 350,000FRW
b) Accountant Mukama James earns 150,000FRW
c) Security Muhire Damien earns 30,001FRW
d) Secretary Keza Joana earns 77,000FRW
e) Casual laborer Ishimwe Anitha earns 150,000FRW
Required: Determine the total PAYE for the above employees that
DUKUNDANE company ltd pays to RRA every month
2. A students’ business club has bought goods from XY enterprise at
1,000,000 FRW VAT included.
Calculate:
a) VAT paidb) The price VAT excluded
5.3. Customs DeclarationLearning Activity 5.3
Fig 5.3: People clearing at the customs office in Rwanda (Source: www.newtimes.rw
Analyze the photo above and respond to the following questions:
1. What is happening in the photo?
2. Where in Rwanda do such activities / operations take place?3. Mention some documents that are used in such activities above.
5.3.1. Customs declaration
Customs declaration refers to the practice used by customs offices to clear
goods into a country and levy tariffs including clearance procedures such as
documentation and inspection, method of determination of goods clarification,
and method of assigning its value as the base for taxation. This declaration
happens at border posts and other customs offices like MAGERWA.
5.3.2. Customs Offices in Rwanda
Rwanda Revenue Authority (RRA) that was established by law N0 15/15 of
8th November 1997, therefore, all border areas of Rwanda with neighboring
countries and airports are gazetted as customs offices.
The Current operational One Stop Border Posts (OSBP) are located at the
Kigali International Airport, Rusumo, Kagitumba, Nemba, Gatuna and Ruhwa.
Other active border posts are located in Cyanika, Rusizi I, Rusizi II, Bugarama,
Akanyaru, La Corniche & Petite Barrière in Rubavu and others.
All in all, Rwanda Revenue Authority has got the following Customs Officescountrywide:
5.3.3. Documents used in customs declaration
These are documents that are used during the declaration process of exports
and imports as some may have limit or customs excise duty or are banned
from entry. These may include:
1. Transaction Invoices: is a non-negotiable commercial document issued
by a seller to a buyer.
2. Transport documents: These are documents which show information
about cargo that is being transported. Transport documents lie at the
heart of international trade transactions. These documents are issued
by shipping line, airline, international trucking companies, railroad,
freight forwarder and all logistics companies. For example:
◾ CMR: the CMR (Convention relative au Contract de transport
international de Merchandise Par Route) transport document is
an international consignment note used by drivers, operators and
forwarders that govern the responsibility and liabilities of the parties
to a contract for the carriage of goods by road internationally.
◾ Air waybill: is a transport document used for air freight. An air
waybill (AWB) is a non-negotiable transport document covering
transport of cargo from the airport. It indicates only acceptance of
goods for carriage. This document is prepared by IATA Transport
Agent or the airline itself and is addressed to the exporter, the
airline and the importer.
◾ Bill of Lading is a transport document for sea freight. Bill of lading
B/L is used by the agent of a carrier to shipper, signed by the
captain, agent, or owner of the vessel.
3. Import license: An import license is a document issued by a national
government authorizing the importation of certain goods into its
territory.
4. Packing list is a more detailed version of the commercial invoice but
without price information.
5. Certificate of origin: show that goods in particular shipment have been
wholly obtained, produced, manufactured or processed in a particular
country.
6. Certificate of analysis is a document which confirms that specific goods
have undergone specified testing with specified results and adhere to
product specification and standard of production.
7. Goods arrival notice: is a document sent by a carrier or agent to the
consignee to inform about the arrival of the shipment and number of
packages, description of goods, the weight, and collection charges (if
any)
8. Assessment Notice: is a document issued by a taxing authority
specifying the assessed value of a property.
9. Certificate of Fumigation: is the proof that wooden packing materials
issued in international sea freight shipping e. g wooden pallets and
crates, wood, wool etc. Have been fumigated or sterilized prior to
international shipment to ensure proper handling as some can be
harmful.
10. Goods invoice: is a document sent by a seller to a buyer. It specifies
the amount and cost of goods that have been provided by a seller.
11. Payment receipt: is a simple document that shows that payment was
received in exchange for goods or services.
12. Phytosanitary certificate: is a certificate stating that a specific crop
was inspected a predetermined number of times and a specified
disease was not found or a certificate based on an area surveillance
stating that a specific disease, as far as known, does not occur in the
area of production.
13. Warehouse handling fees invoice: is a document given by a
warehouseman for items received for storage in his or her warehousewhich has evidence of title to the stored goods.
Application Activity 5.3
Analyze the following transactions and identify the documents used during
their declaration.
1. Bought goats from Uganda
2. Sold coffee to Japan
3. Boughts woods from China4. Bought Rice and Maize flour from Tanzania
5.4. Declaration procedures
Learning Activity 5.4
You have been employed as the export manager of TAM TAM industries
producing cosmetics products and in your exportation plans, you intend toexport 6 tonnes of products in one week’s time to South Sudan.
Rearrange the processes you will take to clear your products under customs
1. Obtain an invoice for warehouse handling fees.
2. Pay import tax.
3. Submit goods arrival notice for verification from Rwanda
Standards Board.
4. Obtain goods exit note
5. Obtain manifest Requirements.
6. Submit import documents to the clearing agent for tax calculation.
7. Obtain notice of arrival of the goods.
8. Pay warehouse fees for goods handling.
Customs declaration may be done both for exports or imports. Although the
procedures may slightly differ based on the type of declaration, the general
procedure when declaring imports or exports is as follows:
Step 1: Taxpayer prepares all necessary documents and contracts a Clearing
Agent.
Step 2: The Clearing Agent prepares and submits an import or export
declaration to RRA using the Rwanda electronic Single Window (ReSW).
Step 3: The Clearing Agent receives assessment notices, containing the
amounts of customs duties due. The taxpayer pays all customs duties due,
either directly or through the Clearing Agent. The assessment notice may
contain different ‘Doc IDs’ for different tax types. If so, these must each be
paid separately.
Step 4: The ReSW system allocates the consignment to a certain Customs
channel. If verification is required, Customs Officers will request the
necessary documents and/or access to the consignment. If there are any
problems, further action may be required.
Step 5: After successful verification, the Customs Officer provides the
taxpayer with a release order.
Step 6: The taxpayer pays any due warehousing fees, if applicable, to the
warehouse owner.
Step 7: The taxpayer receives an exit note and may leave with their
consignment.
Imports declaration procedures
1. Obtain notice of arrival of goods: The requirements for goods arrival
notice are set by internal procedures of Magasins Généraux du Rwanda(MAGERWA) or any other wharehouse / logistics organization.
2. Submit goods arrival notice for verification by Rwanda standards
board(RSB). Requirements are set by internal procedures of Rwanda
bureau of standards import inspection procedures.
3. Obtain manifest: Rwanda revenue tally officer verifies whether the
goods indicated on the import documents match the actual goods on
the goods arrival notice. This is to make sure that the importer pays
the right amount of taxes.
4. Submit import documents to the clearing agent for tax calculation. It
is at this stage that the taxes to be paid on the goods is calculated and
the importer is informed of how much taxes they have to pay.
5. Pay import tax: The clearing agencies have a system whereby goods
are assigned different codes and once this code is entered into the
system and the country of origin of the goods, taxes are calculated
automatically. Large importers who had been previously paying taxes
well may be exempted from withholding taxes.
6. Obtain an invoice for warehouse handling fees: The requirements
are set by the internal procedures of Magasins Généraux du Rwanda
instructions.
7. Pay warehouse fees for goods handling: Warehouse handling fees
are set by MAGERWA management. The fees depend on the quantity
of the goods and the time spent in the warehouse. Within 7 days, each
kilogram is charged 10 RWF per day. From 7 days and above, an extra
1 RWF is charged per kilogram/day. VAT (18%) and parking fees are
added on the total cost.
8. Obtain goods exist note: Once the taxes and warehouse storage
fees have been paid, Rwanda Revenue Authority and MAGERWA tally
officers verify the goods physically to make sure they correspond to
the declared goods and the client issued with the goods exit note. It
is the goods exit note that the client uses to take his goods from thewarehouse.
Application Activity 5.4
Imagine that you had to export raw materials for your business to Dubai.Describe the procedure you would go through.
End of Unit Assessment
1. Project Activity
Imagine that after S.6 you have been provided with capital of 1000,
000FRW by your parents or relatives to begin the business of importing
Rice from Tanzania. This involves different procedures to have your
Rice reach Rwanda especially in clearing under customs. Using the
knowledge and experience acquired from the previous lessons, make
a report on the process of declaring taxes under Customs.
II. Other Assessment Questions
1.
a) Differentiate between customs and customs procedures
b) Give three examples of Rwanda’s imports and exports
c) List examples of exempted goods that are imported into
Rwanda.
2. A business club at one of the schools has 3 regular employees
namely KALISA, Ingabire, and BERWA with monthly salaries of
35,000FRW, 40,000FRW, and 20,000FRW respectively. On top
of that, the business made sales of 300,000FRW VAT exclusive,
and the input VAT was 34,000FRW.
a) Calculate the total amount of tax that the business club has
to pay to RRA
b) Advise the above business on how the above taxes would bepaid.
Unit 6: Financial Market
Unit 6: Financial Market
Key unit competence
To be able to manage their finances responsibly and invest in capital markets.
Introduction
You have got prior knowledge and skills related to financial institutions in
Senior four. This unit will help you on how to invest your financial resources
in long term financial investments in an easy way particularly by investing in
capital markets. Therefore, by the end of this unit you must have the ability
to make decisions of managing your finances well and investing in financial
markets.
Introductory ActivityAnalyze the Illustration below and answer the questions that follow
a) What are financial markets?
b) Who are the key players in the financial markets?
c) What are the functions of financial markets?
d) What steps would one go through in order to invest in the financial
markets?
e) How do people invest in financial markets in Rwanda?
6.1. Meaning, functions and types of financial markets
Learning Activity 6.1
The picture below is from the Rwanda Stock Exchange website. Study itand answer the questions that follow.
Questions:
a) Describe what the people in the picture are doing?
b) How does the activity above promote investment in the country?
c) What do you understand about the financial market?d) How do you differentiate primary from secondary financial markets?
6.1.1. Meaning
A financial market is a marketplace where individuals and organizations
engage in buying and selling of securities, commodities and other tangible
assets. These transactions occur with low transaction costs and the prices are
determined based on the interaction of supply and demand forces. Securities
include stocks and bonds, and commodities include precious metals or
agricultural goods.
Financial Markets are used to match those who want capital to those who
have it. Typically, a borrower issues a receipt to the lender promising to pay
back the capital. These receipts are securities which may be freely bought or
sold. In return for lending money to the borrower, the lender will expect some
compensation in the form of interest or dividends. This return on investmentis a necessary part of markets to ensure that funds are supplied to them.
6.1.2. The functions of financial markets
There are several functions of financial markets as explained below:
i) Price determination: The financial market performs the function of
price determination of the different financial instruments traded
between the buyers and the sellers on the financial market.
ii) Funds mobilization: Funds available from the lenders or the investors
of the funds will get allocated among the persons who need the funds
or raise funds through the means of issuing financial instruments in the
financial market
iii) Liquidity: Investors can sell their securities readily and convert them
into cash in the financial market, thereby providing liquidity.
iv) Risk sharing: The financial market performs the function of risk sharing
as the person who is undertaking the investments is different from the
persons who are investing their fund in those investments.
v) Easy access: The industries require the investors to raise funds, and
the investors require the industries to invest their money and earn
the returns from them. So, the financial market platform provides the
potential buyer and seller easily, which helps them save their time and
money in finding potential buyers and sellers.
vi) Reduction in transaction costs and provision of information: The
trader requires various types of information when doing the transaction
of buying and selling the securities. For obtaining the same time and
money is required. But the financial market helps provide every type
of information to the traders without the requirement of spending anymoney by them.
vii) Capital formation:
Financial markets provide the channel through which the new
investments savings flow into the country, which aids in the country’s
capital formation.
6.1.3. Types of financial markets
Normally, all the types of financial markets can be classified as:
a) The primary market is the market for new issuers or where new capital
is raised . It is the market where securities are sold for the first time.
b) The secondary market is the market for trading securities that have
been sold or issued in the primary market and already in the hands of
the public.
The types of financial markets include:
◾ Physical asset markets versus financial assets markets:
Physical assets markets are for physical products such as wheat,
autos, real estate, computers, and machinery whereas financial
asset markets, on the other hand, deal with stocks, bonds, notes,
and mortgages.
◾ Spot markets versus futures markets:
Spot markets are markets in which assets are bought or sold for
“on-the-spot” delivery (literally, within a few days) whereas futures
markets are markets in which participants agree today to buy or sell
an asset at some future date.
◾ Money markets versus capital markets:
Money markets are the markets for short-term, highly liquid debt
securities whereas
Capital markets are the markets for intermediate or long-term debtand corporate stocks.
Application Activity 6.1
Read and answer the following question:
Imagine you are the leader of the Youth forum in your area. You have
invited fellow youth and you want to talk to them about investing through
capital markets. Write the ideas you would tell them relating the functionsof Capital markets
6.2. Benefits and instruments of capital markets
Learning Activity 6.2
Read and answer the questions below
a) What do you understand by “Capital market”?
b) What are the benefits of investing in capital markets?
c) What do the following terms mean in financial markets• Shares
• Bonds
• Debentures• Stocks
6.2.1. Meaning of capital markets
Capital market is a place where long term financial securities are traded by
individuals and institutions/organizations. In other words, they are financial
markets where buyers and sellers together trade stocks, bonds, currenciesand other financial assets.
6.2.2. Benefits of investing through capital market
The following benefits apply both to the primary and secondary markets:
◾ Access to capital: By issuing shares or debt directly to the public
through the Rwanda stock exchange (RSE), private sector businesses
and the government can raise funds for expansion of existing business
or new projects.
◾ Discover the value of your business: By listing on the RSE issuers or
owners of business are able to discover the price of their securities
and therefore the value of their business. This enables them to realize
the market worth of their wealth.
◾ Strengthens the company’s status: Raise a company’s visibility and
therefore, enhancing its status with customers and suppliers at home
and overseas: A listing on the capital market raises the profile of a
company through continuous media coverage. This is free publicity
and enhances the product presence of the issuer among its customers.
◾ It improves bargaining power: Have a better bargaining position
with financiers.
◾ Enhance management practices: The capital market requires a
minimum level of disclosure and corporate governance and this
encourages the quality of management practices.
◾ Foster employee motivation: Listed companies may easily employ
executives using stock option techniques.
◾ Benefits from Capital Market incentives: New issuers take advantage
of incentives provided to listed companies. This comes in the form
of low costs and tax advantages to shareholders and owners of the
business.
◾ Use of shares as currency: Listed companies with known market
value can use their shares as currency instead of cash when taking
over others.
◾ Savings accumulation: Investing in securities that are listed in the
capital or stock market encourages investors to accumulate their
savings in small amounts over time.
◾ Source of income: Investment in the stock market provides a source
of income. In every transaction made, the investors have higher
chances of earning profits therefore, being able to increase their
financial base.
◾ Improving investment value: Whenever the prices of securities go
up, the value of investment of shareholders increases.
◾ Easy to get loans: Listed securities are easily accepted as collateral
security against loans from financial institutions.
◾ Way of getting cash: Shares and bonds can easily be converted into
cash in the shortest time possible without losing much value.
6.2.3. Capital Market instruments
a) Shares: A share is considered as the unit of capital. It is also taken as a
unit of ownership in a limited company that gives the holder claim over
any dividends that the corporation/company may pay for it. Owners of
shares are called shareholders and receive dividends on their shares
from the company’s profits usually at the end of the financial year.
b) Debentures: A debenture is a type of debt instrument that is not secured
by physical assets or collateral. Debentures are backed only by the
general creditworthiness and reputation of the issuer. Both corporations
and governments frequently issue this type of bond to secure capital.
c) Bonds are debt instruments created for the purpose of raising capital.
They are essentially loan agreements between the bond issuer and an
investor, in which the bond issuer is obligated to pay a specified amount
of money at specified future dates.
◾ Government-owned capital market instruments
i) Treasury Bills: Treasury Bills (T-bills) are short-term debt securities
(one year or less) issued by the central bank in order to raise money
from the public.
In Rwanda; T-Bills are issued by auction on a weekly basis with maturity
dates of 28 days, 91 days, 182 days, and 364 days. T-Bills market is
announced via the BNR website, each Monday for auction on Thursday
(T), and settlements take place on Friday (T+1). The minimum purchase
is 100,000 FRW. T-bills market is open for all investors
(Banks, nonBanks, Insurance companies, Pension Fund, individuals, etc.)
ii) Treasury Bonds: A Treasury Bond/Government bond is a debt
instrument issued by a national government through the Central Bank
in its capacity as a government agent, generally with a promise to pay
periodic interest payments and to repay the face value on the maturitydate. This is a long-term security.
Skills Lab Activity
The Capital Market Authority in Rwanda played an important role in the
financial stability and economic development of the country. Discuss thecapital market instruments and role played by the Capital Market Authority
Application Activity 6.2
1. How does investing in a capital market benefit your back home
business?
2. How would you use the capital market to raise funds for yourbusiness?
6.3. How to invest in Rwanda stock exchange markets
Learning Activity 6.3
From the library resourceful person or computer lab, make research on
the requirements and process of investing in the Rwanda stock exchangemarkets (you can use this link: https://www.cma.rw
Requirements and process to join the Rwanda stock exchange
How to open an account and trade on the Rwanda stock exchange
markets
After the shares have been allocated to subscribers in the primary market, the
company that offered its shares to the public is listed on the Rwanda Stock
Exchange (RSE) where shares can only be bought and sold through licensed
stockbrokers (stockbrokers are professionals licensed by CMAC to buy and
sell shares on behalf of clients. For this service they charge a commission).
The secondary market is the market where already existing shares and bonds
are bought and sold through licensed stockbrokers who are members of the
RSE.
Step 1 Open an investment account with your stockbroker
◾ To buy securities, one must open an investment account with a
stockbroker for investment and trading in securities.
◾ To open this account one needs to provide 2 recent passport photos
and a copy of the ID card.
◾ The stockbroker will also open a central securities depository (CSD)
account into which your shares/bonds will be held electronically.
Step 2 Placing a buying or selling order to your stockbroker
◾ To buy shares or bonds you are required to discuss with your
stockbroker and then provide your account details.
◾ To buy or sell, you must give written instructions to your stockbrokers.
◾ The investor then completes a purchase order (or sale order)
giving personal particulars (including contact address etc) and the
instructions on the transactions (that is what security to buy/sell, the
transaction price, etc).
◾ Where the investor intends to sell securities, he will be required to
submit his security certificate.
◾ In the case of a purchase, the investor will be required to make a
deposit covering the value of the transaction.
Application Activity 6.3
Suppose you have a plan of investing the stock market, describe the stepsyou will be required to get through
End of Unit Assessment
I. Project Activity
As a S.6 student leaver, your father has been investing a lot of money
in you to access the education of your choice at all levels. Here comes
your father in need of advice on how and when he can invest in
capital markets as a way of securing his financial future and your
entire family. Using your knowledge as a student of entrepreneurship
regarding finances and investment, help your father to find out the
solution for his problem.
II. Other Assessment Questions
1. Describe/explain the process of joining Rwanda Stock
Exchange?
2. Discuss the benefits of investing in capital markets?
3. Describe the steps involved in investing in the stock exchange
markets
Unit 7:7Stock Control
Unit 7:7Stock Control
Key unit competence
To be able to properly handle stock for the business
Introduction
A business can run smoothly only when enough inventory is kept on hand.
All operational processes, including production, warehousing, sales, etc., are
impacted by inventory. There should be a balance between opening and closing
inventories to prevent any negative effects on other business operations. As
a result, inventory is very important to operations management.
This unit is designed to equip you with knowledge, skills, attitudes, and values
that will enable you to manage stock effectively and make an inventory,
to comply with the standards, policies and procedures followed in the
procurement of goods, services and works in supply chain management.
Throughout this unit, you will learn how to use basic documents needed
in stock management, how to conduct perpetual and periodic inventory,procurement procedures, as well as evaluation methods on supplied stock.
Introductory Activity
Analyze the paragraphs below and answer the questions that follow.
Stock control, otherwise known as inventory control, is used to show how
much stock you have at any one time, and how you keep track of it.
It applies to every item you use to produce a product or service, from raw
materials to finished goods. It covers stock at every stage of the production
process, from purchase and delivery to using and re-ordering the stock.
Efficient stock control allows you to have the right amount of stock in
the right place at the right time. It ensures that capital is not tied up
unnecessarily, and protects production if problems arise with the supply
chain.
Questions
a) What is meant by stock, stock control/management and inventory?
b) What are the necessary documents for stock management in a
business?
c) Why is stock control important in a business?d) Describe the different methods of stock valuation
7.1. Concepts and necessary documents for stock management
Learning Activity 7.1
Read the story below and answer questions that follow.
Kamanzi is a prosperous trader in Nyarugenge district and owns a very
big business. He is considered an exceptional trader by many customers
mainly because during scarcity of scholastic materials like reams of papers
and exercise books, he is the only trader every parent refers to as he
helps them find the needed materials for their children. Kamanzi is also
exemplary in terms of stock management. This is attributed to the fact that
he has employees who are well trained and manages his stock properly.
Questions
a) Mention the documents that can be used for proper stock management
in Kamana’s business.
b) Under which circumstances can his employees record information?
7.1.1. Meaning of stock and inventory management
Stock
Goods obtained for resale or manufactured for sale that are yet unsold on
any particular date are known as stock.
It also means the value of the goods that you have on hand to sell to your
customers. If you sell services rather than goods, you will not have any stock.
Stock can be classified as:
◾ Opening Stock: Value of stock at the beginning of an accounting
period.◾ Closing Stock: Value of stock at the end of an accounting period.
Inventory
Inventory refers to a company’s goods and products that are ready to sell, as
well as the raw materials that are used to produce them. Inventory can be
categorized in three different ways, including raw materials, work-in-progress,
and finished goods. This term is better fit in the manufacturing businesses.
Therefore, a stock reflects the finished goods available for sale while an
inventory includes both finished goods and components that create a finished
product.
Stock management
Stock management is the practice of ordering, storing, tracking, and controlling
inventory.
It is also the process of managing the goods your business plans to sell. Or is
the process of buying and storing these goods while keeping order, shipping,
handling, and storage expenses under control.
7.1.2. Necessary documents for stock management
The following are the necessary documents in stock management process:
a) Material/ purchase requisition note
A materials requisition form is used to draw/ get materials from the stores,
and it specifies the quantity and quality of materials required, along with the
job number or work order for which it is needed.
Also known as a requisition slip or materials requisition note, a materials
requisition form is a document that authorizes and records the issue of
materials for use.An example of a purchase requisition template
b) Materials receipt note
This is a document that keeps records of the materials received in the stores
at specific dates.An example of a materials receipt note.
c) Return-outward note
This records the materials obtained for a specific job but not fully consumed or
they are drawn in excess of requirements, and therefore need to be returned
to the stores.An example of a materials return outward note template.
d) Materials return inward note
This is prepared by the store keeper to record the materials that were given
out for a specific job and were not fully consumed or they were drawn in
excess of requirements, and have been returned to the storesAn example of a materials return inward note template.
e) Stock sheet inventory
The stock sheet is a document that records regular movement of goods in the
store. The storekeeper indicates the goods received or issued.
The storekeeper determines the balance after the movement of purchases
and sales of goods. Each exit and entry of goods into stock must be justifiedwith a relevant document such as receipt note and purchase requisition note.
Application Activity 7.1
Nyiraneza is a stock manager for SABANA LTD, a distributor of BRALIRWA
products. On March 12th, 2018, SABANA LTD had the following items inthe stock:
In the morning of March 12th, 2018, Nyiraneza made a Purchase order forthe following items:
a) Complete the receipt note and stock sheet for SABANA LTD on March
12th, 2018.
b) Develop a purchase requisition (10 crates for each identified item)
for SABANA LTD on March 13th, 2018, following the principle that theminimum stock level is 6 crates for each item.
7.2. Inventory management systems
Learning Activity 7.2
Read answer the following questions
1. Differentiate between perpetual and periodic inventories
2. Referring to your school, briefly explain how perpetual and
periodic inventories are carried out by the accounting department.
7.2.1. Meaning of inventory systems
One of the most challenging aspects of running a business is learning how to
effectively manage your inventory so you have what your customers need
and want without having too much excess, which can be a waste of money.
Whether it is deciding what and how much to order, when to order, keeping
an accurate count of your products, or knowing how to handle excess and
shortages, knowing how to control inventory properly will help ensure your
business’s success.
Inventory management systems therefore, refers to the accounting methods
that businesses use to track the number of products they have in their stores.They are two methods of tracking inventory and these include:
7.2.2. Types of inventory management systems
a) Periodic inventory is one that involves a physical count at various periods
of time. The periodic inventory system uses an occasional physical countto measure the level of inventory and the cost of goods sold.
Advantages of Periodic Inventory System
◾ Since no permanent employee is required for physical counting of
merchandise inventory under this system it is less expensive.
◾ It is applicable for all business organizations large or small dealing
with specific or a variety of goods.
◾ Since stock taking is done at the end of a period under this system
the normal activities of the business are not hampered.
◾ Since the stock-taking of merchandise is done on a particular date
the quantity of stock of merchandise is reliable.
Disadvantages of Periodic Inventory System
◾ On the very day of the physical counting of merchandise stock,
normal activities of business remain almost suspended.
◾ The act of counting merchandise stock is to be completed hurriedly
due to a shortage of time.
◾ Under this system the chance of fraud and forgery lies, because here
continuous control over merchandise is absent.
◾ Under this system on expiry of the particular period, the reasons for
differences between merchandise at hand and merchandise shown
in the books of accounts cannot be sorted out easily.
◾ Under this system, the stock control device is very weak. Their
employees get a chance to adopt corruption.
b) Perpetual inventory is computerized, using point-of-sale and enterprise
asset management systems. The perpetual system keeps track of
inventory balances continuously, with updates made automatically
whenever a product is received or sold.
Perpetual inventory can save the business money in these ways:
◾ There is no need to close facilities regularly to perform physical
inventories,
◾ Data from scanned barcodes help you forecast stock,
◾ You can account for all transactions, providing complete accountability
of your products.
Even though perpetual inventory is superior, it is not perfect. While there
is a constant, automatic product tracking system, there are still ways to
lose positive inventory control.
The disadvantages of using perpetual inventory include:
◾ You must still perform an annual inventory to synchronize your data,
◾ You must input every transaction, which requires more consistent
record-keeping and monitoring,
◾ Perpetual inventory systems have higher setup costs than other
methods since they require software and training.
Differences Between Perpetual and Periodic Inventory Systems:Perpetual Inventory Systems Periodic Inventory Systems
Track sales immediately Track sales on recurring basis
Use point-of-sale systems Utilize recurring physical counts
Better for large businesses Better for small companies
Smaller margin for error Larger margin for error
Cost of goods sold updated
constantly periodically
Cost of goods sold updated
Require less effort Require physical countsStart-up cost potentially high Less expensive to start up
Application Activity 7.2
Analyze the scenario below and answer questions that follow
Nishimwe and Rugwiza are employees of TURAHEZA COMPANY LTD which
has hardware stores in Huye and Kigali towns. Nishimwe is the manager
of the Huye branch, while Rugwiza is the manager of the Kigali branch. In
their daily work, Nishimwe records and controls the physical movements
of stock. Every time she sells or purchases an item, she puts the report in
the template that she has developed using excel software. For Rugwiza,
the stock manager of the Kigali branch, the inventory control is done at the
end of the month and the monthly stock value is determined.
Questions
1. Determine whether the system used by these employees is
perpetual or periodic and explain why.2. Identify advantages of each system.
7.3. Inventory valuation methods on supplied stock
Learning Activity 7.3
Read the scenario below and answer questions that follow:
AMBARUBERWE Limited bought a range of beachwear in the summer, with
each item costing 15,000 FRW and retailing for 30, 000 FRW. Most of the
goods were sold but, during the rainy season, ten items remained unsold.
These were put at a discount of 18,000 FRW each. On 31 December, at the
end of the store’s financial year, five items remained unsold.
a) At what price will they be valued at the end of year stock valuation?
b) Twelve months later, three items still remained unsold and have been
reduced further to 10,000 FRW each. At what price will they now be
valued at the end of year stock valuation?
The cost of unsold inventory is determined at the end of each accounting
period. Inventory is valued usually at cost or at the market value, whichever is
lower. Stocks are never valued at selling prices when selling prices are above
cost prices. The reason for this is that selling prices include profit, and to value
stock in this way would recognize the profit in the financial statements before
it has been realized.
The three common stock valuation methods Are First-In, First-Out (FIFO);Last-In, First-Out (LIFO) and Weighted Average Cost (WAC).
7.3.1. FIFO
FIFO is the acronym for First-In, First-Out. FIFO is a valuation method in which
assets produced or acquired first are sold, used, or disposed of first.Under FIFO, the oldest cost of an item in inventory will be removed first
when one of those items is sold. This oldest cost will then be reported on the
income statement as part of the cost of goods sold. Example: If a company
using FIFO method has four units purchased at different costs and in the
following sequence: 6,000 FRW; 6,400 FRW, 6500 FRW and 6,600 FRW, thecompany will report its cost of goods sold as 6,000 (the first cost)
7.3.2. LIFO
LIFO is the acronym for Last-In, First-Out. It is a valuation method in which
the last asset acquired (the newest), is the first asset sold.
Under LIFO the latest or more recent costs of products purchased (or produced)
are the first costs expensed as the cost of goods sold. This means that the
costs of the oldest products will be reported as inventory.
For example
Let us illustrate LIFO with a company that has three units of the same product
in inventory. The units were purchased at different costs and in the following
sequence: 6,000 FRW, 6,400, FRW and 6,600 FRW. Under LIFO the company
will report its cost of goods sold as 6,600 (the latest cost).
Note that the last cost of 6,600 FRW is the first cosT out of inventory-the LIFO
assumption.
LIFO has become popular because of inflation and the fact that the incometax rules can permit companies to use LIFO.
7.3.3. Weighted Average Cost method (WAC)
In Weighted Average Cost method (WAC or AVCO), the weighted average
cost of items is calculated, using the formula:
Weighted Average Cost =Total cost of goods in stock
Number of items in stock
The weighted average cost is then used to value goods sold. A new weighted
average cost must be calculated each time that further stocks are bought
during the year.
Recording stock values
To be able to accurately calculate the price at which stocks of materials are
issued and to ascertain a valuation of stock, a store’s ledger record or stock
card is used. Note that stock records are usually kept at cost price, not theselling price.
Example of stock card
Vannesa & Kalisa Papeterie sell office materials. One of the items stocked is
reams of papers. To show how the stock card would appear under FIFO, LIFO
and AVCO, the following data is used:
January 2018: Opening stock of 40 reams of papers at a cost of 3,000 FRW
each
February 2018: Bought 20 reams of papers at a cost of 3,600 FRW each
March 2018: Sold 36 reams of papers
April 2018: Bought 20 reams of papers at a cost of 3,750 FRW eachMay 2018: Sold 25 reams of papers.
3. Stock card using WAC (weighted average cost per unit)
In this method, each quantity issued is valued at the weighted average cost per unit, and so is the balance instock. The complete list of different costs does not have to be re-written each time.
WAC method
The closing stock valuations at the end of May 2018 under the three methods show total cost prices of:
◾ FIFO: 71,250 FRW
◾ LIFO: 57,000 FRW
◾ WAC: 65,550 FRW
Application Activity 7.3Analyze the following information from the books of GASABO Bakery Limited
GASABO Bakery Limited Makes cakes which are sold to supermarket chains. The company uses the first in, first out(FIFO) method for valuing its stocks. Complete the following stock card for wheat flour for December 2017:
Skills Lab Activity
Interview a resourceful person such as a school bursar, accountant or an
entrepreneur about the procurement process using the following questions:
1. Why does the business/ school manager control a business
inventory/stock?
2. What documents does the school/business use in stock
management?
3. Which inventory system does the business/school use?
End of Unit Assessment
I. Project Activity
Each student creates 3 stock management documents for the business
they tend to start back home.
II. Other Assessment Questions
1. Suppose you are selected to be the Head of Finance Unit in a
newly established public school. Prepare a purchase requisition
for your office materials.
2. The following information is extracted in the books of a stock
manager:
• 200 bags of 50 kg of cement are bought in January 2016 at a
cost of 10, 000 FRW each
• 100 bags are sold in February
• 80 bags are bought in March at a cost of 9,500 FRW each
• 100 bags are sold in April
• 150 bags are bought in May at a cost of 9,800 FRW each.
From this information, prepare stock cards for cement using:
a) FIFO
b) LIFOc) WAC
Unit 8: Work Habits and Behavior
Key unit competence
To be able to apply for a job and maintain professional conduct at the
workplace.
Introduction
Every workplace is full of a diverse group of individuals who behave in
different ways. Managers may assist their teams perform better and finish
tasks more successfully by recognizing the various workplace behaviors that
employees may exhibit.
Understanding one’s personality can help an employee change their behavior
at work, play to their strengths, focus on their flaws, interact with co-workersmore successfully, and ultimately succeed in their job.
Introductory Activity
The activity below is a self-reflection. It is not a test but is a way to see
what you already know or do not know about the unit. You will read
statements and check (X) the column that best describes your experience.Please, you need to answer honestly and independently
8.1. Recruitment process for the employer
Learning Activity 8.1
Analyze the illustration below and use it to answer the questions thatfollow
Required
a) What does recruitment mean?
b) Describe the process of recruitment
c) When does the recruitment process begin?
d) When does the recruitment process end?
e) What do the following terms mean in the recruitment process?
i) Job analysis
ii) Job description
iii) Job specificationiv) Job advert
Recruitment process
Recruitment is a process of finding and attracting the potential resources for
filling up the vacant positions in an organization. It sources the candidates
with the abilities and attitude, which are required for achieving the objectives
of an organization.
Recruitment process is a process of identifying the job vacancy, analyzing the
job requirements, reviewing applications, screening, shortlisting and selecting
the right candidate.
Recruitment process is the first step in creating a powerful resource base.
The process undergoes a systematic procedure starting from sourcing the
resources to arranging and conducting interviews and finally selecting the
right candidates.
i) Job analysis
It involves establishing the nature of the job (tasks, activities, responsibilities,
and accountabilities) which will also determine associated required talentsand competencies defining behavioral attributes for best performance.
ii) Job description
This is a written statement which outlines the duties and responsibilities
involved in performing a job such as who does what, when, where and why.
The main contents include job purpose, job tasks and responsibilities.
It informs employees exactly what is expected of them and provides a useful
document to refer to when you are evaluating an employee’s performance.
You can also use it to develop selection criteria, identify training needs, andmanage performance.
Purpose of Job Description
a) The main purpose of job description is to collect job-related data to
advertise for a job. It helps in attracting, targeting, recruiting and selecting
the right candidate for the right job.
b) It is done to determine what needs to be delivered in a particular job. It
clarifies what employees are supposed to do if selected for that particular
job opening.
c) It gives recruiting staff a clear view of what kind of candidate is required
by a particular department or division to perform a specific task or job.
d) It also clarifies who will report to whom.
e) Once someone has been employed, it will show whether they are
carrying out the job effectively.Here is a job description for a financial manager.
iii) Job specification
Job specification involves a definition of qualifications, experiences and
competencies required by the jobholder and any other necessary information
on the special demands made by the job such as physical conditions, unusual
hours or travel away from home. Job specification sets out terms and
conditions of employment such as pay, employee benefits, general health,
mental health, intelligence, aptitude, judgment, leadership skills, emotional
ability, adaptability, flexibility, values and ethics, manners and creativity, etc.
Purpose of job specification
i) It helps candidates analyze whether they are eligible to apply for a
particular job vacancy or not. It is based on job description and job
specification.
ii) It helps the recruiting team to understand what level of qualifications,
qualities and set of characteristics should be present in a candidate to
make him or her eligible for the job opening.
iii) Job Specification gives detailed information about any job including
job responsibilities, desired technical and physical skills, conversational
ability and much more.
iv) It helps in selecting the most appropriate candidate for a particular job.Here is a job specification for a financial manager
v) Job Advertising
It is a way organizations communicate to attract new employees to work
with them, Recruitment advertisements typically have a uniform layout and
contain the following elements;
i) Brief description of the organization
ii) The title of the job advertised the grade and the manager to whom the
job holder will report
iii) Duties and responsibilities of the job holder
iv) Skills and Competences of the job holder
v) Conditions of educational qualification and experience of that job
position holder
vi) The channel of communication used for submitting the application
vii) The timeline during which applications will be submitted
viii) The channel of communication for feedback
ix) Signature and the stamp of the organization manager who wants to
post the advertisement.
Some business organizations use recruitment advertising agencies to receive
professional advice and help them to recruit new workers. They offer a
service which they are paid for in return. Examples of recruitment agencies
in Rwanda include; -
i) Tohoza.com
ii) Umurimu.com
iii) Jobs in Rwanda
iv) NFT consultv) Ndangira.net
Application Activity 8.1
1. A collection of jobs with comparable responsibilities, tasks, and
duties is known as……….…
a) job,
b) business,
c) career,
d) Entrepreneurship
2. ________________ is a result of job analysis.
a) job specification
b) job description
c) job requirement
d) both A & B
3. The development and application of employees’ skills and
energies to accomplish the goals and objectives of the
organization is called:
a) human resource management.
b) human resource planning.
c) selection.
d) recruiting.
4. The first step in the human resource planning process is:
a) preparing a job analysis.
b) forecasting future human resource needs.
c) assessing future demand.
d) assessing future supply
5. Which term describes the process of gathering, analyzing, and
synthesizing information about the jobs that are being done and
any new jobs that are envisaged?
a) job description.
b) job analysis.
c) job specification.
d) human resource inventory.
6. A job _________ is a written statement of the job’s activities, the
equipment required for it, and the working conditions in which it
exists.
a) analysis.
b) specification.
c) design.d) description.
8.2. Finding/Applying for a Job
Learning Activity 8.2
Describe the experience of finding any kind of work/job you have or
have heard from others, by answering the questions below.
a) How did you start the process?
b) What resources did you use to find a job?
c) What steps did you take to find the job?
d) Did it require you to write some documents? If yes, which ones?
e) How long did it take?f) What approaches worked well and what did not work?
Finding a job/work requires one to prepare some documents expressing your
interest in a particular job or area of work and highlights why you are qualified
for the work; and also describing a brief history of your education, work
experience and activities, skills, accomplishments and any other information
relevant to getting a job.
These documents are:
a) Cover letter
Also referred to as an application letter, it is a letter to an employer expressing
your interest in a job or area of work and highlights why you are qualified forthe work.
It is designed to introduce you in a more personal way, complementing the
contents of the resume/CV, expanding on relevant skills and achievements,
and highlighting a selection of your most prominent accomplishments.
A cover letter contains:
◾ contact information,
◾ purpose of letter,
◾ summary
Purpose of a Cover Letter
A good cover letter persuades the employer your qualifications match their
needs, plus:
◾ Shows you did research and take the job seriously.
◾ Proves you understand the challenges of the company.
◾ Reflects that your vision aligns with their goals.
◾ Presents how your skills and experience are a solution.
It is designed to introduce you in a more personal way, complementing the
contents of the resume/CV, expanding on relevant skills and achievements,
and highlighting a selection of your most prominent accomplishments.
A cover letter contains:
◾ contact information,
◾ purpose of letter,
◾ summary
Purpose of a Cover Letter
A good cover letter persuades the employer your qualifications match their
needs, plus:
◾ Shows you did research and take the job seriously.
◾ Proves you understand the challenges of the company.
◾ Reflects that your vision aligns with their goals.◾ Presents how your skills and experience are a solution.
Steps of writing a cover letter for a job application
1. Start with a header
A professional cover letter opens with a header. Ideally, your cover letter
header should be the same as in your resume (for consistency). Include the
following in your header:
◾ Full name
◾ Job title
◾ Phone number
◾ Email address
2. Address the reader
Once you are done with the header, mention the location and date of writing.
Then, address your cover letter directly to the hiring manager like so:
◾ Dear Sir,
◾ Dear Madam
3. Make a proper introduction
These few sentences at the beginning of your cover letter will determine
whether the hiring manager will read on. So, you need to start your cover
letter in a way that attracts and holds the reader’s interest. Highlight your
achievements and display your passion and enthusiasm.
ENTREPRENEURSHIP FOR GENERAL EDUCATION | Senior 6 138
4. Explain why you are the perfect fit
The second paragraph (main body) of your cover letter has a couple of jobs
to perform:
◾ Give the hiring manager what they’re looking for.
◾ Show that you will satisfy the company’s specific needs.
5. Show your motivation to join the company
Your future employers have needs. If they are willing to hire you, it is because
they think you will satisfy those needs. But they also want you to enjoy
working with them. That way, they know you’re more likely to stay with them
for longer. The key to writing a perfect third paragraph of your cover letter
is showing the hiring manager why you want this job, not just any job. That’s
particularly important for entry-level candidates—enthusiasm and passion
help prove you’ll hit the ground running.
6. Close with a promise
The best cover letter ending should be by providing value. Tell the hiring
manager that you are looking forward to meeting in person and discussing
how your experience and knowledge can help your future employer fulfil
their goals. Avoid these mistakes in the final paragraph:
◾ Coming off needy
◾ Focusing on how much you want the job, not on what you have to
offer
◾ Repeating the clichéd phrase, “Thank you for your consideration and
your time”
7. Stay Formal in the Closing Salutation
Once you have written the body of your cover letter, you just need to put
a formal closing at the very end. Write “Sincerely” and follow it with your
full name. Adding your handwritten signature is optional (recommended for
more formal cover letters). You can also use any of the following:
◾ Thank you,
◾ Best regards,
◾ Kind regards,
◾ Respectfully yours,
◾ With best regards,
8. Double-check the formatting
Before you send, make sure your cover letter formatting is intact. Consider
the following:
◾ Choose a legible cover letter font like Arial or Garamond, and keep it
between 10 and 12 points in font size.
Set even margins on all sides—1-inch margins should be perfect.
◾ Left-align all your contents.
◾ Use double cover letter spacing between paragraphs and 1–1.15
between lines.
◾ Title your cover letter by JobTitle—CoverLetter—YourName.
◾ Let your cover letter layout stay intact en route to the recruiter by
saving the file in PDF.
9. Match your cover letter with your resume
The final step of writing your cover letter is, in fact, checking up on your
resume to see if they both match the job requirements. Make sure you meet
your hiring manager’s expectations to the best of your ability.
Plus, a great cover letter that matches your resume will give you an advantageover other candidates.
Cover letter format
Sample Application Letter
b) Curriculum Vitae (CV)
A curriculum vitae (CV) is a detailed document highlighting your professional
and academic history. CVs typically include information such as your work
experience, along with your achievements, awards, scholarships or grants
you’ve earned, coursework, research projects and publications of your work.
Elements of Curriculum Vitae
A basic Cv should include the following:
1) Contact Information: At the top of your CV, include your personal
identification/name and contact information (address, phone number,
email address, etc.).
2) Education background/Qualifications: This may include the school/
institution attended, dates of study, and degree received.
3) Work Experience: List relevant work experience; this may include
non-academic work that you feel is worth including. List the employer,
position, and dates of employment. Include a brief list of your duties
and/or accomplishments.
4) Skills
◾ Professional competencies relevant to the position for which you
are applying.
◾ Computer Skills
◾ Language Skills Etc.
5) References: In this part, include people who know you and who might
be contacted in case they need any information about you.
6) Lastly, end by certifying that the information is from the best of your
knowledge.
CV writing tips
◾ Include relevant information only: Your bio-data should not include
all details about your life!
◾ Keep it simple, clear and neat
◾ Limit to 1-2 pages
◾ Be accurate: no spelling or grammatical errors
◾ Use bullets to describe duties/responsibilities of previous work
◾ Spell out acronyms the first time you use it, put the acronym in
parentheses and then use the acronym after that
◾ If using a computer, font size should be between 10 and 12 points◾ Use 2.5 cm margins
Application Activity 8.2
Analyze the illustration below and use it to answer the questions thatfollow.
Required
a) Which document is illustrated above?
b) In which process is it used in business operations?
c) Use the information provided on the illustration and prepare:
• A cover letter• A curriculum vitae
8.3. Interview Process and techniques
Learning Activity 8.3
Observe the picture of a job applicant being interviewed and answerquestions follow:
For any interview you have attended, be it at school, in the community or
for a job, describe:
a) What was the interview for?
b) How you prepared yourself:
• Before the interview
• During the interview• After the interview
8.3.1. Interview process
The interview process is a multiple-stage process for hiring new employees.
The stages mainly comprise job interviews held either one-on-one, with a
group of candidates, or with a panel.
Interviews are conducted in person, over the phone or by email, or via
video conferencing tools. The exact process will vary for each organization,
depending on the role and who is responsible for recruiting and hiring.
A job interview is an opportunity for the employer to find out more about
you – your education, work background, interests, personality – and for you to
find out more about the employer/business/company/organization and thespecific job to which you are applying.
8.3.2. Parts of the interview
In general, there are three main parts to the interview:
1) Opening: This part involves greetings, introductions, and it is where
the employer states the purpose of the interview.
2) Body of the interview: This is the major part of the interview process
where the interviewee is asked questions by interviewers to elicit
information in relation to the post.
In the process of questioning, interviewers should ensure that clear
questions are asked, and the interviewee is given time to respond. To
be able to answer well, the interviewee should also listen attentively
to questions and respond accordingly.
Commonly asked questions in interviews include;
a) Tell me/us about yourself
b) What qualities and skills do you have that will help you perform
this job?
c) What previous experiences do you have that are related to this
position?
d) Are you familiar with this company/business/organization?
e) What do you know about this company/organization?
f) What are your strengths and weaknesses?
g) What makes you fit for this position?
3) Closing the interview: In closing the interview, ask whether the
candidate has anything more to tell you about his candidacy or any
questions about the job/employer. Thank the interviewee for turning
up for the interview. The interviewee should also thank the interviewerand express interest and enthusiasm regarding the next step.
8.3.3. Tips for an interview
An interview is an integral part of the recruitment process. Interviews
range from conversations lasting a few minutes to several formal meetings,
sometimes with more than one interviewer. The interview process allows
you to demonstrate that you are the right candidate for the job. The better
prepared you are, the more relaxed and comfortable you will be when the
interview questions begin.
Getting the most out of interviewing is a combination of preparation, suitable
questioning and listening.
Before the interview
◾ Learn as much as you can about the organization or business to
which you are applying for a job: What do they do? Where? Size?
Who are their clients? etc.
◾ Think about how your previous work experience, schooling and
activities will help you perform the job to which you are applying.
◾ Dress appropriately for the interview: neat, clean clothing and shoes.
◾ Allow plenty of time to get to the interview.
◾ Write down questions you may have for the interviewer.
During the interview
◾ Greet the interviewer. Speak slowly, clearly and distinctly in a
confident voice.
◾ Think before speaking.
◾ Be respectful.
◾ Listen carefully: One of the most neglected interview skills is listening.
Make sure you listen attentively and respond accordingly.
◾ Be a good listener: Wait until the interviewer has finished talking
before you respond.
◾ Stay calm.
◾ Ask the interviewer to repeat or rephrase a question if you have not
fully understood it.
◾ If you do not know the answer to a question, be honest and let the
interviewer know why.
◾ Be honest in your answers but present any negative experiences in
a positive light or as lessons learned.
◾ Present yourself as being confident that you can do the job.
◾ Thank the interviewer.
After the interview
◾ Send a thank you letter by post or email if appropriate.◾ Follow up with a phone call after a week if appropriate.
Application Activity 8.3
Case study
An Interview with Mutesi
Mutesi has applied to be a cashier in one of the supermarkets in her district.
She has prepared and sent in her CV showing different experiences she
has acquired as a cashier. She has practiced answering questions she
thinks might be asked. She is confident in her ability to handle the duties
of the cashier.
One week before her interview, Mutesi got a call from the owner of the
supermarket, requesting her to prepare for the interview which was
scheduled in two weeks to come. Without panicking, she quickly got on
the internet to search how she could best show her skills. She approached
her relatives and friends for advice on how best she can approach the
interview.
On the day of the interview, she was very confident, clear and was able to
sell her skills successfully. She was able to demonstrate several things that
ultimately made her the best suited for the job. She showed the interviewer
that she understood the challenges facing the retail, wholesale businesses
and the competitors that the supermarket could capitalize on.
Finally, she proved that she understood the business she wanted to enter
in and that her skills were appropriate for the position.
Read the above case study and answer the questions that follow:
1. What did Mutesi do to prepare for her interview?
2. During her interview, what skills did she demonstrate that madeher the suitable candidate?
8.4. Appropriate workplace behaviors and attitudes
Learning Activity 8.4
Think of any previous work you have done
(including long or short term jobs, family business, and any others). Describe your experience by
answering the questions below:
a) What was the work setting – office, shop, construction site, restaurant?
b) Did you need to follow any rules or regulations (dress, work hours)?
c) What happened if you were not able to follow the rules?
d) Did your employer give you feedback on how well you were doing
your job? And on what you need to do better?
e) Did you behave the same way at work and at home? Why or whynot? What were some differences?
Every place of work has a different atmosphere, a different environment, a
different ethos. An efficient and harmonious working environment is created
largely by the way people behave in the workplace. This includes the behavior
of employees, employers and to some extent, even customers and clients.
Work behavior is the behavior one uses in employment and is normally more
formal than other types of human behavior. This varies from profession to
profession, as some are far more casual than others.
Work attitude means a feeling, belief or an opinion about a particular activity.
At work some people may feel uncomfortable towards doing certain types
of work or may not be interested in helping others. Such attitudes reduce
productivity and team work at work. Proper workplace behavior and attitude
contribute much to the success of a given organization.
Appropriate workplace behavior and attitude include the following;
◾ Dressing neatly and appropriately for the work: If wearing a uniform
make sure it is clean and neat; clothes should not get in the way or
prevent you from doing your work; it should not be distracting to you
or others.
◾ Keeping time and managing it well: Attendance and punctuality are
essential to keep your job. Let your supervisor know if you are going
to be late.
◾ Speaking to co-workers in a positive and respectful manner
◾ Being honest: Being honest will gain you the respect of co-workers.
◾ Keeping discussions and interactions related to work: Don’t bring
your personal problems to work or let them affect how you do your
job or interact with others. Avoid topics or making comments that
might make others feel uncomfortable.
◾ Staying positive: Don’t complain or be pulled into negative discussions
about work. Rather, approach problems positively and help to think
about how to improve the situation.
◾ Being respectful of others and your environment: Take proper care
of equipment, put things back where they belong and keep the
environment tidy.
◾ Being a team player: Participate proactively and respectfully and
listen to the ideas of others as well.
◾ Respecting the roles and contributions of others.
◾ Believing in yourself and what you do: Being positive about your job
and how you do it will help you to succeed and achieve your goals.
◾ Open mindedness: This involves having increased receptiveness to
new ideas.
◾ Valuing new experiences: This calls for desire to seek out and take
on new challenges.
◾ Desire for self-improvement: To attain it, one should exercise
continued learning as well as self-instruction.
Some examples of unacceptable behavior are:
◾ Aggressive or abusive behavior, such as shouting or personal insults
◾ Spreading malicious rumors or gossip, or insulting someone
◾ Discrimination or harassment
◾ Unwanted physical contact
◾ Stalking
◾ Offensive comments/jokes or body language
◾ Publishing, circulating or displaying pornographic, racist, sexually
suggestive or otherwise offensive material or pictures
◾ Isolation, deliberate exclusion and/or non co-operation at work
◾ Persistent and unreasonable criticism
◾ Unreasonable demands and impossible targets
◾ Coercion, such as pressure to subscribe to a particular political or
religious belief
Skills Lab Activity
Bright Business club wants to expand by introducing other viable projects.
In efforts to ensure the club grows effectively, they will recruit a strong
marketing manager from one of the members of the club. The key role of
the marketing manager is to ensure the right projects are implemented in
the club.
Questions
1. As a student of entrepreneurship, create a relevant job
specification and make an advert for the above position.
2. Discuss the importance of creating a job specification for a given
position.
Application Activity 8.4
Analyze the illustrations below and use them to answer the questionsthat follow
Required
a) Which illustration shows appropriate and inappropriate workplace
behavior?
b) Describe the workplace behavior illustrated above in A and B
c) If there is any inappropriate behavior in the illustrations, how can it bestopped at the workplace?
End of Unit Assessment
I. Project Activity
1. Students think of a vacancy they want to fill in their back-home
business and design:
a) Job analysis
b) Job analysis
c) Job description
d) Job specification) Job advert
2. You have come across an advertisement on the internet about
the need for a Head of Security in a prominent shop. Write an
application letter to apply for the above post.
3. Gikundiro is a senior six-level student who wants to start a fruit
processing business and she needs help from you to design anadvert for various posts in a fruit processing business.
Unit 9: Work Safety and Health
Key unit competence
To be able to apply standard health and safety practices and regulations at
the workplace.
Introduction
Successfully managing health and safety practices in the workplace relies on
commitment, consultation, and co-operation of everyone at the workplace.
Safety practices help protect people from accidents and injuries, while security
helps protect people from crime and violence. Both are important for creating
a safe and productive work environment. Everyone in the workplace needs
to understand the need for standard health and safety practices, what their
role is in making the workplace safer, and how they can abide by regulations
and fulfill their responsibilities and duties.
This unit is intended to give knowledge, skills regarding the health and safety
guidelines that the business must comply with and attitude to be adoptedduring an emergency.
Introductory Activity
Read the proverb below and answer the questions that follow.
“Inyamaswa idakenga yicwa n’umututizi” (When not cautious, an animal
can be killed by an ordinary tree cutter).
a) What does the proverb mean?
b) What is the relationship between the proverb and safety and health
at work place?
c) Give an example of situations at the workplace that may relate with
the proverb.
d) What other proverbs do you know that have the same meaning?
e) What should one do in order to avoid the situation portrayed by theproverb?
9.1. Positive health and safety practices
Learning Activity 9.1
Study the figure below showing a workplace and answer questions thatfollow.
Questions
a) Does the workplace above provide a healthy environment for work?
Explain your answer.
b) What do you think the following terms means in relation to safety and
health at the workplace?
• Workplace safety
• A healthy workplace
• A healthy habit
• Hygiene
• Sanitation
• Personal hygiene
• Workplace hygiene
c) Why is it important to have a safe and healthy workplace?
d) Mention any health habits that you observe at the workplace (school)
e) Why is it important to have good personal care and healthy habits at
the workplace?
f) Using the knowledge on hygiene and sanitation, give examples of
personal hygiene and sanitation practices that can be practiced at:
• Home• School/workplace
9.1.1. Definition of concepts
Workplace safety refers to the limitation of elements that can cause harm,
accidents, and other negative outcomes in the workplace. It represents a
collection of policies, behaviors, and precautions applied at work to limit
hazards, accidents, and other kinds of harm in a work environment.
A healthy workplace is a setup where employees, managers, and leaders
openly communicate and collaborate on a shared vision of improving the
health, safety, and wellbeing of all members of the organization. According to
the World Health Organization (WHO), a healthy workplace provides physical,
psychological, social, and organizational conditions that protect and promote
the health and safety of all workers of a company. A healthy workplace is the
ideal place to work in.
A healthy habit: is any behavior that benefits physical, mental, and emotional
health. These habits improve overall well-being and make you feel good.
Example: Most people spend at least six hours every day sitting in a chair.
Not only is this bad for your back, but it also leads to weight gain and
circulatory issues.
Hygiene is the practice of keeping oneself and one’s surroundings clean in
order to prevent infection and disease and remain healthy and fit.
Sanitation is an arrangement to protect the public health specially the
provision of clean drinking water and proper disposal of sewage.
Personal hygiene refers to maintaining cleanliness of one’s body and clothing
to preserve overall health and well-being.
Workplace hygiene refers to the standards of cleanliness that employers are
expected to meet in ensuring that they provide a healthy working environment
in which their staff can work, as well as clean and safe premises for membersof the public to visit.
9.1.2. Importance of safety and health workplace
Workplace safety is important because it helps prevent deaths, injuries,
financial losses, property damage, increases worker productivity, enhances
product or service quality and promotes good public relations.
A safe and healthy workplace not only protects workers from injury and
illness, it can also:
◾ Improved health and wellbeing. The most significant and most
obvious benefit of a healthy workplace is the improvement of the
workforce’s health and wellbeing.
◾ Greater productivity and performance. A business can increase
productivity when employees are healthy and happy in the
workplace, which results in an improvement in the performance of
their employees as well as the quality of output.
◾ Improved corporate image. When employees are satisfied with the
safety and health of the workplace, it leads to an improvement in the
organization’s corporate image.
◾ It also attracts more clients. Employees in a healthy workplace are
more productive, which results in higher quality output. This will
attract customers and clients to the products and services of that
business, bringing in higher profits.
◾ Increased job satisfaction. Seeing employees happy with the
workplace is one of the significant benefits of a healthy workplace.
When a workplace caters to the needs and wants of an employee, it
reduces the turnover rates of the company.
◾ Greater work development and learning opportunities. Employees
feel appreciated when their work environment allows them to explore
their capabilities and skills in their work.
◾ Improved employee morale. Having a healthy workplace helps
employees feel safe, heard, and comfortable enough to freely
work and express their creativity without feeling judged. A healthy
workplace sees employees’ happiness increase and motivation to
continue working.
◾ Lower absenteeism rates. Businesses that take the time to cultivate
a healthy workplace will see fewer health and sickness instances,
lowering the number of absenteeism and tardiness.
◾ Increased employee engagement. A healthy workplace naturally
increases employee engagement in the workforce, resulting in
higher productivity rate, greater loyalty, better retention rates, and
enhanced customer experiences.
◾ Lower turnover rate. Employees who are happy with their business’s
work environment will be less likely to leave for another company.
When turnover rates are low, it helps businesses lower costs
associated with hiring new employees.
◾ Lower workers’ compensation premiums. Having a healthy
workplace sees employees satisfied, motivated, and healthy. In effect,
companies will see a reduction in claimed workers’ compensationpremiums
9.1.3. Daily Positive health habits
Healthy habits include but are not limited to eating well, exercising, getting
enough rest and avoiding harmful substances, but also:
◾ Get enough sleep. A good sleep can improve memory and
concentration, boost the immune system, and help you cope with
stress more easily.
◾ Manage stress. Stress can affect the mood and physical health. It
can cause anxiety, anger, and irritability as well as headaches, muscle
pain, exhaustion, and sleeping problems.
◾ Find time to relax. Set aside time every day for self-care and
relaxation. Make a routine for the self, so that relaxation becomes a
daily ritual.
◾ Meditate once a day. Meditation may help you manage pain, reduce
blood pressure, improve symptoms of depression and anxiety, and
cope with daily stress.
◾ Maintaining a healthy social life. Whether it is volunteering, joining
a club, or attending a movie, communal activities help improve mood
and mental functioning by keeping the mind active and serotonin
levels balanced.
◾ Maintain healthy eating habits. To get all the nutrition the human
body needs, you must eat a balanced diet including dairy, grains,
protein, fruits and vegetables, as well as fat.
◾ Get some exercise every day, even just a little. This will not only
make you feel better but also make you look better. Try walking if
you cannot afford another as it is a great exercise.
General good safety habits at work
◾ Everyone helps keep the work environment tidy and organized.
◾ Everyone is comfortable reporting unsafe working conditions up the
chain of command.
◾ Everyone who is required to wear PPE is wearing it the right way—
and it fits properly.
◾ Everyone knows where safety equipment is located.
◾ Everyone who handles heavy objects uses proper lifting and carrying
techniques.
◾ Everyone knows that their organization is committed to safety at the
highest levels and can see posters in the break room or on the job
site demonstrating this commitment.◾ Everyone knows where to go and what to do in an emergency.
Everyone is aware of hazardous chemicals in the work area andknows where to find the Safety Data Sheets (SDSs).
Healthy hygiene and sanitation are very important for every workplace.
Below are some healthy hygiene and sanitation practices that can be practiced
at the workplace:
◾ Provide staff with a written hygiene policy. Inform them of the
intentions and expectations of a clean workplace.
◾ It is pivotal for a hygienic workplace to have a clean restroom well
stocked with soap, toilet paper and hand towels.
◾ Provide items such as clean wipes, sanitizers, and tissues to help the
staff maintain a clean and hygienic workspace.
◾ Make sure the workplace is regularly cleaned. This helps prevent the
spread of infection
◾ Before and after using the cooking supplies (including utensils) youshould wash these with soap and water (preferably hot water).
Application Activity 9.1
Using the knowledge and skills on hygiene and sanitation, make a weekly
plan that you will follow in order to apply hygiene and sanitation practices
either at home or work (school). In you include the practices you will
apply and those you will avoid. Every day you will put a check/tick on the
hygiene and sanitation practices applied or avoided.Use the following template to make the plan.
At the end of the week you will assess the hygiene and sanitation practices
by comparing the practices applied and those avoided. Which practiceswere you able to apply? Which practices did you manage to avoid?
9.2. Hazards in the workplace and ways to make work saferLearning Activity 9.2
The above figure illustrates a workplace environment from one of
the departments in the company. Study the figure and answer the
questions below.
a) Is this a safe and healthy workplace? Justify your answer
b) What do you think the term ‘hazard’ means?
c) What do you think the term ‘Workplace Hazard’ means?
d) How many workplace hazards can you identify in this image?
e) Briefly explain what you understand by the following types of hazards
as relates to safety and health at work
• Safety hazards
• Chemical hazards
• Biological hazards
• Physical hazards,
• Ergonomic hazards,
• Workload hazards
f) How can the workplace above be made safer? Suggest ways toeliminate the hazards identified
9.2.1. Meaning of Hazards at the workplace
A hazard is any source of potential damage, harm or adverse health effects
on something or someone. A hazard is the potential for harm or an adverse
effect to for example, to people as health effects, to organizations as property
or equipment losses, or to the environment.
Hazards in the workplace occur when the working environment can cause
injury, illness or death. The hazards can result from many of the different
aspects of the working environment world, including: equipment, dangerous
materials, unsafe working practices and behavior of people.
9.2.2. Types of hazards
Workplace hazards fall into six core types – safety, biological, physical,ergonomic, chemical and workload.
Safety hazards
Safety hazards can affect any employee, but these are more likely to affect
those who work with machinery or on a construction site. Safety hazards
include slips, trips and falls, operating dangerous machinery and electrical
hazards
Biological hazards
Biological hazards are extremely dangerous. These include exposure to
dangerous substances and diseases associated with working amongst
animals, people, or infectious plant materials.
Physical hazards
Physical hazards can affect those who work in extreme weather conditions or
in harmful environments. Workers that are exposed to continuous loud noise,radiation, sun rays and ultraviolet rays could be at risk.
Ergonomic hazards
Ergonomic hazards affect individuals whose work puts a strain on their body.
Manual roles that require lifting or sitting for long periods can cause damage
over time.
Chemical hazards
Chemical hazards mainly threaten employees whose roles expose them
to dangerous liquids, solvents or flammable gasses. Exposure to harmful
chemicals can cause illness, skin irritation, breathing problems and, in extreme
cases, death.
Workload hazards
Workload hazards include issues that could cause stress or strain, such as
workload, violence or aggression. These hazards can be experienced in anyjob role.
9.2.3. Handling hazards in a workplace
The best way to prevent injuries or illness in the workplace is to find the
hazards that could cause injury or illness, and fix them.
The following four steps may be followed to prevent unsafe situations at the
workplace using the acronym SAFE (Spot the Hazard, Assess the Risk, Fix the
Problem, Evaluate Results)
Spot the hazard
The first step in ensuring a safe workplace is to identify hazards. Hazards can
be identified by:
◾ Asking workers and contractors in the workplace about any hazards
they may have noticed.
◾ Looking at the physical structure of the workplace: for example,
stairs, desks, floor surfaces, exits, driveways.
Checking all machinery, appliances and vehicles used for work.
◾ Examining how substances are stored, used and moved from one
place to another.
◾ Reviewing the injury records, including ‘near misses’ reviewing
information from designers, manufacturers or suppliers of the
equipment and substances in the workplace.
Assess the risk
A risk is the likelihood of a hazard causing injury, illness or damage to the
health. So you need to work out which hazards are more serious than others
and deal with those first.
Assess the risk associated with each hazard by determining:
◾ The potential impact of the hazard.
◾ How severe could an injury or illness be?
◾ What’s the worst possible damage the hazard could cause to
someone’s health?
◾ Would it require simple first aid only? Or cause permanent ill health
or disability? Or could it kill?
◾ The likeliness of the hazard to cause someone harm.
◾ Could it happen at any time or would it be a rare event?
◾ How often are workers exposed to the hazard?
Fix the problem
Remove the hazard completely from the workplace. Concentrate on the most
urgent hazards without neglecting the simpler ones that could be easily and
immediately fixed.
Hazards can be fixed by using the hierarchy of controls to remove or reducerisk in the workplace.
Eliminate the hazard
Remove it completely from the workplace. For example: repair damaged
equipment. If this is not practical, then;
Substitute the hazard
Replace it with a safer alternative. For example: use a less toxic chemical; lift
smaller packages. If this is not practical, then;
Isolate the hazard
Keep it away from workers as much as possible. For example: relocate
photocopiers to separate, ventilated rooms; install barriers to restrict access
to hazardous work areas. If this is not practical, then;
Use engineering controls
Adapt tools or equipment to reduce the risk. For example: place guards on
dangerous parts of machinery; use a trolley for moving heavy loads. If this is
not practical, then;
Use administrative controls
Change work practices and organization. For example, rotate jobs to reduce
the time spent on any single work task; train staff in safe work procedures;
carry out routine maintenance of equipment. If this is not practical, then;
Use personal protective equipment (PPE)
For example: use hearing/eye protection equipment, hard hats, gloves and
masks; train staff to use PPE correctly.
Evaluate results
◾ After fixing the problem, find out whether the changes have been
effective.
◾ Get feedback from those affected by the changes and include them
in any modifications to their workplace or work routines.
◾ Make sure the solution does not introduce new hazards.
◾ If the work process changes, or new equipment is introduced to atask, then the risk assessment must be reviewed.
Application Activity 9.2
The illustration above shows some situations that may cause harm to
workers or people at a workplace. Study the illustration and answer the
questions below.
a) Describe all the situations that can cause harm illustrated above
b) Categorize the situations described above according to the types of
hazards and suggest how the situation (hazard) can be managed bycompleting the table below:
c) Using the knowledge and skills of hazards at the workplace, identify
all potential causes of harm at the school (workplace) and make a
report of all the hazards identified which should include:
• All potential hazards identified
• Categories of the hazards identified• Measures or strategies to manage or handle the hazard
9.3. Emergencies at workplaceLearning Activity 9.3
The figure above shows a situation at a workplace. Study the figure and
answer questions that follow.
a) What do you think is happening at the workplace?
b) How can the situation illustrated above affect the workplace (people
and organization)?
c) Name any other situations that can occur and endangers employees,
clients, or the public at the workplace.
d) What do you understand about the term ‘workplace emergency’?
e) What do you understand about the following types of emergencies
related to safety and health at work?
• Natural emergencies
• Civil emergencies
• Work-related emergenciesf) How can emergencies be responded to at the workplace?
9.3.1. Types of workplace emergencies
A workplace emergency is an unforeseen or unplanned situation that
threatens the employees, customers, or the public; disrupts or shuts down
the operations; or causes physical or environmental damage.
A natural emergency could occur as a result of flooding, severe weather
such as hurricanes or tornadoes, or forest fires.
Work-related emergencies are caused by factors relating directly to the work
conducted. Work-related emergencies could be things such as chemical spills,
explosions, machinery malfunction, or dangerous gas releases.
Civil emergencies are emergencies that stem from civil factors. Civil factors
could be things such as protests, strikes, or workplace violence or harassment,either employee-to-employee or client-based.
9.3.2. Responding to emergencies and staying healthy at work
Guidelines for action in an emergency situation
There are five steps that are considered to be best-practice that should be
taken in the management of an emergency.
Prevention: The steps that are taken to avoid an incident or accident from
occurring in the first place
Mitigation: These are measures that can reduce the risk of an emergency
happening.
Preparedness: The activities that are carried out to be ready to respond in
the event that an emergency has occurred.
Response: The actions that are taken immediately before, during and or after
an emergency to save lives and reduce loss and damages.
Recovery: The actions that take place in the aftermath of the emergency torestore services and return to normal conditions.
Application Activity 9.3
Read the statement below and answer questions that follow.
“An emergency can happen with no warning, so the best thing to do is
be prepared”.
Make an emergency response plan that can be followed to respond
appropriately if there is a safety hazard, an accident or an emergency in
a workplace and in daily life. The plan should include steps and guidelines
for the following emergencies:
a) Fire and smoke/Natural disasters/Severe weather
b) Personal injury or threat
c) Gas leak/Dangerous gas releasesd) Workplace violence or harassment
Skills Lab Activity
Skills Lab activity You have been given a job to make guidelines to apply
standard health and safety practices and regulations related to your
business club. Present the guideline that include:
a) Daily positive health habits to be practiced.
b) Daily hygiene and sanitation practices to be applied.
c) Strategies to handle hazards at the school.
d) Steps and guidelines to respond to emergencies at the workplacewhen something happens.
End of Unit Assessment
I. Project activity
Suppose that the Head Teacher asks you to put in place the checklist
to ensure that the Kitchen department is working in healthy and safe
working conditions. |Your checklist should include.
• Emergency procedures in kitchen context.
• Health and safety practices and hazards to be checked.
• How to recognize and assess the health and safety risks
• Appropriate practices to protect the environment.
II. Other Assessment Questions
1. Describe any 5 healthy habits that should be practiced every
day:
• at work
• in daily life
2. Describe some strategies to prevent the spread of illness and
contamination at the workplace and at home.
3. Briefly describe any 5 unsafe situations that could harm people
while on the job.
4. With examples, differentiate the types of hazards in the
workplace.
5. With examples, differentiate the types of emergencies at the
workplace.
6. Describe some strategies to deal with emergencies in life and inany workplace.
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