Topic outline

  • Unit 1: Ledgers and Trial Balance

    Key unit competence

    To be able to prepare ledger accounts and trial balance.


    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 to

    prepare 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

    Use your previous experience and accounting skills to answer the following

    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 cash


    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


    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?
    2. What should Mupenzi have done differently to qualify him for the


    1.1.3. Preparation of ledgers

    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
    The table below summarises how and what to post from prime books to


    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
    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


    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.



    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 posting

    information from the sales journal to debtors’ ledger.

    Example 3:
    Given the following Alain’s sales journal, post the information to the debtors’



    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.


    JANUARY 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.
    ◾ 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 their
    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 (bal

    b/f) is posted to the capital account in the general ledger.

    Example 5:
    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 Traders


    Following the clear steps of balancing accounts, balance off accounts in all

    the 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

    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 transactions

    are 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’s

    business 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 of

    December 2020. Extract the trial balance.

    Application Activity 1.2
    The following balances were extracted from the books of Umucyo Business

    Club 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 to

    respective ledgers and there after extract a trial balance

    General journal



    Return inwards journal


    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 Keza

    limited on 31st December 2020.

    Required: Prepare the Keza limited’ trial balance as on 31st December 2020

    Files: 2
  • Unit 2: Financial Statements

    Key Unit Competence
    To be able to prepare a balance sheet, income statement, and cash flow
    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 he

    failed 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.


    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 2.1

    Study the quote below and respond to the questions that follow

    a) What does the quote above mean to you as a student of
    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 their


    2.1.1. Meaning of Financial Statements

    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 interested

    in 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
    ◾ To derive financial ratios from the statements that can indicate the
    condition of the business.
    ◾ To investigate the details of certain business transactions, as outlined

    in 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
    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.
    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 that

    can 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 goods

    sold, 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
    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 format

    However, this unit will use the vertical format only.


    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 the

    trading 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 format

    However, in this unit will use the vertical format only.

    Required: Prepare the profit and loss account for the year ended 31st December

    2020 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 FRW

    Required: 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
    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
    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, Capital

    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,
    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
    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.
    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 format

    However, 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.
    The following balances were extracted from the books of UWERA’s business

    on 31st Dec 2021

    The following additional information was available:
    Inventory as of 31st December 2021 was valued at 4,500 FRW
    Prepare Uwera’s balance sheet as of 31st Dec 2021 using the order permanency

    and horizontal method.

    Application Activity 2.4
    The following information was obtained from the books of savanna

    business club as of 31 March 2022. 

    Prepare savanna’s balance sheet using a horizontal format.

    2.5. Cash Flow Statements
    Learning Activity 2.5

    Analyze 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 was

    his 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
    ◾ 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 are

    running, 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
    Direct method
    The direct method for creating a cash flow statement reports major classes of

    gross cash receipts and payments (Cash inflow and cash outflow)

    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
    ◾ 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 equal

    instalments during the months of February and March.



    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
    ◾ 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 for

    April, 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 are

    the projected estimates (in FRW) for the first two years.

    You are required to prepare a cash flow statement for the first two years

    of 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
    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
    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
    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 and

    a 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 Kaneza

    and 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
    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

    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.

    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
    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 .com

    While entrepreneurs are undertaking economic activities or setting projects,

    they must be cautious to reduce adverse effects on the environment and
    human beings. This can be done by replacing and/or modifying planned
    activities to reduce negative impacts.
    a) What do you see in the photo?
    b) What do you understand by the term Environmental Impact
    c) Explain the major purpose of Environmental Impact Assessment.
    3.1.1. Meaning of EIA
    Environmental Impact Assessment (EIA) is the systematic method for
    determining, forecasting, and assessing the environmental effects of
    suggested actions and projects.
    Prior to making substantial decisions and commitments, this method is used,
    with a focus on preventing, minimising, and offsetting the significant negative
    effects of proposed activities.

    3.1.2. Importance of Environment Impact Assessment

    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
    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
    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
    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

    Fig 3.2 Industrialization activities lead to waste disposal which contaminates the

    environment. Source; 

    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 monitoring

    implementation of environmental protection measures.

    Roles of REMA
    i) Receive and register EIA Applications (project briefs) submitted by
    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
    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
    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 during

    EIA 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
    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
    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
    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 decision

    making 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 for

    the 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
    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 responsibilities

    between the state and investor are differentiated.

    Skills Lab Activity
    Create an EIA report for your respective projects in the student business

    club 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
    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
    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
    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
    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 the 

    environment 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
    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
    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
    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

    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
    mentors and friends and gradually growing her presentation and pitching

    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.
    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 and


    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
    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.


    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 you

    prepare 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 MarketA 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 of

    the 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.
    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 and

    emerged 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 one

    can 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
    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
    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 below


    Application Activity 4.3
    Reflect on the problem you identified in the introductory activity, and the
    solutions. Incorporate the above techniques and present your business

    idea 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.
    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 you

    present 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.
    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 plan


    URL: 1
  • Unit 5: Taxes and Customs Procedures

    Key unit competence
    To be able to interpret tax computations and declare goods/services from
    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
    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
    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.
    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
    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
    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
    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.
    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
    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
    ◾ 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
    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
    ◾ 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
    ◾ 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
    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
    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
    ◾ 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

    ◾ 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.
    a) VAT to be paid
    b) The price VAT inclusive
    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)


    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
    2. Assuming that your future back home business employs an
    accountant who will be paid 300,000FRW per month, How much

    tax 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.
    a) VAT paid

    b) The price VAT excluded

    5.3. Customs Declaration

    Learning Activity 5.3

    Fig 5.3: People clearing at the customs office in Rwanda (Source:
    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 Offices


    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
    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
    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
    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
    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 warehouse

    which 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 China

    4. 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 to

    export 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
    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
    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
    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 the


    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
    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
    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 be


  • Unit 6: Financial Market

    Unit 6: Financial Market

    Key unit competence
    To be able to manage their finances responsibly and invest in capital markets.
    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
    Introductory Activity

    Analyze 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
    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 it

    and answer the questions that follow.

    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 investment

    is 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 any

    money 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 debt

    and 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 functions

    of 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, currencies

    and 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
    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 maturity

    date. 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 the

    capital 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
    2. How would you use the capital market to raise funds for your


    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 exchange

    markets (you can use this link:

    Requirements and process to join the Rwanda stock exchange

    How to open an account and trade on the Rwanda stock exchange

    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
    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 steps

    you 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
    2. Discuss the benefits of investing in capital markets?
    3. Describe the steps involved in investing in the stock exchange


  • Unit 7:7Stock Control

    Unit 7:7Stock Control

    Key unit competence
    To be able to properly handle stock for the business
    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
    a) What is meant by stock, stock control/management and inventory?
    b) What are the necessary documents for stock management in a
    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.
    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

    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

    Closing Stock: Value of stock at the end of an accounting period.

    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
    Stock management
    Stock management is the practice of ordering, storing, tracking, and controlling
    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 stores

    An 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 justified

    with 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 in

    the stock:

    In the morning of March 12th, 2018, Nyiraneza made a Purchase order for

    the 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 the

    minimum 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 count

    to 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
    ◾ 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 counts

    Start-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.
    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, the

    company 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
    LIFO has become popular because of inflation and the fact that the income

    tax 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 the

    selling 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
    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 each

    May 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 in

    stock. 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 7.3

    Analyze 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
    2. What documents does the school/business use in stock
    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

    • 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) LIFO

    c) WAC

  • Unit 8: Work Habits and Behavior

    Key unit competence
    To be able to apply for a job and maintain professional conduct at the
    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-workers

    more 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 that


    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 specification

    iv) 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 talents

    and 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, and

    manage 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
    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; -
    iii) Jobs in Rwanda
    iv) NFT consult


    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
    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 for

    the 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.
    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
    ◾ 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 advantage

    over 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
    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 that


    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 answer

    questions 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 the

    specific 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
    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 interviewer

    and 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

    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 made

    her 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 why

    not? 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. 
    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
    Application Activity 8.4
    Analyze the illustrations below and use them to answer the questions

    that follow

    a) Which illustration shows appropriate and inappropriate workplace
    b) Describe the workplace behavior illustrated above in A and B
    c) If there is any inappropriate behavior in the illustrations, how can it be

    stopped 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 an

    advert 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.
    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 adopted

    during 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 the


    9.1. Positive health and safety practices

    Learning Activity 9.1

    Study the figure below showing a workplace and answer questions that


    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 members

    of 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’ compensation


    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
    ◾ 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 and

    knows 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) you

    should 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 practices

    were you able to apply? Which practices did you manage to avoid? 

    9.2. Hazards in the workplace and ways to make work safer

    Learning 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 to

    eliminate 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
    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 any

    job 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 reduce

    risk 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
    ◾ 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 a

    task, 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 by

    completing 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 workplace

    Learning 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 emergencies

    f) 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
    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 to

    restore 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 releases

    d) 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 workplace

    when 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
    • 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
    5. With examples, differentiate the types of emergencies at the
    6. Describe some strategies to deal with emergencies in life and in

    any workplace.


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