GATSIBO DISTRICT

KIZIGURO SS

CLALL S6:ALL TEACHER NAME :MUREKATETE CLEMENTINE

ENTREPRENEURSHIP N0TES 2023-2024

TABLE OF CONTENTS

Unit 1: LEDGER AND TRIAL BALANCE ....................................... Page 3

Unit FINANCIAL STATEMENTS ..................................................Page 8

Unit 3: ENVIRONMENT IMPACT ASSESSMENT(EIA)..…………… Page 22

Unit 4: BUSINESS PLAN PITCH………………………………………… Page 24

Unit 5: TAXES AND CUSTOMS PROCEDURES………………………Page 26

Unit 6: FINANCIAL MARKETS ……………………...........................Page 29

Unit 7: STOCK CONTROL …………………………………………...... Page33

Unit 8:WORK HABITS AND BEHAVIOUR…………………………….Page38

Unit 9: WORK SAFETY AND HEALTH………………………………... Page46

UNIT 1: LEDGER AND TRIAL BALANCE

LEDGER: is a book which contains various accounts of a business. It is a set of accounts.

A ledger is also known as the principal book of accounts.

The process of transferring the debit and credit transactions from the journal to the ledger is
called‟Posting of transactions to the ledger”

TYPES OF LEDGER
• Sales ledger: or Debtors’ Ledger
It is a grouping of all accounts related to customers to whom goods have been sold on credit
(Credit Sales). (Records credit sales transactions.)
• Purchase ledger: or Creditors’ Ledger
It is a grouping of all accounts related to sellers from whom goods have been purchased on
credit (Credit Purchases). (Records credit purchase transactions.)
• General ledger: is a centralized compilation for all the ledger accounts of a business.
(It contains all types of accounts which can be found in an organization such as assets,
liabilities, capital or equity, revenues, expenses, etc.)

An account is a place where debit and credit entries concerning the business
transactions are recorded.

Presentation of an account
There are several ways of presenting an account but our focus is only on two ways:
1o T- Account and,
2o Open format Account

The common form of an account has three main elements:

• A title that describes the name of the asset, liabilities or Owner's equity.
• A leftt side, which is called the debit side (Dr).
• A right side, which is called the credit side (Cr).

• T-FORMAT ACCOUNT

Debit Name of the account credit

OPEN FORMAT ACCOUNT

Debit Name of the account Credit

Date Particulars Folio Amount Date Particulars Folio Amount
Debit and Credit

Debit means increasing an account while Credit means decreasing an account.

Debiting an account means to record the amount on the left side of an acouunt.
Crediting an account means to record the amount on the right side of an account.

Balancing an account

An account is balanced off at the end of the month where both the debit side and the
credit side are added and compared.
• Balance carried down (Bal c/d): This is the amount that is added to the less
side of an account to make both sides of an account equal.
• Balance brought down (Bal b/d): This is the amount that is recorded on the
greater side to act as a reminder that it was a greater side of an account.

(C) TRIAL BALANCE

A trial balance is a list of debit and credit balances extracted from the ledger accounts
at a given date.
Or A trial balance is a statement of debit and credit balances extracted from the ledger
accounts.

Format of a trial balance

Particular
Debit (Frw) Credit (Frw)
A
Xxxx --------------
B
Xxxx -------------
C
-------------- Xxxx
D
-------------- Xxxx
Totals
Xxxx Xxxx

The importance (uses) of a trial balance in a business:

• It helps to prove the arithmetical accuracy in the journals and ledgers.

• It helps to check errors in the double entry system.
• It is used to check whether the double entry system has been correctly respected.
• It provides data for future reference.
• It is used to prepare final accounts such as trading, profit and loss account and the
balance sheet.
• It is used to determine the value of assets and liabilities of the business, revenue and
expenses balances.

Preparation of a trial balance (How to draw a trial balance)

The following steps are taken when preparing a trial balance:

• Post transactions into the journals.
 • Make ledgers and balance off all ledger accounts.
• Post the debit balances in the debit column and credit balances in the credit column of
the trial balance.
• Add up all the debit balances and all the credit balances and the total of debit balances
must be equal to the total of credit balances.
• If the totals are not equal, check the process over again to identify the errors and
correct them.

Example 1
On 01/01/2014: SIFA Enterprise Ltd started business with 1,000,000 Rwf of
cash, 500,000 Rwf at bank and a stock of 2,000,000 Rwf.
02/01/2014: Sold goods of 200,000 Rwf to Issa on credit.
05/01/2014: Purchased goods of 400,000 Rwf by cash from Fred.
07/01/2014: Issa paid a half of his debt by cheque.
15/01/2014: Withdrew 300,000 Rwf from the bank for business use.
Required:
(a) Record the above transactions in a journal.
(b) Post the transactions in a ledger.
(c) Prepare the trial balance.
Answer:
(a) Journal

Date Details Folio Debit Credit

01/01/2014 Cash A/C 1000 000
Bank A/C 500 000
Stock A/C 2 000 000
Capital A/C 3500 000
(Initial balance)
02/01/2014 Issa A/C 200 000
Sales A/C 200 000
(Sale of goods on credit)
05/01/2014 Purchases A/C 400 000
Cash A/C 400 000
(Purchase of goods by cash)
07/01/2014 Bank A/C 100 000
Issa A/C 100 000
(Payment of Issa by cheque)
15/01/2014 Cash A/C 300 000
Bank A/C 300 000
(Withdrawal of money from bank for
business use)

(b) Ledger
 Dr Cash A/C
Cr
01/01/2014 Capital A/C 1 01/01/2014 Purchases A/C
000 000 400 000
15/01/2014 Bank A/C 31/01/2014 Bal c/d
300 000 900 000

Total 1 Total 1
300 000 300 000
01/02/2014 Bal b/d
900 000

Dr Bank A/C Cr
01/01/2014 Capital A/ 500 000 15/01/2014 Cash A/C 300 000
07/01/2014 Issa A/C 100 000 31/01/2014 Bal c/d
300 000

Total 600 000

01/02/2014 Bal b/d 300 000 Total 600 000

Dr Stock A/C Cr
01/01/2014 Capital A/C 2 000 000 31/01/2014 Bal c/d 2 000
000

Total 2 000 000

01/02/2014 Bal b/d 2 000 Total 2 000 000
000

Dr Capital A/C Cr
31/01/2014 Bal c/3 500 01/01/2014 Cash A/C 1 000
000 000
01/01/2014 Bank A/C 500
000
01/01/2014 Stock A/C 2 000
000
Total 3 500 000

Total 3 500 000

01/02/2014 Bal b/d 3 500
000

Dr Issa A/C Cr
02/01/2014 Sales A/C 200 000 01/01/2014 Bank A/C 100 000
31/01/2014 Bal c/d
100 000
 Total 200 000
01/02/2014 Bal b/d Total 200 000
100 000

Dr Sales A/C
Cr
31/01/2014 Bal c/d 200 02/01/2014 Issa A/C 200 000
000

Total 200 000 Total 200 000

01/02/2014 Bal b/d 200
000

Dr Purchases A/C Cr
05/01/2014 Cash A/C 400 000 31/01/2014 Bal c/d
400 000

Total 400 000

01/02/2014 Bal b/d Total 400 000
400 000

• Trial balance

Particulars Debit (Rwf) Credit (Rwf)

Cash 900 000
Bank 300 000
Stock 2 000 000
Capital 3 500 000
Issa 100 000
Purchases 400 000
Sales 200 000

Total 3 700 000 3 700 000

NOTE: 1. BUY DEBIT: -what we buy acount

-purchase A/C, goods/stocks A/C
CREDIT: - Cash A/C on cash
- Bank A/C cheque
- Supplier A/C on ccredit

2. SELL DEBIT: - Cash A/C

- Bank A/C
- Customer A/C
CREDIT: - Sales A/C
 3.. PAY DEBIT: -Supplier A/C
CREDIT: -Cash A/C
-Bank A/C

ERRORS IN A TRIAL BALANCE

(a) ERRORS DETECTECT BY A TRIAL BALANCE

Errors (mistakes) detectect by a trial balance are errors which when committed, the trial
balance will not balance .
*Errors disclosed (detected) by trial balance are as follows:
• When the principle of double entry system has not been observed.
• Mistakes in balancing off ledger accounts.
• Mathematical errors i.e wrong addition or wrong subtraction of figures.
• Posting a wrong amount in the trial balance.
• Making an entry on the wrong side of the trial balance.
• Recording balances on the wrong side of the trial balance.

Note: When the above errors (mistakes) are committed, the trial balance will not balance.

(b) ERRORS NOT DETECTED BY A TRIAL BALANCE

Errors (mistakes) not detectect by a trial balance are errors that do not prevent the trial
balance from balancing. These are errors which when committed, the trial balance will still
balance yet an error has been made.

*Errors not disclosed (detected) by trial balance:

• Errors of omission: This error is committed when a transaction is completely not
recorded in the books of accounts. The trial balance will still balance yet an error has
been made.
• Errors of original entry: This error is made in source documents like invoice and
receipt.
e.g if goods sold at 23,000 Rwf are recorded as 32,000 Rwf on the cash sales.
• Errors of commission: This error is committed when transactions are recorded in
wrong accounts.
e.g Purchases by John being recorded on Marry's account.
• Errors of principle: These are errors of making entries in wrong types of accounts.

UNIT 2 FINANCIAL STATEMENT

Financial statements are reports prepared by a company‘s management to present the

financial performance and position at the end of the accounting period.

Importance of financial statements/ Examine/describe the uses of financial statements”

 They are important for the following reasons:
• To determine the ability of a business to make money and uses of that money.

• To determine whether a business has made a profit or loss over a given period.

• To determine the financial position of a business at a given period of time.

• To determine whether a business has the capability to pay back its debts.

• To investigate the details of certain transactions.

• To correct and take measures where necessary, etc

TYPES OF FINANCIAL STATEMENTS

There are 4 main types of financial statements:

• Income statement

• Balance sheet

• Cash flow

• Statement of owner’s equity

Income statement
Income statement is a financial statement that reports a company‘s financial performance
over a specific accounting period.

Income statement (Trading, Profit and Loss account) is also a financial statement that
shows the company's income, expenses and net profit or loss at a given period of time.
• INCOME STATEMENT

Income statement is the combination of 2 accounts:

• Trading account

• Profit and loss account

- 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 – cost of sales

- Profit and loss account where the value of net profit or Net loss is calculated by deducting
expenses from the gross profits i.e Net profit= Gross profit – total expenses.

Items found in a trading, profit and loss account

• Opening stock: These are unsold goods available in the business at the beginning of the
new trading period.
• Purchases: This refers to goods bought by the business for resale.
• Purchases returns or returns outwards: These are goods bought by the business for sale
but have been returned or sent back to the suppliers due to unsatisfactory resaons. Net
purchases = purchases – return outwards/purchase returns
• Sales: refer to the value of goods which were bought for resale and have been sold by the
business.
• Sales returns or returns inwards: These are goods that were previously sold but have
been returned back to the business by customers due some reasons.
Net sales = sales – returns inwards/ sales returns.

• Drawings of goods: These are goods withdrawn or taken out of the business by the
entrepreneur for personal use.
• Trading expenses: These are expenses incurred by the business like rent paid, salaries
and wages, electricity, etc.
• Carriage inwards: These are the transport costs incurred when bringing goods bought to
the business.
Or Carriage inwards: refers to the cost of transporting the goods or bring the goods to the
business premises. It forms part of the goods bought hence added to purchases the
trading account. Net purchases = purchases + carriage inwards – purchases return.

• Closing stock: This refers to the stock of unsold goods remaining in the business at the
end of the trading period.
• Gross profit: Is the 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 – cost of sales
• Gross loss: this is excess of cost of sales over the net sales of the business.
• Miscellaneous incomes: These are small incomes that a business receives from other
sources than the sale of goods and services.

Note: *Gross profit = net sales – cost of sales. In case the answer is positive, it is termed
as gross profit. In case the answer is negative, it is termed as Gross loss.

*Net profit = Gross profit- expenses. In case the answer is positive, it is termed as Net
profit. In case the answer is negative, it is termed as Net loss.

Components of the income statement

Income statements comprises two parts:

-Trading account
-Profit and loss account
1. The trading account
(a) Vertical format of the trading account
Particulars Rwf Rwf Rwf
Sales XXX
Less: sales returns XXX
Net sales XXXX
Less: Cost of sales
(Cost of goods sold)
Opening stock XXX
Add: Purchases XXX
Add: Carriage inwards XXX
 Less: Purchases returns XXX
Net purchases XXX
Goods available for sale XXX
Less: Closing stock XXX
Cost of sales (cost of goods XXXX
sold) XXXX
Gross profit

Example1
Imanzi enterprise Ltd had the following information at the end of December 2011.
Purchases 5000 Rwf
Sales 7000 Rwf
Opening stock (01/01/2011) 1000 Rwf
Closing stock (31/12/2011) 1200 Rwf
Returns outwards 500 Rwf
Sales returns 860 Rwf
Required: Prepare the trading account for the period ending 31st December, 2011

Solution

• Using narrative format/vertical format

Imanzi enterprise ltd trading account for the period ending 31st December, 2011

Particulars/Details Rwf Rwf Rwf

Sales 7000
Less: sales returns 860
Net sales 6140
Less: Cost of sales
(Cost of goods sold)
Opening stock 1000
Add: Purchases 5000
Less: Purchases returns 500
Net purchases 4500
Goods available for sale 5500
Less: Closing stock 1200
Cost of sales (cost of goods sold) 4300
Gross profit 1840

• Using T-format/ horizontal format

Dr
Cr
Opening stock 1000 Sales 7000
Add: Purchases 5000 Less: sales returns 860
Less: Purchases returns 500 Net sales 6140
Net purchases 4500
Goods available for sale 5500
Less: Closing stock 1200
 Cost of sales (cost of goods sold) 4300
Gross profit
1840
6140
6140

2. Profit and loss account

The profit and loss account begins with the gross profit or gross loss carried forward from the
trading account.
There are two formats used to prepare the profit and loss account. These are:
- T-format/ Horizontal format
- Narrative format/Vertical format (or Informative format)

Example

Imanzi enterprise Ltd had the following information at the end of December 2011.
Gross profit 1840
Wages and salaries 500
Rent and rates 360
Postage and telephone 120
Stationery and printing 160
Rent received 1200
Required: Prepare the profit and loss account for Imanzi enterprise Ltd for the period ending
31st December, 2011

Solution

• vertical or narrative format

Imanzi enterprise Ltd profit and loss account for the period ending 31 st December, 2011

Details Amount Amount (Rwf)

(Rwf)
Gross profit 1840
Add: miscellaneous
income 1200
Rent received 3040
Less: Expenses 500
Wages and salaries 360
Rent and rates 120
Postage and telephone 160
Stationery and printing 1140
Total expenses 1900
Net profit

• T-Format or Horizontal format

Dr Cr
Wagesandsalaries 500 Grossprofit 1840
Rentandrates 360 Add: miscellaneous income
 Postageandtelephone 120 Rentreceived 1200
Stationeryandprinting 160

Totalexpenses 1140
Netprofit 1900
3040
3040

INCOME STATEMENT OR TRADING, PROFIT AND LOSS ACCOUNT

An income statement (Trading, Profit and Loss account) is a financial statement that
shows the company's income, expenses and net profit or loss at a given period of time.

A) Vertical or Narrative format of the income statement for the period ending
31/12/XXX
Particulars/Details Rwf Rwf Rwf
Sales XXX
Less: sales returns XXX
Net sales XXXX
Less: Cost of sales
(Cost of goods sold)
Opening stock XXX
Add: Purchases XXX
Add: carriage inwards XXX
Less: Purchases returns XXX
Net purchases XXX
Goods available for sale XXX
Less: Closing stock XXX
Cost of sales (cost of goods sold) XXXX
Gross profit XXXX
Add: Miscellaneous income
Discount received XXX
Interest received XXX
Commission received XXX
Rent received XXX
XXXX
XXXX
Less: Operating expenses
Discount allowed XXX
Rent XXX
Electricity and water XXX
Insurance premiums XXX
Salaries and wages XXX
Carriage outwards XXX
Interest on loan XXX
Bad debts XXX
Depreciation XXX
Bank charges XXX
Stationery XXX
Total expenses XXX
Net profit or net loss XXXX XXXX
(B) T-Format or Horizontal format of income statement for the period ending 31/12/XXX

Dr Cr
Rwf Rwf
Rwf Rwf
Opening stock Sales XX
XX Less: sales returns XX
Add: Purchases XX Net sales
Add: carriage inwards XX XXX
Less: Purchases returns XX
Net purchases
XX
Goods available for sale
XX
Less: Closing stock Gross profit
XX XXX
Cost of sales (cost of goods sold) Add: Miscellaneous income
XX Discount received
Gross profit XX
XXX Interest received
XX
XXX Commission received
XX
Less: Operating expenses Rent received
Discount allowed XX
XX Etc
Rent
XX
Electricity and water
XX
Insurance premiums
XX
Salaries and wages
XX
Carriage outwards
XX
Interest on loan
XX XXX
Bad debts Net profit or net loss XXX
XX
Depreciation
XX
Bank charges
XX
Bonus stock
XX
Stationery
XX
Total expenses
XX
Net profit or net loss
XXX
 XXX

Example 1

The following information is available from the books of MAHORO Enterprise Ltd for the year
ended 31
December, 2012
Capital 298 000 Rwf
Cash at hand 24 000 Rwf
Cash at bank 220 000 Rwf
Stock (01/01/2012) 420 000 Rwf
Debtors 160 000 Rwf
Creditors 200 000 Rwf
Returns inwards 10 000 Rwf
Sales 1 120 000 Rwf
Purchases 410 000 Rwf
Salaries 80 000 Rwf
Water and electricity 12 000 Rwf
Postage 4000 Rwf
Drawings 18 000 Rwf
Furniture and fittings 150 000 Rwf
Motor vehicle 700 000 Rwf
4 years bank loan 600 000 Rwf
Rent received 24 000 Rwf
Office rent 34 000 Rwf

Additional information:
Stock at 31/12/2012 was 540 000 Rwf.
Required:
• Prepare MAHORO Enterprise Ltd Trading, Profit and Loss account for the year ended
3/12/2012.

• MAHORO Enterprise Ltd Trading, Profit and Loss account for the period ended
31st December, 2012.
Details Rwf Rwf Rwf
Sales 1 120 000
Less: Returns inwards (10 000)
Net sales 1 110 000
Less: Cost of goods sold (Cost of
sales) 420 000
Opening stock 410 000
Add: Purchases 830 000
Goods available for sale (540 000)
Less: Closing stock (290 000)
Cost of goods sold 820 000
Gross profit
Add: Miscellaneous incomes: 24 000
Rent received 844 000

Less:Operating expenses 80 000

Salaries 12 000
Water and electricity 4000
 Postage 34 000
Office rent
(130 000)
Total expenses 714 000
Net profit

• BALANCE SHEET

The balance sheet is a statement that shows the financial position of a business at a
given date. It shows the value of assets, liabilities and capital of the business at a given
period of time.

There are 2 types of balance sheet, namely:

• Initial balance sheet: which is prepared at the start of the business, in this
Capital is

unknown you have to calculate it.

• Final balance sheet: it is prepared at the end of a financial year, here Capital is
known.

It is prepared after the trading profit and loss account have been prepared, it is
prepared basing on the ACCOUNTING EQUATION, which states that: Assets=capital
+ liabilities

The balance sheet has three (3) major parts of a balance sheet are Assets, Liabilities
and Capital (Owner’s equity)

• ASSETS: These are possessions/properties that belong to the business or

what the business owns. They are grouped into two: Fixed assets and Current
assets.

a) Fixed assets: these are business properties for use in a long period of time usually
above one year. E.g land, equipment, machinery, fixtures and fittings, motor
vehicle etc.

b) Current assets: possessions or properties of the business which last for a short
time. Current assets keep on being converted into cash. e.g. stock of goods, debtors,
and cash at hand, Cash at hand, prepaid expenses, outstanding income, etc.
 • LIABILITIES: These are debts or amount of money that the business owes the
outsiders. Properties that are used by the business and which must be paid
back in future.

There 2 types of liabilities: Long-term liabilities and Short-term liabilities (or Current
liabilities)
a) 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, debentures.

b) Short term liabilities/current liabilities: these are debts of the business which
are to be paid within a short time usually within a year. e.g creditors, bank
overdraft, outstanding expenses, prepaid income (income received in advance)
etc.

• CAPITAL: These are the resources invested by the owner in the business.
Capital is also known as owner’s equity. To start any business a person
requires capital; which can be in form of money or other physical resources.

Types of capital

• Capital invested/initial capital: this is the actual amount of money or other

resources invested into the business by the owner when commencing a business.

• Owner’s equity: this is the total amount of the resources in business that belongs
to the owner at a given date.

Owner’s equity = Total assets – Total liabilities

c) Borrowed capital: this is total amount of long term liabilities.
d) Fixed capital: this refers to the value of fixed assets in the business.

e) Liquid capital (or Circulating capital): this refers to the total value of current
assets inform of cash and those that can easily be changed into cash like cash
at hand debtors.
Liquid capital = Total current assets – closing stock

f) Working capital: It is the difference between current assets and current liabilities
Working Capital = Current assets – Current liabilities

g) Capital employed: this is the value of the assets that contributed to a company’s
ability to generate
revenue.

Capital employed = total assets – current liabilities

 or
Capital employed = working capital + fixed assets

h) Gross capital employed (or Trading Capital): this is the total value of all the
assets o\f the business. It is the sum of fixed assets and current assets.

T-Format or Horizontal format of the balance sheet As at 31st December, XXX

ASSETS Rwf LIABILITIES AND CAPITAL Rwf Rwf
Rwf
FIXED ASSETS
• Land • Capital
XX XX
• Buildings • Add: net profit XX
XX • Add:contributions xx
• Fixtures • Less: Drawings XX
XX Owner’s equity
• Motor vehicle XX XXX
Less: Depreciation XX
LONG TERM LIABILITIES
XX • Long term bank loan e.g Loan of
• Equipment 2, 5, 20 years and more
XX XX
• Machinery XX • Creditors exceeding one year
Less: Depreciation XX XX
• Debentures
XX XX
• Furnitures and fittings • Bonds
XX XX
• Goodwill • Preference share
XX XX
• Trade mark
XX XXX
• Patent or copyright
XX CURRENT LIABILITIES
• Companies registration charges • Creditors of <1 year
XX XX
• Discount on shares • Prepaid income
XX XX
• Bank overdraft
XXX XX
CURRENT ASSETS • Accrued/unpaid expenses e.g
• Stock/inventory (31/12/XXX) salary owing
XX
• Debtors XX
XX • Supplier's loan
• Cash XX
XX • Outstanding expense
• Bank XX
XX • Loan of < 1 year
• Prepaid expenses e.g prepaid rent XX
XX • Bills payable
 • Accrued/unpaid income XX
XX
• Bills receivable XXX
XX

XXX
Total assets Total liabilities and capital
XXXX XXXX

Example 1

The following information is available from the books of MAHORO Enterprise Ltd for the year
ended 31
December, 2012
Capital 298 000 Rwf
Cash at hand 24 000 Rwf
Cash at bank 220 000 Rwf
Stock (01/01/2012) 420 000 Rwf
Debtors 160 000 Rwf
Creditors 200 000 Rwf
Returns inwards 10 000 Rwf
Sales 1 120 000 Rwf
Purchases 410 000 Rwf
Salaries 80 000 Rwf
Water and electricity 12 000 Rwf
Postage 4000 Rwf
Drawings 18 000 Rwf
Furniture and fittings 150 000 Rwf
Motor vehicle 700 000 Rwf
4 years bank loan 600 000 Rwf
Rent received 24 000 Rwf
Office rent 34 000 Rwf

Additional information:
Stock at 31/12/2012 was 540 000 Rwf.
Required:
• Prepare MAHORO Enterprise Ltd Trading, Profit and Loss account for the year ended
3/12/2012.
• Prepare MAHORO Enterprise Ltd balance sheet as at 31/12/2012.

• MAHORO Enterprise Ltd Trading, Profit and Loss account for the period ended
31st December, 2012.
Details Rwf Rwf Rwf
Sales 1 120 000
Less: Returns inwards (10 000)
Net sales 1 110 000
Less: Cost of goods sold (Cost of
sales) 420 000
Opening stock 410 000
Add: Purchases 830 000
Goods available for sale (540 000)
Less: Closing stock (290 000)
 Cost of goods sold 820 000
Gross profit
Add: Miscellaneous incomes: 24 000
Rent received 844 000

Less:Operating expenses 80 000

Salaries 12 000
Water and electricity 4000
Postage 34 000
Office rent
(130 000)
Total expenses 714 000
Net profit

• MAHORO ENTERPRISE LTD BALANCE SHEET AS AT 31/12/2012

ASSETS LIABILITIES+CAPITAL
Rwf
FIXED ASSETS Rwf Capital 298 000
Add: Net profit 714 000
Motor vehicle 700 000 Less: Drawings 18 000
Furniture and fittings 150 000 Owner's equity 994 000

CURRENT ASSETS LONG TERM LIABILITIES

Stock (31/12/2012) 540 000 4 years bank loan 600 000

Debtors 160 000
Cash at bank 220 000 CURRENT LIABILITIES
Cash at hand 24 000
Creditors 200 000

Total 1 794 Total 1 794 000

000

Formula balance sheet

• Capital= T.A-T.L

• T.A=TFA+TCA

• T.L=L.L+C.L
 • Capital net worth= T.A-T.L

• Working capital=C.A-C.L

• Working capital ration/Current ration= C.A/C.L

• Liquid fund=cash at hand+cash at bank

• Liquid capital=C.A-Stock

• Liquid capital ration/acid test=C.A-Stock/C.L

• Circulating capital= C.A

• Fixed capital=F.A

• Capital employed=F.A+Working capital

• Borrowed capital=L.L

Financial statements analysis

Financial analysis is done by use of financial ratios. Below are some of the common
ratios:

• Liquidity ratio

These measure the ability of the enterprise to meet its short term maturing obligations.
Therefore, they
assess the level of current assets and current liabilities. These ratios include the
following:

• Current ratio: is the percentage of current assets to current liabilities. A low figure
(below 1) is unfavourable i.e. the business is not able to pay the current liabilities.

Current ratio

• Acid Test ratio: The interpretation is similar to current ratio although here the
assets that are hard to realize are removed (especially the stock).

Acid test ratio

 • Profitability ratio

There are ratios that indicate the ability of the business to generate enough profit or
returns on the investment made. These ratios include the following:

• Gross profit Margin: Gross profit margin shows the percentage of gross profit per
unit of sales.

Therefore, the higher the ratio or percentage, the higher the gross profit per unit of
sales.

Gross Profit Margin

• Gross profit Mark-up: Gross profit mark up, refers to gross profit expressed as a
percentage of cost of sales.

Gross Profit Mark-up

• Return on capital employed (ROCE): This ratio shows how efficient a business has
used funds available to earn a profit. (Capital employed = Total assets – Current
assets).

Return on capital employed (ROCE)

• Return on investment (ROI)

ROI= x100
Shows how efficient management used total assets to earn profit
Or

ROI= x100

E. Return on equity (ROE)

Return on equity (ROE) = x 100

This shows the return accruing to shareholders after interest payments to long-term creditors
and taxes have been deducted.
F. Debt to equity ratio

This is the ratio of total debt to the total equity of the business. It measures the extent to which
the borrowed funds are covered by the business owners‘funds.

Debt/equity ratio= x100

This ratio compares the amount invested by owners to that invested by other lenders. The
higher the ratio, the higher the financial risk.

G. Assets management ratio

This is also referred as asset turnover ratio which measures how many Frw‘s worth of sales a
company can generate from its net assets.

Total assets turnover = x100

Examples: The following information was obtained from the books of MANIRAREMA general
trader for the year ended 31 July 1999.
Details Rwf
Opening stock 80,000
Closing stock 60,000
Purchases 260,000
Sales 600,000
Expenses 120,000
Capital 500,000
Current assets 100,000
Current liabilities 40,000

Calculate the following ratios and make a report for the management that show your
observations/ constatations of business‘ performance from obtained ratios and
recommendations for improving their business performance:
(a) Gross profit mark-up percentage
(b) Acid test ratio
(c) Current ratio
(d) Gross profit Margin
(e) Net profit margin
(f) Stock turnover ratio
(g) Return on capital employed
Answer:
Particulars/details Amount Amount (Frw) Amount (Frw)
(Frw)
Sales 600 000
Less COS (cost of sales)
Opening stock 80 000
Add: Purchases 260 000
Cost of good available for 340 000
sale Less: closing stock 60 000
Cost of goods Sold 280 000
(COS) 320 000
Gross Profit 120 000
Less: Expenses 200 000
Net profit
(i) Mark up percentage= (Gross profit/ Cost of sales)*100= (320,000
Frw/280,000)*100=114.3%

Form the above answer, gross profit mark up is 114.3% which is very high for a business. This
ratio means that the business is earning more 1.143 Frw in per 1 Frw invested which is a good
deal for the business. The business is in good position considering its trading activities.

(ii) Acid test ratio/ quick assets ratio= (current assets- stock)/current liabilities) = (100,000-
60,000)/40,000= 40,000/40,000= 1

The recommended acid test ration is 1. Therefore, this business is performing well because its
acid test ratio is equal to the recommended one. The business need to maintain this position or
improve.

(iii) Current ratio= current assets/ current liabilities=100,000/40,000=2.5

The recommended acid test ration is 1. Therefore, this business is performing well with its 2.5
ratio which is above the normal/ recommended one. The business need maintain this position
or improve.

(iv) Gross profit margin= (Gross profit/sales)*100= (320,000/600,000)*100= 53.3%

This ratio indicates the amount of gross profit per sales. From the above data, per 100 Frw of
sales, there are 53.3 Frw in gross profits which looks good for the business.

(v) Net profit ratio= (Net profit/total sales)*100= (200,000/600,000)*100= 33.3%

The business net profit is 33.3% of sales which is a good indication for business‘profitability.

(vi) Stock turnover ratio= Cost of sales/average stock

Average stock= (opening stock+ closing stock)/2= (80,000+60,000)/2= 70,000

Stock turnover= 280,000/70,000= 4 times
This shows the number of how the stock is used up to reflect the extent to which the capital is
being tied up.

(vii) Return on capital employed = (Net profit/capital employed)*100=

(200,000/500,000)*100= 40%

• CASH FLOW STATEMENT

Cash flow refers to the amount of cash being received and spent by a business in a given
period of time.
Cash flow statement is a financial statement that shows the cash inflows and cash outflows of
a business in a given time.

Cash flow is made up by 2 major elements; namely:

• Cash inflows refer to the money coming into the business. Sources of cash inflows
include: sales, donations, debtors, loans, rent income, borrowing from friends, etc.
• Cash outflows refer to the money moving out of the business. Cash outflows include:
Purchase of equipment’s, payments of salaries and wages, rent, interest paid on
loan, administrative expenses, electricity bills, etc.
N.B: the business will have a surplus if the cash inflows are more than the cash outflows and
a deficit if the cash inflows are less than the cash outflows.

Cash flow statement is important because:

• It helps to identify the source of cash inflows in the business

• It reveals the ability of the business to repay loans acquired from the bank.
• It provides information on the enterprise's liquidity and solvency.
• The cash flow statement helps management in proper cash planning to avoid excess
cash or cash deficits in the business.
• It helps investors to understand how the company’s money is coming from and it is
spent.
• It shows the future expected cash inflows and cash outflows of the business.

Format of a cash flow

DETAILS Period 1 Period 2 Period … Period n

3

INFLOWS

• Initial balance
-
-
-
Total inflows (1)

OUTFLOWS

Total outflows (2)

Balance or Net cash position

(1-2)
Example 1

Given the information below for ALPHA Enterprise Ltd for the month of April, May and June
2013.
• On 1st April, 2013 ALPHA Enterprise Ltd had a cash balance of 10,000,000 Rwf
• It expected cash sales of 5,000,000 Rwf per month.
• Credit sales were to be 3,500,000 Rwf per month and payments would be made in
the following month.
• Monthly rent income from some of its properties was expected to be 1,000,000 Rwf.
• Monthly purchases were 6,000,000 Rwf.
• The monthly salary and wage bill was projected at 800,000 Rwf.
• ALPHA Enterprise Ltd planned to purchase a welding machine in April at 12,000,000
Rwf and pays 5,000,000 Rwf. The balance was to be paid in two months and in two
equal installments.
• Interests of 100,000 Rwf on the outstanding loan is payable after one months in
single sum.

Required: (a) Prepare a monthly cash flow statement for three months period.
(b) State the cash position of ALPHA Enterprise Ltd for the three months.
(c) Suggest the measures which should be taken by ALPHA Enterprise Ltd to avoid a
deficit in the cash flow.
Answer:

(a) ALPHA Enterprise LTD Cash flow statement for April, May and June 2013.
Details April May June
Cash inflows
Cash balance b/f 10,000,000 4,200,000 3,300,000
Cash sales 5,000,000 5,000,000 5,000,000
Credit sales - 3,500,000 3,500,000
Rent income 1,000,000 1,000,000 1,000,000
Total cash inflows 16,000,000 13,700,000 12,800,000
Cash outflows
Purchases 6,000,000 6,000,000 6,000,000
Salaries and wages 800,000 800,000 800,000
Purchase of welding machine 5,000,000 3,500,000 3,500,000
Interests on loan - 100,000 -
Total cash outflows 11,800,000 10,400,000 10,300,000

Net cash position 4,200,000 3,300,000 2,500,000

(b) The cash position of ALPHA Enterprise Ltd for the three months.
The cash position of ALPHA Enterprise Ltd in April is a surplus of 4,200,000 Rwf.
The cash position of ALPHA Enterprise Ltd in May is a surplus of 3,300,000 Rwf.
The cash position of ALPHA Enterprise Ltd in April is a surplus of 2,500,000 Rwf.

(c) The measures which should be taken by ALPHA Enterprise Ltd to avoid a deficit in the
cash
flow:

• Increasing sales.
 • Delaying some cash expenditures.
• Borrowing some more money from banks.
• Reducing some expenditure like salary and wage bills.

STATEMENT OF OWNERS EQUITY

Owner's equity: Is the amount of funds the owner of the business has invested in the business
from personal source plus net profit made by the business less drawings which may be
incurred by the business.
Owner's Equity is prepared basing on the Income Statement. This means that income
statement is the source of in formation to prepare Owner's Equity.

Owner’s equity(ending capital balance) = Beginning capital+ Additional Contributions

+Net Profit (or - Net loss) – Drawings(witthdrawal).

E.g. Kate’s Fashion boutique started on January 15, 2015 with Kate’s investment of 15,000$.
During the 1st term of operation, the company made a profit of 10,000$ and Kate decided to
withdraw 5,000$ from the company to pay for her living expenses. Prepare the statement of
owner’s equity for the term ended 14th April 2015.

Solution:

KATE’s Fashion boutique

Statement of Owner's Equity

For the Term Ended April 14, 2015

KATE’s Beginning capital 15,000
Add: Net profit 10,000
Less: TWIYUBAKE; withdrawals 5,000
Kate’s equity (ending capital) at 14th April 2015 20,000

UNIT3: ENVIRONMENT IMPACT ASSESSMENT(EIA)

EIA is a process of identifying, analyzing and evaluating the effects of a business activity on
the natural environment.
Here are examples of some projects that have to undertake an EIA in Rwanda:Construction
and repair of national roads, Construction of large bridges,Construction of industries, large
hotels,Installation of electrical lin, Construction oh Hydro-dams, artificial lakes.

EIA was adopted to effectively manage environmental challenges such as Soil erosion,
Deforestation, Wetland drainage, Water degradation, Climate change, the loss of biodiversity.
Objectives and Roles of EIA in Rwanda

• To ensure that environmental factors are considered in decision making process,

• To ensure that the possible environmental impacts are identified and avoided,

• To inform the public about the proposed projects,

• To provide a national standardized process for development authorization,

• Providing information beneficial to decision making,
• Making development projects more financially and economically efficient, etc.

The Roles (responsibilities) of EIA in Rwanda/ The benefits (importance) of EIA in

Rwanda
• Enables implementation of environmental safeguards.
• Mitigating and minimizing environmental damage.
• Making an active contribution to sustainable development.
• Providing information beneficial to decision making.
• Making development projects more financially and economically efficient.
Roles(rsponsability) of Stakeholders in EIA Process

(a) REMA (Rwanda Environment Management Authority)

REMA is mainly responsible for monitoring implementation of environmental protection

measures.

Roles (responsibilities) of REMA

• To protect environment.
• Receive and register EIA Applications (Project Briefs) submitted by developers,
• Identify relevant Lead Agencies to review Project Briefs and provide necessary input
during screening,
• Review Project Briefs and determine project classification at screening stage,
• 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.
Roles (responsibilities) of Developers
• Prepare and submit EIA applications (in form of Project Briefs) to REMA,
• Hire experts to undertake EIA studies on their behalf,
• Submit the EIA report, Environmental Management Plan.
• Participate in public hearings and also 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 have the responsibility to take
part in EIA of projects under their sectors.

Roles (responsibilities) of Lead Agencies/ Line Ministries

• Participate in screening at the request of REMA,

• At the request of REMA, review Project Briefs so as to advise on Terms of Reference,
• Ensure that their own projects adhere to EIA requirements,
• At the request of REMA, they can serve on REMA‘s Technical & executive committee.

Environmental Impact Assessment (EIA) Procedure

The EIA procedure can be summarized into 6 steps that follow:
• Project Application and Registration: a developer of project(owner) apply for
EIA of a proposed project to REMA in form of a Project Brief. And REMA registers
the proposed project.
A Project Brief submitted to REMA contains the following information:
• Name, title and address of the developer.
• Name, objectives and nature of project
• Description of where the project is proposed to be located.
• Any other information that may be useful in determining the level of EIA
required.
• Screening: is carried out by the Authority is a process of determining impact
level of a proposed project, which then determines extent of the EIA study.

• EIA Study and Report: EIA study is a stage of the EIA process for which a
developer hires EIA expert. The developer selects an expert among a list of EIA
experts provided by REMA.

• Submitting Project to REMA and waiting for approval.

• Public hearing: After completion of EIA report, REMA if necessary may consult
the stakeholders that are likely to be affected by the proposed project. Public
views are considered when deciding whether or not to approve a proposed
project.

• Decision-making: If the project is approved, the developer will be issued with an

EIA Certificate of Authorization.
• Environmental Monitoring: During implementation and operation of a project,
monitoring is a responsibility of the developer and REMA to ensure that it is
implemented as expected.

component of EIA report

-Screening,scoping,project descripion,assessment of environment and social impact,mitigation
measure,
UNIT 4: BUSINESS PLAN PITCH
Pitch: is a presentation of a technology startup in order to obtain investment.
Business project pitching:is a business plan that you present to your potential investors tto
secure funding. The pitch helps you explain your business to investors to enables them to
make right decision.

Importance of project pitching

• Financial support
• Attracting investor
• Strategic orientation
• Attracting customer
Preparation of a project pitching

• before pitching
-Content preparation
-select a topic(focus of the presentation)
-define the pitching objectives
-prepare the body of the business plan pitch and anticipate the questions from
audience.
-prepare suggestions and conclusion
-practice pitching of business plan(micro-pitch)

B. During pitching
-greeting and thank audience for the attendance
-start with the problem(gap identified after market analyis)
-business ideas and goals(solutions)
-target market
- benefits to the investors and society
-amount of money requested,projected use of it and anticipated returns.
-the call tto investors
-thanks the audience
-receive feedback

C. After pitching
- Integrate the suggestion and recommendations

Steps involved in preparation of business plan pitch

• Analysis the audience
• Select a topic(focus of the presentation)
• Define the pitching objectives
• Prepare the body of the business plan pitch and anticipate the questions from
audience.
• Prepare suggestions and conclusion
• Practice pitching of business plan(micro-pitch)
The key items to cover in business plan pitch
• Business ideas and goals,
• Problem identified
• Solution
• Target markett
• Marketing strategy
• Industry analysis
• Management team
• Competition

Techniques to pitch your business plan

• Writing only key points
• Not reading them speaking about them
• Using visualisation,pictures,symbol,colours and tables
• Making it short,concise,come to the point,not more than 10min.
• Reacting positively to questions
• Using body languages,voice,appearance
• Trying to convince

Criteria that should be considered while pitching a project are:

 Greet: begin by greeting the audience and stating the purpose of speaking
 Engage: they speak to attract the attention/engage the audience
 Problem: state the problem or the opportunity of the business, they are to do or
are doing
 Inform: explain how their business will solve the above problem.
 Challenge: ask the audience /investors to support you or take action

UNIT5: TAXES AND CUSTOMS PROCEDURES

Tax: Is a compulsory contribution, imposed by the government to its citizens and business
organization so as to raise revenue for public expenditure.
Taxation: Is a system of raising money or revenue by the government from individuals and
companies by law through taxes.
Customs: Government agency entrusted with enforcement of laws and regulations to collect
and protect import –revenues (is official department that is responsible for collecting taxes
for the government).

Benefits (roles/importance) of paying taxes to the economy

The roles of taxes in an economy are the following:

• It is a source of government revenue
• Protect domestic infant industries
• Reduce income inequality where the rich is taxed and the poor is subsidized.
• Discourage the consumption of undesirable commodities
• Reduce population growth: If taxes are based on the number of children one has.
• Taxes encourage hardworking
• Protect the environment
Taxes imposed in Rwanda.

Types (forms)/classification of taxes

There are two types of taxes which are: Direct taxes and INDIRECT taxes.
Direct taxes: Direct taxes are taxes imposed on incomes, profits and property of individuals
and companies.
Examples (types) of direct taxes are as follows:
• Income tax (personal income tax): Is a tax imposed on income (e.g salary, rent, etc) of
a person.
• Property/wealth tax: Is a tax levied on property or wealth of a person.
• Gift tax: Is a tax imposed on the person who receives the gift.
• Property/wealth tax: Is a tax levied on property or wealth of a person.
• Corporation tax/ Company tax: Is a tax deducted on income achieved by firms and
other companies working as commercial companies.

Indirect taxes: Indirect taxes are taxes imposed on goods and services.
Examples (Forms) of Indirect taxes:

• value added tax (VAT) is a tax imposed on the value added to a commodity at
each stage of production. In Rwanda the standard VAT rate is 18% to all taxable
goods and services
• Customs duties: A customs duty is a tax imposed on imports and exports that
cross the border.
• Excise duty: This is a tax levied on imported and locally manufactured goods. The
goods liable for excise duty are: cigarettes, sugar, cement, etc
• Sales tax/Turnover tax: is a tax imposed on sales of commodities.

Calculation (Computation) of Pay as you earn (PAYE)/Professional income tax

• Table: Monthly taxable income.

Monthly taxable income Tax rate

(Rwf)
From To
0 30 000 0%
30 001 100 000 20%
100 001 And more 30%

• TABLE: Annually taxable income

Annual Tax rate
taxable
Income(Rwf)
From To
0 360000 0%
360001 1200000 20%
1200001 Above 30%
Example

Inyange Industries Ltd wants to calculate the professional income tax (PIT) on the salaries of
October 2014 for their following employees:
• Umulisa gets 400 000 Rwf
• Kamali gets 100 000 Rwf
• Tuyizere gets 90 000 Rwf
• Kwizera gets 30 000 Rwf

Required: Calculate the total amount for professional income tax of Inyange Industries Ltd
employees.

Answer:
Since PIT is progressive, it will be charged as follows:
Income(Rwf) Rate
0-30,000 0%
30,001-100,000 20%
100,001 and more 30%

• Umulisa's income scale of 100,001 and above since his salary is 400,000 Rwf
Therefore 30,000 Rwf is exempted
(100,000-30,000) x20% = 14,000 Rwf
(400,000-100,000) x30%= 90,000 Rwf
90,000 + 14,000= 104,000 Rwf
Umulisa is supposed to pay 149,000 Rwf

• Kamali is supposed to pay:

1st step 30,000x0%=0
(100,000-30,000) x20% = 14,000 Rwf
Kamali is supposed to pay 14,000 Rwf
• Tuyizere is supposed to pay:
1st step 30,000x0%=0
(90,000-30,000) x20% = 12,000 Rwf
Tuyizere is supposed to pay 12,000 Rwf

• Kwizera is supposed to pay:

(30,000-0) x0% = 0 Rwf.
Kwizera is supposed to pay 0 Rwf, she is exempted to pay.
 The total amount of Professional income tax to be paid by Inyange Industries Ltd
employees
= 149,000+14,000+12,000+0 = 175,000Rwf

VAT

• Kankindi bought a tables 40 tables from a manufacturer at 4,000 Rwf per one table and
sold them at 5,000 Rwf per each. Calculate the VAT to be paid

Solution:
Value added on 40 tables = (5,000 – 4,000) × 40 = 40,000 Rwf
VAT = 40,000 ×18% = 7,200 Rwf

Customs declaration: An official document that lists and gives details of goods that are being
imported or exported.
TYPES OF CUSTOMS DECLARATION/CUSTOMS ENTRY
• Import and export: To import products, the customs declaration must state the origin
and value of the goods

• Temporary Importation: Some goods are used temporarily in Rwanda, for example,
vehicles used by Diplomats working at embassies.

• Warehouse entry: for the goods stored in a bonded warehouse until customs duties are
paid.

Functions of warehouse: - storage of goods - protection goods - risk bearing -

financing – transportation – processing – grading and branding.

• Transit. for the movement of goods from the port of unloading to the port of
destination, under a customs bond.

ROLE OF CUSTOMS PROCEDURES

*To ensure observance of laws.

*Trade compliance and facilitation.

*To protect economic interests.

*To protect the rights and interest of citizens and businesses.

STAKEHOLDER INVOLVED IN CUSTOMS DECLARATION

*Rwanda Revenue Authority(RRA)

*Rwanda Standards Board(RSB)

*Clearing and forwarding agencies.

*Warehousing agencies and security bodies.

THE NECESSARY DOCUMENTS FOR THE DECRALATION OF GOODS AT CUSTOMS.
*Transaction invoice. Describes the products and state the quantity and price.

*Transport document. It shows the acceptance and receipt of goods. Ex: air waybill used for
transport by air, bill of lading used for transport by sea, road transport document or road
consignment note used for land freight.

*Import license. Is document from the importer bank that authority the client to import
goods.

*Packing list. this list informs the transport agencies, government and customer of the
content.

*Certificate of origin.it shows where the goods were obtained or produced.

*Certificate of analysis. It states the quality of goods. RSB test the goods and states whether
the goods meet requirements and international standards.

Declaration procedures(steps for customs declaration)/the process of clearing through

customs

*Obtain notice of arrival of the goods (avis d’arrivee)

*Submit goods arrival notice for verification by Rwanda Standards Board.

*Obtain manifest.

*Submit import document to the clearing agent for tax calculation.

*Pay import tax.

*Obtain an invoice for warehouse handling fees.

*Pay warehouse fees for goods handling.

*Obtain goods exit note.

UNIT 6: FINANCIAL MARKETS

Key Unit Competency: To be able to Evaluate the role of financial market

Meaning and functions of financial Markets
A financial market is a market in which people and entities trade financial securities,
commodities, and other items of value. Securities include shares, bonds, while commodities
include precious metals or agricultural goods Or financial market is a market in which
financial securities like shares, bonds and treasury bills are traded. Financial markets are
made of capital markets and money markets.

The functions (importance) of financial markets include:

• They help in mobilization of savings.

 • They provide employment to brokers and dealers (jobbers)
• They encourage the inflow of international capital by selling securities to foreign
investors.
• Financial markets facilitate the raising of capital (in the capital markets).
• Financial markets facilitate international trade (in the currency markets).
• They speed economic growth and development.
• They improve on competitiveness in the economy.

Types of financial markets

• Physical asset markets versus financial assets markets

Physical assets market is a market where physical assets like machinery, vehicles,
furnitures and fittings, etc are traded whereas financial asset market is a market in
which financial securities like stocks, shares and bonds are traded.

• Spot markets versus futures markets.

A spot market (cash market) is a market in which commodities or financial

instruments are traded for immediate delivery. In a spot market, delivery of cash and
commodity must be done immediately or in few days whereas a future market is a
market in which participants agree to buy or sell an asset or commodities at some future
date. In a future market, contracts for delivery of assets or commodities are set 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 long-term debt securities like bonds and stocks.

On the other hand, Money markets are financial markets where short-term debt
instruments like treasury bills are traded whereas Capital markets are markets where
long-term securities like stocks and bonds are traded.

Meaning and functions of capital markets

A capital market is a place in which long-term securities are traded by individuals and
organizations. The capital market is further divided into primary and secondary market

Types of capital market:

Primary market is the market where securities like bonds are traded for the first time.
Whereas
 Secondary market is the market in which existing and already outstanding securities
are traded among investors. Secondary market is the market where existing securities
are traded.

Functions of capital markets

The functions (importance/roles) of capital markets include the following:

• Mobilization of savings: Capital market is an important source for mobilizing idle savings
from the economy.
• Capital formation: Capital market helps in capital formation. Capital formation is net
addition to the existing stock of capital in the economy.
• Speed up economic growth and development: Capital market enhances production and
productivity in the national economy.
• Proper regulation of funds: Capital markets not only helps in fund mobilization, but it
also helps in proper allocation of these resources.
• Service provision: As an important financial set up capital market provides various types
of services.
• Continuous availability of funds: Capital market is place where the investment avenue is
continuously available for long term investment. Both buyers and seller can easily buy and
sell securities as they are continuously available.
• They provide employment to brokers and dealers (jobbers).

Application activity

Government of Rwanda is supporting capital market operations in Rwanda and there were
different benefits that arisen from its introductions. With the help of examples explain the
benefits of investing through capital market.

Meaning and functions of stock exchange

The stock exchange is a market where different types of securities are bought and sold.

Securities traded on a stock exchange include shares issued by companies, and bonds.

Note: The stock exchange market is a market where different types of existing securities like
shares, bonds and treasury bills are traded. The stock exchange is therefore a secondary
market.

Functions of stock exchange

• Mobilization of surplus savings: Stock exchange is an important source for mobilizing
idle savings from the public
• Provision of Investment Avenue: Stock exchange market raises resources for longer
periods of time.
• Speed up economic growth and development: It helps in, increasing production and
productivity in economy by generation of employment and development of infrastructure.
• Marketability of securities: The stock exchange provides for easy marketability of
securities as securities can be bought and sold conveniently on the floor of the stock
exchange.
 • Price determination and continuity: Since transactions take place regularly on a stock
exchange there is continuity in the dealings..
• Profit sharing and resource allocation: As a result of stock market transactions, funds
flow from the less profitable to more profitable enterprises.
How to invest Rwanda stock exchange market
• Pick a broker
• Open trading account with the brokers
• Choose the asset in which to invest
• After making a decision, send a buy order via to the broker
• The transaction is completed once buying and selling prices match
• The broker issues the transaction notificattion and charges their fees.
Capital Market Authority (CMA)
Rwanda Capital Market Authority (CMA) is a public institution established by Law No.23
/2017 of 31/05/2017 responsible for developing and regulating the capital markets industry,
commodities exchange and related contracts, collective investment schemes and warehouse
receipts system.

Responsibilities of Rwanda Capital Market Authority

The Rwanda Capital Market Authority is responsible for:

• Implementing the government policy on capital market;

• Advising government on policy relating to the capital market;
• Formulating principles and regulations for the capital market;
• Making regulations governing capital market business
• Controlling and supervising all capital market activities

• Capital market instruments

• Shares: Share is a unit of ownership in a limited company that gives the owner to
claim over dividends in that company. The owner of a share is called “shareholder”
and a collection of shares is called “stock”.

• Government-owned instruments: e.g. Treasury bills, treasury bonds

• Treasury bills (T-bills): they are short-term debt securities (1 year or less) for
regulating or raising funds of the national budget. T-bills are issued by National
Bank of Rwanda (BNR) through a weekly auction and this market is open to all
investors.

Note: The minimum purchase is 100,000 Rwf

 • Treasury bonds/Government bonds: they are long-term debt securities issued by
Government with a promise to pay periodic interest.

• Instruments acknowledging indebtedness (liability) e.g. Certificate of deposit,

debenture, loan stock

• Certificate of deposit: a certificate/contract issued by a bank to a person who

deposits money for a specified period and a specified interest rate.

• Loan stock: refers to shares used as collateral for a loan.

• Debenture: a certificate that certifies an amount of money owed to someone.

• Capital market participants

Participants in capital can be divided into: Issuers, Investors, Intermediaries.

• Issuer: a legal entity (government, company) that sells securities to the public in
order to finance its own operations.

• Investor: a person/entity that has a will to buy financial securities.

• Intermediaries: e.g. Rwanda stock exchange (RSE), stock brokers, sponsors,

advisors, etc.
.

The benefits of investing through capital markets include the following:

• Helps investors to accumulate savings: Investing in securities that are listed on capital
market help investors to accumulate their savings over time.
• Provides a source of income for investors: Investment in capital market provides a
source of income to investors. Shares pay dividends to the shareholders when companies
make profits while bonds pay an interest income to the bonds holders.
• Creates opportunities for growth in wealth/Wealth or capital gain: Whenever the
prices of securities listed in the stock market go up, the value of the investment of the
holders of those securities increases. This creates opportunities of growing wealth through
the capital market.
• Securities as collateral: Listed securities are easily acceptable as collateral against loans
from financial institutions.
• Diversification of investments: There is investment diversification as one can invest in
different securities thereby reducing the risk of investing in one particular product.
• Access to professional advice and management of securities: Through the use of
licensed advisors and managers who have specialized expertise in capital market research
and analysis.
• Confidentiality: Investing in securities guarantees confidentiality in the management of
wealth, as financial securities are intangible in nature.
Procedures to join the Rwanda stock exchange

To join Rwanda Stock Exchange (RSE) you have to open an account in Central
Securities Depository (CSD). CSD is like a bank where all the records of all
shareholders are kept.

Requirements:
• Providing 2 recent passport size photos,

• Proving Identity card/ passport together with photocopy,

• Certificate of registration and Certificate of incorporation together with their

photocopies (for companies).

Note:

• You are free to open several CSD accounts with different stock brokers (agents).

• Members of RSE can trade either face to face or via any other way of
communication.

• All members must report all their transactions that they conducted at the RSE
secretariat.

UNIT 7: STOCK CONTROL

Key Unit Competency: To be able to assess the need for proper inventory management

Stock or Inventory refers all the items (goods/materials) that are stored by an organization for
use or resale.

Stock management (or Inventory management) is the practice of ordering, storing and
controlling inventory.

The types inventories in an enterprise are:

• Stock of raw materials: These are goods kept by the manufacturing firm to be utilized in
the production process.
• Stock of consumables (supplies): They include tools and consumables which are
consumed in the production of goods and services.
• Work in progress (unfinished goods): These are the semi-finished goods. They include
those materials that have been put in the production process but have not yet been
converted into finished goods.
• Finished goods: These are completed goods wait for sale.
In a manufacturing firm, they are final output of the production process.
• Office supplies: These are materials used to support the production process for example
computers, stationery, etc.
• Goods under repair.
Importance of stock and inventory management in organizations is as follows:

• The stock gives a safety (buffer) between supply and demand. This safety is essential to
ensure the smooth running of operations.Without stocks, most operations are impossible.
• Improvement of ordering process
• Stock management helps to analyze sales and profits of the enterprise.
• Helps to revise any pricing strategies that aren‘t generating maximum profit.
• Stocks allow operations to become more efficient and productive.
• Stocks affect operating costs and hence profit, return on assets, return on investment and
every other measure of financial performance.

Necessary documents for stock management

The following are the necessary documents in stock management process:
• Purchase requisition note
• Purchase order
• Goods received note
• Return-outward note
• Return-inward note
• Stock sheet

• Material requisition note: is a document generated by a storekeeper to notify

item(s) needed, their quantity and the time scale for delivery.

• Purchase order: it is issued by a buyer to a seller indicating the type, quantity of

products and the price the buyer is ready to pay for those products.

• Goods received note: is a document for recording all goods received in store and
often compared to a purchase order before payment is made.

• Return-outward note: document for recording the goods returned by a business to

its suppliers. So, it records “purchases returns”.

• Return-inward note: Return inwards refer to the goods returned to a business by

its customers. So, it records “sales returns”.

• Stock sheet /Inventory form/Stock card: The stock sheet is a document that
records regular movement of goods in the store. The storekeeper indicates the
goods received or issued and determines the balance after receiving or issuing
goods.

Format of stock sheet

 Name of business: ………
Date: …/…/……

Date Stock RECEIVED ISSUED BALANCE

items Qty P/U Total Qty P/U Total Qty P/U Total

Procurement procedures in a business

Procurement is to give an order to a supplier to deliver goods or services under some
conditions in order to add more goods in the stock. Or Procurement is also the process of
buying or acquiring goods and services from an external source, often via a tendering or
competitive bidding process.
Procurement process involves the following steps:

Step 1: Need Recognition: A business owner (or procurement department) must

recognize that a product is needed in order to purchase it.

Step 2: Specific Need: the procurement department specifies the requirements of a

product needed (type, quantity, specifications, etc.)

Step 3: Examination of Supplier Options (Source): Every business needs to

determine where to get the needed product because all suppliers may not be
trusted, you choose the best one for you.

Step 4: Purchase Order: The purchase order shows the price, specifications and
terms and conditions of the product or service and any other additional
obligations. Once the seller accepts the purchase order, it becomes a binding
contract on both the buyer and seller.

Step 5: Delivery: The transfer of the product or service to the customer.

Step 6: Receipt and inspection: Once delivered, the receiving organization

(customer) inspects and accepts or rejects the product. Rejection may be due
to a damaged product.
 Step 7: Invoice Approval and Payment: At this stage, three documents must match
when the seller wants payment: the original purchase order, the goods
received note and the invoice. Then payment is made if there is no problem.

Step 8: Record Keeping: The receiving (buying) organization must keep good
records. This
means saving all relevant documents for the purchased product.

Inventory systems

The two main types of inventory systems: perpetual system and periodic system:

• Perpetual inventory system: is a regular system of recording and controlling the

physical movements of stock and establishing its current balance, i.e. after every
purchase or sale the stock is updated immediately.

he stock held is valued as follows:

Stock Value = number of items held x cost per item

• Periodic Inventory: Periodic inventory can be defined as a system of inventory in

which updates are made on a periodic basis (like a month, term, year, etc.)

The following are the main differences between perpetual and periodic inventory
systems:

Periodic inventory Perpetual inventory

• It is based on physical stock taking.
• It provides data periodically (once in
a year).
• It does not provide basis for control.
• It is cheap (economical) and can be
adopted in small enterprises.
• It is based on records.
• It provides data on running (continuous)
basis.
• It provides basis for control.
• It is expensive and can be adopted by big
companies only.

Stock valuation methods

Stocks are never valued at buying prices because 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 which are: First in, First out (FIFO); Last in, First
out (LIFO) and Weighted Average Cost (WAC).

• FIFO (First in, First Out)

Under FIFO, the oldest cost of an item in inventory will be removed first when one of
those items is sold.

• LIFO (Last in, First Out)

Under LIFO the latest products purchased (or produced) are the first to be sold.
 • Weighted Average Cost method (WAC or AVCO)
The weighted average cost of items is calculated, using the formula:

REMARK: Note that stock records are usually kept at cost price, not the selling price.

EXAMPLE OF STOCK CARD

Papeterie Umusanzu is a company selling office materials. One of the items stocked is
reams of papers. To show how the stock card would appear under FIFO, LIFO and
WAC, the following data is used:

1st January 2018: Opening stock of 40 reams of papers at a cost of 3,000 Frw each
14th January 2018: Bought 20 reams of papers at a cost of 3,600 Frw each
15th February 2018: Sold 36 reams of papers for 4,000 Frw each
27th March 2018: Bought 20 reams of papers at a cost of 3,750 Frw each
29th April 2018: Sold 25 reams of papers for 4,000 Frw each

SOLUTION

• Papeterie Umusanzu Stock card.

Stock card using FIFO Method:

Date Stock RECEIVED ISSUED BALANCE

items Qt P/U Total Qty P/U Total Qty P/U Total

y

1st Balance 40 3,000 120,000

J
a
n

14th Purchase 20 3,600 72,000 40 3,000 120,000

Jan
20 3,600 72,000

60 192,000
15th Sale 36 3,000 108,000 4 3,000 12,000
Feb
20 3,600 72,000

24 84,000

27th Purchase 20 3,750 75,000 4 3,000 12,000

Mar
20 3,600 72,000

20 3,750 75,000

44 159,000

29th Sale 4 3,000 12,000

Apr
20 3,600 72,000

1 3,750 3,750 19 3750 71,250

25 87750

•Stock card using LIFO Method:

Papeterie Umusanzu Stock card

Items: Reams of papers

Date Stock RECEIVED ISSUED BALANCE

items Qty P/U Total Qty P/U Total Qt P/U Total

y

1st Jan Balance 40 3,000 120,000

14th Purchase 20 3,600 72,000 40 3,000 120,000

Jan
20 3,600 72,000

60 192,000
15th Sale 20 3,600 72,000
Feb
16 3,000 48,000 24 3,000 72,000

27th Purchase 20 3,750 75,000 24 3,000 72,000

Mar
20 3,750 75,000

44 147,000

29th Sale 20 3,750 75,000

Apr
5 3,000 15,000 19 3,000 57,000

25 90,000

• Stock card using WAC Method:

Date Stock RECEIVED ISSUED BALANCE

items Qty P/U Total Qty P/U Total Qty P/U Total

1st Jan Balance 40 3,000 120,000

14th Purchase 20 3,600 72,000 40 3,000 120,000

Jan
20 3,600 72,000

60 192,000

15th Sale 36 3,200 115,200 24 3,200 76,800

Feb
27th Purchase 20 3,750 75,000 24 3,200 76,800
Mar
20 3,750 75,000

44 151,800

29th Sale 25 3,450 86,250 19 3,450 65,550

Apr

Papeterie Umusanzu Stock card

NOTE: Weighted average cost is calculated by dividing the quantity held in stock into
the value of the stock. For example, at the end of February, the weighted
average cost is 192,000Frw ÷ 60 = 3,200, and at the end of April it is 151,800
÷ 44 = 3,450Frw.

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

EXERCISES
• The following information is extracted in the books of a stock manager:
• 200 bags of 50 kg of cement are bought in January 2016 at a cost of 10, 000
Frw each
• 100 bags are sold in February
• 80 bags are bought in March at a cost of 9,500 Frw each
• 100 bags are sold in April
 • 150 bags are bought in May at a cost of 9,800 Frw each.

From this information, prepare stock cards for cement using:

(a) FIFO
(b) LIFO
(c) WAC

UNIT 8: Work Habits and Behaviours

Recruitment involves attracting the right standard of applicants to apply for vacancies.

If you need to hire (recruit) right employees, this should be put into
consideration./process of recruitment:

• Conduct a job analysis

• Create a job description
• Create a job specification
• Job grading
• Job advertisement
• Application and selection of candidates
• Recruitment test

• Job analysis
Job analysis is 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. /Before you
employ people, you need to think about what type of role you are trying to fill.

A job analysis will identify:

• The skills, knowledge and attributes an employee must have to do the job.
• New tasks or responsibilities, given changed circumstances in the business.

Note: The components of job analysis are: Job description, Job specifications, Job
grading and Job performance standards.

• Job description
is a process of describing the job to be performed? Or is a written statement which
outlines the duties and responsibilities involved in performing a job.

• Job specification
• involves a definition of qualifications, experiences and competencies required by the
jobholder and any other necessary information.
• Job grading
Job grading/classification is done when jobs are assigned grades e.g. I, II, III etc.
by taking into account key skills, competencies and responsibilities required by the
job to be done effectively.

Job grading in an organisation may be as follows:

 Grade I: Executives: Further classification under this category may be Chief
Executive officer, (C.E.O) Office Manager, Deputy Office Manager, Office
Superintendent, Departmental Supervisor, etc.
Grade II: Skilled workers: Under this category may come the professionals like
Purchasing assistant, Cashier, Receipts clerk, etc.
Grade III: Semi-skilled workers: Under this category examples are drivers,
Machine-operators, Switchboard operator, etc.
Grade IV: Unskilled workers: This category may comprise of persons like,
messengers, housekeeping staff, File clerks, Office boys, accounts clerk, tea
boys/girls, etc.

• Job Advertisements
Job advertising: Is a way organizations communicate to attract new employees to
work with them.
Some business organizations use recruitment advertising agencies to advertise job
vacancies. They advertise job vacancies in the following channels of
communication:On Radio, Television, Newspapers, www.tohoza.com,
www.umurimo.com,www.jobs in rwanda.com,www.mucuruzi.com, NFT
consult , ,Ndangira.net

Finding/applying for a job

Below are some sources of Job information

• Newspapers For example job advertisements from Imvaho nshya, the New
Times etc.

• Through Media like Radio, television etc.

• Potential work places: This can be through Notices, announcement etc.

• Internet: nowadays in Rwanda job seekers can use internet channels like
Tohoza.com, Mucuruzi.com, Umurimo.com, jobs in Rwanda to look for job
advertisements.

• Government agencies and offices: Some government agencies provide

Information on jobs, career, consultancy. For example; Akazi in Rwanda found
on (http://recruitment.mifotra.gov.rw), etc.
Writing Curriculum Vitae (CV) and an Application Letter

• The letters CV stand for curriculum vitae which in Latin means “Course of life”.
When used in a job seeking context, a CV is a brief history of your education, work
experience and activities, skills, accomplishments and any other information relevant to
getting a job.

Elements of Curriculum Vitae:

In your CV you can include:

• Contact Information: At the top of your CV, include your personal

identification/name and contact information (address, phone number, email
address, etc.).

• Education background This may include the school/institution attended,

dates of study, and degree received.

• 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.

• Skills
• Key achievements/developments, skills, and experience relevant to the
position for which you are applying.

• Computer Skills.
 • Language Skills.

• Interests and Hobbies

• References: In this part, include people who knows you and who might be
contacted in case they need any information about you. Lastly, end by
certifying that the information is from the best of your knowledge.
Sample of a CV
 • An Application Letter 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.

Writing an application letter

• Start your letter by adding your contact information at the top. You want
to make it as easy as possible for your prospective employer to contact you and
know who you are. Before you begin your letter, make sure that you have the
proper letterhead. Name, Address, Phone number, Email address, Personal
website (if you have one)
• Include the company’s information. After you include your information, you
need to include the title of the employer to whom you are applying for the job,
the name of company and address.

• Address your letter to the person whom you are writing. To begin your
letter, you want to be formal and start with a proper address. Like “Dear
Sir/Madam”, “Dear Manager”, “Dear Director”, etc.

• Body of the letter: Think of this section as having three distinct parts:
1. In the first paragraph, you'll want to mention the job you are applying for
and where you saw the job listing.

2. The next paragraph(s) are the most important part of your letter.
Remember how you gathered all that information about what employers
was seeking, and how you could meet their needs? This is where you'll
share those relevant details on your experience and accomplishments.

3. The third and last part of the body of the letter will be your word of
appreciation to the employer; you can also offer follow-up information.

• Complimentary Close: Sign off your email with a polite close, such as "Best"
or
"Sincerely," followed by your name.

Notice: When you apply online in e-Recruitment, you have to follow the structure
/format provided to you.
Sample of an application letter
 Job-interview Process and techniques

It is a formal verbal interaction between the employers and the prospective candidates which
helps the employers in extracting as much information as possible about the candidate.

A job interview is an opportunity for the employer to find out more about you, your education,
work background, interests, hobbies and personality; and for you to find out more about the
employer and the specific job to which you are applying for.

In general, there are three main parts to the interview:

• Opening: This part involves greetings, introductions, and it is where the

employer states purpose of interview.

• Body of the interview: This is the major part of the interview process where the
interviewee is asked questions by interviewer(s) to obtain information in relation
to the post.

In the process of questioning, interviewer 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.

Common questions asked in interviews may include;

a. Tell me/us about yourself
b. What qualities and skills do you have that will help you perform this job?
c. What previous experiences do you have that are related to this position?
d. Are you familiar with this company/business/organization?
e. What do you know about this company/organization?
f. What are your strengths and weaknesses?
g. What makes you fit for this position? Etc.
 • Closing the interview: In closing the interviewer asks whether the candidate
has anything more to tell 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 expresses interest and
enthusiasm regarding the next step.

Tips for Job Interviews/interview techniques

• 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 clothing and shoes.

• Allow plenty of time to get to the interview.

• Write down questions you may have for the interviewer, etc.

• DURING THE INTERVIEW

• Greet the interviewer. Speak slowly, clearly and distinctly in a confident voice.

• Think before speaking.

• Be respectful and stay calm.

• Listen carefully: One of the most neglected interview skills is listening. Make
sure you listen attentively and respond accordingly.

• Ask the interviewer to repeat or re-phrase 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.

• AFTER THE INTERVIEW

Thank the interviewer(s) and after some time make a follow up to find out if you
were considered for the next step.

Appropriate behaviors and attitudes in a workplace

Behavior is an action or reaction that occurs in response to an event, and Attitudes
are a complex combination of things we tend to call personality, beliefs, values,
behaviors, and motivations.

At work place some people may feel uncomfortable towards doing certain type of
work or may not be interested in helping others. Such attitudes reduce productivity
and team work at work.

Work behavior and attitude include the following:

• Dressing appropriately for the work: make sure your clothes are clean and
comfortable to your work.
• Keeping time and managing it well
• Speaking to co-workers in a positive and respectful manner
• Being honest and respectful of others and your environment
• Keeping discussions and interactions related to work (Don’t bring your
personal problems to work)
• Respecting the roles and contribution of others
• Believing in yourself and what you do, etc.

Personal qualities that help one to manage time

Time management is the ability to use your time wisely and appropriately, especially
to increase effectiveness or productivity. It means changing those habits or activities
that cause waste of time.

Time management skills include:

• Setting goals: When trying to manage or planning for your time, you should
think
about what you really want to achieve within a given period of time.
Goals you set should be SMART (Specific, Measurable, Achievable, Realistic
and Time bound).

• Prioritizing: listing your tasks/activities starting from the most important to the
least important.

• Scheduling/ Action plan: You can do a calendar of activities where you show
the date, activity which must be done, who will do the activity and the
observations.

• Self-discipline: it is the ability you have to control yourself and do what is right.
 • Being focused on accomplishing tasks: you have to eliminate all distractions

• Balancing Work and Personal Life

• Making proper decisions in the right time, etc.

Developing a career plan

A career plan is all about choosing an occupation and developing a plan of the steps it will take
you to get to that occupation.

Below are some helpful steps to guide you in developing a career plan:
• Identify Your Career Options (examining your interests, skills, and values
through self-assessment.)

• Setting Goals (Identify specific, time-bound goals and steps to accomplish

your plan)

• Pooling together necessary information needed (CV, Application letter,

etc.): Develop your CV and application letter if you are a jobseeker.

Unit 9: Work Safety and Health

Positive health and safety practices

Workplace health and safety (WHS) is concerned with protecting the health and safety of all
stakeholders in the workplace from exposure to hazards and risks resulting from work
activities.

Workplace health and safety is important because it protects the wellbeing of employers,
visitors, customers, work premises, products and the environment in general.

The business must protect its staff from:

• Falls from heights
• Accidents involving vehicles at work
• The effects of noise and vibration
• Skin diseases from work
• Injuries from trips, etc.

A good WHS can reduce your insurance premiums, as well as the costs of accidents
that aren't covered by your insurance, such as sick pay, production delays or
repairs to plant or equipment.

• Healthy habits
 A healthy habit is any behavior that benefits physical, mental, and emotional
health. These habits improve overall well-being and make you feel good.

Healthy habits include:

• Manage stress in your life
• Find time to relax
• Eating well
• Get some exercise every day, even just a little
• Manage stress in your life, etc.

Hygiene and sanitation practices

Hygiene is a set of personal practices that contribute to good health. It includes things like
hand-washing, bathing and cutting hair/nails. Hand-washing is the single most important
activity we can all do to encourage the stop of disease.

Sanitation is the effective use of tools and actions that keep our environment healthy. These
include latrines or toilets to manage waste, food preparation, washing stations, effective
drainage, etc.

Healthy hygiene and sanitation is very important for every workplace and below are some
healthy hygiene and sanitation that can be practiced both at home and the workplace:

• Use clean water: for drinking and washing. Boil water and store in clean
containers.

• Wash hands before preparing and eating food: Regular hand washing,
particularly before and after certain activities, is one of the best ways to remove
germs, avoid getting sick, and prevent the spread of germs to others.

• Wash dishes and store food: Germs can also be on dirty dishes and cooking
pots and pans.
• Personal hygiene: showering, using deodorant or perfume, grooming facial,
hair and hair washing.

• Work area cleanliness: This could include regular cleaning of surfaces with
disinfectant to reduce the risk of bacterial contamination, keeping the area tidy
and free of dust, etc.

• Restroom facilities(toilets): restrooms should be equipped with water, soap,

toilet paper and towels to ensure that workers have the opportunity to practice
personal hygiene after using the toilet.

Hazards in the Workplace

Workplace hazard refers to anything (whether physical or psychological) that presents a
potential threat to employees.

Hazards can be classified into:

• Safety Hazards: Safety Hazards are unsafe working conditions that can cause
injury, illness and death.
 e.g. - Anything that can cause falls such as working from heights, including
ladders, roofs
- Electrical hazards like uncovered wires,
- Unguarded machinery and moving machinery parts that a worker can
accidentally touch, etc.

• Chemical Hazards: are present when a worker is exposed to any chemical

preparation in the workplace in any form (solid, liquid or gas). Some solutions
can cause illness, skin irritation, or breathing problems.

e.g. - Vapours and fumes

- Gases like acetylene, propane, carbon monoxide
- Flammable materials like gasoline, solvents, and explosive chemicals, etc.

• Biological Hazards: Biological Hazards include exposure to harm or disease

associated with working with animals, people, or infectious plant materials.

e.g. - Bacteria and viruses

- Plants
- Insect bites
- Animal excrement (droppings), etc.

• Physical Hazards: Physical hazards can be any factors within the

environment that can harm the body without necessarily touching it.

e.g. - Radiation (microwaves, radio waves, etc.)

- Ultraviolet rays
- Constant loud noise

• Ergonomic Hazards: Occur when the type of work, body positions and
working conditions cause pains or on your body or injuries.

e.g. - Improper chairs and workstations

- Frequent lifting
- Having to use too much force, especially if you have to do it frequently

f) Organization Hazards: Hazards that cause stress.

e.g. - Workload demands (heavy tasks and responsibilities)
- Violence
- Lack of respect
- Sexual harassment
 Some symbols of workplace hazards and their meanin

• WAYS TO MAKE WORKPLACE SAFER

The workplace can be made safer by the following methods below:

Method 1: Remove the Hazard

To remove the hazard from the workplace or keep it away from workers so it can’t
hurt anyone.

Here are some examples:

• Use safer chemicals, and get rid of hazardous ones
 • Store chemicals in locked cabinets away from work areas
• Use machines instead of doing jobs by hand

Method 2: Improve Work Policies and Procedures

If you can’t completely eliminate a hazard or keep it away from workers, good
safety policies can reduce your exposure to hazards.

Here are some examples:

• Safety training on how to work around hazards
• Regular breaks to avoid fatigue
• Assigning enough people to do the job safely (lifting, etc.)

Method 3: Use Protective Clothing and Equipment

Personal protective equipment is the least effective way to control hazards.

It can include items such as respirators, face shields, eye protection, safety
helmets, gloves, eye protection, high-visibility clothing, safety footwear, etc

Emergencies at work

Emergency is an unplanned situation that threatens your employees, customers and

disrupts/stops your operations or causes damage.

Emergencies may be natural or manmade and include the following:

• Severe injury,
• Accident
• Earthquake,
• Workplace violence resulting in bodily harm and trauma,
• Floods,
• Fires, etc.

• RESPONDING TO EMERGENCIES AT THE WORKPLACE

Below is how one can respond to the most common types of emergencies:

• Earthquakes

During an earthquake, at work people will be at the greatest risk from collapsing
ceilings, windows, light fixtures, and other falling objects.

In case of an earthquake:
• Wherever you are when an earthquake starts, take cover immediately. Move a
few
steps to a nearby safe place if need be. Stay there until the shaking stops.

• Drop under heavy furniture such as a table, desk, bed or any solid furniture.
• Cover your head and torso to prevent being hit by falling objects.
• Stay away from windows, and shelves with heavy objects.
• Be ready to rescue people who may fall victim to the earthquake
• Fire
 In case of a fire in a workplace, follow the following basic steps:
• Raise the alarm.
• Evacuate: Evacuation should be prompt and calm,
• Do not stop to collect any personal belongings, and never use lifts in the
event of a fire this is because the lift could stop working, trapping you inside.

• If the fire is small and controllable and you are trained in the use of a fire
extinguisher, you may attempt to extinguish the fire.

• If it is clear the fire cannot be controlled by a fire extinguisher, evacuate

immediately.

• KEEPING SAFE AT NIGHT

• Make sure someone knows where you are going, who you are meeting and
when you expect to return.

• Know your limit (alcohol will dull your instincts and can lead to you making
unsafe decisions)

• Stick to busy streets if you can (Avoid dark areas, deserted places, alleyways,
etc.)

• If you are socialising with a group of people, take care of each other and make
sure everyone stays safe.

• Always carry the telephone number of a trusted, licensed taxi or minicab

company with you.

• Always have a fully charged cell phone with you. If you are in trouble, you can
quickly call for help.

• Travel with a friend or in a group, as criminals are less likely to attack a group
than an individual.

REVISION QUESTIONS
 • SENIOR FOUR

• Define each of the following terms and give an example

• Entrepreneurship

• Entrepreneur

• Intrapreneur

• Manager

• Given the following stages of entrepreneurship process

• Discovery

• Concept development

• Resourcing

• Actualization

• Harvesting

Explain each stage and give an example

• Using a table give 4 differences between:

• An entrepreneur and an intrapreneur

• An entrepreneur and a manager

• a) Discuss the various qualities an entrepreneur should posses

b) Choose two best entrepreneurs in the world today that act as your role
models, one male and one female.

(i) …………………………………………………………….

(ii) ……………………………………………………………

• Explain any 4 attributes of each of the following types of entrepreneurs

 • Innovative entrepreneurs

• Imitative entrepreneurs

• Drone entrepreneurs

• Fabian entrepreneurs

• Describe briefly the relationship that exists between creativity and innovation
and give an example in each.

• a) Define the term “Career” as used in the field of entrepreneurship

b) From which sources can we obtain information concerning work to do?

c) Identify any 10 career opportunities that people today are engaged in starting
with those in your home area.

• (i) What do you understand by the following terms?

• Career trajectory path

• Career guidance

(ii) Make a list of sources where career guidance can be obtained

• Many people are confused today whether to engage in paid or self-employment.

Advise them by showing them 5 advantages and 5 disadvantages of Paid-
employment and Self-employment.

• a) Explain any 6 benefits of being an entrepreneur

b) Explain any 6 challenges of being an entrepreneur

• Identify the various values and skills that employers want

• a) Define the term goal as used in entrepreneurship

b) By giving examples, distinguish between short term and long-term goals

 c) Giving possible examples, describe any 5 characteristics of a goal

• a) Explain the meaning of “Standards” in business

b) List any 5 types of standards

• List the various characteristics of each of the following giving examples from
Rwanda

• Standards products

• Substandards products

• Discuss the process of standardisation in Rwanda

• Discuss importance of standardisation to the following stakeholders in Rwanda

in the process of exercising their rights and obligations:

• Government

• Consumers

• Industries

• Society

• Explain the following levels of standardisation

• National standardisation

• Regional standardisation

• International standardization

• a) Differentiate between law and business law

b) Identify various business laws that govern business activities

• Suggest various problems that may result from running the business activities
in the country without laws set.

• a) Identify the various legal institutions related to the business in Rwanda

b) List and explain any 4 forms of business ownership you know.

• a) In each of the following forms of business ownership, state 5 advantages and

disadvantages of each and give examples basing on Rwanda experience.

• Sole proprietorship (Sole trade business)

• Partnership business

• Joint stock company (public and private limited and unlimited)

• Cooperative business

b) Discuss the various procedures followed in registering the different forms of

business ownership mentioned in number (a) above.

• a) Outline the procedure of registering the following in Rwanda today:

• A domestic company

• A foreign company

b) Discuss the benefits of registering a business

c) Show the various consequences that result from refusing to register a

business.

• Define the following concepts as used in entrepreneurship:

• Market

• Marketing

• Market research

• Promotion

• Distribution chain
 • Quality

• Explain the components of marketing mix in commercial activities (4ps)

• Identify various marketing strategies that can be used in commercial activities.

• Describe how customers are the backbone of any business

• a) Define market survey

b) Describe the elements of market surveys

c) What is the importance of market surveys?

• What is the difference between quality analysis and quality control?

• Describe the process of developing marketing plan

• Identify types of business organizations

• According to size

• According to area of activities

• According to life span

• According ownership

• Identify any 6 departments of a business and their roles in a business

organization

• a) What is an organizational chart (organogram)

b) Design an organizational structure/chart for a business organization of your

choice

c) What is the importance of organizational chart for the business?

• Define the following types of business clearly giving merits and demerits in each
case:

• Sole proprietorship

• Partnership

• Cooperative

• Joint stock companies

• Parastatals

• a) Explain the meaning of finance, financial management

b) Explain the functions of financial management

• a) Identify various sources of capital

b) List advantages and disadvantages of every source mentioned in point (a)

• Find the simple interest and compound interest for:

• A principle of 80,000 Rwf at 6% interest per annum for 5 years

• A principle of 40,000 Rwf at 2% interest p.a.

• UMUBANO Enterprise deposited 1,200,000 Rwf in bank for 4 years. If the bank
offers an interest rate of 16% p.a. and allows the interest to be added on the
principal so that it earns interest, find the interest after 4 years.

• Define the following concepts:

• Break-even point

• Payback period

• Return on investment

• a) A business invests 500,000 Rwf and it is projected to have a useful life of 8

years with a uniform cash flow stream of 75,000 Rwf. Find the payback period.
 b) A firm invested 2,000,000 Rwf at the beginning of the first year, 800,000 Rwf
at the beginning of the second year and 600,000 Rwf at the third year. The firm
expected a uniform cashflow stream of 500,000 Rwf. The fourth and fifth years
of 900,000 Rwf and 1,200,000 Rwf respectively. How long the payback period?

• Umutako company makes dresses. In 2015 the company sold 124,000 pieces of
dresses at 5,000 Rwf per dress, the expenses of this company can be divided
into:

• Total variable costs 1,005,000 Rwf excluding tax

• Total fixed costs 6,700,000 Rwf excluding tax

Calculate the Break-even point of that company

• a) Explain the meaning of:

• Bank loan

• Cheque

b) Describe parties to a cheque

• a) Using examples distinguish between banking and non-banking financial

institutions

b) Identify services offered by financial institutions

• a) Explain the procedures of acquiring a loan

b) Assess the advantages and disadvantages of bank loans

• a) Distinguish between book-keeping and accounting

b) Give the accounting equation and explain

c) Explain the importance of accounting

• List and explain any 5 five source documents of accounting process.

• Describe advantages and disadvantages of credit transaction

• Explain the 3 major types of accounting: financial, cost and management

accounting

• Discuss the users of accounting information and explain how they use it.

• SENIOR FIVE
• “Not all business ideas are business opportunities” What does this statement
mean to you?
• Referring to your community, choose one idea that you think may be turned into
a profitable business and give reasons to support your choice.

• Analyze the example below and answer questions that follow:

Nkusi and Mukarutesi are capable adults. Nkusi is in the need for a new car. He
is on a
budget, so he finds Mukarutesi, who is selling an old Toyota Carina for
2,000,000Frw. Nkusi calls Mukarutesi and offers 1,800,000Frw. Mukarutesi
accepts Nkusi's offer and they decide to meet. At the meeting, Nkusi hands over
1,800,000Frw and Mukarutesi hands over the keys to the Toyota Carina.

Questions:
a) Is there a valid contract in the above example?
b) Referring to the elements of a valid contract, support your response
c) Which type of business contract is represented in the example above?
d) Which form of business contract would you advise Nkusi to sign with
Mukarutesi?
e) What do you think may lead to the contract in the example above to be
terminated?

• Read the following passage and answer questions that follow.

Ntwali started a business selling general merchandise in his community. He is
renting the
place where his business operates. Ntwali paid his property owner three months’
rent in
advance but never asked for receipt. After two months, his property owner says
he wants
the rent for the two months. Ntwali is perplexed and tries to remind the property
owner that he paid his rent for three months. The property owner denies and
asks Ntwali for proof of the payment which he does not have. Ntwali is stuck,
does not know what to do while the property owner threatens to evict him if he
does not pay his rent.
Questions:
a) What is the cause of the conflict in the example above?
b) Advise Ntwali on how he can resolve the conflict with the property owner
c) What are the disadvantages of the form of contract between Ntwali and the
property owner?
d) Help Ntwali design a written contract that he can sign with his property owner
to avoid such conflicts again.

• What do you think will happen if tax payers don’t pay both taxes assessed and
fines/penalties?

• It is saying that “tax is the free money to central or local authorities from
taxpayers”
do you agree with this statement? Justify your answer.

• Explain different taxes vested to decentralized authority (District revenues)

• What is the role of EBM in Economic Development of Rwanda?
• Describe any four principles of tax
• How tax is used by government to:
a) Support Entrepreneurs
b) Support the community

• Imagine a situation when you have finished your secondary school studies and
one of your family members learns that you studied entrepreneurship and so
accepts to grant you capital to start your own business. But before he gives you
that money he asks you to first carry out market research for the feasible
business.

He then asks you to first carry out the following business research task after
which you prepare report and present it to him for you to obtain the promised
capital.

• What products (goods or services) that people in your community would like
to have but are currently not being provided?
• Choose one product that you would be interested in dealing with.
• Who from your community can give you information about the product you
identified?
• Decide the population sample (the number of people identified in No. 3
above) to ask
• Formulate questions that you will use to collect the data that you require
about the product that you chose in No. 2 above)
• Make a plan of how you will collect the data and how you will analyze it.
• Proceed to collect the information/data.

• Mr. HABINEZA needs to start a business in Rulindo district at the end of his
secondary
studies. After making a research in his district, he realized that people in his
district
consume products per month as stated in the following table:
 Product Rural area Urban area
Irish potatoes 2,000kg 5,000kg
Beans 1,000kg 800kg
Meats 500kg 1,500kg
Pineapple 100kg 500kg
Sorghum 2,500kg 2,000kg

Required:
i) Use the bar charts to present the consumption of those goods in rural area.
ii) What is the most needed product in rural and urban area?
iii) According to the above-mentioned data, which kind of business can be started
in both areas?
iv) Use the pie chart to graphically present the consumption of those goods in
urban area.

• Using the knowledge obtained, outline the essential things to put in

consideration when conducting an interview.

• As an entrepreneur, you are planning to initiate a new product “Made in Rwanda

Sandals” in the market. This is an activity that requires deep and serious research
so as you produce a product that will be appreciated by the buyers.
You particularly want to find out the following:
• Characteristics of a good sandal
• Size of the market
• Appropriate price

Required:
i) Identify the sample
ii) Design a questionnaire to be used while collecting data
iii) Administer and collect the filled questionnaires
iv) Using Microsoft Excel, analyses and interprets the data collected.

• Explain how research can help the marketing department of a business in

achieving
its target.

• Assume you have a small business with a small capital and there are more
competitors where your business is located. Do you think it will be possible to
compete successfully with your competitors? What will you do to continue
operating and over compete your business rivals?

• Entrepreneurial practices below hinder business growth, identify the hindrances

resulted from those practices and propose the corresponding solutions to these
barriers of business growth.
• Not to employing a professional accountant in a large enterprise.
• Not to insure business assets and stock in insurance companies.
• Use business money on private affairs.
• Employing non-competent manager in business.
• Being impolite and using negative words when treating customers.
• Assume your business is attaining the following:
a) Increase in production, profitability and size. This is.……………………. (Fill in
blank).
b) A prolonged period of little or no growth for companies. This is
…………………….… (Fill in blank)

• Assume that you have a mini-supermarket selling fresh milk, juices, bread and
cakes in Kicukiro District;
• How would you know that your business is growing?
• How would you know that your business is declining?
• What can you do to minimize such a decline?

• Distinguish between labor intensive technology and capital-intensive technology.

• a) Identify various ICT tools used in the business world today.

b) Discuss the various business opportunities that can be started basing on ICT.
c) Examine the impact of using technology in businesses today.

• Try to find an example of simple and more complicated technology method of

production from each of the following areas of human activity.

Human activity area Example of Simple Example of Complex

technology technology
Cultivation
Cloth making
Secretariat
Transportation
Milking
Mining

• If you were to start a business in any of the above human activity area, which
technology will you likely choose? A simple technology or a more complex
technology?

• What could be the reasons guiding your choice?

• Now that you have identified possible businesses from these areas of activities,
which technology do you think will be more effective in order to improve the
productivity of the specific businesses or to improve your qualities?

• Write an essay “Technology is something to be welcomed rather than

feared”.

• Read the following case study and answer questions that follow:

Mugwaneza has a peanut butter making business. Last week she announced the
purchase of new equipments and modern technology that would make a radical
change in the production process. The investment would lead to some employees
lose their jobs. Mugwaneza explained to them but there was no doubt, it was in
the best interests of the company as a whole.
 Employees where not consulted because it would slow up the process and
Mugwaneza felt that it was the best decision to make. In the long run, the
modern technology and equipments should increase the businesses’
competitiveness and also produce quality products and in large quantities. The
working practices would obviously be changed, and employees would have to
learn new skills of using them. The employees where promised to be trained,
although it was not a guarantee to employ all them if they fail to adapt
successfully.

After the announcement, the employees where so furious and considered taking
industrial action. Hearing the rumours of a possibility to strike, Mugwaneza
admitted that the issue was not handled very well but would not reconsider the
decision.

Questions
• What factors may have made Mugwaneza decide to invest in modern
technology?
• Do you think the employees were right in taking industrial action? Give
reasons for your arguments.
• Analyze the factors that Mugwaneza might have taken into account before
acquiring the modern technology.
• Mugwaneza admitted that the issue was not well handled. In your opinion,
how should she have handled it?

• a) Distinguish between capital saving technology and labor-saving technology.

(b) Explain any 5 advantages and 5 disadvantages of using capital intensive
technology.

• a) What is meant by the term ―technology‖

(b) Discuss the pros and cons of labor intensive technology.

• Peter produces flowers and sells them both in the local and international
markets. He plans to use e-commerce in his business.
• Mention any 3 e-shops he can contact for advice.
• Explain the merits and demerits of using e-commerce in a business like
that of Peter.
• Explain how ICT can be of great importance in financial management.
• “The key to better performance is better management rather than
more technology” Critically assess this view.
• Examine the challenges of using Information Communication Technology
tools in business.

• Mahoro went to the shop to buy different items. When he entered in the shop, he
asked the shop owner to give her the items she wanted to buy but the trader was
busy conversing with his/her friends on phone. The shop owner continued to be
busy until a time where Mahoro decided to move to the next shop, the second
shop owner welcomed her and gave what she wanted.

Questions
a) Did Mahoro get good customer service or not? Justify your answer?
b) Why did Mahoro decide to move to the other shop?
 c) What do you think the business owner would have done to offer quality service
to Mahoro?
d) Suppose you have business of selling clothes at Nyabugogo near the tax park,
do you think is it important for you to provide good customer care? Give
reasons to justify your answer.

• a) It is normally said that “a customer is a king”. Dou you agree with this
statement? Give reasons to support your response.

b) Suppose you create a business after your studies, how can you ensure good
customer relations in your business?

• a) Mention different business communication documents that are found in offices

b) Explain how the documents identified above facilitate business communication

• Gikundiro is a senior six level student who wants to start a fruit processing
business and she needs help from you to:

a) Design an advert for various posts in a fruit processing business.

b) Identify office equipments she need in her office.
c) Prepare at least two business documents she may need while operating
business.

• a) What are the consequences of overspending?

b) Explain why it very important to save money
c) Where do you think you can you save money? Explain why?

• a) What do you understand by the terms MONEY and FINANCE?

b) Explain different sources of income.
c) Describe at least fifteen household expenses.

• a) Make a list of financial institutions that are found in your community where
you live.
b) Choose one Financial institution that you know and that you can work with
when needing to take loan and explain why.

• Make field trip and visit where there is financial institution that use ATM and
request for a convenient bank officer to answer the following questions:

a) How is ATM used?

b) What are the advantages of using ATM Cards?
c) Differentiate Credit Cards from Debit Cards?

• Pick up the Most Appropriate

i. The prime function of bookkeeping is to:
(a) Record economic transactions
(b) Provide information for action.
(c) Classifying and recording business transactions
(d) Attain non-economic goals.
 ii. This system is universally followed in accounting:
(a) Single Entry System;
(b) Double Entry System
(c) Cash Accounting;
(d) Cost Accounting

• Recall your Memory and answer using True or False)

• Book-keeping is a part of accounting.

• Accounting is an exact science.
• Approach for subjects “Accounting” and “Accounting for Managers” is one
and the same.
• Total assets minus capital is equal to liabilities.
• An increase in assets is necessarily due to profits.
• Drawings reduce the business capital.
• Liabilities are decreased by losses and increased by profit

• From the details given below write up a cashbook of PETER as per January, 2016
and balance off at the end of the month:
June 1st started a business with 70,000Frw in the bank.
2nd Paid for furniture using a cheque 8,000Frw less 4 % discount
5th Cash sales 7,500Frw less 5% discount
6th Paid for postage by cheque 1,600Frw less 2% discount
7th Received a cheque from Kamasa 8,200Frw
9th Withdrew cash from the bank 6,300Frw for business use
12th Ngenzi paid us in cash 1,400Frw
16th Deposited cash into bank 5,000Frw
18th Paid Nzaramba cash 3,900Frw
20th Withdrew 2,700Frw from bank for personal use
23rd Paid electricity account by cheque 1,700Frw
26th Cyiza paid us by cheque 7,400Frw less 2.5%
28th Paid wages 1,100Frw and Rent all by cash 10,000Frw
30thSold goods for cash 4,800Frw

• A company’s petty cashier is given an imprest of 250,000Frw for the month of

May 2011.
The expenditures were as follows:

March 2nd bought 8 reams of duplicating papers each at 4,000 F

3rd May Paid transport to town 15,000 F
4th May Bought sodas for staff 20,000 F
5th May Bought 1 dozen of stapling machines at 22,000 F
6th May Paid for compound cleaners wages 60,000 F
 18th May Bought 10 brooms for compound cleaning each at 3,000 F
20th May Paid for stamps 3000 F and postage 5,000 F
21th May Paid money for special hire taxi 30,000 F
22th May Bought 5 floor cleaners each at 4,000 F
25th May Bought ink for duplicating machine 25,000 F
You are required to open up a petty cashbook on imprest system with analysis
columns for stationery, travelling, and sundry expenses.

• Rights and responsibilities are the same for employers and employees
TRUE FALSE

• Cycle the right answer:

• In Rwanda, an employer does not need to:
a) Provide regular breaks for employees
b) Maintain a safe workplace
c) Pay employees the agreed-upon wage on time
d) Pay for employee’s transportation to work

• In Rwanda, an employee has the responsibility to:

a) Respect and follow directions given by the employer
b) Avoid hazards at the workplace
c) Keep equipment in good working order
d) Show up on time
e) All of the above

• Universal human rights include the following:

a) The right to education
b) The right to shelter
c) The right to practice the religion of your choice
d) All of the above
e) None of the above
• A leader should choose only one style of leadership and always stick to it. TRUE
or FALSE and explain why.

SENIOR SIX

• a. Why is it necessary for an entrepreneur to take care of the natural

environment?
b. Identify and explain the responsibility of business to society and the
environment
• Differentiate between the economic environment and the legal environment of a
business
• Discuss the role of entrepreneurship in socio economic development
• Briefly explain how the following external business environment factors may
negatively affect business activities
a. Economic environment
b. Legal environment
c. Natural environment
d. Society

• What is essential in an EIA? (Select all that apply):

• That it allows decision makers to assess a project’s impacts in all its phases
• That it allows the public and other stakeholders to present their views and
inputs on the planned development

• That it contributes to and improve the project design, so that environmental as

well as socioeconomic measures are core parts of it

• Which type of project usually requires an EIA? (Select all that apply):
a. Small housing building
b. Dams and reservoirs
c. Industrial plants (large scale)
d. Irrigation, drainage, and flood control (large scale)
e. Mining and mineral development (including oil and gas)
f. Development of wells in the community

• Discuss the role of capital market on the financial market on the country’s
economy
• Explain the role of stockbrokers in stock exchange process.
• Summarize advantages of investing at the Rwanda Stock Exchange.
• Discuss the difference from primary capital market from secondary capital
market.
• Describe/explain the process of joining RSE
• Explain what might happen in the economy if there were no financial institutions.
• On January 1, 2017 Madenge started a travel agency. The following events
occurred during that first month.

• On Jan 2, he invested 1 320 000 Frw cash and 100 000 Frw equipment in the
business.
• On Jan3, he paid 60 000 Frw cash for furniture for the travel agency.
• On Jan 5, he paid 50 000 Frw cash to rent the space for his business.
• On Jan 7, he purchased additional equipment on credit amounting to 320 000
Frw from Jack
• On Jan 8, he received cash from services provided in the first eight days 625 000
Frw.
• On Jan 16, he provided services on account, the amount is 98 000 Frw.
• On Jan 17, he received a cheque for services rendered the previous day on
account.
• On Jan 19, he paid 75 000 Frw to an assistant for working during the opening.
• On Jan 29 cash received from services provided during the second half of January
is 804 000 Frw.
• On Jan30, he paid 230 000 Frw part of the money he owed Jack
• On Jan 31, Madenge made a 310 000 Frw cash withdrawal for personal use.

Required
i) Record the preceding transactions in a journal
ii) Post the transactions in a ledger and prepare the trial balance
iii) Prepare an income statement for January
iv) Prepare a statement of owner’s equity for January
v) Prepare a balance sheet as of January 31

• What is the importance of stock and inventory management in organizations?

• Differentiate between Return inwards and Return outwards.
• Indicate 3 disadvantages of perpetual inventory system
• Identify 3 disadvantages of periodical inventory system
• Suppose you are selected to be the Head of Finance Unit in a newly established
public hospital. Prepare a Purchase requisition for your office materials.

• Explain the relationship between purchase requisition and purchase order.

• The following information is extracted in the books of a stock manager:
• Started on 20th December 2015 with 100 jerrycans of cooking oil all bought at
2,900,000 Frw
• 75 jerrycans are sold during the month of January
• 28 jerrycans are bought in February 2016 all at the cost of 840, 000 Frw
• 50 jerrycans are sold in March
• 102 jerrycans are bought in April all at the cost of 3,029,400 Frw
• 80 jerrycans are sold in May
From this information, prepare stock cards for cement using:
(a) FIFO
(b) LIFO
(c) WAC
• In your opinion, explain the meaning of business plan.
• After your study you have a dream to study a small business and you have just
writing your business plan. Explain how Rwanda Revenue Authority can use that
business plan.

• Describe three challenges that a new enterprise might face.

• A business that fails to plan will plan to fail. Discuss.
• Explain the term “MARKETING MIX” as could be used in business planning.
• Suppose your mother wants to start a hotel business, based on your knowledge
and skills gained from entrepreneurship subject. Prepare for her the following
plans:

a) Production plan
b) Action plan

• Explain the various components of a financial plan

• Explain the guidelines followed in business contingency planning.
• Mention the elements of a business plan
• Ingabire Sandra and Jean Claude are planning to start up a business in your
sector; they approached you for more information on metrology in business
activities.
• First explain to them the different types of metrology
• Having accurate measurements in business activities is very important. Justify
the statement to the above people feel confident to apply metrology in their
business activities.

• Explain the relationship between quality compliance, assurance and management

• Describe the procedures that are embedded in quality assurance.
• Explain how accreditation aids and promotes trade across borders.
• Nyaruguru district is looking for a land officer, explain the process you will follow
for applying on the position

• What are the elements of a well written CV and application letter?

• Identify and explain the elements of a career plan
• Read and answer the following questions
• If you are inside a building and begin to feel the shaking of an earthquake, what
should you do?
• If you smell smoke and suspect a fire burning somewhere in the building, what
should you do?
• If you are working outside when a storm with lightening starts, and you can’t get
to shelter, what should you do?

• A co-worker slips on a slippery floor and hits his head, losing consciousness.
What do you do?
• If a co-worker falls off a ladder and injures his back, what should?
• What phone number should you call to report an emergency
• Name 3 times where it is necessary to wash your hands.
• What is at least one item that should be included in an emergency kit?
• Name 2 personal hygiene practices that can prevent spreading germs when
working in a restaurant.