BSTAZ BS SUPPLEMENTARY NOTES(1)

Business Studies A Supplementary Study Text 1
MINISTRY OF EDUCATION
LUSAKA PROVINCE
Business Studies Teachers Association of Zambia
BUSINESS STUDIES
A SUPPLEMENTARY STUDY TEXT FOR JUNIOR SECONDARY
2ND EDITION
NOT FOR SALE

Business Studies Teachers Association of Zambia – Lusaka Province
NOT FOR SALE
BUSINESS STUDIES609
SUPPLEMENTARY TEXT FOR JUNIOR SECONDARY
2nd Edition
Authors
MINISTRY
RICHARD FISONGA MBA Fin, ZiCATech, BBA Ed, Dip. Ed.
Head of Business Studies Department – Highland Secondary School,
OF EDUCATION
Winner of the 2018 Outstanding Educator Initiative National Award in Financial Literacy,
Past Chairperson of the Business Studies Teachers Association of Zambia, Lusaka Province
LUSAKA PROVINCE
JAMES GWENANI MBA Fin, ZiCATech, BBA Ed, Dip. Ed.
Deputy Headteacher - Arakan Boys Secondary School,
Formerly Head of Business Studies Department - Nelson Mandela Secondary School,
Past Chairperson of the Business Studies Teachers Association of Zambia, Lusaka Province
Past National Treasurer General for the Business Studies Teachers Association of Zambia.
EDGAR SHILUWE BBA Ed, Group Dip. Marketing, Dip. Ed.

Deputy Headteacher, Roma Girls Secondary School,
Formerly Head of Business Studies Department - Roma Girls Secondary School,
Winner of the 2018 Outstanding Educator Initiative National Award in Financial Literacy,
JOHN KAPUTULA MBA Fin, ZiCALic, BBA Ed, Dip. Ed.

Head Teacher, Mahatma Gandhi Combined School,
Formerly Head of Business Studies Department - Chilenje South Secondary School,
Past Vice Secretary General for the Business Studies Teachers Association of Zambia,
Lusaka Province
BUSINESS STUDIES TEACHERS ASSOCIATION OF ZAMBIA

LUSAKA PROVINCE

NOT FOR SALE
©2022 BUSTAZ Lusaka Province

Business Studies609 - Supplementary Study Text for Junior Secondary, 2nd Edition
The right of Richard Fisonga, James Gwenani, Edgar Shiluwe and John Kaputula as authors of
this work under the umbrella of the Business Studies Teachers Association of Zambia has been
asserted by them. This supplementary book is not for sale, however express permission for free
distribution and education purposes has been granted.
Disclaimer
Although the authors have made every reasonable effort to ensure that the information in this
book was correct at press time, they make no express or implied representation, with regard to
the accuracy of the content herein and hereby disclaim any legal responsibility or liability to any
party caused by errors or omissions. Note that some pictures of products and services that are
referred to may be either trademarks and/or registered trademarks of their respective owners.
The authors make no claim to these trademarks.

NOT FOR SALE
PROVINCIAL EDUCATION OFFICER’S STATEMENT
The Ministry of Education envisions to achieve access to high quality education across the nation
and Lusaka province is no exception. One of the main indicators of quality education is
Examination results to which the availability of quality books is irrefutably one of the main
contributing factors. There is therefore a need at all times to have material written with the teacher
and learner in mind and which adheres to the official syllabus and the associated learner
outcomes.
The production of this supplementary book by the BUSTAZ is one of the provincial initiatives to
improve teacher and learner performance in class assessments and National Examinations. The
book has been written in such a way as to meet these needs and ensure that teachers and
learners have access to up to date subject content. The association and authors deserve
commendation for the job well done.
This initiative started in 2018 when the first edition of this book was produced. The province would
therefore like to express sincere thanks to the then, Provincial Education Officer, Mr. Paul Ngoma,
the Principal Education Standards Officer Mrs. Grace Sinkolongo and the Senior Education
Standards Officer – Business Studies, Dr. John S. Chola, for the administrative support given to
the association.
I sincerely believe that this supplementary material will go a long way in achieving the goals of
the Ministry of Education and improve learner performance in Lusaka Province and beyond.
School administrators are therefore encouraged to distribute the material to teachers and learners
in hard and soft copy at no cost to the recipients.
Allan Lingambe PhD

Provincial Education Officer
LUSAKA PROVINCE

NOT FOR SALE
FOREWORD
The compilation of this supplementary book was necessitated by the need to provide
comprehensive material in the subject area to cover all aspects of the syllabus in order to
improve examination results. The authors ensured that the contents of the book conformed to
the requirements of the official Curriculum Development Centre (CDC) Syllabus as well as the
Examination Syllabus for the Examinations Council of Zambia.
The information contained in this supplementary book is professionally written by qualified and
experienced teachers of the subject. Teachers and learners are therefore assured that the
information is well researched and relevant to the current curriculum and lesson outcomes as
contained in the syllabus.
The book has been developed with the teacher and learner in mind. The teacher will be equipped
with a well summarised all-in-one resource that will enhance their preparedness for effective
delivery of lessons in class, thus improving teacher performance. The learner, on the other hand
will find this book easy to use with its well summarised notes and easy to understand illustrations
which will aid their understanding of concepts. This will equip them with knowledge, values and
skills necessary for the business environment and in turn help to improve learner performance in
the final examinations.
This book will prove to be a helpful resource for both teachers and learners in their quest to
achieve the intended syllabus outcomes and improve results in Business Studies.
Mrs. Lenny N. Longwe

Senior Education Standards Officer – Business Studies

NOT FOR SALE
ACKNOWLEDGEMENTS
The authors would like to acknowledge the help and support received from the Provincial
Education Officer, Dr. Allan Linganbe for the encouragement to have this material edited and the
permission to have it distributed in soft copy to teachers and learners. We also acknolwedge the
professional help and advise received from the Senior Education Standards officer, Mrs. Lenny
Longwe in the preparation of the Second edition of this book.
We appreciate the efforts of many teachers who provided reviews and advice on a number of
topics, chief among them, Mrs. Rhoda Kafiswe of Kabulonga Girls Secondary School.
Special thanks to key stakeholders in Business and Financial Education such as the Curriculum
Development Centre (CDC), Examinations Council of Zambia (ECZ), Securities and Exchange
Commission (SEC), Pensions and Insurance Authority (PIA), Competition and Consumer
Protection Commission (CCPC), the Zambia Institute of Chartered Accountants (ZICA) and the
Bankers Association of Zambia (BAZ). These organisations availed valuable information through
seminars, workshops and electronic means without which some topics in this book could not have
been updated.
This book is a result of many years of the authors’ practical teaching experiences in the
classroom. The bigger part of the book is a compilation of the authors’ self-generated notes.
Other resources used are here acknowledged which have been used particularly for education
purposes as provided for under Fair Use. They include:
Chibuye Lovemore, (2017), Academic Help Line – Junior Business Studies, Academic Help
Line Publishers, Lusaka Zambia
Hampungani M. Chrispin, (2013), Total Office Practice, Hampungani M. Chrispin, Lusaka,

Zambia
Matimba A., (2009), Distinction in Commerce, Matimba A, Livingstone, Zambia
Ng’anga Joseph et al, (2014), Achievers Junior Secondary Business Studies East African
Educational Publishers Ltd
Sichivula Noel, (2016), Junior Secondary Business Studies, MK Publishers, Lusaka,

Zambia

NOT FOR SALE
TABLE OF CONTENTS
1.0 INTRODUCTION TO BUSINESS STUDIES ................................................................12

1.1 What is Business Studies?.............................................................................................................. 13
1.2 What is a Business? ....................................................................................................................... 13
2.0 AN OFFICE .................................................................................................................14
2.1 Location of an office ...................................................................................................................... 14
2.2 Clerical Duties ................................................................................................................................ 14
2.3 Functions of an Office .................................................................................................................... 14
2.4 Types of Offices.............................................................................................................................. 15
2.4.1 Open Plan Office ..................................................................................................................... 15
2.4.2 Closed Plan Office ................................................................................................................... 16
2.4.3 Virtual Office ........................................................................................................................... 16
3.0 OFFICE ORGANISATION AND PERSONNEL ................................................................18
3.1 Directors and Managers of an Organisation.................................................................................. 18
3.2 Departments of an Organisation ................................................................................................... 18
3.3 Job Opportunities in Business Studies ........................................................................................... 21
4.0 OFFICE ETIQUETTE .......................................................................................................22
4.1 Personal Qualities of an office Worker .......................................................................................... 22
5.0 ENTREPRENEURSHIP ...................................................................................................23
5.1 Qualities of a Good Entrepreneur.................................................................................................. 23
5.2 Ways of Strengthening Entrepreneurial Abilities .......................................................................... 23
5.3 Entrepreneurial activities found in the Community ...................................................................... 23
5.4 Reasons for Entrepreneurship ....................................................................................................... 24
6.0 TYPES OF BUSINESSES................................................................................................25
6.1 Sole Proprietorship ........................................................................................................................ 25
6.2 Partnership .................................................................................................................................... 25
6.3 Cooperatives .................................................................................................................................. 26
6.4 Limited Company ........................................................................................................................... 26
7.0 BUSINESS IDEAS ...........................................................................................................27
7.1 Sources of Business Ideas .............................................................................................................. 27

NOT FOR SALE
7.2 SWOT Analysis ............................................................................................................................... 27

8.0 COMPANY FORMATION ................................................................................................28
8.1 Factors to consider before forming a Company ............................................................................ 28
8.2 Documents needed for the formation of different types of business........................................... 28
9.0 THE BUSINESS PLAN ....................................................................................................30
9.1 Functions/Purposes of a Business Plan ......................................................................................... 30
9.2 Contents of a Business Plan ........................................................................................................... 30
10.0 FINANCING BUSINESSES ...........................................................................................32
10.1 Ways of Financing Businesses ..................................................................................................... 32
11.0 BUSINESS ETHICS .......................................................................................................33
11.1 Desirable business ethics ............................................................................................................. 33
12.0 DEALING WITH FRAUD................................................................................................34
12.1 Fraudulent Situations .................................................................................................................. 34
12.1.1 Shopping Fraud ..................................................................................................................... 34
12.1.2 Internet Fraud ....................................................................................................................... 34
12.1.3 Banking Transactions Fraud .................................................................................................. 34
12.1.4 Borrowing money from unreliable places ............................................................................ 34
12.2 Ways of avoiding being a victim of fraud .................................................................................... 35
12.3 Effects of fraud on victims ........................................................................................................... 35
12.4 Effects of fraud on fraudsters ...................................................................................................... 35
13.0 OFFICE STATIONERY AND EQUIPMENT....................................................................36
13.1 Stationery..................................................................................................................................... 36
13.2 Office Equipment ......................................................................................................................... 40
14.0 BUSINESS TRANSACTIONS ........................................................................................47
14.1 Types of transactions ................................................................................................................... 47
15.0 BUSINESS DOCUMENTS .............................................................................................48
15.1 The Inquiry ................................................................................................................................... 48
15.2 Quotation..................................................................................................................................... 49
15.3 Order ............................................................................................................................................ 50
15.4 Invoice.......................................................................................................................................... 51
15.5.1 VAT ........................................................................................................................................ 51
15.5.2 Discounts .............................................................................................................................. 51

NOT FOR SALE
15.5.3 Trade Discount and Cash Discount ....................................................................................... 51

15.5.4 Differences between Trade Discount and Cash Discount .................................................... 52
15.5.5 Calculations of Trade and Cash Discount.............................................................................. 52
15.6 Dispatch/Advice Note .................................................................................................................. 53
15.7 Delivery Note ............................................................................................................................... 53
15.7 Consignment Note ....................................................................................................................... 53
15.8 Goods Received Note .................................................................................................................. 53
15.9 Debit Note.................................................................................................................................... 53
15.10 Credit Note ................................................................................................................................ 53
15.11 Statement of Account ................................................................................................................ 53
15.12 Cheque ....................................................................................................................................... 54
15.13 Cheque Counter foil / Cheque Stabs ......................................................................................... 55
15.14 Receipts ..................................................................................................................................... 55
15.16 Cash sale slip .............................................................................................................................. 55
15.17 Petty Cash Voucher.................................................................................................................... 55
16.0 SOURCE DOCUMENTS ................................................................................................56
16.1 Source Documents used in bookkeeping .................................................................................... 56
17.0 THE ACCOUNTING CYCLE ..........................................................................................57
17.1 Stages in the Accounting Cycle .................................................................................................... 57
18.0 BOOKS OF ORIGINAL ENTRY .....................................................................................58
18.1 The Purchases Day Book .............................................................................................................. 58
18.2 Purchases Returns Day book ....................................................................................................... 59
18.3 Sales Day Book ............................................................................................................................. 61
18.4 Sales Returns Day book ............................................................................................................... 62
18.5 The General Journal ..................................................................................................................... 63
18.6 The Cash Book.............................................................................................................................. 64
18.6.1 Single Column Cash Book - Cash Account............................................................................. 64
18.6.2 Single Column Cash Book - Bank Account ............................................................................ 66
18.6.3 Two Column Cash Book ........................................................................................................ 66
18.6.4 Three Column Cash Book ...................................................................................................... 67
18.6.5 Petty Cash Book and the Imprest System ............................................................................. 69

NOT FOR SALE
19.0 CLASSIFICATION OF ACCOUNTS IN THE LEDGER ..................................................71

19.1 Personal Accounts ....................................................................................................................... 71
19.2 Real Accounts .............................................................................................................................. 71
19.3 Nominal Accounts ........................................................................................................................ 71
20.0 THE LEDGER ................................................................................................................72
20.1 General Ledger or Nominal Ledger.............................................................................................. 72
20.2 Purchases Ledger/Creditors Ledger/Accounts Payable Ledger ................................................... 72
20.3 Sales Ledger/Debtors Ledger/Accounts receivable Ledger ......................................................... 72
20.4 Cash Book (Cash Ledger).............................................................................................................. 72
21.0 THE DOUBLE ENTRY PRINCIPLE ...............................................................................73
21.1 Double Entry Bookkeeping .......................................................................................................... 73
21.2 Role of Double Entry .................................................................................................................... 73
21.3 Summary of double entry rules ................................................................................................... 73
22.0 THE TRIAL BALANCE ..................................................................................................74
22.1 Purpose of the trial balance......................................................................................................... 74
22.2 Preparation of the Trial Balance .................................................................................................. 74
23.0 FINAL ACCOUNTS .......................................................................................................77
23.1 The Trading Account .................................................................................................................... 77
23.2 The Profit and Loss Account ........................................................................................................ 78
23.3 Statement of Financial Position ................................................................................................... 79
23.3.1 The Accounting Equation ...................................................................................................... 79
23.3.2 Preparation of the Balance Sheet ......................................................................................... 80
24.0 WAGES AND SALARIES ..............................................................................................84
24.1 Salaries ......................................................................................................................................... 84
24.1.2 The Pay Slip ........................................................................................................................... 84
24.2 Wages .......................................................................................................................................... 86
24.2.1 Overtime ............................................................................................................................... 86
24.2.2 The Time Card or clock Card ................................................................................................. 86
24.2.3 Wage Sheet or Coining Analysis ........................................................................................... 87
24.2.4 Flat rate ................................................................................................................................. 88
24.2.5 Piece Rate/Piece Work ......................................................................................................... 88
25.0 PERSONAL FINANCIAL MANAGEMENT.....................................................................89

NOT FOR SALE
25.1 Savings ......................................................................................................................................... 89

25.2 Budgeting ..................................................................................................................................... 89
26.0 BANKING ......................................................................................................................91
26.1 What is banking? ......................................................................................................................... 91
26.2 Financial Institutions .................................................................................................................... 91
26.3 Types of Financial Institutions ..................................................................................................... 91
26.3.1 Building societies .................................................................................................................. 91
26.3.2 Credit Unions and Savings Associations ............................................................................... 91
26.3.3 National Savings and Credit Bank (NATSAVE) ...................................................................... 91
26.3.4 Micro Finance Companies .................................................................................................... 92
26.3.5 Bureau De Change ................................................................................................................ 92
26.4 Services offered by Financial Institutions .................................................................................... 92
26.5 Types of Bank Accounts ............................................................................................................... 92
26.5.1 Current account .................................................................................................................... 92
26.5.2 Savings account /Save as you earn ....................................................................................... 92
26.5.3 Deposit account/Investments Accounts ............................................................................... 93
26.6 Documents used in Banking ........................................................................................................ 93
26.6.1 Deposit Slip ........................................................................................................................... 93
26.6.2 Pay-in-Slip ............................................................................................................................. 94
26.6.3 Withdrawal Slip..................................................................................................................... 94
26.6.4 Bank Statement .................................................................................................................... 94
26.6.5 ATM Transactions Slips ......................................................................................................... 95
26.6.6 Cheque .................................................................................................................................. 95
27.0 FILING ...........................................................................................................................97
27.1 Characteristics of a good filing system ........................................................................................ 97
27.2 Filing Systems............................................................................................................................... 97
27.2.1 Centralised Filing .................................................................................................................. 97
27.2.2 Decentralised/Departmental Filing ...................................................................................... 98
27.3 Filing Methods ............................................................................................................................. 98
27.3.1 Alphabetical filing ................................................................................................................. 98
27.3.2 Geographical Filing ............................................................................................................... 98

NOT FOR SALE
27.3.3 Numerical filing ..................................................................................................................... 98

27.3.4 Chronological filing ............................................................................................................... 99
27.3.5 Subject filing ......................................................................................................................... 99
27.4 Filing Equipment .......................................................................................................................... 99
27.4.1 Factors to consider when choosing filing equipment........................................................... 99
27.4.2 Types of filing equipment: .................................................................................................. 100
28.0 POSTAL AND TELECOMUNICATION SERVICES .....................................................102
28.1 Postal Services ........................................................................................................................... 102
28.2 Telecommunication Services ..................................................................................................... 106
29.0 BUSINESS ABBREVIATIONS.....................................................................................110
29.1 Why use abbreviations? ............................................................................................................ 110
29.2 Common Business Abbreviations .............................................................................................. 110
30.0 ENTREPRENEURSHIP ...............................................................................................113
30.1 Business Management............................................................................................................... 113
30.2 Business Management Sheet .................................................................................................... 113
30.3 Ways of Managing Business Finances ....................................................................................... 113
30.4 Basic Financial Records .............................................................................................................. 114
30.5 Company Dissolution ................................................................................................................. 114
1.0 INTRODUCTION TO BUSINESS STUDIES

NOT FOR SALE
1.1 What is Business Studies?

Business Studies is a subject aimed at imparting learners with knowledge, attitudes and skills
in office management, entrepreneurship and financial management.
Business Studies is made up of three components, namely:

a) Office Practice which is the study of office duties.
b) Book keeping which is the systematic recording of business transactions from source
documents into the books of accounts.
c) Entrepreneurship which is a way of thinking and acting to take advantage of
opportunities to create wealth.
The subject is intended to equip learners with ability to set up and manage their own businesses
as entrepreneurs, their personal and business finances and and their office related work
effectively.
1.2 What is a Business?

A business is any legal activity formed with the intention of making profit. The term legal means
something that is allowed by law. Thus, a business should meet the legal requirements for it to
be set up and must provide goods and services that better the lives of the community. Business

NOT FOR SALE
2.0 AN OFFICE
An office is a room or place in an organization where various duties are carried out or performed.
It can also be defined as a place where planning and organization of work is done. A person
who works in an office is called an officer. An office is usually occupied by a single person or a
number of business personnel.
2.1 Location of an office

An office need to be situated in an area within which the job is being done or performed or right
at the place where the business is being carried out.
2.2 Clerical Duties

Clerical duties include the following:
a) Sorting: choosing or selecting documents for filing and putting them in order
b) Checking: this is proof - reading documents to make sure they bear correct information
c) Computing: calculating various units of things including, wages and salaries for workers,
expenses, incomes etc.
d) Writing: producing original documents both typed and handwritten.
e) Typing: the reproduction of records or letters from hand-written into typed material.
2.3 Functions of an Office

a) Obtaining/Receiving Information: receiving information from both internal and external
sources. Information can be received through letters, telephone, word of mouth, e-mails
etc.
b) Keeping Records of Information: this includes the keeping of records in certain books and
computer storage facilities to allow for easy access to information when it is required.
c) Preparing Information: this includes arranging information in such a way that it can easily
be understood by management or anyone who uses it
d) Communicating Information: this is the sending or transmitting the information the office
has received to the concerned people within or outside the firm.
e) Protecting Information: this includes keeping the information safe from bad things such as
dust, dump and from outsiders who are not supposed to have access to it.

NOT FOR SALE
2.4 Types of Offices

There are basically three types of offices; these are:
2.4.1 Open Plan Office
An open plan office is a large space where many workers operate from as they carry out their
duties. It is designed in such a manner that there could be many desks or tables to
accommodate many workers. Examples of open plan offices are:
Staff room
- Typing pool
- Post office
- Bank
- Computer rooms
- Boardrooms
Advantages of an open plan office

a) Punctuality is observed in that each empty seat indicates absence.
b) Economic use of space as there is more space to use as all desks and equipment are
pre-arranged in an orderly manner.
c) Economic use of lighting and heating such as bulbs, heaters, and fans are used more
economically when used in an open plan office.
d) Supervision becomes easier as the supervisor does not need to move from one office
to another in order to supervise.
e) Communication is easy since everyone is in one room.
f) It is easy to take over if one worker is absent.
Disadvantages of an open plan office

a) The noise generated in the office is a disturbance, especially to those who perform
delicate duties such as tabulating figures and computing work.
b) There is a quick spread of diseases such as water bone and air borne diseases.

NOT FOR SALE
c) Too much gossiping among the workers in the same room retards the efficiency in
production.
d) The workers cannot have confidential conversations with the outsiders.
2.4.2 Closed Plan Office
A closed plan office is where one or two people operate. A closed office is also known as
partitioned or enclosed office.
Advantages of a closed office

a) There is no noise in this kind of office and as a result, there is concentration on office
work resulting in efficiency
b) There is privacy as there is only one person in the office
c) Diseases are not spread quickly because there is only one person operating from there.
d) It is easy to satisfy one or two workers with regard to lighting and heating
e) There is no gossip and production is not affected
f) It is easy to know one’s status/position as it would be indicated on the door.
Disadvantages of a closed office

a) It is more difficult to observe punctuality.
b) Supervision is very difficult as the supervisor needs to move from office to office in order
to supervise the work performed by various workers.
c) There is no economic use of space and equipment as offices take up a lot of space
d) There is no economic use of lighting and heating, (bulbs, heaters).
e) It is difficult to take over when one is absent or sick.
f) Communication is difficult unlike in an open plan office.
2.4.3 Virtual Office

This is also known as Online Office. It is an office environment which is web or
telecommunication technology based. It relies on computers, phones, internet and many other
information technology systems that allow people to work from anywhere. Some companies
make use of virtual offices by having all their employees operating without a physical office
address, but connected to company’s internet or phone lines so that they can update each other
and attend to customer’s needs or meetings online.

NOT FOR SALE
Advantages of a Virtual Office

a) It saves money since there is no need for paying rentals
b) Video conferencing may be used, so costs of transportation to the venues of the
meetings are eliminated.
c) It saves time as workers can work from home, thus working 24/7, no knocking off time,
more work can be done.
Disadvantages of a Virtual Office

a) It may be difficult to coordinate workers especially if the organization is very big as they
would be in many different places or countries with network problems.
b) There may be lack of customer trust since customers would want to have a fixed place
where they can take their complaints in case a product has a problem
c) It may be difficult to motivate workers to work hard because some of them believe in
face to face communication with their managers not just online or phone.
d) Virtual Offices are only suitable in businesses providing services such as internet buying
and selling of goods, mobile tuition centre, consultation firms, online newspapers etc.
How a virtual office operates

NOT FOR SALE
3.0 OFFICE ORGANISATION AND PERSONNEL
Office organization refers to how offices are structured or organized to ensure efficiency in
service delivery to customers.
Work in an organization is carried out through departments. A Department is a section/division
of a business whose duty is to carry out a specific function. The departments are shown on a
business’ organization chart.
An Organisation Chart is a plan in an organization, which shows channels of communication. It
shows the hierarchy of who should report to who and who should manage who. The
organization chart identifies various departments for which different employees work and the
departmental managers.
The departmental heads /directors usually report to the Managing Director who is the overall
boss in an organization.
3.1 Directors and Managers of an Organisation

Shareholders: these are the investors or owners of a business.
Board of Directors: these are people appointed by shareholders to take care of the day to day
operations of an organization.
Managing Director: this is the person appointed by the Board of directors to manage the day
to day business of the company/organisation. He/she is in charge of developing new business
for the organization, making sure customers are satisfied, employing and retaining workers and
briefing the Board of Directors on the development of the organization. He/she is also refered
to as the Chief Executive Officer (CEO).
General Manager: He/she is appointed by the Managing Director from among the employees
of an organization. He/she is expected to have managerial character and qualifications. He/she
oversees all the managers of the different departments within the organization.
3.2 Departments of an Organisation
SHAREHOLDERS
BOARD OF DIRECTORS
MANAGING DIRECTOR
HUMAN RESOURCE ADMIN. PRODUCTIO SALES LEGAL

DEPT DEPT N DEPT DEPT DEPT
PUB. RELATIONS IT PURCHASING FINANCE

DEPT DEPT DEPT DEPT

NOT FOR SALE
(a) Administration Department

The main function of this department is to ensure that all the other departments work
according to the objectives of the company. It coordinates all the departments by providing
services like photocopying, printing, telephone services and dealing with contracts. This
department is headed by the Administrative Officer.
(b) Human Resources/Personnel Department

Duties of this department includes:
- Recruitment and sometimes training of new staff
- Conducting induction courses where new employees are exposed to the new working
environment
- It promotes, demotes and retires employees
- Conducts interviews
- Provision of housing facilities, recreation or entertainment and canteen facilities for
employees etc.
- Attending to workers’ complaints
This department is headed by the Human Resource/Personnel Manager
(c) Public Relations Department

The head of this department is known as the Public Relations Manager. This is preferably
a journalist by profession. The main function of this department is to portray and maintain
a sound and positive image of an organization by constantly informing the public about its
operations. This is the organisation’s mouth piece.
(d) Legal Department

This department has a principal function of defending the company in legal related matters
of the organization. It also deals in company registration, signing, drafting of contracts,
keeping company records, organizing Annual Generals (AGM) Meetings. The head of this
department is called the Company Secretary also known as the Legal Counsel.
(e) Production/Operations Department

The main function of this department is to ensure that quality goods that meet customer’s
needs are produced at the lowest cost possible. This department is found in a
manufacturing company. It is headed by the Production Manager. Other workers found in
this department include machine operators, designers or engineers and work clerks.
(f) Advertising Department

The main function of this department is to advertise or spread the information about the
company’s products. It also arranges for advertising space on television, radio, bill boards,
etc. functions include;
- Informing the public about the goods sold by the organization
- Educating the public on how to use a particular product, which the company produces
through promotions
- It helps to raise the sales base of the business through constantly informing the public.
(g) Purchasing Department

The main function of this department is to order and buy all the raw materials, machinery,
goods and services required by the organization. The department is headed by the
Purchasing Manager or Chief Buyer. Others found in this department are supplies officer,
purchasing clerks.

NOT FOR SALE
(h) Sales/Marketing Department

The main function of this department is to plan, organize, and the selling and marketing of
the company’s products and services. It also carries out market research to find out what
customers really want and how much they would be willing to pay. The head of this
department is the Sales or Marketing Manager. Others found in this department include;
salesperson, sales representatives, invoice typist.
(i) Finance Accounts Department

The main function of this department is to deal with all monies received and paid out of the
organization. It also does the following;
- Budget making
- Safe keeping of finances
- Making payments
- Auditing
The head of this department is the Chief Accountant or the Finance Manager. Other
workers found in this department are; Auditor, Accountant, Cashier, Boo Keeper,
Wages Clerk.
(j) Auditing Department

This department’s main function is to check the correctness of the books of accounts to
whether money was used for the intended purpose. This is meant to reduce stealing of
company by workers. The department is headed by Chief Internal Auditor
(k) Warehousing or Stores Department

This department stores all the company’s assets, that is goods bought, machinery, motor
vehicles. It is headed by the Stores Manager. Others in the department are the Stores
clerk who keeps records of assets and stock that are in the business.
(l) Transport and Distribution Department

The main functions of this department are;
- To provide transport to all employees
- To deliver raw materials and goods to and out of the company
- To ensure that there are no shortages of raw materials for continuous production of
goods
It is headed by the Transport and Distribution Manager
(m) Maintenance Department

The main functions include;
- To repair and maintain the property and equipment belonging to the company such as
building machinery and equipment to ensure continuity in the production of goods
- To ensure good sanitation and safety in the working place and making it conducive to
work.
This department is headed by Maintenance Engineer or Maintenance Manager
(n) Information Technology Department or Computer Room

This department’s main function is to ensure that there is efficient operation and
maintenance of the information system so that information flows accurately between
departments. It has to ensure that data necessary for decision making is kept properly.
This department is also used to type and process documents, thus may act as a Typing
pool. It is headed by the Supervisor.

NOT FOR SALE
3.3 Job Opportunities in Business Studies

1. Office Manager: the duty of this member of staff is to ensure that the office is well organized
so that office duties are carried out well. He is also known as an office orderly
2. Messenger: - is for delivering letters/parcels/documents within and outside the organization
3. Telephonist: - is responsible for receiving and sending phone calls. Since he/she is
responsible for operating the switchboard, he/she is referred to as a Switchboard Operator
4. Typist: - these are responsible for typing letters, reports, contracts etc. There are many
types of typists;
5. Audio Typist- types dictations from the boss or dictation machine
6. Copy Typist- types copies from a written document either shorthand, handwritten
manuscript or printed document
7. Clerk Typist- types, records and files the documents in an office
8. Shorthand Typist or Stenographer- this is a person who types and writes shorthand.
Shorthand is a quick way of writing and it uses signs to represent words. It is used by
secretaries and journalists to write down what someone is saying quickly
9. Cashier: - is responsible for money received and paid out of the organization.
10. Receptionist: - is responsible for receiving and directing callers/visitors to the organization
11. Clerks: - these perform various duties depending on the size and nature of the business.
Duties may include:
- Processing incoming and outgoing mail
- Preparation of invoices
- Filing of documents and sorting out of records
- Filing and recording of all accounts records
12. Confidential Secretary/Private Secretary: - he/she assists the manager/director. He/she
takes the notes from the boss and keeps records of appointment for the manager. He/she
must have high levels of integrity and self-discipline to keep secrets of the organization.
13. Managing Director: - this is a person who is in charge of the whole organization. He/she is
sometimes referred to as Chief Executive Officer (CEO).
14. Managers: - are people who are in charge of departments in an organization e.g. finance
manager, marketing manager, etc.
15. Buyer/Purchasing Officer: - this is a person who buys goods and services for the company.

NOT FOR SALE
4.0 OFFICE ETIQUETTE
Office etiquette are good office manners that an office worker must have. It is all about
conducting oneself and courteously in the office or at one’s work place.
It is good to have good manners in an office because:

a) The office worker will work well with colleagues.
b) The office worker will be keeping the work place clean.
c) The office worker will attract more customers to the business.
d) The office worker will keep the job and possibly be promoted.
e) The office worker will create a lasting impression onto the customers.
4.1 Personal Qualities of an office Worker

(a) Appearance: an office worker should always appear as presentable as possible at
work. He/she must dress properly according to the nature of the work that they perform in
the company. Some jobs require that a worker wears protective clothing when they are
working, for example, factory workers, mechanics, and electricians will wear an overall to
protect their clothes. If one works in a bank, he/she may be required to wear a suit. Be
neat and clean as the business requires one to be.
(b) Reliability: reliability refers to how dependable, honesty and trustworthy a worker
should be at the place of work. A worker should display a hardworking attitude when they
perform their everyday work in an organization. They should work without any supervision
or constant instructions and should have proper knowledge to do their job.
(c) Punctuality: this refers to how early a worker reports for work, it is ill -discipline for a
worker to report late for work. An employee of a company must report early for work and
he/she must be consistent in reporting early for work before superiors arrive.
(d) Loyalty: to be loyal at one’s place of work means to support, listen to and care for fellow
workers, supervisors and the company one works for. An employee who is not loyal speaks
badly of the people or the place he works at.
(e) Courtesy: courtesy at work means to have good manners, being polite and kind. All
employees must have good manners while at work. An employee should not look down
upon anybody in the company.
Below are some points that show good courtesy to others at one’s work place:
a) Be co-operative and helpful to each other
b) Show appreciation for the slightest courtesy extended to you.
c) Be discreet and compassionate in your criticism of others
d) Don’t gossip about any workmate’s private life
e) Don’t shout on top of your voice whist in the office, talk gently and politely
f) Avoid sexist comments about a workmate’s dress or appearance
g) Keep your office or table tidy
h) Show consideration for other people’s feelings
i) Do not eavesdrop
j) Keep your phone on vibration or silent to avoid disturbing others.
k) Don’t wear strong perfume that would disturb your workmates.

NOT FOR SALE
5.0 ENTREPRENEURSHIP
Entrepreneurship is the ability to create, build or generate something from nothing. It is initiating,
doing, achieving and building a business from readily available resources within or outside the
community.
An Entrepreneur is a business initiator. An entrepreneur is a risk taker who takes advantage of

any given chance and resource in order to make a profit.
5.1 Qualities of a Good Entrepreneur

a) An entrepreneur must be open to criticism.
b) An entrepreneur must be a hard worker, willing to work longer hours.
c) Must be independent and organized.
d) An entrepreneur must be able to implement new and creative ideas in business, in short
he/she must be innovative.
e) Must be responsive to feed back.
f) Must be a risk taker.
g) Must be self confidence in what they do.
h) Must be flexible to change in terms of rising demands of customers and the business world
at large.
i) Must be a good decision maker and action oriented.
j) Must be creative so as to come up with new ideas of doing business.
5.2 Ways of Strengthening Entrepreneurial Abilities

a) Seeking help from other people, friends, family members and other business people.
b) Observe and learn from successful business people.
c) Engaging in various business training programs.
d) Through using various communication channels to acquire new business ideas and
improve on existing business ideas.
e) Inculcating a reading culture to learn more new business ideas.
f) By attending motivational talks.
g) Getting involved in activities being done in the communities.
5.3 Entrepreneurial activities found in the Community

The following are some of the entrepreneurial activities in the community:
 Farming
 Fishing
 Poultry
 Bee keeping
 Diary selling
 Transport
 Hair salon
 Brick making
 Tailoring
 Barber shops
 Shoe repairs

NOT FOR SALE
 Welding
 Welding, etc.
5.4 Reasons for Entrepreneurship

Below are the reasons for entrepreurship:
a) Self-reliance – entrepreneurs works for themselves and create jobs for others.
b) Ensure innovation and creativity- an entrepreneur must be able to come up with new
business ideas of doing ideas.
c) Creates employment opportunities- entrepreneurs create employment for others, hence
reducing levels of unemployment in the country.
d) Promote healthy competition, thereby enabling the country to have quality goods at
competitive prices.
e) Flexibility – an entrepreneur must be able to change the line of business or diversify into
other business ventures that are profitable.
f) Generate wealth- encouragement for an entrepreneur comes from the profit he makes
which is essential for wealth generation.
g) Entrepreneurs creates employment for themselves which makes them their own boss.
h) Promotes national development – entrepreneurial activities also generate more business
activities and gives a multiplier effect in the economy thereby making a positive
contribution to national development.

NOT FOR SALE
6.0 TYPES OF BUSINESSES
6.1 Sole Proprietorship

This is a business owned by one person. The individual owner is called a sole trader.
Features of a Sole Trader

 All the capital needed to set up the business is raised by one person.
 He/she takes all the benefit of profit of the business.
 He/she also bears loss burdens on his/her own.
 The sources of capital for a sole trader includes the owner’s savings, loans from friends
and from the bank, inheritance, credit buying, ploughing back profits, leasing and renting
out property.
 The liability of the sole trader is unlimited. This means that if the business is unable to
settle all its external debts, personal properties of the sole trader can be sold to pay off
the debt.
The documents needed in this business include the following:

- Trading license, obtained from the local authority.
- Special business permits obtained from the local council.
6.2 Partnership
This is a business owned by two or more people who are known as partners.
Features of a Partnership Business

 The capital needed to set up the business is contributed by the partners.
 The profits made are shared among the partners.
 The loss burdens are also borne by the partners.
 The sources of capital for a partnership includes Contributions made by partners from
their individual savings, Loans from members, relatives and friends, Bank loans and
overdrafts, Trade credit i.e. goods and services obtained on credit from suppliers,
ploughing back profits, leasing and renting out property.
Types of Partners
There are two types of partners:
 General partners: They have unlimited liability in that if the partnership is unable to
settle all its external debts, personal properties of individual partners can be sold to pay
off the debt.
 Limited Partners: They have limited liability, meaning that in case the business is
unable to settle its debts, the partners lose only the amount of capital each had
contributed and not their individual property.
The documents needed in a partnership business include the following:

- Trading license, obtained from the local authority.
- A partnership Agreement or partnership deed which is a document drawn up by the
partners to agree on how they will run the business.

NOT FOR SALE
6.3 Cooperatives
This is an organisation of people who come together to provide efficient and convenient
services/goods to their members. The idea is to put resources together to provide goods and
services to members at lower costs. There are many types of cooperative societies including
producer cooperatives, consumer cooperatives, savings and credit cooperative societies,
primary cooperatives and secondary cooperatives.
Features of Cooperatives
 Cooperatives are owned by at least 10 members who are registered as members upon
payment of a membership fee which is not refundable.
 Membership is voluntary and open to those willing.
 The sources of capital for a cooperative includes Contributions made by members in the
form of shares, Bank loans and overdrafts, ploughing back profits, leasing and renting
out property.
Documents needed in a cooperative include the following:

- Trading license from the local authority
- Constitution for the cooperative.
- Registration of business names certificate from PACRA.
6.4 Limited Company

This is a corporate association of people who put their capital together in order to carry out a
business together.
Features of a Limited Company

 Their liability is limited to the capital contributed. This is because a company is
considered as a legal entity separate from its members.
 The bankruptcy, death, insanity or retirement of a member does not affect the continuity
of a company.
 The company being an artificial person can sue and be sued, can own property, and can
even enter into contracts in its own name.
 Capital is raised by selling shares to members/shareholders. Other sources of capital
include Bank loans and overdrafts.
Documents needed in a company include the following:

- Trading license from the local authority.
- Certificate of Incorporation from PACRA (Patents and Companies Registration Agency)
- Trading certificate from PACRA (Patents and Companies Registration Agency)
- The Articles of Association (to show how the company will be managed internally)
- The Memorandum of Association (to show how the company will relate with other
organisations and persons)
- Registration of business names certificate from PACRA.

NOT FOR SALE
7.0 BUSINESS IDEAS
For someone to start a business, they ought to have an idea of what they intend to do. A
business idea is a concept which has the potential to be realised into an actual business.
7.1 Sources of Business Ideas

Business ideas can come from different sources including the following:
- Self
- Friends and Family members,
- Books and the media
- Existing business
- New knowledge and new technology
7.2 SWOT Analysis

A person intending to start a business may come up with several business ideas but they may
only need to implement one of them. It is therefore important to analyse the business ideas so
as to choose the one that has the highest chance of success.
One tool that is used to analyse business ideas is the SWOT Analysis.
SWOT is an acronym which stands for:

- Strengths
- Weakness
- Opportunities
- Threats
Strengths
These are positive internal factors which a business can draw on to achieve a mission, goals
and objectives e.g. special skills, good location, knowledge or a positive public image etc.
Weaknesses
These are negative internal factors which hinders progress of the business e. g shortage of
skilled workers, inability to use the technology, and inferior location or bad location e. t. c
Opportunities
These are positive external options that a firm can exploit to carry out its mission, goals and
objectives e.g. if the town is growing and so is the demand, say there are three filling stations
for gas hence the town needs more filling stations.
Threats
These are negative external forces that prevent a business ability to attain its mission, goals,
and objectives e.g. competition like too many people dealing with the same business e. g
lodges, damping where by our local products are disadvantaged etc.

NOT FOR SALE
8.0 COMPANY FORMATION
8.1 Factors to consider before forming a Company

When forming a company, a number of factors need to be considered. Some of the factors
include:
1) Locality – the physical address of the business
2) Start-up capital – the minimum amount of capital needed to start the business
operations.
3) Trading hours – how long will the business be trading on a normal day and on weekends.
4) Source of raw materials – where the raw materials will come from for the manufacture
of goods or where to buy already processed goods.
5) Competition – other businesses within the locality dealing in the same type of
goods/services as our business.
6) Advertising – methods of spreading information about our products. May include radio,
television, newspapers etc.
7) Banking – the availability of banks near the locality of our business for safe keeping of
cash realised from sales.
8.2 Documents needed for the formation of different types of business

1. Partnership Deed/Partnership Agreement
A partnership deed is a written document drawn up by the partners to spell out the duties,
powers and rights of partners in a partnership business. The partnership agreement helps
to avoid disputes in the administration of the partnership business. The Partnership deed
may include the following:
(a) Name of the partnership
(b) Name of the business
(c) Amount of capital each partner contributes
(d) The ratio in which partners share profit
(e) The rate of interest each partner is to be paid on capital
(f) The rights of each partner
(g) Procedure of admitting a new partner
2. Articles of Association
It is a set of rules prepared by the company which govern the internal operations of the
company. It contains the following rules:
(a) Rights of shareholders
(b) Powers of directors
(c) Procedures of meetings
(d) Sharing of profit
(e) Borrowing powers of a business
(f) Method of auditing the financial accounts
3. Memorandum of Association
This is a document prepared by founders of a company which explains how the company
will relate to other individuals and companies. It contains the following:
(a) Name of the company e.g. ltd, for private, plc for public
(b) Address of the company’s registered headquarters
(c) The objects of a company

NOT FOR SALE
(d) A statement that shareholders have limited liabilities i.e. shareholders’ properties
cannot be grabbed if the company has collapsed
(e) The amount of authorized capital
(f) A list of founders or promoters
(g) Names and addresses of the first board of directors
4. Trading Licenses
These are business permit issued by the local authority (council) that allow individuals or
companies to conduct businesses. Some business permits are only issued after meeting
certain laid down conditions.
5. TPIN Certificate
TPIN stands for Tax Payers Identification Number. The TPIN Certificate is a document
issued by the tax authority (ZRA) when a business is given a special number by which it
will be identified for tax purposes. All businesses are expected to pay income tax to the
government including companies.
6. Business Permits
This is a licence issued by government agencies that allow individuals or companies to
conduct business within the government’s geographical jurisdiction. It is authority by a
local government (Council) e.g. Lusaka City Council to a business to conduct business
within their council area.
7. Certificate of Incorporation
This document is issue by PACRA (Patents and Companies Registration Agency) as
evidence of company registration as provided for in the Companies Act. It recognises a
firm as a separate legal entity and contains; the name of the company and its registration
number, a statement that it has be registered according to the law and the Registrar’s
signature.

NOT FOR SALE
9.0 THE BUSINESS PLAN
A Business Plan can be described as a document in which you present your business idea,
goals and objectives, and how you are going to achieve them.
The structure and content of a Business Plan may differ depending on the business.
Most of the business planning takes place in one’s head. It is therefore, important that one writes
the plan in their own understanding. The plan should be a living, working document flexible
enough to accommodate the changing needs.
9.1 Functions/Purposes of a Business Plan

a) It provides a clearer and more organized business ideas
b) It leads to putting down of ideas into written documents
c) It acts as an operational plan
d) It can be used for sourcing Loans from lending institutions
e) It helps to determine the viability of a business idea
f) It provides an answer as to the profitability of the business
g) It helps to secure business contracts
h) It is a communication tool to professional service providers – such as lawyers and
business consultants.
9.2 Contents of a Business Plan

A business plan should contain all the information necessary for starting and runing the business
such as below:
1) Executive summary
2) Business idea
3) Marketing plan
4) Form of business
5) Staffing
6) Organization structure
7) Legal responsibilities and Insurance
8) Operational Plan and Costing items
9) Financial planning
10) Required start-up capital
11) Source of start-up capital etc.
1. Executive Summary
This section serves as an introduction as well as a short summary of your business. It
should be short and easy to read and should leave the reader with a clear picture of what
your business is about. It should also contain the vision and mission statement.
2. The Business Idea

This should contain the description of the business to be set up, the economic sector in
which it will be set up, the products to be provided, the location etc.

NOT FOR SALE
3. Marketing Plan
Marketing involves assessing the needs of the market, creating products that meet the
needs, coming up with ways in which customers will know about its products, how it will be
distributed and at what price it will be sold.
4. Form of Business
This explains what form of business will be operated. The owners may choose to operate
the business as a Sole proprietorship, partnership, Co-operative or as a Limited company
5. Staffing/Human Resource Plan

This includes a plan of the work force need and other important details relating to the
workforce such as Wages and incentives; Salary structure; Office equipment; Legal and
industry compliance; VAT; Income tax; PAYE; NAPSA contributions etc.
6. Organization structure
The organisational structure shows the hierarchy of who should report to who and who
should manage who in the company. It gives a description of various departments for which
different employees work and the departmental managers responsible.
7. Legal Responsibilities and Insurance

This includes all the statutory responsibilities obtaining in the land such as: The tax
obligations that one will be subjected to; The registration requirements; Licenses and
permits; Insurance needs; and Social responsibilities of the business according to the local
council in which the business will operate.
8. Operational Plan and Costing

This section describe How you will operate your business on a day to day basis and the
costs attached to the operations. It answers the question, what will you need to purchase,
when and for how much, how will the products be sold, to whom and for how much.
9. Financial planning
Financial planning is the predicting revenues and costs, and comparing of estimated profit
with the cost of investment i.e. start-up cost, cash flow income statement and balance
sheet.
10. Required Start-Up Capital

The start-up capital is the initial capital outlay that one needs to start the business
operations. This is determined by the costs arrived at in the operational plan.
11. Source of Start-Up Capital

This part of the business plan explains where the capital will come from. The sources of
income may include: Self-financing, sale of shares etc. Loans from banks and development
institutions, Asset financing, Trade credit financing, etc.

NOT FOR SALE
10.0 FINANCING BUSINESSES
10.1 Ways of Financing Businesses

Financing a business means providing for the capital needed to start or run the business.
Business owners raise capital from various sources. This include:
(a) Personal Savings
(b) Banking loans and overdrafts – This is when a firm or sole trader borrows money from the
bank and pays back after the agreed time with interest on top. Interest on a loan is fixed
whereas on the overdraft is charged on the day to day outstanding balance.
(c) Borrowing from friends or family members
(d) Leasing (to allow someone to use a firm’s asset for a period of time e.g. for 10 years in
exchange for payment)
(e) Subletting (to allow someone to use an apartment. This happens when an existing tenant
that lets all or part of their home to someone else who is known as a sub-tenant
(f) Trade credit – this is an arrangement of buying goods on credit for re-sale and pay back
after selling those goods.

NOT FOR SALE
11.0 BUSINESS ETHICS
Desirable business ethics is the application of general principles and standards to business
behaviour.
Businesses draw ideas of “the right thing to do” and “the wrong thing to do” from the same
sources as anyone else. A business should not make its own rules about what is right and wrong
11.1 Desirable business ethics

1) Honesty: A business person should be Honesty. This means being truthful, sincere and
frank in one’s dealings.
2) Integrity: A business person should be of Integrity – they should have strong morals
consistently.
3) Loyalty: A business person should have Loyalty – they should be faithful to business
commitments and obligations.
4) Dependability: A business person should be dependable – they should be worthy of
trust and reliable.
5) Flexibility: A business person should be flexible – he/she should be ready to adapt to
new changes in the business environment without changing the objectives of the
business.
6) Punctuality: A business person should be Punctual. They should strictly observe the
keeping of appointments, times and dates of delivery of products etc.
7) Responsibility: A business person should be responsible. This means the business
should be answerable or accountable for its actions to society and to other businesses.
8) Truthfulness and Fairness: A business person should be Truthful and Fair. He/she
should always tell the truth about the products to consumers without any bias.

NOT FOR SALE
12.0 DEALING WITH FRAUD
Fraud can be defines as the crime of using dishonest methods to take something valuable from
another person or a person who pretends to be what he or she is not in order to trick people or
a copy of something that is meant to look like the real thing in order to trick people.
12.1 Fraudulent Situations
12.1.1 Shopping Fraud

 Online shopping fraud involve scammers - Pretending to be legitimate sellers.
 Scammers use the latest technology to set up fake retailer websites that look like genuine
on line retail stores.
 They may use sophisticated designs and lay outs.
 Stolen logos and even a “dot com, dot zm” domain name and stolen business number.
 The biggest tip off that a retail website is a scam is the method of payment, scammers will
often ask you to pay using a money order, cable transfer or preloaded money card, and if
you send your money using any of the methods above, you will unlikely not see it again
or receive your goods.
 Apart from fake retailers websites-Fraud is also done by local retailers, both small and
larges-scale retailers, through non display of prices on individual goods, calculation of
VAT, difference in exchange rate, abuse of commission schemes, difference in shelve and
till prices, selling of prepacked goods not equivalent to the selling price, of expired goods,
etc.
12.1.2 Internet Fraud

• An internet fraud is the use of internet service or software with internet access to defraud
victims or to otherwise take advantage of them, for example, by stealing personal
information which can lead to identity theft.
• A very common form of internet fraud is the distribution of security software.
• Internet fraud can occur in chat rooms, email messages, or website.
• Some people fall victim of work at home jobs, e.g. people are promised handsome income
for minimal labour.
12.1.3 Banking Transactions Fraud

• ATM Scams involve criminal theft of credit card numbers and Personal Identification
Numbers (PINs) from the innocent users of these machines.
• Tempering with customers’ accounts
• Inconsistency ATM and Bank charges
• Difference in exchange rates
• Hidden cost on loans, etc.
12.1.4 Borrowing money from unreliable places

• Borrowing money from unreliable sources can be connected to fake financial institutions.
There are individuals who never consider the consequences when obtaining a short term
loan without bank authorization.
 Others mostly do not avail the actual interest rates and other hidden costs in a
transaction.

NOT FOR SALE
12.2 Ways of avoiding being a victim of fraud

a) Keep personal information confidential
Do not give out personal information over the phone, through email or over the internet
unless you initiated the contact and know who you are dealing with.
b) change your password and PINs
We know it can be hard to keep track of all those passwords and PINs, but experts
recommend changing them at least twice a year, even if your account haven’t been
compromised. Avoid using obvious choices like “password” or “1234” or names or
birthdays or birth years that someone could guess.
c) Shred unneeded documents
Shred any document containing sensitive data, such as receipts, bank statement, old tax
returns, etc.
d) Talk to your loved ones about fraud
Scammers target anyone regardless of their age or social status, and even well educated
people. So talk to you friends, relatives about fraud and how to avoid it.
e) Watch out for unusual transactions
f) Be wary of unexpected offers or requests that are too good to be true such as “you have
inherited a large sum of money but in order to claim it, send us a deposit first or give us
your bank details”. You should not agree to conduct financial transactions on behalf of
strangers.
g) Lock your financial documents in a safe place.
h) Checking that your change is correct
i) Knowing your rights.
j) Reading the terms and conditions of a contract
k) Learn about the average bank fees that are authorised by the central bank.
12.3 Effects of fraud on victims

• Loss of money
• Get into unnecessary debt.
• Become bankrupt
• Fall out with family members and friends.
• Shame
• Suffer in silence
12.4 Effects of fraud on fraudsters

• Loss of trust among colleagues
• Blacklisted
• Arrested as a fraud convict.
• Bad reputation
• Shame
• Guilty
• Embarrassment
• Suffer in silence

NOT FOR SALE
13.0 OFFICE STATIONERY AND EQUIPMENT

13.1 Stationery
Office stationery are consumable writing materials which are used in an office. Consumables
mean items that are bought, frequently used, finish faster and replaced easily.
Office stationery include: Paper, pens, rulers, envelopes, rubbers, stencils, duplicating ink, files
and folders, carbon papers, correction fluid, filing clips, pins, pencils, books, etc.
The following are some of the stationery used in an office:
1. Paper: this is used for writing on, drawing, duplicating, photocopying, printing, typing, etc.
Types of paper
(a) Flimsy or Bank Paper: - this paper is made in such a way that one can make more
than one copy without using carbon paper. It is also known as NCR (No Carbon
Required). This kind of paper can be used for newspapers, tissue paper, receipts,
bank deposit slips and receipt books. It is a cheaper quality paper which can also be
used for tracing maps, drawings, etc.
(b) Bond Paper: This is a good quality of paper that is mostly used for office work such
as typing original documents like letters and photocopying. It is usually white in
colour.
(c) Stencil Duplicating Paper: This paper is not smooth as the bond paper because it is
used for making as many copies as possible. It is generally so as to absorb or suck
in ink during duplicating.
Quantities of Paper
(a) Ream = 500 sheets
(b) Quire = 24 sheets
(c) Dozen = 12 sheets
(d) Gross = 144 sheets
Paper Sizes The table below shows International paper sizes and their common uses.
Paper Measurements Uses
Sizes (Width/Length)
A0 841mm x 1189mm Charts, technical drawings, maps and posters
A1 595mm x 841mm Charts, drawings, maps, and posters
A2 420mm x 595mm Drawings, charts, maps, posters, newspapers
A3 297mm x 420mm Newspapers, legal documents, large, tables, accounts
documents
A4 210mm x 297mm Secondary school not books, magazines, reports, letters
etc.
A5 145mm x 210mm Note pads, menus, short letters, memos, primary school
note books etc.
A6 105mm x 148mm Post cards, wedding cards, NRC, etc.
A7 75mm x 105mm Price tags in shops, identity cards, note books, labels etc.
A8 52mm x 75mm Passport size photos, bus tickets, etc.
A9 37mm x 52mm Stamps, passport size photos, labels, etc.
A10 26mm x 52mm Stamps, labels, price tags etc.
A11 18mm x 26mm Price tags and labels
A12 13mm x 18mm Price tags

NOT FOR SALE
2. Envelopes
These are paper containers in which letters and other documents are put before posting
them. Envelopes are also used to keep documents safe and secure. There are six (6)
types of envelopes;
(a) Banker Envelope: also known as a wallet envelope. It has the opening on the longer
side.

NOT FOR SALE
(b) Pocket Envelope: this type of envelope has the opening on the shorter side.
(c) Window or Aperture Envelope: this kind of envelope has a transparent material or
a hole – like opening to show the name and address of the addressee written on the
letter inside. The name is read through the transparent material. The opening of
this envelope is on the reverse side.
(d) Registered Envelope: this is used when sending something valuable like money,
cheques.
(e) Airmail Envelope: this is especially used for mails sent by air.
(f) Pre-paid Envelope: this is an envelope with local or international postage included.
This is used where the addressee (receiver) pays in advance for the mails
addressed to him.

NOT FOR SALE
3. Staples:
These are used for attaching papers together.
4. Correction Fluid
A special white fluid for painting over/covering incorrect text (tipex)
5. Thinners
This is a fluid used to soften correction fluid when it gets dry or thick so that it can be easily
used.
6. Paper Clips/filling clips

Paper clips are used for holding two or more papers together
7. Pen and Pencils

Used for writing and drawing on paper. All tools used for writing are collectively called
writing utensils
8. Rubbers or Erasers
Used for erasing out mistakes for work written in pencil

NOT FOR SALE
9. Rulers
These are used for measuring, underlining and making straight lines.
10. Carbon Paper

This is a special type of paper coated with carbon used to produce several copies of one
document.
11. Stencils
this is a special type of paper used for obtaining a large number of copies of documents. It
is used in duplicating machines such as RISO printers.
To write on a stencil, a special type of pencil called a stylus is used.
13.2 Office Equipment

Office equipment are tools needed to carry out office duties. The following are some of the
office equipment used:
1. Computer
A computer is an electronic equipment that can create, store, organize, and retrieve
information stored in it. Computers come in different types, a Laptop, Palmtop (tablet) and
a Personal computer (PC).

NOT FOR SALE
2. Scanner
This machine which copies pictures and documents so that they can be stored on a
computer without having to type them in at a keyboard. It works more like a camera.
3. Duplicating Machines
These are machines used to produce many copies of a document from one master copy.
A master copy is a piece of paper from which all other copies are copied. Writing on the
master copy can be done by hand using a stylus or by a machine. An example of a
duplicating machine is a Riso Machine.
4. Photocopier or Photocopying Machine

This is office equipment that is used to make many copies of the original by way of
photocopying (use of light).
5. Printer
This is equipment used for producing text and images on paper. A printer is usually
connected to a computer or by wireless technology: one can print without physical
connection.

NOT FOR SALE
6. Typewriter
This is equipment used to type letters, reports, notes etc. Typewriters are in two main
types: Manual (the old type and manually operated) and the Electronic (the latest one which
is electronically operated)
7. Teleprinters/Telex machine
A teleprinter is a combination of a typewriter and a telephone system. It is used for sending
and receiving telex messages. Messages typed on the machine are reproduced
simultaneously (at the same time) on one or more receiving machines wherever situated,
using the telephone/telex numbers.
8. Facsimile (Fax) Machines

A fax machine is similar to a teleprinter and is used to send or receive documents in written,
typed or printed form over long distance. It works more like a photocopier, but the copy
comes out on the receiving end. The difference between a teleprinter and a fax machine
is that, a teleprinter is used to type and send documents over long distance whilst a fax
machine is used to copy and send documents over long distance. The machines look the
same, only the functions differ.
9. Shredder
A shredder machine is used to destroy confidential or unwanted information into small
pieces so that no one could read it afterwards. A shredder is also known a Bit Bucket. The
documents are put into this bucket, which grinds them into smaller pieces.

NOT FOR SALE
10. Collator or Collating Machine

This is a machine used to assemble related or consecutive documents or sheets of paper
in a given order. The collated papers or pages can then be fastened or bound together.
11. Guillotine or Paper Cutter

This is a machine used to cut paper into required sizes. This machine is razor sharp (very
sharp like a razor blade), it is used to slice paper and cardboard to the required size and
for straightening uneven edges of paper.
12. Stapler
A stapler is a small machine which is used for putting staples into the sheets of paper. That
is, it is used for fastening or attaching papers together. A staples are office stationery
because they are consumables i.e. are used and replaced fairly quickly.
13. Paper Tray

This is used to organize and keep papers or documents together on a person’s desk.

NOT FOR SALE
14. Perforator or Hole Punch

This is machine used to make holes in papers so that filing clips can pass through when
filing.
15. Date Stamp

This is used for printing dates on documents so as to show that the document is genuine
or true and not forged. Date stamps are also used for incoming and outgoing mail to show
the date when the letter was received or sent.
12. Files and Folders

These are used for keeping records properly and securely for future use
16. Franking Machine

This machine used to print a form of postage stamp (impressions) on an envelope. This
means that instead of using postage stamps, a firm can buy or hire a franking machine from
the Post Office to print postal impressions such as cost of postage, date of postage and
license number on all types of mail.

NOT FOR SALE
17. Addressing Machine

These are machines used to write addresses and company labels on envelopes.
18. Letter Opening Machine or Paper Knife

This is a machine used to open envelopes, by cutting a narrow strip from the edge of the
envelope so that letters can be removed.
19. Calculator
A calculator is a device used to compute figures by adding, subtracting, multiplying, dividing
and other mathematical calculations. This machine is especially used in the Sales,
Purchases and Accounting Departments.
20. Filing Cabinets

These are cabinets specially designed for files and folders or any correspondence so that
documents are kept systematically and secure.

NOT FOR SALE
21. Telephones and Cell Phones

These are office devices used for verbal and text communication over long distance. Cell
Phones (mobile) and Telephones (land phone) are some of the quickest methods of
communication available to modern man.
22. Telephone Answering Machine

These are machines used to answer incoming calls when the telephonist is unavailable.
They answer callers using a tape – recorded message, and record any statement made by
the caller in reply.
23. Intercom (Internal Communication)

This is a device used for internal communication, that is, communication within the
organization. Intercom saves time, since instead of sending a messenger to call somebody,
just pick up the intercom and call. An intercom cannot be used for outside the organization
communication. Intercoms are used in large organizations such as schools, hotels, banks,
hospitals.

NOT FOR SALE
14.0 BUSINESS TRANSACTIONS
A transaction is an exchange of goods, money and services or money’s worth between persons.
Business transactions are interactions between a business and its customers, suppliers and
others with whom it does business. When a transactions takes place, it starts the accounting
process of recording in the company’s accounting system.
14.1 Types of transactions

There are basically three types of transactions namely Cash transactions, Credit transactions
and Barter transactions.
(a) Cash Transactions

A cash transaction can either be a bank transaction or a cash transaction.
Cash transaction: A transaction that involves the exchange of goods or services for
immediate payment of cash
e.g. bought goods by cash K10 000
Bank Transactions: A transaction that involves the exchange of goods or services for
immediate payment by cheque.
e.g. bought goods by cheque K1 000
(b) Credit Transaction

A transaction that involves the exchange of goods or services for a deferred payment i.e.
postponed payment, e.g. bought goods on credit from Chintu, payment is to be made the
following week.
(c) Barter transaction

A transaction that involves the exchange of goods for goods, services for services or goods
for services.
E.g. sold furniture to Bwalya in exchange for maize.

NOT FOR SALE
15.0 BUSINESS DOCUMENTS
The business documents are used in the process of buying and selling of goods and services
.The following are the documents:
15.1 The Inquiry

This is a document sent by the buyer to the seller to request for information about goods
and services. An inquiry may be made by a letter, telephone or by word of mouth.
The purpose of using an inquiry in a business transaction are:
 It enables the buyer to know the type, quantity, prices etc. of goods on sale.
 It enables the buyer to find out the terms of sells etc.
LETTER OF INQUIRY
Roma Girls Secondary School
P.O. Box 30437,
LUSAKA
16th January, 2022
Zam Paper Limited

P.O Box 50075
LUSAKA
Dear Sir/Madam
Kindly send us information on the availability, units, prices and other
Terms of sale and delivery conditions for the following stationery:
1. Reams of plain papers
2. A4 hard cover books (192 pages)
3. Board rubbers
4. Class registers
5. Manila paper
Your reply must be delivered at Roma Girls Secondary School before 22 nd January,
2022. For any clarification or additional information do
Not hesitate to contact the undersigned on 0211292295.
Yours faithfully,
Edshils
E. SHILUWE
PROCUREMENT OFFICER

NOT FOR SALE
15.2 Quotation
A quotation is a reply to an inquiry that shows the goods available for sale, their terms and
conditions of sale. It gives details of the goods requested for by the buyer. It is prepared by
the seller and sent to the buyer.
QUOTATION
NO. 112
Zam Paper Limited
P.O. Box 50075
LUSAKA.
20th January 2022

P.O. Box 30437
LUSAKA
In reply to your letter of inquiry dated 16th January 2022

REF. DESCRIPTION UNIT PRICE
(K)
R002 Reams of plain papers 37.00
B005 A4 hard cover books (192 pages) 17.00
D001 Board rubbers 15.00
C003 Chalk 18.00
MP01 Manila paper 4.00
ST05 Staples 15.00
Delivery : 2 days on receipt of order
Trade discount: 5%
Cash Discount: 10% 1 Wk, 5% 2Wks, 2% 3 Wks and Net after 3 Wks.
Rfisonga
R. FISONGA
SALES & MARKETING MANAGER
Forms of a Quotation.
(a) Catalogue
This is a printed booklet or pamphlet that shows the goods that the seller has to
offer and their prices. It shows details such as colour, size, quantity, prices etc. The
buyer will then decide which products he/she is interested in and make further
inquiries to the supplier about it.
(b) Price List
A price list is a document that shows a list of goods on sale and their prices. The
following is an example of a price list:
(c) Estimate
It is a special kind of quotation usually sent by the seller (supplier) in reply to an
inquiry for work to be done according to specific instructions. e.g. redecoration of
offices etc. An estimate is based on the amount of time and materials which the
supplier (seller) estimates will be used in completing the work.
(d) Tender
A tender is sent by the seller to the buyer in response to the buyer’s request for
sellers to compete to supply goods and services for the particular period of time.

NOT FOR SALE
They are also used to supply goods or services to an organization or to a

government department and usually tenders are for a long contract period of time,
say one year or where large sums of money are involved. e.g. if the government
wants a big job done such as building a bridge.
(e) Proforma Invoice
A proforma invoice is a document which shows the buyer the details that will be on
the actual invoice if he/she decides to buy the listed goods. A proforma invoice has
the same details as those of the proper invoice such as quantity, description, unit
price, total price etc.
15.3 Order
An order is a document sent by the buyer to the seller to request the seller to supply the
goods indicated on it. it shows the details of goods to be sent.
ORDER
P.O. Box 30437
LUSAKA
NO. 303
27th January 2022

Zam Paper Limited
P.O. Box 50075
LUSAKA
Please supply the following items
Quantity Description REF Unit Price Total
20 reams Plain Papers R002 37.00 740.00
40 A4 Hard cover books (192 pages) B005 17.00 680.00
10 Board Rubbers D001 15.00 150.00
30 boxes White Chalk C003 18.00 540.00
100 Manila MP01 4.00 400.00
10 boxes Staples ST05 15.00 150.00
TOTAL 2 660.00
Edshils
E. SHILUWE
PROCUREMENT OFFICER

NOT FOR SALE
15.4 Invoice
An invoice is a bill prepared by the seller to show the total cost of the goods sold to the
buyer. The invoice serves as a reminder for payments.
The invoice also shows other details such as Value Added Tax (VAT) and Discount. The
letters E&OE must also be printed which stand for Errors and Omissions Excepted. E&OE
means that the buyer has a right to make corrections on the invoice if need to do so arise.
INVOICE
Zam Paper Limited
P.O. Box 50075
LUSAKA
NO. 105
30th January 2022
P.O. Box 30437
LUSAKA
For Order no.303 of 27th January 2022
Quantity Description REF Unit Price Total
20 reams Plain Papers R002 37.00 740.00
40 A4 Hard cover books (192 pages) B005 17.00 680.00
10 Board Rubbers D001 15.00 150.00
30 boxes White Chalk C003 18.00 540.00
100 Manila MP01 4.00 400.00
10 boxes Staples ST05 15.00 150.00
GROSS INVOICE PRICE 2 660.00
Less Trade Discount 5% 133.00
NET INVOICE PRICE 2 527.00
Cash Discount: 10% 1 Wk, 5% 2Wks, 2% 3 Wks and Net after 3 Wks
JKalala
J. KALALA E&OE
ACCOUNTS DEPARTMENT
15.5.1 VAT
VAT is the abbreviation for Value Added Tax. This tax is levied on goods and services at
every stage in the chain of distribution. If a product passes through several stages before
it can be consumed, it means that each and every stage there should be some tax being
levied on the same product.
15.5.2 Discounts
Discounts are reductions in the invoice price of goods given by the seller to the buyer. There
are two types of discounts namely; trade discount and cash discount.
15.5.3 Trade Discount and Cash Discount

A trade discount is a price reduction given to buyers for buying goods in large quantities
(bulk)
A Cash Discount is a price reduction given to buyers for paying promptly. A cash discount
is given to the buyer by the seller in order to encourage the buyer to pay for the goods
promptly or within credit period.

NOT FOR SALE
15.5.4 Differences between Trade Discount and Cash Discount

 Trade discount is given for buying goods in large quantities while cash discount is given for
prompt payment.
 Trade discount is given out regardless of whether goods are bought for cash or on credit
while cash discount is only given out for goods bought on credit.
 Trade discount is calculated on the gross or total invoice price while cash discount is
calculated on the net invoice price (on the amount after subtracting trade discount).
 Trade discount is mainly given to traders or dealers (they are the ones who mostly buy in
large quantities) while cash discount is given to all who buy goods on credit.
 Trade discount is given out even before the goods are paid for while cash discount is only
given when goods are paid for (this should happen within the period considered prompt
payment period).
 The actual amount deducted as trade discount appears on the invoice while the actual figure
deducted for cash discount does not appear on the invoice as it is only given when payments
are done.
 Trade discount encourages repeat purchases while cash discounts reduces bad debts and
improves cash flow.
15.5.5 Calculations of Trade and Cash Discount

Masheta Musamai bought goods for a total invoice price of K10 000.00 given a trade discount of
10%. The other conditions of sale were that Masheta Musamai would be given 10% cash discount
if he paid within 1 week, 5% if he paid with 2 weeks, 2% if he paid in 3 weeks’ time and to pay
the net invoice price if he paid after 3 weeks. Calculate:
(a) Trade discount and how much he would pay if he was not given any cash
discount.
i) Trade discount = 10/100 X 10 000.00 = K1 000.00
ii) Net invoice amount = Gross invoice amount less Trade Discount.
= K10 000.00 - K1 000.00 = K9 000.00
(b) Cash discount and how much he would pay if he paid within 1 week
i) CD within 1 Week = 10/100 X K9 000.00 = K900.00
ii) Amount paid within 1 Week = Net Invoice amount less Cash discount.
= K9 000.00 – 900.00 = K8 100.00
(c) Cash discount and how much he would pay if he paid in 2 weeks time.
i) CD Within 2 weeks= 5/100 X K9 000.00= K450.00
ii) Amount paid within 2 weeks = Net Invoice amount less Cash discount.
= K9 000.00 - K450.00 = K8 550.00
(d) Cash discount and how much he would pay if he paid in 3 weeks time.
i) CD Within 3 weeks = 2/100X K9 000.00 = K180.00
ii) Amount paid within 3 weeks = Net invoice amount less cash discount.
= K9 000.00 – K180.00 = K8 820.00
(e) How much he would pay if he paid after 3 weeks

i) No cash discount given
ii) Amount paid is the net invoice amount = K9 000.00

NOT FOR SALE
15.6 Dispatch/Advice Note

This is a document sent by the seller to the buy to inform or advice the buyer that goods
ordered have been sent or are ready for dispatch.
15.7 Delivery Note

A delivery note is a document which is sent together with goods being delivered. It shows
all the particulars of the delivered goods in terms of weight, quantity, quality and description.
When goods have been delivered you will always have to sign both copies of the delivery
note to acknowledge the receipt of the goods. The seller keeps one copy and the other one
is given the buyer. A delivery note enables the driver to deliver the right type and the
amounts of goods and of a seller to obtain the receipt of goods.
15.7 Consignment Note

A Consignment note is sent by the seller to the buyer when the seller has used hired
transport to deliver goods to the buyer. The Transporting Company prepares the
consignment note in three copies; one copy for the buyer, one copy for seller and the other
copy is retained by the transporting company.
15.8 Goods Received Note

This is an internal document used to show the goods that have been received by the
organisation. It shows the quantity of goods and the condition in which they have been
received.
15.9 Debit Note

A debit Note is sent by either the seller or buyer to inform each other of a fault, undercharge
or oversupply of goods. When a debit note is sent by the buyer, the seller will in return send
another invoice for the additional amount omitted on the first invoce.
The debit note can also be sent by the seller to the buyer when the seller is the first to notice
that the buyer has been undercharged or oversupplied, informing the buyer that his account
has been debited with the additional amount not included previously. It is also called a
supplementary invoice.
15.10 Credit Note

A credit note is a document prepared by the seller to the buyer to inform the buyer that his
account has been credited or reduced due to an overcharge or undersupply. The credit
note can be sent when the buyer returns goods to the seller for such reasons as goods
being faulty, of poor quality, wrong colur,, wrong size, etc. The credit note is usually printed
in red ink to distinguish it from an invoice. It is also called an invoice in reverse.
15.11 Statement of Account

This is a document sent by the seller to its credit customer to show a summary of
transactions that have taken place between the buyer and the seller over a particular period
of time. The summary includes information on invoices issued, debit notes, credit notes,

NOT FOR SALE
payments made etc. in a given period. The statement of account also serves as a reminder
that the buyer must pay the amount due and it is sent at the end of the month. It enables
the buyer to compare the entries in his or her books with the seller so that any differences
or queries can be corrected.
STATEMENT OF ACCOUNT
Zam Paper Limited
P.O. Box 50075
LUSAKA
NO. 014
31st January 2022
P.O. Box 30437
LUSAKA
For the month of February 2022
Date Details Debit (K) Credit (K) Balance (K)
01.02.17 Balance b/f 20 000.00
05.02.17 Cheque no. 000252 10 000.00 10 000.00
13.02.17 Invoice no. 349 15 000.00 25 000.00
20.0217 Credit Note no. 111 3 000.00 22 000.00
22.02.17 Cheque no. 000262 17 000.00 5 000.00
25.02.17 Invoice no. 372 18 500.00 23 500.00
27.02.17 Debit Note no. 0022 300.00 23 800.00
28.02.17 Cheque no. 000273 20 000.00 3 800.00
JKalala
J. KALALA
ACCOUNTS DEPARTMENT
15.12 Cheque
This is a document written by an account holder instructing the bank to pay a specified
amount of money to a named person. The buyer sent it to the seller to pay for the
goods/services that he/she bought.
STANBIC BANK ZAMBIA 11-33-22

(Registered commercial bank)
LUSAKA MAIN BRANCH
000429
DATE: 10/03/22
Pay: Choolwe Fisonga Or Order

K200=00
The sum of: Two hundred kwacha only
Richard Michael
000527!0!10050:0529744800169!!-033 sign RMichael

NOT FOR SALE
15.13 Cheque Counter foil / Cheque Stabs

A cheque counter foil is what remains when the cheque has been removed from a cheque
book. It contains details such as the amount paid, date, signature of the drawer and the
name of the person receiving the payment. The buyer uses it to record the details of the
payment in his/her books of account.
15.14 Receipts
A receipt is prepared by the seller and given to a buyer as a proof of payment made either
by cash, cheque or any other means of payment.
15.16 Cash sale slip

This is a document issued by shops when goods are bought and are usually issued by cash
registers at pay points.
The difference between a receipt and a cash sale slip is that a cash sale slip shows the
details of goods bought while a receipt simply indicates the name the person who paid the
money.
15.17 Petty Cash Voucher

This is a document used when making payment for goods or services from petty cash funds.
The Petty Cash Voucher show the date, amount paid, purpose of payment, name of the
person authorizing the payment and the person receiving the money.

NOT FOR SALE
16.0 SOURCE DOCUMENTS
Not all business documents are used in the accounting process. Some of the documents are
just necessary for administrative purposes, but the following are important in the accounting
system for any business. This is because they are the basis on which the accounting process
starts. The information in these documents is used to make entries in the books of prime entry.
The table below shows subsidiary books and the source documents from which information is
obtained:
16.1 Source Documents used in bookkeeping

Source document Subsidiary book
1 Original Invoice/Top invoice/purchases Purchases Day Book
invoice
2 Duplicate Invoice/Copy Invoice/Sales Sales Day Book
Invoice
3 Original Credit Note Purchases Returns Day Book
4 Duplicate Credit Note/Copy Credit Note Sales Returns Day Book
5 Cheque Cash Book
6 Cheque counterfoil/Stabs Cash Book
7 Original Receipts, original Cash Sale Slips Cash Book
8 Petty Cash Voucher Petty Cash Book

NOT FOR SALE
17.0 THE ACCOUNTING CYCLE
The accounting cycle is a description of how financial information flows in an organisation. It

starts with the source documents which provide the details of transactions. These details are
entered in the Subsidiary books. The details in the subsidiary books are posted to the ledger
using the double entry system. To prove the accuracy of the double entry in the ledger, a Trial
Balance is extracted from which the Final Accounts are prepared. Below is the flow of financial
information presented in diagrammatic form.
17.1 Stages in the Accounting Cycle
Documents providing proof of

transactions are collected SOURCE DOCUMENTS
Receipts, cheques, Credit notes, Debit Notes, Invoices,
Details of transactions are SUBSIDIARY BOOKS

entered in the books of prime Cash Books, Purchases Journal, Purchases
entry Returns Journal, Sales Journal, Sales Returns
Journal, General Journal
Information is then posted to the LEDGER

ledger accounts
Sales Ledger (Debtors Ledger)
Purchases Ledger (Creditors ledger)
General Ledger (Nominal Ledger)
A trial balance is extracted from

TRIAL BALANCE
the ledger accounts
Finally, Final Accounts are

prepared FINAL ACCOUNTS
Trading Account, Profit and Loss Account, Balance
Sheet

NOT FOR SALE
18.0 BOOKS OF ORIGINAL ENTRY
(Books of Original Entry/Books of Prime Entry/Subsidiary Books/Books of first entry)
Books of first entry are books in which business transactions are first recorded from source
documents before posting them to the ledger.
These are special book for each type of transaction. They include the following: The Purchases
Day Book, Purchases Returns Day book, Sales Day Book, Sales Returns Day book, The Cash
Book, Petty Cash Book and the General Journal
18.1 The Purchases Day Book

This is a book used for recording trading goods bought on credit from suppliers.
Trading goods are those bought with the intention of reselling. Therefore, we can define
purchases as goods bought either on credit or by cash or cheque and are meant for re-sale.
When goods are bought on credit form suppliers, the buyer is given a Purchases Invoice
(Original Invoice or Top Invoice) to be used as a source document for information which should
be entered in the purchases Day book.
The following table describes the flow of information and how it is posted to the ledger.
Source document Subsidiary book Account to Dr Account to Cr.

1 Original Invoice Purchases Day Purchases Creditor’s Account
Book Account (in the (in the Purchases
General Ledger) Ledger)
Example
The following information relates to G. Mumba Traders. Prepare G. Mumba Traders Purchases
Day book for the month of January 2016.
2022
Jan 01 Bought on credit from Book World Ltd
` 50 cases of Business Studies Books at K95.00 each
20 Business Calculators at K155.00 each.
All less 5% Trade Discount
Jan 05 Bought from Book Hut Ltd

75 Computer Studies Books on credit at K60.00 per book.
Less 12.5% Trade discount.

NOT FOR SALE
G. Mumba Traders’
Purchases Day book
Inv. Invoice
Date Details No. Folio Amount Total
2022 K n K n
Jan 01 Book World Ltd 04 PL1

50 cases Business Studies Books @K95.00
per book 4 750 00
20 Business Calculators @K155.00 each. 3 100 00
7 850 00
Less 5% Trade Discount (5/100 X 7 850.00) 392 50
7 457 50
Jan 05 Book Hut Ltd 23 PL2

75 Computer Studies Books @K60.00 per
book. 4 500 00
Less: Trade Discount 12.5/100 X 4 500.00 562 50
3 937 50
Jan 31 Debit Purchases Account GL 11 394 50
18.2 Purchases Returns Day book

This is a book used for recording trading goods previously bought but which the business has
returned to its suppliers.
Goods may be returned to the supplier for any of the following reasons:
- If goods are expired
- If goods are damaged
- If goods are of the wrong colour, type, size, make etc.
- If the buyer has been oversupplied.
When the buyer returns goods to the seller for one of the above reasons, and the seller agrees
to take back the goods and refund part or all of the amount paid by the buyer, the seller sends
a document called a credit note (original Credit note) to the customer to show the amount by
which the total bill has been reduced. The credit note is called so because the customer’s
account in the debtors’ ledger is credited with the amount of the reduction to show the reduction
in the amount owed. Credit notes are always printed in red to avoid mistaking them for invoices.
Source Subsidiary book Account to Dr Account to Cr.

document
Original Credit Purchases Returns Creditor’s (Supplier) A/C Purchases Returns A/C
note Day Book (in the creditors ledger) (in the general ledger)

NOT FOR SALE
Example
In the month of February, Kaputula J had the following goods returned to its suppliers. You are
required to enter them in the Purchases Returns Day Book and show the end of month total to
be transferred to the general ledger.
2022
Feb 04 Returned to Book World Ltd
10 cases of Business Studies Books at K95.00 each which were damaged.
6 Business Calculators at K155.00 each which were faulty.
All less 5% Trade Discount
Feb 05 Returned to Book Hut Ltd

7 Computer Studies Books on credit at K60.00 per book which had missing pages.
Less 12 ½ % Trade discount.
J Kaputula’s
Purchases Returns Day Book
Credit
Note
2022 K n K n
Feb 01 Book World Ltd CN. 9 PL4

10 cases Business Studies Books
which were damaged (10 x K95.00) 950 00
6 Business Calculators which were
faulty (6 x K155.00) 930 00
1
880 00
Less 5% Trade Discount
(5/100 X 1 880.00) 94 00
1 786 00
CN.
Feb 05 Book Hut Ltd 23 PL5
7 Computer Studies Books missing
pages (7 x K60.00) 422 00
Less: Trade Discount 12.5/100 X
422 52 50
369 50
Feb 31 Credit Purchases - Returns Account GL 2 155 50

NOT FOR SALE
18.3 Sales Day Book

This is a book used for recording trading goods sold on credit to customers.
When goods are sold on credit to customers, the customer (buyer) is given the Original Invoice
and the seller (supplier) remains with the duplicate Invoice (Sales Invoice). The seller uses the
duplicate Invoice as a source document for the Sales Day book.
Source document Subsidiary Account to Dr Account to Cr.
book
Duplicate Invoice Sales Day Book Customer’s (Debtor’s) A/C Sales Account (in
(in the debtors Ledger) the general
ledger)
Example:
Mufalo Ltd had the following transactions in the month of June, 2022. You are required to enter
them in the Sales Day book and show what will be posted to the Sales Account at the end of
the month.
2022
June 02 Sold on credit 45 T-shirts to Himoonga at K55.30 each and;
30 pairs of socks at K15.00 each. Invoice No. 302
All subject to 10% Trade Discount.
June 05 Sold to Bwalya on credit 80 pairs of trousers at K60.50 each. Invoice No. 226.
Subject to 7 ½ % Trade Discount.
June 15 Sold 41 jerseys on credit to Chintu at K160.20 each. Invoice No. 604.
Mufalo Ltd’s
Sales Day Book
Invoice
2022 K n K n
June 02 Himoonga Inv. 202 SL1

45 T-shirts @K55.30 each . 2 488 50
30 pairs of socks @K15.00 each 450 00
2 938 50
Less 10% Trade Discount (10/100 X 2
938.50) 293 85
2 644 65
June 05 Bwalya Inv. 226 SL2

80 pairs of trousers @K60.50 each. . 4 840 00
Less 7.5% Trade Discount (7.5/100 x
4 840) 363 00
4 477 00
June 15 Chintu Inv. 604 SL3

41 jerseys @K160.20 each.
6 568 20
June 30 To Sales Account GL 13 689 85

NOT FOR SALE
18.4 Sales Returns Day book

This is a book used for recording trading goods previously sold but which the customers have
returned back to the business.
When goods have been returned by the customer, the customer sends a document called Debit
Note to the seller (supplier) giving details of goods returned and the reasons for their return.
The supplier (seller) will then send the original credit note to the customer whose main purpose
is to show proof that he (seller) has agreed to get back the goods and to reduce the amount the
customer is owing. The seller remains with the duplicate Credit Note used for recoding in the
Sales Returns Day Book.
Duplicate Credit Sales Returns Day Sales Returns A/C Customer’s (Debtors)
Note Book (in the general A/C (in the debtors
ledger) ledger)
Example:
Katongo L a supplier of clothes had the following goods returned by its customers in the month
of June, 2022. You are required to enter them in the Sales Returns Day book and show the end
of month transfer to the ledger.
2022
June 06 Goods returned by Himoonga:
8 T-shirts wrong colour
4 pairs of socks wrong size. Debit Note No. 35
June 21 Goods returned by Chintu;
11 jerseys wrong type. Debit Note no. 29
Katongo L’s
Sales Returns Day Book
Credit
Date Details Note No. Folio Amount Total
2022 K n K n
June 06 Himoonga
8 T-shirts wrong colour (8 x K55. CN. 35
30) SL1 442 40
4 pairs of socks wrong size (4 x
K15.00) 60 00
502 40
Less 10% Trade Discount
(10/100 X K502.40) 50 24
452 16
June 21 Chintu
11 jerseys wrong type (11 x CN. 29
K160.20) SL2 1 762 20
June 30 Debit Sales Returns Account GL 2 214 36

NOT FOR SALE
18.5 The General Journal

This is a book used for recording all unusual transactions (i.e. all transactions that cannot be
entered in the day books and cash book above), such as opening balance, closing balances,
sale of assets on credit, purchase of assets on credit, writing off bad debts, calculation of capital
at the beginning of the account period.
Example
From the following information, you are required to prepare Humphrey’s General Journal
2022
Jan 1 Machinery K13,200; Bank K 17, 690; Creditors: Hilda K 5,000, Ngungu
K 4,000, Cecilia K 3,000; Debtors: Ngululu K 8,000, Rodgers K 2,500,
Mulilo K 6,000; Stock K2,900, Cash K 860; Furniture K 9,700.
Jan 14 Sold Furniture on credit to Rodgers at K 4,000.
Jan 27 Bought a Motor Vehicle on credit from Hilda at K 25,000.
Humphrey’s
General Journal
Date Details F Dr (K) Cr (K)

2022
Jan 1 Machinery 13,200
Bank 17,690
Debtors: Ngululu 8,000
Rodgers 2,500
Mulilo 6,000
Stock 2,900
Cash 860
Furniture 9,700
Creditors: Hilda 5,000
Ngungu 4,000
Cecilia 3,000
Capital 48,850
60,850 60,850
(Being opening balances)
Jan 14 Rodgers 4,000
Furniture 4,000
(Being Furniture sold on credit)
Jan 27 Motor Vehicle 25,000
Hilda 25,000
(Being a Motor Vehicle bought on
credit)

NOT FOR SALE
18.6 The Cash Book

This is a book used for recording cash transactions. (i.e. all cash receipts to the business and
all cash payments by the business). The cash book is a book of prime entry and is also part of
the double entry system. For this reason, the cash book is also called the cash ledger.
Types of Cash books

There are four types of cash books. These are:
- Single Column cash book
- Two column cash book
- Three column cash book
- Petty Cash Book
18.6.1 Single Column Cash Book - Cash Account

This is a book with the Cash Account only. The cash account is an account used for all cash
receipts and payments. All cash received is recorded on the debit side and all cash paid out is
recorded on the credit side of the cash account.
The source documents for the cash account are:

- For cash receipts (money received) - Duplicate receipt/Duplicate cash invoice
- For cash payments (money paid out) - Original Receipt/Original cash invoice
Source document Subsidiary Account to Dr Account to Cr.

book
Original Receipts, original Cash Book Corresponding A/C Cash A/C
Cash Sale
Duplicate receipt/Cash Cash book Cash A/C Corresponding A/C
Sale
Double Entry for the cash book - Cash Account

- Money received by cash/cash withdrawn from the bank for business use –
Dr. Cash Account
Cr. Corresponding account
- Money paid by cash/Cash deposited in the bank
Dr. Corresponding account
Cr. Cash Account
Example
From the following information pertaining to the business of Willie Simwinga, prepare a Single
Column Cash Book and balance the account at the end of the month.
2022
1 Jan Willie Simwinga started in business with K20 000 cash.
2 Jan Deposited K3 000 in the bank
3 Jan Bought land and buildings by cash K4 500
4 Jan Bought fixtures and fittings by cash K1 700
5 Jan Bought furniture by cash K2 500
7 Jan Paid for electricity by cash K250
10 Jan Bought goods by cash K6 000
12 Jan Sold goods by cash K2 000
14 Jan Bought stationery by cash K30
14 Jan Bought goods by cash K3 400

NOT FOR SALE

15 Jan Withdrew cash from the till for personal use K250
15 Jan Withdrew K300 from the bank for business use.
18 Jan Bought a motor van by cash K11 000
21 Jan Cash sales K500
24 Jan Cash purchases K1 400
29 Jan Bought a Cash Register (till) by cash K1 300
30 Jan Paid wages and salaries by cash K2 400.
Willie Simwinga’s
One Column Cash Book (Cash Account)
Date Details F Dr (K) Cr (K)
2022
Jan 1 Capital 30,000
2 Bank 3,000
3 Land and Buildings 4,500
4 Fixtures and Fittings 1,700
5 Furniture 2,500
7 Electricity 250
10 Purchases 6,000
12 Sales 2,000
14 Stationery 30
14 Purchases 3,400
14 Sales 3,600
15 Drawings 250
15 Bank 300
15 Sales 4,100
18 Motor Van 11,000
21 Sales 500
24 Purchases 1,400
29 Cash Register 1,300
30 Wages and Salaries 2,400
31 Balance c/d 2,770
40,500 40,500
Feb 1 Balance b/d 2,770

NOT FOR SALE
18.6.2 Single Column Cash Book - Bank Account

The bank account is an account used for all cash receipts and payments involving the money
kept in the bank account.
The source documents used in the two column cash book include the following
- For money received - Duplicate receipt, The cheque
- For money paid - Original Receipt, cheque counterfoil

Cheque Cash Book Bank A/C Corresponding A/C
Cheque counterfoil/Stabs Cash book Corresponding A/C Bank A/C
Bank Account
- Money received by cheque/cash deposited in the bank account
Dr. Bank Account
Cr. Corresponding Account
- Money paid by cheque/cash withdrawn from the Bank Account
Dr. corresponding Account
Cr. Bank Account
18.6.3 Two Column Cash Book

This is a cash book that has both the Cash Account and Bank account side by side.
Example
M Kachesa started business on 1st March, 2022 with K30 000 cash and K25 000 at bank. The
following transactions took place during the month. You are required to enter them in her Cash
book and balance it at the end of the month.
2022
March 02 Bought Land and buildings by cash K5 600.
March 03 Bought Furniture and Fittings by cheque K3 000.
March 05 Purchased Furniture and Fittings by cheque K1 500.
March 07 Paid by cash for advertising K250.
March 09 Bought goods for K5 000 by cash.
March 12 Sold goods by cheque K3 000.
March 15 withdrew K550 from the cash till for personal use.
March 19 Sold goods by cash K1 200.
March 20 Bought goods by cheque K3 400.
March 20 Sold goods for K3 500 cash
March 22 Withdrew cash K400 from the bank for business use.
March 23 Bought a Motor car for K10 000 by cheque.
March 26 Received a bank loan for K7 000 by cheque.
March 28 Received K2 000 cash from Cecilia shindende.
March 30 Sold goods by cash and immediately deposited into the bank K2 100.
March 30 Paid cash into bank K500

NOT FOR SALE
M Kachesa’s
Two Column Cash Book
Date Details F Cash Account Bank Account
Dr (K) Cr (K) Dr (K) Cr (K)
2022
March 01 Capital 30,000 25,000
02 Land and buildings 5,600
03 Furniture and fittings 3,000
05 Furniture and fittings 1,500
07 Advertising 250
09 Purchases 5,000
12 Sales 3,000
15 Drawings 550
19 Sales 1,200
20 Purchases 3,400
20 Sales 3,500
22 Cash/Bank C 400 400
23 Motor Car 10,000
26 Loan 7,000
28 Cecilia Shindende 2,000
30 Sales 2,100
30 Bank/Cash C 500 500
30 Balance c/d 25,200 13,300
37,100 37,100 34,600 34,600
April 01 Balance b/d 25,200 13,300
18.6.4 Three Column Cash Book

This is a cash book with the cash account, bank account and discount columns. The discount
column is divided into two columns namely; discount allowed and discount received.
Discount received
When a business is making payment by either cash or cheque, the creditor might decide to
reduce the price by a percentage, fraction or just a block sum. This is called discount received.
The cash discount received is an income to the business.
Discount allowed
When a business is receiving payment by either cash or cheque, a decision may be made to
reduce the amount to be paid by a percentage, fraction or a block sum. This is called cash
discount allowed. Cash discount allowed is an expense to the business.
Reason for granting cash discounts
The main reason for granting cash discounts to a customer is to appreciate them for paying
promptly (in time). The other reason is to encourage the customer to continue buying from a
particular trader.

NOT FOR SALE
Example
From the following details, prepare Chembe Fisonga’s three column cash book.
2022
July 01 Cash in hand K12 000 and Cash at Bank K24 000.
July 02 Bought land by cheque K10 000.
July 03 Bought equipment by cheque K6 000.
July 04 Bought goods by cash K4 000.
July 05 Sold goods by cheque K5 000.
July 06 Received K4 000 cash from Norah Choono, less 10% cash discount.
July 07 Paid K2 000 by cheque to Miriam Makayi, less cash discount of 5%.
July 12 Paid for land Rates by cheque K1 000.
July 14 Withdrew K1 300 from the bank for business use.
July 16 Withdrew K670 from the till for own use.
July 18 Paid K1 800 to Chiputa by cheque, less cash discount of 5%.
July 28 Habeenzu paid us K2 600 by cash; cash discount of K500.00.
Chembe Fisonga’s’s
Three Column Cash Book
Date Details F Cash A/C Bank A/C Discounts
Dr Cr Dr Cr Allowed Received
(K) (K) (K) (K) (K) (K)
2022
July 1 Balance b/f 12,000 24,000
2 Land 10,000
3 Equipment 6,000
4 Purchases 4,000
5 Sales 5,000
6 Norah Choono 3,600 400
7 Miriam Makayi 1,900 100
12 Rates 1,000
14 Cash/Bank C 1,300 1,300
16 Drawings 670
18 Chiputa 1,710 90
28 Habeenzu 2,600 500
31 Balance c/d 14,830 7,090
19,500 19,500 29,000 29,000 900 190
Aug 1 Balance b/d 14,830 7,090

NOT FOR SALE
18.6.5 Petty Cash Book and the Imprest System
A petty cash book is a book for recording small payments made by the business. Petty means
small. The petty cash book is maintained on the Imprest system. The Imprest system is a system
where the cashier gives the petty cashier enough cash to meet the petty cash expenses for a
particular period of time. The petty cashier will be disbursing the cash during that period as per
requests presented to him/her. The requests are presented using Petty Cash Vouchers which
act as a source document for the petty cash book. At the end of the period, the total used up is
calculated to know the amount that has remained unspent. The cashier then gives an amount
equal to what was spent in the period so as to start the next period with the same amount as in
the previous period. This amount given to the petty cashier to top up (replace) what was spent
is called the Petty Cash Float and this system of maintaining the petty cash is called the
Imprest system.
How the Imprest system works
K
March – The petty cashier receives from the cashier 10 000
The petty cashier pays out during the period - 7 500
Petty cash remaining at the end of the period (K10 000 – K7 500) 2 500
The cashier now gives the petty cashier the amount spent +7 500
Petty cash which the petty cashier will start with in April 10 000
Example
The following is a summary of the petty cash transactions of Machima Investments Ltd for April
2022.
K
April 1 Received from Cashier K10 000.00 as petty cash float 10 000
April 2 Postage 800
3 Travelling 200
4 Cleaning 150
7 Petrol for van 220
8 Travelling 170
9 Stationery 180
11 Cleaning 50
14 Postage 400
15 Travelling 900
18 Stationery 250
18 Payment to Busaka cleaning services for Cleaning 230
20 Postage 100
24 Payment to A.M Motors for Van servicing 800
26 Petrol 180
27 Cleaning 210
29 Postage 50
30 Petrol 400
You are required to:

1. Rule up a suitable petty cash book with analysis columns for expenditure on cleaning,
motor expense, postage, stationery, travelling.
2. Enter the month’s transactions.
3. Enter the receipt of the amount necessary to restore the Imprest and carry down the
balance for the commencement of the following month.

NOT FOR SALE
Machima Investment Ltd’s

Petty Cash Book
DATE DETAILS PCV AMT AMT ANALYSIS COLUMNS
CLEANIN MOTOR POSTAGE STATIONE TRAVELLIN
G (K) EXPENSE (K) RY (K) G (K)
NO. REC SPENT S (K)
(K) (K)
2022
April 1 Cash 7,000
2 Postage 800 800
3 Travelling 200 200
4 Cleaning 150 150
7 Petrol 220 220
9 Stationery 180 180
11 Cleaning 50 50
14 Postage 400 400
18 Stationery 250 250
18 Cleaning 230 230
20 Postage 100 100
24 Van servicing 800 800
26 Petrol 180 180
27 Cleaning 210 210
29 Postage 50 50
30 petrol c/d 400 400
30 Balance 1,710
b/d 7,000 7,000 640 1,600 1,350 430 1,270

May 1 Balance 1,710
1 Imprest Restored 5,290
1 Cash 7,000

NOT FOR SALE
19.0 CLASSIFICATION OF ACCOUNTS IN THE LEDGER
Accounts can be classified according to what they contain, thus:
19.1 Personal Accounts

These are accounts of people or businesses. They are usually accounts of debtors and
creditors. Examples of personal accounts include: Shoprite Account, Mulimbika Account, Trade
Kings Account etc.
19.2 Real Accounts

Real accounts are accounts for assets of a business. Examples of real accounts include:
furniture account, stock account, cash account, machinery account, buildings account etc.
19.3 Nominal Accounts

Nominal accounts are accounts of expenses and incomes (revenues) of the business.
Examples of nominal accounts include fuel expenses account, advertising account, rent
account, stationery account, drawings account, capital account, etc.

NOT FOR SALE
20.0 THE LEDGER
The Ledger is the main/principle book of accounts where the double entry is completed.
In the ledger, the details of transactions are record in accounts. Therefore, each page in the
ledger represents an account. An account is a summarized record of transactions that have
taken place with a particular person or valuable.
Below is the format of an account:
Format of an account
Date Details F DR CR
The following are the types of ledgers:
20.1 General Ledger or Nominal Ledger

This is the ledger where we record all gains (income) and expenses (losses) are
recorded. All gains will have a credit balance and expenses debit balance in the nominal
ledger. It also records assets, which are debited; liabilities including capital which are
credited; and drawings which are debited.
20.2 Purchases Ledger/Creditors Ledger/Accounts Payable Ledger

This is the ledger where we record all the names of our suppliers (seller or creditor) for
goods and services bought on credit. All creditors will have a credit balance in the
purchases ledger.
20.3 Sales Ledger/Debtors Ledger/Accounts receivable Ledger

This is the ledger where we record all the names of our customers (buyers or debtors)
for goods and services sold on credit. All debtors have a debit balance in the sales
ledger.
20.4 Cash Book (Cash Ledger)

It is a ledger (book) where the double entry of contra transactions are completed.
Meaning that, these transactions are not posted to the ledger. Examples of contra entry
transaction: withdrew cash from the bank for business use, cash deposited to the bank.

NOT FOR SALE
21.0 THE DOUBLE ENTRY PRINCIPLE
The double entry principle states that for every debit entry, there is a corresponding credit entry
of the same amount arising from the same transaction. The principle rule of double entry
(golden rule of double entry bookkeeping) is debit the receiver and credit the giver
It is derived from the Dual Aspect Concept
The double entry concept therefore, assumes that every transaction has a dual effect.
For example, goods purchased for cash has two aspects which are:
(i) Giving of cash
(ii) Receiving of goods
(iii) These two aspects are to be recorded
21.1 Double Entry Bookkeeping

Double Entry Bookkeeping is a system of maintaining books of accounts on the basis of the
double entry principle.
The other type of bookkeeping is Single entry bookkeeping which does not recognise the
Double Entry Principle.
21.2 Role of Double Entry

The role/importance of double entry can be summarised as follows:
1. provides a method for quick checking the accuracy of the ledger
2. Confirms the dual aspect of every transaction
3. helps to track the movement of value from one account to another
4. Double entry keeps the accounting equation in balance
21.3 Summary of double entry rules

Type Of Account Normal Balances
Assets Debit
Liabilities Credit
Expenses Debit
Income (Gains) Credit
Further summary
The summary of the above can be expressed in the form of a mnemonic “A LEG” (A for Assets,
L for Liabilities, E for Expenses and G for Gains) as follows:
A L E G
Dr Cr Dr Cr

NOT FOR SALE
22.0 THE TRIAL BALANCE
A trial balance is a list of debit and credit balances extracted from ledger accounts as at a
particular date.
Since transactions in the ledger are entered on the basis of double entry, it follows that for every
transaction, there must be two entries: a debit entry; and a credit entry. This means that if all
entries are done correctly, the total of the debit entries should be equal to the total of the credit
entries.
The test/trial of the accuracy can then be determined by picking balances from the ledger
accounts. Balances are picked because they represent a summary of the entries made in each
account.
22.1 Purpose of the trial balance

1. To prove the arithmetic accuracy of the double entry in the ledger accounts.
2. To see if the double entry rule has been followed.
3. To show all ledger balances.
4. To prevent fraud.
5. To be used as a source of information for preparing the final accounts.
22.2 Preparation of the Trial Balance

The Trial balance is prepared as at a particular date (end of the accounting period) when the
accounts in the ledger are balanced. When preparing the trial balance, Debit balances are listed
on the Debit side of the trial balance; and Credit balances are listed on the Credit side of the
trail balance. The total of balances on the Debit side is calculated as well as the total on the
Credit side. If the balances tally (i.e. if they are the same), it is proof that the double entry in the
ledger was done correctly.
Preparation of the trial balance
The position of Assets, Liabilities, Expenses and Incomes in the trial balance
In the preparation of the trial balance, the usual positions of the balances are as follows:
Assets and expense accounts normally have Debit balances; hence, their balances appear on
the Debit side of the trial balance.
Liabilities and Income accounts normally have credit balances; hence, their balances appear
on the Credit side of the trial balance.
A L E G
Dr Cr Dr Cr

NOT FOR SALE
Question
From the details below, prepare Gwenani J’s trial balance as at 31 March 2023.
K
Capital 40 000
Bank 5 000
Cash 8 000
Purchases 80 000
Purchases Returns 1 200
Sales 120 000
Sales Returns 1 500
Discount allowed 2 100
Discount received 3 400
Commission 5 000
Commission received 4 300
Advertising 3 400
Transport costs 2 000
Rent 1 300
Rent received 5 300
Debtors 3 000
Creditors 2 400
Equipment 20 000
Machinery 18 000
Motor vehicles 12 500
Furniture 27 700
Loan 10 000
Bank overdraft 2 900
Solution
Gwenani J’s
Trial Balance
as at 31st March 2016
Dr Cr
K K
Capital 40 000
Bank 5 000
Cash 8 000
Purchases 80 000
Purchases Returns 1 200
Sales 120 000
Sales Returns 1 500

NOT FOR SALE
Discount allowed 2 100

Discount received 3 400
Commission 5 000
Commission received 4 300
Advertising 3 400
Transport costs 2 000
Rent 1 300
Rent received 5 300
Debtors 3 000
Creditors 2 400
Equipment 20 000
Machinery 18 000
Furniture 27 700
Loan 10 000
189 500 189 500

NOT FOR SALE
23.0 FINAL ACCOUNTS
Final Accounts are financial statements prepared at the end of a trading period (period of twelve
months) to calculate the profit or loss made and to ascertain the financial position of the
business. They include the Trading Account, Profit and Loss Account and the Balance sheet.
23.1 The Trading Account

This account is used for calculating the Gross Profit or Gross Loss for the business. The Gross
Profit/loss of a business is the unrefined result of business activities. This means that there are
other items to consider but which have not yet been taken into account.
To calculate the Gross Profit or Loss we use the formula:

Gross profit = Turn Over – Cost of sales
Where:
Turnover = Sales–Sales returns
Cost of Sales = Opening Stock+ (Purchases + Carriage inwards–Purchases returns)–Closing
stock + Wages.
Presentation of the Trading account
Question
From the details below, prepare F. Malunga’s Profit and Loss account for the year ended 30
September 2022.
K
Sales 130 000
Returns outwards 4 000
Sales returns 6 000
Wages 8 000
Opening stock 8 000
Purchases 55 000
Carriage inwards 3 000
Closing stock (30 Sept. 2022) 6 000
F. Malunga’s
Trading Account
for the year ended 30 September 2022
K K K
Sales 130 000
Less: Sales returns (6 000)
Turnover/Net Sales 124 000
Opening stock 8 000
Purchases 55 000
Add: carriage inwards 3 000

NOT FOR SALE
58 000
Less: Returns outwards 4 000
Net Purchases 54 000
Total stock available for sale 62 000
Less: Closing stock 6 000
Cost of goods sold 56 000
Add:Wages 8 000
Cost of Sales 64 000
Gross Profit 60 000
Note:
Please add carriage inwards to purchases before subtracting purchases returns
23.2 The Profit and Loss Account

The Profit and Loss Account is used for calculating the Net Profit or Net loss of the business.
This is important because even after arriving at the gross profit/loss, there may still be some
expenses and incomes which took place but cannot be absorbed in the trading account.
To calculate the Net Profit or Net Loss, we use the following formula:
Net Profit/Loss = Gross Profit/Loss + Other Incomes – Other expenses
Preparation of the Profit and Loss Account
Question
Use the following list of balances to prepare the profit and Loss account for H. Jolezya for the year
ended 30 September 2022
K
Gross Profit 68 000
Rent and Rates paid 1 400
Insurance 3 000
Discount received 400
Repairs 800
Commission received 600
Interest received 500
General expenses 5 000
Rent received 900
Advertising expenses 3 000
Fuel costs 1 200
Stationery 500
Salaries and wages 25 400
Electricity 380

NOT FOR SALE
Commission paid 750

Motor vehicle expenses 900
Lighting and heating expenses 2 000
Solution
H. Jolezya’s
Profit and Loss Account
for the year ended 30 September 2022
K K K
Gross Profit 68 000
Add: Other Income
Discount received 400
Commission received 600
Interest received 500
Rent received 900
Total Income 2 400
Net Income 70 400
Less: Expenses
Advertising expenses 3 000
Fuel costs 1 200
Stationery 500
Salaries and wages 25 400
Rent and Rates paid 1 400
Electricity 380
Commission paid 750
Repairs 800
Motor vehicle expenses 900
Insurance 3 000
Lighting and heating expenses 2 000
General expenses 5 000
44 330
NET PROFIT 26 070
23.3 Statement of Financial Position

A balance sheet is a statement showing the financial position of a business as at a particular
date. It is also defined as a statement of assets and liabilities as at a particular date or a
statement of affairs which show the financial position of the business through assets owned and
liabilities owed at a particular date.
23.3.1 The Accounting Equation

The Accounting equation states that at any point in time, the assets of the business will be equal
to its capital and liabilities.

NOT FOR SALE
If the proprietor is the only supplier of the resources to the business, the equation is recorded
as: Assets = Capital.
If the resources are supplied by the proprietor and others, the equation is recorded as:
Capital = Assets – Liabilities
Assets = Capital + Liabilities
Liabilities = Assets – Capital
The balance sheet follows the Accounting equation where:

Since, the accounting equation depicts the fundamental relationship among the components of
the balance sheet; it is also called the Balance Sheet Equation. As the name suggests, the
balance sheet is a statement of assets, liabilities and capital.
Capital
Capital is money or money’s worth invested in the business by the owner/proprietor or Capital
are resources used to start up a business, e.g. money, machinery, motor vehicles, etc.
Liabilities
Liabilities are money which the business owes other persons or businesses or Liabilities are
resources used in the business but do not belong to the business. Liabilities can be divided into
two types namely, short term liabilities and long term/Non-current liabilities.
Long term liabilities/Non-current liabilities are liabilities that will come due for payment beyond
one year or beyond a period of twelve months, e.g. loan, bonds, mortgages, etc.)
Short term liabilities/Current liabilities are liabilities that are due to be paid within one year or
within a period of twelve months, e.g. Creditors/payables, overdrafts etc.)
Assets
Assets are things/resources that belong to the business and are used in the business. They are
legal possessions of a business. They are acquired using the resources provided by capital and
liabilities. There are two types of assets namely, fixed assets and current assets.
Fixed assets are assets bought for use in the business to generate profit and not for resale e.g.
land and buildings, motor vehicles, equipment, machinery etc.)
Current assets are cash and other assets which can easily be converted to cash within one
year, e.g. stock/inventory, debtors/receivables, cash at bank, cash in hand etc.)
23.3.2 Preparation of the Balance Sheet

Preparation of the balance sheet follows the Accounting equation where:

Following the accounting equation, all the assets are shown on the right hand side while the
liabilities and capital are shown on the left hand side of the balance sheet. The total of the
assets is called Net Worth. The total of the Capital and Liabilities is called Total Equity as it
represents two types of equity/capital i.e. the owners’ equity and equity from long term debts.
A balance sheet is prepared as at a particular date.

NOT FOR SALE
Sections of the Balance Sheet

As per accounting equation, the balance sheet shows three main sections, namely; the capital
section, liabilities section and the assets section.
The capital section must show the balance at the beginning of the period, the net profit or net
loss made during the period and the drawings made.
The liabilities section should show two sub-sections:
a) The long term liabilities (liabilities paid after one year, e.g. loan, mortgage etc.)
b) Short term liabilities (liabilities paid within one year, creditors, overdrafts etc.)
The assets section also has two sub-sections:

a) Fixed assets (Assets bought for use in the business and not for resale e.g. land and
buildings, motor vehicles, equipment, machinery etc.)
b) Current assets (assets whose form or nature changes continuously, e.g. stock, debtors,
cash at bank, cash in hand etc.)
Order of the balance sheet

Fixed assets and current assets in the balance sheet are usually listed beginning with the asset
that is most difficult to turn into cash moving down to the asset which is easiest to turn into cash.
This method of listing is called Increasing order of liquidity or Decreasing order of permanence.
Liquidity means the ease with which an asset can be turned into cash.
The balance sheet below is arranged in the increasing order of liquidity.
Most businesses use the order of permanence when preparing their balance sheets.
Types of Capital
a) Owners capital/capital employed
This is the total amount in the business that belongs to the owner
Owners capital = starting capital – Drawings + Net Profit
b) Circulating capital/net Current assets/Working Capital

This is the excess of current assets over current liabilities. It is the capital that is available
in the business for the day today expenses. It is also called Circulating capital, capital in
circulation or capital at work.
Working capital = Current assets – current liabilities
c) Fixed capital
This is the total value of all fixed assets in the business.
d) Loan capital
This is the total value of all long term liabilities

NOT FOR SALE
Preparation of a balance sheet
Question
The following balances remained in the books of Fisonga R. after the preparation of his profit and
loss account for the year ended 30 September 2022. You are required to prepare his balance sheet
as at that date.
K
Net Profit 47 670
Land and buildings 25 000
Premises 23 000
Fixtures and fittings 12 000
Machinery 18 000
Equipment 6 000
Office furniture 6 000
Closing stock 6 000
Debtors 14 000
Cash at bank 31 000
Cash at hand 5 670
Creditors 3 400
Capital 60 000
Drawings 4 000
Mortgage 25 000
Loan 32 000
R. Fisonga’s
Balance Sheet
as at 30 September 2022
K K K
Fixed Assets
Land and buildings 25 000
Premises 23 000
Fixtures and fittings 12 000
Machinery 18 000
Equipment 6 000
Office furniture 6 000
Total Fixed Assets 113 000
Current Assets
Closing stock 6 000
Debtors 14 000
Cash at bank 31 000
Cash at hand 5 670

NOT FOR SALE
56 670
Less: Current Liabilities
Creditors 3 400
Total Current Liabilities 9 000
Working Capital 47 670
Net Assets 160 670
FINANCED BY:
Capital 60 000
Add/Less: Net Profit/loss 47 670
107 670
Less: Drawings 4 000
Owners capital 103 670
Add: Long term Liabilities
Mortgage 25 000
Loan 32 000
Total Long term liabilities 57 000
Capital employed 160 670

NOT FOR SALE
24.0 WAGES AND SALARIES
Wages and salaries are used as a form of monetary payment for work done. However, there is
a difference between a wage and a salary.
24.1 Salaries
A salary is a fixed payment to an employee which is paid on a monthly basis. A salary is fixed.
The amount of pay does not depend on the amount of work done. A salary can be paid to both
skilled and unskilled workers.
Workers who receive salaries or a wage usually receive a statement known as a Pay slip.
24.1.2 The Pay Slip

A pay slip shows how much a person has earned and how much deductions have been made
from their pay.
Items found on a pay slip include:
a) Name and identification number, such as NRC number.
b) Employee number, an identification number at the company
c) Method of payment e.g. by cash, cheque, by bank account etc.
d) Details/Description, explaining the entries on the pay slip.
e) Payments, showing all the payments including the following:
(i) Basic pay – this is a worker’s pay before any allowances are added to it.
(ii) Allowances – these are incomes given to an employee as appreciation for loyalty,
work done etc. examples include, housing allowance, education allowance,
transport allowance, lunch allowance commissions, bonuses, etc.
(iii) Bonus: A bonus is an extra payment given to an employee for a job well done or
as an appreciation. Examples include bonuses for high production, Christmas
bonus, etc.
(iv) Commissions: A commission is an amount of money given to a sales person for
selling goods on behalf of the company. Sometimes commissions are given when
workers sell goods beyond the target set.
(v) Gross pay – this is a worker’s total pay before any deductions are made. Gross
pay is made up of Basic Pay plus Allowances.
f) Deductions, which are amounts of money removed from one’s payments. There are
two types of deductions, namely, Statutory deductions and Non-statutory deductions.
(i) Statutory Deductions: these are deductions imposed by the state. They are part
of the law of the country and employees are mandated to deduct from every
employee and send the money to the government. Examples of statutory
deductions include Income tax (PAYE), Pension contributions, and personal levy.
(ii) Income Tax/Pay As You Earn (PAYE) – is a tax levied on the income calculated
as a percentage of your pay. Hence, the higher you earn the more you pay.
(iii) Pension contributions is money deducted every month which the pension fund
can keep for you to be used by you when you retire and you are old. The employer
sends this to the pensions fund such as Public Pensions or National Pension
Scheme Authority (NAPSA).
(iv) Personal levy – is a tax deducted from the worker’s pay and paid to the local
council in which they reside. The local council uses the money collected through

NOT FOR SALE
personal levy to provide services such as street lights, sweeping the streets,
robots, street lights, etc. in Zambia, this is deducted twice in a year in March and
June.
(v) Voluntary deductions (Non-statutory deductions) – these are deductions
decided upon by the worker him/herself. The employee/worker is the one who
volunteers to have the deductions effected. Examples of voluntary deductions are
loans, insurance contributions, hire purchase payments, club subscription, salary
advance payments, medical schemes etc.
g) Net pay, is the actual amount that a worker gets after all deductions have been made
on their pay. It is also called the take home pay.
Net pay = Gross pay – Total deductions
Below is an example of a Pay slip.
Fisri Investments Ltd

Plot 75 Industrial Park
LUSAKA
PAY SLIP
For the month ending 31 October 2015

Name: Renard Bwalya Employee No.: 1045
NRC No.: 304728/16/1 Payment method: Bank
s/n DESCRITION PAYMENTS DEDUCTIONS
(EARNINGS)
1045 Basic pay 5 500
1020 Housing allowance 2 000
1922 Education allowance 1 000
4444 Transport allowance 500
5555 NAPSA 800
6666 PAYE 1 500
7999 Personal Levy 60
5646 Loan – Barclays 500
9870 Donation – Bible Society 200
6547 Swift Save policy – ZSIC 200
9807 Salary advance 300
9598 Hire Purchase – Game Stores 700
Totals ? ?
NET PAY ?
Calculate the totals and Net pay on the pay slip above.

NOT FOR SALE
24.2 Wages
A wage is a payment given to a worker and is based on the work done by the worker, or hours
worked. It is usually paid daily, weekly, or at any agreed time. Unlike a salary, a wage is not
fixed as it can change upwards or downwards. Wages can be paid to both skilled and unskilled
workers.
Terms associated with wages
24.2.1 Overtime
Overtime is a payment given to a worker for working over and above his normal working hours.
The normal working hours in Zambia is 8 hours per day or 40 hours per week.
Overtime pay can be expressed in the following ways:
(i) Standard time, means that the overtime pay is at the same rate as when working
normal time. For example, if a worker gets K10 per hour during normal time,
he/she will be paid K10 for every overtime hour.
(ii) Time and half, means that the worker is paid his/her hourly rate plus half of it.
For example, a worker who gets K10 per hour during normal time will be paid
K10 plus half of K10 (K5) which comes to K15 for every overtime hour worked.
(iii) Double time, means that a worker will receive his hourly rate times 2. For
example, if a worker gets K10 per hour during normal hours, h/she will be paid
K10 X 2 = K20 per overtime hour.
For example:
Ngosa Mapulanga is an employee of Fisri Investments Ltd. She is paid K10 per hour for a 40
hours week. She is paid overtime at the rate of time and half during the week and Double time
if she works over the weekend.
During the week ending 24th October, 2015, she worked for a total of 40 hours normal time, 5
hours overtime during the week and 4 hours on Saturday. Calculate her pay for the week.
Solution
Hours worked = 40 normal + 5 during the week + 4 over the weekend
= 49 hours.
Pay = Rate X Number of hours
Hours Rate per hour Total

worked
Normal hours 40 hrs K10 K400
Overtime during the week 8 hrs Time and half = K10 X 1.5 = K15 K120
Overtime during the weekend 4 hrs Double time = K10 X 2 = K20 K 80
Totals 49 hours K600
24.2.2 The Time Card or clock Card

This is a card used for showing the time employees come in and go out of the organization. It
is used in work places where pay is on the basis of hours of work.
Below is a time Card for Monde Kabinda who works for Muche Investments Ltd:

NOT FOR SALE
Muche Investments Ltd

LUSAKA
TIME CARD
Name: Monde Kabinda Employee No.: 1045
Department: Production Week: 43/52
Date Morning Afternoon Total
Time in Time out Time in Time out hours/min
Sunday - - - -
Monday 08:00 13:00 14:00 17:00 8 Hrs
Tuesday 08:30 13:00 13:30 17:00 8 Hrs
Wednesday 07:00 13:00 13:00 17:00 10 Hrs
Thursday 07:30 13:00 13:15 16:45 9 Hrs
Friday 08:00 12:30 13:00 17:00 8 Hrs 30 Min
Saturday 08:00 13:00 - - 5 hrs
Total Man Hours Worked 48 Hrs 30 Min
Total pay for week days (normal time) ?
Total for Overtime (time and half) ?
Total pay for the weekend(double time) ?
Net pay ?
Calculate the following:

(i) Total pay for week days (normal time)
(ii) Total for Overtime (time and half)
(iii) Total pay for the weekend(double time)
(iv) Net pay
24.2.3 Wage Sheet or Coining Analysis

A wage sheet is a statement which shows the breakdown of notes and coins needed to pay the
workers over a given period. It shows all the workers and wages that are due to them
The following is a coining analysis for Fisri Investments for the week ending 24th October 2015

NOT FOR SALE
Sichivula Investments Ltd

LUSAKA
WAGE SHEET
th
Week: 43/52
Time Name Wages K100 K50 K20 K10 K5 K2 K1 50n 10n 5n
card
No.
01 Namfukwe P. 2 040.00 20 - 2 - - - - - - -
02 Sinyangwe M. 1 250.30 12 1 - - - - - 3 -
03 Mulongo L. 3 467.05 34 1 - - 1 1 - - - 1
04 Mwanza V. 1 999.05
05 Malunga F. 5 860.35
06 Banda H. 2 473.80
06 Musenge W. 1 234.50
06 Ng’uni L. 2 982.40
Totals
Complete the above Wage sheet by filling in the missing figures.
24.2.4 Flat rate

This is a type of pay which does not depend on the number of hours worked or amount of work
done. The pay is fixed whether you work of more hours or not. A salary is a flat rate.
24.2.5 Piece Rate/Piece Work

This is a method of paying workers based on the amount of work done. Portions are given to
workers who are paid according to the portions they have completed.

NOT FOR SALE
25.0 PERSONAL FINANCIAL MANAGEMENT
Personal Financial Management
Personal finance is the financial management which an individual or family unit is required to
do to obtain, budget and save and spend monetary resources overtime, taking into account
various financial risks and future life events.
Personal finance looks at how an individual current and future finances are managed.
25.1 Savings
Savings are income not spent or income postponed for future use. It is important to save for
specific goals.
Methods of Investment/saving
 Savings account – offered by banks and credit unions. Service charges may be
charged and small rate of interest given to this account.
 Pension Plan – this is where one undertakes a pension scheme with institutions such
as the insurance companies, pension fund institutions such as NAPSA, etc. Under this
scheme one makes small monthly contributions towards his/her pension. The retirement
package is paid when the pension holder reaches retirement age.
 Reducing expenditure on expenditure on luxurious goods and services.
 Buying shares and debentures from public limited companies.
 Buying government bonds and treasury bills.
 Engaging in entrepreneurial activities.
25.2 Budgeting
A budget is a plan or a forecast of future expenditure. It helps an individual or organisation to
effectively allocate resources prudently and meet expected expenditure.
Types of budgets
There are so many types of budgets a firm may use, such as master budgets, capital budgets,
operational budgets, problem solving budgets, etc.
Below are some of the budgets:
a) Individual (Personal) Budget

These are budgets that an individual draw to meet certain financial goals. This helps an
individual to plan their income and save some money for specific goals, e.g., schools
fees for children.
b) Home (Family) Budget

A home budget is the type of budget that shows the allocation of some money in a
month, for purchasing items required to be used in a home for food, clothing, groceries
and other necessities. The procedures for drawing a budget are:

NOT FOR SALE
 Make an allocation in terms of percentage as a saving per month before you start
spending.
 Budget should be made in the following way: Expenses = Income – Savings.
 Make a list of all your fixed expenses.
 Write down the cost of household essential, such as food, transportation,
medication, etc.
 Take into account discretionary spending.
c) National Budget
This is a government document presenting the government’s proposed revenues and
spending for a fiscal year. It estimates the anticipated government revenues and
expenditure for the current fiscal year. In Zambia, our national budget takes into account
the budgets for all provinces and ministries and analyses them before coming up with
the national budget. It includes the sources of income (revenue) and expected
expenditure on government employees as well as the projects initiated by the central
government.
Reasons for budgeting
a) Control measure
Budgets help firms control expenditure. It helps to keep spending under control.
b) Guide
It creates a road map which guides the business owner in the implementation of
operational activities.
c) Transparency
A budget reduces arguments as money often plays a big role in most arguments in
businesses. A budget shows openness.
d) Allocation of resources
The budget helps to allocate funds to various areas where they are needed.
e) Performance evaluation
A budget is a tool for business owners to evaluate the performance of their organisation
at the end of a trading period. The actual revenue and expenditure during the period
under review is compared against the planned revenue and expenditure. This is called
budget trucking which show variances and give room for corrections.

NOT FOR SALE
26.0 BANKING
26.1 What is banking?

Banking involves the collection of surplus money from the general public, keeping it safe and
lending some of it at an interest to those in need.
26.2 Financial Institutions

Financial institutions are organisations that provide financial services to consumers and
businesses.
26.3 Types of Financial Institutions

Examples of financial institutions include banks, pension funds like NAPSA, Insurance
companies, Microfinance companies such as Bayport, FINCA, IZWE etc.
Financial institutions include the following:

• Commercial banks
• Building societies
• Credit unions and Savings Associations
• National Savings and credit bank
• Micro Finance companies
• Bureau De-change
26.3.1 Building societies

Building societies are financial institutions that receive money deposits from the public in order
to carry out their main activity of lending to people and organisations who want to invest in real
estate.
Building societies in Zambia include:
- Zambia National Building Society
- Pan African Building Society
- Finance Building Society
- Meanwood Building Society
26.3.2 Credit Unions and Savings Associations

Credit Unions and Savings Associations are financial institutions which are owned and
controlled by people who use their services and have a common goal. These financial
institutions are established to mobilise savings from members and extend loans to members at
relatively lower interests.
26.3.3 National Savings and Credit Bank (NATSAVE)

National Savings and Credit Bank is a government owned financial institution that was
established in 1972 by an Act of Parliament.
The main services provided by this bank include the following:
- To accept deposits through providing various types of savings accounts.
- Offer loans to needy individuals and business organisations.

NOT FOR SALE
- To act as an intermediary through which organisations can channel payments such as

donor funds, government funding to various organisations such as Food Reserve Agency
etc.
26.3.4 Micro Finance Companies

Micro finance Companies are financial institutions that provide financial services to low income
earners and small business entrepreneurs. They mainly provide banking services to people who
may not access banking and related services in commercial banks. They also provide small
loans to people with or without collateral security. Examples of Micro Finance Institutions in
26.3.5 Bureau De Change

A bureau De Change is a financial institution that deals in exchange of one currency for another.
For example, exchanging a British Pound for Zambian Kwacha. Since different countries have
different currencies, these institutions help business people and travellers to exchange their
local currency with the currency they need in a particular country.
26.4 Services offered by Financial Institutions

• Safe keeping of surplus money and other valuables for bank customers.
• Lending money to bank customers through Loan facilities.
• Lending money to bank customers through bank overdrafts.
• Providing Foreign Exchange by enabling bank customers to buy foreign currencies.
• Facilitating payments through Standing order (banker’s order or stop order)
• Facilitating payments through Credit Transfer (Bank Giro credit system)
• Facilitating payments through Direct debiting
• Providing Automatic Teller Machine (ATM) facilities – Cash Dispenser
• Providing Point of Sales (POS) services to enable customers pay for services when
shopping in retails outlets using Debit Cards or Credit Cards.
• Providing Night safe facility that allows businessmen and women to deposit cash when
banks are closed.
• Providing Credit cards for making payments
26.5 Types of Bank Accounts

26.5.1 Current account
• A current account is used by individuals and organizations who wish to safe keep money
but would also like to withdraw some of the money at any time.
• It uses cheques for withdrawing cash from the account and also for making payments.
For this reason, a current account is also called a cheque account.
• There is no minimum balance required to maintain the current account.
• It is the only bank account that can be overdrawn or allows overdrafts.
• There is no interest paid on deposits.
• The customer pays ledger fees as a service charge.
26.5.2 Savings account /Save as you earn

• A savings account is used by people who wish to save fairly small amounts of money
on a regular basis.
• A minimum balance is required to maintain the account.
• Interest may be paid on the savings.
• The customer does not need to inform the bank in advance to withdraw money.

NOT FOR SALE
• There is a maximum amount that a customer is allowed to withdraw per day.

• Customers may be provided with ATM Cards which they can use to withdrawal money
at any time.
26.5.3 Deposit account/Investments Accounts

• A deposit account is used by bank customers who wish to keep large sums of money
not needed for immediate use.
• There is minimum investment capital required for one to open a fixed deposit account.
• Money can only be withdrawn from a deposit account after an agreed fixed period e.g.
3 months, 6 months, 9 months etc.
• Capital and interest is repaid in full when the fixed period is over.
• Interest on a deposit account is fixed.
• Overdraft facilities are not allowed on fixed deposit accounts.
26.6 Documents used in Banking

There are a number of documents used in banking. They include deposit slip, Pay-in slip, Pass
book, Cheque Book, Bank Statement and Withdrawal Slip:
26.6.1 Deposit Slip

This is used when depositing cash or cheques in a savings or deposit account.
Example of a Deposit slip
INDO-ZAMBIA BANK LTD
DEPOSIT SLIP
Branch: Cairo North Date: 12/09/22
Account name: Witola Boonda Account No.: 069970550900
Notes K100 X 10 1 000.00
K50 X 50 2 500.00
K20 X 20 400.00
K10 X 24 240.00
K5 X 7 35.00
K2 X 5 10.00
Coins K1 X 5 5.00
50n X 30 15.00
10n X 10 1.00
5n X 13 0.65
Total Notes and Coins deposited 4 206.65
Cheques 3 000.00
Total Deposited 7 206.65
Amount in words: Seven Thousand Two Hundred and six Kwacha, Sixty-five Ngwee
Deposited by: Witola Boonda

NOT FOR SALE
26.6.2 Pay-in-Slip
This is a document used for depositing cash or cheques into a current account
Example of a Paying-in-Slip

PAY-IN-SLIP
Branch: Cairo North Date: 12/09/22
Account name: Patrick Makungu Account No.: 069970550900
Notes K100 X 10 1 000
K50 X 50 2 500
K20 X 20 400
K10 X 24 240
K5 X7 35
K2 X5 10
Coins K1 X5 5
50n X 30 15
10n X 10 1
5n X 13 0.65
Total Notes and Coins 4 206.65
Cheques, Money orders etc. 3 000
Total Deposited 7 206.65
Amount in words: Seven Thousand Two Hundred and six Kwacha, Sixty-five Ngwee
Deposited by: Patrick Makungu
26.6.3 Withdrawal Slip

This is a document used to withdraw money from a savings account or deposit account. Proof
of identity is required to withdrawal the money. It is presented to the counter after being filed in
together with the proof of identity which can be a National Registration Card, Passport or a
Driver’s License.

WITHDRAWAL SLIP
Branch: North End Date: 15/08/17
Debit Account name: Simon Nkamba Account NO.: 069970550900
Amount of withdrawal K2 100 = 00
Amount in words: Two Thousand One Hundred Kwacha Only
Customers’ Signature: Nkamba
Received by: Nkamba
26.6.4 Bank Statement

This is a summarized record of all financial transactions between the bank and an accountholder
for a given period of time. It shows the deposits made, withdrawals made, interest received,
bank charges etc. bank statements are issued monthly, quarterly, annually, or upon the
accountholder requesting for it.

NOT FOR SALE
INDO ZAMBIA BANK LTD

P. O BOX…. LUSAKA
BANK STATEMENT
Account type: Current Account Account No.: 37665892009
Date: 30th September 2017
Date Details Ref. Withdraws Deposits Balance
No. (DR) (CR)
01/02/22 Balance 5 000
03/02/22 Cheque No. 67455 2 000 3 000
10/02/22 Choolwe 1 500 4 500
10/02/22 Chembe ? 10 200
15/02/22 Shiluwe 8 300 18 500
23/02/22 Chque 03442 3 800 ?
26/02/22 Cheque 03456 2 600 ?
28/02/22 Cheque 004592 1 700 ?
Complete the Bank Statement above by filling in the missing figures.
26.6.5 ATM Transactions Slips

These ae slips produced by the Automated Teller Machines after one has withdrawn or
deposited money. They are also produce when one has requested for a mini bank statement,
account balance or even after an online payment for goods or services.
26.6.6 Cheque
A cheque is a written order to a bank to pay a specific amount of money to a named person or
organization. Cheques are usually used to pay out money from current accounts.
STANBIC BANK ZAMBIA 11-33-22

(Registered commercial bank)
LUSAKA MAIN BRANCH
000429
DATE: 10/03/22
Pay: Choolwe Fisonga Or Order

K200=00
The sum of: Two hundred kwacha only
Richard Michael
000527!0!10050:0529744800169!!-033 sign RMichael

NOT FOR SALE
Parties to a cheque
Parties to a cheque are persons or organizations whose names appear on a cheque. They
include the drawer, the drawee and the payee.
Drawer: This is the name of the current account holder. He/she is the one who signs the cheque
and is the one making the payment.
Drawee: The bank where the account is held.
Payee: This is the name of the person to whom money is to be paid upon the presentation of
the cheque to the bank.
Requirements of a valid cheque/Parts of a cheque

A valid cheque should have the following:
Date: All cheques should carry the date on which they are drawn (or written).
The Drawee’s name: Normally the cheques will bear the name, branch and any other details
relating to the address of the bank.
Payee’s Name: If the cheque is open money is given over the account, but if it is a crossed
cheque then the payee deposits such a cheque in his or her account.
Amount: The amount to be paid out should be indicated in both figures and words.
Drawer’s Name: Often the name is printed beneath the box in which the figures are written.
The Drawer’s Signature: The drawer must sign the cheque and the signature should tally with
the ones given on the signature card at the time of opening the account.
Cheque Number/Account Number/Branch Code: With the coming of electronic cheques, the
cheque number, Account number and Branch numbers are combined. These are the numbers
that appear at the bottom of the cheque.

NOT FOR SALE
27.0 FILING
Filing is the arranging of records in a logical order in storage containers so that they can be
easily retrieved when needed. Filing involves:
- Arranging records according to a simple, logical system
- Placing records in a storage container in correct sequence; and
- Retrieving the records so that they can be used.
Filing can be either: Manual or Electronic ual filing is when paper documents are kept in cabinets
while electronic filing is when records are kept in a database on a computer.
27.1 Characteristics of a good filing system

A good filing system must be:
• simple and easy to use
• capable of expansion
• accessible by all who need to use it
• economical in terms of cost and space
• secure from unauthorised access
• capable of keeping files safe from damage
27.2 Filing Systems

There are two common filing systems namely, centralised filing and decentralised
(departmental) filing.
27.2.1 Centralised Filing

A centralised filing system is one in which all records are stored in one central place under the
control of specific staff. Staff from various departments come and “borrow” files to use like in a
library and return them after use. The person in charge of the centralised records is referred to
as the Records Officer or Librarian.
Advantages of Centralised Filing System

- It saves space.
- Staff more specialised and experienced.
- Better equipment can be purchased as less equipment is needed
- Staff become expert in their duty
- A uniformed system of filing can be established throughout the organisation
- It reduces duplication of work.
- Documents are more secure since access to the records room is controlled.
Disadvantages of Centralised Filing System

- Repetitive work can be boring for staff
- It can be time consuming for staff to walk to another area to obtain files
- It may be difficult to keep confidential records
- It may lead to huge losses of data in case of fire, damage, floods and other eventualities.

NOT FOR SALE
27.2.2 Decentralised/Departmental Filing

A Decentralised filing system is one in which records are kept in individual departments.
Advantages of Decentralised Filing System

- Departments can use the filing method they prefer.
- Time is saved not having to leave the department to obtain files.
- Confidentiality can be maintained.
- Files are fewer and easier to find.
- In case of fire outbreaks and damage, only files in one department may be destroyed.
Disadvantages of Decentralised Filing System

- It is more expensive as more filing equipment is required.
- It results in unnecessary duplication of work.
- The record system may not be very efficient as some staff may lack the necessary skills to
file documents.
- There is lack of uniformity and consistency in the filing system.
27.3 Filing Methods

Filing methods are the different ways in which records can be arranged in a filing system. They
include alphabetical filing, Geographical filing, Numerical filing, chronological filing and subject
filing.
27.3.1 Alphabetical filing

This is a method of filing where records are arranged according to letters of the alphabet.
Advantages of Alphabetical filing

- It is simple to understand.
- Storage is easy if standard procedures are followed.
- It is flexible to use.
Disadvantages of Alphabetical filing

- It is difficult to locate records in case of common names.
- It is time consuming.
27.3.2 Geographical Filing

This is a method of filing where records are arranged according to the geographical location of
the person, firm or organisation.
Advantages of Geographical filing

- It is easy to understand and use.
Disadvantages of Geographical filing

- It is expensive especially if the company has many branches.
- It is time consuming.
27.3.3 Numerical filing

- This is a method of filing where records are arranged according to reference numbers
assigned to them.

NOT FOR SALE
Advantages of Numerical filing

- Capable of endless expansion since a new customer is given next number
- It is flexible
Disadvantages of Numerical filing

- It is expensive
- it is not suitable for small organisations.
- It is less costly.
- It provides efficient maintenance of records
- It reduces the possibility of misfiling and reduce duplication
- Less time is spent searching for files and documents
27.3.4 Chronological filing

This is a method where records are arranged according to the year, month, and dates when
they were prepared.
Advantages of Chronological filing

- It is simple to understand and use.
- Records can be located quickly.
Disadvantages of Chronological filing

- It is not suitable for large offices
27.3.5 Subject filing

This is a method of filing where records are arranged according to topics or category.
Advantages of Subject filing

- It is simple to operate
- It is easy to locate files
- It is flexible
Disadvantages of Subject filing
- It is time consuming because all document must be read to determine their subject.
- It is difficult to locate a file if the subject matter is not known.
27.4 Filing Equipment

Filing equipment are the different physical and electronic tools for handling records. Manual
filing equipment include: Spike, Flat, Box files, Vertical filing cabinets, Lateral filing cabinets,
Horizontal filing cabinets, Rotary file, Trays, Filofax, Card Index, Folders etc. electronic filing
equipment include: Floppy Disc, Database Software, Hard Disc, CD-ROMs and DVDs.
27.4.1 Factors to consider when choosing filing equipment

The choice of filing equipment to be used will be dependent on many factors such as:
 Type and size of documents being stored
 Length of time it is intended to retain documents
 How often files are likely to be referred to
 Volume of papers to be stored
 Amount of space available

NOT FOR SALE
27.4.2 Types of filing equipment:

27.4.2.1 Files
 Folders – a wide variety of cheap folders is available such as wallet, pocket, straight
fold, etc. they are generally used to hold current documents within the filing system.
 Box Files – these are rigid boxes of board with strong clip inside to hold papers. Box
files are stored upright on shelves with labels on the board spice. They are used for
long term storage of files or documents no longer in current use.
 Circular Rotary Files – these are files which enable many records to be in wallets or
pockets around a central vertical pillar.
 Pending Files (Trays) – This is used to file/hold letters that cannot be answered
immediately. The contents of the pending files may be arranged alphabetically,
numerically, etc., in date order.
27.4.2.2 Spike
 This is used to hold documents such as telephone messages or petty cash vouchers.
27.4.2.3 Flat Filing cabinet

 A flat file is used to store documents and items such as drawings, paintings and maps
that need to flat.

NOT FOR SALE
27.4.2.4 Vertical filing cabinet

 Files are stored in drawers in order from front to back, is tall and narrow.
27.4.2.5 Lateral Filing Cabinet

 A lateral filing cabinet is wider and narrower and files are stored side by side.

NOT FOR SALE
28.0 POSTAL AND TELECOMUNICATION SERVICES
To operate effectively, businesses require a lot of accurate commercial information to move

quickly between persons and businesses. Communication helps to transmit information from
one person or business to another. This can be done in written, oral, visual or physical form.
Many organisations provide the means by which businesses and people can make contact. In
Zambia, the Zambia Telecommunication Corporation and the Zambia Postal Services are
examples of such firms that provide the means by which other firms can communicate. In
addition, there are privately owned companies like Airtel, MTN, DHL, FEDEX, Post NET etc.
that provide postal and telecommunication services.
28.1 Postal Services

These are services provided by the post office for posting and delivering of letters, parcel etc.
information about services provided by the post office is found in a book called the Post Office
or Guide or Post Office Directory. They include the following:
1) Mail
Mail refers to the sending of letters or packages delivered by the post office. Mails can be
delivered at the door step or the customer can collect them at the post office. Mail carried by
planes are called airmail while those carried by road are called surface mail.
2) Railex
This refers to mail sent by train. The receiver of the letter normally collects the mail at the rail
station when it arrives.
3) Circulars
Circulars are used to share the same information to a large audience within or outside the
organisation. This may be sent using the post office to the branches of a large organisation e.g.
from Lusaka to branches in Kabwe, Ndola etc.
4) . Express Mail service (EMS)

This is a service used to send urgent mail. Express Mail service provides fast and safe means
of delivering letters and parcels up to a certain size and weight. The word “Express” must be
written clearly in the top left-hand corner of the package. Mail is personally accepted at post
office and delivered to the destination. Charges for the service are higher as they are based on
distance and weight.
5) Registered Mail
This service is used for sending valuable items such as cash by post. They are recorded at the
time of posting and, the sender is given a certificate of posting or receipt as proof of posting.
The receiver must provide proof of identification and sign a post office slip when receiving the
mail as proof of delivery. If a registered mail is lost, the post office will normally pay
compensation up to certain amount.
6) Cash-On-Delivery
This service enables a trader to send parcels to customers by post and ask the post office to
collect the payment when delivering the item. The money is then remitted to the trader by the
post office, less a small charge. It is widely used by mail order firms.

NOT FOR SALE
7) Courier Services
This service is provided through courier service named Expedited Mail Service (EMS). EMS
operates along the line of rail. EMS mail is given priority over other mail items in custom
clearance and it is delivered straight to the customers’ home or office and not sent through the
postal boxes or bags.
8) Philately
Issuing of postage stamps and historic items of the post office is done by the department of
philatelic products. Historical stamps and other items depicting postal events are sold at the
post office, e.g. first day cover envelopes and postage stamps.
9) Data Post
Data Post provides a speedy and reliable service for sending business documents and other
parcels within the same day. Packages display the data post sign and are given special security
treatment. Newspaper companies use this service for delivery of newspapers on the same day.
10) Poste Restante

This service is used by people who do not have fixed addresses for collection of mail and
parcels. This service is particularly useful to sales people who continually travel from one town
to another. Here is how Poste Restante addresses can be written:
MITI PAPA
POST RESTANTE
KITWE MAIN POST OFFICE
P.O BOX 24673
KITWE
ZAMBIA
11) Business Reply Services

This service enables members of the public to send short replies to businesses without having
to pay for a stamp. It is mostly used by customers for replying to letters of guarantee,
questionnaires and mail order forms. Before the service can be used, a license must be obtained
from the post office and a deposit paid to cover the likely cost of delivering the letters.
12) Recorded Delivery

This facility provides a proof of both posting and delivery of letters. Letters sent by recorded
delivery are not posted in the posting boxes but delivered to the counter where they are recorded
and a receipt given to the sender as a proof of delivery. The receiver signs a form to say that
the letter or parcel has been received. If lost or damaged a small compensation is paid by the
post office. It is mostly used by traders who want to ensure that their debtors receive their bills
and by legal practitioners sending important legal documents by post.
13) Freepost
Freepost is a postal service whereby a person sends mail without affixing a postage stamp, and
the receiver pays the postage when collecting the mail. This service allows potential customers
to write to a business, in reply to its adverts, without paying postage. Instead the trader includes

NOT FOR SALE
the word “FREEPOST” in his address. Usually the trader obtains a licence or approval from the
post office prior to using this facility.
Ms. Beatrice Chilufya FREE POST

NO STAMP REQUIRED
Kasenje Basic School

P.O Box 39229
KAFUE
14) Private bags

Private bags are used for posting and receiving letters. Being lockable, the bags offer security
and can easily be handled. When letters are received by the post office, they are locked in the
mail bag. The letters cannot be removed until the owner collects the bag and opens it at his or
her own place.
15) Post office boxes.

A post office box is used for receiving letters and parcels. An individual or organisation renting
a post office box is given a key to the box. Letters can be collected at any time. The hirer pays
annual fee to the Post Office for renting the box.
16) Franking machine.

Franking machines are machines used for printing postal impressions on envelopes. The postal
impressions show the amount of postage, place and date of posting. Franking machines are
used by organisations that send many letters at once. They save time in affixing postage
stamps on each letter.
However, before the franking machine can be used, a licence to use it must be obtained from
the post office. The post office sets meters for the franking machines. The hirer of the franking
machine pays the post office according to the units of postage value used.
17) Postal orders

These are printed in fixed denominations and are suitable for sending small amounts of money.
The sender usually pays for the face value of the postal order with a fee know as Poundage for
the service rendered or offered to him or her.
18) Money Orders

Money orders are ways of sending money through the postal system to someone who is far
away and does not have a bank account. Money orders are printed in fixed value
denominations, like the bank notes and are sold by the post office, banks or any licensed shop.
A money order is a more trusted method of payment than a personal cheque because the
sender has to pay for it in full at the time of purchase, and the receiver is guaranteed the money
will be paid to him/her. There is no chance of bouncing money orders.

NOT FOR SALE
ZAMBIA POSTAL CORPORATION

P.O BOX 4010
LUSAKA M.O No. 21
APPLICATION FOR MONEY ORDER

No. of Order: ……………………………………………….
DATE STAMP
Office of payment: ……………………………………….
By Telegraphy/By Post *Delete the inappropriate
Amount in figures K…………………………………………………………………...
Amount in words: ……………………………………………………………………………….
Payee’s name and address: ………………………………………………………………….
Remitters name and address: ……………………………………………………………….
Private Telegraphic Message (Limit 12 words) ……………………………………………
……………………………………………………………………………………………………
Money orders are rarely used now as they have been replaced by a more modern method called
Swift Cash.
19) Swift Cash

This is an online money transfer service offered by the Post office. It is instant and uses internet.
SWIFT CASH FORM OF ZAMPOST

SENDER FOR OFFICIAL USE
First name(s): …………………………………………. Transaction No.
Surname: ……………………………………………….
Address: …………………………………………………
Office of Origin: ……………………………………….. Principal Amount: K …………….
Telephone No.: ……………………………………….. Commission: K…………………..
NRC No.: ……………………….SIGN: ……………… Total collected: K ……………….
Officers Code/Signature………..
RECEIVER
First name(s): ………………………………………….
Surname: ……………………………………………….
Address: …………………………………………………
Amount (in figures): …………………………………… OFFICIAL STAMP
Paying office: ………………………………………..
Test question (upon request) …………………………
………………………………………………………….

NOT FOR SALE
28.2 Telecommunication Services

Telecommunication companies provide several means by which people or organisations can
instantly communicate with each other.
a) The Telephone.
Telephone provides people engaged in commerce with speedy means of contacting with other
business people over any distance either within the country or abroad. Its main advantage is
that communication can be done quickly and feedback is given immediately.
Telephone Services offered for business use
Toll Free Service

This is a service which allows customers to make free calls to specific numbers in an
organisation, the number will allow the organisation to pay for the calls that the customers make
to communicate with the business. Customers can make a call to the organisation from
anywhere within the country.
Voice Mail
Voice mail is a telephone-activated and voice-prompted system that allows you to leave
messages when the dialled number is not active and to receive messages you could have
missed when your phone was off.
Types of Telephone calls
Personal calls
A personal call is a telephone call that specifies a person to whom the caller wishes to speak.
Local call
A local call is a telephone call to another telephone number within the same area or within the
same telephone exchange, e.g. from Kabanana to Matero within Lusaka.
Trunk calls/Domestic Trunk Call
A trunk call is a telephone call from one telephone exchange to another distant exchange, i.e.
a call from one town to another but within the same country, e.g. a call from Kabwe to
Livingstone.
International call/International Trunk Call
An international call is a call made from one country to another country e.g. from Zambia to
South Africa.
Transfer charge call
A transfer charge telephone service enables telephone charges to be transferred to the called
telephone subscriber provided he or she agrees to pay for the telephone call before it is made.
The Telephone Alphabet

A telephone alphabet is also known as a spelling alphabet.
It is a set of words which are sued to stand for the letters of the alphabet.
It can be used when speaking in a noisy environment to ensure clarity and promptness of
communication.

NOT FOR SALE
Below is an example of a telephone alphabet:
A – for Andrew N – for Nellie

B – for Benjamin O – for Oliver
C – for Charles P – for Peter
D – for David Q – for Queen
E – for Edward R – for Robert
F – for Fredrick S – for Samuel
G – George T – for Tom
H – for Harry U – for Uncle
I – for Isaac V – for Victor
J – for Jack W – for William
K – for King X – for X-Ray
L – for Lucy Y – for Yellow
M – for Mary Z – for Zebra
For example, if Mr. Kennedy Chaya has received a call from Toronto, Canada, asking him to
spell the name Chilufya, he may spell it as follows:
Charles, Harry, Isaac, Lucy, Uncle, Fredrick, Yellow Andrew.
The receiver on the other side in Toronto Canada will be writing down the first letter of each
name.
The Telephone Message Form

This is also known as a Telephone Pad or Telephone Message Form. It is used to record
messages received through the phone to ensure that the callers’ message is taken down
correctly. It is also used to record messages for an official who is not around at the time of the
call.
A Telephone message form shows:
a) The date and time of call
b) The name of the caller
c) The phone number of the call and address
d) The name of the person/official for whom the call was made and the message,
e) The name and signature of the person recording the message.
Example
On 10th April, 2015, Mr. David Mulenga of Kwame Nkrumah University P.O. Box 80404, Kabwe,
called at 10:00 hours and wanted to speak to Mr. Kraus Bbabbi, the Sales Manager. He wanted
to inform him that 3 of the shoes sold to him were of the wrong size and were being returned
for exchange. His telephone number is 0950 565606. The message was received by Edna
Nayame.
TELEPHONE MESSAGE FORM
DATE: 10/04/22 TIME: 10:30 hrs .

MESSAGE FOR: Mr. Kraus Bbabbi
FROM: Mr. David Mulenga
ADDRESS: Kwame Nkrumah University, P.O Box 80404, Kabwe
TELL: 0950 565606
MESSAGE: 3 pairs of shoes were of wrong size and have been
returned for exchange.
RECEIVED BY: Edna Nayame

NOT FOR SALE
b) Cell Phones (Mobile/Cellular phones)

A cell phone is a phone that makes use of wireless signals to enable communication between
businesses and people. It offers the following business and personal uses: for sending and
receiving short messages, emails, photos, videos etc. it can also be used for storing different
things like photos, videos, personal contacts, audio files. Some cell phones have a provision for
internet which can be used for information. Today a cell phone can even be used for online
banking as it enables one to check on their account balances, bank statements, make payments
and even receive payments.
c) Telex
The telex or Teleprinters have been regarded as a combination of a telephone and a typewriter.
Subscribers to this service have a teleprinter installed in their offices and are given a number in
the same way as telephone users. To send a message, the sender dials the receiver’s number,
and types out the message, manually on the teleprinter. The message is automatically printed
at the recipient’s office, even if there is no one to receive it. Thus a message can be sent during
the night and await the arrival of the recipient at the office the next morning.
d) Fax (Facsimile) or Photo telegrams

This service enables a business to send exact copies of a document to distant places using
telephone lines. The fax machine is plugged into the telephone network and therefore it uses
and the bills are added to the user’s telephone bills. It is used for sending urgent documents as
quickly as a telephone call. Thus documents can be received 24hours a day even when it is
after working hours for as long as the machine is left on. It can transmit documents whether
printed, typed, hand-written or drawn plans.
e) Electronic Mail (e-Mail)

Electronic mail refers to a variety of facilities, which allow computer users to communicate with
other distant computers in different parts of the world. Its greatest advantage over the post and
fax is that it is faster and more flexible and the message can be as short or as long as you like.
You can send files, spreadsheets, graphics, database, and even audio and video files via E-
mail.
f) Confravision or Videoconferencing
This allows people situated at different distant locations to hold face to face discussion, but
without the inconvenience of everyone travelling to the same meeting place. It provides studios
which link up by sound and vision, so that discussions can take place as if all those attending
were present in the same room.
g) Radio Messages/Paging
This service allows a user to send a telephone number or message to another user. It provides
a beeper, which warns people of the message, either, that they are required, for example, to
return to their point of operation or to their phone. It is commonly used in shops, factories, offices
and hospitals.
h) Phonograms
A phonogram is a telegram sent by phone or radio. Phonograms make use of letter combination
to make sure the words are spelt correctly. For example, if a message is read out as “TAKE
BOOKS TO CHABU”, the sender then uses the phonograms to ensure “CHABU” is spelt
correctly by saying:

NOT FOR SALE
C as in China
H as in Hungary
A as in Argentina
B as in Botswana
U as in Uruguay
i) International Telegram
A Telegram is a brief communication sent through the post office to deliver urgent messages to
any part of the world. To send a telegram, one is required to write a message on a form provided
by the post office. The message must be summarised because payments are made per word.
For example, if one wants to communicate that they have passed to go to grade 8 and need
school fees, they can simply write:
PASSED GRADE 9. NEED MONEY FOR SHOES.
j) Internet
The Internet is an arrangement of connected computers, which lets the computer users all over
the globe exchange data. It is essentially one network, which is the sum of thousands of
individual private and public networks interconnected by satellite and fibre optic cable systems.
The principal components of the Internet are the World Wide Web (WWW) and e-mail. With the
passage of time, the Internet has become the most effective business tool in the contemporary
world. It can be described as a global meeting place where people from every corner of the
world can come simultaneously.

NOT FOR SALE
29.0 BUSINESS ABBREVIATIONS
An abbreviation is any shortened form of a word or phrase.

29.1 Why use abbreviations?
• Abbreviations are used for convenience.
• Abbreviations are used to save space and time as words are quickly written using less
space.
29.2 Common Business Abbreviations

The following are the commonly used business abbreviations
Abbr. Meaning When Is It Used
A/C Account A summarized record of a business transactions
with a particular person of concerning a particular
valuable
ADC Advice Duration Charge Finding out about the charge after a call
A.O.B Any other business To discuss things not included on the agenda of a
meeting
Bal. Balance Difference between two sides of an account
b/d or b/f Balance brought Balance at the beginning of the period
down/forward
cd/cf Balance carried Balance at the end of the period
down/forward
Bros. brothers Used in partnerships and companies e.g. Patel and
Bros.
CAI Cash Against Invoice Goods belong to the buyer only when the buyer has
made a cash payment for them and the invoice will
only be issued when cash is paid by the buyer
C.C Carbon Copy or Used when copies of a letter are sent to other
Courtesy copy or Copy people,
to
C.W.O Cash With Order The payment must go together with the order
Cert. Certificate Proof of an educational qualification
Chq Cheque Document for making payments from an account.
C.N Credit Note Document used when goods are returned to the
seller by the buyer.
Co. Company An incorporated business organization which is an
artificial person
C/O Care Of If one is using another person’s address to receive
mail
C.O.D Cash on Delivery Goods must be paid for upon delivery to the buyer
Cr. Credit The giving side of an account

NOT FOR SALE
Dept. Department A division in an organization

Do Ditto or Same as Something similar to be repeated
E.M.S Express Mail Service A fast service for delivery of mail and parcels by the
post
e.g. For example or Used when giving an example for something
Example given already explained
E&OE Errors and Omissions The document may contain errors which when
Excepted discovered can be corrected by the author only
ESQ Esquire or Mr. A formal way to address a man.
etc. Etcetera/ and so on The list goes on and on
FAS Free Alongside Ship No charge to the buyer up to the point of loading
goods on the ship
Fax Facsimile A method of sending documents via telefax
machines
F Folio or page Page number showing where the corresponding
account is
Fig. Figure A diagram or picture
F.Y.A For Your Action or For The person to whom it has been directed should act
Your Attention on it
F.Y.I For Your Information Just to let you know
Govt. Government Political power that controls the affairs of the state
i.e. Id est or That is Expanding a point
Inc. Incorporated Company registered by the Registrar of Companies
Inv. Invoice Sale of goods on credit
I.O.U I Owe You Acknowledging that I owe you money
Ltd or Pvt Limited or Private Used at the end of the name of a private limited
Limited company company
Max Maximum The highest level
Memo Memorandum A letter sent within the organisation
Messrs. Gentlemen or Sirs Used when addressing two or more men or a
business partnership e.g. Messrs Daka and Makasa
Min Minimum The lowest level
N/A Not applicable Not required to provide information
NCR No Carbon Required Used when paper is self-carbonated and hence
does not need any carbon paper
N.B Nota Benie or Take Used as an additional note or piece of information
note
No. Number Position in the numerical order
O.N.C.O Or Nearest Cash Offer Price is negotiable
P.A. Per annum or Per Year On a yearly basis

NOT FOR SALE
P.C. Personal computer A computer meant to be used by one person

P.T.O Please Turn Over Turn to the next page
R/D Refer to Drawer Go back to the drawer, written by the bank on a
bounced cheque
Re. or Reference The subject on a letter
Ref.
RTS Return To Sender Take the letter back to the sender if the receiver is
not found
St. Saint or Street a holy person, or name of an organization e.g. St.
Peters
STD Subscriber Trunk Calling outside your local area network e.g. calling
Dialing Kabwe from Lusaka
UFS Under Flying Seal Used when a letter has to pass through a number of
superiors before it reaches the last person.
VAT Value Added Tax Tax levied on the supply of goods or services
included in the price of goods
VIP Very Important Person A high ranking person
via Through or By Way of Passing through some address to reach a
destination
Viz. Viza Viz or namely Listing of names after a description
Yrs Yours Complimentary close

NOT FOR SALE
30.0 ENTREPRENEURSHIP
30.1 Business Management

Business Management is the art of planning, coordinating and controlling of various business
aspects. Good management is important for a business even before an organisation starts its
operations. This entails that business management requires A Business Management Sheet.
30.2 Business Management Sheet

A Business Management Sheet is a plan or guideline for how management will run the business
and plan to achieve its goals as a business grows. It is also referred to as a business plan or
business management plan. It helps the business management to monitor how activities are
being carried out so as to ensure that the set organisational goals are effectively achieved.
Below is a format of A Business Sheet:
A Business Management Sheet
S/N Activity Description of Work/Task Officer Department
Responsible
1 Financial control Managing business income and Finance Accounts
expenditure Manager
2 Production of goods Ensuring that goods and services Production Production
produced are of right quality Manager
3 Quality control Ensuring production of high quality Quality Controller Quality Control
products through monitoring and
supervising the production process
4 Stock/inventory Ensuring that the right quality and Stores Manager Stores/Inventory
control quantity of stock/inventory required
is maintained in the business at a
low cost
5 Marketing Identify customers, setting prices, Marketing/Sales Marketing/Sales
making products available Manager
6 banking Ensuring that all business cash is Finance Accounts
banked Manager
30.3 Ways of Managing Business Finances

Financial Management is the process of energising the Book Keeping and accounting system
of the business to work to make the business more successful. With good financial system, you
will know how your business is doing financially. It can be used to make decisions to improve
the operation of your business.
Below are some of the ways of managing business finance:
 Financial control – financial control is important because a good financial control
system enables you accomplish important big picture and daily financial objectives. It
will enable the business match its expenditure against its revenue so as to ensure
profitability of the business. The business will endeavour to reduce its expenditures and
at the same time sale its goods/services at economical prices.
 Banking – as soon as your business is registered, the next step would be to open a
bank account. Once this is done, the business must ensure that all transactions pass
through the bank. The following are some of the benefits of running a bank account:

NOT FOR SALE
a) Deposits – this brings about good accountability of the funds of the business.
Where you hold a current account an overdraft can be obtained from the bank.
b) Withdrawing – ensures that all payments are made through the bank account. This
assists in accounting for all payments as a bank statement can be collected at the
end of each month showing all payments during the month. If a business holds a
bank account some transactions can be made directly to suppliers (creditors)
through the bank by means of cheques, direct debt, standing orders and credit
transfer.
c) Loans – borrowing money is important in enabling a business plan ahead for
financial needs. Maintaining a healthy bank account can help in the approval
process of a loan if need arise for the business.
d) Avoiding investing too much in fixed assets.
30.4 Basic Financial Records

When it comes to creating and managing an accounting/book keeping records for your
business, you have two options that you can follow: you have an option of doing it on your own
or you can hire/employ an accountant/book keeper or you go for both. Where you decide to do
it alone by way of having the accounting knowledge or using the accounting software, there
would be need to hire a qualified accountant to assist with preparation of end of year financial
statements and tax reports. The services of an auditor would be ideal also to check and verify
your reports.
The aspects of Book keeping and other financial statement such as income statements and the
balance sheet has already been dealt with in earlier units.
30.5 Company Dissolution

Reasons for Dissolving Companies
Dissolution of a corporation signifies the extinguishment or the cancellation of its franchise and
the termination of its corporate existence for business purpose and consequently the
termination of any obligation to pay taxes as a corporate entity.
A corporation formed or organised under the corporation code may be dissolved either voluntary
or involuntarily.
Among the grounds for dissolution of a company are:
 Shortening of corporate term (period) by the amendment of the articles of incorporation.
 Pay back of start-up capital – this can hold where shareholders made a decision to get
back their capital, this will render the company inoperative hence the need for it to be
dissolved.
 Sharing of profits – this is a situation where all shareholders agree to share all profits
with retaining anything for the operations and expansion of the business. This would
imply the willingness of the members wind off company operations.
 Partnership disagreement and disputes.
 When the business is declared bankrupt.
 Failure by companies to file in required reports and annual returns to the registrar of
companies (PACRA).
 When the company is not operational for a period of at least five (5) years.

NOT FOR SALE

BSTAZ BS SUPPLEMENTARY NOTES(1)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BSTAZ BS SUPPLEMENTARY NOTES(1)

Uploaded by

Copyright:

Available Formats

Business Studies A Supplementary Study Text 1

NOT FOR SALE

EDGAR SHILUWE BBA Ed, Group Dip. Marketing, Dip. Ed.

JOHN KAPUTULA MBA Fin, ZiCALic, BBA Ed, Dip. Ed.

BUSINESS STUDIES TEACHERS ASSOCIATION OF ZAMBIA

Business Studies Teachers Association of Zambia – Lusaka Province

©2022 BUSTAZ Lusaka Province

Business Studies Teachers Association of Zambia – Lusaka Province

PROVINCIAL EDUCATION OFFICER’S STATEMENT

Allan Lingambe PhD

Business Studies Teachers Association of Zambia – Lusaka Province

Mrs. Lenny N. Longwe

Business Studies Teachers Association of Zambia – Lusaka Province

Hampungani M. Chrispin, (2013), Total Office Practice, Hampungani M. Chrispin, Lusaka,

Matimba A., (2009), Distinction in Commerce, Matimba A, Livingstone, Zambia

Sichivula Noel, (2016), Junior Secondary Business Studies, MK Publishers, Lusaka,

Business Studies Teachers Association of Zambia – Lusaka Province

1.0 INTRODUCTION TO BUSINESS STUDIES ................................................................12

Business Studies Teachers Association of Zambia – Lusaka Province

7.2 SWOT Analysis ............................................................................................................................... 27

Business Studies Teachers Association of Zambia – Lusaka Province

15.5.3 Trade Discount and Cash Discount ....................................................................................... 51

Business Studies Teachers Association of Zambia – Lusaka Province

19.0 CLASSIFICATION OF ACCOUNTS IN THE LEDGER ..................................................71

Business Studies Teachers Association of Zambia – Lusaka Province

25.1 Savings ......................................................................................................................................... 89

Business Studies Teachers Association of Zambia – Lusaka Province

27.3.3 Numerical filing ..................................................................................................................... 98

1.0 INTRODUCTION TO BUSINESS STUDIES

Business Studies Teachers Association of Zambia – Lusaka Province

1.1 What is Business Studies?

Business Studies is made up of three components, namely:

1.2 What is a Business?

Business Studies Teachers Association of Zambia – Lusaka Province

2.1 Location of an office

2.2 Clerical Duties

2.3 Functions of an Office

Business Studies Teachers Association of Zambia – Lusaka Province

2.4 Types of Offices

2.4.1 Open Plan Office

Advantages of an open plan office

Disadvantages of an open plan office

Business Studies Teachers Association of Zambia – Lusaka Province

2.4.2 Closed Plan Office

Advantages of a closed office

Disadvantages of a closed office

2.4.3 Virtual Office

Business Studies Teachers Association of Zambia – Lusaka Province

Advantages of a Virtual Office

Disadvantages of a Virtual Office

How a virtual office operates

Business Studies Teachers Association of Zambia – Lusaka Province

3.0 OFFICE ORGANISATION AND PERSONNEL

3.1 Directors and Managers of an Organisation

3.2 Departments of an Organisation

HUMAN RESOURCE ADMIN. PRODUCTIO SALES LEGAL

PUB. RELATIONS IT PURCHASING FINANCE

Business Studies Teachers Association of Zambia – Lusaka Province

(a) Administration Department

(b) Human Resources/Personnel Department

(c) Public Relations Department

(d) Legal Department

(e) Production/Operations Department

(f) Advertising Department