TABLE OF CONTENTS

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

Unit FINANCIAL STATEMENTS ..................................................Page 19

Unit 3: ENVIRONMENT IMPACT ASSESSMENT (EIA)..…………… Page 33

Unit 4: BUSINESS PLAN PITCH………………………………………… Page 37

Unit 5: TAXES AND CUSTOMS PROCEDURES………………………Page 40

Unit 6: FINANCIAL MARKETS ……………………...........................Page 49

Unit 7: STOCK CONTROL …………………………………………...... Page53

Unit 8: WORK HABITS AND BEHAVIOUR……………………………. Page62

Unit 9: WORK SAFETY AND HEALTH………………………………... Page72

CLAUDE . N : 0785362059 ES RUHANGO

UNIT 1: LEDGER AND TRIAL BALANCE

Key unit competence to be able to prepare ledger accounts and trial balance.

Ledger is a collection or a set of accounts of a business. Or This is an accounting book used to maintain proper
records of business transaction.

Journal records all transactions chronologically.

Posting. The process of transferring information from the books of original entry to the ledger accounts.
The leger has two sides
 left hand side (debit side) is used to record the value received
 Right hand side (the credit side) is used to record the value spent or lost
An account Refers to the record or statement in the ledger where transactions of similar nature are expressed in
financial or monetary terms as recorded in chronological order.
Classification of accounts
a. Personal accounts: these accounts appear in people’s names e.g creditors and debtors
b. Impersonal/ non personal: are those accounts which appear in names of things/items and they can be
subdivided into two ie.
i. Real account– tangible items e.g land, furniture, cash
ii. nominal account.- intangible items or expenses e.g salaries, electricity, wages.

format of account

1. Open format/Columnar format. Each side of the column comprises the date, details, folio, and amount.
The debits are entered on the left side and the credits on the right side.
Dr name of the account Cr
Date Details Folio Amount Date Details Folio Amount

2. T-format the account is divided into two equal parts i.e the debit and credit sides.
Dr Name a/c Cr

Debit side: debit in accounting refers to any transaction of value added to an account. A debit entry indicates
receiving of value which leads to an increase of the value.
Crediting an account means reducing the value of an account by way of a credit entry.

TYPES OF LEDGERS
a) General ledger: is a ledger that contains all accounts of the business except sales and purchases. E.g., assets,
liabilities, incomes, expenses, and capital.

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b) A sales ledger/ Debtor’s ledger is a collection of all accounts of people or businesses to whom the business
has sold goods on credit (debtors).

c) Purchases ledger/Creditors ledger is collection of accounts of people or businesses from whom the
business has bought goods on credit(creditors).

Preparation of ledgers
Accounting prime books i.e.: general journal, purchases journal, sales journal, return inwards and return
outwards journals

The table below summarizes how and what to post from prime books to ledgers

Accounting prime book Type of ledger

General journal General ledger
Purchases journal Each credit purchase from creditor Purchases ledger/ creditors ledger
Total purchases on credit from General ledger
purchases journal
Purchases return journal Each return to a creditor Purchases ledger/ creditors ledger
Total purchases returns General ledger
Sales journal Each credit sale to a debtor Sales ledger/debtors ledger
Total sales on credit for sales journal General ledger
Sales return journal Each return from a debtor Sales ledger/debtors ledger
Total sales returns General ledger
Cash book (all forms) General ledger, sales ledger, purchases
ledger

Note:
1. sale of goods in cash/cheque
DR cash account /bank account
CR sales account
2. Sales of a fixed asset in cash / bank cheque
Dr Cash / bank account
Cr respective asset account.
3. Purchasing goods for sales
Dr Purchase account
Cr cash / bank account.
4. Purchasing of a fixed asset by cash or cheque
Dr Asset a/c
Cr cash / bank act
5. Withdrawal of cash from the business by the owner for his personal use
Dr Drawings account
Cr cash account.
6. Credit purchase
Dr purchases a/c
Cr personal credit’s a/c
7. Purchase of a fixed asset on credit
Dr respective asset a/c

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 Cr creditor’s personal a/c

8. Credit sales
Dr debtor’s a/c
Cr sales a/c
9. Sale of a fixed asset on credit
Dr debtor’s respective a/c
Cr assets a/c
10. Withdrawing of goods by the owner for personal personal use
Dr Drawing a/c
Cr stock a/c
Recording of returns in the ledger account using double entry
1. When goods have been returned by the business to the supplier
Dr supplier’s a/c
Cr returns outwards a/c
2. When the customer has returned back the goods
Dr returns inward a/c
Cr customer personal a/c

The double entry system of bookkeeping

Double entry is a system of keeping records which involves making two entries for every transaction.

Rules of double entry

 Every transaction affects at least two accounts
 There must be one debit entry and one credit entry
 The total credit must be equal to the total debit
 Particulars or details in the accounts will become names of other accounts where double entry is
recorded.

Type of account Increase decrease Normal balance

Asset Debit (DR) Credit (CR) Debit (DR)
Liability Credit debit credit
Capital Credit debit credit
Revenue/income Credit debit credit
Expenses Debit credit debit

A. Purchases ledger/ Creditors’ ledger

The creditors’ ledger accumulates information from the purchases journal.

When balancing off an account the following steps are put into consideration:

Step 1: Add the two sides separately to find out the total of each

Step 2: Subtract the smaller side total from the bigger side
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Step 3: Record the differences on the smaller side and call it balance carried down (bal c/d) or balance carried
forward (bal c/f) using the last date of the month.

Step 4: Now both sides are equal.

Step 5: Put balance c/d on the opposite side (bigger side) of the account and call it balance brought down (bal
b/d) or balance brought forward (bal b/f), using first date of the next month or period

PURCHASES JOURNAL / PURCHASES DAY BOOK: is a daybook that records all the credit purchases of the
business before being posted to the ledger.

Format of a purchase journal

Date Particulars/ Details Voucher No. Amount

EX: Peter enterprise made the following credit purchase in month of april 2015
April2 bought goods 3000frw from mohammed voucher no 333
April12 received goods from liliane 2000frw vno 111
April 14 purchase goods from mutoni 2500 v no 2444
Required: make entries in purchases journal peter enterprise

Date details Voucher no amounts

April2 Mohammed 333 3000
April12 Liliane 111 2000
April14 mutoni 2444 2500
Total purchase journal 7500 frw

Dr mohammed a/c cr
31 bal c/d 3000 2 april purchase 3000
1 may bal b/d 3000
Dr general ledger a/c cr
30 april total purchase 7500 30 bal c/d 7500
1 may bal b/d 7500

PURCHASES RETURNS JOURNAL / RETURNS OUTWARDS JOURNAL: This is the book in which goods returned
by the business to the supplier/creditor and their value are recorded in chronological order.

Format of a purchase returns journal

Date Particulars/ Details Credit note No. Reasons Amount

EX: Peter trader made the following purchase return in the month of june 2015
June 1 returned good 500frw to mohammed credit not no 112
June 4 returned good 1000 frw to mutoni credit note no 3331
Required: make entries purchase return journal peter trader.

CLAUDE . N : 0785362059 ES RUHANGO

 date details Credit note no amount
June1 Mohammed 112 500
June4 mutoni 3331 1000
Total purchase return 1500 frw

Dr mohammed a/c cr
june1 row 500 31 june bal c/d
1 july bal b/d 500

Dr general ledger a/c cr

31 bal c/d 1500 31 june total row
1500
1 july bal b/d 1500

B. SALES JOURNAL / SALES DAY BOOK: This is a book of original entry where credit sales are first
recorded before being posted to the ledger accounts.

Format of a Sales journal

Particulars/ Details Invoice No. Amount

EX: Kigali traders made the following credit sales in month of january 2015
Jan1 sold good 4500frw to Gasana invoice no 012
Jan5 sold good 1000frw to james invoice no 015
Sold good 3000 frw to kamali in o 018
Required:Makes entries in the sales journal of kigali traders.

Kigali traders sales journal

Date details invoice amount
Jan1 Gasana 012 4500
Jan5 James 015 1000
Kamali 018 3000
Total credit sales 8500 frw

Dr gasana a/c cr
Jan1 sales 4500 31 bal c/d 4500
4500 4500
1feb bal b/d 4500

Dr general ledger a/c cr

31 bal c/d 8500 31 Total credit sales 8500

1 bal b/d 8500

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  SALES RETURN JOURNAL / RETURN INWARDS BOOK: This is the book in which goods returned
by our customer are recorded before being posted to the ledger. The business normally accepts
these returned goods to maintain good reputation and customers.

Format of a Sales returns journal

Date Particulars/ Details Credit note No. Reasons Amount

EX: kigali traders during month of january 2015

Jan2 Gasana returned good valued 2500 frw credit note no 201
Jan 7 kamali returned faulty good value at 1000 frw credit note no 205
Required: makes entries in the sales returns journal of kgli traders.

Kigali trader RIW book

Date details Credit note no amount
Jan2 Gasana 201 2500
Jan7 kamali 205 1000
Total sales return 3500
Dr gasana a/c cr
31 bal c/d 2500 Jan2 sales returnn 2500

1feb bal b/d 2500

Dr General ledger a/c cr

31 total Riw 3500 31 bal c/d 3500
1 feb bal b/d 3500

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

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

B) LEDGER.

Dr Cash A/C Cr
01/01/2014 Capital A/C 1 000 000 01/01/2014 Purchases A/C 400 000
15/01/2014 Bank A/C 300 000 31/01/2014 Bal c/d 900000

Total 1 300 000 Total 1 300 000

01/02/2014 Bal b/d 900000

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

Total 600 000 Total 600 000

01/02/2014 Bal b/d 300 000

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

Total 2 000 000

Total 2 000 000
01/02/2014 Bal b/d 2 00000

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

Total 3 500 000 Total 3 500 000

CLAUDE . N : 0785362059 ES RUHANGO

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

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

Total 200 000 Total 200 000

01/02/2014 Bal b/d 100 000

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

Total 200 000

Total 200 000
01/02/2014 Bal b/d 200 000

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

Total 400 000 Total 400 000

01/02/2014 Bal b/d 400 000

C. Trial balance

Particulars Debit (Rwf) Credit (Rwf)

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

Total 3 700 000 3 700 000

N.B: It is good time to remember that the records in the cashbook are posted to the general ledger, creditors’
ledger, and debtors’ ledger depending on what transaction took place.

Notes: CASH BOOK

◾ When transactions are recorded in the cashbook, cash and bank accounts are not opened up in the ledger.
Because the recording of transactions in the cash book takes the shape of a ledger account. The cash book serves
the purpose of a ledger account as well as a journal for cash and bank accounts.

CLAUDE . N : 0785362059 ES RUHANGO

◾ Contra entry transactions are not posted to the ledger because their double entry is completed within the
cashbook.

◾ Discount allowed and discount received are posted to discount allowed account and discount received
account respectively in the general ledger

◾ While posting information from any type of cash book,

i) Details from the debit side are names of accounts to be opened in the ledger and credited.

ii) Details from the credit side are names of accounts to be opened in the ledger and debited.

◾ The balance brought down (bal b/d) or balance brought forward (bal b/f) is posted to the capital account in
the general ledger.

EX1: Desire had the following transactions in the month of January 2013
1st Jan cash at hand 500,000Frw and cash at bank 200,000Frw
5th Jan received a cheque from peter 300,000Frw
7th Jan cash purchases 300,000Frw
10th Jan cash sales 400,000Frw
11th Jan paid Musoni by cheque 190,000Frw
15th Jan bought stationery for use in cash 40,000Frw and paid rent by cheque 200,000Frw
20th Jan received payment by cheque from Aaron 600,000Frw
30th Jan paid Gasirabo by cheque 100,000Frw.
Required: Prepare desire’s 2-column cashbook with the above transactions and dully balance it.
Solution:

Desire’s Entreprise Two-Column Cash Book for the Month of Jan. 2013
Dr Cr
Date Particulars Cash Bank Date Particulars Cash Bank

1 Capital 500,000 200,000 7 Purchases 300,000 -

5 Peter - 300,000 11 Musoni - 190,000

10 Cash sales 400,000 - 15 Stationery 40,000 -

J20 Aaron - 600,000 15 Rent - 200,000

30 Gasirabo - 100,000

31 Bal. c/d 560,000 610,000

TOTAL 900,000 1,100,000 TOTAL 900,000 1,100,000

Feb Bal. b/d 560,000 610,00

1

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 LEDGER

DR CAPITAL A/C CR
st st
31 jan balc/d700,000 1 jan cash
500,0
Bank200,000
700,000 Total 700,0000
st
1 feb bal b/d 700,000

Dr purchases a/c cr

7 jan Cash 300,000 31st jan bal c/d 300,000

st
bal b/d 300,000

continue trace the ledger……………………

DR D.A CR
31/3 Total D.A Amount

Dr D.R cr

7 31/3 total amount

(C) TRIAL BALANCE

A trial balance is a list of debit and credit balances extracted from the ledger accounts at particular date. Or A
trial balance is a statement which contains balances of all ledger accounts on a particular date.
The following are some of the objectives of preparing a trial balance:
1. To verify arithmetical accuracy
2. To assist in the creation of financial statements
3. Helps in identifying errors.
4. Assists by way of comparison.
5. Helps in making corrections.

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Preparation of a trial balance

Trial Balance is not an account. It is only a list or schedule of balances of ledger accounts. it I prepared
following the steps below.

Step 1: Post all the journal entries to the appropriate ledgers.

Step 2: Balance off all ledger accounts and determine the credit or debit balances for each ledger account.

Step 3: List all the accounts with their debit or credit balances. Ensure the debit balances are in one column and
the credit balances are in another.

Step 4: Add up all the credit balances and add up all the debit balances.

Step 5: The total of the debit balances should be equal to the total of the credit balances. If the totals are unequal,
recheck the process to identify and correct the errors.

Note: The accounts having a debit balance are entered in the debit amount column, and the accounts having a
credit balance are entered in the credit amount column.

Briefly explain the accounting cycle

 Record journal entries

 Post entries to ledger account
 Prepare unadjusted trial balance
 Adjusting journal entries
 Prepare adjusted trial balance
 Record reversing entries
 Prepare post-closing trial balance
 Record closing entries
 Prepare financial statements

Identify the steps for transaction analysis.

• Is the transaction an accounting transaction?

• Which ledger account does the transaction affect?

• What type of account does each of the accounts belong to?

• Is the balance on each account going to increase or decrease because of the transaction?

• Will this increase or decrease lead to each account being debited or credited?

• What is the amount to be entered into each account?

What is meant by business transactions

Business transaction refers to any dealing between two or more parties that involves exchange of value.
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Types of business transactions

-cash transaction (cash sales and cash purchase)

-credit transaction (credit sales and credit purchase)

Format of a trial balance

Title

Particulars Debit Credit

Any assets like debtors,stock XXXX

Any expenses like salary XXXX

Any revenue/income XXXXX

Capital XXXXX

Any liabilities like creditors XXXX

bank over draft

purchases XXXXXX

Sales XXXXXXX

Total XXXXX XXXXXX

Note: All expense and asset accounts normally have debit balances and are listed in the debit column, and all
liability and income accounts normally have credit balances and are listed in the credit column.

Example1. make a list of accounts of Akeza’s business as at the end of March, 2023

Account Balance

Creditors: - Mukasa 48,000

- Bikorimana 36,000

- Mutabazi 50,000

- Munezero 26,000

CLAUDE . N : 0785362059 ES RUHANGO

 - Kwizera 34,000

Purchases 194,000

Solution:

AKEZA’S TRIAL BALANCE AS AT 31ST MARCH, 2023

Particulars Debit Credit

Purchases 194,000

Creditors: - Mukasa 48,000

Bikorimana 36,000

Mutabazi 50,000

- Munezero 26,000

Kwizera 34,000

Total 194,000 194,000

Example 2:

The following balances were extracted from Claudine Enterprises’ books as of December 2020. Extract the trial
balance.

Capital 8,880,000

Purchases 7,000,000

Stock 01-Jan 2008 1,550,000

Furniture 3,000,000

Debtors 1,050,000

Bank overdraft 750,0000

Motor vehicles 5,200,000

Cash at hand 250,000

Return outward 150,000

CLAUDE . N : 0785362059 ES RUHANGO

 Distribution expenses 400,000

Sales 9,500,000

Creditors 850,000

Salaries 1,400,000

Commission received 240,000

General expenses 520,000

CLAUDINE’S TRIAL BALANCE AS ON 31ST DECEMBER 2020

Particulars Debit Credit

Purchases 7,000,000

Opening stock 1,550,000

Furniture 3,000,000

Debtors 1,050,000

Motor vehicle 5,200,000

Cash at hand 250,000

Distribution expenses 400,000

Salaries 1,400,000

General expenses 520,000

Capital 8,880,000

Bank over draft 750,000

Return out wards 150,000

Sales 9,500,000

Creditors 850,000

Commission received 240,000

Total 20,370,000 20,370,000

UNIT 2 FINANCIAL STATEMENT

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Financial statements are reports prepared by a company’s management to present the financial performance
and position at the end of the accounting period.
“Any remedy is going to depend on having financial statements that are reliable”
having well prepared financial statements is a key to taking informed and reliable decisions, hence better
financial position of a business.

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

They are important for the following reasons:

 To determine the ability of a business to make money and uses of that money.
 To determine whether a business has made a profit or loss over a given period.
 To determine the financial position of a business at a given period of time.
 To determine whether a business has the capability to pay back its debts.
 To investigate the details of certain transactions.
 To correct and take measures where necessary, etc

TYPES OF FINANCIAL STATEMENTS

There are 4 main types of financial statements:

a) Income statement
b) Balance sheet
c) Cash flow
d) Statement of owner’s equity

a) Income statement is a financial statement that reports a company’s financial performance over a
specific accounting period. composed of two sections/account
- Trading account
- Profit and loss account

Trading account is an account which is prepared to determine the gross profit or the gross loss of a trading
business. gross profit = net sales – the cost of goods sold
Final accounts are a term used to refer collectively to the financial statements which consist of the trading
account, the profit and loss account and the balance sheet, while a
Trading account is an account drawn / prepared at the end of the trading period to determine the gross profit
or loss made by a business over a period.
Profit and loss account is prepared to determine the net profit or loss after all expenses have been charged. It is
prepared after the trading account is completed. Gross income – Total expenses.
Where Gross income = gross profit or loss + additional revenues

b) Balance sheet/statement of financial position: this is a statement which reflects the financial position
of the firm at the end of the financial year. balance sheet helps to ascertain and understand the total
assets, liabilities and capital of the business

ACCOUNTING EQUATION, which states that: Assets=capital + liabilities

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

 ASSETS: These are possessions/properties that belong to the business or what the business
owns. They are grouped into two: Fixed assets and Current assets.

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

b) Current assets: possessions or properties of the business which last for a short time. Current assets
keep on being converted into cash. E.g. stock of goods, debtors, and cash at hand, cash at bank,
prepaid expenses or expenses paid for in advance, outstanding income

 LIABILITIES: These are debts or amount of money that the business owes the outsiders.
Properties that are used by the business and which must be paid back in future.

There 2 types of liabilities: Long-term liabilities and Short-term liabilities (or Current liabilities)
a) Long term liabilities: these are debts of the business that are expected to be paid after a long time
usually after one year. e.g bank loans, debentures.

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

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

a) Statement of owner’s equity: this is the financial statement that shows the portion of a company’s
assets that an owner can claim; it shows what is left after subtracting a company’s liabilities from its assets.
b) Cash flow statement: this is a financial statement that provides the information about cash
movement (cash inflows and outflows) over a given period of time.
The examples of cash inflows of the business include sales revenues, capital contribution, rental incomes, etc. on
the other hand, cash outflows include salary expenses, purchases, and any other cash payments by the business.

2.3. Preparation of the income statement (Trading, profit & loss account)

Income statements comprises two parts:

 Trading account

(a) Opening stock: These are unsold goods available in the business at the beginning of the new trading period.
(b) Purchases: This refers to goods bought by the business for resale.
(c) Purchases returns or returns outwards: These are goods bought by the business for sale but have been
returned or sent back to the suppliers due to unsatisfactory resaons. Net purchases = purchases – return
outwards/purchase returns
(d) Sales: refer to the value of goods which were bought for resale and have been sold by the business.
(e) Sales returns or returns inwards: These are goods that were previously sold but have been returned back
to the business by customers due some reasons.
Net sales = sales – returns inwards/ sales returns.
(f) Drawings of goods: These are goods withdrawn or taken out of the business by the entrepreneur for
personal use.
(g) Trading expenses: These are expenses incurred by the business like rent paid, salaries and wages,
electricity, etc.
(h) Carriage inwards: These are the transport costs incurred when bringing goods bought to the business.

CLAUDE . N : 0785362059 ES RUHANGO

 Or Carriage inwards: refers to the cost of transporting the goods or bring the goods to the business
premises. It forms part of the goods bought hence added to purchases the trading account. Net purchases =
purchases + carriage inwards – purchases return.
(i) Closing stock: This refers to the stock of unsold goods remaining in the business at the end of the trading
period.
(j) Gross profit: Is the excess of net sales over the cost of goods sold or cost of sales. It also refers to the total
profit obtained by an enterprise before paying off the operating expenses. Thus, Gross profit = net sales –
cost of sales
(k) Gross loss: this is excess of cost of sales over the net sales of the business.
Format of a trading account
There are two formats used to prepare a trading account. i.e.
 Horizontal
 Vertical format

(a) Vertical format of the trading account

Particulars Rwf Rwf Rwf
Sales XXX
Less: sales returns XXX
Net sales XXXX
Less: Cost of sales
(Cost of goods sold)
Opening stock XXX
Add: Purchases XXX
Add: Carriage inwards XXX
Less: Purchases returns XXX
Net purchases XXX
Goods available for sale XXX
Less: Closing stock XXX
Cost of sales (cost of goods XXXX
sold) XXXX
Gross profit

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

Solution
CLAUDE . N : 0785362059 ES RUHANGO
 (a) Using narrative format/vertical format

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

Particulars/Details Rwf Rwf Rwf

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

B) Using T-format/ horizontal format

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

EX2. Given that sales: 20,000,000FRW, opening stock: 2,000,000FRW, cost of sales 15,000,000FRW and closing
stock: 5,000,000FRW Calculate

a. Gross profit
b. Purchases
Answers
a) Gross profit = Sales – Costs of Sales
profit = 20,000,000FRW – 15,000,000FRW = 5,000,000FRW
B. Purchases = Cost of sales + closing stock – opening stock
Purchases = 15,000,000FRW + 5,000,000FRW – 2,000,000FRW = 18,000,000FRW

 income statement or trading, profit and loss account.

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

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 Gross income= gross profit or loss additional revenues
Net profit/loss= Gross profit +revenue – total expenses.

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

There are two formats used to prepare the profit and loss account. These are:
- T-format/ Horizontal format
- Narrative format/Vertical format (or Informative format)

A) Vertical or Narrative format of the income statement for the period ending 31/12/XXX
Particulars/Details Rwf Rwf Rwf
Sales XXX
Less: sales returns XXX
Net sales XXXX
Less: Cost of sales
(Cost of goods sold)
Opening stock XXX
Add: Purchases XXX
Add: carriage inwards or carriage in XXX
purchase XXX
Less: Purchases returns XXX
Net purchases XXX
Goods available for sale XXX
Less: Closing stock
Cost of sales (cost of goods sold) XXXX
Gross profit XXXX

Add: Miscellaneous income

Discount received XXX
Interest received XXX
Commission received XXX
Rent received XXX
Less prepaid income/income received XXX XXXX
in advance XXXX
Add unpaid income/outstanding XXX
income
Total revenue XXX
Gross income XXX
Less: Operating expenses
Discount allowed XXX
Rent XXX
Electricity and water XXX
Insurance premiums XXX
Salaries and wages XXX
Carriage outwards or carriage on XXX
sales
Interest on loan XXX
Bad debts XXX
Depreciation XXX
Bank charges XXX
Bonus stock XXX
Stationery XXX
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 Motor expenses XXX
Electricity XXX
Unpaid expenses/outstanding XXX
expenses/expenses due/accrued
expenses

Total operating expenses XXX

Profit before Tax (PBT) XXX

Less: Profit tax (XXX)

Profit after Tax XXXX

(B) T-Format or Horizontal format of income statement for the period ending 31/12/XXX

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

Example:
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KALISA’s business. The following information relates to his business’ expenses for the year ended 31st December
2020.
Gross profit 1,569,000
Salaries 14,000
Insurance 74,000
Rent & Rates 27,000
Gen. Off. Expenses 19,000
Carriage on sales 45,000
Print. & stationery 37,000
Electricity 12,000
Postage & Telephone 8,000
Discount allowed 15,000
Bank charges 120
Advertisement 42,000
Interest on bank loan 2,500
Salesman’s commission 32,000
Discount received 5,000
Rent received 2,700

Required: Prepare the profit and loss account for the year ended 31st December 2020 using vertical format

Solution:

KALISA’S PROFIT & PROFIT AS AT 31ST DECEMBER 2020

Gross profit 1,569,000

Add: Other incomes:

Discount received 5,000

Rent received 2,700

Total 7,700

Gross income 1,576,700

Less: Operating Expenses:

Salaries 14,000

Insurance 74,000

Rent & Rates 27,000

Gen. Off. Expenses 19,000

Carriage on sales 45,000

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Print. & stationery 37,000

Electricity 12,000

Postage & Telephone 8,000

Discount allowed 15,000

Bank charges 120

Advertisement 42,000

Interest on bank loan 2,500

Salesman’s commission 32,000

Total Operating. Expense 327,620

Profit before tax 1,249,080

2.4. Preparation of a balance sheet

ACCOUNTING EQUATION, which states that: Assets =capital + liabilities

Total asset= fixed asset+ current asset

Total liability= long term liability + short term liability

Net capital (O.E)= capital +net profit + retained earning - drawing

There are two ways of arranging items in the balance sheet:

 Order of permanency, which involves recording items that the business will keep for a long time first.
E.g., fixed assets, current assets on the debit side and capital, long-term liabilities, and current liabilities
on the credit side.
 Order of liquidity; items that the business will keep items for a short time are written first. E.g., Current
assets, then fixed assets on the debit side and current liabilities, long-term liabilities, and capital on the
credit side.
There are two formats used to prepare a balance sheet i.e.
 Horizontal
 Vertical format

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

ASSETS Rwf Rwf LIABILITIES AND CAPITAL Rwf Rwf
FIXED ASSETS
 Land XX  Capital XX
 Buildings XX  Add: net profit XX
 Fixtures XX  Add:contributions xx
 Motor vehicle XX  Less: Drawings XX
Less: Depreciation XX Owner’s equity XXX
XX
 Equipment XX LONG TERM LIABILITIES

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  Machinery XX  Long term bank loan e.g Loan of 2, 5, 20
Less: Depreciation XX years and more XX
XX  Creditors exceeding one year XX
 Furnitures and fittings XX  Debentures XX
 Goodwill XX  Bonds XX
 Trade mark XX  Mortgage XX
 Patent or copyright XX  Preference share XX
 Companies registration charges XX XXX
 Discount on shares XX
XXX CURRENT LIABILITIES
CURRENT ASSETS  Creditors of <1 year XX
 Stock/inventory (31/12/XXX) XX  Prepaid income/income received in
 Debtors XX advance XX
 Cash XX  Bank overdraft XX
 Bank XX  Accrued expenses/expenses due/unpaid
 Prepaid expenses e.g prepaid rent XX expenses e.g salary owing /accrued
 Accrued/unpaid income/outstanding salary XX
income XX  Supplier's loan XX
 Trade receivable XX  Outstanding expense XX
 Expenses paid in advance XX  Loan of < 1 year XX
 Bills receivable XX  trade payable XX
  Bills payable XX
XXX XXX
Total assets XXXX Total liabilities and capital XXX

Example

The following balances were extracted from the books of UWERA’s business on 31st Dec 2021

Details FRW

Sales 40,000

Purchases 8,500

Wages and salaries 5,100

Repair and maintenance 1,300

Heating and lighting 900

General expenses 1,200

Insurance 800

Cash at bank 2,200

Cash at hand 1,300

Trade receivables 4,100

Trade payable 3,400

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Premises 30,000

Fixtures and fittings 10,000

Motor vehicle 8,000

Capital 52,000

Drawings 12,000

The following additional information was available: Inventory as of 31st December 2021 was valued at 4,500 FRW

Required. Prepare Uwera’s balance sheet as of 31st Dec 2021 using the order permanency and horizontal
method.

Formula balance sheet

 Capital= T.A-T.L
 T.A=TFA+TCA
 T.L=L.L+C.L
 Capital net worth= T.A-T.L
 Working capital=C.A-C.L
 Working capital ration/Current ration= C.A/C.L
 Liquid fund=cash at hand+cash at bank
 Liquid capital=C.A-Stock
 Liquid capital ration/acid test=C.A-Stock/C.L
 Circulating capital= C.A
 Fixed capital=F.A
 Capital employed=F.A+Working capital

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  Borrowed capital=L.L

CASH FLOW STATEMENT

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

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

 Cash inflows refer to the money coming into the business. Sources of cash inflows include: sales,
donations, debtors, loans, rent income, borrowing from friends, etc.
 Cash outflows refer to the money moving out of the business. Cash outflows include: Purchase of
equipment’s, payments of salaries and wages, rent, interest paid on loan, administrative expenses,
electricity bills, etc.
 Balance brought forward (b/f)
 Net cash position

N.B: the business will have a surplus if the cash inflows are more than the cash outflows and a deficit if the
cash inflows are less than the cash outflows.

Cash flow statement is important because:

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

DETAILS Period 1 Period 2 Period 3 … Period n

Format of a cash flow

INFLOWS
- Initial balance
-
-
-
Total inflows (1)

OUTFLOWS
-
-
-
-

Total outflows (2)

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Balance or Net cash position
(1-2)
Example 1

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

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

Answer:

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

Net cash position Bal c/d 4,200,000 3,300,000 2,500,000

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

(c) The measures which should be taken by ALPHA Enterprise Ltd to avoid a deficit in the cash flow:
1. Increasing sales.
2. Delaying some cash expenditures.
3. Borrowing some more money from banks.
4. Reducing some expenditure like salary and wage bills.

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

Solution:

KATE’s Fashion boutique

Statement of Owner's Equity

For the Term Ended April 14, 2015

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

UNIT3: ENVIRONMENT IMPACT ASSESSMENT(EIA)

Key unit competence: Be able to use EIA to manage the environmental effects of business activities.

Environment impact assessment (EIA) is a process of identifying, analyzing and evaluating the effects of a
business activity on the natural environment.
Strategic Environmental Assessment is the assessment of impacts of policies, plans, programs which are higher
than the project level.

Impact management and environmental monitoring plan (EMP). This is a plan for monitoring and
management of impacts during the implementation and operation of the project, where the responsibilities
between the state and investor are differentiated.

Here are examples of some projects that have to undertake an EIA in Rwanda: Construction and repair of
national roads, Construction of large bridges, Construction of industries, large hotels, Installation of electrical
line, Construction oh Hydro-dams, artificial lakes.

EIA was adopted to effectively manage environmental challenges/ negative effects of the business to the
environment
 Soil erosion,
 Deforestation,
 Wetland drainage,
 Water degradation,
 Climate change,
 the loss of biodiversity.
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  Displacement of people,
 over exploitation of resources

Measures she would take to mitigate the likely environmental challenges of her project.

Environmental challenges Mitigation measures

Proximity to areas with many people Establish the project in an area away from many people to avoid
accidents and other inconveniences.
Dumping of wastes in water bodies Have designed water bodies’ free areas where to dump wastes
and other disposals
Risks of accidents Use of protective equipment and wear (helmets, gloves)
Air emission by dust Soil watering during the time of soil works
Urinating and defecating inappropriate Capacity building and training of personnel with respect to
places environment and safety. Construct a toilet to act as a place of
convenience.

Objectives and Roles of EIA in Rwanda

 To ensure that environmental factors are considered in decision making process,
 To ensure that the possible environmental impacts are identified and avoided,
 To inform the public about the proposed projects,
 To provide a national standardized process for development authorization,
 Providing information beneficial to decision making,
 Making development projects more financially and economically efficient, etc.

The Roles (responsibilities) of EIA in Rwanda/ The benefits (importance) of EIA in Rwanda
1. Enables implementation of environmental safeguards.
2. Mitigating and minimizing environmental damage.
3. Making an active contribution to sustainable development.
4. Providing information beneficial to decision making.
5. Making development projects more financially and economically efficient.
Roles(rsponsability) of Stakeholders in EIA Process

(a) REMA (Rwanda Environment Management Authority)

REMA is mainly responsible for monitoring implementation of environmental protection measures.

Roles (responsibilities) of REMA

1. To protect environment.
2. Receive and register EIA Applications (Project Briefs) submitted by developers,
3. Identify relevant Lead Agencies to review Project Briefs and provide necessary input during screening,
4. Review Project Briefs and determine project classification at screening stage,
5. Approve EIA Experts to conduct EIA studies.

(b) Developers

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The developer has direct responsibility for the project and should provide necessary information about the
project at all stages of the EIA process.
Roles (responsibilities) of Developers
1. Prepare and submit EIA applications (in form of Project Briefs) to REMA,
2. Hire experts to undertake EIA studies on their behalf,
3. Submit the EIA report, Environmental Management Plan.
4. Participate in public hearings and also implement terms and conditions (if any) REMA attached to approval
of their projects.

(c) Lead Agencies/Line Ministries

Lead agencies such as government ministries or departments have the responsibility to take part in EIA of
projects under their sectors.

Roles (responsibilities) of Lead Agencies/ Line Ministries

1. Participate in screening at the request of REMA,

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

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

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

iv) Submitting Project to REMA and waiting for approval.

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

vi) Decision-making: If the project is approved, the developer will be issued with an EIA Certificate of
Authorization.
vii) Environmental Monitoring: During implementation and operation of a project, monitoring is a
responsibility of the developer and REMA to ensure that it is implemented as expected.

Or
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EIA process:
1. Project application and registration by REMA
2. Screening
3. Scoping and terms of reference
4. EIA study and report
5. Submission of EIA report to the authority
6. Review and decision
7. Decommissioning and relocation

Components of EIA report.

According to REMA, the EIA report should entail the following:

i) Executive summary of the EIA report which should be brief and focus on following matters:

◾ Name and location of the project.

◾ Name of the developer

◾ Name of the agency preparing EIA report.

◾ Main impacts identified.

◾ Mitigation recommendation

◾ Environmental monitoring plan

ii) Objectives of the project, including ideas, intentions, and particular objectives.

iii) Description of the proposal and its alternatives. In this part, it is necessary to describe in detail the proposed
project and its alternatives including those not subjected to pre-feasibility study or feasibility study.

iv) Discussion on the proposal and its relation to relevant policies, laws, and programs (sectoral and
regional). In this section, the proposal must be shown to be in line with policies, laws, institutional framework,
and development strategy of Rwanda.

v) Impact assessment that includes assessment of all impacts to the local population and measures to
avoid and mitigate impacts.

vi) Evaluation and comparison of alternatives and selection of one that is environmentally
suitable that shows impacts with largest effects, measures for avoiding, mitigating and managing
them and environmental improvement opportunities.

vii) Impact management and environmental monitoring plan (EMP). This is a plan for monitoring and
management of impacts during the implementation and operation of the project, where the responsibilities
between the state and investor are differentiated.

UNIT 4: BUSINESS PLAN PITCH

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Key unit competence: To be able to pitch a business plan

Pitch: pitch refers to the presentation of ideas designed to attract investors, get feedback to improve your
business

Project pitching is the presentation of a business idea to potential investors so that they can be attracted to
finance it. The pitch helps you explain your business to investors to enables them to make right decision.
A business plan pitching refers to a demonstration where an entrepreneur or a team of individuals must
influence an investor or group of investors to finance a business

Importance of project pitching

1. It would help him to Attract the investor
2. It would help him in Strategic orientation
3. It would help him to Attract the customer
4. It would help him to get the needed resources for the project.
5. It would help him to raise startup cash for the project
6. Good pitch quickly enables business to emerge.
7. Finally, he needed a partner or resource to help him accomplish the project mission.
8. To share a clear picture of business
9. Boosting network

Two types of pitching your project plan

 Elevator pitch is a brief (30 second) way of introducing yourself and making connection with
someone. Or this short pitch will spark the curiosity of the client and encourage them to ask more
questions.
 live plan pitches rely more on visual aids than on speaking. Or are a one-page pitch template that
focuses on what important. What you’re marketing and sale activities will be.
 One -word/and Interrogative pitch(questions). one-word sales pitch because they are short, focused,
and memorable pitches. some mini slogans/ Slogans like these are great tools for pitching to
customers because they are catchy and easy to remember like Just do it!, Think differently, Got milk? I'm
loving it, Imagination at work.

Interrogative pitch(questions). usually made to customers, are characterized by a few questions during the
first part of the pitch.

The purpose of Business plan pitching to the growth and development of a business are:

• Financing support
• Attracting investors
• Strategic orientation
• First impression
• Showcasing skills
• Boosting network
• Communicate the brand message

what are the three most significant challenges your business is facing right now?

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  Lack of funds
 Lack of equipment or materials
 Limited space of operation
 High advertisement and publicity cost
 Inadequate support

Preparation of a project pitching/techniques of project pitching/ Explain how you can prepare for pitching
of the project before, during and after the presentation to convince the audience.

A) activities done before pitching

Techniques before pitching:

- Writing only key points

- Not reading them, speaking about them

- Using visualization, pictures, symbols, colors, tables

- Making it short, concise, come to the point, not more than 10 min.

- Reacting positively to questions

- Using body language, voice, appearance

- Trying to convince

B. activities done During pitching/ The Real Pitching Process

Techniques during pitching:
- Greetings & thank audience for the attendance
- Start with the Problem / gap identified after market analysis

- Business idea and goals (Solution)

- Target market

- Benefits to the investors & society

- Amount of money requested, projected use of it, and the anticipated Returns

- The call to investors

- Thank the audience

c. activities done After pitching

techniques after pitching:

-Integrate the suggestion and recommendations

-Receive feedback

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Steps involved in preparation of business plan pitch / What would you do as you prepare to pitch your
business idea?

 Analysis the audience

 Select a topic (focus of the presentation)
 Define the pitching objectives
 Prepare the body of the business plan pitch
 anticipate the questions from audience.
 Prepare suggestions and conclusion
 Practice pitching of business plan(micro-pitch)
Or
✔ Conduct and gather research.
✔ Understand your audience.
✔ Build a pitch.
✔ Keep it focused.
✔ Share successes.
✔ Answer questions.
✔ Follow your audience's cues (ibimenyetso ex eye contact, listening,smiling).
How to make a pitch for investors?
1. Create a presentation: First, take the time to put together your pitch deck. Speaks 10 minutes.
2. Practice your pitch
3. Outline the problem with a story
4. Your solution Share what’s unique about your product and how it will solve the issue you shared in the
previous slide.
5. Your target market Don’t say that everyone in the world is potentially your target market, even if it could be
true one day.
6. Your revenue or business model How will you make money? Be very specific about your products and
pricing
7. Your successes: Early traction and milestones
8. Customer acquisition: Marketing and sales strategy
9. Your team
10. Your financial projections
Show what you’re projecting in revenue (per product) over the next three to five years.
11. Your competition
12. Your funding needs
13. Your exit strategy
14. Follow-up
15. Take feedback and refine your pitch

10 TIPS FOR CREATING A SUCCESSFUL BUSINESS PITCH

1. Be Concise and to the Point. Simplify the expression and ensure that the investors understand the facts right
away.
2. Create an Elevator Pitch. is a brief business presentation delivered quickly, such as during an elevator ride.
Describe your business’ nature, what you do, and show why you are the best candidate for funding.
3. Practice Your Timing Bear in mind that you’ll need to present your pitch within a short time.
4. Pay Attention to Details. get into the details and justify why investors should invest in your business idea,
and show how you will offer solutions to societal problems. How competes others.
5. Understand Your Audience Give a brief description of how your product works and demonstrate how you
intend to grow your business.
6.Address a Real Customer Experience. Use real customer experiences to highlight an existing problem and
demonstrate how your idea will solve it.

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7. Outline Your Business Model. Show investors with what your company does, they’ll be interested to know
how to generate income. A business model entails your assets, business activities, and what you do to get
customers and make money.
8.Talk About Your Team Investors are interested to know if you have the right team to implement your
business strategies.
9. Show How You’ll Deal with the Competition
10. Go-To-Market Strategy Explain to investors how you intend to market your products or services. More
importantly, show how much money you will spend to acquire new customers.

The key items to cover in business plan pitch

 Business idea and goals

 Problem identified
 Solution
 Target Market
 Marketing strategy
 Industry Analysis
 Management Team
 Competition
 Current status, amount of money requested, and the projected use of funds.

Criteria that should be considered while pitching a project are:

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

UNIT5: TAXES AND CUSTOMS PROCEDURES

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

Tax: Is a compulsory contribution, imposed by the government to its citizens and business organization so as to
raise revenue for public expenditure.
Taxation: Is a system of raising money or revenue by the government from individuals and companies by law
through taxes. Or refers to the practice of the government collecting money from its citizens to pay for public
services.
Tax avoidance. It is the taxpayer’s exploitation of the loopholes in the tax system there by paying less tax than
what they are supposed to pay. tax deductions to minimize business expenses and thus lower your business tax
bill and setting up a tax deferral plan to delay taxes until a later date.
Tax evasion is the illegal practice of not paying taxes, by not reporting income, reporting
expenses not legally allowed, or by not paying taxes owed.
Tax shifting is the transfer of either part or the whole amount of tax imposed on a taxpayer to
another party (other taxpayer). Ex if the tax on sugar is increased and as a result, a sugar producer or seller
increases its price,

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Customs: are government agencies responsible for regulating and facilitating the movement of goods across
borders.

Benefits (roles/importance) of paying taxes to the economy/ contribution of taxes to Rwanda’s socio-
economic development:

The roles of taxes in an economy are the following:

1. Discourage the consumption of undesirable commodities
2. Reduce population growth
3. Taxes encourage hardworking
4. Protect the environment
5. Funding construction of roads
6. Funding the installation of electricity
7. Funding construction of hospitals
8. Funding construction of public schools
Role of taxes

To an entrepreneur

◾ it helps the business activity to operate smoothly, as it does not face penalties

◾ it improves his/her reputation or public image which may result into increased customers.

◾ To avoid inconveniences of closure of the business. (Close of business)

◾ it helps to build infrastructures such as roads to move raw materials, finished goods, workers; security for their
enterprises.

◾ it helps to get loans and other financial support like bdf and brd.

To the government

◾ Source of government revenue like to pay it workers, construct roads, security, provide health care.

◾it improves the standards of living like constructing houses of citizens.

◾ Poverty alleviation such as GIRINKA, VUP, UBUDEHE

◾ it helps the state to regulate the prices of goods and services by increasing well-being of citizens.

◾ Taxes enable the government to maintain a balance between the poor and rich.

◾ Taxes enable the government to promote its industrialization policy by reducing export.

◾ Taxes enable the government to ensure that the citizens have enough products.

To the Society

◾ it reduces the rates of poverty among the community

◾ Improved wellbeing among the

◾ Reduced infant mortality rates and increased life expectancy

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◾ it reduces the ignorance by improving the peoples ‘skills through programs such as 12YBE.

◾ Increased community/social unity, general happiness, life satisfaction,

◾ i t r e d u c e s h armful product by protecting the environment.

Types (forms)/classification of taxes imposed on business in Rwanda

There are two types of taxes which are: Direct taxes and INDIRECT taxes.
 Direct taxes: Direct taxes are taxes imposed on incomes, profits and property of individuals and
companies.

Examples (types) of direct taxes are as follows:

* Income tax (personal income tax): Is a tax imposed on income earned by individuals (e.g salary,
rent, Activities of a craft person, singer, artist or player, Sports, cultural or leisure activities

 Trading license: It is a tax paid by everyone who commits himself to do income generating activities,
organizations with legal personality, It is paid before starting activities. And It is paid every year not
later than 31st March with ongoing business
 Gift tax: Is a tax imposed on the person who receives the gift.
 Inheritance tax is determined by who owns the property after the decedent. It is also known as death
tax.

 Withholding tax: This is a tax that is deducted or withheld from an individual’s income or payment by
a third party and paid directly to the government on their behalf. Like Pay as you earn, dividends,
interests, performance payments made to an artist, musician, or an athlete; A quitus fiscal is a
certificate issued by RRA. It is issued to taxpayers who have manifested high integrity in their
transactions. A withholding tax on public tenders is 3%. From abroad is 5%
 Property/wealth tax: Is a tax levied on property or wealth of a person. Land tax is FRW 0 to 80 FRW per
square meter, residential house will be taxed at 0.5% of the combined market value of the house and land
and commercial buildings is 0.3% of its market value on both buildings and land.
 Rental income tax: tax is paid by any individual who earns income from renting out fixed assets located
in Rwanda, including land, buildings, and improvements.
N.B: In Rwanda, rental income tax

TAX AMOUNT

From O to 180,000 0%

From 180,001 to 1,000,000 20%

From 1,000,001 above 30%

EX. Ganza has two (2) houses located in Kicukiro district. For the year 2011, he received 8,000,000FRW from
renting each of his two houses. From the above case:
Possible answers

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a. What is the type of tax to be paid in each category?
Rental income tax

b. Calculate the total amount of tax to be paid by the firm = (0% x 180,000) + (20% x 1,000,000) + (30% x
6,820,000) FRW = 0 + 200,000 + 2,046,000 = 2,246,000FRW

Corporation tax/ Company tax: Is a tax that must be paid by an entity or a corporation based on
the amount of profit generated.
The corporate income tax is paid by: Companies established in accordance with Rwandan law or foreign
law, Cooperative societies and their branches and Legal persons and public institutions with autonomy of
management
As of April 21st 2023, the Government reduced the corporate income tax statutory rate from 30% to 28% with
an eventual target of 20% in the medium term. This will improve Rwanda’s competitiveness and position the
country as a preferred African investment destination.

 Indirect taxes: are taxes imposed on on consumption, sales, shipping, or production generally included
in the price of goods and services.

Examples (Forms) of Indirect taxes:

I. Value Added Tax (VAT): VAT is a tax on the consumption of goods and services. It is indirectly paid by the
final consumer of the goods or services. In Rwanda, the normal rate of VAT is 18%. There is also a zero
rate (0%) and exemptions applicable for certain types of goods and services. On 21 april2023 RDA
exempted VAT on rice and maize four for both domestic trade and imports. The move is expected to
improve food security and the school feeding program. Other exempted Services of supplying clean water,
Goods and services for health purposes; Educational materials and services; Books, newspapers and
journals; Transportation services by licensed persons; Lending, lease and sale; Financial and Insurance
Services; Energy supply equipment; All Agricultural and Livestock products, except processed ones.
However, milk processed, excluding powder milk and milk derived products, are exempted from VAT;
Services of agriculture insurance
II. Customs duties: A customs duty is a tax imposed on imports and exports that cross the border. Customs
duties: This is the tax imposed on imports and exports. They Include: . .
. Import duty: This is the tax imposed on imported goods to; Get government revenue, discourage
imports so as to protect domestic industries and Discourage imports so as to conserve foreign exchange
. Export duty: This is a tax imposed on exports to raise revenue and discourage the exportation of
certain goods in order to satisfy the local market demand.
III. Excise duty/SUMPTUARY TAX: Excise tax is imposed on specified good. Discourage consumption
with negative social impact. Example; taxes on alcoholic drinks, cigarettes etc where wines pay 70%;
brandies, liquor and whisky 70%, cigarettes 150%.
IV. Sales tax: Sales tax is imposed on sales of commodities. In Rwanda, the sales tax is charged to consumers
based on the purchase price of certain goods and services.

Computation of VAT

VAT can be calculated for a VAT exclusive or inclusive price as follows;

A. VAT Inclusive

This means the price of the goods or services including VAT.

Goods and services supplied by VAT registered taxpayers must always be sold at the VAT-inclusive price.

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 Total invoice∨amount x 18 selling pricex 18
VAT inclusive = ⇨
118 118

B. VAT Exclusive

This means that the price of goods and services does not include VAT, as it has not been incorporated into the
final cost
INVOICE WITH NO VAT X 18 SELLING PRICE X 18
VAT exclusive = OR
100 100
Example

Considering the selling price of goods supplied as indicated by the invoice to be 8,000 Rwf.

VAT=selling price *rate

VAT =8,000* 18%= 1,440 Rwf

Total Invoice = Selling price + VAT ⇨ will be 8,000+1,440=9,440 Rwf

Ex1. Kankindi bought a tables 40 tables from a manufacturer at 4,000 Rwf per one table and sold them at 5,000
Rwf per each. Calculate the VAT to be paid.
Solution:
Value added on 40 tables = (5,000 – 4,000) × 40 = 40,000 Rwf
VAT = 40,000 ×18% = 7,200 Rwf

EX2. UTEXRWA industry bought cotton from a local farmer worth 1,200, 000Frw to use in production of
blankets.170blankets were manufactured and sold to wholesaler at a cost of 4,000,000frw which he later
supplied to Lemigo hotel at a value of 8,000,000frw VAT included. Calculate the VAT of:
a) LOCAL FARMER
b) UTEXRWA
c)WHOLESALER
d) LEMIGO HOTEL
d) TOTAL VAT
Possible solution
A)
The VAT of local farmer is o because is exempted
B)
VAT paid by UTEXRWA Industry.
VAT = (SP-BP) x 18% where BP is Buying Price and BP is Selling Price
Or
VAT paid by UTEXRWA Industry: VAT= (FP-IC) x18% where FP is final product and IC is Intermediate Cost
Because a farmer does not pay VAT, Then VAT will be paid by UTEXRWA on 1st Buying Price (BP) as follows:
VAT paid by UTEXRWA Industry =1,200,000Frw*18% = 216,000 Frw

C) VAT paid by wholesaler.

Value added = (SP-BP) x 18% = 4,000,000-1,200,000=2,800,000Frw
VAT paid by wholesaler =2,800, 000*18%= 504000 Frw
D) VAT paid by Lemigo hotel.
Value added = (SP-BP) x 18%= 8,000,000- 4,000,000VAT = 4,000,000 Rwf
VAT paid by Lemigo hotel = Value added * 18% = (4,000,000Frw*18%)=720,000 Frw

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Therefore total VAT =216000+504000+720000 =1440, 000 Frw
Or
VAT is calculated on last Selling Price (SP)/Sales
VAT = Last SP (Sales) *18% Which is equal 8,000,000*18%=1,440,000

Ex3. A students’ business club has sold goods to XY enterprise at 100,000 FRW VAT exclusive.

Calculate:

a) VAT to be paid

b) The price VAT inclusive

Solution

a) VAT received= 100,000 x18%= 18,000FRW

b) The price VAT inclusive=100,000FRW+18,000FRW=118,000FRW

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

 Table: Monthly tax rates

Monthly tax rates (Rwf) Tax rate

From To
0 60 000 0%
60 001 100 000 10%
100 001 200,000 20%
200,001 above 30%
Casual laborer 15%
Casual laborers not exceeding 60,000 0%

 TABLE: Annually tax rates

Annually taxes rates Tax rate

From To
0 720,000 0%
720,001 1,200,000 10%
1,200,001 2,400,000 20%
2,400,001 above 30%
Casual laborer 15%
Casual laborers not exceeding 720,000 0%

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 Example 1

AKAGERA BUSINESS GROUP has made a list of employees indicating their

monthly income:

AKALIZA gets FRW 250,000

AKIMANA gets FRW 360,000

ANGELINE gets FRW 100,000

ASSOUMPTA gets FRW 24,000

Required: Compute the following:

i) The amount of professional income tax to be deducted on the salary of each employee.

ii) The total amount of tax on all employees to be paid For Akaliza with income of FRW 250,000

SOLUTION

For Akaliza with income of FRW 250,000

1st step 60,000 x0%=0

2nd step (100,000-60,000) x10%=4,000

3rd step (200,000-100,000) x20%=20,000

4th step (250,000-200,000) x30%=15,000

Total taxes /PAYE: 0+4,000+20,000+15,000=39,000rwf

For Akimana with income of FRW 360,000

1st step 60,000 x0%=0

2nd step (100,000-60,000) x10%=4,000

3rd step (200,000-100,000) x20%=20,000

4th step (360,000-200,000) x30%=48,000

Total taxes/PAYE: 0+4,000+20,000+48,000=72,000rwf

For Angeline with income of FRW 100,000

1st step 60,000 x0%=0

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2nd step (100,000-60,000) x10%=4,000

Total taxes: 0+4,000=4,000rwf

For Assumpta with income of FRW 24,000
1st step 24,000x0%=0
No taxes paid

Total amount to be paid by all employees

Total pay: 39,000+72,000+4,000+0=115,000rwf

Customs Declaration

Customs declaration: An official document that lists and gives details of goods that are being imported or
exported. Or is a statement showing goods being imported and exported on which duty will have to be paid.

Types of declaration forms

There are two forms of declaration:
1. Customs arrival card or a landing card when traveling with your goods. The traveler or family members are
required to complete the form, sign it, and then submit it to the customs and/or border protection official before
arriving into the nation. Most nations require declaration of alcoholic drinks, tobacco product, animals, fresh
food, plant material, seeds, soils, meats etc.
2. Commercial invoice or a Pro-forma invoice, or an import declaration form, or a reexport
declaration. If not traveling with the goods, which are shipped, one must use other customs declaration forms.
Incoterm on these forms define the shipment and customs declaration. Also, the forms normally require the
traveler to note the country of origin of the goods and may sometimes require a certificate of origin. These forms
can also be used when hand carrying goods across a border.
To correctly fill out your customs declaration, you will need the following information:
1. Name and complete address of the sender.
2. Complete address and name of receiver.
3. Item description (if there are several different products in the same package, note them all separately)
4. Quantity of items.
5. Value of each item.

The following are main Stakeholders involved in customs declaration:

• Customs administration: It manages all the operations in collaboration with the customs agent in charge.
• Warehouse: refers to a designed space to receive and records goods
• Customs warehouse: It is a warehouse where goods are stored waiting to be cleared. e.g: MAGERWA
• Rwanda Standards Board RSB: It verifies and accredits the conformity of the quality
goods and services following the international norms/ standards
• Transport Companies: Include national and international transport companies
• Customs Agent also called declarant: refers to an agent who is in charge of customs
declaration for an importer's account who pays him/her agreed fees.
• Rwanda National Police: It is a unit of national police in charge of protecting rights of
customs administration. It sues customs and fiscal infractions. e.g. Rwanda Protective Department

THE NECESSARY DOCUMENTS FOR THE DECRALATION OF GOODS AT CUSTOMS.

*Transaction invoice. Describes the products and state the quantity and price.

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*Transport document. It shows the acceptance and receipt of goods. Ex: CMR: the CMR (Convention relative au
Contract de transport international de Merchandise Par Route air waybill used for transport by air, bill of
lading used for transport by sea, road transport document or road consignment note used for land freight.

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

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

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

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

*Goods arrival notice: is a document sent by a carrier or agent to the consignee to inform about the arrival of
the shipment and number of packages, description of goods, the weight, and collection charges (if any)
*Assessment Notice: is a document issued by a taxing authority specifying the assessed value of a property.
*Goods invoice: is a document sent by a seller to a buyer. It specifies the amount and cost of goods that have
been provided by a seller.
*Payment receipt: is a simple document that shows that payment was received in exchange for goods or
services.
*Phytosanitary certificate: is a certificate stating that a specific crop was inspected a predetermined number of
times and a specified disease was not found or a certificate based on an area surveillance stating that a specific
disease.
*Warehouse handling fees invoice: is a document given by a warehouseman for items received for storage in
his or her warehouse which has evidence of title to the stored goods.

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

clearing through customs

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

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

*Obtain manifest.

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

*Pay import tax.

*Obtain an invoice for warehouse handling fees.

*Pay warehouse fees for goods handling.

*Obtain goods exit note.

Procedure you would go through when declaring your exports:

Step 1: Prepare all necessary documents and contract with a Clearing Agent.
Step 2: The Clearing Agent prepares and submits an export declaration to RRA using the Rwanda electronic
Single Window (ReSW).
Step 3: The Clearing Agent receives assessment notices, containing the amounts of customs duties due. Then I
will pay all customs duties due, either directly or through the Clearing Agent.

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Step 4: The ReSW system allocates the consignment to a certain Customs channel. If verification is required,
Customs Officers will request the necessary documents and/or access to the consignment.

Step 5: After successful verification, the Customs Officer provides me with a release order.
Step 6: Then I pay any due warehousing fees
Step 7: Then I receive an exit note and may leave with the consignment

Advocate for compliance with customs procedure

Compliance with customs procedures is crucial for individuals and businesses engaged in international trade.
Customs procedures are not just a legal obligation but also a strategic advantage for businesses engaged in
international trade. By advocating for compliance, you contribute to a more efficient, secure, and sustainable
global trading environment.
As an advocate for compliance with customs procedures, here are some key points to consider:
1. Facilitating trade: customs procedures are designed to streamline the movement of goods across borders.
2. Ensuring security: customs procedures play a vital role in ensuring the security of international supply
chains. Compliance measures, such as proper documentation, accurate declarations and inspection protocols,
3. Avoiding penalties and legal consequences
4. Supporting national economies: customs procedures are a vital source of revenue for governments.
5. Capacity building and education: by improving understanding and knowledge of customs procedures.

UNIT 6: FINANCIAL MARKETS

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

A financial market is a marketplace where individuals and organizations engage in buying and selling of
securities, commodities and other tangible assets. Securities include shares, bonds, while commodities include
precious metals or agricultural goods Or financial market is a market in which financial securities like shares,
bonds and treasury bills are traded. Financial markets are made of capital markets and money markets
The functions (importance) of financial markets include:

1. They help in mobilization of savings.

2. Price determination
3. Easy access
4. Risk sharing
5. Liquidity: Investors can sell their securities readily and convert them into cash
6. Reduction in transaction cost and provision of information.
7. Capital formation: provide channel through new investment saving flow into country.
8. They speed economic growth and development.

Types of financial markets

Normally, all the types of financial markets can be classified as:

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 primary market is the market for new issuers or where new capital is raised . It is the market where
securities are sold for the first time.
 secondary market is the market for trading securities that have been sold or issued in the primary
market and already in the hands of the public.

types of financial markets include:

i. Physical asset markets versus financial assets markets

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

ii. Spot markets versus futures markets.

Spot markets are markets in which assets are bought or sold for “on-the-spot” delivery (literally, within a
few days) whereas futures markets are markets in which participants agree today to buy or sell an asset at
some future date.
iii. Money markets versus capital markets

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

Meaning and functions of capital markets

A capital market is a place where long term financial securities are traded by individuals and
institutions/organizations. In other words, they are financial markets where buyers and sellers together trade
stocks, bonds, currencies and other financial assets.
Benefits of investing through capital market /The functions (importance/roles) of capital markets
include the following:

1. Mobilization of savings: Capital market is an important source for mobilizing idle savings from the
economy.
2. Discover the value of your business
3. Strengthens the company’s status
4. Easy to get loans: Listed securities are easily accepted as collateral security against loans from financial
institutions.
5. Way of getting cash: Shares and bonds can easily be converted into cash in the shortest time possible
without losing much value.
6. Source of income:
7. Foster employee motivation
8. Enhance management practices

Capital Market instruments

 Shares: A share is considered as the unit of capital. Owners of shares are called shareholders collection
of shares is called “stock”.
 Debentures: A debenture is a type of debt instrument that is not secured by physical assets or collateral.
 Bonds are debt instruments created for the purpose of raising capital.
. Government-owned capital market instruments
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  Treasury bills (T-bills): they are short-term debt securities (1 year or less) for regulating or raising
funds of the national budget. T-bills are issued by National Bank of Rwanda (BNR) through a weekly
auction and this market is open to all investors.
Note: The minimum purchase is 100,000 Rwf
 Treasury bonds/Government bonds: they are long-term debt securities issued by Government with a
promise to pay periodic interest.

Capital market Participants

 Investor: An investor is a person or a legal entity that allocates capital with the expectation of a future
financial return.
 Issuer: refers to a legal entity (government, corporation) that develops; registers and sells securities to
the investing public in order to finance its own operations.
 Stock brokers: is an agent who represents clients to buy or sell stocks and other securities.
 Dealers and traders: A stock market dealer trades equities under its own. The business itself maintains
stock holdings that are not in the name of any client. The dealer may be a client of another broker, so as to
trade these stocks for its own account. “Market makers” are dealer businesses that continuously buy or
sell certain securities from the public, using their own holdings for these transactions.
 Sponsors: can be a range of providers and entities supporting the goals and objectives of a capital
market. Sponsors invest in private companies, create demand for publicly traded securities.
Money markets participants
 Treasury bills (T-bills) are short term government debt instruments. They mature between 3-12
months.
 Certificate of deposit (CDs). A receipt, issued by a financial institution for a deposit of funds, that
permits the holder to receive interest plus the deposit at maturity.
 Commercial paper is a commonly used type of unsecured, short-term debt instrument issued by
corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting
other short-term liabilities.
 financial institutions to borrow and lend money at interbank rates. The loans in the call money
market are very short, usually lasting no longer than a week.

How would you use the capital market to raise funds for your business?
 Buying stock
 Buying shares
 Dealing in bonds
 Dealing in debentures

Stock exchange markets

The stock exchange is a market where different types of securities are bought and sold.
Securities traded on a stock exchange include shares issued by companies, and bonds. The stock exchange is
therefore a secondary market.

Process of how to invest Rwanda stock exchange market/steps of investing in Rwanda stock exchange
markets

- Pick a broker
- Open trading account with the brokers
- Choose the asset in which to invest
- After making a decision, send a buy order via to the broker
- The transaction is completed once buying and selling prices match

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 - The broker issues the transaction notification and charges their fees.
Functions/Roles of stock exchange
 Price discovery
 Promotes investment of savings
 Promotes better allocation of capital
 Becoming a medium for foreign investments
 Driving economic growth and being an economic barometer
 Liquidity
 Safe transactions
 Provides scope for speculation

Steps you will be required by investing the stock exchange market/Requirements and process to join
the Rwanda stock exchange/ Procedures to join the Rwanda stock exchange
Step 1 Open an investment account with my stockbroker
 To buy securities, I must open an investment account with a stockbroker for investment and trading in
securities.
 To open this account, I will need to provide 2 recent passport photos and a copy of the ID card.
 The stockbroker will open a central securities depository (CSD) account into which my shares/bonds
will be held electronically. CSD is like a bank where all the records of all shareholders are kept.
Step 2 Placing a buying or selling order to my stockbroker
 To buy shares or bonds I will discuss with my stockbroker and then provide my account details.
 To buy or sell, I must give written instructions to my stockbrokers.
 The investor then completes a purchase order (or sale order) giving personal particulars (including
contact address etc) and the instructions on the transactions (that is what security to buy/sell, the transaction
price, etc).
 Where I intend to sell securities, I will be required to submit my security certificate.
 In the case of a purchase, I will be required to make a deposit covering the value of the transaction.

UNIT 7: STOCK CONTROL

Key Unit Competency: To be able to properly handle stock for the business.

Stock: refers all the items (goods/materials) that are stored by an organization for use or resale. Or is products
or service available to be offered to customers.

Stock can be classified as:

1. Opening Stock: Value of stock at the beginning of an accounting period.
2. Closing Stock: Value of stock at the end of an accounting period.

Inventory: refers to a company’s goods and products that are ready to sell, as well as the raw materials that are
used to produce them. Or are items you use to produce a product or service, from raw materials to finished
goods.

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Stock management (or Inventory management) is the practice of ordering, storing and controlling inventory.
Or process of managing the goods your business plans to sell.

The types inventories in an enterprise are/Inventory can be categorized in different ways:

1. Stock of raw materials: These are goods kept by the manufacturing firm to be utilized in the production
process.
2. Stock of consumables (supplies): They include tools and consumables which are consumed in the
production of goods and services.
3. Work in progress (unfinished goods): These are the semi-finished goods. They include those materials
that have been put in the production process but have not yet been converted into finished goods.
4. Finished goods: These are completed goods wait for sale.
In a manufacturing firm, they are final output of the production process.
5. Office supplies: These are materials used to support the production process for example computers,
stationery, etc.

Importance of stock and inventory management in organizations is as follows:

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

Necessary documents for stock management

The following are the necessary documents in stock management process:
i) Material/ purchase requisition note is used to draw/ get materials from the stores, and it
specifies the quantity and quality of materials required, along with the job number or work order
for which it is needed. Also known as a requisition slip or materials requisition note, a
materials requisition form is a document that authorizes and records the issue of materials for
use. While Purchase order is prepared based on purchase requisition.
STOCK REQUISITION
TO No:
Date:
Please supply the following items
Quantity Description Quantity Description

Requested by: Department

Authorized by: Date:
Received by: Date:

ii) Materials receipt note: This is a document that keeps records of the materials received in the
stores at specific dates.
Materials receipt note
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 TO No:
Date:
Please acknowledge receipt of the
following items(s)
Quantity Description Quantity Description
Received by: Department
Checked by: Date:
Store keeper by: Date:

iii) Return-outward note: document for recording the goods returned by a business to its suppliers.
So, it records “purchases returns”.

Materials return outward note

TO No:
Date:
Please verify return of the following
items(s)
Quantity Description Quantity Description
Department
Retuned by: Date:
Verified by: Date:

iv) Return-inward note: Return inwards refer to the goods returned to a business by its customers.
So, it records “sales return.

Materials return inwards note

TO No:
Date:
Please supply the following items
Quantity Description Quantity Description

Department
Returned by: Date:
Stored by: Date:

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

Format of stock sheet

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 Name of business: ………
Date: …/…/……

Date Stock RECEIVED ISSUED BALANCE

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

1.

2.

3.

Inventory management systems

Inventory management systems refers to the accounting methods that businesses use to track the number of
products they have in their stores.

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

 Perpetual inventory system: is a regular system of recording and controlling the physical movements of
stock and establishing its current balance, i.e., after every purchase or sale the stock is updated
immediately.
he stocks held is valued as follows:
Stock Value = number of items held x cost per item

Advantages of perpetual inventory system:

- Quick valuation of closing stock.

- Lesser investment in materials.
- Helpful in formulating proper purchase policies.
- Immediate detection of theft and leakages etc.
- Adequacy of working capital.
- Beneficial in ascertaining efficiency of stores’ organization

The disadvantages of using perpetual inventory include:

 High cost of implementation

 Recorded inventory may not reflect actual inventory/ the recorded figures may not match with the actual
inventory.
 Greater complexity
 More time-consuming
Periodic Inventory: system of inventory in which updates are made on a periodic basis (like a month, term, year,
etc.).
Advantages of Periodic Inventory System
 Since no permanent employee is required for physical counting of merchandise inventory under this
system
 it is less expensive.
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 It is applicable for all business organizations large or small dealing with specific or a variety of goods.
 Since stock taking is done at the end of a period under this system the normal activities of the business
are not hampered.
 Since the stock-taking of merchandise is done on a particular date the quantity of stock of merchandise is
reliable.

Disadvantages of Periodic Inventory System

 On the very day of the physical counting of merchandise stock, normal activities of business remain
almost suspended.
 The act of counting merchandise stock is to be completed hurriedly due to a shortage of time.
 Under this system the chance of fraud and forgery lies, because here continuous control over
merchandise is absent.
 Under this system on expiry of the particular period, the reasons for differences between merchandise at
hand and merchandise shown in the books of accounts cannot be sorted out easily.
 Under this system, the stock control device is very weak. Their employees get a chance to adopt
corruption.

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

Differences Between Perpetual and Periodic Inventory Systems:

Perpetual Inventory Systems Periodic Inventory Systems
Track sales immediately Track sales on recurring basis
Use point-of-sale systems Utilize recurring physical counts
Better for large businesses Better for small companies
Smaller margin for error Larger margin for error
Cost of goods sold updated constantly Cost of goods sold updated periodically
Require less effort Require physical counts
Start-up cost potentially high Less expensive to start up

Procurement procedures in a business

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

Procurement process involves the following steps:

Step 1: Need Recognition: A business owner (or procurement department) must recognize that a product is
needed in order to purchase it.

Step 2: Specific Need: the procurement department specifies the requirements of a product needed (type,
quantity, specifications, etc.)

Step 3: Examination of Supplier Options (Source): Every business needs to determine where to get the needed
product because all suppliers may not be trusted, you choose the best one for you.

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

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

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Step 6: Receipt and inspection: Once delivered, the receiving organization (customer) inspects and accepts or
rejects the product. Rejection may be due to a damaged product.

Step 7: Invoice Approval and Payment: At this stage, three documents must match when the seller wants
payment: the original purchase order, the goods received note and the invoice. Then payment is made if there is
no problem.

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

Importance of procurement process

 Helps to decide what to buy as needed by the organization
 Helps reduce raw material costs since much bargaining takes place.
 Helps identify the better sources of supply as it involves contacting many suppliers to get the best.
 Aids planning and reduces the unnecessary costs.

Stock valuation methods

Stocks are never valued at buying prices because selling prices include profit, and to value stock in this way
would recognize the profit in the financial statements before it has been realized.

The three common stock valuation methods which are: First in, First out (FIFO); Last in, First out (LIFO) and
Weighted Average Cost (WAC).

i) FIFO (First in, First Out)

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

ii) LIFO (Last in, First Out)

Under LIFO the latest products purchased (or produced) are the first to be sold.

iii) Weighted Average Cost method (WAC or AVCO)

The weighted average cost of items is calculated, using the formula:

Total cost of goods∈the stock

W eighted average cost=
Number of items∈the stock

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

EXAMPLE OF STOCK CARD

Papeterie Umusanzu is a company selling office materials. One of the items stocked is reams of papers. To show
how the stock card would appear under FIFO, LIFO and WAC, the following data is used:
1st January 2018: Opening stock of 40 reams of papers at a cost of 3,000 Frw each
14th January 2018: Bought 20 reams of papers at a cost of 3,600 Frw each
15th February 2018: Sold 36 reams of papers for 4,000 Frw each
27th March 2018: Bought 20 reams of papers at a cost of 3,750 Frw each
29th April 2018: Sold 25 reams of papers for 4,000 Frw each
SOLUTION

a) Papeterie Umusanzu Stock card.

Stock card using FIFO Method:

Date Stock RECEIVED ISSUED BALANCE

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 items

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

1st Jan Balance 40 3,000 120,000

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

20 3,600 72,000
60 192,000

15th Feb Sale 36 3,000 108,000 4 3,000 12,000

20 3,600 72,000
24 84,000

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

20 3,600 72,000
20 3,750 75,000
44 159,000

29th Apr Sale 4 3,000 12,000

20 3,600 72,000
1 3,750 3,750 19 3750 71,250
25 87750

Total 19 3750 71,250

b. Stock card using LIFO Method:

Papeterie Umusanzu Stock card
Items: Reams of papers

Date Stock RECEIVED ISSUED BALANCE

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

1st Jan Balance 40 3,000 120,000

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 14th Jan Purchase 20 3,600 72,000 40 3,000 120,000
20 3,600 72,000
60 192,000

15th Feb Sale 20 3,600 72,000

16 3,000 48,000 24 3,000 72,000

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

20 3,750 75,000
44 147,000

29th Apr Sale 20 3,750 75,000

5 3,000 15,000 19 3,000 57,000
25 90,000

Total 19 3000 57,000

c. Stock card using WAC Method:

Date Stock RECEIVED ISSUED BALANCE

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

1st Jan Balance 40 3,000 120,000

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

20 3,600 72,000
60 192,000

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

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

20 3,750 75,000
44 151,800

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

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

The closing stock valuations at the end of May 2018 under the three methods show total cost prices of:
 FIFO: 71,250 Frw
 LIFO: 57,000 Frw
 WAC: 65,550 Frw

Conclusion: i decide to use FIFO method because you gain higher amount than others.

EXERCISES
The following information is extracted in the books of a stock manager:
2200 bags of 50 kg of cement are bought in January 2016 at a cost of 10, 000 Frw each
100 bags are sold in February
80 bags are bought in March at a cost of 9,500 Frw each
100 bags are sold in April
150 bags are bought in May at a cost of 9,800 Frw each.
From this information, prepare stock cards for cement using:
(a) FIFO
(b) LIFO
(c) WAC

UNIT 8: WORK HABITS AND BEHAVIOURS

Key unit competence to be able to apply for a job and maintain professional conduct at the workplace.

Recruitment refers to the overall process of attracting, shortlisting, selecting, and appointing suitable candidates
for jobs (either permanent or temporary) within an organization.

Recruitment process is a process of identifying the job vacancy, analyzing the job requirements, reviewing
applications, screening, shortlisting and selecting the right candidate.

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

 Identify skills gap and hiring needs

 Formulate job descriptions advertise job opening
 Make short list
 Interview potential customer
 select the most suitable candidates
 Make a job offer
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Term used in recruitment process.

o Conduct a job analysis

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

(a) Job analysis

Job analysis is the systematic process of collecting, recording, and analyzing information on a job.
OR is establishing the nature of the job (tasks, activities, responsibilities, and accountabilities) which will also
determine associated required talents and competencies defining behavioral attributes for best
performance. /Before you employ people, you need to think about what type of role you are trying to fill.

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

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

Purpose of Job Description

a) The main purpose of job description is to collect job-related data to advertise for a job. It helps in attracting,
targeting, recruiting and selecting the right candidate for the right job.
b) It is done to determine what needs to be delivered in a particular job. It clarifies what employees are
supposed to do if selected for that particular job opening.
c) It gives recruiting staff a clear view of what kind of candidate is required by a particular department or
division to perform a specific task or job.
d) It also clarifies who will report to whom.
e) Once someone has been employed, it will show whether they are carrying out the job effectively.

c) Job specification involves a definition of qualifications, experiences and competencies required by the
jobholder and any other necessary information. Or provides a section that discusses the type of person

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 needed for the position. Job specification sets out terms and conditions of employment such as pay,
employee benefits, general health, mental health, intelligence, leadership skills, emotional ability,
adaptability, flexibility, values and ethics, and creativity,

Purpose of job specification

-It helps candidates analyze whether they are eligible to apply for a particular job vacancy or not.
-It helps the recruiting team to understand what level of qualifications, qualities and set of characteristics should
be present in a candidate to make him or her eligible for the job opening.
-Job Specification gives detailed information about any job including job responsibilities.
-It helps in selecting the most appropriate candidate for a particular job.

d) Job grading is done when jobs are assigned grades e.g. I, II, III etc. by taking into account key skills,
competencies and responsibilities required by the job to be done effectively.

e) Job Advertisements It is way organizations communicate to attract new employees to work with
them. Elements of job advertisements
 Brief description of the organization
 The title of the job advertised the grade
 Duties and responsibilities of the job holder
 Skills and Competences of the job holder
 Conditions of educational qualification and experience of that job position holder
 The channel of communication used for submitting the application
 The timeline during which applications will be submitted
 The channel of communication for feedback
 Signature and the stamp of the organization manager who wants to post the advertisement.

Some business organizations use recruitment advertising agencies to advertise job vacancies. They
advertise job vacancies in the following channels of communication: On Radio, Television, Newspapers,
www.tohoza.com, www.umurimo.com,www.jobs in rwanda.com, www.mucuruzi.com, NFT
consult , ,Ndangira.net

Finding a job/work requires one to prepare some documents

 An Application Letter/cover letter is a letter to an employer expressing your interest in a job or area of
work and highlights why you are qualified for the work.
A cover letter contains:
. contact information,
. purpose of letter,
. summary
Purpose of a Cover Letter A good cover letter persuades the employer your qualifications match their needs,
plus:
. Shows you did research and take the job seriously.
. Proves you understand the challenges of the company.
. Reflects that your vision aligns with their goals.
. Presents how your skills and experience are a solution.

Steps of writing a cover letter for a job application

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 1. Start with a header A professional cover letter opens with a header, Include the following in your header:
. Full name
. Job title
. Phone number
. Email address

2. Address the reader

Once you are done with the header, mention the location and date of writing.
Then, address your cover letter directly to the hiring manager like so:
. Dear Sir,
. Dear Madam
.
3. Make a proper introduction
These few sentences at the beginning of your cover letter will determine whether the hiring manager will
read on. So, you need to start your cover letter in a way that attracts and holds the reader’s interest. Highlight
your achievements and display your passion and enthusiasm.
4. Explain why you are the perfect fit
The second paragraph (main body) of your cover letter has a couple of jobs to perform:
. Give the hiring manager what they’re looking for.
. Show that you will satisfy the company’s specific needs.

5. Show your motivation to join the company

Your future employers have needs. If they are willing to hire you, it is because they think you will satisfy those
needs. But they also want you to enjoy working with them. That way, they know you’re more likely to stay with
them for longer. The key to writing a perfect third paragraph of your cover letter is showing the hiring manager
why you want this job, not just any job. That’s particularly important for entry-level candidates—enthusiasm and
passion help prove you’ll hit the ground running.
6. Close with a promise
The best cover letter ending should be by providing value. Tell the hiring manager that you are looking forward
to meeting in person and discussing how your experience and knowledge can help your future employer fulfil
their goals. Avoid these mistakes in the final paragraph:
. Coming off needy
. Focusing on how much you want the job, not on what you have to offer
. Repeating the clichéd phrase, “Thank you for your consideration and your time”

7. Stay Formal in the Closing Salutation

Once you have written the body of your cover letter, you just need to put a formal closing at the very end. Write
“Sincerely” and follow it with your full name. Adding your handwritten signature is optional (recommended for
more formal cover letters). You can also use any of the following:
. Thank you,
. Best regards,
. Kind regards,
. Respectfully yours,
. With best regards,

8. Double-check the formatting

Before you send, make sure your cover letter formatting is intact. Consider the following:
. Choose a legible cover letter font like Arial or Garamond, and keep it between 10 and 12 points in font size.
. Set even margins on all sides—1-inch margins should be perfect.

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 . Left-align all your contents.
. Use double cover letter spacing between paragraphs and 1–1.15 between lines.
. Title your cover letter by Job Title—Cover Letter—Your Name.
. Let your cover letter layout stay intact end route to the recruiter by saving the file in PDF.

9. Match your cover letter with your resume

The final step of writing your cover letter is, in fact, checking up on your resume to see if they both match the job
requirements. Make sure you meet your hiring manager’s expectations to the best of your ability. Plus, a great
cover letter that matches your resume will give you an advantage over other candidates.

EX. Umuhire Alexis has completed his senior six and is in the vacation. He happens to read in the newspapers
about a part time job in Inyange ltd as an attendant. He decides to apply for that post. Prepare an application
letter in the name of Umuhire Alexis (who lives in Musanze district, Kigombe sector with phone number:
0780000000 and whose email is : [email protected] and he will submit the letter to the human
resource manager of Inyange Ltd Kigali branch.
(NB: please don’t write this letter in your name and don’t show any contact related to you, it is prohibited in the
national examination to write your contact on the answers sheet or anywhere else in the answer booklet).

Sample of an application letter

UMUHIRE Alexis
North Province
Musanze District
Tel: 0780000000
E- mail: [email protected]
Musanze on September 10th, 2023

To the Manager of Inyange LTD

P.O BOX 111 KIGALI
Dear Sir/Mrs, Mr, Madam, …..
RE: Application for the post of an Attendant
After seeing your advertisement, I would like to express my interest in applying for the position of Supermarket
attendant in your company.
I have completed my senior six in 2022, I have developed the necessity skills in dealing with different clients. I
am creative, innovative, hardworking, good communicator and honest person. If successful I am ready to start
immediately and at time convenient to you.
Enclosing are the relevant documents of my education and background, I look forward to having this opportunity
to work with you.
Regards or faithfully,
Signature
Umuhire Alexis

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  Writing Curriculum Vitae (CV) and an Application Letter

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

Elements of Curriculum Vitae

In your CV you can include:

1. Contact Information: At the top of your CV, include your personal identification/name and contact
information (address, phone number, email address, etc.).
2. Education background This may include the school/institution attended, dates of study, and
degree received.
3. Work Experience: List relevant work experience; this may include non-academic work that you feel
is worth including. List the employer, position, and dates of employment. Include a brief list of your
duties and/or accomplishments.
4. Skills
 Key achievements/developments, skills, and experience relevant to the position for which
you are applying.
 Computer Skills.
 Language Skill
5. Interests and Hobbies
Games you like
6. References: In this part, include people who knows you and who might be contacted in case they
need any information about you. Lastly, end by certifying that the information is from the best of
your knowledge.

CV writing tips
. Include relevant information only: Your bio-data should not include all details about your life!
. Keep it simple, clear and neat
. Limit to 1-2 pages
. Be accurate: no spelling or grammatical errors
. Use bullets to describe duties/responsibilities of previous work
. Spell out acronyms the first time you use it, put the acronym in parentheses and then use the acronym after that.
. If using a computer, font size should be between 10 and 12 points
. Use 2.5 cm margins

CURRICULUM VITAE

SAMPLE OF CV

IDENTIFICATION
Name: NZEYIMANA Oscar
Tel: +250781111111
E-mail: [email protected]
Gender: MALE
Nationality: RWANDESE
Date of birth: 15/08/1997
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 Place of birth: Mukarange, Kayonza, Eastern Province
Place of birth: Kanombe, Kicukiro, Kigali City
ID No: 1199780070654317
Father’s name: KAMASA Sylvetre
Mother’s name: KABANYANA Monique
EDUCATION
2013-2015: Advanced level HEG at EFOTEK
2010-2012: Ordinary level at G S Karama
2004- 2009: Primary education at E P Kayonza
EXPERIENCE
2016- present: receptionist at Berwa Fashion Boutique

LANGUAGES
Kinyarwanda: Native language
English: Good
Swahili: Good
French: Fair
SKILLS
Team work skills and Communication skills
IT skills: Microsoft word, Excel, Power point
HOBBIES
Basket ball
REFERENCES
1. Names, address, email, number
2. Names, address, email, number
3. Names, address, email, number

I certify that the above information is sincere and exact.

Job-interview Process and techniques

interview process is a multiple-stage process for hiring new employees. The stages mainly comprise job
interviews held either one-on-one, with a group of candidates, or with a panel.

A job interview is a major tool for the selection process which is set up by the employers to know in detail about
the candidates. Or is an opportunity for the employer to find out more about you – your education, work
background, interests, personality – and for you to find out more about the
employer/business/company/organization and the specific job to which you are applying.

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

1. Opening: This part involves greetings, introductions, and it is where the employer states purpose of
interview.

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 2. Body of the interview: This is the major part of the interview process where the interviewee is asked
questions by interviewer(s) to obtain information in relation to the post.
In the process of questioning, interviewer should ensure that clear questions are asked, and the
interviewee is given time to respond. To be able to answer well, the interviewee should also listen
attentively to questions and respond accordingly.
3. Closing the interview: In closing the interviewer asks whether the candidate has anything more to talk
about his candidacy or any questions about the job/employer. Thank the interviewee for turning up for
the interview. The interviewee should also thank the interviewer and expresses interest and enthusiasm
regarding the next step.

Tips for Job Interviews/interview techniques

 BEFORE THE INTERVIEW

 Learn as much as you can about the organization or business to which you are applying for a job:
What do they do? Where? Size? Who are their clients? etc.

 Think about how your previous work experience, schooling and activities will help you
perform the job to which you are applying.

 Dress appropriately for the interview: neat clothing and shoes.

 Allow plenty of time to get to the interview.

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

 DURING THE INTERVIEW

. Greet the interviewer. Speak slowly, clearly and distinctly in a confident voice.
. Think before speaking.
. Be respectful.
. Listen carefully: Make sure you listen attentively and respond accordingly.
. Be a good listener: Wait until the interviewer has finished talking before you respond.
. Stay calm.
. Ask the interviewer to repeat or rephrase a question if you have not fully understood it.
. Present yourself as being confident that you can do the job.
. Thank the interviewer.

 AFTER THE INTERVIEW

. Send a thank you letter by post or email if appropriate.
. Follow up with a phone call after a week if appropriate.

Explain why a job interview is important to the employer and the interviewee.

A job interview is a major tool for the selection process which is set up by the employers to know in detail about
the candidates. It is a formal verbal interaction between the employers and the prospective candidates which
helps the employers in extracting as much information as possible about the candidate.

Advantages of applying online

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1. It is cost-effective
2. It is immediate
3. You can reach a bigger audience
4. It is easy
5. You can make your job ad more dynamic
6. It is flexible
7. It is durable
8. It is accessible

“Ministry of Public Service and Labor. Discuss its responsibilities.

. Find and recruit competent employees in Public Institutions.

. Initiate strategies to promote work in the private sector.
. Training workers in Public and private.
. Strategies to increase productivity and fight for employees’ benefits.
. Update laws on employees and labor.
. To set up new politics on salaries and employees’ welfare.
. Training and reintegrating employees from exile/refugee.

Appropriate workplace behaviors and attitudes

Behavior is an action or reaction that occurs in response to an event, and Attitudes are a complex combination of
things we tend to call personality, beliefs, values, behaviors, and motivations.
Work attitude means a feeling, belief or an opinion about a particular activity. At work some people may feel
uncomfortable towards doing certain types of work or may not be interested in helping others. Such attitudes
reduce productivity and team work at work.

Appropriate workplace behavior and attitude include the following:

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

Examples of unacceptable behavior

. Aggressive or abusive behavior, such as shouting or personal insults

. Spreading malicious rumors
. Discrimination or harassment
. Unwanted physical contact
. Offensive comments/jokes or body language
. Publishing, circulating or displaying pornographic, racist, sexually suggestive
. Isolation, deliberate exclusion and/or non-co-operation at work
. Persistent and unreasonable criticism
Work habit
. Clean your workspace regularly
. Keep your mobile phones face down on your desk away from you,
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. Eat healthy snacks to keep you energized and productive throughout your day at work.
. Always make sure that you drink enough water throughout your day at work
. Limit the amount of caffeine you consume throughout the day at work

Do and Don’ts of Personal Hygiene in the Workplace

. Do clean up after yourself
. Do regularly wipe down your workstation
. Do wash your cups and mugs daily
. Do use sanitizer provided for you
. Do adhere to the company’s hygiene policy
. Don’t sneeze or cough without covering your nose and mouth
. Don’t leave the toilet without washing your hands
. Don’t use a public toilet without wiping it down

Unit 9: Work Safety and Health

Key unit competence: to be able to apply standard health and safety practices and regulations at the workplace.

Workplace safety refers to the limitation of elements that can cause harm, accidents, in the workplace.

A healthy workplace is one where workers and managers collaborate to continually improve the health, safety
and wellbeing of all workers.

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

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

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

Personal hygiene refers to maintaining the cleanliness of one’s body and clothing to preserve overall health and
well-being.

Workplace hygiene refers to the standards of cleanliness that employers are expected to meet in ensuring that
they provide a healthy working environment in which their staff can work, as well as clean and safe premises for
members of the public to visit.
“Inyamaswa idakenga yicwa n’umututizi” (When not cautious, an animal can be killed by an ordinary tree
cutter). “It never hurts to remind employees that what they do at work matters and can have an impact on
their life at the end of the day.”

The importance of having a safe and healthy workplace/ Why is it important to have a safe and
healthy workplace? / Describe the importance of good personal care and healthy habits at work

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  Improved health and wellbeing.
 Greater productivity and performance.
 Improved corporate image.
 It also attracts more clients.
 Increased job satisfaction.
 Improved employee morale.

Describe strategies to prevent the spread of illness and contamination at the workplace and at
home/Healthy hygiene and sanitation is very important for every workplace
some healthy hygiene and sanitation that can be practiced both at home and the workplace:

. Washing your hands

. Using hand sanitizer
. Changing sanitary pads several times a day by females
. Washing your hands before and after changing tampons or pads.
. Putting on clean, dry clothing.
. Handling food safely
. Washing your hands before and after preparing food.
. Make sure your workplace is regularly cleaned
. Having a clean restroom well stocked with soap, toilet paper and hand towels
General good safety habits at work / Describe any 5 healthy habits that should be practiced every day:
a) Everyone helps keep the work environment tidy and organized.
b) Everyone is comfortable reporting unsafe working conditions up the chain of command.
c) Everyone wearing it the right way and it fits properly.
d) Everyone knows where safety equipment is located.
e) Everyone who handles heavy objects uses proper lifting and carrying techniques.
f) Everyone knows where to go and what to do in an emergency.
g) Everyone is aware of hazardous chemicals in the work area

Health habits observed at the workplace (school)/Daily Positive health habits/In daily life.
 Get enough sleep.
 Manage stress.
 Find time to relax.
 Meditate once a day:
 Maintaining a healthy social life.
 Maintain healthy eating habits
 Get some exercise every day, even just a little.

Hazards in the workplace and ways to make work safer

Hazard is any unsafe situation that may result in harm to people and property.
Workplace hazard refers to anything (whether physical or psychological) that presents a potential threat to
employees. Or is any unsafe situation that may result in harm or injury to people and property at work.

Hazards can be classified/types of hazards/ With examples, differentiate the types of hazards in the
workplace

Type of hazard Examples

Safety hazard: affect those who work with slips, trips and falls, operating dangerous
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 machinery or on a construction site machinery and electrical shocks
Biological hazards: exposure to dangerous Bacteria and viruses, Contaminated waste
substances and diseases associated with Animal droppings
working amongst animals, people, or infectious
plant materials
Physical hazards: can affect those who work Continuous loud noise, Radiation, Sun rays and
in extreme weather conditions or in harmful Ultraviolet rays
environments.
Ergonomic hazards: affect individuals whose Manual roles that require lifting, sitting for
work puts a strain on their body. long periods can cause damage over time.
Chemical hazards: mainly threaten employees Exposure to harmful chemicals can cause
whose roles expose them to dangerous liquids, illness, skin irritation, breathing problems and,
solvents or flammable gases. in extreme cases, death
Workload hazards: issues that could cause workload, violence or aggression. harassment.
stress or strain,

Briefly describe any 5 unsafe situations that could harm people while on the job
. Slips, trips and falls, operating dangerous machinery and electrical hazards
. Working amongst animals, people, or infectious plant materials
. Exposure to continuous loud noise, radiation, sun rays and ultraviolet rays
. Issues that could cause stress or strain, such as workload, violence or aggression
. Exposure to harmful chemicals can cause illness, skin irritation, breathing problems and, in extreme cases,
death.

Some symbols of workplace hazards and their meaning

ways to make workplace safer/ To effectively control and prevent hazards, employers should:

Following four steps may be followed to prevent unsafe situations at the workplace using the acronym SAFE
(Spot the Hazard, Assess the Risk, Fix the Problem, Evaluate Results)
1. Spot the hazard: The first step in ensuring a safe workplace is to identify hazards. Hazards can be
identified by:
. Asking workers and contractors in the workplace about any hazards they may have noticed,

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 . Looking at the physical structure of the workplace, checking all machinery, appliances and vehicles used
for work,
. Examining how substances are stored, used and moved from one place to another.
2. Assess the risk: A risk is the likelihood of a hazard causing injury, illness or damage to the health. So, you
need to work out which hazards are more serious than others and deal with those first.
Assess the risk associated with each hazard by determining:
. The potential impact of the hazard.
. How severe could an injury or illness be?
. What’s the worst possible damage the hazard could cause to someone’s health?
. Would it require simple first aid only? Or cause permanent ill health or disability? Or could it kill?
. How often are workers exposed to the hazard?

3. Fix the problem: Remove the hazard completely from the workplace. Concentrate on the most urgent
hazards without neglecting the simpler ones that could be easily and immediately fixed.
Hazards can be fixed by using the hierarchy of controls to remove or reduce risk in the workplace/
Describe strategies to handle unsafe situations that could harm people in any work environment

Describe strategies to handle unsafe situations that could harm people in any work environment
a) Eliminate the hazard. Remove it completely from your workplace.
b) Substitute the hazard. Replace it with a safer alternative.
c) Isolate the hazard. Keep it away from workers as much as possible.
d) Use engineering controls. Adapt tools or equipment to reduce the risk.
e) Use administrative controls. Change work practices and organization.
f) Use personal protective equipment (PPE)

4. Evaluate results:
. After fixing the problem, find out whether the changes have been effective.
. Get feedback from those affected by the changes and include them in any modifications to their
workplace or work routines.
. Make sure the solution does not introduce new hazards.
. If the work process changes, or new equipment is introduced to a task, then the risk assessment must be
reviewed.

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 Emergencies at work place
Workplace emergency is an unplanned situation that threatens your employees, customers and disrupts/stops
your operations or causes damage.

Types of emergencies as related to safety and health at work/ With examples, differentiate the types of
emergencies at the workplace.

 A natural emergency could occur as a result of flooding, severe weather e.g. hurricanes or tornadoes, or
forest fires.
 Work-related emergencies are are emergencies that stem from civil factors. Civil factors could be
things. E.g. protests(kwigaragambya), workplace violence or harassment.
 Civil emergencies caused by factors relating directly to the work conducted. E.g., Chemical spills,
explosions, machinery malfunction, or dangerous gas releases.

Different types of emergencies at workplace/Responding to emergencies and staying healthy at work

Emergency Response/precautions you will apply to respond to this emergence.

-Pull the nearest fire alarm.
-Use stairwells to leave the building.
-Do not re-enter building(s) until directed by emergency personnel.
-Evacuate: Evacuation should be prompt and calm, with everyone making their
Fire way to the designated assembly point
-Do not stop to collect any personal belongings, and never use lifts in the event of
fire
-Head directly to the nearest emergency fire exit
-If the fire is small and controllable, use of a fire extinguisher.
-Get to the Assembly Point
-A headcount (or nominal roll call)
-dial the emergency number
-If the fire cannot be controlled by a fire extinguisher, evacuate immediately
-STOP. Running is the most common cause of injury during an earthquake.
-DROP. Make sure your head is not the tallest thing in the room.
-COVER. Get under a desk or table to protect yourself from falling objects.
-HOLD. Whatever you are under, hold on tightly until the shaking stops.
-After the shaking has stopped, evacuate to a safe location, away from buildings.
-Report your status to school officials.
-Avoid using cell phone lines except for emergency calls. Use text messages for
Earthquakes other contacts.

-RUN. Leave the building as quickly and quietly, if safe to do so.

-HIDE. If you can’t leave, go to an area that can be locked or secured. Stay low,
hidden and spread out.
-Call 911.
-If you encounter police, show your hands, follow their commands and don’t make
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Active Shooter sudden movements.

- leaving an injured person except to summon help.

-Do not move the injured person.
-Render first aid or CPR if you are trained and feel comfortable doing so.
-Protect yourself before and after rendering assistance.
-Call 911.

Medical Emergency
-Notify affected personnel immediately and evacuate the contaminated area.
-Move to a safe distance of at least 100 yards.
-Advise others to stay clear of contaminated areas.
-Wait for further instructions from emergency personnel.
Hazardous Materials -Call 911.

-Do not let a stranger into locked or secured areas for any reason.
-Do not confront or attempt to stop any person from leaving the area.
-Move to a safe location and call 911

Suspicious Person

-Do not disturb, touch or use electrical devices near objects.

-Move at least 100 yards from the object.
-Call 911

Suspicious Object
-Remain calm and offer assistance to others.
-Take the nearest marked exit.
-Do not panic or push others while exiting.
Power Outage -Call Facilities at 206-592-3260 to report power outages.

An emergency plan for workplace /The plan should include steps and guidelines for the following
emergencies:
A. Fire and smoke:
 Make sure the fire alarm is accessible
 Train worker on how sound the alarm
 Stairways should be accessible for all without discrimination
 Install firefighting equipment in the workplace
 Make sure firefighting equipment is accessible to all
 Train workers on how to operate the equipment
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 Train workers on how to respond in case of the fire and smoke
 Prepare an evacuation site accessible to all

B. Personal injury or threat

 Buy and provide a well-stocked first aid kit
 Make sure the first aid kit is easily accessible by all
 Train workers on how to use the first aid kit
 Train workers in first aid action/response in case of an emergency
 Provide toll free emergency numbers

C. Gas leak/Dangerous gas releases

 Make sure gases are kept in safe and secure place
 Make sure the gas seals are always checked for proper sealing
 Provide workers with safety tools (masks, gloves) to handle gas leaks in case it happens
 Provide danger signs for workers to be aware
 Train workers on how to respond in case of a gas leak

D. Workplace violence or harassment

 Provide workers with a workplace violence or sexual harassment policy
 Train workers on the policy
 Design actions to be taken in case of such behaviors happening at workplace
 Encourage workers to speak out in case any of the behaviors happens

Five steps that are considered to be best-practice that should be taken in the management of an
emergency. /Guidelines for action in an emergency situation
 Prevention: The steps that are taken to avoid an incident or accident from occurring in the first place
 Mitigation: These are measures that can reduce the risk of an emergency happening.
 Preparedness: The activities that are carried out to be ready to respond in the event that an emergency
has occurred.
 Response: The actions that are taken immediately before, during and or after an emergency to save lives
and reduce loss and damages.
 Recovery: The actions that take place in the aftermath of the emergency to restore services and return to
normal conditions.

A safety and health management system means the part of the Organization’s management system which
covers:
. the health and safety work organization and policy in a company
. the planning process for accident and ill health prevention
. the line management responsibilities
. the practices, procedures, and resources for developing and implementing, reviewing and maintaining
the occupational safety and health policy.

Critical safety and health issues, which should be addressed and allocated resources, in the safety and
health policy, include the:

• Design, provision, and maintenance of a safe place of work for all employees

• Provision and maintenance of welfare facilities

• Preparation of emergency plans and the provision of first-aid training

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• Reporting of accidents and dangerous occurrences to the Authority and their investigation

• Development of in-house safety and health competence

• Employment of external safety and health experts as required

• Use of standards, Codes of Practice, guidelines, or industry practice.

How can the safety and health management system be monitored?

Can be monitored with Two types of monitoring are required:

1. Active Systems that monitor the design, development, installation and operation of management
arrangements, safety systems and workplace precautions. or Every organization should collect information to
investigate the causes of substandard performance or conditions adequately.

The monitoring system should include:

• Identification of the appropriate data to be collected and accuracy of the results required

• Monitoring of the achievement of specific plans, set performances criteria and objectives

• Installation of the requisite monitoring equipment and assessment of its accuracy and reliability

• Analysis and records of the monitoring data collected

• Evaluation of all the data as part of the safety and health management review

Techniques that should be used for active measurement of the safety and health management system
include:

• Systematic inspections of workplace processes or services to monitor specific objectives, e.g., weekly, monthly
or quarterly reports

• Systematic review of the organization’s Risk Assessments to determine whether they are need to be updated,
and are the necessary improvements being implemented

• Plant or machinery inspections, e.g., statutory plant inspections and certification

• Environmental sampling for dusts, chemical fumes, noise or biological agents

• Analysis of safety and health management system records.

2. Reactive Systems that monitor accidents, ill health, incidents and other evidence of deficient safety and health
performance. Or A system of internal reporting of all accidents (which includes ill health cases) incidents of non-
compliance with the safety and health management system should be set up so that the experience gained may
be used to improve the management system.

Those responsible for investigating accidents, and incidents should be identified, and the investigation should
include plans for corrective action, which incorporate measures for:

• Restoring compliance as quickly as possible

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• Preventing recurrence

• Evaluating and mitigating any adverse safety and health effects

• Reviewing the Risk Assessments to which the accident relates

• Assessing the effects of the proposed remedial measures.

Should the management of safety and health be audited in addition to monitoring performance?

Monitoring provides the information to let the organization review activities and decide how to improve
performance. Auditing and performance review are the final steps in the safety and health management control
cycle. They constitute the ‘feedback loop’ that enables an organization to reinforce, maintain and develop its
ability to reduce risks to the fullest extent and to ensure the continued effectiveness of its safety and health
management system.

The key questions that an employer should ask when measuring, reviewing and auditing their safety and
health performance are:
• Do you know how well you perform in safety and health?
• How do you know if you are meeting your own objectives and standards for safety and health?
• How do you know you are complying with the safety and health laws that affect your business?
• Do you have accurate records of injuries, ill health and accidental loss?

• Do you report on safety and health failures to your board and your directors?

• How do you learn from your mistakes and your successes?

Training staff: it increases the necessary skills, knowledge and attitudes to make them competent in the safety
and health aspects of their work. training objectives and methods by first identifying the training needs.
Training needs may be organizational, job-related and individual:

1. Organizational needs: Everyone in the organization should know about Safety Statement, structure and
systems for delivering the policy
2. Job - related needs: These fall into two main types - management needs and non-management needs.
Management needs include: Leadership skills, Communication skills, Techniques of safety and health
management, Training, instruction, coaching and problem - solving skills relevant to safety and health,
understanding of the risks in a manager’s area of responsibility, Knowledge of the organization ‘s
planning, measuring, reviewing and auditing arrangements

Non-management needs include: An overview of safety and health principles, Detailed knowledge of
the safety and health arrangements, Communication and problem-solving skills
3. Individual needs: are generally identified through performance appraisal.
Training needs vary over time, and assessments should cover:
 Induction of new starters, including part-time and temporary workers
 Maintaining or updating the performance of established employees
 Job changes, promotion
 Introduction of new equipment or technology
 Follow-up action after an incident investigation.

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 end

K. JOHN G.S REMERA PROTESTANT

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