Business Studies (Y10/11)

STRAND 1: OFFICE SKILLS (4wks)

S.S 1: Communication Skills

SLO 1: Define the term Communication

Communication is a process that involves sending and receiving information between two or more people, either one-on-one or in groups. It can be verbal, non-verbal, written, or visual, and can take place face-to-face or through devices. The purpose of communication is to build understanding when passing or receiving information.

SLO 2:  Communication Procedures for Businesses

The communication process is a cyclical exchange between a sender and a receiver that involves understanding, sharing, and meaning. The process helps determine how well a message is transferred and understood. In business, communication is also known as marketing, and it focuses on sending messages to specific audiences to get a desired response. 

In the beginning of any business arrangement, there are two ways Communication is carried out between any two parties:

1. Through telephone/phone, 

2. Through 'face to face' communications, and, or

3. Written communication (Records are also written from the communication modes 1 and 2 above).

Effective Communication - effective Questioning, Active listening and Speaking skills

To be effective you need the following skills:

• understanding of the workplace procedures

• know the proper Line of Communication (LOC) with supervisors and colleagues

• know how to use the appropriate communication methods/equipment to use

• you should be effective in your questioning, active in listening, and have good speaking skills

• have appropriate non-verbal behavior skills

• able to encourage, acknowledge and act upon constructive feedback

Let's learn more:

Line of Communication (LOC)

Is a chain-of-command that requires employees to communicate only with their direct superior rather than bringing comments or concerns directly to leaders higher.

In order for employees to do this, there is usually an Organisation Chart in the workplace that shows 'how the lines of communication work.

SLO 1.3: Writing information for Business?

Information business writing pertains to recording business information accurately, and consistently. It involves documents essential to thr core functions of the business, such as, its growth, plans, and legal obligstions.

SLO 1.4:  Communication skills in Business

Some communication skills that are important in business: 

• Active listening

          This involves absorbing the message and amplifying the sender's thinking. It can help build confidence, improve productivity, and deepen relationships. 

• Nonverbal communication

            Understanding nonverbal communication techniques can help business owners understand their customers' expectations and demands. 

• Feedback

                  Feedback is an important part of the communication process because it determines if the message was sent and interpreted successfully. 

• Negotiation

Negotiation is important for avoiding conflicts and finding alternatives that suit everyone. Good negotiation can directly affect future business opportunities. 

• Presentation skills

Presentation skills allow you to communicate your ideas, products, and services to clients, colleagues, and stakeholders. A well-designed presentation can help you build    trust, credibility, and persuade others. 

• Empathy

Empathy involves understanding someone else's feelings and motivations. In the workplace, empathy can help you make informed decisions based on

 how others might react. 

Other communication skills that are important in business include: 

Collaboration skills 

• Adapting your message to your audience 

• Preparing for message delivery 

• Being authentic and enthusiastic 

• Managing nonverbal signals 

• Asking for feedback 

• Probing for understanding

• Handling conflicts respectfully 

• Using the right tools 

What is Non-verbal behavior?

What are the examples of verbal and nonverbal skills?

Non-vocal elements such as unspoken symbols, signs, and signals to express meaning are examples of verbal communication. Non-vocal elements such as body language, gestures, facial emotions, and eye contact are examples of nonverbal communication.\

Nonverbal behavior is a way to express thoughts and feelings without using words. It can include:

• Facial expressions

Can reveal your thoughts and feelings, and can even change the meaning of what you say 

• Gestures

Deliberate body movements that are handled by the same parts of the brain that process language 

• Posture

The position of your body when you're sitting or standing, which can indicate your mood or how you feel about something 

• Body language

Includes posture and movement, and can convey messages to others 

• Haptics

Nonverbal communication that involves touching, which is important for humans and animals 

• Appearance

How you present yourself, which can be influenced by cultural standards of attractiveness 

• Proxemics

How you signal to others how comfortable you are with certain distances, and can also include the design of a room to promote or inhibit communication 

• Vocal tone

Can convey emotions like happiness, sadness, anger, or boredom, and can be an effective way to amplify your message 

Other examples of nonverbal behavior include eye contact and pointing to get someone's attention. 

Constructive Feedback

Constructive feedback is a response to someone's actions that aims to help them improve their performance or behavior. It can help people recognize their strengths, weaknesses, and growth opportunities, and provide actionable insights. The goal is to help the recipient understand what they did well, where they can improve, and how they can make those improvements. 

Here are some characteristics of constructive feedback: 

• Helpful

        The feedback should help the person improve or sustain their performance or behavior. 

• Specific

        The feedback should include specific examples of actions or behaviors that help the person 

         understand your perspective. 

• Evidence-based

        The feedback should have some evidence to support what you are saying. 

• Focused

       The feedback should focus on one particular thing at a time, rather than being a general

       statement. 

• Solution-oriented

       The feedback should provide ideas or solutions to help the person understand what they should

         do differently or continue doing. 

Here are some tips for giving constructive feedback: 

• State the reason for giving feedback, 

• Describe what you've seen and your reaction,

•  Let the other person respond, 

• Offer specific solutions, and 

• Summarize everything

SLO 1.2.1: Critical Thinking

A. Critical thinking is the ability to effectively analyze information and form a judgment.

To think critically, you must be aware of your own biases and assumptions when encountering information, and apply consistent standards when evaluating sources.

Critical thinking skills help you to:

• Identify credible sources

• Evaluate and respond to arguments

• Assess alternative viewpoints

• Test hypotheses against relevant criteria

B. Critical thinking is a disciplined process of using information to guide your beliefs and actions. It involves analyzing, evaluating, and synthesizing information from observation, experience, reflection, reasoning, or communication. Critical thinking skills include: 

• Inference

Drawing conclusions based on an analysis of facts, events, sensations, ideas, or objects. Inferences can be factual and verifiable, but they may require

 industry-specific knowledge or experience. 

• Problem solving

Using knowledge, facts, and data to solve problems by defining them, identifying causes, and selecting solutions. This involves thinking on your feet

 and assessing problems. 

• Open-mindedness

Being willing to consider a variety of positions and beliefs as possibly valid, and to change your beliefs if presented with a more valid argument. This

 doesn't mean being indecisive, but rather being flexible and searching for evidence against your own beliefs. 

Other critical thinking skills include observation and communication. 

What is a real life example of critical thinking?

Deciding how you use your time is another example of critical thinking. Continually evaluating how you spend your time can help you discover tasks and activities that may change how you prioritize your duties.

Why is critical thinking important?

Critical thinking is important for making judgments about sources of information and forming your own arguments. It emphasizes a rational, objective, and self-aware approach that can help you to identify credible sources and strengthen your conclusions.

Critical thinking is important in all disciplines and throughout all stages of the research process. The types of evidence used in the sciences and in the humanities may differ, but critical thinking skills are relevant to both.

In academic writing, critical thinking can help you to determine whether a source:

• Is free from research bias

• Provides evidence to support its research findings

• Considers alternative viewpoints

Outside of academia, critical thinking goes hand in hand with information literacy to help you form opinions rationally and engage independently and critically with popular media.

FIVE CRITICAL THINKING SKILLS

1. Problem-solving

2. Analyzing

3. Reasoning

4. Evaluating

5. Decision Making

ORGANIZATION CHART

An organizational chart is a visual representation of a company's structure, showing the hierarchy of employees, their reporting relationships, and the division of responsibilities within different departments, making it important for clarifying roles, improving communication, and identifying potential resource gaps within an organization 

An organizational chart shows the internal structure of an organization or company. The employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons and illustrations. Straight or elbowed lines link the levels together. 

• The Chart shows the relationships between departments, the chain of command, and employee roles and responsibilities. 

• Org charts can also help identify seniority, lines of authority, and talent gaps. 

• It shows the Line of Communication (LOC)eg. to whom you should firstly, pass on an information.

Activity

•  Design a simple organisational chart 

• Explain why every business or organisation should have this organisational chart and it's main purpose 

SLO 1.3. PLANNING

What is a Business Plan?

• Business plan is a document that outlines a company's goals, strategies, and financial projections. 

• It provides a detailed description of the business, including it's products and services, target markets, competition, and marketing and sales strategies.

SLO 1.3.2 GOAL

What Are Business Goals?

Business goals are the outcomes an organization aims to achieve. They can be broad and long term or specific and short term. Business leaders set goals in order to motivate teams, measure progress, and improve performance.

• SMART: SMART goals are specific, measurable, achievable, relevant, and time-bound. This is probably the most popular method for setting goals. Ensuring that your goals meet SMART goal criteria is a tried and true way to increase your chances of success and make progress on even your most ambitious goals.
  
  Example SMART Goal: We will increase the revenue from our online store by 5 percent in three months by increasing our sign-up discount from 25 to 30 percent.

Here are some tips for setting business goals: 

• Be specific: Goals should be specific enough that a child could tell if they've been achieved. For example, instead of saying "earn more money," you could set a specific target, like "increase online sales by 10% in this quarter". 

• Be measurable: Goals should be measurable. 

• Be attainable: Goals should be achievable, but you can also stretch the limits of what's achievable. 

• Consider actions: Describe the actions you'll take to work towards your goal, and set a deadline for completing it. 

• Consider resources: Detail your budget, staffing requirements, and any supplies you'll need. 

• Consider accountability: Tell your staff, customers, or a group of people you trust about your goals. 

• Consider review: Think about how you'll measure the success of your goal. 

Here are some examples of business goals: 

• Increase revenue 

• Improve customer service 

• Increase management efficiency

• Launch a new product or service 

• Expand to a new country or region 

• Improve hiring practices 

• Rebrand your company 

S.M.A.R.T. Goals Defined

A S.M.A.R.T. goal is defined by its five key aspects or elements. Without all aspects, you might be goal setting but not effectively creating a plan for success. Let’s look at the five elements of S.M.A.R.T. goals.

Specific

Specific goals have a desired outcome that is clearly understood. This might be a sales number or a product rollout goal. No matter what it is, the goal should be clearly articulated so that everyone is on the same page with the objective. Define what will be accomplished and the actions to be taken to accomplish the goal.

Measurable

These are the numbers used with the goal. You need to have a quantifiable objective so that you can track progress. Define what data will be used to measure the goal and set a method for collection.

Achievable

Goals need to be realistic to maintain the enthusiasm to try to achieve them. Setting lofty goals is good, but you may want to break them down into smaller, bite-sized chunks. If the goal is not doable, you may need to first ramp up resources to give yourself a shot at success. Ramping up resources would likely be its own S.M.A.R.T. goal.

Relevant

Goals should be aligned with the mission of the company. Don’t set goals just as an exercise for something to do. One way to determine if the goal is relevant is to define the key benefit to the organization.

Time-Bound

Goals should have a deadline. A goal without a deadline doesn’t do much. How can you identify success or failure? This is why S.M.A.R.T. goals set a final date. This doesn’t mean that all the work is done, but it means that you can evaluate the success of the endeavor and set new goals.

Benefits of S.M.A.R.T. Goals

There are a lot of benefits to setting S.M.A.R.T. goals, which is why you should consider adding them to your business toolbox. First, a S.M.A.R.T. goal helps to give you an objective. In doing this, you can identify strengths and weaknesses. Second, a S.M.A.R.T. goal provides motivation to succeed. When you know where the goal line is, you’ll want to work to meet or beat it. Third, a good S.M.A.R.T. goal, while attainable, will also be challenging and force you out of your comfort zone. Ultimately, the S.M.A.R.T. goal is a useful tool to remain focused in attaining a goal.

Examples of S.M.A.R.T. Goals

Professional Goal: “I’m going to increase sales”

• Specific: “I am going to learn about social media marketing and invest in a social media management platform to start growing an online audience of potential customers.”

• Measurable: “The goal is to increase sales by 30% within the next quarter.”

• Achievable: “I can afford a subscription to Zoho Social, and I have a moderately successful business that can handle a large increase in customer demand.”

• Relevant: “I want to grow my sales volume so that I can buy a new vehicle for my business.”

• Time-bound: “I will subscribe to Zoho Social tomorrow and go through all of their instructional material to learn how the platform works. I will build a social media strategy and deploy it in two weeks.”

SLO 1.3.3. TIME MANAGEMENT IN THE WORKPLACE

Time management in the workplace is a skill that can benefit any employee. By learning how to manage your time you can

• improve your work life

• increase your productivity

• lower your stress

• build a positive work-life balance

 SLO 1.3. 4  PORTFOLIO EVIDENCES

What are portfolio evidences?

A business portfolio is a document that summarizes a company's products, services, investments, past projects, current performance and more, such as:

• company awards, 

• certificates, 

• memberships,

• company history, etc.

SLO 1.4  WORKPLACE SAFETY AND HEALTH

What is Workplace Safety?

Workplace safety refers to the overall safety of people in their workplace. Tasks related to workplace safety include managing the condition of the workplace, managing injuries, and reducing or eliminating risks and hazards. The study and implementation of workplace safety guidelines also fall under the field of occupational safety and health.

Why is Workplace Safety Important?

Workplace safety is an essential part of any working environment. Per the US Occupational Safety and Health Administration (OSHA), “a safe workplace is sound business.” Having robust policies and processes for a safer workplace can help reduce injuries, work-related ill health cases, fatalities, sicknesses, and deaths, which can boost employee morale and productivity, as they will feel protected. Fewer workplace injuries can also benefit the company financially due to reduced insurance premiums and money spent on equipment repairs, leading to a better safety reputation. This is also echoed by Safe Work Australia. 

The World Health Organization (WHO) also strongly advocates for general occupational health safety. A study from 2017 shows that around 12 million people of active working age, mostly in developing countries, die from noncommunicable or chronic diseases yearly, and in turn, work-related health issues have led to an economic loss of 4–6% in most countries’ GDP. 

Following this, WHO’s research has shown that workplace initiatives can reduce sick leaves and other health complications from worsening by 27%, and reduce company healthcare costs by 26%. 

Therefore, WHO encourages:

• Countries to develop policies and actions on a national level to encourage private and public entities to do the same

• Companies to create intervention plans for different types of injuries and hazards depending on the nature of work

• Officials and company leaders to collaborate with relevant health groups and leaders to create safety and health-related programs focused on dealing with diseases, injuries, mental health, and environmental health

What are The Most Common Workplace Safety Issues?

The most common workplace safety issues and workplace hazards can be divided into the following:

• Human factors

• Health hazards

• Environmental factors

Human Factors

Human factors pertain to the environmental, organizational, and job factors affecting an individual. These factors can influence human behavior at work across all industries, which can result in unsafe conditions, behaviors, and practices. 

This includes one’s: 

• Job-related tasks such as:

  • Tasks to be done at work and their workload

  • Daily work patterns

• Organizational environment, such as:

  • Workplace design, culture, and environment

  • Team and leaders 

  • Incidents of violence

  • Communication with others 

  • Resources at work 

Individual characteristics, such as:

• • Capability and competence

  • Attitudes 

  • Risk tolerance

  • Psychological state 

Human factors often affect workers in subtle ways that build up over time, affecting their psychological safety and health. While psychological safety in the workplace may not manifest in such a way that is clear to the naked eye, multiple internal and external factors, such as organizational stress, mental health illness, financial issues, bullying and harassment, and substance misuse, can affect their work and physical state, regardless of their industry. 

Large-scale life-changing events can also be considered human factors that can affect workplace safety. Events such as pandemics, international conflicts, and detrimental changes in political climate can not only affect one’s work style, psychological state, and productivity, but also their overall safety.

Health Hazards

Health hazards pertain to items that can affect one’s health. Chemical hazards such as dust, gases, vapors, fluids, and liquids or solids that can cause burns, irritations, and respiratory issues are one of the most well-known hazards to affect health, as handling them can lead to burns, inhalation of dangerous gasses, and allergic reactions that can lead to further complications. 

Inadequate housekeeping leading to scattered or misplaced equipment can also pose a threat to workplace safety. Things like tangled wires, unplugged machines, and broken items can not only negatively impact work processes, but can also cause injuries to its users and those around them. This goes for chemical items as well. 

Other common hazards to health and workplace safety are:

• Biological hazards from improper waste management, especially from liquid or toxic wastes, which can lead to radiation 

• Physical ergonomic safety risk factors such as heavy lifting without training and other repetitive motions done in succession and for long periods of time including but not limited to squatting, standing, sitting, and digging 

While these may be considered essential parts of certain jobs and industries, improper execution and inadequate training can injure or cause life-changing injuries to people, sometimes even leading them to their deaths. 

The industries that are most at risk of encountering health hazards are:

• Construction

• Manufacturing

• Health services

• Aviation

• Mining

• Oil and gas

Environmental Factors

Environmental factors are factors based on one’s workplace or immediate work environment. The most common environmental factors affecting workplace safety are weather conditions, especially for those who do field work such as construction workers, electrical workers, and oil and gas excavators. Generally, these people are advised to be cautious when working with high and strong winds, tall heights, heavy rains, and hot weather conditions. 

Excessive or low levels of noise can also be a cause of concern in the workplace; if there is a need to raise one’s voice constantly to be heard, there can be a noise issue, which can also affect the quality of work done. Similarly, a problem with lighting can also affect workplace safety, as too much or inadequate lighting may increase the risk of injury due to reduced visibility. Sudden changes in lighting can also cause momentary blindness or eye dryness, which can lead to migraines. 

Extreme changes in temperature, such as reaching too hot or too cold temperatures from one’s environment can also affect workplace safety. Sudden, rapid changes can stress the body, hindering it from working effectively.

How Do You Know if Your Workplace is Safe?

Generally, a safe workplace should first begin with employers or company leaders actively promoting workplace safety and health programs. They are encouraged to start small and then move on to creating and maintaining large-scale programs and initiatives, and improving on them as needed. They may start by conducting a safety audit, to identify areas in the workplace that require actions to promote safety. Employees should also be involved in these, especially in the creation of systems that deal with identifying and addressing hazards. Managing workplace safety should be the priority and basis of all work-related tasks. 

Personal Protective Equipment (PPE)

Personal Protective Equipment (PPE) refers to protective clothing for the eyes, head, ears, hands, respiratory system, body, and feet. It is utilized to protect individuals from the risks of injury and infection while minimizing exposure to chemical, biological, and physical hazards. PPE serves as the final line of defense when engineering and administrative controls are insufficient in reducing or eliminating risks. 

Ergonomics

is the science concerned with designing and arranging things people use so that the people are comfortable and not be stressful.

Strand 2: STARTING A BUSINESS

What does business mean?

A business is defined as an organization or enterprising entity engaged in commercial, industrial or professional activities. Businesses can be for profit entities or non-profit entities.

What is a sole trader?

Being in business on your own, if you don’t set up a limited company at Companies House to run your business through, then by definition, you’re a sole trader.

When you’re a sole trader, you are self-employed, and legally, you and your business are one and the same. We’ll explore what that means in a bit more detail shortly.

What is a Partnership?

A partnership is a business with more than one owner that hasn't filed papers with the state to become a corporation or limited liability company (LLC). The partnership is the simplest and least expensive co-owned business structure to create and maintain. 

• General partnership. You form a general partnership by agreeing to do business with one or more other people 

• Limited partnership. This type of partnership consists of at least one general partner who manages the business and one or more limited partners who usually only finance the business. 

• Limited liability partnership (LLP). This type of partnership is a mix of a general partnership and a limited partnership. The partners co-manage the business and participate in the partnership's day-to-day activities. 

What is a Company?

A Company, abbreviated Co., is a legal entity formed by one or more individuals to engage in and operate a business. Companies can be either public or private and must generally be registered.

• One person company is an Indian concept where one person can create a company without having partners, board of directors or shareholders. 

• A private company is a form of company that doesn’t offer its shares to the public like in the public companies. 

• Public companies are those that advertise their stock and shares to the general public. 

Summary

What is a sole trader?

A sole trader is anyone operating a business where they are the sole owner and have not incorporated the business into its own legal person. As such, they have unlimited liability for the business’ debts and obligations. 

What is a company?

The most common type of company is a private company limited by shares. This business structure has its own legal personality, meaning it can own assets, enter into contracts, sue and be sued. A company’s shareholders are its ultimate owners, but the shareholders are not liable for the company’s obligations in excess of their shareholding in the company. 

What is a partnership?

A partnership is any business structure where the law treats the owners as partners. The most common form is a general partnership, which is an unincorporated business structure with unlimited liability. This means that you can be sued for your partners’ conduct and that the partnership itself does not own any assets.

Activity:

Visit some shops or establishments near you and kindly ask what type of business they are running, whether it is a sole trader, a partnership or a company. Determine the business name for each of the three types given.

Advantages and Disadvantages

Strand 2.2  Developing a Business Plan

What is a Business Plan

A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions. A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. 

A business plan lays out a written road map for the firm from marketing, financial, and operational standpoints. Both startups and established companies use business plans. 

A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions. 

Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals. 

Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction. 

Why Do Business Plans Fail? 

Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out of control budgets. Markets and the economy can also change - without flexibility built in to your business plan, you may be unable to pivot to a new course as needed 

Summary

• A business plan is a document describing a company's core business activities and how it plans to achieve its goals.

•   Startup companies use business plans to get off the ground and attract outside investors. 

• A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives. 

• Businesses may create a lengthier traditional business plan or a shorter lean startup business plan. 

• Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget 

Activity

1. Define a Business Plan. 

2. Explain the purpose of a business plan. 

3. Outline the steps of developing a business plan. 

4. Students to develop a Business Plan. 

Sub-Strand  2.3: Creating Business Ideas

Businesses need to use a method or tool or a way in which they can get a general understanding of what they are good or bad at and what outside factors might present them with chances for success or difficulty. SWOT analysis is a tool most businesses use to achieve this.

SWOT  What is SWOT?

SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym.

 A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid or matrix, as shown below.

Components of SWOT Analysis 

Every SWOT analysis will include the following four categories. Though the elements and discoveries within these categories will vary from company to company, a SWOT analysis is not complete without each of these elements: 

Strengths 

Strengths describe what an organization excels/excellent at and what separates it from the competition: a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on. For example, a hedge fund may have developed a proprietary trading strategy that returns market-beating results. It must then decide how to use those results to attract new investors. 

Weaknesses 

Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive: a weak brand, higher than average turnover, high levels of debt, an inadequate supply chain, or lack of capital. 

Opportunities 

Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales and market share 

Threats 

Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things like rising costs for materials, increasing competition, tight labor supply. and so on. 

(Please watch the clips below before doing the Activity at the bottom).

Activity:

Individual work:  (Pick a product that you would like to introduce into your company)

• Identify TWO (internal) strengths of your product. 

• Identify TWO (internal) weaknesses of your product

• Identify TWO (external) opportunities to promote your product 

• Identify TWO (external) threats to the marketing of your product

Present in a 2 x 2 matrix/grid - see SWOT analysis diagram on the right, above.

Sub-strand 3.1: BOOKKEEPING

Bookkeeping is the activity or occupation of keeping records of the financial affairs of a business: 

Journals, Ledgers and Report 

We, the bookkeeper, look at the cash deposit slip and the purchase receipt in the folder. We enter the transactions into the books in the following order: 

1. Journals – There are seven journals all together such as: 

a. General Journal 

b. Cash Receipt Journal 

c. Cash Payment Journal 

d. Sales Journal 

e. Sales return and allowances Journal

 f. Purchases Journal 

g. Purchases Return and Allowances Journal. 

2. Ledgers : There are two formats of a ledger account being used such as a T format and a 3 column format 

Bookkeeping Application - Business Transactions

Example 1: . 

1. Income Transaction 

• On June 1 Lotana, who owns a Clothing Business, receives a cash payment from her customer Mr. Smith for $100 for sales invoice 1. 

• Lotana goes and deposits the cash into the ANZ bank and puts a copy of the deposit slip into the bookkeeper’s file back at his office. 

2. Expense Transaction

• On June 2nd Lotana buys a bottle of window wash from The General Store who issues her a receipt showing the details of the transaction (date, description, amount and how it was paid).

• Lotana pays with her business bank card. the payment is electronically processed through the General Store's POS (point of sale) machine and the money is taken out of the Clothing Business bank account.

Double Entry Bookkeeping

Double-entry bookkeeping, also known as double-entry accounting, is a method of bookkeeping that relies on a two-sided accounting entry to maintain financial information. Every entry to an account requires a corresponding and opposite entry to a different account. The double-entry system has two equal and corresponding sides, known as debit and credit; this is based on the fundamental accounting principle.

Posting transactions into 'T' accounts

To post transactions to T-accounts, you can follow these steps: 

• Draw a T for each account 

• Write the account name above the T 

• Post transactions to the T-account in the order of debit (DR) and credit (CR) 

• Use the information from the journal entry 

Here are some other things to consider when posting transactions to T-accounts: 

• Debits and credits

• Debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts. 

• Balance

• The total debits must equal the total credits for each transaction to maintain balance. 

• T-account format

• The debit side is always on the left side of the T, and the credit side is on the right.

Check this video "Recording Transactions"  https://slideplayer.com/slide/2403794/

Activity : 

1. Post transactions, made by Wascally Wabbbitt Pest Control company to the General Journal

• Copy the General  Journal format below and post the company transactions to the Journal

2. Posting transactions to 'T' accounts

• Post the transactions from the General Journal to 'T' accounts

Wascally Wabbbitt Pest Control Transactions from July 1 to July 31.

General Journal

What are 'Accounts Receivable' and 'Accounts Payable'?

• Accounts receivable - amounts owed by customers to the company

• Accounts payable - amounts owed by the company to suppliers

Trial Balance 

What are the two methods of trial balance?

1. Total Method – Total Method records each ledger account's debit and credit columns to the Trial Balance. Both the columns should be equal as this method follows the double-entry bookkeeping method.

2. Balance Method – This method uses each ledger account's final debit/credit balance in the Trial Balance.

Balance Sheet

A balance sheet is a financial statement that summarizes a company's financial position at a specific point in time: 

• What it shows

A balance sheet lists a company's assets, liabilities, and owner's equity. The total of liabilities and owner's equity should equal the assets. 

• What it tells you

A balance sheet can show if a company is solvent, meaning it can cover its debts. It can also show if the company gained or lost value compared to previous balance sheets. 

• How it's used

Lenders use balance sheets to assess how comfortable they are lending money to a company. 

• How it's prepared

Balance sheets are usually prepared at the end of set periods, like quarterly or annually. 

• What it's also known as

A balance sheet is also called a statement of financial position or statement of net worth. 

• What's required by law

Along with an income statement and a statement of cash flows, a balance sheet is one of the three primary financial statements that all companies are required to have by law

Difference between a Balance Sheet and a Trial Balance Sheet

A balance sheet is a financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time, while a trial balance is a worksheet that lists the ending balances of all general ledger accounts, 

Sub-strand 3.2  Budgeting

What is a Budget?

A budget is a statement of projected income and expenses for a period in the near future. 

A personal budget or a home budget is a finance plan that allocates personal incomes towards expenses, savings and debt repayments. Past spending and personal debt are considered when creating a personal budget.

Preparing a budget

In a business a budget refers to an estimation of revenue and expenses made for a specified future period of time.

When we are preparing a budget, we must be clear on why it is being prepared. This is usually for at least one of the following three reasons. 

▪ To make ends meet, in other words, to make sure we can live on our income. 

▪ To make savings for future needs/means, i.e: you want to buy a car or a house in the future. 

▪ To support our application for loan finance. 

Budget Format

A successful budget planner helps you decide how to best spend your money while setting aside some for savings and avoiding or reducing debt. NerdWallet's budget template incorporates the 50/30/20 rule, which suggests that 

• 50% of your income goes toward needs, 

• 30% toward wants and 

• 20% toward savings and debt repayment. 

What is Income?

Is money received, especially on a regular basis, for work or through investments. 

Money earned from an employer and dividends/interest are all forms of income. 

Gross income is money received before deductions.

Net income is take-home pay after all deductions. 

Variable and Fixed Expenses

Variable Expense: 

Variable expenses are costs that fluctuate (rise and fall) based on usage. 

Examples include groceries, entertainment, gas, water, 'te karea', and children's school expenses,  which can change from month to month.  

Fixed Expenses:

Fixed expenses are costs that remain the same regardless of usage or production.

Examples include rent, mortgage payments, insurance, loans, and salaries.  

Activity:

Choose the 4th budget template above, copy into your Note book and fill in the necessary information that you deem the best for your personal budgeting.