COMMERCIAL STUDIES

YEAR 9

Week 1 (20/04-24/01) and Week 2 (27/04-01/05)

Note: Students are to attempt worksheet 1 and 2 in their Exercise book from the front. All
questions to be written with black pen and answers with blue pen.

WORKSHEET 1 (30 MARKS)

1. What is the difference between needs and wants? (2 marks)

2. State two basic needs of a family. (2 marks)
3. List one long term goal which you have identified this year. (1 mark)
4. How did you plan to meet your long term goal stated in (3) above? (1 mark)
5. Define barter system (1 mark)
6. In which year was money introduced in Fiji? (1 mark)
7. Define money. (1 mark)
8. Explain the following qualities and functions of money:
i. Portable
ii. Durable
iii. Medium of exchange (3 marks)
9. Identify two ways to keep money safely. (2 marks)
10. State two basic functions of commercial banks (2 marks)
11. Name two requirements to open a bank account. (2 marks)
12. Differentiate between cash and cheque payments (2 marks)
13. Identify the method of payment used for payment in the supermarkets
through EFTPOS machines. (1 mark)
14. Identify one role of consumers in Fiji. (1 mark)
15. For each of the following cases, identify the consumer right or responsibility
from the resource list that can be exercised:

Resource List
The responsibility of Environmental awareness
The right to representation
The responsibility of critical awareness
The right to redress
The right to consumer education

i. We have the right to be compensated for being cheated.

ii. As consumers it is our duty to be more observant and curious about the price.
iii. Consumers are free to give their views on matters affecting them when policies are made
iv. It is necessary to look after the environment for the upcoming generations
(4 marks)
16. List two factors that affect consumer choices and preferences (2 marks)
17. Explain persuasive advertisement. (1 mark)
18. Describe an effect of advertisement on consumer. (1 mark)
 WORKSHEET 2 (30 MARKS)

1. State one disadvantage of advertisement on consumer. (1 mark)

2. Identify two laws that protect consumers in Fiji. (2 marks)
3. Define inflation. (1 mark)
4. Identify the impact of inflation on prices of goods and services. (1 mark)
5. Use the description in column A to match the answers with column B

Column A Column B
1 Is a plan of families income and expenses A Fixed Expense
2 Expenses that remain the same for a long period of B Earned income
time
3 Refers to income received from source which requires C Dividends
actual work and effort
4 Profit distributed to shareholders D Family Budget
5 Income received on hourly basis E Unearned income
6 One years income F Variable expense
G Wages
H Salary

(6 marks)
6. Explain personal budget. (1 mark)
7. Explain two components of a budget (2 marks)
8. Identify two fixed expenses of a family. (2 marks)
9. State two reasons why it is important to save. (2 marks)
10. Mr. Sirsa Singh earns $3,000 per month from his taxi business. He rents out part of his house
for $400 per month.

The family expenditures are as follows:

$
Food 250 per fortnight
Electricity Bill 15 per week
Social Committee Levy 10 per fortnight
Clothing 100 per month
Travelling 120 per fortnight
Medical Expenses 300 per annum
Recharge Card 25 per fortnight
Insurance Premium Payment 60 per month

Required:
i. Prepare Mr Singhs Family budget for a month. (6 marks)
ii. Calculate the total amount of money that the Mr Sirsa can save in 3 years if they
keep strictly to this budget. (2 marks)
a) Identify one factor which influences decision making. (1 mark)
b) Shanaya in a University student. She never keeps track of her income and expenses.
State three impact of unplanned spending that Shanaya can face. (3 marks)
Week 3 (04/05-08/05)

Financial Accounting

Reasons for Starting a Business

✓ To earn income by making profit
✓ To meet needs and wants
✓ To beat unemployment
✓ To increase wealth

Factors that small business Entrepreneurs must consider before starting their own business
✓ Goods and services to be produced
✓ Location of the business
✓ Type of labour and skills required
✓ Transportation costs
✓ Competition in the market
✓ Rate of profitability
✓ Legal requirement – business license
✓ Availability of required materials and equipment

The Accounting Process

Stages of Accounting Process

Transactions are financial events that take place in a
Transactions
business.

Source Documents are evidences that a transaction has

Source Documents taken place

Journal Journals are books of first entry.

Ledger Accounts Ledger is list of all accounts in a business.

Trial Balance Trial Balance is a list of all ledger account balances.

Final Accounts The three final accounts are Trading Account, Profit &
Loss Account and Balance Sheet
 Types of Transactions

1. Cash Transactions – are those transactions that involve immediate transfer of cash.
Examples- Paid wages $100, Received Rent $150, Cash Sales $200

2. Credit Transactions – are those financial trasactions that involve payment or receipt of cash at a
later date.
Example – Sold goods to Samu $50, Bought a Honda CRZ from Automart $12000

3. Revenue Expenditure – refers to buying of goods for resale and payment of any expenses.
Example – Cash Purchases $120, Paid wages $60

4. Capital expenditure – refers to buying and selling of fixed assets either on cash or credit and
paying off liabilities.
Example – Paid Loan $300, Bought a Computer from Bomdwell $1200

Refer –Activity 3.3.1 (pg 94)

Samantha operate a Fish Processing Business in Navua. Given below are the transactions that took
place in March, 2010

March 1 Invested $3000 in the business

9 Paid interest on laon for $15
17 bought fish cleaning equipment from Fisheries Suppliers $300
23 Owner took cash for personal use $100
26 Sold fish to Anare $200
27 Paid wages $150.
Required
State whether the above transactions are cash or credit.

Activity 3.3.2 (pg 95)

Harry Marlos owns a bakery in Labasa. Given below are the transactions that took place in January,
2010 .

1. Bought bakery machines from Courts Homecentres.$5 500.

2. Purchased fuel and oil for cash for $200.
3. Bought flour and yeast for the bakery.$100.
4. Bought a computer table and chair for cash $1080.
5. Purchased sugar for cream from the supermarket $80
6. Paid Wages to the labour $70

Required:
State whether each of the transactions 1-6 is capital expenditure or revenue expenditure.
 Week 4 (11/05-15/05)
Chart of Accounts
A chart of Accounts is a complete list of ledger account titles and account numbers used in the
accounting system.

Elements of Accounting
1. Assets – things owned by the business.
2. Expenses – cost incurred by the business.
3. Liabilities – are things owed by the business.
4. Proprietorship – are owners equity.
5. Revenue – income earned.

Chart of account for small trading business can be illustrated as follows:

Assets[A]
Current Assets
Cash In Hand Cash At Bank Accounts Receivable/ Debtors
Petty Cash Stock / Inventory Income Due
Expenses Prepaid
Fixed Assets
Land Buildings Furniture
Plants Equipment Motor Vehicle
Fixtures Fittings

Expenses
Purchases Wages Purchases Returns (Negative Exp)
Insurance Rates Customs Duty
Freight Inwards / Outwards Repairs Maintenance
Carriage Inwards / Outwards Stationery Telephone
Electricity Water Bill Cleaning
Advertising Salaries Depreciation
Bad Debts Doubtful Debts Rent
Discount Allowed Interest

Liabilities
Current Liabilities
Bank Overdraft Accounts Payable/ Creditors Expenses Due
Income In Advance Short Term Loan

Long Term Liabilities

Loan Mortgage

Proprietorship
Capital Drawings (Subtract) Net Profit (Add)

Revenues
Sales Commission Received Sales Returns (Negative Revenue)
Discount Received Interest Received Rent Received
Bad Debts Recovered Other Revenues
 Week 5(18/05-22/05)

Analysis Chart
✓ Analysis Chart is a method of summarizing transactions.
Given below is an example of an analysis chart which summarises some common business
transactions.
Date Transactions Accounts Increase / Elements Amount
Affected Decrease $
May 1 Cash sales $100 Cash Increase Assets 100
Sales Increase Revenue 100
2 Sold goods to Jasbir $200 (credit sale) Jasbir - debtor Increase Asset 200
Sales Increase Revenue 200
3 Jasbir returned faulty goods worth $20 Sales Returns Increase -Revenue 20
Jasbir - debtor Decrease Asset 20
4 Jasbir paid his account $180 Cash Increase Asset 180
Jasbir-debtor Decrease Asset 180
5 Bought Furniture (any fixed asset) for Furniture Increase Asset 2000
cash $2000 Cash Decrease Asset 2000
6 Sold Equipment (any fixed asset) on Mr Singh - debtor Increase Asset 1500
credit to Mr Singh $1500 Equipment Decrease Asset 1500
7 Received rent $200 (revenues) Rent increase revenues 200
Cash Increase Asset 200
8 Paid wages $50 (any expense) Wages Increase Expense 50
Cash Decrease Asset 50
(Note: students please refer to pages 99 and 100 of your Commercial Studies Year 9 textbook
for all possible examples)
Refer—Activity 3.5.1 (pg 101)
Sham owns a sugarcane farm in Labasa. Below are the transactions that took place on his farm from
January to June 1997
i. Bought goods from Tractor Spares Co. $900.
ii. Purchased fuel and oil for $185 cash.
iii. Received sugarcane income $8 900.
iv. Paid for tractor repairs $90.
v. Paid loan $1600

Required:
Show the effects of this transaction on the Analysis Chart with heading as accounts affected, account
type, increase/decrease, Dr, Cr, amount
Refer—Activity 3.5.2 (pg 101)
On 2 July 2007, Bobby started a video shop with $2 500 cash in Sigatoka. His transactions for the
month were as follows:
July 9 Bought original DVD movies on credit form Pacific Video Limited for $900.
19 Paid Pacific Video Limited $500
23 Sold DVD movies to Vicky’s Video Hire $1 950
31 Paid wages $160
Required:
Show the effects of this transaction on the Analysis Chart with heading as accounts affected,
account type, increase/decrease, Dr, Cr and the amount.
 Week 6 (25/05-29/05)
The Accounting Equation

Basic Accounting Equation – Assets = Liabilities + Proprietorship

Extended Accounting Equation – Assets + Expense = Liabilities + Proprietorship + Revenues

Example
Gokul Bhai started his grocery business with the following assets and liabilities on 1st March:
Cash at Bank $4,500 Accounts Receivable $450 , Equipment $12,000
Building $35,000 Loan $9,000 Accounts Payable $200
The following transactions took place during the month:
02/03 Bought equipment for cash $2,500
15/03 Sold goods for cash $450
19/03 Peter, a debtor, paid his account $50
25/03 Paid Water Bill $38
26/03 Received commission $350

Required:
a. Prepare the analysis chart
b. Calculate the Capital for Gokul Grocery Store on 1st March
c.. Show the effects of each transaction on the BASIC Accounting equation

b. Capital = Assets - Liabilities

=(4500+450+12000+35000) - (9000+200)
= 51950 - 9200
= $42750
 c.

Refer Activity 3.6.2

S. Patel operates a canteen in Dilkusha. The assets and liabilities of her business as at 1st March,
2006 were as follows:
Cash at Bank 2 300 Debtors 600 Furniture and Equipment 3 000
Creditors 1 500 Proprietorship ?

During March 2006 the following transactions took place:

March 5 Cash Sales $100
8 Bought a refrigerator from M.H .Homemaker for $600 and made a down payment of
$200.
10. Sold goods on Credit $50
15 Received $190 from a debtor
19 Bought goods on Credit from A .Cama $130.
24 Paid electricity bill $50 26 Paid A. Cama $100
31 The proprietor took cash for own use $80

Required:
a. Prepare the analysis chart
b. Calculate the value of the proprietorship
c. Show the effects of the transaction on the equation.

Refer Activity 3.6.2

Week 7 (01/06-05/06)

Ledger Accounts
✓ Ledger is a record of all accounts of a business.
✓ A ledger is prepared using Double Entry Concept whereby for every transaction two accounts
are affected: one the debit entry and the other correscponding credit entry.

Activity 1
 Activity 2

Week 8 (08/06-12/06)

Trial balance

Debit side (left hand side) – records all the Assets, Expenses and Drawings (A, E, D)
Credit side- (right hand side) - records all the Liabilities, Proprietorship and Revenues (L, P, R)

Trial Balance of Flory Grocery Store for the year ended 31st December, 2019

A, E, D $ L, P, R $

Question 1
Amit Singh operates his business known as Singh’s Enterprises. He keeps all his accounting
records in a general ledger. Given below are the ledger balances as at 30 th Junes, 2016.

Ledger Accounts $ Ledger Accounts $

Motor Vehicle 12000 Stock 7300
Capital 25750 Purchases 8300
Furniture 3000 Debtors 2500
Creditors 3200 Loan 9000
Cash at bank 20300 Commission Received 60
Drawings 50 Discount Allowed 200
Sales 15600 Discount Received 40

Required: Prepare a Trial Balance of Singh’s Enterprises business for the year ended 30 th June
2016.
Question 2
Semesi operates a seed selling business known as Happy Garden Store. Semesi has provided you
with the following ledger account balances as at 31st July, 2019.
Ledger Accounts Balance ($)
Cash at bank 5000
Stock 3300
Debtors 2000
Creditors 3500
Rent (expense) 500
Electricity Bill 300
Sales 8000
Purchases 4000
Loan 7500
Drawings 150
Furniture 1500
Van 10000
Equipment 2300
Capital 10050
Required: Prepare a Trial Balance of Happy Garden Store for the year ended 31 st July, 2019.

Balance Sheet / Statement of Financial Statement

✓ A Statement of Financial Position is a statement of the Assets, Liabilities, and
Proprietorship at a certain date showing what the business owns and what is owes.
✓ It is also known as Balance Sheet.
✓ Purpose of a Balance Sheet: is to show the financial position of a business at a certain date.
✓ Assets are classified into:
i. Current Assets- are those things owned by the business which can be turned into cash
within on accounting period. (within one year)
ii. Fixed Assets – are assets owned by the business to earn revenue for several
accounting periods
✓ Liabilities are classified into:
i. Current Liabilities – are to be paid within one accounting period
ii. Long Term Liabilities – are liabilities which can be paid over a period of years.

Example
From the following information, prepare a fully classified balance sheet of Osea Lovai as at 31 st
December, 2013.
$
Cash at bank 12500
Debtors 16000
Stock 4250
Creditors 34000
Loan 50000
Capital (1.1.2013) 155000
Net Profit 18000
Drawings 72640
Furniture 16610
Delivery Van 15000
Land and Building 120000
Solution
Balance Sheet of Osea Levai as at 31st December 2013.
Assets $ $ Liabilities $ $
Current Assets Current Liabilities
Cash at bank 12500 Creditors 34000
Debtors 16000
Stock 4250 32750 Long- Term Liabilities
Loan 50000
Fixed Assets
Furniture 16610 Proprietorship
Delivery Van 15000 Capital 155000
Loan and Building 120000 151610 Add Net Profit 18000
173000
Less Drawings 72640 100360
$184360 $184360

Refer Activity 4.3 (pg 120)

R. Daniva is a proprietor of Super Brite Laundry in Suva. His Assets and Liabilities as as 31 st
December 2010 were as follows:
$
Cash 5 000
Equipment 20 000
Buildings 40 000
Debtors 2 000
Loan 10 000
Capital 57 000

Required:
Prepare R. Danivas Balance Sheet As At 31st Decmeber 2010.