Professional Documents
Culture Documents
GRADE
Business and
Entrepreneurship
Education (BEE)
Professor Vassen Naëck - Head Curriculum Implementation,Textbook Development and Evaluation
Design by
ISBN: 978-99949-44-60-6
Acknowledgement
The Business and Entrepreneurship Education (BEE) textbook panel wishes to thank:
- Shalini Jagambal Ramasawmy (Senior Lecturer, MIE) for proof reading.
Consent from copyright owners has been sought. However, we extend our apologies to those we might have overlooked.
All materials should be used strictly for educational purposes.
ii
Foreword
As the first cohort to embark on the Nine Year Continuous Basic Education at secondary level, we are
pleased to offer you a new series of Grade 7 textbooks. These textbooks have been designed in line
with the National Curriculum Framework (NCF) and syllabi for Grades 7, 8 and 9 − documents that
offer a comprehensive notion of learning and teaching with regard to each subject area. These may be
consulted on the MIE website, www.mie.ac.mu.
This set of textbooks aims at providing a smooth transition from Grade 6 so that learners gradually
get initiated into the requirements of secondary schooling. As per the philosophy propounded by the
NCF, the content and pedagogical approach, as well as the activities, have been crafted to allow for an
incremental and continuous improvement of the learners’ cognitive skills. The content is contextual and
based on the needs of the Mauritian learners. Care has been taken to provide the basics that should
help every student develop key competencies, knowledge, skills, attitudes and values that would make
him or her a successful learner for the grades beyond. The comments and suggestions of a variety of
stakeholders have been kept in mind. We are especially appreciative of those made by educators who
have been part of our validation panels, and whose suggestions emanate from long standing experience
and practice in the field.
The production of this series of textbooks, within a relatively short period of time, has been a challenge
to the writers who have invested a considerable amount of time, effort and energy into the process.
I would therefore wish to thank all those who have been part of the whole process for the time they
devoted to it and their perseverance. The panel coordinators are to be commended for their leadership
and insistence on maintaining the standard and quality of the textbooks, while ensuring that the
objectives of the National Curriculum Framework are translated in the content.
Every endeavour involves a number of dedicated, hardworking and able staff whose contribution
needs to be acknowledged. Professor Vassen Naëck, Head Curriculum Implementation and Textbook
Development and Evaluation, had the very demanding task of ensuring that all panel leaders are
adequately guided with respect to the objectives of the NCF, while ascertaining that the instruction
designs are appropriate for the age group being targeted. I also have to acknowledge the efforts of the
Graphic Artists and the Graphic Unit for putting in much hard work to ensure that MIE publications have
a distinctive quality that singles them out. My thanks go equally to the support staff who have worked
hard to ensure that every one receives the necessary support and work environment that is conducive
to a creative endeavour.
I am thankful to all those who provided the support, both within and outside the MIE, and to the Ministry
of Education, Human Resources, Tertiary Education and Scientific Research for giving us the opportunity
to be part of the whole reform process.
Dr O Nath Varma
Director
Mauritius Institute of Education
iii
Preface
Business and Entrepreneurship Education (BEE) has emerged as a new subject, which is in line with
the objectives of the Nine Year Continuous Basic Education Reform 2016. The BEE curriculum lays
the foundation for understanding the diverse aspects of the modern business environment while
initiating learners towards a culture of entrepreneurship and developing an interest for business
acumen.
The BEE Curriculum comprises of four distinct and key academic subjects of the 21st Century
Learning namely Economics, Business, Enterprise and Accounting to be taught in Grades 7-9 at lower
secondary level. The aim of this textbook is to enhance teaching and learning all subjects under BEE.
The textbook also looks into terminologies, concepts, and real life situations relating to Economics,
Business, Enterprise as well as Accounting. The content knowledge in Business and Entrepreneurship
Education (BEE) will enable learners to apply and transfer the knowledge and skills acquired to other
subject areas and also build a strong foundation for those who wish to move to upper classes and /or
training as it draws into many other fields of study.
The different units have been designed in a clear and logical style, which are interspersed with a
wide spectrum of classroom activities to develop the creative thinking skills of learners. Readers
will find simple explanations, short stories, mini conversations, short case studies, worked examples
and multiple choice questions. The end of unit activities and key terms provide a quick reference for
learners to consolidate their understanding.
Educators are advised to devise interactive lesson plans and use innovative teaching methods that
promote effective teaching and learning. They have the freedom to choose classroom activities that
allow them to progressively assess the competencies of learners.
The Authors
iv
Table of contents
Unit 1: Needs and Wants 1
1.1 Basic needs 2
1.2 Wants 4
1.3 Entrepreneurs satisfying human needs and wants 6
1.4 Basic economic problem 8
v
Unit 6: Entrepreneurial Culture 67
6.1 Earning a livelihood 68
6.2 Discovering different occupations 70
6.3 Factors influencing choice of occupation 72
6.4 Self-employment 73
6.5 Why people start their own enterprise? 73
6.6 Discovering entrepreneurial culture 74
6.6.1 Factors influencing entrpreneurial culture 74
6.7 Steps towards successful entrepreneurship 76
vi
Unit 1 I Needs and Wants
Unit 1
Needs and Wants
Learning Objectives:
On completing this unit, you will be able to:
In this unit, you will learn about needs and wants, and discover how
entrepreneurs are involved in satisfying the needs and wants of individuals.
You will also discover three important concepts, namely scarcity, basic
economic problem and opportunity cost.
1
Unit 1 I Needs and Wants
Basic needs are essential for survival. The three basic needs Basic needs refer to those things
are food, clothing and shelter. that are essential for survival.
Food
Human beings need food for survival, as the body requires nutrients to stay healthy. A large
variety of food is produced, for example vegetables, rice, bread, fish and meat. Food are sold at
different places such as school canteens, bakeries, vegetable markets, supermarkets, as well as
hypermarkets.
The figure below shows different types of food. Observe the figure and fill in the empty space
with an example of your own.
Food
Clothing
Clothing is needed to protect our body. Different types of clothes are needed by individuals,
depending on the climate. For example, during winter people wear warm clothes whereas
during summer they wear light clothes.
The figure below shows different types of clothes. Observe the figure and fill in the empty space
with an example of your own.
Clothing
T-shirt Trousers
Figure 3: Examples of clothing
Shelter
Shelter is a place to live, which protect us from the weather. Different types of shelter like houses
or apartments are built to meet the needs of individuals.
The figure below shows different types of shelter. Observe the figure and fill in the empty space
with an example of your own.
Shelter
House Igloo
3
Unit 1 I Needs and Wants
Activity 1
Basic needs refer to those things that a person ________________ live without. The three
basic needs are ________________ , ________________ and ________________ .
Activity 2
1.2 Wants
People satisfy their needs before satisfying their wants. For example, a family will spend on
food, clothing and shelter before paying for their wants.
5
Unit 1 I Needs and Wants
Activity 3
Wants refer to goods and services that are not ______________ for survival. To satisfy
our wants, we need to have the capacity to ______________ for them. Wants are
______________ and vary according to ______________ and ______________ .
Activity 4
6
Unit 1 I Needs and Wants
Entrepreneurs Consumers
Payment
Activity 5
Read the case studies below and carry out the activity that follows.
Case Study A
Entrepreneur in Mauritius
D. Sarjua can be called the Mauritian ‘Serial Entrepreneur’. He started his career at the age
of 24 as a vegetable seller. His enterprise is specialised in a number of agro-related projects,
namely the production of pickles, jams, spices, herbal
tea with bettlenut leaves known as ‘betel’ and tuna with
pink pepper. He was the first Mauritian to export chillies
(‘ti piment vert’) to Réunion Island. Sarjua products are
popular in many supermarkets in France and in other
parts of Europe. He continued to develop his enterprise
and added cassava (‘manioc’) and breadfruit flour to his
exhaustive line of products.
(Source: www.lemauricien.com)
7
Unit 1 I Needs and Wants
Case Study B
Entrepreneur in Rodrigues
Miel Victoria has been set up by Marie-Claude Donze in Rodrigues Island in 2005. Miel Victoria
proposes honey, but also derivatives such as sweets. The enterprise also produces cream for the
body and the hair (the famous Bee Coco Cream) from beeswax and coconut oil. Miel Victoria
offers products (spray for the throat and balm for healing)
from propolis.
(a) Mr Sarjua started his career as a _______________________ . (fruit seller / vegetable seller)
______________________________________________________________________________
______________________________________________________________________________
Is the money available sufficient to buy all your needs and wants?
Even if you had more money, could you be able to satisfy ALL of your wants?
8
Unit 1 I Needs and Wants
The basic economic problem is that human wants are unlimited or infinite but the resources available
to satisfy them are limited or scarce.
Resources are also said to have alternative uses. This means that resources available can be used for
several purposes. For instance, water can be used for washing, drinking, irrigation or cleaning. Money
can be used to buy food, mobile phones, clothes or cinema tickets. A plot of land can be used to build
a school, a house or to cultivate crop.
Scarcity refers to the basic economic
Resources are always scarce to satisfy unlimited human wants. problem where wants are unlimited but
There is a permanent state of imbalance between unlimited resources available to satisfy them are
wants and limited resources. This basic economic problem is also limited.
called scarcity.
Sarah’s scarce
resources (Rs 100)
Options
Opportunity Cost
Choice
Figure 9: Sarah’s options
9
Unit 1 I Needs and Wants
Activity 6
Activity 7
10
Unit 1 I Needs and Wants
Column A Column B
Column A A B C D E
Column B
11
Unit 1 I Needs and Wants
Group Presentation
KEY TERMS
Basic needs refer to those things that are essential for survival.
Entrepreneur refers to someone who organises and manages a business, with the aim of
making profit.
Goods are tangible, that is, they can be seen and touched.
Purchasing power or capacity to pay refers to the ability to buy goods and services.
Risk-taking means that entrepreneurs venture into a new business even if there is a risk of
making losses.
Scarcity refers to the basic economic problem where wants are unlimited but resources available
to satisfy them are limited.
Services are aids that satisfy those who consume them, though they cannot be touched,
that is, they are intangible.
Wants are those goods and services people would wish to have but which are not
essential for survival.
12
Unit 2 I Goods and Services
Unit 2
Goods and Services
Learning Objectives:
In this unit, you will learn about the different types of goods and services
that are provided by entrepreneurs and the government to satisfy needs
and wants.
13
Unit 2 I Goods and Services
Activity 1
(a) Identify the goods and services mentioned in the above conversation.
___________________________________________________________________________
___________________________________________________________________________
(b) List two goods and two services that you require to satisfy your needs and wants.
14
Unit 2 I Goods and Services
2.2 Types of goods
1. Free Goods
Free goods are provided by nature. Individuals use them without making any form of payment
and they are unlimited in supply. For example, sunlight is available to every human being.
Enterprises do not pay for sunlight when they use solar energy to produce electricity. At the
seaside, the beach is freely available to everyone.
Free goods are provided by nature.
A free good can also be described as a good that Individuals use them without making
can be consumed by everyone at the same time. any form of payment.
For example sunlight, sea water and pure air.
Free Goods Rs 0
t
ligh re air
Sun Sea Pu
2. Economic goods
In contrast to free goods, economic goods are scarce. People have to pay for them and they
are not abundant in supply. Enterprises use scarce resources to produce different types of
economic goods, which they sell for profit. Economic goods are goods that are obtained in
exchange of a payment.
Economic Goods
ry
s elle
Fan Pen Jew
15
Unit 2 I Goods and Services
Activity 2
Activity 3
(b)
(c)
16
Unit 2 I Goods and Services
Economic goods can be classified into private goods and public goods. Most of the goods are
produced by entrepreneurs, except public goods, which are provided by the government.
ECONOMIC GOODS
17
Unit 2 I Goods and Services
A. Private goods
Private goods are goods that
consumers buy for their personal
Private goods are goods that consumers buy for their
use. Consumption of a private good
personal use. Consumers own private goods because they pay
by one individual prevents another
for them. For example, if Jane buys a pen then she is the owner
individual from consuming it.
of the pen.
B. Public goods
A public good is a good or service that
Public goods are goods or services that are provided only is provided only by the government.
by the government to everyone. For example, street lighting
and police services.
The Government is the authority of a
The government provides public goods in order to improve country having the power to decide
the welfare of the citizens. on behalf of people in a society.
18
Unit 2 I Goods and Services
Activity 4
Fill in the table with two features of private and public goods.
C. Consumer goods
Bread Television
D. Durable goods
Durable goods are goods, which last for a long period of time.
Durable goods are goods which last
They can be used over and over again. For example, an individual
for a long period of time.
may use a car for a number of years. Office furniture is another
example of durable goods.
19
Unit 2 I Goods and Services
E. Non-durable goods
Non-durable goods are goods that are consumed over a Non-durable goods are goods that are
short time period as they have a limited lifespan. Examples of consumed over a short time period as
non-durable goods are cakes, fresh vegetables, sandwiches they have a limited lifespan.
and fresh flowers.
Activity 5
Fill in the table with two features of durable and non-durable goods.
20
Unit 2 I Goods and Services
Activity 6
(a) Smartphone
(b) Bread
(d) Bicycle
(f ) Fishing rod
F. Producer goods
Producer goods are man-made goods used to produce Producer goods are man-made goods
other goods and services. For example tools, equipment and used to produce other goods and services.
machinery are used to facilitate the production of economic
goods.
21
Unit 2 I Goods and Services
Activity 7
Computer
Textile Manufacturing
Machine
Deep sea fishing
Boat
Call centre
Greenhouse
Greenhouse farming
2.4 Services
Services are aids that satisfy those who consume them, Service is an aid that satisfies the
though they cannot be touched. For example, a dentist one who consumes it though it
provides treatment to patients. Services are activities
cannot be touched.
carried out by individuals for the benefit of others.
Activity 8
Read the case study below and carry out the activity that follows.
On a Saturday morning, Rihan decided to accompany his mother to the dentist. They
decided to go by bus and on their way to the city centre, they saw people buying fresh
vegetables in a small village market.
The low floor air conditioned bus stopped at the city centre and all the passengers were able
to get down. It was quite warm and mother bought a bottle of cold water for herself and
mango juice for Rihan. Afterwards, they both made their way to the dentist.
While mother was waiting for her turn, Rihan went to a nearby shop and bought a flash
disk. Then, he stopped at ‘Cool electronics’ to buy a few bulbs. Rihan used the free wifi
service to phone his father and requested him to join them for lunch.
(a) Identify the goods and services used by Rihan and his mother.
Goods Services
23
Unit 2 I Goods and Services
2. Choose the correct answer for each of the questions below and write it in the space
provided.
3. Imagine yourself as an entrepreneur. Suggest a good or service that you would like to
produce and give three reasons for your answer.
Good or Service:
Reason 1:
_____________________________________________________________________________
_____________________________________________________________________________
Reason 2:
_____________________________________________________________________________
_____________________________________________________________________________
Reason 3:
_____________________________________________________________________________
_____________________________________________________________________________
24
Unit 2 I Goods and Services
4. Read each scenario and state whether you are purchasing a good or a service.
Write the word good or service on each line.
(i) Give an example of someone purchasing a service. [Do not use an example from the above.]
_____________________________________________________________________________
(j) Give an example of someone purchasing a good. [Do not use an example from the above.]
_____________________________________________________________________________
5. Match each term in Column A with the corresponding definition in Column B. Write
your answers in the table which follows.
Column A Column B
B Economic goods 2 Goods which are made to last for a long period of time.
Column A A B C D E
Column B
25
Unit 2 I Goods and Services
KEY TERMS
A consumer is someone who buys goods and services to satisfy his/her needs and
wants.
Consumer goods are goods which satisfy human needs and wants through their
direct consumption or use.
Durable goods are goods which last for a long period of time.
Economic goods are produced using scarce resources. People have to pay for them
and they are not abundant in supply.
Free goods are provided by nature. Individuals use them without making any form
of payment.
Goods are tangible items, that is, they can be seen and touched.
Non-durable goods are goods that are consumed over a short time period as they
have a limited lifespan.
Private goods are goods that consumers buy for their personal use. Consumption of
a private good by one individual prevents another individual from consuming it.
Producer goods are man-made goods used to produce other goods and services.
Service is an aid that satisfies the one who consumes it though it cannot be touched.
26
Unit 3 I Factors of Production
Capital Land
Enterprise Labour
Factors of production
Unit 3
Factors of Production
Learning Objectives:
On completing this unit, you will be able to:
• describe the four factors of production
• differentiate between renewable and non-renewable resources
• identify the reward for each factor of production
• explain the use of factors of production in the production process
In this unit, you will learn about the different factors of production, namely
land, labour, capital and enterprise, as well as their uses in the production
process to obtain goods and services. You will also learn the difference
between renewable and non-renewable resources.
27
Unit 3 I Factors of Production
Factors of production
28
Unit 3 I Factors of Production
Activity 1
Read the case study below and carry out the activity that follows.
To prepare the pickles, Mrs Claire uses ingredients like lemons, chillies,
honey, salt, and oil, among others. Items like utensils, knives, water,
electricity, gloves, mixer/grinder are also used in the production. Mrs
Claire employs Emilie to assist her in the enterprise. She also helps her to
cultivate lemons, chillies and garlic on a plot of land in front of her house.
3.1.1 Land
Land refers to the natural resources or free gifts of nature used in the production of goods
and services.
For example, a restaurant or a school uses natural resources like a plot of land for the construction
of buildings. A jeweller uses gold and precious stones to make jewellery.
Water Sunlight
29
Unit 3 I Factors of Production
Activity 2
Identify and tick the natural resources from the list below.
Mr Ramen and his daughter, Jenna, stopped at a filling station on their way to school. She
started thinking about the large difference between the price of petrol and the price of
water.
Jenna: Dad, what is more precious, water or petrol?
Dad: Jenna, obviously water is essential for life. We would all die without it.
Jenna: Then why is petrol so expensive while water is much cheaper? Should water not
be more expensive than anything else if it is essential for life?
Dad: Water is a renewable resource. When it rains, the reservoirs are filled up again. In
this way, water is replaced by rainfall but oil reserves are not easily replaced
by nature. Therefore, it is said that petrol is a non-renewable resource.
Jenna: O
h, now I understand! Non-renewable resources are
not easily replaced by nature, this is why they are more expensive.
30
Unit 3 I Factors of Production
Land or natural resources can be classified into renewable and non-renewable resources.
Natural Resources
Oil
Rain Coal
Gas
Sun Gold
Non-renewable resources are resources which are not easily replaced by nature. Some
resources are limited in supply. Once they are used, the quantity available is reduced. Therefore,
non-renewable resources must be used cautiously.
Activity 3
31
Unit 3 I Factors of Production
3.1.2 Labour
All enterprises need people in the production of goods and Labour refers to workers who provide
services. Labour refers to workers who provide physical their physical and mental efforts to
and mental efforts to produce goods and services. Another produce goods and services.
term for labour is human resource. Without human efforts,
production cannot take place.
Activity 4
(a) Identify three examples of the factor of production labour in your school.
, and .
(b) R
eferring to the case study “Zassar Unik”, identify an example of labour used
by the entrepreneur, Mrs Claire.
32
Unit 3 I Factors of Production
3.1.3 Capital
Capital refers to man-made resources
Capital refers to man-made resources used in the used in the production of goods and
production of goods and services. Capital is an important services.
resource used by enterprises to produce final goods.
For example, in the production of shoes machines, A final good is a good which is
equipment, factory building as well as computers are ready for consumption.
used.
in an
enterprise
Non- Non-financial capital are other
Financial man-made resources required
Capital to produce output.
Activity 5
State whether the following statements are True or False.
33
Unit 3 I Factors of Production
3.1.4 Enterprise
Enterprise as a factor of production
combines the other three factors
The fourth factor of production is enterprise. Enterprise (land, labour and capital) to
as a factor of production combines the other three produce goods and services with
factors (land, labour and capital) to produce goods the aim of making profits.
and services with the aim of making profits. The
entrepreneur (decision-maker) is responsible for Profit occur when revenues are
organising resources and takes all the important greater than costs. It is calculated
decisions in the business, such as what to produce, as follows:
whom to employ and where to locate the business.
Profit = Revenue – Cost
As a risk-taker, the entrepreneur can make profits if the
business is successful or losses if the entrepreneur does Loss occur when costs are higher
not manage the business properly. than revenue.
34
Unit 3 I Factors of Production
Activity 6
A a risk-taker only.
B a decision-maker only.
C both a risk-taker and a decision-maker.
D a natural resource. Answer: _______
2. Sabrina took a risk and invested her savings to set up a new business of cooking
home-made snacks and supplying them to supermarkets. An example of risk taken
by Sabrina is
A making profits.
B making losses.
C she is the only decision-maker.
D she is not helped by her friends in her enterprise. Answer: _______
3. An example of an entreprise is
A a self-employed taxi driver.
B a supermarket worker.
C a gym secretary.
D an office worker. Answer: _______
35
Unit 3 I Factors of Production
Activity 7
The money left after all these expenses become his profit.
Rs Rs
Revenue from sales 50,000
Less expenses:
Rent 5,000
Wages 10,000
Interest 2,000
PROFIT 18,000
(a)
Factors of production Example in the case
Rewards to factors of production
used by Mr Sham study
__________________________________________________________________
36
Unit 3 I Factors of Production
Activity 8
Match each term in Column A with the corresponding definition in Column B. Write
your answers in the table which follows.
Column A Column B
Factors of production Definition
Column A A B C D E
Column B
The production process refers to the steps involved in The production process refers to
converting factor inputs into output. It is a complex process steps involved in transforming factor
where entrepreneurs organise resources for production to inputs into output.
take place.
Resources Goods
or &
Factors of Production Services
37
Unit 3 I Factors of Production
The figure below shows the production process in “Zassar Unik Enterprise”.
1 2 3 4
Cultivation Purchase of Preparation Packaging
of lemon raw materials of pickles
Figure 9: Example of the production process in ‘Zassar Unik’ enterprise
Add pic
PRODUCTION
INPUTS PROCESS OUTPUT
Resources or
Goods & Services
Factors of Production
38
Unit 3 I Factors of Production
CERTIFICATE
1. Jim and Tom are two young entrepreneurs. They are business partners and owners of Sea
Sports Club, an enterprise which provides parasailing and
kayaking services. The business is expanding and they are
planning to buy more parasails and motorboats to satisfy
an increasing number of customers. Consequently, they
also need to employ more staff to work on the beach and a
secretary for administrative work.
Identify which factors of production have increased for Sea Sports Club enterprise.
Land
Labour
Capital
Enterprise
39
Unit 3 I Factors of Production
4. Project work
Create a poster to demonstrate the factors of production used by an enterprise of your own
choice. You may present your poster in the format given below.
40
Unit 3 I Factors of Production
KEY TERMS
Capital refers to man-made resources used in the production of goods and services.
Enterprise as a factor of production combines the other three factors (land, labour
and capital) to produce goods and services with the aim of making profits.
Factors of production are resources, also called factor inputs, used to produce goods
and services.
Financial capital is money used to buy tools and equipment in the business.
Labour refers to workers who provide their physical and mental efforts to produce
goods and services.
Land refers to the natural resources or free gifts of nature used in the production of
goods and services.
Non-renewable resources are resources which are not easily replaced by nature after
their use.
Production process refers to the steps involved in transforming factor inputs into output.
41
Unit 4 I Business Activities
TERTIARY SECTOR
SECONDARY SECTOR
PRIMARY SECTOR
Unit 4
Business Activity
Learning Objectives:
On completing this unit, you will be able to:
• define business activity
• understand the different economic sectors
• discover the importance of each sector
42
Unit 4 I Business Activities
Organise factors of
production
Exchange and
distribute goods
Business Produce goods and
services to satisfy
and services Activities needs and wants
Enterprises can be grouped into different economic sectors according to their business
activities. These economic sectors include the primary sector (basic production), secondary
sector (manufacturing sector), tertiary sector (service sector) and quaternary sector (knowledge-
based activities).
Economic sector is a type of
Quaternary Sector business activity in a country.
(E.g. consultancy, research and development)
Tertiary Sector
(E.g. trade, transport, education and health)
Secondary Sector
(E.g. manufacturing of textile products and construction)
Primary Sector
(E.g. agriculture, forestry, mining and fishing)
43
Unit 4 I Business Activities
Activity 1
(c)
Employees are paid in terms of and they use it to
goods and services.
Farming Forestry
Mining Fishing
Figure 3: Activities of enterprises in the primary sector
44
Unit 4 I Business Activities
Activity 2
air, mobile phone, hat, water, forests, table, timber, natural gas, lakes, scissors
Man-made
Natural resources resources
Activity 3
Read the case study below and carry out the activity that follows.
(b) Describe the sector which you have identified in part (a).
Many primary sector enterprises are set up on a small scale and they grow over time. The chart
that follows illustrates the importance of primary sector enterprises.
45
Unit 4 I Business Activities
Revenue can be
earned by exporting
Importance of Idle natural resources can
raw materials like primary sector be used to produce more
flowers and local fruits goods and services
enterprises
Activity 4
Read the case study below and carry out the activity that follows.
46
Unit 4 I Business Activities
Activity 5
Read the case study below and fill in the table that follows.
Following this curiosity, he did some research on the subject on the internet to gather
information. Hydroponics is one method in which crops are grown in a medium other than
soil (e.g coco peat) under a protected culture like a greenhouse.
All he needed was land and finance. With the help of his parents, he has been able to get
a loan of Rs 1.2 million from the bank by putting a piece of land under guarantee and
paying a monthly instalment of Rs 15,000. Together with a friend, Mehdi succeeded in
constructing two locally mounted greenhouses of 1000 m2 at Triolet (a village in the north
of the country) and they formed a company called “Les Serres du Nord”.
Name of entrepreneur
Name of enterprise
Sector in which the business operates
Identify the good
Describe the business activities
47
Unit 4 I Business Activities
Activity 6
Read the case study below and carry out the activity that follows.
Deven is renowned for his bakery around the island. One day, Vani and her classmates visited
Deven’s bakery. They were fascinated with the making of bread. Vani and her friends drew
the following charts to explain the process of bread-making.
Use of wheat in
Wheat cultivation Wheat as raw material bread-making
(b) Describe the sector which you have identified in part (a).
Secondary sector enterprises are involved in manufacturing and construction activities. The
chart below illustrates the importance of the secondary sector.
Revenue can be
earned by exporting
Importance of Larger variety
finished goods like secondary sector of goods for
consumption
textile products and
canned foods enterprises
Activity 7
Activity 8
Read the case study below and fill in the table that follows.
Name of entrepreneur
Name of enterprise
49
Unit 4 I Business Activities
Activity 9
Read the case study below and carry out the activity that follows.
Leticia is a young dentist and she offers her services at the hospital during
weekdays. On Saturday, she operates in a private clinic in her locality.
Leticia has decided to open a dental clinic in Rodrigues Island where she
would train other dentists to offer a good service to the people.
(b) Describe the sector which you have identified in part (a).
50
Unit 4 I Business Activities
4.5.1 Importance of tertiary sector enterprises
People require a number of services in their daily life. The chart below illustrates the importance
of tertiary sector enterprises.
Activity 10
Activity 11
Read the case study below and carry out the activity that follows.
Janice is a very talented and creative person. She has always won
the first prize in painting competitions at school or at university.
Janice has opened an enterprise in graphic design and her
customers are very satisfied as Janice provides them with new and
unique ideas. Her enterprise has become famous.
(b) Describe the sector which you have identified in part (a).
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Unit 4 I Business Activities
Activity 12
Read the case study below and fill in the table that follows.
Zuckerberg launched Facebook from his Harvard dormitory room on February 4, 2004.
Zuckerberg’s personal wealth is estimated to be $9.4 billion in 2012. Vanity Fair magazine
named Zuckerberg number 1 on its 2010 list of the Top 100 “most influential people of
the Information Age”.
Name of entrepreneur
Name of enterprise
Sector in which the business operates
Name the good/service
Describe the business activities
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Unit 4 I Business Activities
2. Group Discussion
Choose one business activity from the list below and explain its importance to your country.
(i) Fishing
(ii) Textile
(iii) Tourism
Business Activity:
Importance to Mauritius/Rodrigues:
KEY TERMS
Business activity refers to the production and distribution of goods and services to
satisfy the needs and wants of customers.
Natural resources are gifts from nature and are not made by human beings.
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Unit 5 I Economic systems: Resource allocation
Unit 5
Economic Systems: Resource Allocation
Learning Objectives:
On completing this unit, you will be able to:
• differentiate between the public sector and the private sector
• explain the term economic system
• distinguish between a free market economy and a mixed economy
In this unit, you will learn how the public and private sectors use resources
in different economic systems to produce goods and services.
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Unit 5 I Economic systems: Resource allocation
The main objective of the public sector is to improve the welfare of the citizens rather than to
make profit. It also gives job opportunities to a number of people in ministries, district councils,
municipalities, public corporations and other government-owned organisations.
Examples
of public
sector
activities
55
Unit 5 I Economic systems: Resource allocation
Taxes provide revenue for the government to fund essential services such as healthcare,
education, social allocations and pensions, etc. Taxes are also used to finance the provision
of vital public goods and services such as defence, highways, street lighting, a justice
system, etc. which would not be effectively provided by the private sector.
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Unit 5 I Economic systems: Resource allocation
The following is a conversation between Joseph and his father. It is about the public sector
which provides different types of government services.
Joseph: Dad, Reena told me that his uncle who works as a nursing
officer is retiring from his job. He has been working in public
hospitals for more than thirty years.
Father: Yes, he works for the public sector which is owned and controlled
by the government. The public sector provides services like
education, law and order, healthcare and transport.
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Unit 5 I Economic systems: Resource allocation
Examples
A school canteen of private A retail shop
sector
enterprises
A hairdressing salon
Figure 2: Private sector enterprises
Activity 1
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Unit 5 I Economic systems: Resource allocation
Activity 2
The bar chart below shows employment figures in the public and private sectors of
country S for three different years. Study the chart and answer the following questions.
400000
2,000,000
350000 • In 2012, the private sector
1,800,000
employed 1,400,000 workers
300000 1,600,000 and the public sector employed
250000 1,400,000 1,000,000 workers.
Public sector
200000 1,200,000
Private sector
150000
1,000,000 • The private sector employed
800,000 more workers than the public
100000
600,000
sector for all the three years.
500000
400,000
200,000
• The number of workers employed
Year
in the public sector increased by
Year 200,000 from 2008 to 2012.
2008 2012 2016
Bar chart on the number of workers employed in the
public and private sectors in country S.
(a) In which year did the public sector employ the highest number of workers? __________
(b) In which year did the private sector employ the lowest number of workers? __________
(c) Calculate the increase in the total number of workers employed from 2008 to 2012
__________
(d) Calculate the percentage increase in the number of workers employed in the public
sector from 2012 to 2016, using the following formula.
100 =
.......................................................................... ..........................................................................
...........................
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Unit 5 I Economic systems: Resource allocation
How to
produce ?
Basic
economic
questions
What to produce?
This question is about the variety and amount of goods and services that an economic system
must produce to satisfy needs and wants. For example, private sector enterprises may decide
to manufacture more warm clothes during winter. The government may decide to build more
schools in order to improve the literacy rate.
In some African nations, for example in Liberia and Sierra Leone, the lack of medical care
facilities contributes to the proliferation of infectious diseases like Ebola. Consequently, more
resources are allocated to the provision of healthcare services.
The decision of what to produce involves an opportunity cost. For example, if the government
in a country decides to build a dam instead of a highway, then the opportunity cost of the dam
is the highway which has been sacrificed.
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Unit 5 I Economic systems: Resource allocation
How to produce?
It is important to decide how to produce goods and services.
Enterprises use the method of production that enables them Labour intensive methods of
to make profits. Their decision of how to produce a good or production is when an enterprise
service depends on the cost and availability of resources. uses more labour than capital.
For example, if labour is readily available and costs less than
capital (machines and equipment) then enterprises may use
labour intensive methods of production. Capital intensive methods of
However, if capital is cheaper and produces more output than production is when an enterprise
uses more capital than labour.
labour, then an enterprise may use capital intensive methods
of production.
For whom to produce?
When the questions of what to produce and how to produce have been answered, the question
for whom to produce needs to be answered. Due to scarce resources, it must be decided who
gets the goods and services produced. For example, the government decides whether to
provide healthcare for the general public or homes for the elderly.
Private sector enterprises produce those goods and services for which consumers can pay and
there is potential for profits.
Produce for:
Activity 3
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Unit 5 I Economic systems: Resource allocation
Activity 4
Fill in the blanks with the appropriate words given below.
profits, innovation, cheaper, how, competition, consume, environment
(a) In a free market economy consumers and producers decide what to
produce,___________ to produce and for whom to produce.
(b) Individuals may start their own business in order to make___________ .
(c) Firms use labour intensive method of production because labour is ___________
than capital.
(d) ___________ among firms helps to promote creativity and ___________ .
(e) Individuals are free to decide which goods and services that they want to
___________ .
The public sector provides education, healthcare, law and order as well as other services which are
important for the welfare of the society. Private sector businesses produce a wide variety of goods
and services to make profits. In some countries, the public sector plays a more important role in
economic activities. In many of them, government can enact laws in order to reduce pollution
and protect endangered animal species.
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Unit 5 I Economic systems: Resource allocation
Mixed Economy
Public Smart
Schools phones
How to For whom
produce ? to produce ?
?
Public Taxi
Hospitals services
Determined by the public (government)
and private sectors
______________________ ______________________
Intensive Intensive
More less
labour labour
less
more
capital
capital
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Unit 5 I Economic systems: Resource allocation
TRUE/FALSE
The main objective of the public
(a)
sector is to make profit.
The private sector does not
(b) influence economic activities in
a free market economy.
In a free market economy
competition among firms
(c)
promotes innovation and
creativity.
Firms use capital intensive
(d) methods of production because
labour is cheaper than capital.
The public sector provides
(e)
education and fire services.
One advantage of the free
(f ) market economy is that it
reduces pollution.
(iii) Which of the following is the role of the government in a mixed economy?
A. Enacting laws to reduce smoking
B. Producing goods and services to make profit
C. Discouraging the use of new technology
D. Increasing unemployment Answer___________
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Unit 5 I Economic systems: Resource allocation
(v) A mixed economy is more likely to improve the welfare of the society than a free market
economy because
A. all workers get the same pay.
B. all private businesses make profits.
C. the government provides education and healthcare services.
D. the private sector provides goods and services only for the rich. Answer___________
4. T
he chart below shows the number of workers employed by the public and private
sectors during three different years in country T. Study the chart and answer the
questions that follow.
400000
350000
300000
250000
Public sector
200000
Private sector
150000
100000
500000
2005 2010
Year 2015
Year
(a) In which year did the public sector employ the highest number of workers? ____________
(b) In which year did the private sector employ the highest number of workers? ____________
(c) Calculate the difference between the total number of workers employed in 2005 and 2010.
_____________
(d) Calculate the percentage increase in the number of workers employed in the private
sector from 2010 to 2015. __________________
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Unit 5 I Economic systems: Resource allocation
Materials required:
bristol paper, coloured felt pens/pens, glue, pictures and any other necessary items to present
the project.
Procedure
Each group will choose a theme and prepare a poster on bristol paper to make a ten minutes
presentation to the class.
THEMES
KEY TERMS
Economic system is how a country uses its scarce resources to produce goods and
services to satisfy needs and wants.
Mixed economy is an economic system in which both the private and public
sectors decide what to produce, how to produce and for whom to produce.
Private sector consists of private enterprises which produce goods and services to
make profit.
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Unit 5 I Economic systems: Resource allocation
Unit 6
Entrepreneurial Culture
Learning Objectives:
On completing this unit, you will be able to:
• discover different occupations
• distinguish between employment and self-employment
• discover entrepreneurial culture
• explain the reasons why people start their own enterprise
In this unit, you will discover the different types of occupation that people
undertake to earn a living and distinguish between employment and self-
employment. You will also learn about entrepreneurial culture and why
people set up their own enterprise.
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Unit 6 I Entrepreneurial Culture
Earning a living
Employment Self-employment
The employer is someone who hires the services of people An employer is someone who hires
to assist him/her in his/her enterprise. On the other hand, an the services of people to assist him/
employee is someone who offers his/her services in return her in his/her enterprise in return
of a payment. The payment is usually in the terms of salary or of a payment.
wage.
An employee is someone who
Salary is paid to employees at the end of each month. Wage is offers his/her services in return of a
paid to employees on an hourly or weekly basis. payment.
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Unit 6 I Entrepreneurial Culture
Activity 1
Activity 2
Match each term in column A with the definition in column B. Write your answers
in the table which follows.
Column A Column B
Someone who offers his/her services in return
1 Salary or wage A
of a payment.
Someone who hires the services of people to
2 Occupation B assist him/her in his/her enterprise in return of
a payment.
Column A 1 2 3 4 5
Column B
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Unit 6 I Entrepreneurial Culture
There are a variety of occupations which people may take up to earn a living. Some examples
are given below.
Photographer
Doctor
Mason
Discovering
different
occupations
Fire fighter
Mechanic
Farmer Shopkeeper
Activity 3
Read the case study below and fill in the table that follows.
Mr Burton is an entrepreneur and he employs his wife Tara as the manager of their biscuit
factory. They have five children and each of them have a different occupation. Their son Danny
is a doctor and owns a clinic. Hemish is a lawyer, whereas Danish is an accountant. The eldest
daughter Mila is a fashion designer and her sister, Lara is a professional photographer.
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Unit 6 I Entrepreneurial Culture
Activity 4
Observe the pictures provided and state the respective occupation they represent.
Use the list provided below.
carpenter, car mechanic, mobile technician, fashion designer, fruit seller, chef, medical
practitioner, educator, lawyer, policewoman, hairdresser
Occupation Occupation
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Unit 6 I Entrepreneurial Culture
There are a number of factors that influence the choice of occupation of an individual. The table
below describes some factors which determine why some people would choose a particular
occupation over others.
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Unit 6 I Entrepreneurial Culture
6.4 Self-employment
Self-employment
Figure 3: Self-employment
There are different reasons why people start their own enterprise.
Why start an
enterprise?
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Unit 6 I Entrepreneurial Culture
Entrepreneurial culture is
encouraging individuals to set Entrepreneurial culture is
up their own enterprise rather encouraging individuals to set up
than seeking a job. their own enterprise rather than
seeking a job.
These individuals are usually
motivated to innovate, create
and take risks by setting their Start-up enterprises are
own enterprise. entrepreneurial ventures that aim
to offer an innovative product,
As a result, entrepreneurs have process or service.
developed their start-ups.
A start-up enterprise is an
entrepreneurial venture that
aims to offer an innovative
product, process or service.
Some individuals have started their own enterprise because they possess some talent and skills.
Others have continued the family business to earn a living. Individuals are often encouraged by
the government to set up their own enterprise. One of the aims of the government is to instill
the entrepreneurship culture in Mauritius and Rodrigues, and create a “nation of entrepreneurs”
(Source: 10- years SME Master Plan 2017).
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Unit 6 I Entrepreneurial Culture
Activity 5
Read the case study below and carry out the activity that follows.
Pastry Delights
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Unit 6 I Entrepreneurial Culture
• creativity
• innovation
• hard work
• motivation
• decision-making
• risk-taking
• perseverance
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Unit 6 I Entrepreneurial Culture
Activity 6
Read the case study below and carry out the activity that follows.
Lux Candles
Jamie and Simon worked in a large candle factory. They decided to use their experience to
start their own candle making enterprise and named it, “Lux Candles”. At first, they lacked
finance and took advantage of the financial incentives offered by the government. They were
able to contract a loan at a low interest rate. They purchased equipment, rented a factory
and hired employees. The entrepreneurs took further training to improve the quality of the
candles they could make.
The candles are sold around the island and are famous for their unique designs and fragrances.
(b) The products attracted many customers for their unique designs.
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Unit 6 I Entrepreneurial Culture
2. E
xplain two differences between running your own bakery and being employed in a
big bakery.
Difference 1:
_____________________________________________________________________________
Difference 2:
_____________________________________________________________________________
KEY TERMS
Employer is someone who hires the services of people to assist him/her in his/her
enterprise in return of a payment.
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Unit 7 I Enterprising Spirit
Unit 7
Enterprising Spirit
Learning Objectives:
On completing this unit, you will be able to:
• outline the benefits of having an enterprising spirit
• describe the attributes and attitudes of an enterprising person
• identify the opportunities and challenges in setting up an enterprise
In this unit, you will discover the attitudes and attributes that entrepreneurs
require to set up an enterprise. You will also learn about opportunities
and challenges in setting up an enterprise.
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Unit 7 I Enterprising Spirit
Personality
An entrepreneur:
characteristics
is passionate about
1 Passionate everything he does. He puts
all his efforts in what he does.
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Unit 7 I Enterprising Spirit
Activity 1
Read the case study below and carry out the activity that follows.
Clara Fashion
(a) Clara has taken an initiative to try a new fashion style in her
enterprise.
(b) The entrepreneur does not have an enterprising spirit.
(c) Clara is willing to accept challenges.
(d) Creativity and innovation helped her business succeed.
(e) The creative ideas of employees of the fashion boutique are
not respected.
Responsible
Confident
ATTRIBUTES
Enthusiastic
Creative
Talented
Hardworking
Attitudes Attributes
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Unit 7 I Enterprising Spirit
Sarah Johnny
Alexandre Leena
Activity 3
Sarah, Johnny, Alexandre and Leena have decided to set up their own enterprises.
Identify their (i) business opportunity (ii) their challenges (iii) the ways in which they
could overcome their challenges. The first one has already been worked out for you.
Johnny
Alexandre
Leena
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Unit 7 I Enterprising Spirit
Activity 4
Group Discussion
Think about a product which you could make and sell to your classmates. Use the skill(s)
that you have to turn it into a business opportunity. List the challenges that you might
face and how you would overcome them.
Product
Skill(s)
Business Opportunity
Challenge(s)
Way(s) to overcome
the challenge(s)
1. Match each term in Column A with the definition in Column B. Write your answers
in the table which follows.
Column A Column B
are difficult situations which
1 Attribute A entrepreneurs have to overcome with
smarter ideas.
is an individual’s quality to develop his
2 Enterprising spirit B
ideas.
is the way an entrepreneur thinks and
3 Business opportunity C
reacts in given situation.
is having the willingness and ability
4 Business challenges D to undertake an activity, project or
enterprise.
is a situation that allows entrepreneurs
5 Attitude E
to set up or develop an enterprise.
Column A 1 2 3 4 5
Column B
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Unit 7 I Enterprising Spirit
Read the case study below and carry out the activity that follows.
It has been two months now since Vishal has set up his farm. He rears three cows, from which
he obtains thirty litres of milk daily. By word of mouth, most inhabitants of the village buy fresh
milk from him. However, the young entrepreneur is facing challenges in the smooth running
of the business. Vishal is planning to expand his enterprise but his savings are insufficient.
The other challenge faced by Vishal is competition. His neighbour, Reena, has also started the
business of selling milk to the inhabitants. Vishal has decided to take actions to overcome
these challenges. His aim is to double his sales.
___________________________________________________________________________
(b) Identify the challenges faced by Vishal and describe the ways in which he has decided to
overcome them.
Challenge 1:_________________________________________________________________
Way 1:______________________________________________________________________
Challenge 2:_________________________________________________________________
Way 2:______________________________________________________________________
(c) State another challenge that Vishal could face in the future and suggest a way that he could
tackle it.
___________________________________________________________________________
KEY TERMS
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Unit 8 I Income and Expenses
Unit 8
Income and Expenses
Learning Objectives:
On completing this unit, you will be able to:
• identify the different sources of funds
• recognise income and expenses of an enterprise
• calculate the difference between income and expenses
87
Unit 8 I Income and Expenses
Activity 1
Read the conversation below and carry out the activity that follows.
Start up the
Altaf, Alexia and Nishi are three friends who want to explore their
enterprise
business idea. However, they need funds to start up their enterprise.
Altaf: B
ecause to start up the enterprise, Pay for tools
several expenses will have to be and equipment
incurred.
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Unit 8 I Income and Expenses
Activity 2
Read the case study below and fill in the blanks with the appropriate words.
Hanna and Kiyah are not able to make their dream come true since
they have difficulties in arranging for funds to set up their enterprise.
They did manage to obtain some money as start-up capital from their
savings but it is not sufficient.
Therefore, they borrowed money from close friends to pay expenses such as rent of
premises.
Hanna and Kiyah have the required ________________in making products with candles.
Initially, they faced difficulties to find _________________. The ___________________
capital was not enough for them to set up “Les Bougies Bijoux’’. They have been able to
_____________________ some money to make their dream come true. Eventually, they
had to __________________ additional funds as they had to pay for _________________.
Funds can be raised from different sources. Entrepreneurs usually use personal savings to set
up their enterprises. The government also provides financial assistance such as grants to assist
entrepreneurs in their projects. Examples of funds are borrowings from friends or relatives and
contracting loans from banks. When money is borrowed, it has to be repaid after a given
period of time together with interest.
Sources of Finance
Friends
and Relatives Financial
Assistance
Banks (loan)
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Unit 8 I Income and Expenses
1. Personal savings: It is the money set aside by an individual Grant is a sum of money provided
for future use. Such savings can be kept in a bank account by the government that needs not
and it may represent a significant fund when accumulated be repaid.
over a number of years. Personal savings are commonly used
as start-up capital as they are readily available and need not
be repaid. Interest is the sum of money paid
on the amount borrowed.
2. Borrowings: Funds can be borrowed from:
• individuals (friends or relatives) A commercial bank is a financial
• banks (commercial banks) institution that accepts deposits,
• government bodies (SME Mauritius) provides loans and other services.
Activity 3
Match each term in Column 1 with the correct definition in Column 2. Write your
answers in the table which follows. The first one has been done for you.
Term 1 2 3 4 5 6 7
Definition C
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Unit 8 I Income and Expenses
As enterprises are set up, there are a number of monetary Income refers to money flowing
transactions that take place, such as income and expenses. into the business.
Income is money that flows into the business through the
sale of goods and services. Expenses are payments whereby Expenses are payments whereby
money flows out of the business in the form of payment of money flows out of the business in
raw materials, electricity bills and license fees. the form of payment.
Expenditure = Expenses
Income INFLOWS
• Sale of goods and services
• Interest received from bank
• Rent received
• Commission received Enterprise
Expenses
• Purchase of goods for resale
• Purchase of raw materials
• Electricity bills
• License fees
OUTFLOWS • Wages
Activity 4
Income Expenses
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Unit 8 I Income and Expenses
To calculate profit or loss, the formula can be used : Income > Expenses = Profit
Expenses > Income = Loss
Income - Expenses = Profit or Loss
Situation Income (Rs) Expenses (Rs) Profit / Loss (Rs) Profit or Loss
Profit
A 100,000 80,000 100,000 - 80,000 = 20,000
Income > Expenses
Loss
B 100,000 110,000 100,000 -110,000 = 10,000
Expenses > Income
Activity 5
Read the case study below and carry out the activity that follows.
Nelicia is a young entrepreneur who recently set up her own enterprise. Below is a list
of her income and expenditures incurred.
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Unit 8 I Income and Expenses
Total Expenditure /
Total Income (Rs) Profit / Loss (Rs)
Expenses (Rs)
Year 1
___________________ ___________________ ___________________
Expenses incurred
1
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Unit 8 I Income and Expenses
1 50,000 (60,000)
2 (75,000) (5,000)
3 (85,000) 30,000
4 100,000 10,000
5 (95,000) (15,000)
6 120,000 20,000
KEY TERMS
Commercial bank is a financial institution that accepts deposits, provides loans and
other services.
Grant is a sum of money provided by the government that needs not be repaid.
94
Unit 9 I Accounts for Enterprise
Unit 9
Accounts for Enterprise
Learning Objectives:
On completing this unit, you will be able to:
• define the term ‘bookkeeping’
• describe the importance of bookkeeping
• distinguish between the role of a bookkeeper and an accountant
• identify the different documents used in an enterprise
In this unit, you will discover the initial stages of recording data, the role of
bookkeepers and the different documents used in an enterprise.
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Unit 9 I Accounts for Enterprise
9.2 Bookkeeping
Bookkeeping is the process of recording business transactions Bookkeeping is the process of
in an accurate and systematic way. Entrepreneurs need to keep recording business transactions in
a record of all income and expenses in an orderly manner so as an accurate and systematic way.
to run the business effectively.
Activity 1
Tick ( ) for proper record keeping and cross ( X ) for improper record keeping.
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Unit 9 I Accounts for Enterprise
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Unit 9 I Accounts for Enterprise
Bookkeeping is the first basic step of the accounting Note: Nowadays, many businesses
process. It helps to classify, report and analyse data of an simplifies the process of
enterprise. bookkeeping by using software
according to their needs.
Bookkeeping also helps to:
• calculate whether the business is making a profit or
loss
Financial statements are reports
• show how much money the business has received
prepared by accountants to present
and how much it has spent the financial performance of an
• know the amount of credit and cash sales/ purchases enterprise.
• save time when preparing financial statements
• know the financial position of the business, that is,
what the business owns (assets) and what the business
owes (liabilities)
Activity 2
(b) Payment for any business transaction can be made by cash only.
Activity 3
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Unit 9 I Accounts for Enterprise
Activity 4
Give three reasons to explain why keeping accurate records is important for a business.
(i)____________________________________________________________________.
(ii)___________________________________________________________________.
(iii)___________________________________________________________________.
Activity 5
Assets Liabilities
Trading
of goods Buying and selling of goods and services take the form of
different business transactions like purchases, sales and expenses.
and services
Collection
of data Different transactions are posted in their respective accounts.
Preparation The accountant prepares the final accounts from the data
of accounts collected and recorded by the bookkeeper.
Mode of
Pictures Explanation
payment
Activity 6
State whether the following transactions are paid by cash, cheque or card.
Tick (√) as appropriate.
100
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Unit 9 I Accounts for Enterprise
I. Quotation
A quotation is a document which a seller
issues upon the request of a customer.
It provides information on the following:
E
• Product details
• Selling price per unit
L
• Terms of payment like cash or credit
P
and any discount
• Expected date of delivery
M
• Total payment due
S A
101
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Unit 9 I Accounts for Enterprise
II. Order
An order is a confirmed request from the
buyer to the seller. It includes information
on the following:
E
• details about the product
• mode of payment
PL
AM
S
III. Invoice
An invoice is a document that specifies the
amount and cost of goods or services that
have been provided by a seller. It includes
E
the following information:
L
• product details
P
• tax rate
• VAT registration number
AM
S
102
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Unit 9 I Accounts for Enterprise
IV. Receipt
A receipt is a document that confirms the
payment of a transaction.
E
It includes the following:
L
• payment details
P
• discounts and taxes (if any)
• net amount paid
AM
S
V. Cheque
LE
• name of the issuing business
P
• signature of the issuing party
• amount paid
S AM
103
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Unit 9 I Accounts for Enterprise
Activity 7
(iv) An asset is
A. a business document.
B. owned by a business.
C. what the business owes.
D. a business transaction. Answer: _______
104
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Unit 9 I Accounts for Enterprise
3. Identify and explain two reasons why business documents are important in an enterprise.
Reason 1:______________________________________________________________
Explanation:____________________________________________________________
Reason 2:______________________________________________________________
Explanation:____________________________________________________________
4. Fill in the blanks. The first letter of the word has been given to help you.
BOOKKEEPING LIABILITY
ACCOUNTANT RECEIPT 105
105
DOCUMENTS INVOICE
CHEQUES ACCOUNTING
ASSET QUOTATION
Unit 9 I Accounts for Enterprise
(i) Find out examples of different types of transactions that take place in the business on a
daily basis.
KEY TERMS
Accountant is a person who has the responsibility to prepare the accounts of the
business.
Asset is what a business owns. Examples include cash, equipment, machine, land
and building.
Liability is what the business owes. Examples include unpaid expenses or a bank
loan.
Value Added Tax (VAT) is a percentage tax added onto the price of a good or service.
VAT registration number is an identifier number that indicates that the shop
business, is VAT registered.
106
106
Unit 10 I Cash and Bank Transactions
Unit 10
Cash and Bank Transactions
Learning Objectives:
On completing this unit, you will be able to:
• identify cash and bank transactions
• differentiate between cash and bank transactions
• calculate cash and bank transactions of an enterprise
In this unit, you will discover cash and bank transactions of an enterprise.
You will also calculate cash and bank balances.
107
Unit 10 I Cash and Bank Transactions
Selling goods
Goods OUT of the business
Business Consumers
Money IN the business
108
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Unit 10 I Cash and Bank Transactions
Business Suppliers
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Unit 10 I Cash and Bank Transactions
Business Transactions
Cash transactions refer to cash receipts and payments. A cash transaction uses money (notes
and coins) to pay for the goods and services. For the day to day running of the business there
should be cash inflows and cash outflows.
The table below shows the different forms of cash receipts and cash payments in a business.
Sale of old assets Cash paid to suppliers Cash receipts = cash inflows
Cash payments = cash outflows
Cash invested by Proprietor Cash paid for expenses like
(Capital) wages and rent
Cash withdrawn by
Proprietor
Table 1: Cash Receipts and Cash Payments
Transactions Rs
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Unit 10 I Cash and Bank Transactions
Activity 1
(b) When expenses are paid by cash, they are called cash outflows.
(d) Cash received from customers increase the cash balance of a business.
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Unit 10 I Cash and Bank Transactions
Activity 2
From the given data, record the cash transactions in a proper way and calculate the cash
balance at the end. Pierre Louis started a business and the following transactions took place.
Transactions Rs
Pierre Louis started business with capital into cash 45,000
Cash purchases 16,000
Cash paid for advertising 1,800
Sold goods for cash 19,500
Paid for heat and power 3,500
Cash paid for stationery 1,000
Bought equipment and paid cash 12,000
Pierre Louis paid wages to employees 8,500
Cash paid for rent 5,000
Cash sales 15,500
Bought goods on cash 12,000
Paid cash for general expenses 3,500
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Unit 10 I Cash and Bank Transactions
Transactions Rs
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Unit 10 I Cash and Bank Transactions
Activity 3
From the given data, record the bank transactions in a proper way and calculate the
bank balance at end. Charles started business and the following transactions took
place.
Transactions Rs
Add sales
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Unit 10 I Cash and Bank Transactions
Activity 4
3 Cash purchases
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Unit 10 I Cash and Bank Transactions
Match each term in column 1 with the correct definition in column 2. Write your
answers in the table which follows. The first one has been done for you.
Term 1 2 3 4 5 6 7 8 9 10 11
Definition A
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Unit 10 I Cash and Bank Transactions
3. Give two reasons of keeping cash and bank transactions in a proper way.
Reason 1 _________________________________________________________________
Reason 2 _________________________________________________________________
4. State one difference between cash inflow and cash outflow of a business.
Give an example of each.
Difference __________________________________________________________________
_____________________________________________________________________________
Example of a cash inflow ________________________________________________________
Example of a cash outflow _______________________________________________________
KEY TERMS
Bank transaction refers to all receipts and payments made through the bank.
Business transactions are activities that affect the financial position or operations
of an enterprise.
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