Work
It refers to any legitimate or lawful and
socially acceptable activity that one performs to earn a living. That is, it is
any legally acceptable activity that one performs to survive. Example include
farming, teaching, engineering, bakery etc. armed robbery, galamsey and many
others cannot be classified as work because they are not acceptable in the
society.
IMPORTANCE OF WORK
a. Income
generation
b. It
sustains society
c. It
reduces social vices
d. Status
building
e. Socialization
SOURCES
OF EMPLOYMENT
a. The
mass media
b. Employment
agencies
c. Labour
offices
d. Personal
enquires
e. Educational
institutions
Productivity
It is the measurement of a worker’s
efficiency over a period of time. It can also be referred to as the
relationship that exist between a worker’s input and output in production.
Entrepreneurship
It is the act of bringing the various
factors of production such as labour, capital, and production materials
together to make profit. The word was derived from a French word “entrepredre”
which means to undertake, to start a business. It involves bringing together
other factors of production through the medium of money with the view of producing
goods and services. The reward is profit.
An
Entrepreneur
An entrepreneur is an individual or a
person who assumes the responsibility and the risk for a business operation
with the sole aim of making profit. An entrepreneur can also be said to be an
individual who create new product or service, a new market, or a new means of
production with the expectation of making profit.
QUALITIES
OF AN ENTREPRENEUR
Below are some qualities or attributes
an entrepreneur should possess:
1. He
or she must be courageous
2. He
or she must have reasonable intelligence
3. He
or she must a visionary
4. The
person must possess sound or good judgment
5. He
or she must be knowledgeable and skilful
6. The
person must have good human relations or possess the ability to understand
people.
7. He
or she must be persistent
8. The
person must have the ability to prioritize and to stay focused.
FUNCTIONS/
DUTIES/ RESPONSIBILITIES OF AN ENTREPRENEUR
1. Risk
taking
2. Decision
making
3. Planning
4. Provision
of needed facilities
5. Innovation
6. Management
control
7. Evaluation
and monitoring
8. Provision
of needed capital
BUSINESS
ORGANISATIONS
a. Sole
proprietorship
b. Partnership
c. Limited
liability companies or Joint-stock companies
d. Public
corporations or state owned enterprises
e. Co-operative
societies
(WASSCE
2013 QU 10. State four types of business organisations)
The
type of business organisations can only be identified by examining the
distinguishing features they possess. Some of the distinguishing features are
1. The
type of ownership
2. Sources
of income or financing
3. Management
of the business
4. Formation
of the business
5. Share
of the profits and losses.
SOLE
PROPRIETORSHIP
It is a type of business organization which is
owned, controlled and operated by one person. This type of business is the
commonest and popular form of business in Ghana.
ADVANTAGES
1. Decision
making is fast.
2. There
is effective supervision
3. All
profit goes to the owner
4. It
is easy to establish
5. It
is easy to discontinue or terminate
6. Privacy
is maintained
7. There
is flexible working hours.
DISADVANTAGES
1. Insufficient
capital
2. Unlimited
personal liability
3. Lack
of continuity
4. Owner
bears all risks
5. Role
overload
PARTNERSHIP
It refers to a business organization owned by two or
more people who pool their resources together to carry on a lawful business as
co-owners with the aim of making profits. The partners share the assets,
liabilities and profits of the business according to the terms of the
partnership agreement or partnership deeds. Partnership agreement is a
document that states in writing the terms under which the partners agree to
operate the partnership and to protect their interest in the business.
TYPES OF
PARTNERSHIP
1.
Limited partnership: it
a type of partnership in which at least, one of the partners enjoys a limited
liability. Such partner is not allowed to engage in the day-to-day running of
the business. Again, a partner of a business who enjoys this special privilege
is referred to as dormant or sleeping or
silent partner.
2. Ordinary
partnership: it is a type of partnership in
which all the partners are actively involved in the day-to-day running or
management of the business. All partners of such partnership have unlimited
liability. This means that in the event that the business incur debts, the
personal properties of all the partners can be sold to pay off the debts. The
partners in such partnership are referred to as active or general partners.
3. Quasi-partner:
in this type of partnership, a partner who has resigned from the partnership
business, but has left his capital as an investment receives profits on his
capital.
ADVANTAGES
OF PARTNERSHIP
1. There
is larger pool of capital
2. There
is division of labour
3. Risk
is spread among the partners
4. Good
decision making
DISADVANTAGES
OF PARTNERSHIP
1. Unlimited
liability of at least one partner
2. Slow
decision making
3. Disagreement
among partners
4. Limited
capital.
LIMITED
LIABILITY COMPANIES OR JOINT-STOCK COMPANIES.
It is a form of business unit in which
the funds or capital meant for the business are obtained by selling shares or
stock. The shareholders therefore become the owner of the business unit. Joint
stock companies are formed and registered under the Company Code to carry out a
business. In the event of debts the individual shareholder’s personal assets or
properties will not be affected.
Types
Of Limited Liability Companies
There are two main types of limited
liability companies or joint stock companies. They are:
1. Private
limited liability companies
2. Public
limited liability companies.
Private
Limited Liability Companies
Private limited liability companies are
companies that are set up by an individual or a few individuals with the view
of making profits.
FEATURES
a. The
minimum number of persons required to start a private limited liability company
are 2 and the maximum 50.
b. They
are not required to publish their balance sheet
c. They
cannot float shares to the public since it is private.
d. They
are not required to obtain all documents before starting. Obtaining Certificate
of Incorporation is enough to start private limited liability company.
Public
Limited Liability Companies
Public limited liability companies are
business unit whose affairs to a large extent are open to the public. They are
larger than the private companies.
FEATURES
a. The
minimum number of people who can come together to form Public limited liability
company is 7. There is no limit to the maximum number of shareholders
b. They
have the right to issue stocks to the general public. They do so through the
Stock Exchange Commission.
c. They
are required to publish their financial statements in the Newspapers for the
public to read.
d. They
are required by law to obtain certain document before they start operation.
These documents are
i.
Memorandum of
Association
ii.
Article of Association
iii.
Certificate of
Incorporation
iv.
Certificate of trading.
ADVANTAGES
OF JOINT STOCK COMPANIES
1. They
shareholders enjoy limited liability
2. Larger
size of capital
3. Professional
management
4. Long
lifespan
DISADVANTAGES
1. Lack
of privacy
2. Delay
in decision-making.
3. Difficulty
of establishment
4. Absence
of self-interest.
5. Possibility
of a takeover.
PUBLIC CORPORATIONS (STATE-OWNED
ENTERPRISES-SOE’S OR PUBLIC ENTERPRISES)
Public corporations are business
organization which are established by an Act of parliament, for the purposes of
providing essential services and other commercial activities in the country.
They are owned and financed by the state but managed by board of directors.
Examples include Electricity Company of Ghana, Volta River Authority, Ghana
Broadcasting Corporation, etc.
Reasons
For The Establishment Of Public Enterprises In Ghana (Advantages Or Functions)
1. Provision
of essential services at a cheaper or affordable cost.
2. To
create employment opportunities.
3. To
protect the public form private monopolist.
4. High
capital requirement.
5. For
economic development.
6. To
generate revenue for the government.
Problems
Or Disadvantages Of Public Corporations
1. Political
interference
2. Corruption
and embezzlement
3. Negative
work attitude
4. Lack
of proper price policy
5. Management
incompetence
6. Overstaffing
7. Over-reliance
on government for subvention.
CO-OPERATIVE
SOCIETIES
A co-operative society is an association
of people who have pool their resources together to carry on a legal business
for their own welfare and not necessarily for profit making. The association is
controlled by its members.
TYPES
OF CO-OPERATIVE SOCIETIES
1. Consumer
Co-operative: Association which is
formed by consumers to provide themselves essential goods or services at
reduced prices.
2. Producer
Co-operative: an association of producers
who come together to provide goods or render services to people.
3. Workers’
co-operative: Association of workers
who have come together to seek their own welfare.
4. Credit
Union (Credit co-operative): An association
of people who pool their resources (money) together and out of which they are
given loans when they are in need.
ADVANTAGES
OF CO-OPERATIVE SOCIETIES
1. Provision
of education to members
2. Improvement
in the standard of living of the members
3. Larger
capital.
4. Easy
accessibility to loans or credit facilities.
5. Enjoyment
of democratic principles.
DISADVANTAGES
OF CO-OPERATIVE SOCIETIES
1. Lack
of managerial ability
2. Corruption
and embezzlement
3. Lack
of mutual trust.
TRADE
UNIONS OR WORKERS LABOUR UNIONS
A trade union is an association of
workers in the same skilled occupation or industry who act together to secure for
all members favourable wages, working hours and other working conditions.
Examples of trade unions in Ghana include, Ghana Registered Nurses Association,
Ghana National Association of Teachers (GNAT), UTAG, Trade Union Congress, Ghana
Private Road Transport Union (GPRTU), etc.
REASONS FOR THE FORMATION OF TRADE UNIONS
1. To
ensure that the social and economic wellbeing of the members are improved. They
do this through collective bargaining.
2. They
are formed to minimize the threats of unfair management practices.
3. They
act as channels of communication between employees and employers.
4. It
is aimed at uniting workers so that they can speak with one voice on all issues
that affect them
FUNCTIONS
OF TRADE UNIONS
1. Negotiate
agreements with employers on pay and conditions of service (collective bargaining).
2. They
provide educational services to their members and the general public as a
whole.
3. Provide
their members with legal and financial advice
4. They
discuss their members concerns with employers.
5. Accompany
their members in disciplinary and grievance meetings.
6. They
unite their members so they speak with one voice.
7. They
also discuss major changes to the workplace.
REASONS WHY TRADE UNIONS MAY ASK FOR WAGE INCREASE
1. General
high cost of living.
2. Awareness
of increased profit margin
3. Government’s
announcement of general increase in the prices of goods and services.
4. Existence
of wage disparities
5. Conditions
in the collective bargaining agreement
SOURCES OF FINANCE TO THE PRIVATE ENTREPRENEUR
1. Personal
savings
2. Loans
from friends and relatives
3. Loans
from financial institutions
4. Trade
credit
5. Ploughed
back profit
6. Floating
of shares
7. National
Board for Small Scale Industries (NBSSI) and Private Enterprise Foundation
(PEF)
8. Gifts
or support from relatives and friends/inheritance
MEASURES
THAT CAN BE TAKEN TO SUSTAIN A BUSINESS
1. Recruiting
qualified staff
2. Maintaining
high quality products
3. Separating
business account from personal account
4. Having
good human relations
5. Motivating
workers
6. Employing
relevant technology
7. Plough
back profit into the business
8. Constant
evaluation of performance
RUDIMENTS
OF BOOK KEEPING
Book keeping is the recording of
business transactions of an organization on a day-to-day basis over a given
period. The book keeping system commonly employed or used is the “double-entry”
system. This system enables a business to keep the following books:
§ Cash
Book
§ Purchases
Day Book
§ Sales
Day Book
§ Income
statement (profit and loss account)
§ Financial
Position (Balance Sheet)
THE
“DOUBLE-ENTRY” CONCEPT
The double-entry concept is based on the
duality principle. The duality principle states that every transaction must
have two dual effect; a debit entry and a credit entry. This principle gave
birth to the golden accounting rule which states that, “for every debit entry, there
must be a corresponding credit entry and vice versa.”
RULES OR PRINCIPLES OF DOUBLE-ENTRY
1. Every
transaction has two accounts that it affects
2. All
assets (e.g. Building, motor vehicle etc.) should have debit entry
3. All
expenses (e.g. Rent, office expenses) should have a debit entry
4. All
purchases should be recorded at the debit side of the ledger
5. All
gains or income including sales should be credited
6. Capital
should always have a credit entry
7. With
received or payment by cheque a “Bank Account” is opened and not a “Cheque
Account”.
CASH BOOK: It
is used to record daily transactions involving cash and cheques.
PURCHASES DAY BOOK (purchases journal): It
is used to record all goods bought on credit.
SALES DAY BOOK (sales journal): it
is used to record all goods sold on credit.
INCOME STATEMENT (TRADING, PROFIT AND LOSS ACCOUNT):
It is prepared by businesses engaged in
buying and selling to ascertain the profit or losses made from the sale of
goods from the trading activities.
In the preparation of this account, an
individual needs to be familiar with the following terms:
v Opening Stock:
this refers to the goods in the shop at the beginning of an accounting period.
v Closing Stock:
this refers to the goods left unsold at the end of the accounting period.
v Purchases:
this refers to the goods bought during the year
v Carriage Inwards:
the transportation cost incurred for transporting the goods bought to your
final destination
v Purchases Return/
Returned Outwards: goods bought but
returned to supplier due to unsatisfactory conditions
v Sales or turn over:
this refers to the amount realised by the business from selling a commodity
v Cost of Sales:
it refers to the cost of goods sold and it is the amount of money that the
business spends in selling a commodity. The formula is opening stock +
purchases + carriage inwards – purchases return – closing stock = cost of sales
v Sales Return / Returned
Inwards: goods sold but returned by the
customer.
v Gross profit: income
received from the sales of goods in excess over the cost of sales.
v Net Profit: Amount
of money left after all expenses have been subtracted from the gross profit.
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