Indigenous bookkeeping and informal businesses


This Web Quest was designed for grade 10 accounting learners and will be used in conjunction with a lesson in topic 1. Prescribe text book: Study & Master Accounting Grade 10 page:1-3

CHAPTER 1: Indigenous bookkeeping and informal businesses

Informal Business

If you walk in the street of a city or in a township you will see a lot of people selling goods or rendering a service. You will see people who sell vegetables, sweets, chips, cutting hair, have a Telkom line were people can phone, selling second-hand clothes, etc.

Their only labour costs will be that they sell enough goods to survive. Their aim is not to make a big profit but to survive every day and to have enough money to buy stock for the next day. All their stock is bought cash and they normally sell for cash. They keep a low inventory, for example, a person who sells vegetables buys just enough stock to sell for one day, they don’t have a place to store their stock and will therefore buy vegetables again the next day.

Formal Business

In this business all transactions are recorded on source documents and formal records are available to the owner and management. This system uses a set of rules and guidelines in the recording process and computerised accounting system. The accounting system that businesses use have been developed so that people understand it, no matter what business they run or where they are in the world. Many activities take place in a formal accounting environment.

The video presentation below provides a more detailed explanation on the topic also use your textbook to read through chapter 1.



A Written Presentation

As part of your Grade 10 Accounting curriculum, you have to interview two small business owners in your community. In Grade 9 you were taught about entrepreneurship and the basic bookkeeping of a sole trader

You are required to:

  • Work in groups of 3-4.
  • Acquire the following information from the owners of the two different businesses: a formal and informal business. Identify two businesses selling the same type of product, for example, flowers, vegetables and fruit, clothing, etc.
  • Make an appointment with the business owners/managers and conduct an interview with them.
  • Go to the interview prepared with a list of questions to ask the owner/ manager. However, allow for other questions to arise as the interview proceeds.
  • After the interview, your teacher will allow you and your group members some time to collate your findings.

This is the Process you and your group members will follow to complete the assignment task.

Find out the following for your written presentation:

  1. A brief description of the background of the two businesses
  2. How each business budgets and controls its finances and whether it is registered with SARS as a VAT vendor
  3. How each business controls its stock and from where/who it buys its stock
  4. Any problems the business experiences with regards to stock purchases, sales and stock holding
  5. What each business’s main overhead costs are
  6. How each business is managed on a day-to-day basis, and by whom
  7.  How each business records its financial information
  8. Any other points of interest you discovered during the interview.

                                                                                                                                                                 (30 marks)


You will need the following resources in order to complete this assignment effectively:

– Newspaper articles of interviews with business owners

– Samples of questionnaires

– Access to owners of informal and formal businesses


Assessment rubric for written presentation







Background of the business

None; weak attempt; information incomplete

Average presentation; some information not covered

Good presentation of information; most information covered

Excellent and comprehensive; interesting presentation





Budgeting and finance

None; poor explanations; some information questionable

Satisfactory understanding and explanations; some information incorrect/ misleading

Good understanding; information presented well

Excellent understanding; information is correct and presented very well



Stock control and matters regarding stock

None; very little information given

Average presentation; a few aspects not covered

Good presentation of information; most aspects covered well

Comprehensive information given; interesting





Explanation of the costs or expenses

None; partial understanding of costs; some information questionable

Satisfactory understanding of costs and expenses; some information incorrect

Good understanding of costs and expenses; most information correct and acceptable

Excellent understanding; information correct; presentation very good




Management of the business

None; poor understanding of the way the businesses are managed

Satisfactory understanding of the way the businesses are managed

Good understanding of the way the businesses are managed

Excellent understanding of the way the businesses are managed



Handling financial information

None; poor understanding of accounting systems; some information questionable

Satisfactory understanding of accounting systems; some information incorrect/ missing

Good understanding of accounting system; most information correct

Excellent understanding of accounting system; information correct and complete










By the end of this chapter and completion of assignment task learners will be able to

• Know the differences between informal and formal bookkeeping.

• Identify the different ways that resources such as capital, fixed assets, stock and money are managed.

• Be aware of how selling price, cost price, labour costs, income and expenses are determined.



Conradie, E, Kirsch,D and Moyce, M (2011) "Study and Master Accounting Grade 10 Learner's Book" Chapter 1 pages:1-3 


Teacher Page

There are a few difficulties often experienced with this assignment task:

• Finding relevant information with regards to indigenous bookkeeping systems

• Business owners do not want to be interviewed

• Finding the right business owner to interview

• Finding a business owner who will answer the required questions to complete the presentation.

How I will help learners overcome difficulties when teaching this chapter 

When teaching this topic I try to use of “real” examples where possible. Invite a business owner to come and speak to the learners and allow them to ask questions. Find some business owners in the community and explain to them the importance of this assessment task. Give support to learners struggling to find informal and formal business owners for their interview.

In our next lesson we will have a group or class discussion based on the following resources:

  •  Newspaper articles of interviews with business owners
  •  Samples of questionnaires
  •  Case studies
  •  Access to owners of informal businesses.

If you have any questions or difficulties please forward an email and i will assist ,

Z. Munnik