GRADE 8 Pre-technical ENTREPRENEURSHIP β BOOKKEEPING Notes
BOOKKEEPING
Subject: Pre-technical β Topic: Entrepreneurship
Subtopic: Bookkeeping
(Notes for learners in Kenya, age 13)
What is bookkeeping? πΌ
Bookkeeping is the simple, regular recording of money that comes into and goes out of a business. It helps the owner know if the business is making money (profit) or losing money (loss).
Why bookkeeping matters
- Helps plan and make better business decisions.
- Shows if you have enough cash to buy stock or pay expenses.
- Makes it easy to show how the business is doing to parents, teachers or a bank.
- Helps when paying taxes like VAT (Value Added Tax) β basic awareness only at this level.
Basic words to know
| Term | Meaning (simple) |
| Asset | Something the business owns (cash, stock). |
| Liability | Money the business owes (loan, unpaid bills). |
| Capital | Owner's money put into the business. |
| Income (Revenue) | Money earned from selling goods or services (e.g., selling mandazi). |
| Expense | Money spent to run the business (flour, fuel, rent). |
Common records (what to keep)
- Cash book: Write all cash in and out.
- Sales book / receipts: Keep records of sales and receipts (who bought, what, how much).
- Purchases book: Record what you buy for the business.
- Petty cash: For small daily expenses like packaging or sugar.
- Invoices & receipts: Keep paper or photo copiesβimportant proof of transactions.
Step-by-step simple bookkeeping (for a small stall)
- Record each sale or expense every day (date, reason, amount).
- Classify it as income or expense.
- Transfer totals to a ledger (group similar items together).
- Check totals at the end of the week or month.
- Use totals to see profit = Income β Expenses.
Small example with KSh (Kenyan Shillings)
Imagine you run a small snack stall. In one day:
- Sold mandazi and juice and received KSh 1,200 (cash).
- Bought more flour and sugar for KSh 300 (cash).
- Paid a helper KSh 200 (cash).
| Date | Details | Cash In (KSh) | Cash Out (KSh) |
|---|---|---|---|
| 01 Aug | Sales (mandazi & juice) | 1,200 | β |
| 01 Aug | Buy flour & sugar | β | 300 |
| 01 Aug | Helper wages | β | 200 |
| Total | 1,200 | 500 | |
| Cash at end of day | KSh 700 | ||
How to find profit (simple)
Profit = Total income β Total expenses
Using our example: Income KSh 1,200 β Expenses KSh 500 = Profit KSh 700.
Quick visual: T-account (ledger idea)
1,200
500
Wages: 200
Tools you can use
- A simple exercise book or printed cash book form.
- Smartphone notes or Excel (if available) to add numbers quickly.
- Keep receipts or take photos of them β good proof.
Tips for young entrepreneurs
- Write down every transaction the same day β it avoids forgetting.
- Keep business money separate from personal money (different box or pouch).
- Count cash at the end of the day and agree it with your cash book.
- Ask an adult to help check your records once a week.
Try this short exercise (click to open)
Q: What is Monday's cash in, cash out, and profit?
Answer:
Cash in = KSh 800 (sales). Cash out = KSh 50 (packaging). The purchase on credit (KSh 150) is not cash out today, it is recorded as a liability to pay later. Profit today = 800 β 50 = KSh 750.
Keep practising these simple steps and soon bookkeeping will be easy. Good luck with your business! π