Indigenous Book-Keeping Systems

Pages: 9 (1408 words) Published: May 23, 2014
Gardens Commercial High School
Accounting Grade 10
Written Report
Topic: Indigenous Bookkeeping Systems
Maxine February & Mikayla Jansen

Contents
Cover PagePage 1
Contents PagePage 2
IntroductionPage 3
BodyPage 3
Continuation of bodyPage 4
Interview (Blank copy)Page 5
Informal business interviewPage 6
Formal business interviewPage 7
ConclusionPage 8
PlanningPage 9

Introduction
An informal business is a business that is not a registered business and doesn’t pay tax. A formal business is a business this is registered and pays tax.

The difference between a formal business sector and an informal business is best explained by first describing the formal business sector. A formal business sector is the sector of an economy that encompasses all jobs with normal hours and regular wages. In other words, a formal business economy is comprised of the recognized income sources on which income taxes must be paid.

An informal business sector is the opposite of a formal business sector. An informal business sector is the part of an economy that is not taxed, not included in any gross national product, and not monitored by any form of government. In developing countries, the majority of the working population capable of holding jobs earn their income through self-employment in the informal business sector.

Sources:
http://www.ngoleader.org/articles/formal-vs-informal-business.html http://www.urbandictionary.com/define.php?term=business%20formal

Body
The informal and formal business that was chosen by us is businesses that trade with fruit and vegetables. Informal Business

●The informal business is a business that is not a registered business and doesn’t pay tax. ●The informal business that was interviewed was a fruit and vegetable stall. ●This business doesn’t pay rent for an apartment to sell their products but, instead they stand along the road to sell their products and attract people’s attention by ranging their different products. ●These people do this for an income to provide their family with daily needs. ●These businesses hire people to work for them so they can earn a huge profit at the end of the day. ●At the end of the month the business purchase stock at a market and sell these products at a certain period of time. ●They also have a mark-up price on their stock.

Formal Business
●The formal business is a business that is registered and pays tax ●The formal business that was interviewed is called Greenfield’s Fruit & Veg. ●It is located in the Northern Suburbs in Milnerton.

●The business pays rent to sell their products.
●The manager of the business hires people who need an income to cater for their families and themselves ●The business gets their stock from markets and farms
●Like every other business they work towards making a profit

Differences between the informal and formal business
Informal
Formal
Is not registered
Is registered
Doesn’t pay taxes
Pays taxes
Doesn’t rent room space to sell
Rents to sell products
Does not record financial data
Records financial data
Has an owner
Requires a manager

Similarities between the informal and formal business
Informal
Formal
Hires people
Hires workers
Buys sticks from markets
Buys stock from markets and farms
Mark-up price
Mark-up price
Competition with other stalls on the road
Competition with other formal businesses in the area as well as competition with informal businesses

The informal business does not really have a budget system and buys stock whenever they need. They are not registered for VAT. The formal business depends on the buying and the vegetables doesn’t keep very long, they buy as they need and take chances and that is included if they are registered for VAT which they are. The informal business controls their stock by buying...
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