MNE3701
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 8 MAY 2025
, MNE3701
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 8 May 2025
Entrepreneurship and Small Business Management
QUESTION 1
Demonstrate how you would go about constructing financial statements of your
small business with reference to practical examples. (10)
Constructing financial statements involves the systematic recording, summarizing, and
reporting of a business’s financial transactions.
1. Maintain Accurate Financial Records:
I would start by keeping daily records of all business transactions using
accounting software such as QuickBooks or Excel. For example, every sale at
my small retail store would be recorded with details on the amount, date, and
customer.
2. Prepare a Trial Balance:
After recording transactions into the general ledger, I would prepare a trial
balance to ensure that debits equal credits. For instance, if I purchased inventory
worth R5,000, the inventory account (asset) would increase while cash or
accounts payable would reflect the payment or liability.
3. Construct the Income Statement:
This statement reflects business performance over a period.
Example:
o Revenue: R50,000 (sales)
, o Cost of Goods Sold: R20,000
o Operating Expenses: R15,000
o Net Profit: R15,000
4. Prepare the Balance Sheet:
This shows the financial position at a specific date.
Example:
o Assets: Cash (R10,000), Inventory (R5,000), Equipment (R15,000)
o Liabilities: Loan (R8,000)
o Owner’s Equity: R22,000
5. Construct the Cash Flow Statement:
This outlines inflows and outflows of cash. For example, I received R20,000 from
customers and paid R5,000 for rent and R10,000 for inventory, leaving a net
increase in cash of R5,000.
6. Ensure Compliance and Accuracy:
I would regularly review my statements for errors and comply with accounting
standards (e.g., GAAP).
QUESTION 2
The success of your small business depends on your effective management of
the human resources of your organisation. Discuss how you would go about
managing your human resources. (10)
Managing human resources effectively ensures productivity, motivation, and retention of
employees.
1. Recruitment and Selection:
I would use clear job descriptions and conduct structured interviews to hire
competent staff. For instance, when hiring a sales assistant, I would assess their
communication skills and customer service experience.
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 8 MAY 2025
, MNE3701
Assignment 2 Semester 1 2025
Unique Number:
Due Date: 8 May 2025
Entrepreneurship and Small Business Management
QUESTION 1
Demonstrate how you would go about constructing financial statements of your
small business with reference to practical examples. (10)
Constructing financial statements involves the systematic recording, summarizing, and
reporting of a business’s financial transactions.
1. Maintain Accurate Financial Records:
I would start by keeping daily records of all business transactions using
accounting software such as QuickBooks or Excel. For example, every sale at
my small retail store would be recorded with details on the amount, date, and
customer.
2. Prepare a Trial Balance:
After recording transactions into the general ledger, I would prepare a trial
balance to ensure that debits equal credits. For instance, if I purchased inventory
worth R5,000, the inventory account (asset) would increase while cash or
accounts payable would reflect the payment or liability.
3. Construct the Income Statement:
This statement reflects business performance over a period.
Example:
o Revenue: R50,000 (sales)
, o Cost of Goods Sold: R20,000
o Operating Expenses: R15,000
o Net Profit: R15,000
4. Prepare the Balance Sheet:
This shows the financial position at a specific date.
Example:
o Assets: Cash (R10,000), Inventory (R5,000), Equipment (R15,000)
o Liabilities: Loan (R8,000)
o Owner’s Equity: R22,000
5. Construct the Cash Flow Statement:
This outlines inflows and outflows of cash. For example, I received R20,000 from
customers and paid R5,000 for rent and R10,000 for inventory, leaving a net
increase in cash of R5,000.
6. Ensure Compliance and Accuracy:
I would regularly review my statements for errors and comply with accounting
standards (e.g., GAAP).
QUESTION 2
The success of your small business depends on your effective management of
the human resources of your organisation. Discuss how you would go about
managing your human resources. (10)
Managing human resources effectively ensures productivity, motivation, and retention of
employees.
1. Recruitment and Selection:
I would use clear job descriptions and conduct structured interviews to hire
competent staff. For instance, when hiring a sales assistant, I would assess their
communication skills and customer service experience.
