Lesson Plan for Senior Secondary 3 - Financial Accounting - Departmental Account Ii

**Lesson Plan: Financial Accounting - Departmental Accounts II** **Grade:** Senior Secondary 3 **Subject:** Financial Accounting **Topic:** Departmental Accounts II **Duration:** 60 minutes **Objectives:** 1. To understand the importance and purpose of departmental accounts. 2. To learn the methods of accounting for inter-departmental transfers. 3. To prepare and interpret departmental trading and profit & loss accounts. 4. To analyze the performance of different departments using financial ratios. **Materials Needed:** - Whiteboard and markers - Projector and PowerPoint presentation - Textbooks and notebooks - Sample departmental account statements - Calculators **Lesson Structure:** **Introduction (10 minutes)** 1. **Welcome and review**: Greet the students and quickly recap what was covered in the previous lesson about departmental accounts I (purposes, methods, etc.). 2. **Introduction to today's topic**: Explain that today’s session will delve deeper into the specifics of accounting for departments, particularly focusing on inter-departmental transfers and more complex departmental accounts. **Lesson Content (30 minutes)** 1. **Importance and Purpose of Departmental Accounts (5 minutes)** - Explain that departmental accounts help in determining the profitability of different segments of the business. - Mention that they help in planning and controlling activities, making it easier to allocate resources effectively. 2. **Inter-departmental Transfers (10 minutes)** - Discuss what inter-departmental transfers are and why they are important. - Explain the methods of pricing inter-departmental transfers (cost price, cost plus a percentage, market price). - Provide examples to illustrate how inter-departmental transfers are recorded. 3. **Preparation of Departmental Trading and Profit & Loss Accounts (10 minutes)** - Walk through the steps of preparing departmental trading and profit & loss accounts. - Discuss the allocation of expenses among departments (direct expenses, apportioned expenses). - Provide a detailed example and solve it step-by-step to make the process clear. 4. **Analyzing Departmental Performance (5 minutes)** - Introduce financial ratios used in departmental performance analysis (e.g., gross profit ratio, net profit ratio, return on investment). - Demonstrate how to calculate and interpret these ratios using example data. **Activity (15 minutes)** 1. **Group Exercise** (10 minutes) - Divide the students into small groups. - Provide each group with a set of departmental account statements. - Ask each group to prepare the departmental trading and profit & loss accounts, and allocate inter-departmental transfers appropriately. - Each group must calculate relevant financial ratios for their assigned department. 2. **Presentation and Discussion** (5 minutes) - Have one representative from each group present their findings. - Discuss any differences in approaches and clarify any misunderstandings. **Conclusion (5 minutes)** 1. **Summary**: Recap the key points covered in the lesson — importance of departmental accounts, handling inter-departmental transfers, preparing trading and profit & loss accounts, and analyzing department performance. 2. **Questions**: Open the floor for any questions or clarifications. 3. **Assignment**: Assign some homework problems related to the topic for further practice. 4. **Preview**: Give a brief overview of the next lesson to maintain continuity. **Assessment:** - Active participation in group activities. - Accuracy in solving the example problems and preparation of trading and profit & loss accounts. - Completion and correctness of the assigned homework. **Homework/Assignment:** 1. Prepare a mock departmental account for a fictional company, incorporating inter-departmental transfers. 2. Calculate relevant financial ratios for the departments and provide a brief analysis. **Additional Notes:** - Encourage students to bring in real-life departmental account examples if they have access to any. - Use diverse examples from various industries to show the application of departmental accounting in different contexts.