Lesson Notes By Weeks and Term - Junior Secondary School 3

TERM: 2ND TERM

SUBJECT: BUSINESS STUDIES

CLASS: JSS 3

WEEK FIVE

TOPIC: BALANCE SHEET

Contents:

1. Definition,
2. Heading, classification of assets into fixed and current assets and liabilities into capital and current liabilities.

DEFINITION OF BALANCE SHEET

Balance sheet can be defined as a statement showing the assets and liabilities of a business as at a given date. A balance sheet is not an account and so it does not have debit or credit side. Also it does not have balance brought down or balance carried down.

CLASSIFICATION OF ASSETS AND LIABILITIES

Assets: These are the valuable resources of a business. Among these resources we have the ones that are more permanent in nature and others less permanent. The more permanent assets e.g. land and buildings, office equipment plant and machinery furniture and fittings, motor vehicles, etc are referred to as fixed assets. The less permanent ones are referred to as current assets. Examples of current assets are: stock, trade debtors, bills receivable cash at bank, cash in hand, etc.

Capital: This is worth the business owes the owner of the business. In other words, capital is the amount which is used to establish a business.

Current Liabilities: are the debts a business owes outsiders which should be repaid within one year. Examples are trade creditors, bank overdraft, accrued expenses, bills payables, etc. A format of a balance sheet is as follows:-

BALANCE SHEET

As at 31stborder="1" style="height: 140px;" width="318">CapitalXXXFixed AssestsAdd Net ProfitXXXLand and BuildingXXXXXXPlant and MachineryXXLess DrawingsXXXMotor vehicleXXXXXXOffice EquipmentXXXCurrent LiabilitiesCurrent AssetsTrade CreditorsXXXStocksXXXBank OverdraftXXXDebtorsXXXAccrued ExpensesXXXCashXXXXXXXXX

EVALUATION

1. Define a balance sheet
2. List four examples of fixed assets

Reading Assignment

Read Business studies for JSS 3 by O. A. Lawal pages 86 to 90.

GENERAL REVISION QUESTIONS

1. What is a trial balance?
2. Where do you prove the accuracy of double entry book keeping?
3. Define balance sheet
4. State three current liabilities
5. List three current assets

WEEKEND ASSIGNMENT

1. Balance Sheet is_____ A. assets and liabilities B. income and expenditure of a business C. the principal book of account where all entries in the subsidiary books are posted to D. a statement showing the assets and liabilities of a business as at a given date
2. An example of fixed asset is A. debtors B. creditors C. motor van D. bills receivable
3. _______ is a current asset A. Stock B. Furniture C. Drawings C. Bills payable
4. _________ is a current liability A. Stock B. Machinery C. Drawings D. Bills payable
5. The amount a business owes the owner(s) is called A. assets B. liabilities C. capital D. drawings

THEORY

1. Write short rotes on (a) Assets (b) Liabilities (c) Drawings
2. Prepare a format of a balance sheet with at least ten items.