# Lesson Notes By Weeks and Term - Senior Secondary 1

Profit and loss account

Term: 3rd Term

Week: 1

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:

Subject:      Financial accounting

Topic:-       Profit and Loss account

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Mention rules of accruals and prepayments
3. List items in trading account
4. List items in profit and loss account

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

 PRESENTATION TEACHER’S ACTIVITY STUDENT’S ACTIVITY STEP 1 INTRODUCTION The teacher reviews the previous lesson on exercises on trial balance Students pay attention STEP 2 EXPLANATION She mentions the rules of accruals, prepayments and how to post adjustments of bad debts and provision of debts Students pay attention and participates STEP 3 DEMONSTRATION She lists items in the trading account and the profit and loss account Students pay attention and participate STEP 4 NOTE TAKING The teacher writes a summarized note on the board The students copy the note in their books

NOTE

PROFIT AND LOSS ACCOUNT

RULES FOR ACCRUALS

Accrued expenses refers to benefits enjoyed but not yet paid for.

RULES:

1. Less accrued expenses at the beginning of the year.

1. Add accrued expenses at the end of the year. Accrued expenses in additional information will be added to the expenses in focus.

Example: Rent paid N1,200.

Solution:

Rent figure in the profit and loss account will be; 1200 + 300 = N1,500.

RULES FOR PREPAYMENT

Prepaid expenses refers to benefits not yet enjoyd but paid for.

RULES:

1. Add prepaid expenses at the beginning of the year.

1. Less prepaid expenses at the end of the year. Less prepaid expenses in the additional information from the expenses in focus

Example: electricity N1,800. prepaid electricity N500.

Solution: Electricity in profit and loss account

= 1,800 – 500 = N1,300.

Bad debts will be posted at the debit side of profit and loss account. Bad debts in the additional information must be added to the bad debts in the trial balance.

Increase in provision for bad debt will be debited while decrease in provision for bad debts will be credited in profit and loss account.

The following are items in trading account;

1. Opening stock.

1. Sales

1. Carriage inwards.

1. Returns inwards.

1. Returns outwards.

1. Closing stock.

1. Cost of goods sold.

1. Gross profit. Etc.

ITEMS IN PROFIT AND LOSS ACCOUNT

1. Gross profit b/d

1. Discount allowed

1. Carriage outwards

1. Wages and salaries

1. Rent and rates

1. Lighting and heating

1. Depreciation of fixed assets. Etc.

EVALUATION : 1. Mention the rules for accruals.

1. Mention the rules for prepaid expenses.

1. How do you treat bad debts and its provision in profit and loss account?

1. Mention five items in trading account.

1. Mention five items in profit and loss account.

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively