Lesson Notes By Weeks and Term - Senior Secondary School 2

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  4. Terms of trading

Term: 1st Term

Week: 12

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:    Commerce

Topic:-      Terms of trading

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

  1. Discuss the terms of trading
  2. Highlight the differences between commodity and stock

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 the requirements of trading

Students pay attention

STEP 2

EXPLANATION

She highlights the terms of trade

Students pay attention and participates

STEP 3

DEMONSTRATION

She discusses the differences between commodity and stock

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

TERMS OF TRADE

  1. CIF (Cost, Insurance and Freight): A price quoted CIF simply means that it includes the cost of goods insurance, carriage to the port of destination but exclude delivery from the dock to the purchaser’s premises. The importer is responsible for other charges.
  2. FOB (Free on Board): It simply means the cost of goods and the expenses incurred for putting goods on board a ship are included..
  3. FOR (Free on rail): It means that the seller bears all the charges including leading the goods on rail.
  4. FREE Dock: This is an exporter’s price quotation, which includes the cost of the goods but transport charges only is for the docks from which the goods are to be shipped.
  5. F (Cost and Freight): “Cost and freight” means that the price quoted covers carriage of the goods to the importer’s destination but excludes payment for insurance.
  6. S. (Free Alongside Ship): This means that the price quoted includes all charges involved in conveying the goods to the ship but does not include cost of loading the goods onto the ship.
  7. Free On Quay (F.O.Q): This means that the price quoted includes all charges and expenses involved in delivering the goods to the quay. The buyer takes responsibility for loading onto the ship.
  8. FRANCO: “Franco” means that the price quoted covers all charges involved in carrying the goods up to the warehouse of the importer.
  9. Ex-Ship: “Ex-Ship” is a term of sale which indicates that the seller is the one who bears the cost of carriage until the goods have been properly unloaded from the ship at the port of destination.
  10. Carriage Forward: A price which is quoted “Carriage Forward” represents only the cost of the goods to which the cost of transportation will be added at a later date.
  11. Cash On Delivery (C.O.D): “Cash on delivery” means that the buyer may not be allowed to take possession of the goods until he has made payment for them.

 

DIFFERENCES BETWEEN STOCK AND COMMODITIES

 

STOCK

COMMODITY

1

Ownership of company.

Ownership of raw unprocessed goods.

2

They are entitled to dividend.

They are not entitled to dividend.

3

They are intangible items

They are tangible items.

4

Trading is simply on performance of the company and prevailing conditions in the market.

Trading is on price fluctuation.

5

They are bought and held in a portfolio.

Most commodities are not bought or held in a portfolio because some are perishable

6

They are financial instruments.

They are non-financial instruments.

 

EVALUATION:   1. List and explain the terms of trading

  1. Differentiate between stock and commodities

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively