Lesson Notes By Weeks and Term - Senior Secondary School 2

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  4. Credit II

Term: 2nd Term

Week: 2

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:    Commerce

Topic:-      Credit II

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

  1. Explain the types of credit sales
  2. State the similarities and differences between hire purchase and deferred payment

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 credit

Students pay attention

STEP 2

EXPLANATION

She lists and explains the types of credit sales

Students pay attention and participates

STEP 3

DEMONSTRATION

She discusses the similarities and differences between hire purchase and deferred payment

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

TYPES OF CREDIT SALES 

Types of credit sales are:

  1. Hire purchase: Hire purchase can be defined as the system whereby the buyer or hirer has possession and the use of the goods while the owner retains the ownership of goods until the final payment is made. It is a means of paying for goods through installment.
  2. Mortgage: This is a system of credit in which building societies or mortgage bank assist in people to buy landed property or houses by lending them a proportion of the purchase money.
  3. Loan and overdraft: Loan is a sum of money borrowed by individuals, firms and government from financial institutions or individuals for a particular period at an agreed rate of interest.

An overdraft is a form of credit provided by banks in which a customer is allowed to draw over the above the money in his account.

  1. Book-me-down: This is a means whereby the customer will purchase goods on credit and write down their names. Payments may be made at the end of the month after receiving salary.
  2. Leasing: leasing is a system whereby the owner of a property grants to another the right to exclusive possession for a fixed time in return for periodic payment.
  3. Factoring: Factoring can be defined as a system whereby trade debts can be sold immediately for cash to factoring firm (bank) for a lower amount than the actual value of the debt.
  4. Budget Account: It is a system of account operated by departmental stores  where customers agree to pay a certain sum per month which enables credit up to eight times that amount to be obtained.
  5. Conditional Credit sales: It is an agreement for the sale of goods in which the title to goods do not pass completely until all installment payment has been made.
  6. Trading cheque or voucher: This system of credit entails a voucher being issued by a club which is formed to enable its members buy buy from specified local shops in the locality.
  7. Finance House: Finance house is defined as the A financial institution that lends to people or businesses, so that they can buy things such as cars or machinery.
  8. Club Trading: It is a system of credit whereby some organizations set up clubs to collect regular contribution from members.
  9. Deferred payment: This is a system where ownership and possession are transferred immediately to the buyer from the seller after paying an initial deposit then the payment of the balance will be paid later.

 

SIMILARITIES BETWEEN HIRE PURCHASE AND DEFERRED PAYMENT

  1. Durable goods are involved in hire purchase and deferred payment
  2. Initial deposit is required in both system
  3. Both accommodate installment payment and credit facilities
  4. The hirer or buyer can use and enjoy the goods before full payment is made.
  5. Both system of credit ensure that the buyer takes possession of the goods

 

DIFFERENCES BETWEEN HIRE PURCHASE AND DEFERRED PAYMENT

Hire purchase

Deferred payment

1.The price charged is higher

Price charged is lower

2.Goods are on hire

Goods are sold

3.Hire purchase favours the seller

Deferred payment favours

the buyer

4.On default, seller can repossess the goods

Seller cannot repossess the goods

5. Durable goods are involved

Less durable goods are sold

 

EVALUATION:   1. List and explain the types of credit sale

  1. State the similarities and differences between hire purchase and deferred payment

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively