Term: 3rd Term
Class: Senior Secondary School 3
Age: 17 years
Duration: 40 minutes of 2 periods each
Topic:- Terms and means of payment
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
- Define means of payments
- Enumerate the various means of payment
- Highlight the terms of payment
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
The teacher reviews the previous lesson on import and export documents
Students pay attention
She explains means of payments
She lists the various means of payments
Students pay attention and participates
She highlights the terms of making payments
Students pay attention and participate
The teacher writes a summarized note on the board
The students copy the note in their books
TERMS AND MEANS OF PAYMENT
Means of payments can be referred to as the various ways or methods by which settlement of transaction or debts can be affected between people
It can also be referred to as the various ways or methods by which settlement of transaction or debts can be affected between people who are engaged in financial or business transactions e.g Transactions between a debtor and a creditor.
It also includes documents that acknowledge indebtedness e.g promissory notes.
The various means of payment through banks and post office are ;
- BANKING SYSTEM
- Cheque: This is an order, written by the drawer to a bank to pay on demand a specified sum of money to the person named as payee on the cheque.
- Bank drafts: These are issued by a commercial bank for payment to a specified payee at another bank and it is sure guarantee of payment. They are cheques paid by a bank to another bank or to a particular person or an organization.
Note: They are cheques drawn on a bank, when a creditor is unwilling to accept a personal cheque for payment.
- Standing order: This is an instruction given by the account holder to his bank for someone else to make regular payments on his behalf.
- Credit transfer: It involves payments made on instructions to a bank to credit customers of the same and other banks.
- Credit cards: These are cards issued by reputable stores to their approved customers that enable them to purchase goods on credit and settle their indebtedness through their banks monthly.
- Direct debits: This is an arrangement whereby the bank debits the account of a customer with a sum of money at the instance of a creditor.
- POST OFFICE SYSTEM OF PAYMENT
- Postage stamps
- Postal order
- Money order
- Telegraphic money order
- Postal gird
- BUSINESSMEN SYSTEM OF PAYMENT
- Bill of exchange
- Promissory note
- I owe you (IOU)
- LEGAL TENDER
This is money which by law must be accepted in payment for goods and services and in the settlement of debts. It has the backing of law
(i) Coins and
(ii) Bank notes.
TERMS OF PAYMENT
Terms of payment could include
- Payments in advance (PIA) represent customer payments before they pay the full amount.
- Net days confirm the time after the invoice due date that customers need to make the full payment, such as 15, 30, 60 or 90 days.
- End-of-month payments (EOM) typically define payments for each month instead of paying the amount all at once.
- 21st of the month following invoice (21 MFI) states the customer can pay the listed amount by the closest 21st after the invoice date.
- Cash on delivery (COD) represents any cash payment from the customer once they receive the item.
- Cash next delivery (CND) confirms the amount due on the next delivery if a customer receives multiple items or a series of items.
- Cash before shipment (CBS) can include any amount that the customer pays before the business ships the item to them.
- Cash in advance (CIA) provides customers with an option to pay for items once they return the terms of the payment form.
- Cash with order (CWO) means customers may also pay for the item as soon as they order it.
- One- or two-month debt (1- or 2MD) allows the customer to choose to pay for the item with credit in one or two months.
- Stage payments allow customers to pay for their products during a set time agreed upon with the company.
- Forward dating is when a customer receives an invoice for payment after they receive the order.
- Accumulation discounts give the customer allowances for large orders.
- Partial payment discounts apply to customers who choose to pay for an item or service early.
- A rebate is the repayment that the business can apply to the customer invoice after they've submitted documentation of their order or purchase, typically including a receipt.
- Contra represents a payment from the client, subtracted from the cost of supplies they purchase.
EVALUATION: 1. Define means of payment
- List and explain the various means of payment
- Highlight some terms of payment
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively