Class: Senior Secondary School 1 (SS1, SS 1, SSS1, SSS 1)
Term: 2nd Term
Week: 7
Age: 15 years
Duration: 45 minutes
Subject: Financial Accounting
Curriculum Theme: Financial Accounting
Previous Lesson: Bank Reconciliation Statement II.
Topic: ACCOUNTING CONCEPTS
Subject Matter: meaning of accounting concept, entity concept, going concern concept, money measurement concept, identification and explanation of accounting concepts

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

Define accounting concepts.
Identify different types of accounting concepts.
Explain the Entity Concept, Going Concern Concept, and Money Measurement Concept.

Affective Domain:

Appreciate the importance of applying accounting concepts in financial reporting.
Develop an interest in accurate and consistent accounting practices.

Psychomotor Domain:

Differentiate between accounting transactions based on various concepts.
Apply the understanding of accounting concepts to simple accounting scenarios.

Participate in discussions about accounting concepts.
Communicate their understanding of these concepts clearly to others.

Reference Materials

The following resources were used in planning this lesson:

9 Years Basic Education Curriculum for Financial Accounting (Senior Secondary Education)
State Unified Scheme of Work for Financial Accounting SSS 1
Financial Accounting for Senior Secondary Schools by A.L. Oluwasanmi
Charts showing various accounting concepts

Instructional Materials

The teacher will teach this lesson with the aid of:

A chart illustrating various accounting concepts
Whiteboard and markers
Financial Accounting textbooks
Pupils’ notebooks

Rationale for the Lesson

This lesson helps pupils understand the fundamental rules and assumptions that guide the preparation of financial statements. Knowing these concepts enables pupils to interpret financial information correctly and ensures consistency in accounting practices, which is important for making informed business decisions.

Prerequisite/Previous Knowledge

Pupils have been introduced to the basic principles of Financial Accounting and have an understanding of simple accounting terms like assets, liabilities, and capital.

Lesson Content/Board Summary

Accounting Concepts

Meaning of Accounting Concepts

Accounting concepts are the basic rules, assumptions, and principles that serve as the foundation for the preparation and presentation of financial statements. They ensure consistency, comparability, and reliability in accounting records.

Entity Concept

The Entity Concept states that a business is considered a separate and distinct entity from its owner(s). Therefore, the financial transactions of the business must be kept separate from the personal transactions of the owner(s).

The following are implications of the Entity Concept:

Owner’s personal assets and liabilities are not included in the business’s financial statements.
Capital introduced by the owner is treated as a liability of the business to the owner.
Drawings made by the owner for personal use are recorded as reductions in the owner’s capital.

Going Concern Concept

The Going Concern Concept assumes that a business will continue to operate indefinitely in the foreseeable future and will not be liquidated or forced to significantly curtail its operations. This concept influences how assets are valued and how expenses are allocated over time.

The following are implications of the Going Concern Concept:

Assets are recorded at their historical cost and depreciated over their useful lives, rather than at their liquidation value.
Long-term assets and liabilities are distinguished from short-term ones.
Prepaid expenses and accrued incomes are recognised.

Money Measurement Concept

The Money Measurement Concept states that only transactions and events that can be expressed in monetary terms are recorded in the accounting books. Non-monetary events, however important, are not recorded.

The following are characteristics of the Money Measurement Concept:

It provides a common unit of measurement for diverse transactions.
It ignores qualitative aspects that cannot be quantified in money (e.g., quality of management, employee morale, customer satisfaction).
It allows for the aggregation of various assets and liabilities into a single financial statement.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher greets the pupils, reviews the previous lesson briefly, and then asks pupils if they know what rules or guidelines govern how we manage money or keep records in a business. The teacher then introduces the topic: Accounting Concepts.
Pupils’ Activity: Pupils respond to questions and listen attentively.
Learning Point: Pupils are prepared for the new lesson and connect it to previous knowledge.

Step 2: Explanation of Meaning of Accounting Concepts

Time: 10 minutes
Teaching Skill: Explanation/Lecture
Teacher’s Activity: The teacher explains the meaning of accounting concepts as fundamental rules or assumptions that guide the preparation of financial statements. The teacher emphasizes their importance in ensuring consistency and comparability.
Pupils’ Activity: Pupils listen, ask questions for clarification, and take notes.
Learning Point: Pupils understand the general definition and purpose of accounting concepts.

Step 3: Discussion of Entity Concept

Time: 7 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher explains the Entity Concept, using simple examples to differentiate between the business and its owner. The teacher explains how capital and drawings relate to this concept.
Pupils’ Activity: Pupils listen, contribute examples, and ask questions.
Learning Point: Pupils grasp the idea of a business as a separate legal entity.

Step 4: Discussion of Going Concern Concept

Time: 7 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher explains the Going Concern Concept, highlighting the assumption that a business will continue to operate indefinitely. The teacher explains how this concept affects asset valuation and depreciation.
Pupils’ Activity: Pupils listen and participate in discussions.
Learning Point: Pupils understand the assumption of continuous business operation.

Step 5: Discussion of Money Measurement Concept

Time: 6 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher explains the Money Measurement Concept, emphasizing that only transactions measurable in monetary terms are recorded. The teacher gives examples of events that are and are not recorded.
Pupils’ Activity: Pupils listen, ask questions, and provide examples.
Learning Point: Pupils understand the scope of what is recorded in accounting.

Step 6: Further Examples and Clarification

Time: 5 minutes
Teaching Skill: Question and Answer
Teacher’s Activity: The teacher provides additional real-life examples for each concept and encourages pupils to ask any remaining questions to ensure full understanding.
Pupils’ Activity: Pupils respond to questions and seek further clarification.
Learning Point: Pupils consolidate their understanding of the concepts through practical examples.

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

Define accounting concepts.
State any three accounting concepts.
Explain the Entity Concept with an example.
Mention one implication of the Money Measurement Concept.

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Pupils demonstrate understanding of the lesson.

Step 8: Conclusion

Time: 5 minutes
Teaching Skill: Summarisation/Assignment
Teacher’s Activity: The teacher summarises the key points of the lesson, reiterating the importance of accounting concepts. The teacher assigns homework, asking pupils to research two other accounting concepts and write short notes on them.
Pupils’ Activity: Pupils listen, copy homework, and prepare for the next lesson.
Learning Point: Pupils recall the main points and are given an opportunity for further learning.

Lesson Keywords

Concepts – Fundamental rules or assumptions.
Entity Concept – Business is separate from its owner.
Going Concern – Business will continue indefinitely.
Money Measurement – Only monetary transactions are recorded.
Financial Statements – Reports summarizing financial transactions.

Differentiation

For pupils who grasp concepts quickly, the teacher will encourage them to provide more complex real-life examples of how these concepts apply. For pupils needing more support, the teacher will provide simplified examples and additional one-on-one explanations or peer tutoring opportunities.

Note for teachers using this lesson plan

Ensure that the examples provided for each concept are clear and relatable to the pupils’ experiences. Encourage active participation through questions and discussions. Emphasize that these concepts form the bedrock of all accounting practices, making them important to understand thoroughly.