Class: Junior Secondary School 3 (JSS3, JSS 3)
Term: 2nd Term
Week: 7
Age: 14 years
Duration: 45 minutes
Subject: Business Studies
Curriculum Theme: Business Studies
Previous Lesson: Trading Profit and Loss Account
Topic: Trading Profit And Loss Account (part 2)
Subject Matter: Determination of net sales (where there is returns-inwards), Determination of net profit or loss, Rules for constructing profit and loss account

Specific Objectives

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

Cognitive Domain:
(a) Explain net sales and how returns-inwards affect it.
(b) Calculate net profit or loss from a trading profit and loss account.
Affective Domain:
(a) Appreciate the importance of accurate financial records in business.
Psychomotor Domain:
(a) Construct a simple trading profit and loss account using given figures.
Social Domain:
(a) Collaborate effectively in pairs while solving accounting exercises.

Reference Materials

The following resources was used in planning this lesson:

9 Years Basic Education Curriculum
Lagos State Unified Scheme of Work for Junior Secondary Schools
Corporate Finance Institute – “Profit and Loss Statement Guide” (https://corporatefinanceinstitute.com/resources/accounting/profit-and-loss-statement)
Accounting Tools – “Understanding Sales Returns and Allowances” (https://www.accountingtools.com/articles/sales-returns-and-allowances)
Relevant Textbooks

Instructional Materials

The teacher will teach this lesson with the aid of:

Sample trading profit and loss account charts
Calculator
Whiteboard and marker
Printed practice questions
Demonstration ledger sheets

Rationale for the Lesson

Trading profit and loss account helps learners understand how businesses determine their financial performance and make informed decisions.

Prerequisite/Previous Knowledge

Pupils already know about trading account, gross profit, cost of goods sold, and basic business transactions from previous lessons.

Lesson Content/Board Summary

Trading Profit and Loss Account

Net Sales (Where There Is Returns-Inwards)

Net sales refer to the actual revenue a business earns after deducting any goods returned by customers. Returns-inwards reduce the total sales recorded, showing the true sales figure received by the business.
The following are the components of net sales:

Gross sales
Returns-inwards (sales returns)
Net sales = Gross sales − Returns-inwards

Determination of Net Profit or Loss

Net profit or loss is determined after deducting all expenses from the gross profit. A positive result shows profit while a negative result indicates loss.
The following are the items considered when determining net profit or loss:

Gross profit
Expenses such as salaries, rent, electricity, and transport
Net profit or loss = Gross profit − Total expenses

Rules for Constructing Profit and Loss Account

The profit and loss account follows a structured format that shows all income and expenses to determine the net profit or loss for a period.
These include:

All expenses are recorded on the debit side
All incomes other than sales are recorded on the credit side
Net profit is transferred to the capital account
Net loss is deducted from the capital account

Teaching Methods/Instructional Techniques

Discussion, Lecture, Explanation, Demonstration, Group Work, Question and Answer

Instructional Procedures

To deliver this lesson, the teacher will adopt the following steps:

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: Teacher asks pupils to recall the meaning of gross profit and returns-inwards from previous lessons.
Pupils’ Activity: Pupils respond to questions.
Learning Point: Pupils recall key concepts related to trading account.

Step 2: Explanation of Net Sales

Time: 8 minutes
Teaching Skill: Explanation
Teacher’s Activity: Teacher explains net sales and demonstrates how returns-inwards affect it using figures on the board.
Pupils’ Activity: Pupils listen and observe calculations.
Learning Point: Pupils understand how to compute net sales.

Step 3: Determination of Net Profit or Loss

Time: 10 minutes
Teaching Skill: Demonstration
Teacher’s Activity: Teacher shows how to calculate net profit or loss using sample data.
Pupils’ Activity: Pupils follow the steps demonstrated.
Learning Point: Pupils understand how net profit or loss is derived.

Step 4: Rules for Constructing Profit and Loss Account

Time: 10 minutes
Teaching Skill: Guided Practice
Teacher’s Activity: Teacher lists and explains the rules for preparing profit and loss accounts.
Pupils’ Activity: Pupils write the rules in their notes.
Learning Point: Pupils learn the format and rules governing profit and loss accounts.

Step 5: Note-Taking

Time: 5 minutes
Teaching Skill: Reinforcement
Teacher’s Activity: Teacher dictates or displays the board summary for pupils to write.
Pupils’ Activity: Pupils copy the note.
Learning Point: Pupils retain key lesson points.

Step 6: Evaluation/Review

Time: 5 minutes
Teaching Skill: Assessment
Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

What is net sales?
How is net sales calculated?
Define net profit.
Mention two expenses found in a profit and loss account.
State two rules for preparing a profit and loss account.
Pupils’ Activity: Pupils answer the questions.
Learning Point: Pupils demonstrate understanding of the lesson.

Step 7: Conclusion

Time: 2 minutes
Teaching Skill: Summary
Teacher’s Activity: Teacher summarizes the lesson and connects it to the next topic.
Pupils’ Activity: Pupils listen attentively.
Learning Point: Pupils recall important concepts.

Lesson Keywords

Net Sales – revenue after deducting returns-inwards
Returns-Inwards – goods returned by customers
Net Profit – profit after all expenses
Loss – when expenses exceed gross profit
Profit and Loss Account – financial statement showing profit or loss

Differentiation

Teacher provides simpler numerical examples for slower learners and more complex computations for advanced learners. Group work supports peer learning.

Note for teachers using this lesson plan

Ensure pupils practice several examples to reinforce understanding. Emphasize proper formatting of accounts and accuracy of calculations.