Lesson Plan

• Describe the components of a Statement of Financial Position for trading and service sole‑trader businesses.
• Classify trial‑balance items as assets, liabilities or owner’s capital.
• Prepare a complete SFP, arranging assets by liquidity and liabilities by maturity.
• Calculate owner’s capital using net profit and drawings.
• Verify that total assets equal total liabilities plus capital.

• Projector or interactive whiteboard
• Printed worksheets with trial balances (trading & service)
• Calculator or spreadsheet software
• SFP template handout
• Whiteboard and markers
• Answer key for worked examples

Begin with a quick question: Why does a business need a snapshot of its financial position at year‑end? Review that students already know the accounting equation and how to calculate net profit. Explain that today they will learn to turn a trial balance into a complete Statement of Financial Position for both trading and service sole‑traders and will be able to check the equation for accuracy.

1. Do‑now (5’) – Short quiz on assets, liabilities and capital.
2. Mini‑lecture (10’) – Recap SFP structure, liquidity order, and differences between trading and service layouts.
3. Guided practice (15’) – Walk through the trading business example, completing the SFP together.
4. Pair activity (15’) – Students prepare an SFP for the service business trial balance while the teacher circulates.
5. Check for understanding (5’) – Whole‑class review of totals and the accounting equation balance.
6. Common mistakes discussion (5’) – Highlight typical errors and strategies to avoid them.
7. Exit ticket (5’) – Write one step they found most challenging and how they will verify their work.

Summarise that students can now construct a Statement of Financial Position for any sole‑trader and verify the accounting equation. Collect the exit tickets as a formative check. For homework, assign a new trial balance for a mixed‑type business for students to complete an SFP independently.