Lesson Plan

Resources → Subject Notes → Accounting → Notes
Lesson Plan
Grade: Date: 17/01/2026
Subject: Accounting
Lesson Topic: prepare income statements for trading businesses and for service businesses
Learning Objective/s:
  • Describe the components of an income statement for trading and service sole traders.
  • Calculate Cost of Goods Sold and Gross Profit for a trading business.
  • Prepare a complete income statement and determine net profit or loss for both business types.
  • Identify common errors when preparing income statements and apply checks to avoid them.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed income‑statement templates (trading & service)
  • Calculator or spreadsheet software
  • Sample business data handouts (Emily’s shop, Tom’s tutoring)
  • Whiteboard and markers
  • Student worksheets for practice
 Introduction:
Begin with a quick poll: who has ever sold a product or offered a service? Recall that sole traders record all revenues and expenses in an income statement. Today we will learn how to build accurate income statements for both trading and service businesses and be able to calculate net profit. By the end of the lesson you will be able to produce a correct statement and spot typical mistakes.
Lesson Structure:
  1. Do‑now (5'): Students list differences between trading and service businesses on sticky notes (activate prior knowledge).
  2. Mini‑lecture (10'): Explain the income‑statement structure – revenue, COGS, operating expenses, net profit – using the projector.
  3. Guided practice – Trading (15'): Walk through Emily’s shop example, calculate COGS, gross profit and net profit together.
  4. Guided practice – Service (15'): Walk through Tom’s tutoring example, emphasising the absence of COGS.
  5. Independent activity (15'): Students complete a worksheet creating income statements for a new trader and a new service business; teacher circulates for support.
  6. Check for understanding (5'): Quick exit‑ticket quiz with three questions on steps and common errors.
  7. Review & summarise (5'): Highlight the five‑step checklist and answer any lingering questions.
Conclusion:
Summarise the five‑step process for preparing an income statement and remind students of the revision checklist. Collect the exit tickets to gauge understanding. For homework, assign a mixed set of business data for students to prepare income statements independently, reinforcing today’s learning.