Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Accounting
Lesson Topic: understand the meaning of the term equity
Learning Objective/s:
  • Define equity and express it with the equation Assets – Liabilities.
  • Identify and describe the three main components of equity: share capital, retained earnings, and reserves.
  • Interpret a balance sheet to locate the equity section and calculate equity from given figures.
  • Explain why equity is important for assessing financial health and for long‑term financing.
  • Analyse the impact of limited liability on shareholders’ risk.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed balance‑sheet handouts
  • Calculator worksheets for equity calculations
  • Whiteboard and markers
  • PowerPoint slides summarising equity components
  • Example company financial data sheets
 Introduction:

Start with a quick poll: “What do owners claim as their stake in a business?” Review the previous lesson on assets and liabilities, linking the residual interest to equity. Explain that by the end of the lesson students will be able to define equity, list its components, and calculate it on a balance sheet.
Lesson Structure:
  1. Do‑now (5'): Students answer a short exit ticket on assets vs. liabilities.
  2. Mini‑lecture (10'): Define equity, present the equation, and introduce share capital, retained earnings, and reserves using slides.
  3. Guided practice (12'): Work through the provided example calculation, filling missing figures on the projected balance sheet.
  4. Group activity (10'): In small groups, label the equity section on a printed balance sheet and compute equity, then discuss why a positive equity figure matters.
  5. Concept check (5'): Quick quiz (Kahoot or show of hands) covering definition, components, and importance of equity.
  6. Summary & reflection (3'): Teacher recaps key points; students write one new insight on a sticky note.
Conclusion:

Review the definition, components, and calculation of equity, emphasizing its role in financial health and limited liability. Students complete an exit ticket stating one way equity can affect a company’s decisions. For homework, assign a worksheet requiring students to calculate equity from a new set of balance‑sheet data.