Lesson Plan

• Describe the key characteristics of trading and service businesses.
• Explain how business type influences accounting entries and financial statements.
• Compare inventory management, cost of sales and revenue recognition for each type.
• Apply appropriate journal entries for typical transactions in trading and service businesses.
• Analyse risk profiles and tax implications for sole traders operating each type.

• Projector or interactive whiteboard
• Printed handouts with the comparison table
• Sample journal‑entry worksheets
• Calculator for each student
• Whiteboard markers
• Case‑study cards (trading & service examples)

Start with a quick poll: “What type of business do you think a local bakery is – trading or service?” Discuss responses, linking to prior knowledge of business types. Explain today’s success criteria: students will differentiate trading and service businesses and record their transactions correctly.

1. Do‑now (5') – Students list examples of local businesses and classify them as trading or service.
2. Mini‑lecture (10') – Define trading and service businesses; present key differences using slides.
3. Guided practice (12') – Work through sample journal entries for a trading business (stock purchase & sale) and a service business (service provision).
4. Comparative activity (10') – In pairs fill a Venn diagram comparing inventory, cost of sales, revenue recognition and risk.
5. Quick check (5') – Teacher asks three rapid‑fire questions; students respond with thumbs‑up/down.
6. Exit ticket (3') – Write one accounting implication of misclassifying a business type.

Recap the main distinctions and why they matter for sole traders. Students complete an exit ticket summarising one key accounting difference. For homework, each learner analyses a chosen local business and identifies whether it is a trading or service business, justifying the classification.