Lesson Plan

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Lesson Plan
Grade: Date: 25/02/2026
Subject: Business
Lesson Topic: the relationships between items in the statement of profit or loss and the statement of financial position
Learning Objective/s:
  • Describe how revenue, expenses and profit affect specific asset, liability and equity accounts.
  • Explain the closing process that transfers net profit to retained earnings.
  • Analyse the impact of depreciation, tax, interest and dividends on the balance sheet.
  • Apply the relationships by preparing a simple statement of financial position from given profit‑and‑loss figures.
Materials Needed:
  • Projector or interactive whiteboard
  • Printed worksheet with profit‑and‑loss data and balance‑sheet template
  • Calculator
  • Whiteboard and markers
  • Accounting software demo (optional)
 Introduction:
Begin with a quick question: “Where does the profit you see on the income statement end up?” Students recall that profit influences equity. Explain that today they will trace each profit‑and‑loss item to its effect on the balance sheet and identify the closing entries. Success will be shown by correctly completing a balance‑sheet draft from a set of figures.
Lesson Structure:
  1. Do‑now (5’) – Students list where they think revenue, expenses and profit appear on the balance sheet; quick share.
  2. Mini‑lecture (10’) – Review the profit‑and‑loss to balance‑sheet link using a flowchart diagram.
  3. Guided practice (15’) – Match each profit‑and‑loss item to the affected asset, liability or equity account.
  4. Closing process activity (10’) – In pairs, complete the closing entries and update retained earnings on a template.
  5. Full example (15’) – Using the provided numerical example, students construct the statement of financial position.
  6. Check for understanding (5’) – Exit ticket: one sentence describing how net profit moves to retained earnings.
Conclusion:
Summarise that profit and loss items are the bridge between performance and position, with net profit feeding retained earnings. Ask a few students to share their completed balance sheets. For homework, students will analyse a new set of profit‑and‑loss figures and prepare the corresponding balance sheet.