Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Business
Lesson Topic: the distinction between capital expenditure and revenue expenditure
Learning Objective/s:
  • Describe the key differences between capital and revenue expenditure.
  • Explain how each type of expenditure is treated in financial statements and its impact on working capital.
  • Apply classification criteria to real‑world business examples.
  • Analyse the implications of mis‑classification for profitability and financial ratios.
Materials Needed:
  • Projector or interactive whiteboard
  • Slide deck summarising definitions, characteristics, and examples
  • Handout with classification worksheet and decision‑flowchart
  • Calculator or spreadsheet software for depreciation calculations
  • Sample financial‑statement excerpts
 Introduction:
Begin with a quick poll: “If your company spent $50,000 on a new machine, would that be a cost you see on the profit‑and‑loss account or the balance sheet?” This connects to prior learning on basic accounting statements. Today we will identify the criteria that separate capital from revenue expenditure and demonstrate how the distinction influences working‑capital calculations.
Lesson Structure:
  1. Do‑now (5’) – Students classify three short scenarios on sticky notes; quick share.
  2. Mini‑lecture (10’) – Present definitions, characteristics, and accounting treatment using slides.
  3. Guided practice (15’) – Work through the worksheet, applying decision questions to the four example cases; teacher circulates.
  4. Group activity (10’) – Teams create a flowchart on poster paper illustrating the classification decision process.
  5. Check for understanding (5’) – Exit ticket: write one key difference and one implication of mis‑classification.
Conclusion:
Summarise that capital expenditure creates or enhances long‑term assets while revenue expenditure covers day‑to‑day costs, each affecting financial statements differently. Ask students to submit their exit tickets and reflect on how accurate classification supports sound working‑capital management. For homework, complete a short case study where they must decide the correct classification for five additional expenditures.