DEEPER LIFE HIGH SCHOOL

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deeperlifehighschool@yahoo.com

STORE MANAGEMENT SCHEME OF WORK

SS2 THIRD TERM

WEEK TOPIC

THEME VII: BOOK KEEPING

1. Revision of last term’s work.
2. Subsidiary Books: (a) Purchase Day book (b) Sales Day Books
3. Subsidiary Books: (c) Return outward and inward books.
4. Subsidiary Books: (d) Cash books; (i) Single column (ii) Double column (iii)
Three column, etc.
5. Final Accounts: (a) Trading Account: (i) Definition and purposes (ii)
Preparation of trading account (iii) Calculation of gross profit.
6. Final Accounts: (b) Profit and Loss account (c) Preparation of profit and loss
account. (d) Calculation of net profit.
7. MID-TERM BREAK
8. Final Accounts: (e) Balance sheet – (i) Definition (ii) Items on the Balance
Sheet. (iii) Posting of items into the balance sheet (iv) Balancing of account.
9. Sales Turnover: (a) Meaning (b) Calculation of rate of sales turnover.
10.Revision.
11.Revision.
12.Examination.
WEEK 1 Revision of last term work

WEEK 2

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: SUBSIDIARY BOOKS

CONTENT: 1 Meaning of Subsidiary Book

2 Purchase Day Book

3 Sales Day Book

Sub-topic 1 Meaning of Subsidiary Books: These are books of original entry or prime entry in which
events and transactions are initially recorded before being posted or transferred to the ledger. The
recording of transaction in this book is not a double entry system.

Classification of Subsidiary books

1. Purchase Day Book: The purchase day book is a book of original entry used for recording goods
bought on credit from Suppliers. It is sometimes called Purchase journal. Purchase of fixed
assets or cash transaction is not recorded.
2. Sales Day Book: The Sales day book is a book of original entry or prime entry used for recording
goods sold to customers on credit. Sales of fixed assets or cash transaction are not recorded.

EVALUATION

1. What is the meaning of Subsidiary book

2. Identity 2 types of Subsidiary books

Sub –topic 2

Illustration 1: Enter the transactions below in the books of Jonathan:

(ii) Post the item to the general ledger.

June 1 bought goods on credit from Lawa

20 Rulers at #50 each

 26 Big notes at #70 each

Less 21/2 trade discount

June 14 purchased on credit from Niyi:

25 Shoes at #30 each

24 Shoes at #20 each

Less 5% discount

Purchase Day Book

Date Particulars F Detail Total amount

June 1 Lawa # #

20 Rulers at #50 each 1,000

26 Big notes at #70 each 1,820

2,820

Less Discount 21/2% x 2,820 70.50 2,749.50

June 14 Niyi

25 Shoes at #30 each 750

24 Shirts at #20 each 480

1,230

Less 5% x 1,230 61.50 1,168.50

Total posted to the debit of purchase 3,918.00

accouint

General Ledgers

Dr Purchase account Cr

June Sundries 3,918

Dr Lawa account Cr
 June 1 Purchase 2,749.50

Dr Niyi account Cr

# June 14 Purchase account #

1,168.50

Illustration 2

1. Enter the following transaction in the book of Mark.

2. Post the item to the ledger.

August 3 sold goods to Akata:

1 Dozen Of sandals at #50 a dozen

15 Clocks at #200 each

Trade discount 5 %

August 16 sold to Aku:

8 Radio sets at #80 each

23 Televisions set at #20 each

Trade discount 10%

Sales Day Book

Date Particulars Folio Details Total

Aug 3 Akata # #

1 Dozen of sandals at #50 a dozen 50

15 Clocks at #200 each 3,000

3,050

Discount ( 5 % x 3,050) 152.5 2,897.50

Aug 16 Aku
 8 Radio sets at #80 each 640

23 Television sets at #20 each 460

1,100

Discount (10% x 1,100) 110 990

Total posted to the credit of sales account 3,887.50

Dr Sales account Cr

# #

August Sundries 3,887.50

Dr Akata account Cr

# #

August 3 Sales 2,879.50

Dr Aku account Cr

# #

August 16 Sales 990

EVALUATION

1. Enter the following transaction in the book of David

2. Post the item to the ledger.

June 8 Sold to Sesan

2 cup at #800 per cup

13 Radio sets at #40 per set

 Trade discount 10%

June 14 Sold to Tokunbo

2 Video sets at #20 per set

Trade discount 10%

GENERAL EVALUATION

1. Subsidiary book can be define as (a) Book of source information (b) Books of account (c) Books
of original and prime entry (d) Original books of account.
2. Information in the subsidiary books are recorded (a) Twice (b) Once (c) Thrice (d) fourth.
3. After information are recorded in the day book it is posted to (a) Balance Sheet (b) Trial balance
(c) Ledger (d) Profit and loss account.
4. Another name for purchase day book is (a) Ledger (b) Purchase account (d) Purchase return (d)
Purchase journal.
5. Sales of fixed assets are not recorded in the (a) Sales day book (b) Purchase day book (c) Return
inward book (d) Return outward book.

ESSAY

1. What is the meaning of a Subsidiary book?

2. Mention 2 types of classification of Subsidiary book
3. Explain its uses.
4. Where do we post transaction to after recording in the day book
5. WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al (Pages
207,211, and 213)
PRE-READING ASSIGNMENT
Read about Return outward and inward books
WEEKEND ACTIVITY
Mention 2 uses of return and outward book
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 3
SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: SUBSIDIARY BOOKS

CONTENT: 1. Return outward book

2..Return inward book

1. Return outward book: This is the book for recording goods returned to Suppliers; it is often referred
to as Purchase return journal. Transaction entered into this book is from credit note, and it is also issued
as result of damages or defective goods.

2. Return inward book: This is the book for recording goods sold but later returned by the customer
(buyers). Goods may be returned as a result of damage in transit. The transaction recorded are taken
from credit note issued to buyer

EVALUATION

1. Explain return outward and return inward books

2. What are the uses of these books?

Illustration 1: A return outward book has the following columns:- date, particulars, folio, details and
totals.

Date Particulars F Detail Total

(i) Enter the following in the return outward book

(ii) Post it to the Ledger

June 3 Returned to Lawa

2 Rulers at #50 each

6 big notes at #70 each

Less 2 ½ % discount
June 14 Returned to Niyi

5 Shoes at #30 each

3 Shirts at #20 each

Less 5 % trade discount

Date Particulars F Details Total

June 3 Lawa_____________

3 Rulers at #50 each 150

6 Big notes at #70each 420

570______

14.25 555.75

June 14 Niyi_______________

5 Shoes at #30 each 150

4 Shirts at #20 each 80

230

Less 5 % discount 11.50 218.50

Dr Return Outward account Cr

# #

June Sundries 774.25

Dr Lawa account Cr

# #

June 3 Return outward 555.75

Dr Niyi account Cr
 #

June 14 Return outward 218.50

Write up the return outward book of Festus

Jan 1 We returned goods to Joy

32 Bags of rice at #8.00 per bag

4 Yards of Nylon at #1,000 per yard

Jan 15 Returned to Emmanco

20 Rulers at #5 each

10 pencil at #2 each

Illustration 2: The return inward book has the following column:- date, particulars ,folio, details, and
total

Date Particulars Folio Detail Total

Enter the following in the Return inward book of Femi Ltd.

Jan 7 Obang Ltd returned

2 bags of flour,N10 each

5 cartons of fish, N7 each

@ 10% Trade discount

Jan 27 Jackson Enterprises returned

5 Pairs of slippers, N100 each

2 Pairs of gent’s wears, N300 each

 @ 5% Trade discount

Date Particulars Folio Details Total

# #

Jan 7 Obang LTD

2 Bags of flour at #10 each 20

5 Cartons of fish at #7 per carton 35_____

55_

Less discount (10% x55) 5.5 49.50

Jan 27 Jackson ENT

5 Pair of slippers at #100 each 500

2 Pairs of gent’s shoes at #300 each 600____

1,100

Less discount (5 % x 1,000) 55 1,045

1,094.50

Dr Return inward account Cr

# #

January Sundries 1,094.50

Dr Obang LTD Cr

January 3 261 Jan 7 Return inwards 49.50

____ Balance c/d 211.50

261 261

Balance b/d 211.50

Dr Jackson Enterprises Cr

January 15 Sales 2,565 Jan 27 Return inwards 1,045

Balance c/d 1,520

2,565 2,565

Balance b/d 1,520

EVALUATION:

Write up Return inwards book

Jan .3 Returned to us by Kenny

23 Cartons of fish at #40 per carton

32 Bags of flour at #80 per bag

Trade discount 10%

Jan. 15 Aja returned goods to us

6cartons of fish at #30 per carton

12 Bags of flour at #90 per bag
Trade discount 15%

Jan.23 Returned to us by Okete

23 Crates of coke at #9 per crate

34 cartons of stout at #12 per carton

Trade discount 8%

GENERAL EVALUATION

1. Which of these is not a subsidiary book? (a) Sales day book (b) Return day book (c) Purchase day
book (d) Return ledger
2. What is return inward used for? (a) To record sales on credit (b) To record purchase on credit (c)
To record goods returned by customer (d) To record goods returned to Supplier.
3. From which sales documents do we extract transaction used to prepare return outward journal
(a) Debit note (b) Credit note (c) Cash book (d) Cash account.
4. When defective or damaged goods are returned is recorded in the (a) Return inward book (b)
Return outward book (c) Purchase day book (d) Sales day book.
ESSAY
1. Mention2 subsidiary books. Explain their uses.
 2. Another name for return inward book is______
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al (Pages 221 –
223)
PRE-READING ASSIGNMENT
Read about Cash Book
WEEKEND ACTIVITY
Mention the 3 types of Cash book
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 4

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: SUBSIDIARY BOOKS

CONTENT 1 Cash Book

2. Single Column Cash Book

3. Double Column Cash Book
4. Three Column Cash Book

Sub-topic 1. Cash Book:- The Cashbook is a book for recording receipt and payment of money. It
performs both the functions of a ledger account and subsidiary books. No credit transaction is recorded
in the cash book. There are 3 types of Cash books, and they are:

i. Single Column Cash Book

ii. Double Column Cash Book

iii. Three Column Cash Book

EVALUATION 1

1. What is a cash book?

2. Mention 2 functions of a cash book

Sub-topic 2: Single Column Cash Book:-It is used for recording cash received and paid. The balance is
referred to as Cash in hand. All cash received must be debited while cash paid will be credited to the
cash account.
Illustration 1: Enter the following in the cash account of Kola

Jan 2 Cash in hand 4,000

Jan 4 Cash to Mercy 700

Jan 6 Cash Sales 200

Jan 9 Cash purchases 100

Jan 10 Bought stationery 230

Jan 11 Paid insurance 120

Jan 12 Paid wages 480

Jan 22 Cash sales 500

Dr Cash account Cr

EVALUATION 2

1. Enter the following in the cash account of Toke

Feb 4 Cash in hand 500
Feb 6 Cash paid to Jack 150
Feb 8 Cash purchase 650
Feb 10 Bought stationery by cash 400
Feb 12 Paid insurance 250
Feb 14 Paid wages 100
Feb 16 Cash sales 700

Sub-topic 3: Double Column Cash book: This is the combination of both cash account and bank account
in one book. It shows the total particulars of all money received and paid by the firm (cash or cheque) In
preparing the cash book the principles of double entry should be strictly adhere to.

Illustration 3: Enter the following in two – column cash book. Balance off at the end of the month

June 1 Started business with cash #6,400

June 2 The following paid us by cheque; Ade #1,000; Ada #1,200

June 3 Cash sales paid directly into the bank #1,400

June 5 Paid rent by cash #360

June 5 We paid the following accounts by cheque: Kenny #1,040: Sola #600
June 7 Withdraw cash from the bank for business use #140

June 8 Commission received by cheque #900

June 10 Banked #300

June 12 Withdraw cash by cheque #40

June 15 Paid wages by cash #500

June 16 Bought motor van by cheque #40

June 18 Cash sales #2,000

June 20 Bought stationery paying by cash #340

June 22 Received #400 cheque from Biodun

June 23 Cash #1,000

June 24 Cheque drawing #240

June 25 Bought goods by cheque #230

June 27 Lekan lend us #2,040 cash

June 28 Paid motor expenses by cheque #36

June 30 The proprietor put further cash #2,640 into the business capital

Dr Cash book Cr

Date Particulars Folio Cash Bank Date Particulars Folio Cash Bank

# # # #

June 1 Capital 6400 June 5 Rent 360

June 2 Ade 1,000 June 6 Kenny 1,040

June 2 Ada 1,200 June 6 Sola 600

June 3 Sales 1,400 June 7 Cash C 140

June 7 Bank C 140 June 10 Bank C 300

 June 8 Commission 900 June 12 Drawings 60

June 10 Cash C 300 June 15 Wages 500

June 18 Sales 2,000 June 16 Motor van 40

June22 Okete 400 June 20 Stationery 340

June 27 Loan: Lekan 2,040 June 23 Purchases 1,100

June 30 Capital 2,640 June 24 Drawings 240

June 25 Purchases 230

June 28 Motor exp 36

______ ______ Balance c/d 10,380_ 3,054__

13,220 5,200 10,220 5,200__

Balance c/d 10,380 3,054

EVALUATION 3

1. Write up the two column cash book from the following

May 1 Balance brought down

Cash in hand #560

Cash at bank #23,560

May 2 Paid rent by cheque #400

May 3 Paid postage by cash #50

May 5 Brought a new car for #1950 cash

May 7 Paid rent by cheque #200

May 10 Cash sales #740

May 11 Cash drawing by proprietor #200

May 15 Cash paid into bank #600

May 17 We paid Okon by cheque #750

 May 19 Withdraw #2000 from bank for investment use

May 21 Cash sales paid directly into bank #1,100

May 24 Jamiu paid us #1,500

May 29 John paid us by cheque #790

Sub-topic 3. The three column cash book is a cash book which contains bank column along with
cash and discount columns i.e. discount allowed and discount received.

EVALUATION 4: Write up the three column cash book from the following detail and balance off at the
end of the month.

March 1 Balance brought forward cash #230, bank #47,560.

March 2 The following paid their account by cheque, in each case deducting 5% cash discount Bada
#140. Tunde #2,200

March 3 Paid wages by cheque #100

March 4 Paid rent by cheque #880

March 6 Ogun lent us #10,010 by cheque

March 8 Paid motor expenses in cash #440

March 10 We paid the following accounts by cheque in each case deducting a 2 1/2 percent cash discount.

March 15 Paid wages in Cash #1,600

March 17 Akanbi pays his account of #200 by cheque #180. Deducting #20 discount

March 20 Received commission by cheque #709

March 25 The following paid their accounts by cheque in each case deducting 5% cash discounts: Okojie
#2,600, Sola #4,600

March 27 Cash drawing #120

March 30 Cash withdraw from bank #3500 for business

Date Particular Folio Cash Bank Discount Date Particular Folio Cash Bank Discount
Allowed
Received
 # # # # # #

Mar 1 Bal b/f 2,300 47,560 Mar 3 Wages 100

Mar 2 Bada 1,330 70 Mar 4 Rent 880

Mar 2 Tunde 2,090 110 Mar 8 M/exp 440

Mar 6 Ogun 10,010 Mr. 10 Biodun 3,510 90

Mr.17 Akanbi 180 20 Mr. 15 Bose 4,680 120

Mr.20 Commission 709 130 Mr. 27 Wages 1,600

Mr.25 Okojie 2,470 230 Mr.30 Drawing 120

Mr.25 Sola 4,370 Mr.30 Cash C 3,500

Mr. 30 Bank C 3,500_ _______ _______ Mr.31 Bal c/d 2,700 56,929 _______

5,800 68,719 560 5,800 68,719 210

2,760 56,929

EVALUATION 4

Write up the three column cash book from the following details. Balance off at the end of the month.

August 1 Started business with #3,000 in the bank

August 2 Cash withdrawn from the bank #1,500

August 3 Paid rent in cash #50

August 4 Bought goods for cash #35

August 5 Cash sales #370

August 6 The following paid us their account by cheque in each case deducting 10% discount Bello
#2500, Ajasin #230, Onigbinde #440

August 11 Cash drawing #38

August 13 Cash purchase #25

August 17 We paid the following account by cheque less 5% discount: Gunju #100, Festus #50, Victor
#120
August 25 Received a cash loan #700 from Ladipo

August 30 Paid electricity by cheque #20

GENERAL EVALUATION

1. What is a cash book? (a) A book for recording goods bought on credit (b) A book for recording
goods sold on credit (c) A book for recording cash received and paid (b) A book for recording
cash received and paid into bank.
2. How many types of cash book do we have? (a) 3 (b) 2 (c) 4 (d) 5
3. The cash book with bank column is called (a) 2 column cash book (b) 3 column cash book (c) 1
column cash book (d) 4 column cash book.
4. Recording transaction twice is called (a) Dual record (b) Multiple posting (c) Contra entry (d)
Double taxing.
5. All except one is not a principle of book –keeping (a) Debit the giver (b) Credit the receiver (c)
Credit cash (d) All debit entry must have corresponding credit entry.

ESSAY
1. Define a cash book
2. How many types of cashbook do we have?
3. List the types of Cashbook
4. What are the functions of Cash book
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al
(Pages221 – 223)
Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al
(Pages …128,129,136)
PRE-READING ASSIGNMENT
Read about Final account
WEEKEND ACTIVITY
Mention 4 purposes of trading account
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 5

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: FINAL ACCOUNTS

CONTENT 1 Meaning of Final account

2. Meaning of Trading Account

3. Purposes of trading account
4. Preparation of trading account
5. Calculation of gross profit

Sub-topic 1 Meaning of Final account: This are accounts prepared at the end of an accounting period,
usually twelve months, it comprises the following:

a. Trading account
b. Profit and Loss account
c. Balance Sheet.

Sub-Topic 2:

The meaning of Trading account: The account a trading firm prepares, it is a revenue account
and forms part of the double entry system

Sub-topic 3

The purpose of trading account: The purpose of trading account is to find the gross profit or loss.
Some of the terminologies used in trading are:
(i) Sales: this represents total cash and credit sales
(ii) Return inwards: This is the value of goods returned to the Sellers by the customer sold
previously to them. It is also known as sales return.
(iii) Turnover: This is the total net sales during a period I. e Sales less return inward.
(iv) Purchases: This represent the total value of cash and credit purchased.
(v) Returns inwards: This is the total value of goods returned to Suppliers out of goods
bought. It is also known as Purchases return.
(vi) Carriage inward: This is the cost of transportation charged on goods; it must be added to
Purchases. It is the cost incurred in bringing the goods to its present location.
(vii) Carriage outward: The cost of transportation on goods sold to customers. It is a selling
expenses and it is debited to profit and loss account.
(viii) Cost of goods sold: The total cost of goods actually sold by an organization.
(ix) Cost of goods available: The addition of Opening stock and Purchases

EVALUATION 1

1. What is the meaning of Final account?

2. Explain the meaning of trading account
3. Give two purposes of preparing trading account
4. Mention four terminologies used in Trading account and explain

Subtopic 2: The preparation of the trading account: The format for the preparation of the final account
Are as follows

Dr Trading account for the year ended ………………………………….19xx Cr

# # #

Opening stock x Sales x

Add Purchase x Less: Return inward x

Add Carriage inward x Xx

Xx

Less: Returns outwards (x)

Less: Goods destroyed x x

Cost of goods available for sale xx

Less: Closing stock x

Cost of goods sold x X

Gross profit x

Subtopic 3. Calculation of Gross profit: The calculation of gross profit is the excess of cost of sales over
sales I e Sales less return. It can also be loss if the cost of sales is above sales. Trading account can be
prepared in two ways: 1.The horizontal format (T or conventional method) 2. The vertical format
(Columnar or modern method)

3 Balance Sheet as at 31 December 2000

# Fixed Assets #

Capital xx Land and Building x

Add net profit Plant and Machinery x

X____
Premises x
X
Equipment x
Less cash or goods drawn x____
Motor van x

Fixture and fittings x__ xx____

 Motor van

Long term Liabilities

% Debenture x Investments

Bond x__ x Current Assets:

Current Liabilities: Stock x

Loan x Debtor x

Bank x

Cash in hand x_ xx____

_____ Xx

Xx

Trial Balance

Dr Cr

Stock 5,000

Sales 180,000

Capital 10,000

Drawings 1,000

Purchases 120,100

Carriage inwards 4,670

Wages and Salaries 2,230

Returns 1,400 1,800

Rent and Rates 1,500

Communication expenses 3,300

Transport expenses 700

Buildings 30,100
 Sundry expenses 1,640

Insurance 1,520

Debtors 8,652

Creditors 7,500

Cash 9,640

Bank 17,884

Loan 12,600

Fixture 1,452

Carriage outwards 680

Commission payable 432

211,900 211,900

Stock at close #4,000

Dr Trading account (The T format) Cr

# # # #

Opening Stock 5,000 Sales 180,000

Add Purchase 120,100 Less return inward 1,400 178,600

Less Carriage inwards 4,670

124,770
 Less return outwards 1,800
122,970

Cost of goods available for sale 127,970

Less closing stock 4,000

_______
Cost of goods sold 123,970
178,600
Gross profit 178,600

Dr Trading account (The vertical format) Cr

# # #

Sales 180,000

Less inward 1,400

Less: Cost of goods 123,970

Opening Stock 5,000

Add Purchases 120,100

Add: Carriage inwards 4,670

124,770

Less return outward 1,800

Cost of goods available for sale 127,970

Less closing stock 4,000

EVALUATION 2

1The following were extracted from the books of Ayo for the year ended 31 st December 2010

Stock 1/1 2008 16.00 Sales 60,000

Purchases 36,000 Return inwards 4,640

General purchases 3,700 Discount received 1,000

Discount allowed 316 Rates 500

Advertising 1,646 Returns outwards 714

Insurance 1,000 Carriage inwards 270

Stock at close #19,000 interest on loan 1,452

You are required to prepare Trading account for the year ended 31st December 2010 Use the vertical
and horizontal methods

GENERAL EVALUATION

1. What is Gross Profit? (a) Excess of Sales over selling price (b) Excess of Sales over cost of sales (c)
Excess of sales over turnover (d) Excess of selling price over cost price
2. What are the method of preparing trading account(a) Conventional method and unconventional
method (b) T formulae method and conventional method (c) Traditional and modern method
(d) Conventional and Modern method.
3. Another name for Sales return is (a) Return inward (b) Return outward (c) Return ledger (d)
Return account.
4. Carriage inward should be added to (a) Sales (b) Turnover (c) Purchases (d) Discount
5. The cost of goods available is equal to (a) Opening stock + Purchases (b) Purchases+ carriage
inward (c) Opening + purchase + carriage inward – return outward.
ESSAY
1. What is final account
2. Give two purposes of preparing final account
3. List and explain any six terminologies used in trading account.
4. Mention the 2 methods of preparing trading account
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al
(Pages225 – 226, 234)
Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al
(Pages …137)
PRE-READING ASSIGNMENT
Read about Final account (profit and loss account)
WEEKEND ACTIVITY
Explain how to calculate profit and loss account
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 6

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: FINAL ACCOUNTS

CONTENT 1 Profit and loss account

2 Preparation of Profit and loss account

3 Calculation of net profit

Sub-Topic: 1 Profit and loss Account: This is the account constructed to show the net profit of a business.
It shows on the debit side expenses incurred, while on the credit side it shows the gross profit from
trading account.

Sub-Topic: 2 Preparation of net profit: The following terminologies are used in profit and loss account.

a. Expenses: These are total amount, or to be paid for resources used in the accounting period.
They include:- Wages, Electricity, Rent and Rates, Salaries and wages, insurance dues, discount
allowed, sundry expenses, carriage outward and depreciation.
b. Revenue: They refer to money or income received in respect of trading transaction. e g Discount
received,
Adjustment:- These are closing entries or amendments made at the end of an accounting period
but have not been matched ( subtracted or added ) in the relevant books.
1. Accruals: These are benefits or services received during an accounting period but which
have not been billed or paid for. It is divided into accruals expenses and accruals income
(i) Accrual expenses:- These are expenses that are incurred but not paid for, e g telephone
rates, and electricity.
(ii) Accrual income:- These are incomes due in respect of the trading period but have not
been received at the close of the final account preparation, e g rent receivable and
commission receivable
2. Prepayment: These are payment made in advance for services or benefits that not been
received or enjoyed. It is divided into prepaid expenses and prepaid income.
(i) Prepaid expenses:- These are expenses which are paid but are for subsequent period.
Only these expenses are charged to profit and loss account. It is to be deducted from
accounting period.
(ii) Prepaid income:- These are income paid in advance, however they are not charged
( added or deducted from profit and loss account)
3. Increase or decrease in provision:- These are additional or subtraction in provision. Keeping
back an amount or token for some need or exigencies is called provision. Provision can be
made for bad debt, depreciation etc.

The following is the trial balance of Sesan as at 31st March 1999. You are required to prepare the
Trading, profit and loss account and balance sheet.

Trial Balance
 Dr Cr

Stock 5,000

Sales 180,000

Capital 10,000

Drawings 1,000

Purchases 120,100

Carriage inwards 4,670

Wages and Salaries 2,230

Returns 1,400 1,800

Rent and Rates 1,500

Communication expenses 3,300

Transport expenses 700

Buildings 30,100

Sundry expenses 1,640

Insurance 1,520

Debtors 8,652

Creditors 7,500

Cash 9,640

Bank 17,884

loan 12,600

Fixture 1,452

Carriage outwards 680

Commission payable 432

211,900 211,900___

Stock at close #4,000

You are required to prepare Profit and Loss account for the year ended 31st December 2010

PROFIT & LOSS ACCOUNT

Expenses Gross profit b/d 54,630

Rent 1,500

Wages 2,230

Communication 3,300

Transport 700

Sundry expenses 1,640

Insurance 1,520

Carriage outward 680

Commission payable 432

Net profit 43,628 ________

54,630 54,630

EVALUATION:

The following balances were extracted from the books of Festus Enterprises for the year ended 31 st
December 2010

Stock as at 1st Jan 2010 4,000 Return inwards 650

Discount received 700 Sundry expenses 660

Carriage inward 6,000 Postage 320

Return outward 2,000 Sales 90,000

Rent 900 Rental income 3,140

Rates 390 Purchases 50,000

Electricity 750 Carriage outward 300

General expenses 420

Stock at close 31st Dec was #10,000

You are requires to prepare trading, profit and loss account for the year ended

GENERAL EVALUATION

1. What is the reason for constructing profit and loss account (a) To show net profit (b) To show
gross profit (c) To determine profit (d) To calculate gain.
2. The two major terms used in profit and loss account is (a) profit and loss (b) Income and
expenditure (c) revenue and accruals (d) Expenses and revenue.
3. Payment made in advance for services that have not been benefit is called (a) advance fraud (b)
Advance cash (c) Advance money (d) Prepayment.
4. The prepayment charged in the profit and loss is (a) Prepaid expenses (b) Prepaid income (c)
Accrual income (d) Accrual expenses.
ESSAY
1. Why is Profit and loss account constructed?
2. Mention two major terminology used in profit and loss account
3. List the three adjustment made in final account
4. Give two areas where provisions can be made in the final account
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al
(Pages232 -- 233)
Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al
(Pages …138 -- 143)
PRE-READING ASSIGNMENT
Read about Final account (profit and loss account)
WEEKEND ACTIVITY
Explain how to calculate profit and loss account
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 8

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2
TOPIC: FINAL ACCOUNTS

CONTENT 1. Definition of Balance Sheet

2 . Items on the Balance Sheet

3. Posting of items in the Balance Sheet.

4. Balancing of account

Sub-topic 1 Definition of Balance Sheet: This is a statement drawn up at the end of a financial period or
year. It shows the net worth of a business (Capital and liabilities). It also shows the statement of affairs
of a firm at any point in time.

Content 2: Items on the Balance sheet:- A typical Balance Sheet is made of the following:-

a. Assets
b. Liabilities
c. Capital
a. Assets: Assets are properties or resources of a firm or business. They are classified into two:
(i) Fixed Assets: - These are assets that have a long life span, and are procured mainly for
productive purposes they are:- Furniture, Fixture and fitting, Building , Equipment,
Motor van, Motor van and Building.
(ii) Current Assets:- These are assets held for a short period, and are converted in the
course of the business. Examples of such assets are cash in hand, cash at bank, Stock,
Debtors, and bills receivable.
b. Liabilities: Liabilities are financial obligation arising from past transaction. it refers to the
indebtedness of an organization to outsiders.
(i) Long term Liabilities:- These are obligation due for more than a year. E g Debenture and
Bond
(ii) Current Liabilities:- These are obligation due within a year, I e they are paid within a
short time. Examples of current liabilities are Creditors, Overdraft, Accrued expenses,
income in advance.
Other types of Assets
Other types of Assets are:- Tangible assets, intangible assets, wasting assets, liquid
assets, fictitious assets.
(i) Tangible assets: These are assets that can be seen and touched e g Land, Equipment,
Machinery.
(ii) Intangible assets:- These are assets that cannot be seen nor touched e g Copy right,
Patent, Goodwill and Trademark .
(iii) Liquid assets:- These are assets that can be easily converted into cash e g securities
debtors.
 (iv) Wasting assets:- These are assets used up over a period of time, e g Mines, crude
oil, tin Gold, Timber.
(v) Fictitious assets:- These are assets of unusual character, they resembles assets but
are merely debit balance which are not realizable e g preliminary expenses.
c. Capital:-This is the amount of money invested into a business to finance its operation. It is also
referred to as net worth or owner’s equity. Classification of capital are:-
(i) Loan capital:- These is the total amount of money the business borrowed from external
sources e g bond, and debenture.
(ii) Working Capital:- These is the excess of current assets over current liabilities I e the
capital required to run a business.
(iii) Equity Capital:- This is the amount contributed by any shareholder plus any retaining
earning.
(iv) Capital employed: These is the excess of total assets over current liabilities.

EVALUATION

1. What is Balance Sheet

2. How many parts is a typical Balance sheet divided into?
3. Mention 3 other types of assets.
4. Define Capital
5. List and explain the classification of Capital.

Sub –topic 2: items in the Balance Sheet. A typical balance sheet has the following format

# Fixed Assets #

Capital xx Land and Building x

Add Net profit x__ Plant and Machinery x

X Premises x

Less cash or goods drawings x Equipment x

 Long term Liabilities Motor van x

% Debenture x Fixture and fitting x__ xx__

Bond _x x___ Investments x

Current Liabilities: Current Assets:

Loan x Stock x

Creditors x Debtor x

Bank overdraft x __ x __ Bank x

____ Cash in hand x __ x

Xx__ _xx _

The following is the trial balance of Sesan as at 31st March 1999. You are required to prepare the
Trading, profit and loss account and balance sheet.

Dr Cr

Stock 5,000

Sales 180,000

Capital 10,000

Drawings 1,000

Purchases 120,100

Carriage inwards 4,670

Wages and Salaries 2,230

Returns 1,400 1,800

Rent and Rates 1,500

Communication expenses 3,300

Transport expenses 700

 Buildings 30,100

Sundry expenses 1,640

Insurance 1,520

Debtors 8,652

Creditors 7,500

Cash 9,640

Bank 17,884

loan 12,600

Fixture 1,452

Carriage outwards 680

Commission payable 432

211,900 211,900___

Stock at close #4,000

Balance Sheet as at 31st March 1999

# #

Capital 10,000 Fixtures 1,452

Add net profit 42,628 Building 30,100 31,552

52,628_

Less drawings 1,000 Current Assets

51,628 Cash 9,640

Creditor 7,500 Bank 17,884

Loan 12,600 Debtor 8,652

Stock 4,000 40,176

71,728 71,728
EVALUATION

The following balances are extracted from the books of kalu as at 31st December 1999.

Loan from Segun 7,500

Capital 71,000

Drawings 3,500

Net profit 6,000

Stock 21,000

Motor van 14,000

Debtors 7,000

Creditors 1,000

Office equipment 45,000

Cash in hand 6,490

Bank overdraft 550

Debenture 14,000

You are required to prepare the Balance sheet as at 31st Dec 1999.

GENERAL EVALUATION

1. Define Balance Sheet (a) A financial summary over a given period of time (b) A financial account
given a stated period (c) A financial statement of affairs of a firm at any point in time (d) A
financial ledger given over a stated period of time.
2. A typical balance Sheet comprises of (a) Income, expenditure and depreciation (b) Assets,
Liabilities and Capital (c) Debit, credit and posting (d) negative, positive and neutral.
3. Obligation arising from past financial transaction is called (a) Assets (b) Liabilities (c) Income (d)
Expenditure.
4. All are other types of asset except(a) liquid capital (b) wasting capital (c) fictitious capital (d)
short term capital
5. The types of Capital include (a) Long term capital (b) Short term capital (c) Working capital (d)
Medium term capital
ESSAY

1. Define Balance Sheet

2. What are component of a typical balance sheet
3. List and explain 4 types of asset.
4. Mention 5 types of Capital
5. Identify other types of capital.
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et al (Pages228 --
232)
Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al
(Pages …146 -- 150)
PRE-READING ASSIGNMENT
Read about sales turnover
WEEKEND ACTIVITY
Explain how to calculate sales turnover
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al

WEEK 9

SUBJECT: STORE MANAGEMENT

CLASS: S.S 2

TOPIC: SALES TURNOVER

CONTENT 1. Meaning of Sales Turnover

2. Calculation of rate of sales turnover

Sub-Topic 1 . Meaning of Sales Turnover:- This is the total of net sales during a period of time. It means
Sales less return inward.

Sub-Topic 2. Calculation of rate of sales turnover:- To calculate rate of turnover, the following terms
must be taken into cognizant:-

1. Gross Profit: This is the excess of sales over cost of goods. Gross profit = Sales – Cost of goods
sold.
2. Net profit: This is the excess of gross profit over total expenses of a business at a particular
period. It is the real enterprise profit. Net profit = Gross profit – Expenses.
3. Profit margin: Expressing profit as a percentage of selling price. The formulae is Margin ratio =
Profit x 100
Selling price
 4. Mark – up: This is the percentage added to the cost price to give the selling price. Adding some
amount to the cost price based on a particular percentage is called mark up. It is profit
expressed as percentage of cost price. Mark up = Profit x 100
Cost price
5. Average stock: The adding of opening and closing stock and dividing by two.
Opening stock + Closing stock
2
6. Rate of Stock turnover: This is the number of time stocks are replaced during a given period. It is
calculated thus: Cost of good sold
Average stock
Illustration 1
Mr Ojo gives the following information as at 31st June 2009
#
Opening stock 14,000
Closing stock 24,000
Wages and salaries 2,000
Rent 1,000
Rates 2,500
Motor expenses 3,500
Sales 166,000
Return inward 1,000
Return outward 2,000
1
Margin = 33 /3
You are required to calculate
(i) Average stock
(ii) Mark – up
(iii) Cost of goods sold
(iv) Stock turnover
(v) Gross profit
(vi) Net profit

Solution: Trading, Profit and loss Account for the year ended 31st June 2009

# #

Opening stock 14,000 Sales 166,000

Add purchase 122,000 Less return inward 1,000

Less return outward 2,000 120,000

 Cost of good available for sale 134,000

Less closing stock 24,000

Cost of goods sold 110,000

Gross profit 55,000

165,000 165,000

Expenses

Rent 1,000 Gross profit b/d 55,000

Rates 2,500

Moor expenses 3,500

Wages and Salaries 2,000

Net profit 46,000 ______

55,000 55,000

Average stock = 14,000 + 24,00 = 38,000

2 = 19,000

Margin = 331/3 = 1/3

Mark up = 55,000

110,000 50% = ½

Margin = 55,000

165,000 331/3 = 1/3

Cost of goods sold = #110,000

Stock turnover = 110,000

19,000

= 5.989 times

Gross profit= #55,000

Net profit= #46,000

EVALUATION

1. What is Turnover?
2. What is the formula for rate of turnover?
3. Mention 6 terms used in calculating rate of turnover
4. Explain any 4 of these term with their formulae
2. Mr Oyedele gives the following information as at 31st October 2011
Opening Stock 3,000
Closing stock 4,000
Rent 1,200
Stationery 800
Purchases 25,000
Return outward 1,000
Sales 80,000
Return inward 4,000
Motor expenses 1,300
You are required to calculate:-
(i) Average stock
(ii) Mark – up
(iii) Margin
(iv) Stock turnover

GENERAL OBJECTIVES

1. What is turnover? (a) The rate of Sales (b) Sales less return inward(c) Sales less purchases (d)
Sales less discount allowed.
2. Gross profit is (a) Sales less return inward (b) Sales less discount allowed (c) Sales less return
outward (d) Sales less cost of goods sold.
3. Expressing sales as a profit, as a percentage of selling price is (a) Profit mark up (b) profit margin
(c) Profit limit (d) profit percentage.
4. Profit x 100 (a) Average stock (b) Mark up (c) Profit margin (d) Stock turnover.
Cost price
5. Stock turnover is equal to (a) Opening stock + Closing stock (b) Cost of good sold
 2 Average stock
(c) Cost of goods sold -- cost of goods available (d) Gross profit – Expenses
ESSAY
1. What is Turnover?
2. Mention 4 terms used in calculating rate of turnover.
3. Explain the uses of any 3 terms used in calculating rate of turn over.
WEEKEND ASSIGNMENT
Read Simplified and Amplified Store Management for S.S.S.1 –3 by Femi Longe et
al(Pages281 -- 286)
PRE-READING ASSIGNMENT
Read about the columnar and vertical method of preparing trading, profit and loss account
and Balance
WEEKEND ACTIVITY
Prepare trading, profit and loss account using the relevant method.
REFERENCE TEXT
1. Principles of Store Management for S.S.S 1 – 3 by Mustapha Adebola et al.
2. Simplified and Amplified Store Management for S.S.S 1 – 3 by Femi Longe et al