©Deeper Life High School.

2023

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 SCHEME OF WORK

WEEKS TOPICS CONTENT

• Meaning of Consumer.
1 CONSUMER PROTECTION • Need for Consumer Protection.
AGENCIES • Regulators (Agencies).
• Roles and Responsibilities of Consumer
Protection Agencies.

• Meaning of complaint.
2 HOW TO MAKE COMPLAINTS • Types of complaint.
AND HOW TO SEEK REDRESS • Steps in lodging a complaint.
• Writing a complaint letter.
• Reasons for banning chemicals
• Procedures for banning chemicals not
suitable for use
• Reasons for restricting chemical not
suitable for use
• Procedure for restricting chemicals not
suitable for use
• Meaning of redress.
• Ways of seeking redress.
• Benefits of providing redress.
PERSONAL FINANCE • Meaning of personal finance
• Uses of Personal finance
3
• Sources of finance for individuals.
• Consumption and choice
• Scale of preference
• Modesty: (1) Meaning (2) Attributes
• Simplicity (1) Living within one’s means
(2) Contentment etc.
• Effects of living modestly: (1) Self-
control (2) Low tendency of corrupt
practices (3) Prudence etc.
• Link between Modesty and
Extravagances.
• Preparation of individual budget.
TRIAL BALANCE • Meaning of trial balance
4
• Uses of trial balance
• Balances that form the trial balance
• Formation of trial balance from the
ledger

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 • Identification of Balance Sheet items on
the Trial Balance.
• Forms of Trial Balance.
• Preparation of Trial Balance.

TRADING, PROFIT AND LOSS • Meaning of trading profit and loss

ACCOUNT account.
5 • Purpose of trading, profit and loss
accounts.
• Rules for constructing simple profit and
loss account.
• Preparation of trading Profit and Loss
account. .

BALANCE SHEET • Meaning of Balance Sheet

6
• Items of Balance Sheet
• Uses of balance Sheet
• Classification of items in the Balance
Sheet Distinction between Capital and
Liabilities
• Differences between horizontal and
vertical balance Sheet.
• Preparation of balance Sheet.

7 MID-TERM BREAK REVISION

8 REVISION REVISION
9 REVISION REVISION
10 REVISION REVISION
11 REVISION REVISION
12 REVISION REVISION

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WEEK: ONE

TOPIC: CONSUMER PROTECTION AGENCIES.

LESSON OBJECTIVES:

At the end of this lesson, learners should be able to:

1. define consumer protection agencies.
2. state the need for consumer protection.
3. mention the regulatory agencies of consumer protection.
4. highlights the roles and responsibilities of consumer protection agency.

ENTRY BEHAVIOUR:

SUB-TOPIC 1: Meaning of Consumer Protection

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CONTENT:

Consumer protection is the government regulation made to protect the interests of consumers, against
exploitation by producers or manufacturers and ensuring maximum satisfaction. It refers to laws made to
protect consumers from fraudulent business practices, defective products, and dangerous goods and
services.
Note: Hike in price, substandard goods, varying prices and inconsistent weight; are some of the actions of
producers that consumers are protected against.
Need for Consumer Protection
The following are needs or reasons for consumer protection:
1. Lack of concern: Producers generally do not have concern about consumer welfare. They are only
interested in their profit or gain.
2. Illiteracy and Ignorance: Many consumers are ignorance of their right.
3. Protection against harmful, counterfeit and dangerous goods.
4. To ensure production of quality and durable goods.
5. To educate the public: many consumers are not aware of the side effect of consuming certain
goods, and the knowledge about the goods.
6. Maximum satisfaction: To ensure consumer derive optimum utility.
7. To check deceptive weight, and measurement.
8. To guarantee or give warranty to goods not earlier inspected.
9. To reduce or prevent hoarding.
10. To ensure advert that disclose deceptive immoral, exaggerated, or misleading information are
curtailed.

PRACTICE EXERCISE:

1. Consumer protection council of Nigeria was established in ________

2. Illiteracy and ignorance is one of the ________ of consumer education.
3. The government agency responsible for the supervision of production and sale of manufactured
goods in Nigeria is _________
4. _________ was set up by government to ensure that rent charged by landlords, is controlled.
5. Ensuring the prohibition of importation or sale of fake, adulterated food and drugs is the role of
_________

Essay Question
1. caveat emptor can be define as

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 ___________________________________________________________________________________
__________________________________________________
2. Consumers need to be protected for quite a number of reasons, which are;
___________________________________________________________________________________
___________________________________________________________________________________
_____________
3. How can you as a consumer, be protected against unscrupulous producers or traders who are out
to cheat on you?
___________________________________________________________________________________
___________________________________________________________________________________

SUB – TOPIC 2:

REGULATORS OR AGENCIES OF CONSUMER PROTECTION / ROLES AND RESPONSIBILITIES.

CONTENT:

Regulators of consumer education are bodies, organization, association or government agencies that
promote consumer protection, some of which are:
A. Consumer Protection Council of Nigeria (CPC).

This is a federal agency which was established in 1970 to protect, educate and sensitize the public about
their rights as consumers. Their roles include:
i. to educate consumer
ii. to provide redress
iii. ensure consumers that are exploited are compensated
iv. apply to court to obtain justice
v. ensure manufacturer produce high quality product
vi. to eradicate or remove from the market hazardous goods
vii. to expose or publish banned product

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 viii. to organize and undertake campaign that will create public awareness
ix. to issue guidelines to Manufactures in relation to their obligation
x. to encourage trade industry and professionals to develop and enforce quality designed to
safeguard consumer interest

B. Federal Competition and Consumer Protection Commission

The Federal competition and consumer protection Act, 2018 (‘‘FCCPA’’) is the primary legislation that
governs and protects the rights of consumers in Nigeria. Before the establishment of FCCPA, the legislation
that protected the interest of consumers in Nigeria was the consumer protection council Act, which
established the consumer protection council (CPC). The FCCPA repealed (formally cancel or replace) the CPA
and assumed all rights, interests, obligations, assets and liabilities of the consumer protection council (CPC).
The FCCPC was established to take over the role and responsibilities of consumer protection council. It is
responsible for protecting market competition and promoting consumer protection

C. Department of Petroleum Resources (DPR)

This is a federal government agency responsible for

i. Ensuring Filling Station sells fuel at approved pump price.

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 ii. Responsible to check that the volumes of fuel sold, correspond to amount shown on the
sales meters.
iii. Check the activities of hoarders in filling station.

D. National Agency for Food and Drug Administration Control (NAFDAC)

It is also a federal government agency responsible for

i. Elimination of fake and adulterated food, drug, water and cosmetics.
ii. Enforces the law and prohibit importation and sale of fake food and drug.
iii. Educate consumers on the danger inherent in taking harmful goods.
iv. Empowered by statue to confiscated, arrest and destroy harmful goods and offenders.
v. Oversees the production of food and drugs, and safeguard the nation’s health.
vi. Establish a quality assurance system.
vii. Ensure compliance with standard, and specification approved by the agency.

E. Service com.

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This agency was established as a result of maladministration, corruption and inefficiency in government
circles, to ensure
i. In-human treatments are reported.
ii. Consumers have access to quality demand.
iii. Redress is pursued in case of grievances or service failure.

F. National Drug Law Enforcement Agency

This agency works against drug trafficking. Categories of drug are; Indian hemp, cocaine, heroin and
marijuana. They perform the following functions:
i. enforcement of law that prohibits the use of harmful ingredients such as bromate.
ii. elimination of fake and adulterated foods and drugs.
iii. investigates, arrests and prosecutes persons involved in illicit drug, trade or use of
narcotics such as; cocaine, heroin, marijuana etc.

G. Environmental protection Agency.

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This is an environmental agency of the federal government of Nigeria which was established by law, to
ensure a cleaner and healthier environment for Nigerians. Their roles include:
i. to maintain high quality standard of hygiene and environmental health especially in public
places.
ii. to protect and safeguard the natural environment.

H. National Agency for the Prohibition of Traffic in Person and other related Matters (NAPTIP)

This is a federal government agency charge with the responsibility of coordinating all the nation’s crime,
prevention, and law enforcement resources to stamp out human trafficking, and uplift the vulnerable from
exploitative tendencies. Their roles include:
i. Protection of the under-aged and vulnerable people.
ii. Eradicating and prosecuting human traffickers within and outside the borders of Nigeria.

I. Standard Organization of Nigeria (SON)

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This agency was established by government in 1970, foresee the production and sale of manufactured
products in Nigeria. Their roles include:
i. Production and sale of high quality product.
ii. Ensuring both local and international goods conforms to standard.
iii. Test product, and assign number to certified product.
iv. Convince consumers that tested and certified product have met required standard

J. National Electricity Regulatory Council

This agency came into being in 2005 through the electric power reform act enacted by the chief Olusegun
Obansanjo administration. It performs the following roles:
i. Regulating the electricity rates paid by consumer.
ii. Monitoring and regulating electricity industry
iii. Issuing license to market participant.
iv. Ensuring compliance with market rules and operating guidelines

K. Rent Tribunal

It was set up by government to ensure rent charged by landlords is controlled and tenants are not
subjected to inhuman treatment. Their roles include:
i. Control rent charges and regulate activities of Landlord.
ii. Ensures aggrieved tenant seeks redress.
iii. Resolves conflict between landlord and tenant.
iv. Reviews and moderates rent charged.

L. Professional Bodies

They are formed to regulate the practice of their profession, protect members’ right and consumers’
interest. Some of the Professional bodies are;
i. Nigeria Bar Association (NBA),
ii. Nigeria Medical Association (NMA),
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 iii. Institute of Chartered Accountant of Nigeria (ICAN),
iv. Chartered institute of Bankers (CIBN),
v. The National Association of Nigerian Nurses and Mid-wives, etc.

M. Manufactures or Producers Association

i. They ensure that the producer produce goods that are of high quality.
ii. Ensuring that members don’t engage in unethical practices.
iii. Fight against non- arbitrary prices.

N. Public Health Department of Health

i. Enforces sanitation and hygienic of restaurant, abattoir, and shops.

O. Federal Ministry of trade and Industry

i. Ensures registration of business entity.

ii. Regulates import and export.
iii. Ensures compliancy with trade and industry rules.

PRACTICE EXERCISE:

1. The registration of business entity is ensured by _______

2. The agency which enforces sanitation and hygienic of restaurant, abattoir, and shops is ________
3. FCCPC was formerly known as ----------
4. Which agency is responsible rent charges and regulate activities of Landlord? ________
5. The agency charged with the responsibility of monitoring and regulating electricity industry is
________

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 Essay Question.
1. Professional bodies are formed to
___________________________________________________________________________________
_________________________
2. Department of petroleum resources perform the task of;
___________________________________________________________________________________
______________
3. How would you explain the role of National Communication Commission?
___________________________________________________________________________________
_________________________________

CONCLUSION

TOPICAL TEST:

1. Protection against exploitation and ensuring consumer maximum satisfaction is Consumer ____ A.
agency B. right C. protection D. Behavior.
2. One of the reasons or needs for Consumer protection is _____ A. To benefit consumer B. To ensure
security C. To guarantee maximum satisfaction D. To provide for consumer needs.
3. Which of these is not one of the Professional bodies? A. CIBN B. ICAN C. NMA D. SON
4. What is the full meaning of NAPTIP? A. National Agency for Protection of Traffickers in Person B. Nigeria
Association for People Trafficked in Poverty C. National Agency for the prohibition of Traffic in Person
and other related Matters D. National Association for People Trafficked in Picnic.
5. A federal government agency established to fight against maladministration in public office is _____ A.
EPA B. SON C. Service com D. NAFDAC.
6. Standard Organization of Nigeria is responsible for ___ A. maximum satisfaction B. Consumer redress C.
Quality standard D. Public health.
7. The categories of drug that the NDLEA is responsible for are ___ A. Tobacco, marijuana and cocaine B.
Tobacco, Indian and caffeine C. Indian hemp tobacco and marijuana D. Coffee tobacco and Indian hemp.
8. Which of this consumer Protection Agency was formed to regulate the practice of the profession,
protect the right of members and consumers’ interest? A. EPA B. SON C. Professional bodies D. DPR.
9. All the following consumer Agency helps to seek redress except ____ A. CPC B. Rent Tribunal C. NDLEA
D. Service com.
10. Department of Petroleum Resources helps to _____ A. Sanitize the economy B. Improve prices of goods
C. Prevent hoarding D. Improve public health.

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ESSAY

1. State five reasons for consumer protection

2. Mention five regulatory agencies of consumer protection
3. What is the key function of NAFDAC
4. What do rent tribunals do?
5. Who is the vice chairman and executive officer of FCCPC?

GLOSSARY OF TERMS / KEY WORDS / VOCABULARY: Use the dictionary to find the meaning of the following words:

Repeal

Consumer

Protection

Rights

Agencies

Government

PUZZLES / BRAIN TEASER: As the managing director of xyz organization set up by government, what would you do
differently to ensure food, and drugs are not tainted in Nigeria?

INSPIRATIONAL QUOTES:

“A market without consumers will be a night sky without the stars and
moon. Protect their rights and serve them the best for greater reputation
and fame.”

“Without consumers, all the businesses of the market would have

vanished. They are the supreme and prima donna of this demand-supply
chain. Happy World Consumer Rights Day.”
- World Consumer Rights Day Quote
“Your customer doesn’t care how much you know until they know how
much you care.”
- Damon Richard

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WEEK: TWO

TOPIC: HOW TO MAKE COMPLAINT AND SEEK REDRESS

LESSON OBJECTIVES:

At the end of this lesson, learners should be able to:

1. define complaint.
2. state the types and steps in lodging complaint.
3. write a complaint letter.
4. highlights the reasons and procedure for banning chemicals not suitable for use.
5. list the reasons and procedures for restricting chemical not suitable for use.
6. state ways and benefits of seeking redress.

ENTRY BEHAVIOUR:

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 SUB-TOPIC 1: Meaning of Complaint

CONTENT:

Meaning of Complaint

A complaint is an objection to something that is unfair, unacceptable or otherwise not up to normal and
expected standard.

Types of Complaint
There are two types of complaints namely; Justified complaints and unjustified complaints.
1. Justified Complaints
Justified complaints are reasonable, acceptable and defensible complaints. They are about a legitimate
problem that was the result of a company doing something wrong. Some examples include: (i) late
delivery of goods and services (ii) faulty products (iii) poor service quality (iv) mistake on invoice or
statements (v) wrong shipment (vi) missing part (vii) rude employee.
2. Unjustified Complaints
Unjustified complaints are complaints that are baseless and unreasonable.
These complaints come from people who think a company did something wrong but not actually so. This
can happen, for example, if the customer doesn’t remember things correctly or if they haven’t held up
their part of a contract and didn’t want to admit it. Unjustified complaints come from perpetual
complainers who are just trying to get more from a company.

Steps in Lodging a Complaint:

1. Identify the core issue.
2. Determine the proper procedure to lodge the complaint – each setting will require a different
procedure, you can contact an administrator to inquire about the necessary process.
3. Lodge a verbal complaint – certain complaints may be lodged over the phone or in person.
4. Fill out a complaint form – a standard complaint form may be required, especially in schools, large
corporation or government settings.
5. Write a complaint letter – narrate in writing format, what transpired proof of occurrence, and your
resolution, on what you want or the required solution.
6. Follow up on your complaint lodging. If you don’t get a feedback within the expected time frame,
contact the complaint recipient to inquire about the delay.
How to write a Complaint Letter.
The following are procedures to be followed, when writing a complaint letter:
1. Address the letter to the appropriate person – name and address of the person.
2. Introduce yourself – your name, position, address, phone number and your relationship to the
offender(s).
3. Describe the events that transpired – recount relevant conversations, dates, transactions and any
action you have already taken. Provide all necessary information.
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 4. Ask for the appropriate action to be taken and explain your expectations – whether you are
expecting a refund, an apology or some other remedy.
5. Request a letter of receipt notification and clarify the time frame for resolving the issue.

PRACTICE EXERCISE:

OBJECTIVE

1. Objection to quality of goods supplied is------------

2. Reasonable, acceptable and justifiable complaint is called ----------
3. A complaint that is based on prejudice, baseless interpretation is ---------- complaint.
4. Consumers should be ---------- as they lodge their complaint.
5. The first procedure for writing a complaint letter is ----------

ESSAY

1. justified complaint is define as

__________________________________________________________________________________________
________________________________
2. What are the steps to take when loading a complaint?
__________________________________________________________________________________________
__________________________________________________________________________________________
_________________________________________________________________________________
3. State two attributes of unjustified complaint.
__________________________________________________________________________________________
__________________________________________________________________________________________

SUB-TOPIC 2:

Reasons for Banning and Restricting Chemicals not Suitable for Use

CONTENT:

Ban

Ban means, to prohibit legally, or placed embargo on goods or product.

The major reasons for banning goods are:
1. to protect human and public health.
2. to protect the environment.
3. to avoid diseases such as; cancer, hormonal imbalance, infertility, red blood destruction, chronic
illness, congenital ailment, etc.

Restriction of Chemicals
To restrict means, to put a limit on or keep under control. Therefore, restriction of chemicals is the limitation
to the distribution and use of certain chemicals. this could be for the following reasons:
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Reasons for restricting chemicals not suitable for use
Restriction of chemicals is; making chemicals not easily available for the following reasons:
1. To control and check the use of such chemicals.
2. To ensure compliance with International Food and Chemicals Control Treaties.
3. To avoid death, temporary incapability, and permanent harm to human and animals.
Procedures for banning chemicals not suitable for use
1. A NOTICE IS SENT to the international prior informed consent, which Nigeria is a signatory to, that a
chemical has been discovered to be harmful .
2. The secretariat makes further enquiries to verify the information
3. A summary of the information gathered is forwarded to all members of the PIC.
4. When the PIC secretariat receives a response from one or two countries, it sends it to its chemical
review committee
5. The PIC later sends its recommendation to the conference of its members’ countries.
6. Once the countries have accepted the banning of the chemical, this is circulated with reasons for the
action taken

PRACTICE EXERCISE:

1. To limit the distribution and use of a particular chemical means, ------------

2. Ban means to.----------
3. Chemicals can only be banned if they are ---------- to health and the environment.
4. the full meaning of PIC is ----------
5. the first step in banning a chemical is to ----------

ESSAY
1. What is a ban?
2. Explain restriction of chemicals
3. Outline the procedure for banning chemicals not suitable for use

SUB-TOPIC 3: HOW TO SEEK REDRESS

CONTENT:

Meaning of redress:
It is a process of setting right a wrong or providing for fair settlement of justified claims.

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WAYS OF SEEKING REDRESS:
Redress can be sought in the law court and through the Consumer Protection Agency. However the
procedures for seeking redress are:
1. Report or return the product as soon as possible.
2. Request for a replacement.
3. If the Manager does not act on your complaint, proceed to the Consumer protection agency.
4. Take along with you, documents like; invoice and letter of complaint. it is vital for mediation.
5. Be sure to attend the mediation conference.

If the office or warehouse is at a distance. Take the following steps:

1. Report to the nearest branch.

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 2. Give the name, address, contact, person involved, branch or location. Include your name, address
and phone number.
3. State the problem clearly, describes the product completely including the code or identification
marks.
4. Attach the photocopies of receipt or invoice.
5. Forward the letter of complaint or redress to the Manufacturer or distributor whose name is on the
label you bought the product.

Ways of Seeking Redress

1. Through Collective bargaining: This is when the two parties involved, called for a meeting with a view
to negotiate and resolve issues amicably.
2. Through Arbitration: This happens when a neutral person is involved. He listens to both parties
involved in the issue and suggest a solution. His decision at this point is binding on the conflicting
parties.
3. Trough Conciliation: This is an independent body that helps to settle the dispute of conflicting parties.
Hence, the conciliator’s decision is not binding on them.
4. Through Court action: A customer or consumer, may sue a business or an organization to demand
for damages or specific performance.

BENEFITS OF PROVIDING REDRESS

1. Amendment of initial agreement
2. Peaceful resolution of dispute
3. It improves access to justice and facilitates more consistent decisions
4. Provides sufficient safeguards against potential abuse on consumers
5. It promotes market confidence and public relation profile.
6. It enhances product research and improves company’s services.
7. It creates better relationship between customers and service providers.
8. It prevents further harm.
9. It helps standard regulators identify systematic problems that require intervention.

PRACTICE EXERCISE:

1. The process of setting right a wrong or providing for fair settlement of justified claims is called ------
2. Redress usually occurs after -------
3. An independent body that helps to resolve an issue, but whose decision is not binding is called ------
4. One of the benefit of seeking redress is ------
5. If you sue for ------ you are asking the business to apologize, replace faulty goods or reprimand
employees.
6. providing redress helps to protect a business from expenses --------

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 Essay Questions
1. Explain the term collective bargaining.
2. Organizations or businesses that provide redress enjoy a favorable public image and goodwill.
Explain.
3. Explain the role of an Arbitrator in seeking redress.

CONCLUSION

TOPICAL TEST:

1. The process of providing set rules and guidelines to protect consumers is __ A. Consumer right B.
Consumer awareness C. Consumer redress D. Consumer Agency
2. Consumer right are ___ A. The benefit of Consumer B. The opportunity of consumer C. The
privileges of consumer D. The characteristics of consumer.
3. Right to redress means ____ A. right to freedom B. right to settlement C. right to payment D. right
to the good things of life.
4. The first way to seek redress is to _____ A. fight against the Manufacturer B. Report to the law
enforcement agency C. report or return the Product D. Destroy the product.
5. One of the benefit of seeking redress is _____ A. It promote Communication B. It initiate demand
C. It hampers service delivery D. it promote justice.
6. All are benefits of seeking redress except ____ A. Encourages competition B. it initiate agreement
C. Promotes market confidence D. Prevents further harm
7. Right to essentials goods and services is right to _____ A. be informed B. Choose C. be heard D.
basic needs of life.
8. Right to choose is determined by ___ A. status B. Wealth C. Price D. Taste.
9. An important step that will initiate redress is ____ A. Going to report B. Stating the address of the
seller C. Attaching photocopies of documents D. attending mediation conference.
10. Right to be protected against misleading and dishonest advertising is right to be ____ A. heard B.
informed C. consumer education D. healthy environment.

Essay Questions
1. Define Customer right.
2. What is Consumer redress?
3. Name three rights of a consumer.
4. Mention four ways or procedures for seeking redress.
5. List four merits of redress.

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GLOSSARY OF TERMS / KEY WORDS / VOCABULARY: Use the dictionary to find the meaning of the following words
below:

Consumer.

Right

Redress

Ban

Restriction

Lodge

Justified

Chemical

PUZZLES / BRAIN TEASER:

How do you think one can identify a chemical not suitable for use?

INSPIRATIONAL QUOTES:

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WEEK: THREE

TOPIC: PERSONAL FINANCE

LESSON OBJECTIVES:

At the end of the lesson, learners should be able to:

1. define personal finance.

2. state the Uses of budget.
3. mention the Sources of finance for individuals.
4. define consumption, choice, Scale of preference, modesty and contentment.
5. state the attributes and effect of Modesty.
6. explain the link between modesty and extravagant.
7. prepare a personal budget.

ENTRY BEHAVIOUR:

SUB-TOPIC 1: PERSONAL FINANCE AND BUDGET

CONTENT:

Meaning of Personal finance

Personal finance refers to the methods in which an individual or household manages assets (money assets
and real assets) and spend money on goods and services.
Examples of money assets are – cash and money market instruments.
Examples of real assets are – land, buildings, furniture, equipment etc.
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Sources of Finance for Individuals
1. Loans from banks, individual, cooperative society and financial institution.
2. Personal savings, profits on business, commission, rents or rates from bank or people
3. Borrowing from friends and relations or family members.
4. Credit facilities from supplier, Producers or marketers.
6. Wages, salaries, award, gift, or promotion from advertising or other agencies.
BUDGET

A budget is the summary of intended expenditure along with proposals for how to meet them. In planning personal
budget, allowance should be made for surplus so that we can have savings.

Uses of Personal Budget

1. It makes us live within our income.
2. It shows how money is to be spent and being spent.
3. It helps to control expenditure and ensure self or financial discipline.
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 4. It guarantees maximum satisfaction.
5. It helps families communicates their financial conditions to members.
6. It inculcate saving habits
7. It enforces lessons learnt from popular financial equation.
8. It indicates the need for additional or surplus budget.

PREPARATION OF PERSONAL OR INDIVIDUAL BUDGET.

A budget is a tool for national planning and for financial planning.
Factors to consider before preparing a budget.
1. Identify a goal
2. Review your bank and credit card statement for the past three months
3. Categorize your expenses. E.g. rent, loan prepayment, child welfare and utility bills
4. Plan bills that occurs only once or twice a year.
5. List all your income for the month
6. Subtract your total expenses from your total income
7. Review your monthly spending and adjust your expenses category as needed.

The Process or procedures for preparing budget

1. Estimate your income: daily, weekly and monthly.
2. Define major expense categories and set the budget level.
3. Develop a worksheet to accumulate daily expenses.
4. Use the budget summery sheet to monitor and control expenses.
5. Periodically review the budgeting system to make it flexible.
6. Allocate a certain amount for miscellaneous expenses.
7. Save regularly.
8. Start of by making a monthly budget, thereafter a yearly budget.

Budget Preparation
To prepare a budget, you must have an idea of what you should expect. You can view a data compiled from
Federal office of Statistics, how four family spend their income. Compare these with your expenditures and
categorize the area you fall in. The major items are: Income items, expenditures items, and irregular items.
i. Income items: Salaries, Wages, Rates, Commission, Rent, Pensions, Allowances, Sales,
Cooperative earning, Alimony support, Public assistance.

ii. Expenditures Items: Rates, Mortgages, tax, utility bills, mortgage, medicals, Food,
transportation, Insurance, Repairs and maintenance, Recreational or Entertainment,
Licenses, Food, Drinks.
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 iii. Irregular Items: Lunch at work, Car repairs, Haircuts, Day care, Laundry, Day care,
Emergency fund.
Savings = Income – total expenses.

PRACTICE EXERCISE:

1. finance means funds or money required to meet ----------

2. The term personal budget is a ---------- which shows how an individual plans to raise money and spend it.
3. It is also possible to have a ---------- where income equates expenditure
4. In planning personal budget, allowance should be made for --------
5. Personal budget gives an individual a --------- of direction.

ESSAY QUESTIONS

1. List four the sources of individual finance

2. Explain how to prepare a personal or individual budget.
3. State three uses of personal budget

SUB-TOPIC 2: CONSUMPTION AND CHOICE

CONTENT:

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Consumption is defined as satisfaction or utility. It is the end of production process. Choice is defined as the
decision to select from a list of item, which leads to opportunity cost.
What an individual chooses, depends on his purchasing power, price of the goods and what he likes. It is
therefore necessary to choose items of necessities over luxury. Such items are; food, shelter, clothing,
education and medical care.
Scale of Preference
This is the arrangement of an individual needs and wants in order of priority or importance.
Modesty
This is a situation whereby an individual spends or lives within his or her available income.
Attributes of Modesty
1. Simplicity.
2. Honesty.
3. Prudence.
4. Contentment.

EFFECT OF HONESTY
1. It gives peace of mind.
2. It ensures self-control.
3. It makes to be highly esteemed.
4. It relieves us of stress.
5. It instills a low tendency for corrupt practices.
6. It elevates our moral status and spiritual lifestyle.
7. It promotes friendliness and social peace.

LINKS BETWEEN MODESTY AND EXTRAVAGANT.

The link between Modesty and Extravagant is that one is the opposite of the other.
1. Modesty ensures simplicity while extravagant is excessive or unnecessary spending.
2. Modesty is living within your means, not borrowing; extravagant is living above your means,
borrowing to live.
3. Modesty entails careful spending; Extravagant is careless or thoughtless spending.
4. Modesty guarantee honesty and prudency, Extravagant leads to corruption and expensive lifestyle.
5. Modesty reveals person with a high level of discipline, but extravagant dictates individuals that has a
low level of discipline.

PRACTICE EXERCISE:
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 1. ------- involves selecting to buy a product instead of another
2. Scale of preference is a list of our -------- and -------- arranged in order of importance
3. choice leads to ---------
4. The self-discipline to live a simple life is ---------
5. Modest people have good --------- habit
6. Inability to live within your means is ----------

ESSAY QUESTIONS

1. Explain the following terms :

i. Choice.
ii. Consumption
iii. Scale of preference
iv. modesty
2. Differentiate between modesty and extravagancy
3. Mention three benefits of being honest

CONCLUSION

TOPICAL TEST

OBJECTIVE

1. Examples of real money assets include ____ A. land B. Equipment C. land D. Cash.
2. How an individual manages money and real assets is ____ A. Personal finance B. Personal budget C.
Financial planning D financial management.
3. One of the uses of personal budget is ____ A. It makes us borrow from friend B. It provide credit
facilities C. It guarantee satisfaction D. it ensure security.
4. Sources of finance include ____ A. Lending from banks B. Borrowing to financial institution C.
Discounting of bills D. Wages, salaries and gift.
5. The link between modesty and Extravagant is that they are ____ A. Similar B. Opposite C. Correlative
D. Relative.
6. Arranging of need according to their priority is ____ A. Tables of items B. Scale of preference C.
Schedules of items D. List of items.
7. Choice is made from _____ A. Many items B. List of item C. Alternative D. Options.
8. ---------- promotes friendliness and social peace.
9. Consumption can be defined as _____
10. ---------- makes us live within our income.
11. Salaries, wages allowances and sales are ____ items (a) Irregular (b) savings (c) income (d)
Expenditure.
12. ---------- is the ability of an individual to pay for desired goods and services.
13. It is impossible to be modest if you do not have ----------
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 14. --------- are goods and services which we desire but are not essential

ESSAY QUESTIONS

1. Mention five ways money comes into a family

2. Differentiate between modesty and extravagancy
3. Explain:
a) balance budget
b) deficit budget
c) surplus budget
4. outline five ways through which money flows out from a household
5. differentiate between needs and wants

GLOSSARY OF TERMS / KEY WORDS / VOCABULARY: Use the dictionary to find the meaning of the words below:

Extravagancy

Budget

Finance

Wants

Needs

Modesty

Surplus

Deficit

PUZZLES / BRAIN TEASER:

How would the nation Nigeria, benefits from budget preparation?

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INSPIRATIONAL QUOTES:

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WEEK: Four

TOPIC: TRIAL BALANCE

LESSON OBJECTIVES:

At the end of the lesson, learners should be able to:

1. define trial balance.

2. state the uses of trial balance.
3. explain balances that form the trial balance.
4. explain the formation of the trial balance.
5. identify balance sheet items on the trial balance.
6. draw up the format of trial balance.
7. prepare the trial balance.

ENTRY BEHAVIOUR:

SUB-TOPIC 1: Meaning of Trial balance

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CONTENT:

A trial balance is a list of balances extracted from the ledger. It consists of individual debit and credit
balances from various ledger accounts.
Uses of Trial Balance
It is used to check arithmetic accuracy of the ledgers
It is used as a statement that shows individual credit and debit balance obtained from ledger account with
the sum of each set of balances.
It helps in identifying computation errors in recording business transaction.
It encourages compliance adherence to double entry book keeping rules.
It act as a trainee manual for the book keeper.
It shows the summarized balance in the general ledger or book of account.
It is helpful in determining profit or losses of a business.

PRACTICE EXERCISE:

1. ---------- is a list which displays the debit and credit balances extracted from the ledger
2. Assets are found on the --------- side of the trial balance
3. Accounts in the ledger must be --------- before preparing a trial
4. Incomes, gains, and liabilities are recorded on the ---------- side of the trial balance
5. The two sides of the trial balance must always be ----------

ESSAY QUESTION

1. Explain the rules of preparing a trial balance

2. Define the term trial balance
3. State three importance of a trial balance

SUB-TOPIC 2: Balances that form the Trial balance

CONTENT:

The credit and debit balance of each transaction extracted from the ledger are balances that form the trial
balance. The trial balance can be prepared in two ways:
i. The Traditional way
ii. The modern or conventional way.
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 i. The traditional format: The traditional format considers the sub-totals of each ledger. .
ii. The modern or Conventional method: The modern format considers only the balance of the ledger
account, otherwise known as the balance bought forward.

Formation of Trial Balance from the Ledger

Every transaction must either be posted in the credit or debit side of the ledger account. This ledger must
be balanced at the end of a stated or given period. To this end, it implies that both sides of the account must
be equal. The following must be taken into cognizant:
i. The heading of the Trial Balance.
ii. Cash book balance are ledger balance, therefore they are entered in the trial balance.
iii. Accounts that have credit balance in the ledger are entered in the credit side of the trial balance.
iv. Accounts that have debit balance in the ledger are entered in the debit side of the trial balance.
v. An account that has only one entry is not usually balanced.

Identification of Balance Sheet Items on the Trial Balance.

The Balance Sheet is a financial report created from the trial balance, when preparing balance sheet trial
balance is the starting point. A Balance sheet is like a trial balance with account aggregate at a higher level.
Balance sheet provides a snapshot of a company financial position at a given date. It contains totals of all
assets, liabilities and shareholder equity. Some of the balance sheet items in the trial balance are:
i. Capital
ii. Assets – comprises fixed and current assets.
iii. Liabilities – Includes long term liabilities and current liabilities.

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 DR FORMAT OF A TRIAL BALANCE CR
Particulars Debit Credit
# #
Debtors Xxx
Creditors Xxx
Sales Xxx
Purchases Xxx
General expenses Xxx
Sales return (return inwards) Xxx
Discount received Xxx
Discount allowed Xxx
Rent on Premises Xxx
Building Xxx
Furniture and Fittings Xxx
Motor vehicle Xxx
Capital Xxx
Cash Xxx
Bank Xxx
XXXX XXXX

EXAMPLE 1

Prepare a trial balance using the following information:

Sales _____________________________________________________________________ 15,000

Cash______________________________________________________________________6,000

Capital ___________________________________________________________________20,000

Furniture _________________________________________________________________ 10,000

Rent _____________________________________________________________________ 3,000

Purchases _________________________________________________________________ 9,000

Advertisement _____________________________________________________________ 7,000

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SOLUTION

TRIAL BALANCE
Particulars Debit Credit
N N
Sales 15,000
Cash 6,000
Capital 20,000
Furniture 10,000
Rent 3,000
Purchases 9,000
Advertisement 7,000
35,000 35,000

PRACTICE EXERCISE:

1. Rent and electricity are ---------- items found in the trial balance
2. Cash in-hand and cash at bank are recorded on the --------- side of the trial balance
3. ---------- are debt which a business must pay back
4. The trial balance helps in the preparation of -------- account
5. Assets and expenses are recorded on the -------- side of trial balance

ESSAY QUESTIONS

1. Mention the two balances that forms the Trial Balance

2. Enumerate some of the things to be taken into cognizant when forming the TRIAL Balance.
3. Identify some balance sheet items in the Trial Balance.

CONCLUSION

TOPICAL EXERCISE:
1. A list of balances extracted from the Ledger is ____ A. Balance Sheet B. Trial Balance C. Trading
Account D. profit and Loss Account.
2. Purpose or uses of a Trial Balance include ____ A. To correct errors B. To estimate income C. To
check errors D. To balance record.

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 Use the information below to answer question 4 to 6
Trial Balance
Date Particulars Folio Debit Credit

N N

Land and building 30, 000

Furniture and fittings ?

Stock 5, 500

Creditors 15, 000

?
Capital

3. Furniture and fittings amounts to A. N 15, 000 B. N 10, 000 C. N 5, 500 D. N 5, 300
4. Given that the total debit is equal to total credit, what is the credit balance? A. N 40, 800 B. N 30,
500 C. N 25, 000 D. 10, 100
5. What is the value of capital? A. N 40, 800 B. N 25, 00 C. N 15, 00 D. N 30, 00
6. Balances that forms the Trial Balances are _____ and ______ A. Income and receipt B. Profit and
loss C. Sales and Purchases D. Debit and Credit.
7. The following are factors to be considered when computing trial balance from the ledger. A. The
debit of the ledger is posted to credit side of balance sheet B. Items that have one entry is posted C.
There is no heading D. Cash book balance are entered in the trial balance.
8. Which of these is a balance Sheet Items in the Trial Balance? A. Sales B. Purchase C. Capital D.
Turnover.
9. How many ways is Trial Balance? A. 3 B. 4 C. 2 D. 5.
10. The conventional format is also known as ______ format. A. Modern B. artificial C. Traditional D.
Natural.
11. The_______ method considers the sub total format of each ledger. A. Modern B. Traditional C.
Conventional D. Natural.
12. The modern method is otherwise called the ____ method. A. Traditional B. Conventional C. Artificial
D. Natural.
13. An account that has only one entry is usually _____ A. balance B. not balance C. posted D. casted.
14. The aggregate stock, debtors and bank is called ________
15. The book used to record balances extracted from the ledger is called ________

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ESSAY QUESTION
1. What is the meaning of trial balance?
2. State the uses of Trial Balance
3. Use the following information to prepare a trial balance Mallam Danjuma
Cash in-hand_____________________________________________10,000
Capital _________________________________________________ 20,000
Cash at bank ____________________________________________ 10,000
Sales __________________________________________________ 15,000
Overdraft _______________________________________________ 5,000
Loan ___________________________________________________ 7,000
Creditors_________________________________________________ 3000
Wages and salaries _______________________________________ 10,000
Electricity _______________________________________________ 5,000
Land and building ________________________________________ 15,000.

GLOSSARY OF TERMS / KEY WORDS / VOCABULARY:

Trial balance
Asset
Income
Liability
Expenses
Particulars
Debit
Credit

PUZZLES / BRAIN TEASER: What are the four rules of trial balance?

INSPIRATIONAL QUOTES:

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WEEK: Five

TOPIC: TRADING PROFIT AND LOSS ACCOUNT

LESSON OBJECTIVES:
At the end of the lesson, learners should be able to:
1. define trading, profit and loss account.
2. state the reasons for preparing trading profit and loss account.
3. show the format of trading, profit and loss account.
4. prepare trading, profit and loss account.

ENTRY BEHAVIOUR:
SUB-TOPIC 1: Trading Account
CONTENT:
Meaning of Trading Account
Trading account is a final account prepared to determine gross profit or loss by a business. It is prepared at
the end of each financial year.
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 SIMPLE LAYOUT FOR TRADING ACOUNT

# #
Opening Stock xxx Sales xxx
Add Purchases xxx Less Sales return(return inward) xxx
Add carriage inward xxx Net Sales xxx
Less Purchase return(return outward)
xxx
Cost of goods available xxx
Less Closing stock xxx
Cost of goods sold xxx
Gross Profit c/d xxx
__
Xxx Xxx

Items that Formed the Trading Account

1. Opening Stock: The value of items or goods in the store at the beginning of an accounting period.
2. Closing Stock: The value of goods or items in the end of the accounting period.
3. Purchases: Goods by the business for resale during an accounting year.
4. Return Outward: Otherwise known as purchase return, these are goods bought but returned due to
one problem or the other. It is subtracted from Purchases.
5. Return Inward: Otherwise known as sales return, these are goods bought by customers but returned
back to due to one or two reason. It is subtracted from Sales.
6. Sales: Credit and cash sales for a given period, i.e. Amount collected or expected from goods sold
for a given accounting period.
7. Carriage inward: These are transport fare for conveying goods for resale. It is added to Purchases.
8. Cost of goods available: The summation of opening stock, Purchases, and adding carriage inward,
deducting return inward (sales return).
9. Cost of goods sold: Otherwise known as cost of sales, Opening stock plus purchasing less closing
stock.
10. Gross Profit: Excess of Sales over cost of goods sold.

PRACTICE EXERCISE:
1. Value of goods in the store or warehouse at the end of an accounting period is known as --
2. Goods bought by a business for resale during an accounting period is called ------------
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 3. The value of goods in the store or warehouse at the beginning of an accounting period is ------------
4. The trading account is prepared to determine ----------
5. The cost of transporting goods from the supplier’s warehouse to the business premise is known as -
--------

ESSAY QUESTION
1. How is gross profit determined?
2. What are final accounts?
3. Mention three items on the debit side of the trading account.

SUB-TOPIC 2: Profit and Loss Account

CONTENT:
Profit and loss account is an account prepared to determine the real profit or loss, otherwise known as net
profit or net loss.
Items that Form Profit and Loss Account
1. Gross profit bought forward from the trading account.
2. Discount received: cash reduction received as a result of bulk purchase or prompt payment.
3. Discount allowed: cash reduction given as a result of bulk purchase or prompt payment.
4. Rent: Payment for landed property.
5. Rates: Charges for services rendered.
6. Advertising: Cost for publicizing goods or creating awareness.
7. Insurance: Cost or charges for insuring property.
8. Wages and Salaries: Money paid to workers daily, weekly or monthly.
9. Stationery: it includes; postages, stamp, office pins and pen for office use.
10. Lighting and Heating: Cost of electricity incurred.
11. Telephone bills: Telephone charges

Most of the expenses incurred in profit and loss are called overhead expenses.

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 DR FORMAT OF PROFIT AND LOSS ACCOUNT CR

# #
Gross Profit b/d xxx
EXPENSES: Add Discount received xxx
Rent xxx
Wages and Salary xxx
Discount allowed xxx
Motor Expenses xxx
Bad debt xxx
Rates xxx
Advertising xxx
Stationery xxx
Lighting and Heating xxx
Telephone bills xxx
Carriage outward xxx
Insurance xxx
General Expenses xxx
Net Profit c/d xxx ___
xxx Xxx

EXAMPLE I
Use the following information to prepare a trading, profit and loss account for IMPERIAL. NIG. LTD. For
the year ended Dec 31st, 2020.
Opening stock at 1/1/2022____________________________________________________ 21,000
Purchases _________________________________________________________________ 55,000
Sales _____________________________________________________________________ 208,000
Rates _______________________________________________________________________ 2,000
Insurance ___________________________________________________________________ 15000
Wages and salaries __________________________________________________________ 80,000
Advertisement _______________________________________________________________ 5,000
Carriage inward ______________________________________________________________ 12000
Returns inward _______________________________________________________________ 8000
Stock at 31/12/2022 _____________________________________________________________ 3000

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Discount received _____________________________________________________________ 1000
Returns outward ______________________________________________________________ 5000
Carriage outward _____________________________________________________________ 5000
Discount allowed _____________________________________________________________ 2000
Bad debt _____________________________________________________________________ 1000

Solution:
IMPERIAL NIG. LIMITED
DR. TRADING, PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2020. CR.
N N
Opening Stock 21,000 Sales 208,000
Add Purchases 55,000 Less Sales return(return inward) 8,000
Add carriage inward 12,000 Net Sales 200,000
88,000
Less returns outward 5,000
Cost of goods available 83,000
Less Closing stock 3,000
Cost of goods sold 80,000
Gross Profit c/d 120,000

200,000 200,000

Rates 2000 Gross Profit b/d 120,000

Wages and Salary 30,000 Add Discount received 1000
Discount allowed 2000
Bad debt 1000
Advertising 5000
Carriage outward 5000
Insurance 15000

Net Profit c/d 61,000

___
121,000 121,000

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PRACTICE EXERCISE:
1. The purpose of the profit and loss account is to determine ----------
2. Expenses are usually on the --------- side of the profit and loss account
3. Sales less returns inward equals ----------
4. Profit retained in business at the end of an accounting period is known as ---------- profit.
5. Money spent to transport goods from the business premise to customers is called ----------

ESSAY QUESTION
1. Mention two reasons for preparing Profit, and loss account
2. What are the reasons for preparing Trading Account?
3. Construct a simple layout of Trading, profit and loss account.

CONCLUSION
TOPICAL TEST
1. Trading account is prepared to determine ____ A. Net profit B. gross profit C. net loss D. mass profit.
2. The real profit of a business is determined in ____ A. Trading account B. Profit and loss account C.
Trial Balance D. Balance sheet.
3. Balance sheet is ____ A. The property of a business B. The profit of a business C. The net worth of a
business D. The Gross profit in a business.
4. What is overhead? A. Expenses incurred in profit and loss account B. Cost of production C.
Advertisement cost D. Miscellaneous expenses.
5. Rates is ___ A. payment for goods B. Charges for service rendered C. Cost of incurring debt D. Cash
for servicing debt.
Use the following information to answer questions 6 to 8.
Edet Enterprises trading profit and loss account for the year ended 31st December, 2022.
Stock at 1/1/2022 ______________________ 30, 000
Purchases ___________________________ 2, 500
Returns outwards ______________________ 1, 000
Returns inwards _______________________ 500
Sales ________________________________ 50, 000
Stock at 31/12/2022 _____________________ 4, 500
Wages and salaries _____________________ 250
6. What is the cost of goods sold? A. N50, 000 B. N 49, 500 C. N 27, 000 D. N 31, 500
7. The net profit amount is A. N 49, 000 B. N 22, 500 C. N 49, 500 D. N 22, 250
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 8. How much is the net sales? A. N 49, 500 B. N 32, 500 C. N 27, 000 D. N 22, 500
9. Cash reduction as a result of bulk purchase is _____ A. discount allowed B. Discount received C. Sales
commission D. interest on Capital.
10. Goods returned due to one reasons or the other is ____ A. discount allowed B. Discount received C.
return inward C. return outward.
11. Cost of electricity incurred is ____ A. rates B. rents C. lighting and heating D. kilowatt.
12. Gross profit plus other income less direct expenses is ____ A. Net profit B. Gross profit C. Mass profit
D. Gain.
13. Opening stock plus purchases is ____ A. Cost of goods sold B. cost of good available C. Cost of sales
D. Cost of production.

ESSAY QUESTION
Use the following information to prepare a trading, profit and loss account for Mr. Okon & Sons. For the
year ended Dec. 31st, 2022.
Opening stock at 1/1/2022____________________________________________________ 20,000
Purchases _________________________________________________________________ 50,000
Sales _____________________________________________________________________ 108,000
Rates _______________________________________________________________________ 2,000
Insurance ___________________________________________________________________ 5,000
Wages and salaries __________________________________________________________ 28,000
Advertisement ______________________________________________________________ 2,000
Carriage inward _____________________________________________________________ 12,000
Returns inward ______________________________________________________________ 8,000
Stock at 31/12/2022 ____________________________________________________________ 3,000

GLOSSARY OF TERMS / KEY WORDS / VOCABULARY:

Gross profit
Loss
Turnover
Stock
Carriage
Net profit

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PUZZLES / BRAIN TEASER: State the formula for calculating: turnover, average stock, and rate of turnover.

INSPIRATIONAL QUOTES:
I don’t want to do business with those who don’t make a profit, because they can’t give the best service.
LEE BRISTOL

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WEEK: SIX

TOPIC: BALANCE SHEET

LESSON OBJECTIVES:
At the end of the lesson, learners should be able to:
1. define balance sheet.
2. mention the items on a balance sheet.
3. state the uses of balance sheet.
4. classify items on the balance sheet.
5. differentiate between the vertical and horizontal balance sheet.
6. draw the format of a balance sheet.
7. prepare a balance sheet.

ENTRY BEHAVIOUR:

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 SUB-TOPIC 1: Meaning of Balance Sheet

CONTENT:
A balance sheet shows the financial position of an organization at any given point or time. It shows what a
business owns (asset), those it owes (liabilities), and the net worth of the business (capital).
Items on a Balance Sheet
1. Assets: these are what a business owns or the properties of a business. Examples are; Plants and
Machinery, Motor Vehicle, Land and Building, Freehold Premises, Furniture and Fitting, Stock,
debtor, Cash in hand, cash at bank, Goodwill and prepayment.
2. Liabilities: these are what a business owes other businesses. Examples are; debenture, Long term
loan, Short term loan, Overdraft, Creditors and accrued expenses.
3. Capital = Net Profit – drawing.
Uses of Balance Sheet
1. It provides information to prospective investors.
2. It gives the financial summary of a business.
3. It reveals the working capital of a business.
4. It indicates the liquidity position of an organization.
5. It portrays the source of capital of a business.
6. It presents statement of fixed and current assets, and shows current and long term liability.

PRACTICE EXERCISE
1. Machinery, Motor Vehicle, Land and Building, Premises, are examples of _____
2. What a business owns or the properties of a business are called ______
3. What a business owes other businesses is referred as ______
4. The financial position of an organization at any given point or time can be known through ______
5. Money or goods taken from the business for personal use is ________

ESSAY QUESTIONS
1. Define the term balance sheet.
2. Mention three uses of balance sheet.
3. List five balance sheet items.

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 SUB-TOPIC 2: Classification of Items in the Balance Sheet

CONTENT:
Balance sheet items can be classified into the following:
1. Fixed Assets: Plants and Machinery, Motor Vehicle, Land and Building, Freehold Premises, Furniture
and Fitting and Goodwill.
2. Current Assets: Stock, Cash, Debtor, Bank and prepayment.
3. Long term Liabilities: Capital, net profit less drawing, Debenture and mortgage.
4. Current Liabilities: Loan, overdraft, Creditors and accrued expenses.

Distinction between Capital and Liabilities

Capital is cash or fund set aside for further wealth, or amount of money invested into a business. while
liabilities are those the business is indebted to.

Difference between Horizontal and Vertical Balance Sheet.

In horizontal balance sheet, assets are shown on the right and liabilities on the left hand side while in
vertical balance sheet, assets are shown at the top and then capital and liabilities are shown underneath
instead of side by side.
SAMPLE OF HORIZONTAL BALANCE SHEET

Debit Credit
N N
Long term Liabilities Fixed Assets
Capital xxx Plants and Equipment xxx
Add net profit xxx Motor vehicle xxx
Land and building xxx
Less Drawing xxx Furniture and fitting xxx
Current Liabilities xxx Current assets
Creditors xxx Stock xxx
Cash xxx
XXXX XXXX

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EXAMPLE:
Use the information below to prepare a balance sheet for ‘LUXURY INVESTMENT NIG. LTD.’
As at December 31st, 2022
Capital ________________________________________________ 6,000
5 years Bank loan _______________________________________________ 2500
Creditors ______________________________________________________ 1,000
Bank overdraft __________________________________________________ 1,200
Net profit _______________________________________________________ 1,500
Machinery ______________________________________________________ 3,000
Land and building ________________________________________________ 3,000
Motor van _______________________________________________________2,200
Stock ___________________________________________________________ 1000
Debtors __________________________________________________________ 400
Drawings ________________________________________________________ 1500
Cash in hand ______________________________________________________ 600
Cash at bank ______________________________________________________ 500
Solution:
LUXURY INVESTMENT NIG. LTD.
Balance sheet extract as at 31st December, 2022
Debit Credit
N N N N
Capital 6000 Fixed Assets:
Add net profit 1500 machinery 3000
7500 Motor van 2200
Less drawings (1500) Land and building 3000
6000 TOTAL FIXED ASSET 8200
Long term Liabilities : Current assets:
5 years loan 2500 Stock 1000
Current Liabilities: Cash in hand 600
Bank overdraft 1200 Cash at bank 500
Creditors 1000 Debtors 400
10,700 10700

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PRACTICE EXERCISE:
1. Cash or fund set aside for further wealth is ______
2. Loan, overdraft, Creditors and accrued expenses are examples of ______
3. What a business owes other businesses is ________
4. ______shows the financial liquidity of an organization at any given point or time.
5. Stock, cash, debtor, bank and prepayment are called ________

ESSAY QUESTIONS
1. State the two methods of balance sheet.
2. Distinguish between capital and liabilities.
3. How is average stock calculated?

CONCLUSION
TOPICAL TEST:
1. The financial summary of a business is ___ A. Trading account B. Profit and loss account C. Trial
Balance D. Balance Sheet.
2. What a business owes is ____ A. Capital B. Assets C. Liabilities D. Net Profit.
3. Which of these is not an item in the Balance Sheet? A. Furniture B. Motor vehicle C. Income D.
Goodwill.
4. Capital = _____ A. Net Profit + Drawing B. Net profit – Drawing C. Net profit / Drawing D. Net Profit
x Drawing.
5. Debenture, loan overdraft and creditors are examples of ___ A. Current Liabilities B. Current Assets
C. Fixed Assets D. Long term Liabilities.
6. The uses of the Balance Sheet include ____ A. It reveals the net profit B. it shows the gross profit C.
It itemize the business structure D. it indicate the liquidity position of business.
7. Current assets include ____ A. Capital B. Net profit C. Income D. Stock.
8. The vertical format is also called the ____ format A. Modern B. Horizontal C. Artificial D. Natural.
9. The horizontal or T format is also called ___ format A. Modern B. Traditional C. Conventional D.
artificial.
Use the information below to answer question 10 to 12

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 Eyo’s
DR Balance Sheet as at December 31st, 2021 CR

Capital ? Land and building 15, 200

Add net profit 30, 100 Plant and machinery 10, 500
? Stock 10, 800
Creditors 4, 250 Debtors 8, 900
Cash at hand 5, 100
50, 500 50, 500

10. capital amounted to A. N 50, 500 B. N 46, 250 C. N 30, 800 D. N 16, 150
11. What was the total current asset? A. N 25, 800 B. N 24, 800 C. N 15, 200 D. N 10, 800
12. the total fixed asset was A. N 25, 700 B. N 30, 800 C. N 28, 100 D. N 46, 200
13. You need to have accounting knowledge to understand ____ format (a) Modern (b) Traditional (c)
Revised (d) Natural.

ESSAY QUESTIONS
1. What are the items in a balance Sheet?
2. State the uses of the Balance Sheet.
3. Classify the items on the Balance Sheet.
4. Enumerate the differences between Capital and Liabilities.

5. Use the information below to prepare a balance sheet for Goodness Super Stores
As at December 31st, 2022
Capital ________________________________________________ 6,000
5 years Bank loan ________________________________________ 2500
Creditors _______________________________________________1,000
Bank overdraft __________________________________________ 1,200
Net profit _______________________________________________ 1,500

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 Machinery ______________________________________________ 3,000
Land and building ________________________________________ 3,000
Motor van _______________________________________________ 1,200
Stock ____________________________________________________ 500
Debtors __________________________________________________ 400
Cash in hand ______________________________________________ 600
Cash at bank ______________________________________________ 500

GLOSSARY OF TERMS / KEY WORDS / VOCABULARY:

Bank
Loan
Fixed
Asset
Debtors
Creditors
Overdraft
Current asset
Liability

PUZZLES / BRAIN TEASER:

The two most important things in any company, do not appear in its balance sheet. What could these be?

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INSPIRATIONAL QUOTES:

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