Subject:

Introduction to Accounting

Date: 10 March 2015

Class Level: Second Form (1C)

Topic: Financial Statements
Subtopic:

Understanding a Balance Sheet

Time/Date:

40 minutes; 10/03/15

References:
Frank W. & Robinson S. (2007) Principles of Accounts for the Caribbean 5th Edition. Longman
CXC (2006) Principles of Accounts Syllabus, Caribbean Examination Council
Balance Sheet. (n.d.). Retrieved March 13, 2015, from
http://www.collegecram.com/study/accounting/financial-statements/balance-sheet/

Previous Knowledge:
Students have learned how to identify assets, liabilities and capital (owners equity) furthermore,
how to break them into their different subgroups and accounts.

Assets (fixed assets, current assets)

Liabilities (current liabilities, long-term liabilities)
Capital (Owners Equity)

Objectives: Through observation and discussion students will be able to:

1) Calculate Total Assets, Liabilities and Capital
2) Examine accounts that would be placed in a Balance Sheet
3) Construct a simple balance sheet when given the names of accounts
Concept:
A balance sheet shows the assets, liabilities, and capital for a business on a given day. This
business document is one of the major documents used in evaluating a business. Students will
learn the components of a balance sheet (Assets, Liabilities, and Capital) by working through
many problems to strengthen their understanding.

Skills:
1) Recognize the different accounts
2) Group accounts in their place in a balance sheet
3) Calculate using the accounting equation
4) Prepare a Balance Sheet
Attitudes:
1) Work cooperatively
2) Participate in class activity
3) Develop awareness for the importance of accuracy
Materials: chart, adhesive tape, label strips, shop papers, markers, balance sheet template
Introduction:
1) Teacher will begin the class with an ice-breaker by giving two accounting jokes for the
students to have a laugh
2) In the form of review, teacher will have a chart on the board with the three labels (assets,
liabilities, and Capital). Having already prepared some label strips with different account
names, the teacher will give different students in the classroom a strip for the student to
go and stick on the chart where it belongs and orally state why they think that account
goes under that label.
Development:
1) Students already knowing how to classify the different accounts by name, teacher will
assign a number value to each account and will ask students to calculate the total value of
each group.
2) Using the structure of an accounting equation (Assets Liabilities = Capital), students
will find use the math concept of substitution to find a missing variable.
3) Using the accounting equation, place assets on the left side, and then place liabilities and
owner's equity on the right side. According to the equation, the left side of the balance
sheet would then have to equal the right side of the balance sheet. (Hence the name
"Balance" Sheet.)

4) Divide class into groups of 4s and each person will be assigned a role in each group.
Providing different accounts the group will have to calculate the different parts of the
balance sheet and label them properly on a shop paper.
1st person : Calculate Assets
2nd person: Calculate Liabilities
3rd person: Calculate Capital
4th person: prepare the balance sheet format on the shop paper.

Example
Assets

Liabilities
$1,500.00 BankLoan
2,500.00
TotalLiabilities
500.00

Cash
Equipment
Furniture

$3,000.00
3,000.00

Owner'sEquity
Capital
TotalAssets

_______
$4,500.00
=======

TotalL&O.E.

$1,500.00
_______
$4,500.00
=======

Closure: through questioning students will share with the class what they have learnt.
Conclusion: Each student will be given 6 accounts with a number value and they will have to
prepare a balance sheet on their exercise books.

Extended Activity: Student will be given the following assignment to practice on creating a
balance sheet:
The New Westrac Company in Orange Walk Town, owned by Guy Albrecht, had the following
assets and liabilities on March 31, 2014. Prepare a balance sheet for the company as of that date.

Bank, $1,896.00

Tasty Beverages (debtor), $750.00

Food Haven (debtor), $400.00

Metro mall (debtor), $1,235.00

Supplies, $850.00

Furniture and Equipment, $75,840.00

Trucks, $35,000.00

Land, $50,000.00

Building, $140,000.00

Household Finance Company (creditor), $19,345.00

General Trading Company, (creditor), $2,356.00

Lightning Electronics, (creditor), $3,378.00

Bank Loan, $10,000.00

Mortgage Payable, $75,000.00

Evaluation:
Lesson Reflection:
Strengths
Teacher:-

Students:-

Areas of Improvement:
Teacher:-

Students:-

Accounting Jokes
The clerk walks into the boss's office and says, "The auditors have just left, sir.""Have they
finished checking the books?", asks the boss. "Very thoroughly," is the reply. "Well, what did
they say", says the boss. "They want 15% to keep quiet."

A businessman was interviewing job applications for the position of manager of a large
division. He quickly devised a test for choosing the most suitable candidate. He simply
asked each applicant this question, "What is two plus two?"
The first interviewee was a journalist. His answer was, "Twenty-two".
The second was a social worker. She said, "I don't know the answer but I'm very glad that
we had the opportunity to discuss it."
The third applicant was an engineer. He pulled out a slide rule and came up with an answer
"somewhere between 3.999 and 4.001."
Next came an attorney. He stated, "in the case of Jenkins vs. the Department of the
Treasury, two plus two was proven to be four."
Finally, the businessman interviewed an accountant. When he asked him what two plus two
was, the accountant got up from his chair, went over to the door, closed it, came back and
sat down. Leaning across the desk, he said in a low voice, "How much do you want it to
be?" He got the job.

An accountant dies and goes to heaven (no, that's not the joke). St. Peter, of course, is
there, looking through the files and asking a few quick questions. "What sort of accountant
were you?" "Oh, I was a CPA", was the reply. "Name?" asks St. Pete. The accountant gives
his name and St. Peter finds his file. "Oh yes, we've been expecting you. You've reached
your allotted time span." The accountant says, "I don't get it. How can that be? I'm only 48
years old." Pete looks again at the file and says, "Well, that's impossible." "Why do you say
that?" asks the accountant. "Well," says St. Peter, "we've been looking over your time
sheets and the hours you've charged your clients. By our reckoning, you must be at least93
years old!"

An accountant and a lawyer were laying on a beach in Hawaii sipping mai tai's. The lawyer
started telling the accountant how he came to be there. " I had this downtown property in
Memphis that caught fire and after the insurance paid off, I came here." The accountant
said, "I had a downtown property, too, in Miami. It got flooded so here I am with the
insurance proceeds." The lawyer took another sip of his mai tai, and then asked in a puzzled
voice, "How do you start a flood?"