Financial Statements
Lesson Topic:
Students will learn about and practice the parts of three financial statements: Income Statement, Statement of Owner's Equity, and Balance Sheet.
Lesson Description:
Students will learn what the financial statements are, what accounts go on each and practice using a couple activities.
Learning Goals/Outcomes:
Students will better understand the parts of financial statements and be able to identify which accounts are in each of the statements.
Nebraska Standards:
NE.BMM.HS.8.23b Create financial statements utilizing various methods.
Teacher Planning:
Equipment/Materials/Software Needed:
Computer, projector, and printed copies of activity
I used magnets to attach paper to the white boards/walls, but teachers can figure other methods to do the activity if needed (like on a larger table).
Time Required for Lesson:
25 minutes to do what's included, but if a teacher used their textbook to do a problem, it would be 45-50.
Diagram/Setup:
Only need an area big enough to do the financial statements puzzle activity.
Technology Use:
Software:
PowerPoint
Hardware:
Computer & Projector
Instructional Plan:
Anticipatory Set/Pre-Activity:
Teacher may want to do a quick review of accounts and debits & credits connecting them to the accounting equation. That prior knowledge will help them connect to the new information.
Benefits/Explanation/Real-World Connection:
Businesses use financial statements for a variety of reasons from managerial and financial decisions, to comparisons with other business
Activities (i.e. instructions, warm-up, lesson, cool-down):
Teacher should go through the new information about financial statements. Here is an example PowerPoint that has the definitions and an example with business numbers.
Also attached are two activities to review the concepts. The financial statements "On Board" activity should be printed prior to class and cut along the account lines. Depending on how many students you want working on it (I'd suggest 2-3), print that many sets. Have students reorganize "like a puzzle" the accounts in to the proper order of the three financial statements. I used magnets on the white board, but you could also have groups go to different parts of the room and use a table or pushed together desks.
Group Activity:
The other activity is a smaller version of the above, but meant to be done individually. I usually do it the next day as a "bell ringer" activity to review from the day before. However, it could be used as an exit ticket for this day as well. I used Google Classroom to hand it out, and had students digitally drag the accounts to the correct financial statement. The accounts are in individual text blocks as to move them easier.
These activities should be used in conjunction with a textbook problem where students prepare financial statements. These activities are better for learning the proper accounts that go in each.
Individual Practice:
Closure:
Review questions about: What order should the financial statements be completed? Does the order matter and why? Try to draw out of the discussion that the ending balance in each transfers to the next statement. Other review questions: What broad type of accounts go on the income statement? What broad accounts go on the balance sheet? Try to make the connection that those accounts are basically the accounting equation.
Assessment :
The activities are formative. You can easily check the puzzle to see if it's correct. I generally "pull out" pieces that are incorrect, but don't tell them where they go. I let them figure that again. I will attach a "quiz" if you'd like to use it, or modify it. I do not do the quiz on the day I introduce the concept.
Supplemental Information:
Modifications:
Just whether you do the second activity digital or printed.
Safety Precautions:
N/A
Comments (adaptations for various grades/ages, teaching styles, etc.)
N/A
Resources:
