Lesson Plan

• Describe the business entity principle and its importance for sole traders, partnerships and limited companies.
• Distinguish business transactions from personal transactions and record each correctly.
• Prepare journal entries for owner’s capital, drawings and business purchases.
• Calculate profit using only business‑related revenues and expenses.
• Identify common mistakes that breach the principle and propose corrective actions.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with the sole‑trader transaction table
• Accounting journal template handout
• Calculators
• Sample business bank‑statement excerpts (optional)

Begin with a quick question: “If you bought a new phone with money from your business, should that expense appear in the business accounts?” Use this hook to activate prior knowledge of basic journal entries. Review that students already know assets, liabilities and equity. State the success criteria: by the end of the lesson students will correctly classify transactions, record appropriate journal entries and explain how the principle affects profit calculation.

1. Do‑now (5') – short quiz on definitions of capital, drawings and assets.
2. Mini‑lecture (10') – explain the business entity principle, show a flow‑chart diagram and discuss its legal and managerial significance.
3. Guided practice (15') – in pairs, students work through the sole‑trader example, completing journal entries on the worksheet.
4. Whole‑class discussion (5') – share common mistakes (e.g., mixing personal expenses) and correct them together.
5. Application activity (10') – groups record transactions for a partnership scenario, using the journal template.
6. Check for understanding (5') – exit ticket: write one sentence defining the principle and one journal entry for a drawing.

Recap the key steps for keeping business and personal finances separate and how this ensures accurate profit calculation. Collect exit tickets as a quick retrieval check. For homework, assign the three practice questions from the source notes, asking students to prepare the journal entries and calculate profit for the sole‑trader example.