1. To describe LIFO & FIFO stock valuation tools.
UNIT TITLE: Unit 2: Accounts & Finance
LESSON TITLE: Balance Sheet
COMPETENCY FOCUS:
Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data.
Success Criteria
By the end of the lesson, you should be able to…
To describe LIFO & FIFO stock valuation tools.
To calculate LIFO & FIFO stock valuation tools from given information

2. I can recognise the layout of the Balance Sheet, input data correctly and explain what the figures show:
Competence level
Descriptor
Autonomous
I can delve deeper into my calculations by fully explaining how my calculations explain the financial state of the business and I will evaluate how effective/ineffective their business activities have been for the organisation and make justified recommendations for improvement.
Advanced
As below but additionally I can use my calculations to begin to analyse the activities of my focus organisation and recommend strategies for improvement.
Strong
As below but additionally I can fully explain what the calculations show and explain the financial state of the business.
Regular
I can correctly input data into a balance sheet, calculate totals and then begin to explain what the calculations show.
Guided
Through basic calculations, I can input data correctly into a balance sheet.

3. Depreciation (HL)
Depreciation: the decline in the value of a non-current asset over time.
Assets decline in value because:
Normal wear and tear
Obsolete technology

4. Depreciation (HL)
Straight-line method: Annual depreciation change = Original cost of asset/expected life of asset - Now complete task on pg. 221

5. Depreciation (HL)
Reducing balance method: 1- √residual value/cost x100 - Now complete task on pg. 222

6. Stock Valuation
The value of closing stock figure on the balance sheet is important because:
It shows the value of the company
How much profit is made.

7. LAST IN FIRST OUT (LIFO)
LIFO: Valuing closing stocks by assuming that the last one purchased was sold first.

8. FIRST IN FIRST OUT (FIFO)
FIFO: Valuing closing stocks by assuming that the first ones bought in were sold first.

9. TASK
Complete ‘worked examples’ on pg. 222/223.

10. Fixed Assets Vs Current Assets
Fixed Assets: Assets that are owned and are expected to be kept for more than 1 year or many years.
Current Assets: Assets that can be converted in to cash more easily and are only retained for less than 1 year.
These are listed in order of liquidity (easiest to convert in to cash)

11. Current Liabilities
Current liabilities are bills the firm has to pay soon (within 1 year)
Included in current liabilities are:
-creditors (money owed to suppliers for stock)
- Corporation tax (to Government)
- Unpaid dividends to shareholders

12. Current Assets Net Current Assets(working capital) =
Current Assets – Current Liabilities
Net assets (what the company is worth) =
Net current assets + fixed assets

13. TASK 1
Complete ‘Big Tasty Burger’ Case Study
[40mins]

14. TASK 2
Complete ‘The Biscuit Factory’ Case Study
[40mins]

15. TASK 3
Use the revision guidance notes to produce your own revision notes ready for the exam!
[40mins]