Profit, loss, and record-keeping
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Introduction
Students develop an understanding of how and why successful businesses keep records. They engage in a hypothetical dog-walking business to practise keeping a business journal and understand the importance of doing so.
This activity provides a foundation for students to understand how businesses can meet their obligations, including those to the ATO.
This activity contributes to the following outcomes.
A student:
- applies consumer, financial, economic, business, legal, political and employment concepts and terminology in a variety of contexts COM5-1
- evaluates options for solving problems and issues COM5-5
- develops and implements plans designed to achieve goals COM5-6
- works independently and collaboratively to meet individual and collective goals within specified timeframes COM5-9
Related Stage 4 outcomes: COM4-1, COM4-5, COM4-6, COM4-9
Related Life Skills outcomes: COMLS-1, COMLS-7, COMLS-13
Content descriptions
Option 4: Running a Business
Planning for success
Students:
- examine the key considerations involved when planning and organising a small business, including: (ACHEK019, ACHEK030) likely success of small business opportunities, including the factors contributing to the success or failure of businesses (ACHEK018).
Maintaining financial records
Students:
- explain the importance of maintaining financial records and minimising risk, including: (ACHEK018)
- the purpose and use of financial records, e.g.to inform decision-making and fulfil legal requirements
- the features of key business documents and how to interpret them, e.g.taxation records (ACHEK018).
Current issues
Students:
- investigate key issues, processes and strategies related to running a business, for example in relation to:
- a real or hypothetical small business
Teacher resources
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Profit, loss, and record keeping
Student learning resources
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Now you're in business
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
- Use the visualiser to outline the concepts of businesses, profits, loss and factors that lead to business success.
- Explain to students that they will be opening a dog-walking business.
- Ask:
- What risks might you encounter in this business?
- What earnings might you receive?
- What expenses might you have?
- Use a grouping strategy to organise students into groups of 2 or 4.
- Explain the task to students. If necessary, model the task to students on the board. In this example, the rate per each 10 minutes is $2.00.
Day Scenario description Money earned Expenses Total money Monday Cam – 1 dog, 40 mins $8.00 $8.00 Monday Bought a ball $5.00 $3.00 Tuesday Chi – I dog – 10 mins $2.00 $5.00 - Groups complete the worksheet.
- Invite groups to share their findings. Prompts, drawn from the worksheet, include:
- Did your dog-walking business make a profit or a loss in its first week? What actions could you take to increase your profits?
- What are some of the things you have to know in order to keep an accurate ledger?
- Why is it important to keep a ledger? How will keeping a ledger contribute to business success?
- Students write a short statement explaining why keeping business records is important to business success and how not doing so might lead to business failure