{"id":3389,"date":"2023-10-05T08:24:10","date_gmt":"2023-10-05T08:24:10","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=3389"},"modified":"2023-10-05T08:27:12","modified_gmt":"2023-10-05T08:27:12","slug":"week-3-and-4-ss2-third-term-commerce-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-3-and-4-ss2-third-term-commerce-notes\/","title":{"rendered":"Week 3 and 4 – SS2 Third Term Commerce Notes"},"content":{"rendered":"

\u00a0WEEK THREE AND FOUR
\n<\/strong>TOPIC: PROFIT
\n<\/strong>CONTENT
\n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Types of profit
\n2.\u00a0\u00a0\u00a0\u00a0Items in the Trading, profit and Loss Account.
\n3.\u00a0\u00a0\u00a0\u00a0Factors Affecting Profit.
\n4.\u00a0\u00a0\u00a0\u00a0Turnover\/Rate of Turnover.<\/p>\n

\u00a0PROFIT
\n<\/strong>The profit of a business firm could be either Gross Profit or Net Profit.<\/p>\n

\u00a0GROSS PROFIT<\/strong>: This is the total sales less
\nCross Price: It is the same as mark-up which is the amount a seller adds to his cost or buying price to determine his selling price.
\ni.e. Gross Profit = Sales – Cost of Sales<\/p>\n

\u00a0It should be noted that the gross profit of a firm is not the true profit since other expenses are incurred in running the business. The gross profit, by itself, cannot, therefore, tell whether or not a business firm is making a headway. The most important thing to look at is the NET PROFIT.<\/p>\n

\u00a0NET PROFIT<\/strong>: This refers to the gross profit less the expenses of running the business. This is the
\namount left for the owner or owners of the business as a reward for the risk taken. The success of the business is measured in terms of the Net Profit.<\/p>\n

\u00a0Expenses incurred in running a business include rent, rates, advertising depreciation, bad debts electricity bills wages and salaries transportation, carriage outwards, insurance etc.<\/p>\n

\u00a0ITEMS IN THE TRADING PROFIT AND LOSS ACCOUNT
\n<\/strong><\/p>\n

    \n
  1. Purchases\n<\/li>\n
  2. Sales\n<\/li>\n
  3. Returns inwards\n<\/li>\n
  4. Returns outwards\n<\/li>\n
  5. Carriage inwards\n<\/li>\n
  6. Gross Profit or Gross Loss\n<\/li>\n
  7. Expenses e.g. rent, wages, insurance etc\n<\/li>\n
  8. Other operating incomes e.g. discount received commission received, bad debts recovered etc.\n<\/li>\n
  9. \n
    Net Profit or Net Loss.\n<\/div>\n

    \u00a0REVIEW QUESTIONS
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Give a short description of information which should be found in:
    \n\u00a0\u00a0\u00a0\u00a0(a) \u00a0\u00a0\u00a0\u00a0a trading account
    \n\u00a0\u00a0\u00a0\u00a0(b)\u00a0\u00a0\u00a0\u00a0a profit and loss account
    \n2.\u00a0\u00a0\u00a0\u00a0Explain what is meant by each of the following:
    \n\u00a0\u00a0\u00a0\u00a0(a) gross profit\u00a0\u00a0\u00a0\u00a0(b) net profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(c) net sales<\/p>\n

    \u00a0TURNOVER
    \n<\/strong>This refers to the total net sales during a period. The turnover is variously referred to as the stock-turn, sales turnover or stock-turnover.<\/p>\n

    \u00a0THE RATE OF TURNOVER (or Rate of Stock \u2013 turn)
    \n<\/strong>This refers to the number of times average stock is sold during a given period, usually a year.
    \nIt is calculated by dwindling the cost of goods sold by average stock. This means that to find the rate of turnover first, the cost of goods sold must be calculated thus:
    \nCOST OF GOODS SOLD\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0N
    \n<\/strong>\u00a0\u00a0\u00a0\u00a0Opening Stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a05,000
    \n\u00a0\u00a0\u00a0\u00a0Add purchases\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a035,000
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a040,000
    \n\u00a0\u00a0\u00a0\u00a0less: Closing stock\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,000
    \n\u00a0\u00a0\u00a0\u00a0COST OF GOODS SOLD\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a032,000<\/p>\n

    \u00a0OR
    \n<\/strong>COST OF GOODS SOLD:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 N
    \n<\/strong>Sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a050,000
    \nLess: Gross profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a018,000
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a032,000
    \nSecondly the average stock must be calculated thus:
    \nb.\u00a0\u00a0\u00a0\u00a0AVERAGE STOCK\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a0OPENING STOCK + CLOSING STOCK
    \n\t\t\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a05000 + 8000 = 13000 = N<\/strong> 6,500
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2 2
    \nFinally find the rate of turnover thus:
    \nc.\u00a0\u00a0\u00a0\u00a0Rate of Turnover = Cost of goods sold
    \n\t\t\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Average Stock
    \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a032,000
    \n\t\t\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 6,500<\/p>\n

    \u00a0FACTORS AFFECTING THE RATE OF TURNOVER OF A BUSINESS
    \n<\/strong>The number of times a trader buys goods and resells them determines the size of his gross profit. In other words, a trader’s gross profit can be increased by boosting his rate of turnover. The various measures to be applied to increase the rate of turnover of a business can be inferred by considering the following factors which affect the rate of turnover.
    \n1.\u00a0\u00a0\u00a0\u00a0Nature of the product.
    \n2.\u00a0\u00a0\u00a0\u00a0Advertisement and Sales Promotion
    \n3.\u00a0\u00a0\u00a0\u00a0Location of the business.
    \n4.\u00a0\u00a0\u00a0\u00a0Goodwill or reputation of the seller
    \n5.\u00a0\u00a0\u00a0\u00a0Prices
    \n6.\u00a0\u00a0\u00a0\u00a0Wide variety of products offered for sale
    \n7.\u00a0\u00a0\u00a0\u00a0Reliability and frequency of supply
    \n8.\u00a0\u00a0\u00a0\u00a0Credit facilities.
    \n9.\u00a0\u00a0\u00a0\u00a0Application of modern sales techniques e.g. self services that encourage impulse buying
    \n10.\u00a0\u00a0\u00a0\u00a0Number of sales outlets or branches of the business.<\/p>\n

    \u00a0REVIEW QUESTIONS
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Distinguish between turnover and rate of turnover.
    \n2.\u00a0\u00a0\u00a0\u00a0If the cost of goods sold is N4000 and the stock is turned over five times yielding a profit of 10% on sale, calculate the:
    \n\u00a0\u00a0\u00a0\u00a0(a) \u00a0\u00a0\u00a0\u00a0average stock
    \n\u00a0\u00a0\u00a0\u00a0(b) \u00a0\u00a0\u00a0\u00a0gross profit
    \n\u00a0\u00a0\u00a0\u00a0(c) \u00a0\u00a0\u00a0\u00a0turnover<\/p>\n

    \u00a0READING ASSIGNMENT
    \n<\/strong>Essential Commerce for SSS by O.A Longe page 131-143.<\/p>\n

    \u00a0WEEKEND ASSIGNMENT
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0The difference between cost and selling price gives______
    \n\u00a0\u00a0\u00a0\u00a0(a) Trading loss\u00a0\u00a0\u00a0\u00a0(b) Net profit\/loss (c) Gross profit or loss (d) Turnover
    \n2.\u00a0\u00a0\u00a0\u00a0The cost of transporting goods to customers is called ________
    \n\u00a0\u00a0\u00a0\u00a0(a) carriage inwards\u00a0\u00a0\u00a0\u00a0 (b) carriage outward (c) carriage paid (d) carriage forward
    \n3.\u00a0\u00a0\u00a0\u00a0The turnover of a firm may be affected by ________
    \n\u00a0\u00a0\u00a0\u00a0(a) the demand for its products (b) the cost of its goods sold (c) its closing stock
    \n\u00a0\u00a0\u00a0\u00a0(d) its net assets.
    \nUse the following equation to answer questions 4 and 5.
    \nGross Profit = (Closing stock + P) less (Opening stock + G)
    \n4.\u00a0\u00a0\u00a0\u00a0What is P in the above equation
    \n\u00a0\u00a0\u00a0\u00a0(a) purchases returns\u00a0\u00a0\u00a0\u00a0(b) net profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(c) sales \u00a0\u00a0\u00a0\u00a0(d) carriage outwards
    \n5.\u00a0\u00a0\u00a0\u00a0What is G in the above equation
    \n\u00a0\u00a0\u00a0\u00a0(a) Sales return\u00a0\u00a0\u00a0\u00a0(b) carriage inward\u00a0\u00a0\u00a0\u00a0 (c) purchases \u00a0\u00a0\u00a0\u00a0 (d) sales<\/p>\n

    \u00a0
    \n\u00a0THEORY
    \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Outline any seven factors, which might affect the rate of turnover
    \n2.\u00a0\u00a0\u00a0\u00a0Distinguish between gross profit and net profit.<\/p>\n

    \u00a0GENERAL EVALUATION QUESTIONS
    \n<\/strong><\/li>\n

  10. Describe four types of risks that may be insured against under marine insurance\n<\/li>\n
  11. State and explain five classes of shares a public limited company can issue\n<\/li>\n
  12. Explain seven reasons for government participation in business enterprises\n<\/li>\n
  13. State seven demerits of government participation in business enterprises\n<\/li>\n
  14. State seven characteristics of a co-operative society\n<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    \u00a0WEEK THREE AND FOUR TOPIC: PROFIT CONTENT 1.\u00a0\u00a0\u00a0\u00a0Types of profit 2.\u00a0\u00a0\u00a0\u00a0Items in the Trading, profit…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,270],"tags":[],"class_list":["post-3389","post","type-post","status-publish","format-standard","hentry","category-posts","category-third-term-ss2-commerce"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=3389"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3389\/revisions"}],"predecessor-version":[{"id":3390,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3389\/revisions\/3390"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=3389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=3389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=3389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}