Production – Meaning of Production, Types of production:




JS 1 (BASIC 7)




1. Revision

  1. Production – Meaning of Production, Types of production: industry – Extractive manufacturing and constructive industry. Commerce- Trade, Aids to Trade, Services. Effects of Production on the Environment/Society

  2. Factors of production: land, labour, capital, entrepreneur and importance of each.

  3. Types of occupation: meaning of occupation, Divisions – industrial, commercial and service occupation, and factors which affect occupations

  4. Forms of business organization: Types of business organization – Sole Trade/sole proprietorship, partnership, limited liability companies, cooperative society, advantages and disadvantages of each forms of business organization

  5. Introduction to bookkeeping: meaning, importance, essential quality of bookkeeping, common bookkeeping practice and bookkeeping ethics

7 Source Documents and Special Journals: meaning, uses of source document, types of source document, invoice – sales invoice and purchase invoice, receipt for payment made, cash registered tapes, credit note, debit notes, Cheques; Books of original entry.

  1. Source document and special journals: meaning of journal, types of journals: general, special journals – sales, purchases, return inward and return outward

  2. Double entry bookkeeping: meaning of double entry, double entry treatment of asset, double entry treatment of liability, double entry treatment of expenses, meaning of journals, types of journals, meaning of ledgers, classes of ledger, classification of accounts: real, personal and impersonal

10 Introduction to shorthand: define and explain the meaning of shorthand, historical development of shorthand, importance of shorthand in the business world and major shorthand systems

11, Revision

12 Examination



Activity: Revision of first term’s work



CONTENT: 1. Meaning and Forms of Production

  1. Factors of Production

Sub-Topic 1: Meaning and Forms of Production

Production could be defined as any human activity that involves the making of physical goods and provision of services for the satisfaction of human wants. It is also seen as creation of utilities, utility means the ability of goods and services to satisfy human wants.

Forms of Production

There are three forms of production namely primary (extractive industry), secondary production (manufacturing and constructive industry) and tertiary production (commercial and personal or professional services).

Primary Production (Extractive Industry)

This type of production involves the extraction of raw materials or tapping and harnessing of natural resources from the land, sea and atmosphere. It includes farming, fishing, hunting, mining, quarrying, oil drilling etc. This form of production is referred to as primary production.

Secondary Production (Manufacturing and Constructive Industry)

This is the process of converting of raw materials or primary products from the extractive industry into finished or semi-finished goods. This class of production includes furniture making, road construction, bridges, paper milling, food processing, car production, chemical, textile etc.

Tertiary Production (Commercial and Professional Services)

It is made up of those who render commercial and professional services to satisfy other people. The help commercial services help to bring the raw materials, finished or semi-finished goods to those who need them (the users). Such services include, trading, banking, advertising, warehousing, insurance, transportation and communication. The professional services which are equally known as direct or personal are services provided or rendered directly or indirectly by people to give satisfaction to those who want them. These are services like teaching, catering, tailoring, hair dressing etc.


  1. What is Production?

  2. State the three forms of production.



Topic: Factors of Production

The term factor of production is defined as all the visible and invisible resources

that are combined together for the purpose of production of goods and services. There are four factors of production.

(a) Land: Land refers to gift of nature or all the natural resources available, applied and used for production without the help of a man. It includes the fixed natural land and other natural resources such as water, forest, mineral deposits etc. The reward for land is rent.

(b) Labour: Labour means all human efforts physical or mental, skilled or unskilled directed toward the production of economic goods and services. The reward of labour is wages and salaries.

(c) Capital: These are wealth used for the production of further wealth. Capital consists of machinery and equipment, buildings, motor vehicles, tools, raw materials and money. The reward for capital is interest.

(d) Entrepreneur: This is a factor that organizes and coordinates the human and material resources in the production of goods and services. The entrepreneur is the initiator, innovator, risk-bearer, and decision-maker. These functions distinguish entrepreneurship from routine managerial activities. The entrepreneur gets profit as a reward for his services.


  1. Explain the term factors of production

  2. Explain the four factors of production.

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Government Chapter 5 pages 26-27

Weekend Assignment:


  1. The first form of production usually referred to as primary production consists of

(a) manufacturing industry (b) extractive industry (c) commercial services

  1. There are ——- forms of production (a) 2 (b) 5 (c) 3

  2. ———- as a factor of production is a free gift of nature.

(a) land (b) capital (c) labour

  1. The reward for capital is (a) rent (b) interest (c) profit

  2. The factor of production that organizes or coordinates other factors is

(a) Entrepreneur (b) capital (c) labour


  1. What is production?

  2. Explain the factors of production.








Occupation is any legitimate activity one engages in order to earn a living. For example some people work in industries that extract raw materials from land or sea, some work in manufacturing industries which change the extracted raw materials into finished goods or semi-finished goods. Some others provide services for others such as Nursing, Teaching, Hairdressing, carpentry etc. Also others provide commercial services by helping to sell the finished goods to those that need them, as well as engaged some of those auxiliary services that help commerce to function properly such as banking, insurance, advertising etc.


1 Climatic and Weather Condition: Because of climate and weather differences from place to place, people engage themselves in one form of occupation or the other to earn a living.

  1. Natural Resources: Natural resources endowment is also a determinant of one’s occupation. The presence of mineral resources in a particular place will attract the presence of miners and also determines the location of different types of industries. The availability of seaports and large bodies of water like ocean which are part of natural resources has accounted for people’s engagement in different activities and occupation.

  2. Health Factor: There are some occupations which people who are not physically fit cannot engage themselves e.g. Nursing, Teaching etc.

  3. Skill and Training: People engaged themselves in occupation in which they have acquired skill and training.

  4. Interest and Aptitude: People engaged in occupation they have interest in.

  5. Salary and Wages: The salary and wages attached to a particular occupation determines the number of people that will be interested in such occupation


  1. Define Occupation

  2. State 3 factors that could determine occupation.



The different occupation in which people engage themselves can be classified into three main division namely; Industrial Occupation, Commercial Occupation and Service Workers.

Industrial Occupation: This form of occupation involves obtaining raw materials and free gifts of nature, changing them into finished products and assembling the finished products into different forms usable by man. This industrial work includes extraction, manufacturing and construction.

  1. Extraction: This occupation is concerned with the removal of raw materials from air, land or sea for the purpose of being worked upon by the manufacturing and construction industries. For example Agriculture, Mining and Quarrying, Fishing and Forestry etc.
  2. Manufacturing: This form of Industrial occupation involves the process of changing raw materials obtained by workers in the extractive industry into finished goods. Some of the manufacturing industries are:
  3. Plastics-making industries which produce plastic plates, spoons, cups etc.
  4. Food industries which produce various types of items like flour. Sugar, beverages etc.
  5. Textile industries that produce various types of clothing for man.
  6. Mechanical engineering industries that produce all types and sizes of machineries such as equipment, industrial engines, mechanical tools etc.
  7. Hardware industries that produce metal, major items of military equipments electronic and electrical devices, etc.
  8. Cosmetic industries that produce various body creams, pomades, soap, detergent etc.
  9. Construction: Construction industry is concerned with the process of putting together or assembling of manufactured products into usable forms. Those engaged in construction industries are building contractors, architects, surveyors, bricklayers, plumbers, decorators, civil engineers, water engineers etc.

Commercial Industries

The raw materials extracted by the extractive industry are worked upon by way of manufacturing to change their original form so as to make them usable. For these products to be usable implies that they are now finished goods. In order to complete the process of production, the services of commercial workers are necessary. People who are engaged in commercial industries are responsible for getting the finished products to the consumers who want them, when they want them. It is commercial occupation that links up the producer with the supplier of the raw materials. It in turn links up the various processes of manufacture; and finally distributes the finished products to consumers through ancillary services that facilitate trading activities such as advertising, insurance, banking, transporting, warehousing and communication.

Service Workers

In occupational engagements, there are those who are not employed to work in industry and commerce, yet they still earn a living. Those in this category are known as service workers. They are referred to as service workers because they render personal and direct services to people who need their services on payment directly or indirectly. Services may be direct or indirect.


  1. The form of occupation that involves extraction, manufacturing and construction industry is termed _________________

  2. Give five examples of Manufacturing Industry


Business Studies for Junior Secondary School Book 1 produced by Cross River State Government Chapter 6 pages 42-43


  1. One of this is not a factor that could determine occupation.

(a) Salary and Wages (b) Skill and Training (c) Friend’s choice

  1. Mining, Agriculture, Fishing are examples of ——–form of occupation

(a) Extractive (b) Service (c) Construction

  1. Assemblying of manufactured products into usable forms are the responsibility of ——- industry. (a) Extractive (b) Manufacturing (c) Construction

  2. Those who render personal or direct services to people who need their services and they are paid directly or indirectly are called —— (a) Commercial occupation (b) Service workers (b) Industrial worker

  3. The removal of the raw material from the air, land and sea is the responsibility of ——– industry. (a) Industrial worker (b) Extraction (c) Services


  1. What do you understand by the term occupation?

  2. Name three classes of occupation




CONTENT: 1. Types of Business Organisations

  1. Advantages and Disadvantages of each of the Business Organisation

Sub-Topic 1: Meaning of Sole Trade

Meaning: Sole Trade is a business owned by one person. The size of the business may be large or small but it is important to note that it is owned by one man. Examples are restaurants supermarkets, Filing Station, Schools etc. The owner of the business is called a sole trader or a sole proprietor. Another name for sole trade is sole proprietorship.

Advantages and Disadvantages of Sole Trade

Advantages of Sole Trade:

  1. It is easy to start.

  2. The sole proprietor has a close contact with his customers and attends to them personally.

  3. He takes all decisions affecting his business alone.

Disadvantages of Sole Trade:

  1. The provision of capital and ability is limited.

  2. The business ends when a sole trader dies.

  3. He suffers and bears risks alone

  4. If business fails, he may have to sell his personal property to pay the debt.


  1. State at least three advantages of Sole Trade

  2. Identify at least three disadvantages of Sole Trade.

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Chapter 7 pages 38-39


CONTENT: 1. Meaning of Partnership

  1. Advantages and Disadvantage of Partnership

Sub-Topic 1: Meaning of Partnership

Meaning of Partnership: A Partnership is a business owned and managed by two or more persons who become partners by written agreement. The partnership act of 1890 and the companies Act of 1958 state that the maximum number of people who can form a Partnership is restricted to 20 persons while the minimum should be 2 persons. These partners share the profit or losses and the responsibilities of their business.

Types of Partnership: There are various types of partnerships as stated below:

(a) Ordinary Partnership: This is a partnership in which all members are held liable for the debts of the business. Partnership may be dissolved if one partner dies.

(b) Limited Partnership: This is a partnership with limited liability in that members will not be asked to contribute more money that the one used to start the business in case the business fails. For Partnership to become limited, it must be registered with the Registrar of Companies otherwise it will be treated as ordinary partnership.

(c) Active and Sleeping Partners: Partners who take part in running the business are active partners while those who do not take part in the running of the business are sleeping partners.

(d) Quasi or Nominal Partners: A quasi partner is not really a partner but may conduct himself in such a way as to make himself liable for the debts of the firm, even though he does not take part in sharing the profit of the business.

Advantages of Partnership:

(i) It has more capital than sole trading

ii Partners have different ability and talents therefore, each partner specializes in an aspect of business which he is best suited.

(iii) Partners meet to discuss matters relating to the firm

Disadvantages of Partnership:

(i0 Partners have unlimited liability for debts in case of business failure.

(ii) If one partner takes a wrong decision, it affects other partners.

(iii) Disagreement among partners causes confusion in the business.

(iv) Partnership comes to an end with the death or resignation of a partner.



  1. Another name for Sole Trade is ——– (a) Sole Proprietorship (b) Partnership (c) Restaurant

  2. Sole Trade is the business of ———- (a) two people (b) two men (c) one person

  3. The simplest and most common form of business organization is (a) Partnership (b) Sole trade (c) Filing station

  4. One of the disadvantages of Sole trade is ———- (a) He takes all decisions affecting his business (b) He bears and suffers risk alone (c) he enjoys his profits alone

  5. One of the source of capital to a sole trader is (a) easy to start (b) personal savings (c) members’ contribution

  6. The minimum number of Partners in Partnership is (a) 5 (b) 2 (c) 4

  7. The type of partnership in which all the members are held liable for debts of the business is —— (a) quasi partnership (b) Ordinary partnership (c) limited partnership

  8. One of the sources of capital for partnership is —— (a) contribution of capital by members (b) personal saving (c) limited partners

  9. The disadvantage of partnership is ———- (a) Wrong decision of one partners affect others (b) Losses are shared among partners (c) it has more capital than sole trading

  10. All are advantages of Partnership except (a) Death of one partner may end the business (b) Responsibilities are shared among partners (c) It has more capital than sole trading.


  1. What is Sole Proprietorship?

  2. Mention all the sources of capital of sole trade.

  3. What is Partnership?

  4. Outline two advantages and two disadvantages of Partnership

  5. Define Partnership.

  6. Explain the following types of partnership: (a) ordinary Partnership (b) Quasi Partnership

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Government Chapter 7 pages 39-41

Cooperative Societies

Meaning of Cooperative Societies

A cooperative Society exists when groups of workers, individuals, organizations, farmers or

Communities pull their resources together towards a common goal. The main purpose of the cooperative society is to:

(i) Sell goods and services to members at a cheap rate.

(ii) to do business together for profit purpose and share the profits among the members.

Types of Cooperative Society:

The common types of cooperative societies are:

(a) Producers Cooperative

(b) Consumers Cooperative

(a) Producers Cooperative:

Producers form a common association in order to sell their products in a uniform price instead of selling individually, e.g. producers of yam, garri, cocoa etc may form a cooperative society for the selling of their products.

(b) Consumers Cooperative:

In consumers’ cooperative, the members are consumers who contribute funds and buy goods in large quantities from the producers and sell in retail prices to members at a reduced and cheaper rate.

Advantages of Cooperative Society:

  1. Members have equal rights and votes.

  2. Prices are lower as they buy in bulk.

  3. Benefits of repayment of capital to any member who withdraws.

Disadvantages of Cooperative Society:

  1. Election of committee members may not lead to efficient business.

  2. Calculation of dividends to members is always a problem.

  3. Non-members may be reluctant to engage in marketing activities with the cooperative.


  1. What do you understand by the term Cooperative Society?

  2. Mention three advantages of Cooperative society.

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Chapter 7 pages 42-43.

Weekend Assignment:


  1. What is the maximum of number of persons that can be admitted into the society? (a) No maximum (b) 20 (c) 30

  2. Cooperative Society is managed by (a) Board of Directors (b) Committee of management (c) shareholders

  3. The common types of cooperative societies are

(a) Sole Proprietorship and partnership (b) Young and old cooperative (c) Producer and Consumer Cooperative

  1. In cooperative Society every members have equal rights and votes. True/False

  2. The main purpose of cooperative society is to (a)buy goods for everybody (b) provide essentials services at cheaper rate (c) sell goods and services to members at a cheap rate

Limited Liability Company (Public Limited Liability Company)

Limited Liability Company:

A Limited Liability Company is a company in which the responsibility or liability of members for debts of the company is limited to the capital they have contributed or agreed to contribute. The private property of members are excluded, and all that members lose if the company fails is the money they have contributed. It is formed and registered under the law known as the Company Act. When a company is formed and registered with the Registrar of Companies, it is said to be incorporated.

There are two types of Limited Liability Company namely, Private and Public Companies.

Public Limited Liability Company:

A Public Limited Liability Company is a business unit that carries on business to make profit

for its owners. Examples are Nigerian bottling company Ltd., Total Nigeria Limited, First Bank of

Nigeria Plc. It is owned by Shareholders and managed and control by Board of management.

Advantages of Public Limited Liability Company

  1. It can raise money from the public through issuing of shares and debentures. This

enhances the company expansion.

  1. It is a legal entity because it can sue and can be sued.

  2. The company’s properties are different from that of its owners.

  3. It enjoys continuity because it has perpetual life. The company can only be wounded voluntarily or on the order of a law court.

  4. Share holders cannot lose more than the value of their shares. This is because the company enjoys limited liability.

Disadvantages of Public Limited Liability Company:

  1. Shareholders have little say in the running of the company

  2. It does not enjoy privacy. It annual account must be published in the Newspaper for the public to see.

  3. It suffers from double taxation. The net profit of the company is taxed and the dividends of the shareholders are also taxed.


  1. What is a limited liability company?

  2. State 3 advantages of public limited liability company


Business studies for junior secondary schools, new edition book 1 by O. A. Lawal Chapter 5 pages 23-24

Limited Liability Company (Private Limited Liability Company)


  1. Private Limited Liability Company (Meaning)

  2. Advantages, Disadvantages and Comparison between Public and Private companies

Meaning of Private Limited Liability Company:

A private limited liability company is a profitable making business with few shareholders and no open market for its shares. Examples of private limited liability company are Newswatch Communication Ltd., Ekene Dili Chukwu Transport service Ltd., JIMBAZ Construction Company Ltd. etc.

Advantages of Private Limited Liability Company

(i) They enjoy privacy.

(ii) Their annual report and accounts are not required by law to be published, except for


(iii) Management and control is less complex than in public limited company. Its

management structure is simple.

Disadvantages of Private Limited Liability Company

(i) Shares cannot be issued to the public.

(ii) Capacity to raise external finance to expand business is limited.

(iii) Transfer of shares to others is made difficult.


  1. Comparison between the Private and Public Limited Liability Companies.
1. Minimum number of members is seven and has no maximum Minimum number of members is two while the maximum is fifty.
2. Shares are offered to the public. Shares may not be offered to the public.
3. Shares are easily transferable. Shares are not transferable.
4. Account is publish to the public Account is publish for the information of Registrar of companies.


  1. Define Private Limited Liability Company

  2. State the comparison between the public and private companies.

  3. Outline the 4 advantages and the 4 disadvantages of Private companies.


Business studies for junior secondary schools, new edition book 1 by O. A. Lawal chapter 5 pages 24-25


  1. The maximum number of members in a private limited liability company (a) 50 (b) 100 (c) 10

  2. Private liability company enjoys. (a ) enough capital (b) privacy (c) non-Payment of tax (d) transfer of shares to others.

  3. The following are disadvantages of private limited liability company except (a) not listed in the stock exchange (b) cannot sell shares (c) management structure is simple.

  4. The minimum number of owners needed to form a public limited company

Is (a) seven ( b)two (c) fifty (d) eight

  1. Which of this can sell shares to the public (a) Sole proprietor (b) Private

Limited company (c) Public limited company

  1. The maximum number of owners a public Limited liability company is (a) twenty (b) two (c) no maximum.

  2. Public Limited Liability Company is owned by —————— (a) government (b) politicians (c) Shareholders

  3. The major source of capital for Public Limited Liability Company is

(a) selling of shares (b) personal savings (c) partnership contribution


  1. State 3 advantages of private limited liability company

  2. Enumerate 3 disadvantages of private limited liability company



Topic: Introduction to Book Keeping

CONTENT: 1. Meaning, Concepts of Book keeping

  1. Importance and Parties interested in Book keeping

Meaning of Book Keeping:

Book-keeping may be defined as the art of recording business transactions in a systematic

manner so that the books of account will reveal at any time the financial position of the

business to the owner and other stakeholders in the business

Importance and Parties Interested in Book-Keeping

Importance of Book Keeping:

Every business organization keeps daily records of their financial transactions. Therefore,

the importance of bookkeeping becomes necessary for the following reasons:

(i) It is for easy reference of business financial records.

(ii) It shows an accurate standing position of business in relation to its customers i.e. what is owed and what is owed by the firm

(iii) It reveals profits and losses position to the company through trading profit and loss account.

(iv) It provides information to members of the public who are interested in the business through the balance sheet.

(v) Auditors use the books to issue their audit reports.

(vi) The records kept help in management decision-making.

(vii) The records project the image of the business to the public.


  • He or she must be honest
  • False entries should not be made into the book
  • He or she must be hardworking, punctual to work and must show interest in the job
  • He or she must be able to keep records
  • He or she must have a legible handwriting
  • He or she must have retentive memory


  • A single line ruled beneath an amount by the bookkeeper is an indication that a remainder or a total will follow
  • The use of ruler when drawing single or double rulings make for neat accounting work.
  • The Naira and Kobo signs are usually written on top and not in a ruled column.
  • Two zeros are written in the kobo column when an amount to be written does not have the aspect. The kobo column must not be left blank. It should be filled with two zeros
  • When a bookkeeper applies a double ruling across an amount column, this indicates that the work above has been completed and accurate.


  • Accountability
  • Probity
  • Transparency
  • Objectivity
  • Fairness


  1. State five importance of Book-keeping.

  2. Explain the parties interested in Book-keeping.


  1. Explain the term book-keeping

  2. State three importance of book-keeping.



Topic: Source Documents and Journals

PREVIEW: 1.Meaning and Importance of Source Document

  1. Types of Source Document

Meaning of Source Document

Source Document may be defined as original documents on which monetary transactions are

recorded, which provide necessary information for the preparation of books of original entry.

Transactions are the major feature of any business. The business transactions take place when goods and services are transferred from one person to another. There are two types of transaction namely cash and credit transaction. Cash transaction means that money is paid immediately the transaction occurs. Credit transaction means that payment for what is bought or sold is made at a later date.

Importance of Source Document:

  1. To originate data for accounting records.

  2. They act as working evidence or as a proof of occurrence of such transactions.

  3. They enable various books of accounts to be opened.

  4. They serve as a source of information.


  1. Explain the types of transaction

  2. State three importance of source document.

Sub-Topic 2: Types of Source Document

Types of Source Documents:

The major types of Source documents are:

(a) Invoice: This document is usually issued by the seller to the buyer immediately goods are dispatch or services rendered on credit. It shows description of goods bought or sold, quantity, unit price, total cost.

(b) Receipt: This document serves as an evidence of payment for goods bought or sold and services rendered. Receipts are given or received whenever cash is paid or collected for goods bought or sold or services rendered. It shows the following particulars:

(i) The reason for payment

(ii) The amount of money received

(iii) The person who made the payment and to whom the payment was made to.

(iv) The date of payment

(c) Cheque: A cheque is defined as a written order or instruction made upon a bank to pay a specific sum of money to a named person at a specific date. A cheque is a source document used as a means of receipts and payments instead of the physical cash.

Parties to a cheque

There are three parties to a cheque namely – the drawer, the drawee and the payee

  1. The drawer is the owner of the account who issues out or draws the cheque.
  2. The drawee is the bank to whom instruction is given to pay.
  3. The payee is the person to whom the money will be paid.

(d) Debit Note: This is sent by the seller to the buyer when there is an undercharge in the original invoice. A debit note can also be sent when there is an omission or return of goods.

(e) Credit Note: This is normally printed in red to distinguish it from an invoice. It is used when an invoice is overcharged, that is when the buyer is wrongly overcharged.

(f) Petty Cash Voucher: This is a written authorization to pay small amounts in cash. Usually the Petty cashier fills out the voucher and ensures that the person requesting the cash signs it. The petty cashier then disburses the money and files the voucher in the petty cash container.

g. Cash registered tape: A cash registered tape is a machine for quick and accurate recording. This helps when recording volume of transaction. The machine automatically prints receipt on the tape for the customers each time a sale is made.


Book of original entry are books in which data from source documents are first

assembled and classified before being recorded in the principal book of account called the ledger. They include the following:

  • Sales day book or sales journal
  • Purchases day book or purchase journal
  • Return inwards book and
  • Return outwards book
  • The Journal


  1. Source document provides information for (a) preparation of books of original entry

(b) debiting account (c) directors and managers

  1. The two types of transaction are ———— and ————

(a) cash and credit (b) payment and credit (c) credit and debit

  1. A source document used as a means of receipt and payments instead of cash is

(a) Invoice (b) cheque (c) Debit note

  1. A debit note is used when there is ——– (a)overcharged (b) undercharged

(c) credit sales

  1. An evidence for payment is ————- (a) invoice (b) credit note (c) receipt


  1. Explain the term invoice

  2. Differentiate between Credit note and Debit note



Journal is a document which contains the daily records of business transactions. Each

record in a journal is called an entry. The journal is called a book of original entry

because the entries the entries are transferred to a second book.

Types of Journal

We have two major division of Journals: General Journal and Special Journal

  1. General Journal: this is a book that records all transactions (both sales and purchases). It is used when no special journal exists.
  2. Special Journal: these are separate journals that are kept for credit transactions concerning sales and purchases. Types of Special Journals are listed below:
    1. Purchases Journal
    2. Sales Journal
    3. Return Inward Journal
    4. Return Outward Journal

Let’s take each of them one after the other.

Purchase Day Book or Purchases Journal

Purchase Day Book: This is also known as Purchase Journal. It is used to record all daily particulars of goods bought for resale on credit while the cash purchase is entered into the credit side of the cashbook. It is maintained exclusively for credit purchases of goods meant for resale. The particulars of the goods in the purchase journal include the date that of purchase, the seller’s name, the gross amount, the amount of trade discount if given (subtracted from gross amount), the net amount owed to each seller and the total amount of purchases for a given period. Entries are made in the purchase journal from the purchase invoices issued by the sellers.


Debit purchase account with the total amount of purchases for the period. Credit individual seller (creditor) account with the net amount.


Enter these transactions in the purchase journal of Oke & sons for the month of June 2000, and post this to the ledger, June 15 Ekpe & Co.: Invoice No. 102

15 Dozen Eraser at 250k a dozen

30 Rulers at 50k each

40 Writing pad at 10k each

200 Envelopes at 15k per 25

Invoice subject to 10% trade discount

June 16 Bought from Ayi Effiom Bookshop invoice No. 37

10 Reams of foolscap at N350 per ream

6 Dozen Exercise books at N12 a dozen

21 B. Allegro, invoice No. ACP 134 N6,500

Subject to 20% trade discount

Oke & Sons

Purchases Journal for the month of June, 2000

Invoice Folio Detail Total
June 5 EKPE & Co. 102 L8 N N
15 dozen erasers @ 25k a dozen

30 rulers @ 50ok each

40 writing pads @ 10k each

200 envelopes @ 15k per 24

Less 10% trade discount







June 10 Ayi Effiom Bookshop

10 reams of foolscap @ N350 a ream

6 dozen exercise books @ N120 a dozen

37 L9 3,500.00


June 21 B. Alogbo

Purchase of goods

Less 20% trade discount

ACP 134 L10 6,500.00


June 30 Purchase Accounts Dr L12 9,578.85

SALES JOURNAL: This is one of the books of original entry. It is used to record daily sales of goods on credits. The recording of transactions into sales journals is the same as purchase journal except in posting to the ledger. In the ledger, debtors (customers) personal accounts are debited and sales accounts credited in the general ledger with the total amount of credits sales for the period.


Aneke venture is a dealer is cloth materials. Enter the transaction below in his sales day book.

November 2, 2000 Sold to Ibete $ Sons and issued invoice No. 163

200 Meters of Nylon material at N150 a meter

180 Meters of Silk material at N120 a meter

160 Meters of Travara material at N170 a meter

Invoice is subject to 5% trade discount

November 18, 2000 Sold to Ada & Sons invoice No. 46

7 Nylon shirts at N550 each

11 Singlets at N140 each

2 Dozens handkerchiefs at N115 each

Anieke Venture

Sales Day Book for the Month

Invoice Folio Detail Total
Nov. 2 IBETE & SONS 102 L8 N N
200 meters of Nylon @ N150 a meter

180 meters of silk @ N120 a meter

180 meters of Travara @ N1790 a meter

Less 10% trade discount






Nov. 18 ADA & SONS

7 Nylon shirts @N550 each

11 Singlets @ N140 each

2 Dozens Handkerchiefs @ N15

45 L4 3,850



Sales Accounts Cr 80,610


  1. What do you understand by the term Purchase day book and Sales day book?

  2. What is the purpose of each journal?

Sub-Topic 2: Returns Outward Day Book and Returns Inward Day Book:

Returns Outward Day Book:

This day book is also called Returns outward Journal. It is used for used for recording all goods returned to the sellers and allowances granted by them. Entries are made from the credits notes received from the seller. The total amount of the returns and allowances for a period are credited to the returns outwards account in one figure in the ledger while individual items are debited to the personal accounts sellers in the purchase ledger.


The following returns were made to sellers on the dates shown. Record them in the returns outwards journal.

Oct. 5 Returned 1 carbon of biscuit at N250 to B. Ekpe, Credit Note No. 02/13

Oct. 6 Returned to R. Igwe Note No. 02/44 N500

Oct. 8 Received a note from Obongha & Sons on goods returned, Note No.27 N450

Date Supplier/Seller Note No. Folio Amount
Oct. 5




B. Ekpe

R. Igwe

Obongha & Sons

Returns Outwards A/C CR











Returns Inward Day Book:

This day book is also called Returns inward Journal. It is used for recording the particulars of all goods returned by customers and the allowance granted to them. The source document for returns inwards journals is the credit note prepared by the seller who is accepting the goods returned.


The following returns were made by Ibete & Co customer on the date specified. Record the transactions into the returns inwards journal.

Feb.10 Eko & Sons, Note No. 17 N100

Feb.12 Upla Enterprises Note No. 18 N280

Feb.16 Ethothi Ventures Note No. 20 N350

Date Name of Customer Note No. Folio Amount
Feb. 10

Feb. 12

Feb. 16

Feb. 16

Eko & Sons

Upla Enterprises

Ethothi Venture

Retuns Inward A/C DR












  1. Explain the term Return Outward Day Book

  2. What is the purpose of Returns Inward Journal?


Business Studies for Junior Secondary School Book 2 produced by Cross River State Government Chapter 12 pages 62-67


  1. From the following particulars, prepare purchases day book of Eteng & Co.

Jan. 5 Bought goods from Arikpo and Sons

3 Cartons of Biscuit at N450 a carton

2 cartons of Jumbo matches at N350 a carton

The invoice is subject to 5% discount

Jan. 8 Received invoice No. 11 from Abuo Enterprises.

4 dozens of 40 leaves exercise books at N600 a dozen

100 erasers at 5 for N2

20 rulers at N4 each

  1. Credit sales were made to the under mentioned customers. Record the transaction in the sales journals.

April 5 Okoro Enterprises, invoice No. 02/8 N1,020

April 7 Otan & Co., invoice No. 02/12 N2,500

April 9 Ogbodin, A.A. invoice No. 02/16 N1,350

April 10 Agbo & Sons, invoice No. 02/20 N3,150

April 15 Peterson invoice No. 02/21 N1,235

  1. A Credit note was received from Onete Ukam by E. Ina. Below is the credit note No. 102:

1 Carton of biscuit at N350 N350

25 Empty cases returned at N15 each N375


You are required to prepare returns outward journal

  1. Record the following transactions into the returns inward journal

June 6 O. Etim, Note No. 41 275

June 8 A. O. Aduquo, Note No. 43 330

June 9 Onda Enterprises, Note No. 44 250

June 11 Owal & Sons, Note No. 46 315


  1. Define the term cheque.

  2. State three types of source document

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Government, Chapter 8 & 9 pages47-54


Double Entry book-Keeping


  1. Meaning of double entry,
  2. Double entry treatment of asset
  3. Double treatment of liability,
  4. Double entry treatment of expenses,
  5. Meaning of Journal
  6. Meaning of Ledger
  7. Classes of ledger
  8. Classification of accounts: real, personal and impersonal

Meaning of Double Entry

The fundamental concept of accounting is that every business transaction in money or money-worth has two effects: the receipts of a benefit by one account and the giving of a like benefit by another account. Thus, if a value is given, it is also received. The meaning of this is that where there is a giver, there is also a receiver who is called a debtor. The first Golden Rule of bookkeeping therefore states that, you debit the receiver and credit the giver.

In the process of debiting the account receiving the value and crediting the account surrendering the value, you end up recording every transaction twice, once as a debit entry and again as a credit entry. In effect, every credit entry must have a corresponding debit entry, and every debit must have a corresponding credit entry.



The double entry system divides the page into two halves as shown above. Every business that is established must have assets, liabilities, and capital

An Asset is anything of value that is owned by a business. A liability is an amount owed by a business to others, while Capital is the total investment in a business.

Therefore, an account is opened for every asset owned by a business and every liability owed by the business. Each account has a separate title and page given to it


Examples: Olundi, a wood seller, started business on January 1 with N5000 in cash. He purchased the following to enable him run the business.

Jan 9. He bought furniture from Londa & Co. Ltd. For N2000 in cash

Jan 12. He bought office equipment from Banuna & Co. Ltd. For N1000.


Jan 1. B. Olundi started business with N5000 cash as capital. With this introduction of N5000 into the business, two accounts should be opened. The capital account gave the money and should be credited, while the cash account received the money and should be debited.

Jan 9. On the purchase of furniture from Londa & Co. Ltd. For cash, the cash account will be credited because the account gave out the money, while the furniture Account will be debited for receiving the value of N2000.

Jan 12. He purchased office equipment from Banuna & Co. Ltd. The office account will be debited for receiving the value of N1000 while the cash account will be credited for giving the money.


Jan 1. To capital a/c 5000.00 Jan 9.Furniture 2000.00
Jan 10.Office equipment a/c 1000.00
  31 Balance c/d 2000.00
5000.00 5000.00
Feb 1 2000.00


Dr Cr

Jan1. To cash a/c 5000


Dr Cr

Jan 1. To cash a/c 2000.00


Dr Cr

Jan12 to cash a/c 1000.00


Liabilities are debts owed by a business to others. For example, if Mr. Akinola sells good to Mr. Adewale worth N10,000 on credit. Mr. Akinola must keep a record to show that there is some money due from Mr. Adewale. Credit transactions involve the opening of Personal Account. A personal account is an account which bears the name of the a customer or a supplier.


January 10 Bought on credit from Amadu Electronics Company, an electric Cooker worth N10,000

January 24 Sold on credit goods worth N25,000 to B. Solape

The two accounts will be opened for the credit transactions as follows

Dr Amadu Electronics Company Account Cr


Jan 10 Purchases 10,000

Dr Purchases Account Cr


Jan 10 Amadu Electronics Company 10,000


Jan 31 Balance c/d 10,000

Dr B. Solape Account Cr


Jan 24 Sales 25,000

Dr Sales Account Cr


Jan 31 Balance c/d 25,000


Jan 24 B. Solape 25,000


Expenses mean spending money belonging to a business to gain more money. It is recorded on the debit side of the books.


June 12 Vehicle expenses of N2000 paid by cheque.

Solution: Credit Bank account, and debit Vehicle expenses account

Dr Bank Cr


Jan 10 Vehicle expenses 2,000

Dr Vehicle Expenses Cr


June 12 Bank 2,000

Meaning of Ledger

A ledger is book used to record the weekly and monthly transactions from the journal entries. It is therefore called a book of second entry because transactions are transferred from the journal entries to it.

Ledgers are classified into:

  1. Real Account
  2. Personal Account
  3. Impersonal Account


Accounts can be classified into two as stated below: Personal accounts and Impersonal accounts.

(a) Personal Accounts: These accounts refer to particular persons while accounts that are not personal are known as impersonal accounts. Examples of personal accounts are debtors and creditors accounts in any business.

(b) Impersonal Accounts: The accounts relate to intangible and material things. It is sub-divided into real accounts and nominal accounts.

(i) Real Accounts: This refers to things you can see physically such as the assets of a business which may be motor cars, furniture, buildings, lands, machinery etc.

(ii) Nominal Accounts: this deals with intangible things which may be revenue, losses, expenses, goodwill, profits and discounts.


  1. Describe the two sides of Account

  2. Explain the two ways in which account can be treated.

Reading Assignment:

Business Studies for Junior Secondary School Book 1 produced by Cross River State Government, Chapter 8 pages 46-49.

Weekend Assignment:

Objective Questions:

  1. The two sides of Account are ———– and ———–

(a) Debit and Credit side (b) right and left side (c) credit and right side

  1. The type of account that deals with intangible and materials things is ——-

(a) Real account (b) Nominal account (c) impersonal account

  1. The Debit side of account records ——— (a) value given out (b) value received (c) value taken

  2. The following parties are interested in book-keeping except (a) shareholders (b) Directors and Managers (c) Farmers


  1. What is Double Entry in Book-Keeping?
  2. Show the accounts to be debited and those to be credited in the following cases:
    1. Paid rent by cheque
    2. Paid wages by cash
    3. General expenses by cash
  3. Enter the following transactions in the appropriate accounts in double entry form and show the balance as of 10th June

June 1 Started business with N200,000.00 in cash

June 3 A. Amadi loaned the business N50,000.00 and remitted the money by cash

June 5 Bought goods for resale on credit for N150,000 from B. Balogun

June 7 Bought bicycle for the use of the company and paid by cash N15,000.00

June 8 Cash Sales N20,000.00

June 10. Paid wages in cash N25,000.00



Topic: Introduction to Shorthand


  1. Meaning and Brief History of Shorthand
  2. Importance of Shorthand

Sub-Topic 1: Meaning and Brief History of Shorthand:

Meaning of Shorthand:

Shorthand can be defined as the art of representing spoken sound (words) by written signs. The sounds heard in English words are represented by “sign” in shorthand. Therefore, shorthand is “phonetic” or “phonographic” that is, it deals with pronunciation according to sounds and not spelling.

Examples are (i) Palm is written as p-ah-m

(ii) Coal is written as k-oh-l

(iii) Pale is written as p-ay-l

Brief History of Shorthand:

As far back as the 4th century B.C. the growth of shorthand could be traced by the Egyptians, Hebrews, Persians and Greeks. During the time of the Roman Empire, shorthand was generally used to record the history of the very popular and powerful nation. Credit for the first Latin system of shorthand is often given to Marcus Tulles Trio (about 103 B.C.), a Roman slave who was freed by his master Cicero. His Latin shorthand lasted for about 100 years. The reign of Emperor Augustus at the time of Jesus Christ generated a great deal of interest in the coming alive of shorthand. Emperor Titus, Julius Ceasar, a host of Roman bishops, statement orators, poets and philosophers were accomplished shorthand writers..

Modern shorthand started in the 16th century and it led to the achievement of Englishmen. It has been recorded that the English cleric, Timothy Bright (1551-1615), produced a system which he titled “Characteristic” the art of short, swift and secret writing by character. He is generally acknowledged as the inventor of modern shorthand. About fourteen years later John Wills (1902) wrote alphabetical shorthand which was entitled “The art of stenography or short writing by spellings characterize”. He is also designated as one of the inventors of modern shorthand. In 1962, William Cartright (1611 – 1643) a dramatist, produced a system which was further advance in shorthand development popularly known as “Stenography”. In 1707, the stenographer and writing master ‘William Manson’ (1672 -1709) produced his work on shorthand titled ‘La Plume Volante, or the art of shorthand hnyrvid’. Manson’s method was used to record sermons and to translate the Bible in the years following the reformation. The poet and hymn writer, John Bryon (1692-1763) during his life-time, contributed greatly to the development of shorthand by improving the systems that were in existence.

Then next remarkable achievement in the development of shorthand was that of the English Stenographer, Sir Isaac Pitman (1813-1897) who advocated spelling reforms and devised numerous shorthand systems. In 1837, at the age of twenty four (24), Pitman was a student studying the Taylor system of shorthand published in stenograph sound hand. This was due to the weakness he noticed in the Taylor’s system.

Despite the improvements and modernization seen in the previous systems of shorthand that had existed, the Pitman shorthand system stood its ground as nations began to realize and deemed it necessary that records, facts and information concerning government should be preserved. The greatest encouragement to Pitman shorthand was made by the British Parliament in 1772 when they allowed shorthand writers to attend their parliamentary debates. This was when England was beginning to administer a vast empire which resulted in the spread of English language for administrative purposes and this in turn enhanced the spread of Pitman’s shorthand which later became a recognized subject of instruction in vocational education, hence the publication of the first edition of Pitman’s shorthand in 1837. In 1840, the second edition of his work appeared under the title ”Phonography” being a new and natural system of shorthand.


  1. Define Shorthand.

  2. State the years that can be associated with the following names in the development of shorthand:

(a) Marcus Tullius Trio

(b) Timothy Bright

(c) John Wills

(d) Isaac Pitman

Sub-Topic 2: Importance of Shorthand:

The importance and the objectives of shorthand cannot be over emphasized. Shorthand is a very useful skill for everyone.

  1. It can be used for taking down notes in class and in public lectures.

  2. It can be used as a means of earning livelihood.

  3. Knowledge of shorthand assists students to take dictation with enough speed and accuracy.

  4. It develops in the student the ability to know and identify various sounds heard and record same in shorthand.

  5. It enables students to improve their knowledge of English, spelling and punctuation before transcription is introduced.

  6. It develops desirable stenographic traits and habits in students to enable the students appreciate the opportunity open to stenographers.


Shorthand signs are known as outlines which consist of strokes, dots and dashes. Shorthand stroke are usually written in pairs. Light sounding consonants are represented with light strokes while heavy sounding consonants are represented with heavy strokes.

In Pitman’s shorthand, there are twenty four consonants or stroke, twelve vowels and four diphthongs

In Pitman shorthand, speed in writing and reading are achieved by following a coherent and comprehensive system. Each sound has its sign, and sound of the same family have signs with an appropriate family likeness so that with a little practice, the sign seems to produce themselves like snapshots from the sounds and the sound themselves seems to speak from the written page.

Some of the systems to be used in writing good and accurate shorthand will include: pairing of consonants, elimination of vowel signs and position writing.


  1. Define Shorthand.

  2. State five importance of shorthand.


Business Studies for Junior Secondary School 2 produced by Cross River State Government

chapter 14 pages 79-82


  1. Shorthand is written according to ———— (a) signs (b) sound (c) spellings

  2. The first Latin Shorthand was written by (a) Isaac Pitman (b) Marus Tullius Tiro

(c) Timothy Bright

  1. Who produced the system of shorthand titled ‘Characteristic”? (a) Julius Ceasar (b) Timothy Bright (c) William Cartright

  2. What was the title of the art of shorthand used to record sermons and to translate the Bible? (a) Characteristic (b) Semography (c) La Plume Volante

  3. Which of the Shorthand has become a recognized subject of instruction in vocational education? (a) Trio’s shorthand (b) Manson’s shorthand (c) Pitman’s shorthand


  1. Pitman shorthand was introduced in what year and by whom.

  2. Why is shorthand so important to you as a student?

WK11. Revision

Wk12. Examination