California Career and Technical Education Standards

• FB.A.A4.2 Know cash management techniques.
• FB.FS.10.1 Know cash management techniques, including bank reconciliation and cash controls.

California Academic Content Standards (Reinforced)

• ELA.9-10.R.CAGT.2.5 Extend ideas presented in primary or secondary sources through original analysis...3
• ELA.9-10.R.SFIM.2.1 Analyze the structure and format of functional workplace documents, including th...32
• M.6.NS.2.3 Solve addition, subtraction, multiplication, and division problems, including th...1
• M.7.NS.1.7 Solve problems that involve discounts, markups, commissions, and profit and comp...22

• Anticipatory Set - Hooks / Set

  Give students an example of a personal bill: phone, credit card, etc. 

  Play video from “married with children”

  http://www.youtube.com/watch?v=v0Ow5FebcuM

  Oh man we're broke, cha cha cha
  Everybody flat broke, cha cha cha
  Living in the gutter, cha cha cha
  Early grave, cha cha cha
  Alright now, everybody - shoot me on bill paying

  Ask how nice it would be if we could pay less for the things that we buy if we paid them early.

  Give them a copy of a typical business invoice.

  Ask students to identify how they are similar and how they are different.

  Ask how the invoice is similar to and part of the document ordering cycle previously covered that started with the ordering of merchandise with the Purchase Order and the receipt of merchandise and Packing List.

  • The Bill Paying Song [ Watch Video ] [ Download Original Video ] Video clip for "hook"
  • Personal Bill Example [ Download ]
  • Sample Invoice [ Download ]
• Lecture - Lecture

  Discuss the concept of “terms” on the invoice. Explain that businesses use terms to encourage their clients to pay their bills early, as opposed to their bill from the phone company which does not give you that option.

  Explain the format of the terms box on the invoice for example 2/10 net 30 and define the meaning and importance of each number. This is form is known as "ordinary terms"

  Explain the importance of other information on the invoice such as “Gross Amount” and “Date” and the date that they received the merchandise and their relation to the terms and need for them in calculating the final discounted amount.

  • Anatomy of discount terms [ Download ]
• Demonstration - Demo / Modeling

  Refer students back to Business invoice previously handed out to students and have one on the overhead projector.

  Walk students through the process of identifying the pertinent pieces of information:

  • Date
  • Invoice Amount
  • Terms.
  • Calculate the discount
  • Calculate the date the discount is due by

  Calculate when the net amount is due if the discount is not taken
• 4. Checking for Understanding - Check Understanding

  Write an example of a common cash discount terms (Ex: 4/25 net 35) on the board and ask students to respond as I point to the portion and state definition of each of the  symbols and what they mean. Ask individual students as needed to make sure of comprehension.
• Individual/Group Work - Group Work

  Hand out worksheet with several examples of common cash discount terms.  Have students complete using the information to calculate the amount of the discount, and the dates due for both the discount and net amounts.

  Walk around class making sure that students get the correct answers. Students will assist each other when appropriate.

  • Cash Discounts practice worksheet [ Download ] Use this for student practice
  • Worksheet Key [ Download ] This is the Key for the worksheet
• Discount Terms Modifiers - Lecture

  Students will now be exposed to common additions that businesses add to the common cash discount terms that we know. These common modifiers include:

  • Extra Terms
  • ROG Terms
  • EOM Terms
  • As Of terms
  • Common Discount Terms [ Download ]
• Modified Terms Practice - Group Work

  Hand out worksheet with several examples of modified cash discount terms.  Have students complete using the information to calculate the amount of the discount, and the dates due for both the discount and net amounts using examples of all these terms:

  • Extra Terms
  • ROG Terms
  • EOM Terms
  • As Of Terms

  Walk around class making sure that students get the correct answers. Students will assist each other when appropriate.

  • Modified Cash Discount Practice [ Download ] Use this to practice modified terms
  • Modified Practice Key [ Download ] Key for practice
• Wrap up - Closure

   

  Ask students to brainstorm what the typical businness purchases each year in dollars.  Is it $10,000, $50,000, $100,000, more?  What could the business do with the dollars saved assuming a 2% discount was available on all purchases?  Lower prices, hire workers, other?

  Ask students what type of school resources that could be purchased if the school saved similar amounts on all purchases

   

  How would the lyrics to Al Bundy's song be different now?

  How about:

  Oh man we're liquid now, cha cha cha
  Saved me some mad cash now, cha cha cha
  Lots of perks for employees, cha cha cha
  In discounts in now believe, cha cha cha
  Alright now, everybody - dance with me!