AIR Summer 2011

Using The Schrader-Malcom-Willingham Model to Explain Journal Entries

Students new to accounting often have great difficulty journalizing transactions. The Schrader-Malcom-Willingham Model provides a simple recording method based on the concept of the transaction itself. Using this method, students should never again have trouble recording transactions, even those not previously encountered. This paper describes the use of the Schrader-Malcom-Willingham Model to teach debits and credits to beginning accounting students.

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Using Spreadsheet Software to Teach the Reciprocal Method of Service Department Cost Allocation

Accounting textbooks typically cover three methods for allocating service department costs: (1) the direct method, (2) the step-down or sequential method and (3) the reciprocal method. Both the direct and step-down methods are easy to apply, but both of these methods are flawed because they do not allow the full allocation of reciprocal service costs. By contrast, the reciprocal method allows complete freedom in allocating service department costs to other service departments as well as to operating departments. Unfortunately, the reciprocal method is often overlooked in the classroom because its application requires solving a series of simultaneous equations through the use of matrix algebra.

This paper presents a multiple department service cost allocation problem. We first “solve” the allocation problem using the direct and step-down methods, and then fully demonstrate how the reciprocal method can be applied quickly and easily using an Excel spreadsheet.
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Developing Research and Writing Skills for First-Year Accounting Students in an Organizational and Social Context

The first year of tertiary studies and their exposure to what is the first year accounting curriculum can be the deciding factor that influences whether students take on more accounting courses and subsequently pursue accounting as a career. Even if this were not the case, it is important that a student deciding to follow a career in the management, business or commerce area should get a sound foundation on the significance of understanding accounting information and the ubiquitous role that it plays; that is, its importance not just from a purely business perspective but also its role in wider society. The importance of being able to understand financial information to be a more effective manager and decision maker cannot be underestimated as it permeates all facets of business.

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Redesign of an Online Managerial Accounting Course: Lessons Learned

The growth in online education has exploded in recent years. Every year since 2002, the rate of college students taking online courses has increased at a compound rate of 13% annually, while traditional higher education enrollments have increased only 2% annually during this same time. Over 5.6 million students took at least one online course in the fall of 2009 (Allen and Seaman 2010). When these courses were first made available, most of the suppliers were for profit universities. Faculty in traditional institutions often viewed online education as a product for purchase, where students could buy course credits with less rigorous demands in the scope of work required and in assessment. The biggest change in recent years is the number of traditional universities that have joined the ranks of online education. Faculty senates continue to vote to set criteria for online courses so that the standards of the institution offering the courses remain high and the online offerings do not somehow tarnish the reputation of the university. Yet administrators, learning scientists, instructional designers, and students from all over the globe continue to seek online course offerings in increasing numbers, for a variety of reasons.
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The Conceptual Framework for Financial Reporting and a Pedagogical Approach Thereto

In line with these comments by the Chairman of the International Accounting Standards Board (IASB), principle-based IFRS education (figure 1), has been proposed by Barth (2008) and Coetzee and Schmulian (2011). The foundation of this pedagogical approach is that students ought to be taught the concepts as contained in the Framework for the Preparation and Presentation of Financial Statements (1989) (now replaced with the Conceptual Framework for Financial Reporting (2010)1). A Conceptual Framework is the foundation on which Financial Reporting Standards are based. When students understand the foundational concepts contained within a Conceptual Framework, they will be able to apply judgment in accounting for economic events (Barth 2008). Further, given that a Conceptual Framework is not subject to as frequent revision as the Financial Reporting Standards which it underlies, the students are provided with a more enduring knowledge of financial reporting.

This article considers the content of the Conceptual Framework for Financial Reporting, prior to proposing a pedagogical approach to the teaching thereof.
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Teaching Judgment and Ethics in First-Year Accounting: A Good Lecture

Students in first-year accounting often leave with the impression that the numbers in financial statements are fixed and would be the same regardless who was producing them. This impression is fostered by assignments that always result in a right or wrong answer with no room for variation. Most students understand that GAAP are the set of rules, practices, and conventions that describe what is acceptable financial reporting for external stakeholders, but they may find it surprising that a single, normal, everyday accounting choice may be either ethical or unethical.

The difference between an ethical and an unethical accounting choice is often merely the degree to which the choice is carried out. The problem with many accounting judgments is that there is no clear limit beyond which a choice is obviously unethical. Thus, a perfect routine accounting decision, such as expense estimation, may be illegal if the estimated amount is extreme but perfectly ethical if it is reasonable. GAAP does not tell managers what specifically is normal and what is extreme. It is more like a speed limit sign that just says “Don’t Drive Too Fast!”

Here is an example lecture in six steps that illustrates the role of judgment in ethical financial reporting that you can use in class that any first-year student can understand.
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Sustainability Accounting and Reporting

Sustainability education or learning involves more than providing expert knowledge to inform students about sustainability issues. It is about encouraging transformative learning—the capacity to construct knowledge to challenge practice, to critique and debate sustainability issues. The basis objective of teaching “Sustainability” in the first year accounting course is to introduce basic concepts and motivation for sustaining management accounting and reporting.

Students would become acquainted with major frameworks and would be able to discuss relationships of sustainability to financial accounting and prepare students to carry out these concepts into management and cost accounting courses. By incorporating sustainability into the beginning financial accounting course helps students learn to think critically by giving them a range of questions to consider at the same time as the traditional problems and questions of the accounting curriculum. Several case studies could be incorporated into the financial accounting class that deal with activities, methods and systems to record, analyze and report environmental and economic uses that constitute the dimensions of sustainability.
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Accounting Instructors’ Report, Summer 2011: Table of Contents