The objective of this simulation is to illustrate how the profit & loss account is affected by changes in the internal and external environment of the firm. The simulation allows users to change a selection of inputs to identify the consequences on turnover, cost of sales, gross profit, net profit, profit on ordinary activities before taxation, retained profit and all the other sections that are included within the profit & loss account.
The goal of this site is to provide students with the opportunity to modify inputs and then see how these changes flow through the profit and loss statement.
Target Student Population:
British students who have a basic background in accounting principles.
Prerequisite Knowledge or Skills:
Accounting terminology and an understanding of ratios and their significance.
Type of Material:
This module appears to be constructed as an in-class teaching exercise although it could also be used as a homework assignment.
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Evaluation and Observation
For British students the module would appear to be a good vehicle to move beyond basic accounting to see how modifications in the environment lead to changes in the profit and loss statement. The module can help students move beyond the memorization stage to the usability stage of accounting information.
This module may be difficult for students to use on their own. No really good overview and introduction exists. The generic purpose of the model is provided, however the related material contained in the module is inadequate. Clarity is lacking. Concepts are not demonstrated nor are ideas and problems illustrated. Integration and summarization is also lacking.
Potential Effectiveness as a Teaching Tool
Well implemented from a technology standpoint. A generic overview of the simulation is provided. A few study questions are suggested.
Little is provided to make this module a potentially effective teaching tool. No objectives or prerequisite knowledge is specified. Concepts do not build progressively, nor are relationships demonstrated between concepts. This module merely provides a shortcut to number crunching certain given ratios. For U.S. students this module would difficult to use. Valuations are denoted in British pounds. Numbers align left rather than right making them difficult to read for a person used to seeing them aligned right. Having no commas in large numbers also makes the figures difficult to interpret.
Ease of Use for Both Students and Faculty
Since this module is part of a series of simulations, no instructions exist. Although visual appeal, interactivity, and design quality are adequate, the lack of instructions seriously hinders the module's ease of use.