In this first of eight free online accounting lessons, accounting information and double-entry bookkeeping are defined. The differences between financial and managerial accounting is addressed. The four basic financial statements (income statement, statement of cash flows, statement of changes in owners' equity and balance sheet) are introduced and the major financial statement components are explained. Additional concepts covered include permanent (real) and temporary (nominal) accounts and four types of accounting transactions. Two exercises with solutions are also available.
Type of Material:
Individual study and review for examination
Identify Major Learning Goals:
The purpose of this module is to provide a broad overview of accounting terminology, basic relationships, and financial statement concepts.
Target Student Population:
High school or 1st year accounting course for students (accounting and non-major accounting students) with no prior knowledge of accounting
Prerequisite Knowledge or Skills:
No prerequisite accounting knowledge is needed.
This online document provides a broad, overview, type of introduction to accounting.
For the content provided, the module is self contained in that all of the basic concepts are covered.
The presentation is clear and concise.
For individual opposed to teaching accounting using debits and credits, this site focuses on increasing and decreasing accounts.
A link to a glossary of terms is included.
At the end of the material, links to additional chapters of content exist and cover on the following topics: Deferrals, Double-Entry Accounting, Accruals, Merchandise Companies, Advanced Accruals, Inventories, and Long-Lived Assets.
Finally, users can obtain free study notes by registering for the SimpleStudies newsletter.
The definition of the cash flow statement should contain reference to it being a period statement.
Additional exercises are only available for a fee.
The truncated explanations of some terminology used owithin the module differ from the correc definitions given in the links provided.
While not necessarily a problem, users do need to be aware that the statement of changes in equity is not the typical statement found in most introductory texts. The one illustrated is a combination of a statement of changes in owners' equity and retained earnings.
The site should probably indicate that the content included only pertains to U.S. GAAP.
Potential Effectiveness as a Teaching Tool
The module is efficient assuming a broad overview of accounting and financial statements is the primary purpose for its use.
Prerequisite understanding is not required to use this module.
The materials reinforce concepts progressively, building on prior concepts, as well as demonstrating relationships between concepts.
For the two self-test exercises, explanations are provided for incorrect answers.
Links to external sources give learners flexibility in terms of how far they want to pursue a specific concept.
Aside from the topic titles in the table of contents, learning objectives have not been explicitely identified.
The explanations of revenue, assets, and expenses can be misleading because liabilities are ignored in the explanations.
The examples and illustrations that attempt to explain how revenues and expenses affect retained earnings may be misleading. They give the impression that the retained earnings account is increased (revenue transaction) or decreased (expense transaction) immediately instead of at the end of an accounting period.
Only two multiple-choice questions have been included to test understanding. One is a bit complex given the nature of the material.
Ease of Use for Both Students and Faculty
Given the site is primarily text-based, the layout is very nice and pleasing to the eye.
White space has been used effectively. Great graphics. The text is well written and the graphics includes are excellent.
The site has made good use of internal links.
Tabs to next and previous pages makes navigation easy. The Lecture Contents index in the right frame also enhances navigation throughout the whole site.
A link to a feedback forum has been included for users to make suggestions to the site creators.
For the most part, this module lacks interactivity. It only has two multiple-choice question type free exercises.
Other Issues and Comments:
This lesson is one of several presentations/tutorials available on this web site. The module is intended to be a broad overview of the topic.
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