Peer Review

Introducing The Accounting Equation With M&M’s®

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Reviewed:: Jul 19, 2022 by Business

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Ratings

Overall Rating:

Content Quality:

Effectiveness:

Ease of Use:

Overview:

On the first day of Principles of Accounting classes, students learn the fundamental accounting equation from which all financial accounting practice emerge. The accounting equation is the criterion by which companies are valued and by which company performance is measured. This activity simplifies assets, liabilities, and owners’ equity to the representation of M&M’s® in order to focus on overall patterns of company structure and provides further illustration using real public U.S. companies’ assets, liabilities, and owners’ equity.

This assignment allows students to develop individual understanding of the accounting equation using randomized packs of M&Ms. The students manipulate the equation based on the color of the M&Ms and questions about the meaning of each student’s results within the context of business. The second stage of the assignment is to apply the fundamental accounting equation to real companies’ financial statements and discuss the results in a classroom format.

Type of Material:

Assignment

Recommended Uses:

This activity is best used in class and in small groups with instructor lead discussions.

Technical Requirements:

The assignment is a pdf document that can be viewed in MS Edge, Google and Firefox browsers. In any browser, the document can be downloaded. It is also available as a presentation without needing a specific platform.

Identify Major Learning Goals:

Explain the accounting equation in randomized situations.
Apply the results of the randomized situations to accounting concepts.
Extend the concepts of the accounting equation to real-world companies.

Target Student Population:

Lower-division accounting students, professional

Prerequisite Knowledge or Skills:

None

Content Quality

Rating:

Strengths:

The material clearly sets out the purpose and goals of the assignment both for the user of the materials and ultimately the student who will participate in the activity.
The material explains, in depth, the pedagogical basis of the activity.
The material lays out a step by step application for the instructor to follow.
This is a research-based, hands-on explanation of the accounting equation using randomized packs of M&M candy.
It allows students to manipulate the accounting equation in a tactile and visual method, and then connects the activity to real-world companies.

Concerns:

None.

Potential Effectiveness as a Teaching Tool

Rating:

Strengths:

The material plainly states the learning goals for students.
The use of ordinary and familiar materials (M&Ms) makes the assignment easy to understand, follow and produce the desired learning outcomes.
A complex and fundamental concept of accounting: the accounting principle, is made concrete with the use of colors and circles for sorting to exemplify the accounting principle.
This is a highly effective teaching tool that could be used to teach the fundamental accounting equation using a kinesthetic learning mode.
The knowledge is then extended to apply to real-world business financial statements to reinforce concepts.

Concerns:

The assignment would not be suitable for use as an at-home activity.

Ease of Use for Both Students and Faculty

Rating:

Strengths:

The material gives step by step instructions on how to introduce and use the activity.
The material is in narrative text format with graphs and charts showing possible flowthrough activities and results as the assignment progresses.
There is no required software as this material can be downloaded as a pdf.
This assignment is easy to use, engaging and visually appealing.
The interactive nature of the assignment allows students to learn the fundamental accounting equation.

Concerns:

It is unclear whether the charts and graphs are accessible to screen readers.
There is a concern with students who are color-blind or otherwise visually impaired. This first part of the exercise would not work for those students as written, but could be adapted using student teams in which one student is not visually impaired.

Other Issues and Comments:

This material is an excellent tool for introducing the Accounting Equation especially in an undergraduate class.
There is more than sufficient information for the instructor about initiating, conducting and reviewing results with students.

Creative Commons: