This module, developed in Spain and available in English and Spanish, describes the basic components of a balance sheet and provides a couple of exercises to help demonstrate balance sheet classifications. The module does not use the definitions commonly used in the U.S. from FASB’s Conceptual Framework or the common categories for assets, liabilities, and equity commonly applied in U.S. GAAP.
To gain an understanding of the basic components of a balance sheet.
Target Student Population:
Introductory financial accounting in high school or college.
Prerequisite Knowledge or Skills:
Understanding of the accounting equation and recording of financial events.
Type of Material:
Individual homework or review
Evaluation and Observation
The tutorial is divided into three sections, the tutorial and two exercises. The tutorial section is further divided into three sections: the balance sheet, liabilities, and assets. Accounting concepts and terminology is based on the country of origin, Spain. The module is clear and concise and utilizes great graphics. The two account classification exercises serve as a nice reinforcements to self-assess the concepts covered. The time to complete the tutorial is estimated at 30 minutes.
Some of the terminology, e.g. “materialization” may be confusing to a non-Spanish audience. The module does not use the definitions of assets, liabilities, and equity from either the FASB Conceptual Framework or the IASB Conceptual Framework.
Concerns with Exercise 2 involve the examples used to illustrate each situation:
Logic is not provided in feedback for why machinery is a non-current asset.
Q4 - Raw materials purchased with long-term debt does not make sense. In this example no provision is shown for the purchase of raw materials with cash.
Q5 - Sales of stock (inventory) for collection rights (receivables) does not include the impact on equity from selling the goods. Only the decrease in stock (inventory) is included.
Q6 - Debt with suppliers for the purchase of raw materials does not show increase in stock (inventory) just increase in current assets. Question 5 divides current assets into three categories: cash and banks, collection rights, and stock. As a result, this example is inconsistent with the earlier presentation.
Q7 - Profit generated does not illustrate collection rights increasing just the overall increase in current assets which is also inconsistent with sub-classification scheme used in question 5.
Q10 - Debts of the company with personnel for salaries accrued...is awkwardly worded. The example shows current assets increasing when it should be at best a decrease in equity as a result of an expense incurred.
Q11 - Loans repayable in 3 years is identified correctly as a non-current liability. However the example classifies them incorrectly as a current liability which is offset to current assets.
Potential Effectiveness as a Teaching Tool
The module identifies learning objectives, reinforces concepts progressively, and is very efficient. The perspective advanced on slide 2 is interesting in that it suggests reviewing the balance sheet by analyzing liabilities first. Exercise 1 provides the user with multiple attempts prior to providing the solution. Exercise 2 consists of 12 multiple choice questions with both positive and corrective feedback provided, as well as animated illustrations. Content is most directly applicable to students studying accounting in Spain.
Some of the content is probably to high level for high school or first year college/university and may be more appropriate for graduae school for non-accounting students. For instance, reference to bonds and derivatives, value adjustments, subsidies, booked investments, deferred tax assets, and short term debt with credit institutions.
The Introduction to the Balance Sheet should have a reference to equity on slides 2 and 3. Similarly, the heading Liabilities, should be Liabilities and Equity, otherwise it implies that equity is a liability rather than an independent balance sheet account category.
Grammar is bit off on one or two slides. Some sentences are very run-on and overly wordy.
Exercise 1 has confusing goals. The exercise has learners dealing with both classification of accounts and balancing the accounting equation at the same time. Clang associations occur in several instances between the account name and classification, making the answer overly obvious. The nature of the account provisions may be unclear.
Ease of Use for Both Students and Faculty
Nice graphics on slides and exercises. Good use of pop-ups in exercises. The menu that allows a user to choose where to go in the site is nice specially for revisits. The use of animation to illustrate the examples in exercise 2 is novel. Interactive and high quality design especially the format of Exercise 2. The module is engaging and interactive.
The browser used can be problematic. The tutorial did not display all of the graphics when IE8 was used.
Other Issues and Comments:
Uers need to be aware that the module does not address U.S. GAAP. The tutorial may not function with all browsers.