Leveraging Spreadsheets to Learn the Mechanics of Accounting

Abstract

Abstract: As teachers in Introductory Financial Accounting courses, we frequently face the question of whether to teach the mechanics of the accounting process or to focus on analyzing the financial statements themselves. The truth of the matter is that students who understand the mechanics of the accounting process are far more successful at analyzing financial statements than those who have never learned the mechanics. Thus, the question becomes: How can one simply introduce the mechanics of accounting without burying students (especially those who do not intend on becoming accountants) in the detailed accounting terminology of debits, credits, and T-accounts? We present a simple and yet effective means of achieving this objective. Our students create spreadsheets to capture the accounting entries and to generate financial statements. Here we describe the features of the spreadsheet and discuss the advantages that this method enjoys over more traditional ways of teaching the mechanics of accounting.