Alene G. Helling
Stark Technical College
Past issues of Accounting Instructors’ Report included discussions and demonstrations of a “Journal Entry Approach for Calculating Cash Flows from Operating Activities—Direct Method. “Here is a “mock” journal entry for “Computing Cash Flows from Operating Activities—Indirect Method.” First, a very simple situation: Net Income of $20,000. Assume the only current account is Accounts Receivable, which increased $5,000.
Angela H. Bell
Jacksonville State University
Adjusting income statement items from the accrual basis to the cash basis is a difficult subject for Principles of Accounting students to grasp. Students tend to learn new material more readily when they are able to incorporate it into material they have already mastered. This was the objective behind a new approach of determining Cash Flows from Operating Activities (Direct Method) for the Statement of Cash Flows.
Nicholas A. Genovese, Jr.
I read, with considerable interest, in the Accounting Instructors’ Report, the article entitled “A Journal Entry Approach for Calculating Cash Flows from Operating Activities (Direct Method)” by Angela H. Bell, Jacksonville State University.
I, too, have found that the Statement of Cash Flows causes much confusion for accounting students. It has been my experience that many students cannot prepare a SCF and resort to memorizing the mechanics long enough to take a test. I have traced this inability to prepare a SCF to a lack of a good, solid understanding of the concept of
the statement and have attempted to avoid this failure by painstakingly explaining its concept before discussing the mechanics.
David Lipscomb University
Many people see the stereotypical accountant as a numbers-cruncher who can organize, classify, and report details in a manner so illogical that only fellow accountants can understand them. The accountant does not, they claim, possess the more important reasoning skills that are necessary for real-life problem solving and business leadership.
Though stereotypes are rarely founded in fact, this one may hold a grain of truth. Even the Big Eight seem to agree that accountants have failed to “focus on the broader skills that will support a lifetime of professional success’.’ In their Perspectives on Education: Capabilities for Success in the Accounting Profession (April 1989), representatives of the Big Eight considered the often narrow focus of accounting education and concluded: “Passing the CPA examination should not be the goal of accounting education. The focus should be on developing analytical and conceptual thinking—versus memorizing rapidly expanding professional standards”
The Big Eight expressed a familiar concern: accounting students are taught to memorize correct answers rather than to apply thinking processes to the problem at hand.
Belverd E. Needles, Jr.
Most accounting instructors focus on planning activities that take place in the classroom. This is natural because, in recent years, accomplishing objectives during class time has become more and more of a challenge. One reason is that the amount of material that we must cover seems to be increasing. For example, many schools are trying to integrate topics such as ethics and international accounting into the curriculum. And with the trend toward more extensive coverage of managerial accounting in the principles course, the content of financial accounting has been compressed into a shorter period of time. Second, the effort to broaden students’ capabilities has led, in some schools, to an increase in objectives that focus on communication and analytical skills. Integrating activities that require more open-ended problem solving and more oral and written communication can take up large amounts of class time. Third, the extent of what can be accomplished in class is restricted by the preparation and attitude the students bring to class. Even well-motivated students have difficulty preparing for class because of the pressures of jobs, family, commuting, and the other classes they take.
Change has become a constant topic of conversation in accounting education. It is dealt with daily by many prestigious bodies such as the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). It is also discussed at every meeting of ordinary accounting educators. And it’s on everyone’s mind. The last two columns appearing in this space have addressed the nature of the changes under discussion, providing some thoughts about their consequences and how they can be addressed. But what would be the effects of these changes for the average accounting instructor? For the changes to be implemented effectively, the needs of the ordinary faculty member must be addressed.
Thirty years ago this year, I wrote “Welcome to the first issue of Accounting Instructors’ Report.” Our purpose is to serve college accounting educators by providing a medium for sharing information about the teaching of accounting. Over that time, we published 75 issues of Accounting Instructors’ Report, which included 75 Trends editorials in which I have tried address changes that affected the environment of our teaching, the way we teach, and the nature of our students. In those issues, we published almost 400 articles that included “essays, studies, and research about the content, philosophy, teaching techniques, and administration of accounting courses.”