Class Notes for Introductory Financial Accounting for Business, 2nd Edition

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IFAB 2e: Introduction for Traditional Instructors’ Manual1Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.INTRODUCTIONThank you for your interest inIntroductoryFinancialAccounting forBusiness.This introductionoffers teaching suggestions that have evolved over our many years in the classroom. Feel free toadapt our suggestions to suit your own teaching style.This introduction is organized intofoursections: 1) Key Content Features, 2)Developing aCoursePlan, 3)ResourcesAvailable, and 4)Growth and Development.For each chapter of the text, this manual provides you with an introduction along with suggestedlesson plans and teaching materials that include demonstration problems, solutions, and work-sheetsfor your students to use as you work through the demonstration problems. Also includedare chapter-specific quiz questions that allow you to test your students’ understanding of thematerial covered during class. We welcome your comments regarding wayswe can improve boththe text and the instructor’s manual tomeet our primary mission:helping students learnaccounting.1.KEYCONTENTFEATURESWhen writing this text our goal was to organize the contentin a way that madeit easier for studentsto gain a conceptual understanding of financial accounting.Traditionally, the firstfinancialaccountingcoursehas focused onteachingaccounting procedurewith an emphasison recordingjournal entriesand preparingfinancial statements.In our view, thisapproachprovidessomeservice toaccounting majorsbut,little benefit,tothenearly 80%who arenon-majors. Further,technology(i.e. automated datacapture software)has greatlydiminishedtheimportanceoflearningmanual accounting procedureseven for accounting majors.Today’s students need aconceptual understanding of accounting that facilitates decision making.We understand that accounting procedure (i.e. debits / credits) still has a role in the accountingcurriculum.Formanyschools,studentsmovingoutofintroductoryfinancialneedanunderstanding of debit / credit terminology before starting intermediate. Therefore, our approachisto move,not eliminate,coverage of debits and credits.In this text, Chapters 1-12develop aconceptual understanding of financial accounting by focusing on how business events affectfinancial statements.Then, after a conceptual understanding has been developed, accountingprocedure including debit / credit terminology is introduced in Chapter 13. Interestingly, we foundthat our students have a better understanding of not only the financial statement impacts but alsoaccounting procedure (i.e. debits /credits) under this approach.Many instructors find thesheerquantity of contentcovered in introductory financial texts to beoverwhelming fortheirstudents. Toresolve this problem, instructors frequently, skip particulartopics or entire chapters. As a result, some instructors have expressed concern thatwhile they wantto cover debits and credits,Chapter 13 willincludetopics they have skipped. Rest assured that wehave organized Chapter 13 so as to avoid this potential problem. Specifically, completecoverageof debits and credits and theaccounting cycle (journalizing, adjusting, posting, trial balances, and

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IFAB 2e: Introduction for Traditional Instructors’ Manual2Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.financial statements) ispresentedusingonly thebasictransactiondatathatappearin the first threechapters of the text. This means that you can cover Chapter 13 anytime after Chapter 3 withoutworrying aboutpriorcoverage of advanced topics.If you prefer the inclusion of more advancedtopics, Learning Objective 13-5 includes coverage of a second accounting cycle. This cycleincludestransaction data that appears in Chapter 4 through 9 of the text. Accordingly, instructorswhowant more comprehensive coveragecan introduce Chapter 13any timeafter they havecovered Chapter 9.In summary, Chapter 13 is organized so that instructors have maximumflexibility as to when accounting procedures are introduced in their courses.Our conceptual learning approachcontainsfive key featuresthatare discussed below:1.1Step-by-Step Approach1.2Horizontal Financial Statements Model1.3Cash Flow Statement Coverage1,4Accounting Procedure Coverage1.5Financial Statement Analysis1.1STEP-BY-STEP LEARNING APPROACHThe order in which material is presented can strongly influence what is learned, how fast it islearned, and even whether the material is learned at all. Traditionally, teaching the firstcourse in accounting starts with an overview of a full set of financial statements.Unfortunately, introductory students are not equipped to comprehend many of the itemsshown in the financial statements. Terms such as accounts receivable, accumulateddepreciation, prepaid expenses, and so on are not easily explained to abeginner. Students areforced to memorize. Confusion and boredom follow in quick pursuit.In contrast, this text employs a sequential, or step-by-step learning approach. The text beginswith the events rather than the statements that result from the events. Each time a new eventis introduced, the terms presented in the event are defined and the effects of the event on theaccounting equation are explained. Finally, students are shown how the information in theaccounting equation is used to prepare financial statements. At no time are students exposedto terms that have not been fully explained. In other words, information is presented in astep-wise fashion with each new step following logically from the previous one. Thissequential approach is used throughout the text. For example, cash transactions areintroduced inChapter 1, accrual events in Chapter 2, and deferral transactions in Chapter 3.Traditional texts introduce all three of these events simultaneously. The result is informationoverload, which leads to memorization. In contrast, our step-by-step approachgraduallyintroduces concepts in a logical sequence that promotes understanding. Comprehensionstimulates interest. Motivation and engagement increase in a sequential learningenvironment.Moving to a sequential learning approach does not change the content. It changes how thecontent is structured. This text includes all topics that are normally covered in a traditionalintroductory financial accounting book, including debits, credits, andallthe typical recordingprocedures associated with the double-entry accounting system. Indeed, focusing on a

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IFAB 2e: Introduction for Traditional Instructors’ Manual3Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.conceptual understanding of accounting before covering procedural details provides a betterfoundation for more advanced courses.1.2HORIZONTAL FINANCIAL STATEMENTS MODELOne ofourprimary objectivesis to teach students to think like business professionals.Business professionals tend to think about bottom-line consequences: If I do this or that, howwill it affect my company’s net income, total assets, cash flow, and so on. This type ofthinking occurs whether you work in accounting, management, marketing, finance,insurance, real estate, or virtually any other area of business. Accordingly, learning to mimicthis thinking approachbenefits all business studentsregardless of whether they areaccounting majors.Therefore,we titled the textIntroductory Financial Accounting forBusiness.The text employs afinancial statements modelto ensure that students learn how accountingevents affect financial statements. The model arranges the balance sheet, income statement,and statement of cash flows horizontally across a single line of text, as shown next:Throughout the text, students are taught to show how accounting events affect the statementsrepresented in the model. For example, an $8,400 cash payment to settle an interest payableliability would require the student to show the effects as follows:In the statement of cash flows, the student is required not only to identify the item as aninflow or outflow, but also to classify the item as anoperating activity (OA), investingactivity (IA), or financing activity (FA).Traditionally, students are taught how to record multiple events in journal entries, to post thejournal entries to ledger accounts, and then to prepare a set of financial statements thatsummarize the group of transactions. This multi-transaction, procedural approach obscures

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IFAB 2e: Introduction for Traditional Instructors’ Manual4Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.the direct relationships between events and financial statements. In contrast, the financialstatements model approach teaches students howindividualbusiness events affect financialstatements. This approach encourages students to develop the type of “If, Then” thoughtprocess used in the real world. Students learn to draw conclusions such as “if” I earn revenueon account, “then” net income increasesbut cash flow is not affected. Accordingly, thestatements model learning approach mirrors the bottom-line thinking used in businesspractice.We have found that instructors have little difficulty implementing the statements modelapproach. Indeed, it is easier to show students how a single event affects financial statementsthan it is to show them how a series of events are recorded and then summarized in financialstatements. Instead of using confusing debit/credit terminology, common increase/decreaseterminology is all that is necessary to explain the interrelationships between business eventsand how they affect financial statements. It is analogous to skipping the middleman. Insteadof going from events to financial statements through a set of recording procedures, you skipthe recording procedures and focus on a direct link between events and statement effects.Accounting comes alive with purpose, rather than being some boring task of memorizingprocedures. Student comprehension and motivation increase, with virtually no learning curvefor instructors.1.3STATEMENT OF CASH FLOWS COVERED THROUGHOUTThe transaction-by-transaction analysis we use in the financial statements model enables anearly introduction to the statement of cash flows. While the statement of cash flows iscritically important in the real world, coverage of this statement in traditional textbooks isusually slighted and relegated to the last chapter of the text. The usual justification for thistreatment is that teaching students to convert accrual accounting data into cash flow iscomplicated. In fact, it does not have to be this way. We removed the complexity byimplementinga transaction-by-transaction teaching strategy.We begin by defining the termsoperating,investing, andfinancing activities. Thereafter,students are required to classify individual cash events as belonging to one of the threecategories. As shown earlier, we implement this strategy via the financial statements model.The last column of the statements model represents the statement of cash flows. In thiscolumn, students distinguish between cash inflows and outflows, and classify each cash flowas being an operating activity (OA), an investing activity(IA), or a financing activity (FA).See the entry for the $8,400 cash payment to settle an interest payable liability that wasshown in the statements model earlier as an example.This teaching strategy is applied consistently through the first 11 chapters. As a result,students develop the ability to distinguish between operating, investing, andfinancingactivities, and to prepare a formal statement of cash flows under the direct method. Thisknowledge base provides the foundation for grasping the more complicated process ofconverting accrual accounting numbers to their cash flow equivalents, which is presented inChapter 12.

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IFAB 2e: Introduction for Traditional Instructors’ Manual5Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.1.4COVERING DEBITS AND CREDITSThe business-oriented statements model approach does not require knowledge of debit andcredit terminology. Indeed, early exposure to debit and creditterminology can hinderlearning. After all, a debit or a credit is just a confusing way of saying an increase or adecrease. Consistent with sequential learning theory, students should learn the essentialrelationships between events and statements beforetechnical jargon is used to describe thoserelationships. We believe that the appropriate place to introduce debits and credits is at theend, rather than the beginning, of the text.In fact, once students are comfortable with how accounting event affect the accountingequation, learning debits and credits is easy. Traditionally, students learn whether debits orcredits increase an account (i.e. credits increase revenue and debits increase expenses). So,the debit or credit is defined at the account level. With our approach, we build off whatstudents already know, which is how events affect the accounting equation.Many agree with this step-by-step approach. Even so, some worry that accounting majorswill not get enough exposure to recording procedures to prepare them fortheintermediateaccounting courses. We provide a solution to this dilemma. Specifically, weoffer two capstone course projects. These projects are designed to be covered during the lasttwo weeks of class. By this time, students will have had enough exposure to accounting toclassify themselves as accounting majors or general business students. Those who considerthemselves accounting majors should be assigned the General Ledger Capstone Project,while other students should be assigned the Financial Statement Analysis Capstone Project.The General Ledger Capstone Project provides instructors with a mechanism to drill studentsabout debits and credits until the concepts stick, while the Financial Statement AnalysisCapstone Project teaches students how to use financial information to make management andinvestment decisions. These projects let instructors solve the age-old problem ofaccommodating the differing needs of accounting majors versus general business students.1.5FINANCIAL STATEMENT ANALYSISThe text provides extensive coverage of financial statementanalysis. A separate section titled“The Financial Analyst” is included in each chapter. This section covers the financial ratiosrelated to the topics covered in the chapter. For example, theaccounts receivable turnoverratioandnumber of days to collect receivablesare covered in the receivables chapter.Likewise,inventory turnoverandnumber of days to sell inventoryare covered in themerchandise inventory chapter. We not only provide coverage of how to calculate the ratiosbut also provide real-world industry data to help students identify benchmarks and learn howto make meaningful comparisons of financial performance. In other words, the text showsstudents how to use ratios, as well as how to calculate them.In addition, the text includes a separate chapter,Chapter 14(available in Connect), whichprovides in-depth coverage of the analysis of financial statements. This chapter includes twofull sets of exercises, problems, and test bank material, along with all theConnectfeatures.Finally, the appendices of the text include two comprehensive financial statement analysis

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IFAB 2e: Introduction for Traditional Instructors’ Manual6Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.projects. One pertains to Target’s 10K annual report, which is included in the text. The otheris an open-ended project that allows the instructor or the student to choose the company to beanalyzed.Once students understand how events affect statements, the next step is understanding how toanalyze statements. The choice to cover financial statement analysis (FSA) at theintroductory level really depends on the level of your students. We provide thoroughcoverage of FSA for the introductory level, but we separate it in such a way that covering thistopic is left tothe discretion of the professor

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IFAB 2e: Introduction for Traditional Instructors’ Manual7Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.2.DEVELOPING A COURSE PLAN2.1WHAT CHAPTERS TO COVER–GUARDING AGAINSTINFORMATION OVERLOADInformation overload is a deterrent to students’ comprehension of concepts.This textenablesyoutoadjustthelearningexperiencetoapace thatfitsyourstudents’characteristics. The basic underlying concepts are presented in thefirst threechapters.Chapter 1Splitinto to two sections(Section1and2)Section 1introduces the accounting equation, records simple cash events to theaccounting equation, and then uses information in the accounting equation toprepare a balance sheet.Section 2 uses information in the accounting equation to prepare an IncomeStatement, Statement of Changes in Stockholders’ Equity, and a Statement of CashFlows.Tips:Treat each section like a chapter in terms of allocating class time.Gothrough several accounting cycles where only a balance sheet isprepared before introducing the other financial statements.Go slow in the beginning. Everything builds on Chapter 1.Chapter 2Introducesstudents to thehorizontal financial statements modelIntroducesaccrualtransactions.Goesthrough two accounting cycles. The first cycle coverssimple accruals (i.e.accounts receivablesand payables)and the second cycle includes notes payableand related interest expense.Tips:If your students struggle with accruals onlycoverthe first accounting cycleanddelaycoverage of notes payable and related interest expense until Chapter9. This is more in line with our step-by-step approach of introducing topics.

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IFAB 2e: Introduction for Traditional Instructors’ Manual8Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 3Introducesdeferraltransactions.Like Chapter 2, two accounting cycles are covered. The first cycle covers simpledeferrals (i.e. supplies, pre-paid items, and unearned revenue) and the second cycleincludes along-term asset and related depreciation expense.Tips:If your students struggle with deferralsonlycoverthe first accounting cycleand delaying the coverage of depreciation until Chapter 8. This is more in linewith our step-by-stepapproach of introducing topics.Chapters 4–13Thefirst three chaptersshould be covered in sequence as theremaining chaptersexpand the conceptual framework established inChapters 1-3. Afterthe first threechapters, cover the remaining chapters in the sequence that best suits your courseobjectives.We recommend that you coverChapters 4 and 5 in sequence, since they both relateto inventory and cost of goods sold topics.We recommend that you coverChapters7and8in sequence, since the concept of contra accounts is introducedinChapter 7 with allowance for doubtful accounts and then continues intoChapter8 with accumulated depreciation.Chapter13focusesonrecordingprocedures,includingdebitandcreditterminology, and accounting systems. If you want to omit recording procedures,skip Chapter13.You may decide to cover only a portion of the chapters in the text in one semester.For example, you may decide to include only the first 8 chapters in the firstsemester, and cover the final 4 financial accounting chapters during the first partof the second accounting principles course.If your students are struggling with the basics, it will do little good to introduce advancedtopics. The critical issue is not how much you can cover, but how much your students cancomprehend. We do not advocate anynumberof chapters. Instead, we believe individualinstructors should set a pace based on the abilities of their students and their personalassessment of the tradeoff between depth of knowledge and breadth of coverage.If you choose to cover fewer topics, you can spend more time reinforcing conceptualunderstanding.This manual describes useful strategies that foster students’ grasp ofconcepts.We hope you will include several of them in your lesson plans.Be aware,however, that these teaching strategies take more class time than does straightforwardlecturing.You cannot simply add them to an already overcrowded curriculum.Timeconstraints will force you to make choices.Covering additional topics comes at theexpense of conceptual skill development and vice versa. We have taught accounting usingboth approaches. We are convinced that “less is more” and offer an innovative teachingmodel with many features that may be of interest to you.

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IFAB 2e: Introduction for Traditional Instructors’ Manual9Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.To see what I cover in my course,asamplesyllabusisprovided at the end of this document(Appendix A). The syllabus is designed for an introductory course that covers debits andcredits at the end of the semester. If you prefer to not cover debits and credits it is easy tomodify the syllabus by eliminating Chapter 13.2.2FORMAT OF A TYPICAL CLASSOur classes are structured as follows: 1) students complete a pre-class assignment beforecoming to class, 2) students receive instruction and practice concepts in class, 3) studentscomplete a homework assignment to reinforce concepts covered in class.1.Assign a pre-class assignment before every class.For years, we have tried to getour students to prepare for class by reading the textbook beforehand. However, thisapproach oftenfails as many students struggle to comprehend or don’t have theattention spans to grasp difficult material through reading. Today’s students needsomething more interactive. Try assigningLecture VideosorSmartBookactivitiesas a pre-class assignment.a.Lecture VideosAn author created lecture videos are available in Connect. These videos introducetopics in a laid-back style that is like the videos available on Khan Academy. Likeus, students prefer to be introduced to new material through an explanation byanother human being. How often do you rely on YouTube versus a manual to fix ahousehold problem? Indeed, the lecture videos that we offer cover every learningobjective in our hard cover textbook. Think of our video library as a video textbook.Your students now have the option of reading or watching the textbook. You havean option of assigning the videos with an assessment quiz. Having studentscomplete the quiz helps ensure that they are watching the videos before class. Eachvideo averages 10 minutes in length. Werecommendassigning no more than threeper class.b.SmartbookIf you still want your students to read but want something more interactive, assignSmartBook chapter. SmartBook is an interactive study tool that adaptivelyassesses students’ skill and knowledge levels to track which topics students havemastered and which require further instruction and practice. Based upon studentprogress, it then adjusts the learning content based on their knowledge strengthsand weaknesses, as well as their confidence level around that knowledge. Theadaptive technology also understands and accounts for memory degradation. Itidentifies the concepts that students are most likely to forget over the course of thesemester—by considering those that they had been weakest on or least confidentwith—and encourages periodic review by the student to ensure that concepts aretruly learned and retained. In this way, it goes beyond systems that simplyhelpstudents study for a test or exam, and helps students with true concept retentionand learning. Dynamically generated reports document progress and areas for

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IFAB 2e: Introduction for Traditional Instructors’ Manual10Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.additional reinforcement, offering students real-time feedback on their contentmastery. By monitoring student progress, educators can instantly evaluate thelevel of understanding and mastery for an entire class or an individual student atany given time.Smartbook isavailablein Connect.2.Keep classes active.Our teaching experiences have led us to embrace a ‘learn bydoing’ philosophy.We recommend that you teach from the perspective of a coach.Spend less time lecturing and more time observing, evaluating, correcting, andassisting. Keep your comments simple and to the point. Spend ten to fifteen minutesintroducing a concept.Then put the students to work.Walk around the room toobserve what they are doing.Offer help where it is needed.Options for in-classactivitiesfollow.a.Peak Interest-Problem-based learning (PBL) exercises are designed to piquestudent interest and encourage critical thinking. In the traditional lecture-basedlearning environment, instructors present problems and promptly demonstratehow to solve them.Seeing solutions before wrestling with the problems canlimit student learning.Students focus on comprehension and recall.Theirprimary objective is to memorize the solutions provided by the instructor.Incontrast, instructors using PBL exercises begin by presenting a problem, butdelay authoritative discussion of the relevant concepts until the students haveconsidered the problem and proposed their own solutions. PBL fosters criticalthinking skills through encouraging students to examine a problem, identifyalternativesolutions,developselectioncriteria,thinkcreatively,makedecisions, and convince their peers that their conclusions are accurate.Weinclude several PBL exercises and cases in this Instructor’s Manual.b.Drill Concepts–Bsetexercisesin the back of each chapter.Worksheets forthese exercises are available under Instructor Resources in Connect.c.Tie it all together–Demonstration problem provided in each chapter of theinstructor’smanual.WorksheetsfortheseproblemsareavailableunderInstructor Resources in Connect.d.ATCProblems–The ATC problems are located at the end of every chapter.They require studentsanalyze,thinkandcommunicate. This section includesseveral types of problems but two that are useful in class areBusinessApplications Casesand hypotheticalEthical Dilemmas.Thebusinessapplications cases focus on financial statement analysis.They relate chaptertopics to full-featured annual reports such as Target Corporation’s reportreproduced in Appendix B of thetextbook.The ethical dilemmas concernissues that have a direct bearing on financial statements. Students are requiredto address the impact on financial reporting prior to discussing the ethicalimplications.Since each case is independent of the others, you can includecases in your lesson plans as appropriate.You may cover a few, all, or none.We highly recommend that you try some of them.They enliven classdiscussion and providereal-worldrelevancethatcannotbe obtained byexclusively working problems.

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IFAB 2e: Introduction for Traditional Instructors’ Manual11Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.3.Follow up with a post-classhomeworkin Connect.We recommend assigning anA set problem in Connect for homework. These problems should mirror the B setproblems that were worked in class. The A set problems are like the B set except usedifferent names and numbers. Only the A set problems are availablein Connect.Emphasize to students that accounting is a “learn by doing” subject. Draw analogieswith sports or music. Students wouldn’t expect to be able to make free throws or playa new piece of music without many hours of regular practice. Could theylearn to skiby watching? Mastering accounting requires the same kind of effort.2.3COURSE MANAGEMENT TIPSAND TEAM LEARNING1.Assembleacoursepackofallthedemonstrationproblemsandstudentworksheets.Students can purchase the packet at the bookstore for the cost of copying.These resources are available under Instructor Resources in Connect.2.Use all available class time.Set the tone from the first day.Always have shortproblems or review planned if you finish early.Experienced instructors know, justbecause you’ve covered it doesn’t mean students know it!3.Have students workproblems and in-class quizzes inteams.Team learning ishighly effective. One of the challenges of working problems in class is being able toaddress studentquestions in a timely manner. This is especially true in large sections.If students wait too long to get help, they will lose interest. Team learning is the bestsolution to this problem as it frees up instructor time by allowing students to help eachother. Some students are extremely bright, and they quickly build a knowledge basethat helps in assisting weaker students.This system obviously enhances the learning experience for the weaker students, butwhat does it do for the brighter students?Our experience suggests that group workalso has a positive effect on bright students. Teaching is a learning experience. In theprocess of helping their classmates, brighter students learn valuable communicationskills.Knowing something and being able to properly verbalize it are two differentthings.The teaching relationship not only enlightens the weak student but alsoreinforces comprehension and fosters confidence in the bright student. The needs ofweaker and brighter students are complementary; both benefit from team learningactivities.Team learning also encourages students to seek instructor help when they need it. Ifall members of a group are confused, the reluctance of individual students to askquestions is overcome by the opportunity to pose questions from the group, rather thanasingle student. We receive significantly more questions when students are workingin groups than when we are lecturing.The resultis that team learning provides a betteratmosphere for technical as well as social development.

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IFAB 2e: Introduction for Traditional Instructors’ Manual12Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.We have observed great benefits from team learning. Our outcomes, however, werenot always so positive.First attempts to implement group learning produced mixedresults. Why does team learning work in some classes and not in others? We believethe difference is attributable to how the groups are organized and operated. We haveidentified factors that have worked successfully.Please review these factors with ahealthy sense of skepticism. Just as there is no perfect way to deliver a lecture, thereis no perfect formula for implementing team learning.Use our observations as aguide, but feel free to alter these strategies. Just as you have refined your capacity todeliver a lecture, you too will improve in your capacity to implement group learning.1.The instructor should form the groups. One of the primary characteristics ofa successful group is diversity. If students are free to form their own groups,theytendtoorganizearoundhomogeneousratherthandivergentcharacteristics. We have found that random assignment usually providesdiversity.Our class rolls are alphabetized. Once we determine the numberof groups we need, we simply number the class roll from top to bottom. Forexample, if we need 20 groups, the first person on the roll is assigned to group1, the second person to group 2, the third to group 3, and so on, until thetwentieth person is assigned to group 20. We then repeat the process placingthe twenty-first person in group 1, the twenty-second in group 2, and so on,until all students have been assigned to a group.We produce copies of thegroup assignment sheet and distribute them to the students on the second dayof class.We tape the numbers “1” through “20” on the wall at differentlocations in the room and tell students to go to the number on the wall thatcorresponds with their group number.We ask the group members tointroduce themselves to one another and find a set of seats where the groupcan sit. The entire process takes about 10 minutes.We assign students to their groups on the second day of class. We also givethe first in-class assignment on the second day of class.Some students willcomplain that they were unable to attend the first day of class and thereforecannot complete the assignment. Be understanding, and tell them to try theirbest. Our students get to drop their two lowest in-class grades. If necessary,this will be one of them.Set the tone early.If you allow for a reasonablenumber of absences, students don’t have to make up excuses and you don’thave to listen to them.Some of these policies developed from instances ofteaching very large classes with as many as 180 students. In mass sections,it is necessary to establish policies that permit efficient implementationofteam learning strategies.2.Try starting with groups of four.On occasions when attrition causes groupsize to fall below two, we combine groups.Consequently, group size isnormally between two to four students. Except for the reconstructed groupsthat result from the effects ofattrition, students remain in the same groupsthroughoutthecourse.Manyofthesocialbenefitsdependonthedevelopment of strong personal relationships among group members.Such

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IFAB 2e: Introduction for Traditional Instructors’ Manual13Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.relationships require time to develop.Our experience suggests that theduration of a typical introductory accounting course is too short to permitrapport building if group memberships are reshuffled during the term. Whilewe recommend that students stay within the same group throughout the entirecourse, we do consider individual circumstances.Occasionally, a studentdoes not bond with the other members of a group.When this happens, weattempt to accommodate a request to change groups. Our objective, to teachaccounting,canbeunderminedbyantagonisticgroupexperiences.Therefore, we are willing to make reasonable changes that promote cohesivegroups.3.Create an environment with natural incentives.Graded group assignmentsand quizzes are effective natural incentives. The group quiz is beneficial tobrighter students as well as weaker students.Obviously, weaker studentshave the advantage of learningfrom the brighter studentsandbenefiting fromthe opportunity to correct their mistakes before turning in the answer sheets.However, even exceptional students sometimes make careless mistakes.Consequently, they toocanimprove their quiz scores by checking theiranswers with their peers.As previously mentioned, the brighter studentsbenefit academically. Identifying and correcting the misconceptions of otherstudents is an experience that refines their comprehension and promotes thedevelopment of communication skills.Furthermore, bright students gainstatus among their peers, which builds confidence and elevates self-esteem.Thesebenefits from quizzes keep students motivated.Isn’t everyone going to score high on the in-class assignments and quizzes?Yes! This is the motive that facilitates participation in group activities. It’show to get groups motivated. We nevershouldforce participation. Studentsare naturally drawn to the group activity by a desire to improve grades.Fortunately,theirgoaliscongruentwithourdesiretoimprovetheircomprehension of accounting.Comparing and discussing their answers tothe quizquestions facilitates a tremendous learning experience. They receiveimmediate feedback enabling them to correct their misconceptions before theclass proceeds with new material. The key point is that quizzes are designedfor learning rather than evaluation.They are not intended as a means ofevaluating performance. We require three or four individual exams at regularintervals throughout the course.Scores on these exams distinguish grades.At most, in-class group work counts as 10 to 15 percent of the final grade,which is a large enough percentageto motivate interest, but not so large as topermit free riders to score high in the course.The benefit of group quizzescomes from the learning experience.Lack of effort in quiz work usuallytranslates to poor performance on the individual exams.After a few groupquizzes, students tend to bond naturally and establish in-class workingrelationships.

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IFAB 2e: Introduction for Traditional Instructors’ Manual14Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.4.What about the problem of free riders? As the previous discussion implies,group assignments take place in class.Therefore, free riding is obvious togroup members and to the instructor.Confront,in a friendly way, studentswho are sitting idle. Ask if you can help them get started. Sometimes theyreally need help and are just afraid to ask.In addition, productive groupmembers tend to resent slackers. Peer pressure is frequently more persuasivethan instructor intervention. Consequently, groupstend to police themselves.On the rare occasion when someone continually refuses to carry his or herweight, the group is permitted to ask the person to leave.The free rider isthen left with the unpleasant task of finding another group, or he or she mustworkindependently.Whengroupworkisaprivilegeratherthanarequirement, free riding is rarely a problem.5.It is important to establish acooperative environment. Students are not likelyto self-sacrifice to help each other. To make groups work cooperatively, youmust create win-win conditions. Carefully consider these “dos and don’ts”:First,doestablish an absolute grading system.Using a curve creates aconflict of interest among students.If you rank students relatively, it is totheir advantage for their classmates to perform poorly. Second,don’trequiregroup members to evaluate each other. Peerevaluations are usually relativemeasures that put students against each other. If it is free riding that concernsyou, there are better ways to deal with it (see Item No. 4 above). In short, ifyou really want students to help each other learn, you mustcreate a safe, openenvironment.Keep in mind that team learning is a means to an end. Don’t get too caught up in groupdynamics. We do not want to turn our accounting courses into general business courses. Ourobjective is always to teach accounting.Consequently, the group activities we use have adefinitive accounting focus.

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IFAB 2e: Introduction for Traditional Instructors’ Manual15Copyright©2021McGraw-HillEducation.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.3.RESOURCES AVAILABLEAs described in the text preface,many resourcesare availableto helpyourstudents succeed.Further,there are also manyinstructor resources thataccompanythistext.We recommend thatyou familiarize yourself with the available resources and use the ones that work best for yourteaching approach. A table thatoutlining a description andlocation of each resource is providedbelow.All resources are found in one of the following locations:1.The actual textbook2.The End-of-Chapter (EOC) content at the back of each chapter in the textbook.3.Theappendiceslocated after the last chapter in the book.4.The main course page on the Connect Site5.Under the “Add Assignment”“Question Bank” on the Connect Site6.Under the “Add Assignment”“SmartBook” on the Connect Site7.Under the “Library”“instructor resources” on the Connect Site8.Under “Library”“instructor resources”then“additional studentresources” on theConnect SiteResourceDescription and LocationBook/ VideoOptionsResourceDescriptionLocationHard / PaperbackBookTextbookE-bookFull text online available in Connect4SmartBookInteractive E-book (see description in Section 2.2–1–b)6Lecture VideosAuthor created videos that cover every learning objective inthe text. The videosaverage 10 minutes in length and aresimilar in style to Khan Academy5Pre-class AssignmentsResourceDescriptionLocationLecture Videos with AssessmentLecture videos with an attached multiple choice quiz.Thequizzes are automatically graded in Connect.5SmartBookAssignableSmartBookchapters with assessment. You cancustomize these by selecting the learning objectives you wantto cover. You can also customize the depth of coverage. Ifyou selectless time the student will only be required to readthe most critical topics.6In-class Assignments OptionsResourceDescriptionLocationSelf-Study Review ProblemLocated at the end of every chapter. This is a comprehensivechapter problem andsolution. It covers most chapter learningobjectives in one problem.2, 5Open-Ended QuestionsShort open-ended questions to ensure students understand keyconceptual issues covered in the chapter.2Demonstration ProblemsComprehensive chapter problem without solution. Usedextensively in the instructor’s manual.7

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