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

Class Notes for Introductory Financial Accounting for Business, 2nd Edition is designed to supplement your learning, ensuring you have all the necessary details from class discussions.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 1 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. INTRODUCTION Thank you for your interest in Introductory Financial Accounting for Business . This introduction offers teaching suggestions that have evolved over our many years in the classroom. Feel free to adapt our suggestions to suit your own teaching style. This introduction is organized into four secti ons: 1) Key Content Features, 2) Developing a Course Plan , 3) Resources Available, and 4) Growth and Development . For each chapter of the text, this manual provides you with an introduction along with suggested lesson plans and teaching materials that include demonstration problems, solutions, and work - sheets for your students to use as you work through the demonstration problems. Also included are chapter - specific quiz questions that allow you to test your students’ understanding of the material covered during class. We welcome your comments regarding ways we can improve both the text and the instructor’s manual to meet our primary mission: helping students learn accounting. 1. KEY CONTENT FEATURES When writing this text our goal was to organize the content in a way that made it easier for students to gain a conceptual understanding of financial accounting. Traditionally, the first financial accounting course has focused on teaching accounting procedure with an emphasis on recording journal entries and preparing financial statements . In our view, this approach provides some service to accounting majors but , little benefit , to the nearly 80% who are non - majors . Further, technology (i.e. automated data capture software) has greatly diminished the importance of learning manual accounting procedure s even for accounting majors . Today’s students need a conceptual understanding of accounting th at facilitates dec ision making. We understand that accounting procedure (i.e. debits / credits) still has a rol e in the accounting curriculum. For many schools, students moving out of introductory financial need an understanding of debit / credit terminology before starting intermediate. Therefore, our approach is to move , not eliminate , coverage of debits and credits. In this text, Chapters 1 - 12 develop a conceptual understanding of financial accounting by focusing on how business events affect financial statements. Then, after a conceptual understanding has been developed, accounting procedure including debit / credit terminology is introduced in Chapter 13. Interesting ly , we found that our students have a better understanding of not only the financial statement impacts but also accounting procedure (i.e. debits / credits) under this approach. Many instructors find the sheer quantity of content covered in introductory financial texts to be overwhelming for their students. T o resolve this problem, instructors frequently , skip particular topics or entire chapters. As a result, some instructors have expressed concern that while they want to cover debits and credits, Chapter 13 will include topics they have skipped. Rest assured that we have organized Chapter 13 so as to avoid this potential problem. Specifically, complete coverage of debits and cred its and the accounting cycle (journalizing, adjusting, posting, trial balances, and

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 2 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. financial statements) is presented using only the basic transaction data that appear in the first three chapters of the text. This means that you can cover Chapter 13 any time after Chapter 3 without worrying about prior coverage of advanced topics. If you prefer the inclusion of more advanced topics, Learning Objective 13 - 5 includes coverage of a second accounting cycle . This cycle include s transaction data that appears in Chapter 4 through 9 of the text. Accordingly, instructors who want more comprehensiv e coverage can introduce Chapter 13 any time after they have covered Chapter 9. In summary, Chapter 13 is organized so that instructors have maximum flexibility as to when accounting procedures are introduced in their courses. Our conceptual learning approach contains five key features that are discussed below: 1.1 Step - by - Step Approach 1.2 Horizontal Financial Statements Model 1.3 Cash Flow Statement Coverage 1,4 Accounting Procedure Coverage 1.5 Financial Statement Analysis 1.1 STEP - BY - STEP LEARNING APPROACH The order in which material is presented can strongly influence what is learned, how fast it is learned, and even whether the material is learned at all. Traditionally, teaching the first course in accounting starts with an overview of a full set of financ ial statements. Unfortunately, introductory students are not equipped to comprehend many of the items shown in the financial statements. Terms such as accounts receivable, accumulated depreciation, prepaid expenses, and so on are not easily explained to a beginner. Students are forced to memorize. Confusion and boredom follow in quick pursuit. In contrast, this text employs a sequential, or step - by - step learning approach. The text begins with the events rather than the statements that result from the events. Each time a new event is introduced, the terms presented in the event are defined and th e effects of the event on the accounting equation are explained. Finally, students are shown how the information in the accounting equation is used to prepare financial statements. At no time are students exposed to terms that have not been fully explained . In other words, information is presented in a step - wise fashion with each new step following logically from the previous one. This sequential approach is used throughout the text. For example, cash transactions are introduced in Chapter 1, accrual events in Chapter 2, and deferral transactions in Chapter 3. Traditional texts introduce all three of these events simultaneously. The result is information overload, which leads to memorization. In contrast, our step - by - step approach gradually introduces concep ts in a logical sequence that promotes understanding. Comprehension stimulates interest. Motivation and engagement increase in a sequential learning environment. Moving to a sequential learning approach does not change the content. It changes how the content is structured. This text includes all topics that are normally covered in a traditional introductory financial accounting book, including debits, credits, and all the typical recording procedures associated with the double - entry accounting system. Indeed, focusing on a

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 3 Copyright ©2021 McGraw - Hill Education. 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 better foundation for more advanced courses. 1.2 HORIZONTAL FINANCIAL STATEMENTS MODEL One of our primary objective s is to teach students to think like business professionals. Business professionals tend to think about bottom - line consequences: If I do this or that, how will it affect my company’s net income, total assets, cash flow, and so on. This type of thinking occ urs whether you work in accounting, management, marketing, finance, insurance, real estate, or virtually any other area of business. Accordingly, learning to mimic this thinking approach benefits all business students regardless of whether they are account ing majors. Therefore, we titled the text Introductory Financial Accounting for Business . The text employs a financial statements model to ensure that students learn how accounting events 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 statements represented in the model. For example, an $8,400 cash payment to settle an interest payable liability 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 an inflow or outflow, but also to classify the item as an operating activity (OA), investing activity (IA), or financing activity (FA). Traditionally, students are taught how to record multiple events in journal entries, to post the journal entries to ledger accounts, and then to prepare a set of financial statements that summarize the group of transactions. This multi - transaction, procedu ral approach obscures

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 4 Copyright ©2021 McGraw - Hill Education. 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 financial statements model approach teaches students how individual business events affect financial statements. This approach encourages students to develop the type of “If, Then” thought process used in the real world. Students learn to draw conclusions such as “if” I earn revenue on account, “then” net income increases but cash flow is not affected. Accordingly, the statements model learning approach mirrors the bottom - line thinking used in business practice. We have found that i nstructors have little difficulty implementing the statements model approach. Indeed, it is easier to show students how a single event affects financial statements than it is to show them how a series of events are recorded and then summarized in financial statements. Instead of using confusing debit/credit terminology, common increase/decrease terminology is all that is necessary to explain the interrelationships between business events and how they affect financial statements. It is an alogous to skipping the middleman. Instead of going from events to financial statements through a set of recording procedures, you skip the recording procedures and focus on a direct link between events and statement effects. Accounting comes alive with pu rpose, rather than being some boring task of memorizing procedures. Student comprehension and motivation increase, with virtually no learning curve for instructors. 1.3 STATEMENT OF CASH FLOWS COVERED THROUGHOUT The transaction - by - transaction analysis we use in the financial statements model enables an early introduction to the statement of cash flows. While the statement of cash flows is critically important in the real world, coverage of this statement in tradit ional textbooks is usually slighted and relegated to the last chapter of the text. The usual justification for this treatment is that teaching students to convert accrual accounting data into cash flow is complicated. In fact, it does not have to be this w ay. We removed the co mplexity by implementing a transaction - by - transaction teaching strategy. We begin by defining the terms operating , investing , and financing activities . Thereafter, students are required to classify individual cash events as belonging to one of the three categories. As shown earlier, we implement this strategy via the financial statements model. The last column of the statements model represents the stat ement of cash flows. In this column, students distinguish between cash inflows and outflows, and classify each cash flow as 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 was shown 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, and financing activities, and to prepare a formal statement of cash flows under the direct method. This knowledge base provides the foundation for grasping the more complicated process of converting accrual accounting numbers to their cash flow equivalents, wh ich is presented in Chapter 12 .

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 5 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. 1.4 COVERING DEBITS AND CREDITS The business - oriented statements model approach does not require knowledge of debit and credit terminology. Indeed, early exposure to debit and credit terminology can hinder learning. After all, a debit or a credit is just a confusing way of saying an increase or a decrease. Consistent with sequential learning theory, students should learn the essential relationships between events and statements before technical jargon is used to describe those relationships. We believe that the appropriate place to introduce debits and credits is at the end, rather than the beginning, of the text. In fact, once students are comfortable with how accounting event affect the accounting equation, learning debits and credits is easy. Traditionally, students learn whether debits or credits increase an account (i.e. credits increase revenue and debits incr ease expenses). So, the debit or credit is defined at the account level. With our approach, we build off what students already know, which is how events affect the accounting equation. Many agree with this step - by - step approach. Even so, some worry that accounting majors will not get enough exposure to recording procedures to prepare them for the intermediate accounting courses. We provide a solution to this dilemma. Specifically, we off er two capstone course projects. These projects are designed to be covered during the last two weeks of class. By this time, students will have had enough exposure to accounting to classify themselves as accounting majors or general business students. Thos e who consider themselves 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 m echanism to drill students about debits and credits until the concepts stick, while the Financial Statement Analysis Capstone Project teaches students how to use financial information to make management and investment decisions. These projects let instruct ors solve the age - old problem of accommodating the differing needs of accounting majors versus general business students. 1.5 FINANCIAL STATEMENT ANALYSIS The text provides extensive coverage of financial statement analysis . A separate section titled “The Financial Analyst” is included in each chapter. This section covers the financial ratios related to the topics covered in the chapter. For example, the accounts receivable turnover ratio and number of days to collect receivables are covered in the receivables chapter. Likewise, inventory turnover and number of days to sell inventory are covered in the merchandise inventory chapter. We not only provide covera ge of how to calculate the ratios but also provide real - world industry data to help students identify benchmarks and learn how to make meaningful comparisons of financial performance. In other words, the text shows students how to use ratios, as well as ho w to calculate them. In addition, the text includes a separate chapter, Chapter 14 (available in Connect) , which provides in - depth coverage of the analysis of financial statements. This chapter includes two full sets of exercises, problems, and test bank material, along with all the Connect features. Finally, the appendices of the text include two comprehensive financial statement analysis

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 6 Copyright ©2021 McGraw - Hill Education. 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 other is an open - ended project that allows the instructor or the student to choose the company to be analyzed. Once students understand how events affect statements, the next step is understanding how to analyze statements. The choice to cover financial statement analysis (FSA) at the introductory level really depends on the level of your students. We provide thoro ugh coverage of FSA for the introductory level, but we separate it in such a way that covering this topic is left to the discretion of the professor

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 7 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. 2. DEVELOPING A COURSE PLAN 2.1 WHAT CHAPTERS TO COVER – GUARDING AGAINST INFOR M ATION OVERLOAD Information overload is a deterrent to students’ comprehension of concepts. This text enables you to adjust the learning experience to a pace that fits your students’ characteristics. The basic underlying concepts are presented in the first three chapters. Chapter 1  Split into to two sections ( Section 1 and 2 )  Section 1 introduces the accounting equation, records simple cash events to the accounting equation, and then uses information in the accounting equation to prepare a balance sheet.  Section 2 uses information in the accounting equation to prepare an Income Statement, Statement of Changes in Stockholders’ Equity, and a Statement of Cash Flows. Tips:  Treat each section like a chapter in terms of allocating class time.  Go through several accounting cycles where only a balance sheet is prepared before introducing the other financial statements.  Go slow in the beginning. Everything builds on Chapter 1. Chapter 2  Introduces students to the horizontal financial statements model  I ntroduces accrual transactions.  Goes through two accounting cycles. The first cycle covers simple accruals (i.e. accounts receivable s and payable s) and the second cycle includes notes payable and related interest expense. Tips:  If your students struggle with accruals only cover the first accounting cycle and delay coverage of notes payable and related interest expense until Chapter 9. This is more in line with our step - by - step approach of introducing topics.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 8 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. Chapter 3  Introduces deferral transactions.  Like Chapter 2, two accounting cycles are covered. The first cycle covers simple deferrals (i.e. supplies, pre - paid items, and unearned revenue) and the second cycle includes a long - term asset and related depreciation expense. Tips:  If your students struggle with deferrals only cover the first accounting cycle and delaying the coverage of depreciation until Chapter 8. This is more in line with our step - by - step approach of introducing topics . Chapters 4 – 13  The first three chapters should be covered in sequence as the remaining chapters expand the conceptual framework established in Chapters 1 - 3 . After t he first three chapters , cover the remaining chapters in the sequence that best suits your course objectives.  W e recommend that you cover C hapters 4 and 5 in sequence, since they both relate to inventory and cost of goods sold topics.  We recommend that you cover  C hapter s 7 and 8 in sequence , since the concept of contra accounts is introduced in C hapter 7 with allowance for doubtful accounts and then continues into C hapter 8 with accumulated depreciation.  Chapter 1 3 focuses on recording procedures, including debit and credit terminology, and accounting systems. If you want to omit recording procedures, skip Chapter 1 3.  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 first semester, and cover the final 4 financial accounting chapters during the first part of the se cond accounting principles course. If your students are struggling with the basics, it will do little good to introduce advanced topics. The critical issue is not how much you can cover, but how much your students can comprehend. We do not advocate any number of chapters. Instead, we believe individual instructors should set a pace based on the abilities of their students and their personal assessment of the tradeoff between depth of knowledge and breadth of coverage. If you choose to cover fewer topics, you can spend more time reinforcing conceptual understanding. This manual describes useful strategies that foster students’ grasp of concepts. 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 straightforward lecturing. You cannot simply add them to an already overcrowded curriculum. Time constraints will force you to make choices. Covering additional topics comes at the e xpense of conceptual skill development and vice versa. We have taught accounting using both approaches. We are convinced that “less is more” and offer an innovative teaching model with many features that may be of interest to you.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 9 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. To see what I cover in my course , a sample sylla bus is provided at the end of this document (Appendix A) . The syllabus is designed for an introductory course that covers debits and credits at the end o f the semester. If you prefer to not cover debits and credits it is easy to modify the syllabus by eliminating Chapter 13. 2.2 FORMAT OF A TYPICAL CLASS Our classes are structured as follows: 1) students complete a pre - class assignment before coming to class, 2) students receive instruction and practice concepts in class, 3) students complete a homework assignment to reinforce concepts covered in class. 1. Assign a pre - class assignment before every class. For years, we have tried to get our students to prepare for class by reading the textbook beforehand. However, this approach often fails as many students struggle to comprehend or don’t have the attention spans to grasp difficult material through reading. Today’s students need something more interactive. Try assigning Lecture Video s or Smart B ook activities as a pre - class assignment. a. Lecture Videos An author created lecture videos are available in Connect. These videos introduce topics in a laid - back style that is like the videos available on Khan Academy. Like us, students prefer to be introduced to new material through an explanation by another hum an being. How often do you rely on YouTube versus a manual to fix a household problem? Indeed, the lecture videos that we offer cover every learning objective in our hard cover textbook. Think of our video library as a video textbook. Your students now hav e the option of reading or watching the textbook. You have an option of assigning the videos with a n assessment quiz. Having students complete the quiz helps ensure that they are watching the videos before class. Each video averages 10 minutes in length. We recommend assigning no more than three per class. b. Smartbook If you still want your students to read but want something more interactive, assign Smart B ook chapter. Smart B ook is an interactive study tool that adaptively assesses students’ skill and knowledge levels to track which topics students have mastered and which require further instruction and practice. Based upon student progress, it then adjusts the learning conten t based on their knowledge strengths and weaknesses, as well as their confidence level around that knowledge. The adaptive technology also understands and accounts for memory degradation. It identifies the concepts that students are most likely to forget o ver the course of the semester — by considering those that they had been weakest on or least confident with — and encourages periodic review by the student to ensure that concepts are truly learned and retained. In this way, it goes beyond systems that simply help students study for a test or exam, and helps students with true concept retention and learning. Dynamically generated reports document progres s and areas for

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 10 Copyright ©2021 McGraw - Hill Education. 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 content mastery. By monitoring student progress, educators can instantly evaluate the level of understanding and mastery for an entire class or an individual student at any given time. Smartbook is available in Connect. 2. Keep classes active. Our teaching experiences have led us to embrace a ‘learn by doing’ philosophy. We recommend that you teach from the perspective of a coach. Spend less time lecturing and more time observing, evaluating, correcting, and assisting. Keep your comments simp le and to the point. Spend ten to fifteen minutes introducing a concept. Then put the students to work. Walk around the room to observe what they are doing. Offer help where it is needed. Options for in - class activities follow . a. Peak Interest - Problem - based learning (PBL) exercises are designed to pique student interest and encourage critical thinking. In the traditional lecture - based learning environment, instructors present problems and promptly demonstrate how to solve them. Seeing solution s before wrestling with the problems can limit student learning. Students focus on comprehension and recall. Their primary objective is to memorize the solutions provided by the instructor. In contrast, instructors using PBL exercises be gin by presenting a problem, but delay authoritative discussion of the relevant concepts until the students have considered the problem and proposed their own solutions. PBL fosters critical thinking skills through encouraging students to examine a proble m, identify alternative solutions, develop selection criteria, think creatively, make decisions, and convince their peers that their conclusions are accurate. We include several PBL exercises and cases in this Instructor’s Manual. b. Drill Concepts – B set exercises in the back of each chapter . Worksheet s for these exercises are available under Instructor Resources in Connect. c. Tie it all together – Demonstration problem provided in each chapter of the instructor’s manual. Worksheet s for these problems are available under Instructor Resources in Connect. d. ATC Problems – The ATC problems are located at the end of every chapter. They require students analyze , think and communicate . This section includes several types of problems but two that are useful in class are Business Applications Cases and hypothetical Ethical Dilemmas . The business applications cases focus on financial statement analysis. They relate chapter topics to full - featured annual reports such as Target Corporation’s report reproduced in Appendix B of the textbook. The ethical dilemmas concern issues that have a direct bearing on financial statements. Students are required to address the impact on financial reporting prior to discussing the ethical implications. Since each case is independent of the othe rs, you can include cases 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 class discussion and provide real - world relevance that cannot be obtained by exclusively workin g problems.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 11 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. 3. Follow up with a post - class homework in Connect . We recommend assigning an A set problem in Connect for homework. These problems should mirror the B set problems that were worked in class. The A set problems are like the B set except use different names and numbers. Only the A set problems are available in Connect. Emphasize to students that accounting is a “learn by doing” subject. Draw analogies with sports or music. Students wouldn’t expect to be able to make free throws or play a new piece of music without many hours of regular practice. Could they learn to ski by watching? Mastering accounting requires the same kind of effort. 2.3 COURSE MANAGEMENT TIPS AND TEAM LEARNING 1. Assemble a course pack of all the demonstration problems and student worksheet s. 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 short problems or review planned if you finish early. Experienced instructors know, just because you’ve covered it doesn’t mean students know it! 3. Have students work problems and in - class quizzes in teams. Team learning is highly effective. One of the challenges of working problems in class is being able to address student questions 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 best solution to this problem as it frees up instructor time by allowing students to help each oth er. Some students are extremely bright, and they quickly build a knowledge base that helps in assisting weaker students. This system obviously enhances the learning experience for the weaker students, but what does it do for the brighter students? Our experience suggests that group work also has a positive effect on bright students. Teaching is a learning experience. In t he process of helping their classmates, brighter students learn valuable communication skills. Knowing something and being able to properly verbalize it are two different things. The teaching relationship not only enlightens the weak student but also rei nforces comprehension and fosters confidence in the bright student. The needs of weaker and brighter students are complementary; both benefit from team learning activities. Team learning also encourages students to seek instructor help when they need it. If all members of a group are confused, the reluctance of individual students to ask questions is overcome by the opportunity to pose questions from the group, rather than a single student. We receive significantly more questions when students are working in groups than when we are lecturing. The result is that team learning provides a better atmosphere for technical as well as social development.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 12 Copyright ©2021 McGraw - Hill Education. 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, were not always so positive. First attempts to implement group learning produced mixed results. Why does team learning work in some classes and not in others? We believe the dif ference is attributable to how the groups are organized and operated. We have identified factors that have worked successfully. Please review these factors with a healthy sense of skepticism. Just as there is no perfect way to deliver a lecture, there i s no perfect formula for implementing team learning. Use our observations as a guide, but feel free to alter these strategies. Just as you have refined your capacity to deliver 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 of a successful group is diversity. If students are free to form their own groups, they tend to organize around homogeneous rather than divergent characteristics. We have found tha t random assignment usually provides diversity. Our class rolls are alphabetized. Once we determine the number of groups we need, we simply number the class roll from top to bottom. For example, if we need 20 groups, the first person on the roll is assi gned to group 1, the second person to group 2, the third to group 3, and so on, until the twentieth person is assigned to group 20. We then repeat the process placing the twenty - first person in group 1, the twenty - second in group 2, and so on, until all s tudents have been assigned to a group. We produce copies of the group assignment sheet and distribute them to the students on the second day of class. We tape the numbers “1” through “20” on the wall at different locations in the room and tell students t o go to the number on the wall that corresponds with their group number. We ask the group members to introduce themselves to one another and find a set of seats where the group can sit. The entire process takes about 10 minutes. We assign students to their groups on the second day of class. We also give the first in - class assignment on the second day of class. Some students will complain that they were unable to attend the first day of class and therefore cannot complete the ass ignment. Be understanding, and tell them to try their best. 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 reasonable number of absences, students don’t have to m ake up excuses and you don’t have to listen to them. Some of these policies developed from instances of teaching very large classes with as many as 180 students. In mass sections, it is necessary to establish policies that permit efficient implementation of team learning strategies. 2. Try starting with groups of four. On occasions when attrition causes group size to fall below two, we combine groups. Consequently, group size is normally between two to four students. Except for the reconstructed groups that result from the effects of attrition, students remain in the same groups throughout the course. M any of the social benefits depend on the development of strong personal relationships among group members. Such

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 13 Copyright ©2021 McGraw - Hill Education. 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 the duration of a typical introductory accounting course is too short to permit rapport building if group memberships are reshuffled during the term. While we recommend that students sta y within the same group throughout the entire course, we do consider individual circumstances. Occasionally, a student does not bond with the other members of a group. When this happens, we attempt to accommodate a request to change groups. Our objective , to teach accounting, can be undermined by antagonistic group experiences. Therefore, we are willing to make reasonable changes that promote cohesive groups. 3. Create an environment with natural incentives. Graded group assignments and quizzes are effective natural incentives. The group quiz is beneficial to brighter students as well as weaker students. Obviously, weaker students have the advantage of learning from the brighter students and benefiting from the opportunity to correct their mistakes before turning in the answer sheets. However, even exceptional students sometimes make careless mistakes. Consequently, they too can improve their quiz scores by che cking their answers with their peers. As previously mentioned, the brighter students benefit academically. Identifying and correcting the misconceptions of other students is an experience that refines their comprehension and promotes the development of c ommunication skills. Furthermore, bright students gain status among their peers, which builds confidence and elevates self - esteem. These benefits 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’s how to get groups motivated. We never should force participation. Students are naturally drawn to the group activity by a desire to improve grades. Fortunately, their goal is congruent with our desire to improve their comprehension of accounting. Comparing and discussing their answers to the quiz questions facilitates a tremendous learning experi ence. They receive immediate feedback enabling them to correct their misconceptions before the class proceeds with new material. The key point is that quizzes are designed for learning rather than evaluation. They are not intended as a means of evaluati ng performance. We require three or four individual exams at regular intervals 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 percentage to motivate interest, but not so large as to permit free riders to score high in the course. The benefit of group quizzes comes from the learning experience. Lack of effort in quiz work usually translates to poor performance on the individual exams. Af ter a few group quizzes, students tend to bond naturally and establish in - class working relationships.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 14 Copyright ©2021 McGraw - Hill Education. 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 to group members and to the instructor. Confront, in a friendly way , students who are sitting idle. Ask if you can help them get started. Sometimes they really need help and are just afraid to ask. In addition, productive group members tend to resent slackers. Peer pressure is frequently more persuasive than instructo r intervention. Consequently, groups tend to police themselves. On the rare occasion when someone continually refuses to carry his or her weight, the group is permitted to ask the person to leave. The free rider is then left with the unpleasant task of finding another group, or he or she mu st work independently. When group work is a privilege rather than a requirement, free riding is rarely a problem. 5. It is important to establish a cooperative environment . Students are not likely to self - sacrifice to help each other. To make groups work cooperatively, you must create win - win conditions. Carefully consider these “dos and don’ts”: First, do establish an absolute grading system. Using a curve creates a conflict of interest among students. If you rank students relatively, it is to their advantage for their classmates to perform poorly. Second, don’t require group members to evaluate each other. Peer evaluations are usually relative measures that put students against each other. If it is free riding that concerns you, there are better ways to deal with it (see Item No. 4 above). In short, if you really want students to help each other learn, you must create a safe, open environment. Keep in mind that team learning is a means to an end. Don’t get too caught up in group dynamics. We do not want to turn our accounting courses into general business courses. Our objective is always to teach a ccounting. Consequently, the group activities we use have a definitive accounting focus.

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    IFAB 2e: Introduction for Traditional Instructors’ Manual 15 Copyright ©2021 McGraw - Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw - Hill Education. 3. RESOURCES AVAILABLE As described in the text preface, many resources are available to help your students succeed . Further, there are also many instructor resources that accompany this text. We recommend that you familiarize yourself with the available resources and use the ones that work best for your teaching approach. A table that outlining a description and location of each resource is provided below . All resources are found in one of the following locations: 1. The actual textbook 2. The End - of - Chapter (EOC) content at the back of each chapter in the textbook. 3. The appendices located after the last chapter in the book . 4. The main course page on the Connect Site 5. Under the “Add Assignment”  “Question Bank” on the Connect Site 6. Under the “Add Assignment”  “ SmartBook ” on the Connect Site 7. Under the “Library”  “instructor resources” on the Connect Site 8. Under “Library”  “instructor resources” then “ additional student resources” on the Connect Site Resource Description and Location Book / Video Options Resource Description Location Hard / Paperback Book Textbook E - book F ull text online available in Connect 4 Smart B ook Interactive E - book (see description in Section 2.2 – 1 – b) 6 Lecture Videos Author created videos that cover every learning objective in the text. The videos average 10 minutes in length and are similar in style to Khan Academy 5 Pre - class Assignments Resource Description Location Lecture Videos with Assessment Lecture videos with an attached multiple choice quiz. The quizzes are automatically graded in Connect. 5 Smar tB ook Assignable Smart B ook chapters with assessment. You can customize these by selecting the learning objectives you want to cover. You can also customize the depth of coverage. If you select less time the student will only be required to read the most critical topics. 6 In - class Assignments Options Resource Description Location Self - Study Review Problem Located at the end of every chapter. This is a comprehensive chapter problem and solution. It covers most chapter learning objectives in one problem. 2 , 5 Open - Ended Questions Short open - ended questions to ensure students understand key conceptual issues covered in the chapter. 2 Demonstration Problems Comprehensive chapter problem without solution. Used extensively in the instructor’s manual. 7

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