LTSE 2018

1. Two viewpoints surrounding the use of debits
and credits in an introductory accounting
module
• It is essential (Vangermeersch,1997)
• It is not necessary (Pincus, 1997)
A CONCEPTS-BASED
APPROACH FOR THE
TEACHING OF AN
INTRODUCTORY
ACCOUNTING MODULE
Emphasis of the concepts-based approach is
a complete conceptual understanding of the
underlying transactions before they are
processed through bookkeeping entries.
Important to distinguish teaching of double
entry bookkeeping and the teaching of debits
and credits (Ingram, 1998)

2. Select
data
Process
data
Produce
information
(1)
Conceptual
framework
(2)
Accounting
equation
(3)
Debits
&
credits
Pedagogical approach demonstrates the
analysis of transactions using the principles of
the Conceptual Framework followed by the
accounting equation and then only using
debits and credits.
Example transactions
a. Entity pays C48 000 in advance to rent
space for four months.
b. Entity recognises rent expense for one
month.

3. Statement of financial position
Assets Workings C
Rent paid in advance (+48 000a – 12 000b) 36 000
Cash (100 000 – 48 000a) 52 000
88 000
Owners equity (100 000 – 12 000) 88 000
Statement of profit or loss
Expenses Workings C
Rent (+12 000b) 12 000
(1) Analysing transactions and preparing financial
statements using the principles of the Conceptual
Framework only.
(2) Analysing transactions using an accounting
equation worksheet
Assets = Liabilities + Owners equity
Cash Rent pd
in adv
Capital Expenses
Balance 100 000 100 000
(a) Rent
paid in
advance
(48 000) 48 000
(b) Rent
expense
(12 000) (12 000)
52 000 36 000 100 000 (12 000)

4. (3) Analysing transactions using debits and credits
as an outgrowth of the conceptual analysis and the
accounting equation before recording the
transactions in a journal and ledger.
David Kolitz
University of Exeter
Business School
d.l.Kolitz@exeter.ac.uk
Dr Cr
a. Rent paid in advance (A) 48 000
Cash (A) 48 000
Recognising the asset
b. Rent (E) 12 000
Rent paid in advance (A) 12 000
Recognising the expense
Rent paid in advance (A) Rent (E)
a Cash 48 000 b Rent
(E)
12 000 b Rent pd
in adv
12 000
Ingram, R. W. (1998). A Note on Teaching Debits and Credits in Elementary
Accounting. Issues in Accounting Education (May)
Kolitz, D.L. (2017). Financial Accounting: A Concepts-Based Introduction, Routledge
Pincus, K. V. (1997). Is teaching debits and credits essential in elementary
accounting? Issues in Accounting Education (Fall)
Vangermeersch, R. G. (1997). Dropping debits and credits in elementary
accounting: A huge disservice to students. Issues in Accounting Education (Fall)

5. The book
5
https://www.routledge.com/Financial-Accounting-A-Concepts-Based-
Introduction/Kolitz/p/book/9781138844971

6. 6

7. Extracts from book
7

8. Extracts from book . . .
8