Financial Accounting Tutor

Dan Gode and Rachana Gode
New York University

Executive Summary

The Financial Accounting Tutor is a comprehensive electronic textbook that includes all topics covered in a typical financial accounting course. It is innovative along two dimensions -- use of technology for textbooks, and the conceptual development of accounting topics.

Although computer technology is widely used in accounting via spreadsheets, word processors, presentations, bookkeeping systems, computerized supplements, and the Internet, the primary content of most textbooks is still delivered on paper in a non-interactive way. The Financial Accounting Tutor is the first electronic textbook that provides a comprehensive and interactive coverage of introductory financial accounting topics. It is neither a mere supplement that provides practice problems outside class, nor a small tutorial that covers just the accounting cycle. Instead, its objective is to change the very structure of textbooks and fundamentally improve the learning process.

The software also takes a new approach to the development of accounting concepts. It explains why many accrual concepts make sense from the perspective of providing appropriate incentives to managers and as a measure of value beyond the value that is captured in current cash flows. The significance attached to the comparison of incentives provided by alternative methods is quite new in an introductory accounting textbook. This motivates a discussion of accountants' logic and moves accounting away from a mere presentation of procedures. This stimulates student interest and makes accounting exciting to learn.

The software uses interactive and graphical tools to make the material engaging and interesting thereby dramatically enhancing the learning process. The discussions and examples are intertwined with brief, interactive problems that provide immediate feedback to the student. The software uses a drag and drop format of journal entry that significantly speeds learning. The software explains every concept with simple examples so that students learn more thoroughly and at a faster pace. By accelerating the learning of the basics, it allows more time to be spent on the judgment required for real-world applications of financial accounting.

Links to numerous web sites enable students to explore business sites and access current financial information about real companies. Unparalleled search, navigation, and annotation features make the software user friendly. Computations are simplified through the use of built-in financial calculator. This obviates the need to teach obsolete tools such as the annuity tables and allows the instructor to spend more time on the basics. The content can be printed, and the screen layout is designed for easy reading, which makes it easy to review the material.

The electronic medium enables frequent updates at a low cost. Thus, in spite of the significantly advanced features as compared to the textbook, the software was free until August 30, 1998 and is now being sold at a price that is a fraction of the price of textbooks. The electronic dissemination has also enabled immediate worldwide distribution. The software is also accompanied by an extensive set of practice problems for each chapter that make the software a complete electronic textbook.

The software has been received enthusiastically by students and instructors across the world. Student learning is significantly enhanced, which allows instructors to discuss the "soft issues" in class. Through its interactivity, simple examples, and graphical tools, the software makes learning accounting easy and fun. The new explanations of accounting concepts provide a rich understanding of the logic underlying the accounting concepts. Evidence of the successful results, benefits, and adaptability:

The software has been very successful at the undergraduate first course in financial accounting at New York University in fall of 1998. I did not use any textbook for the course. The software and its printouts were used as the primary textbook. Students were very enthusiastic about the software. The course ratings (based upon 41 responses) were as follows:

Overall evaluation of the instructor: 6.6 on a scale of 7
Overall evaluation of the course: 6.0 on a scale of 7
Overall evaluation of the software: 6.1 on a scale of 7

An official summary of the course evaluation is available upon request. The evaluation of the software is particularly noteworthy because usually course materials and textbooks do not receive such a high rating.

Since its introduction in September 1998, the software has been adopted by nearly 20 programs covering more than 5,000 students. In addition, more than 6,000 free copies of the trial version of the software have been downloaded from http://www.wiley.com/college/gode .

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