ISSUES IN ACCOUNTING EDUCATION American Accounting Association

Vol. 33, No. 4 DOI: 10.2308/iace-52254

November 2018
pp. 47–56

Analyzing Two Investments—An Instructional Case to

Introduce Basic Financial Accounting Concepts
Wendy J. Bailey
Janet A. Samuels
Arizona State University
ABSTRACT: This case introduces basic financial accounting concepts to graduate business students in an
accounting orientation session (i.e., ‘‘boot camp’’). Students assume they have invested in two cupcake businesses
in Paris and they now want to determine which business performed best. Instructors can use this case, which
provides students an opportunity to compare two businesses, to achieve several learning objectives including those
related to accrual accounting (i.e., when to record transactions), the legal aspects of business (i.e., company
structure, stock ownership, international accounting), and the use of estimates in financial reporting (i.e.,
depreciation, bad debts). This case also introduces students to the three basic financial statements (i.e., balance
sheet, income statement, statement of cash flows), and the evaluation of financial results (i.e., net income versus
cash flow, ratios). We have found that this simple, straightforward case helps students feel more confident when
working with basic financial accounting concepts.
Keywords: introductory financial accounting; accrual accounting concepts; accounting orientation; accounting
‘‘boot camp.’’

CASE

Y
ou have two friends (Jacques and Gilles) who recently graduated from culinary school in France. You decided to
invest in two cupcake shops and each friend will run one of the shops. Each will have full discretion over establishing
and managing the businesses. On January 1, 2018, you gave Jacques €50,000 and Gilles €75,000 to start the
businesses at the beginning of 2018 in exchange for 5,000 shares and 10,000 shares of common stock, respectively. Jacques
and Gilles have each agreed to receive a starting salary of €40,000 per year.
Jacques decided to focus on selling cupcakes directly to customers, so he opened a bakery and retail store in the 5th
Arrondissement of Paris. On January 1, 2018, he purchased equipment for €21,000 and furniture for €11,000. At that time, he
also purchased a store for €600,000. He paid €30,000 in cash and borrowed the remaining €570,000 from a bank. The bank
loan has an interest rate of 6 percent a year. Jacques pays interest on the 10th of the month for the previous month’s interest but
will pay no principal until January 1, 2028, when the loan is due in full. Although the loan is for 10 years, Jacques expects to
use the building for at least 30 years.
Gilles decided to focus on selling cupcakes to restaurants and corporations, so he rented baking and office space in the 20th
Arrondissement of Paris on January 1, 2018. He purchased equipment for €24,000 and a delivery truck for €30,000.
Now, in early January 2019, you have flown to Paris from your home in the United States to meet with Jacques and Gilles
and discuss the results of your investments.
Jacques said: Business has been good. Customers come in and pay cash1 when they purchase the cupcakes. This year I
collected €410,000 in cash from my customers. Throughout the year, I’ve purchased and received €280,000 in baking
and other supplies for the shop from various vendors. I pay cash when I purchase these items. I try to buy just what I

We thank Valaria P. Vendrzyk (editor) and two anonymous reviewers for their insightful comments.
Supplemental materials can be accessed by clicking the links in Appendix C.
Editor’s note: Accepted by Valaria P. Vendrzyk.
Submitted: October 2017
Accepted: July 2018
Published Online: September 2018

1
Many retail businesses consider credit cards from customers the same as cash because credit card companies transfer cash to the business within a few
days of the transaction.
47
48 Bailey and Samuels

need, so I only have about €100 of unused supplies in the shop at any point in time. The shop is working out great and
the customers love it. However, there has been more wear and tear on the furniture than I expected, so I’ll be replacing
most of the furniture in the next few weeks and that will cost me €17,000. Fortunately, the equipment I purchased is
probably good for another three years.
Jacques continued: The bank loan isn’t due until 2028 and I’ve been keeping current with the monthly interest payments of
€2,850. I’ll be paying December’s interest in the next few days. Also, I recently wrote you a dividend check for
€5,000. As we agreed, I received a salary of €40,000 for the year. Currently, I have €41,650 in the bank.
Gilles spoke next: I’ve focused on selling to restaurants and corporations on credit, so they pay me later. I typically collect
money within 30 days of making the sale. This year I sold €610,000 of merchandise; however, as of year-end, I’ve
only collected €550,000 of this amount and my customers still owe me the remainder. With the state of the current
economy, I’m worried about whether I’ll be able to collect anywhere from €5,000 to €15,000 of what my customers
still owe me. Throughout the year, I’ve also purchased baking and other supplies for the shop from various vendors.
To receive quantity discounts and purchase the supplies for a slightly lower price, I purchase more at a time. This year
I purchased and received €505,000 of supplies. My vendors let me buy on credit and then pay them later. Thus, I still
owe my vendors €25,000. Currently, I have about €10,000 of supplies that I haven’t used that are at the bakery.
Gilles continued: Business has been strong and I’ve been selling to a variety of places. I’ve put more miles on the delivery
truck than I expected to, so it will only last another three years. I will probably need to replace the equipment after
another two years. I’ve found a great location for my baking and office space, which I rent for only €1,400 a month.
However, to get that low rent, I had to sign a three-year lease and must pay three months of rent at a time. At the end
of December, I paid the landlord for rent through March 2019. Since the location is great and the rental rate is good, I
didn’t mind signing the three-year lease and having to pay rent in advance. I’ve also paid myself the €40,000 salary as
we agreed. Currently, I have €30,000 in the bank.
You told your friends that it seemed as though both businesses were doing well and you were happy with your
investments. After they left, you begin to think about the cash you originally gave each of them and how each performed.
‘‘Yes,’’ you think, ‘‘they both did well. Gilles received more cash from customers, but Jacques has more cash in the bank. So,
who did better’’?

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Volume 33, Number 4, 2018
Analyzing Two Investments—An Instructional Case to Introduce Basic Financial Accounting Concepts 49

APPENDIX A
2018 Cash Transactions for Jacques’ Cupcake Shoppe
Beginning Cash Balance €0
CASH INFLOWS
Initial investment €50,000
Cash from customers 410,000
Borrowed cash from the bank 570,000
Total Cash Inflows (receipts) €1,030,000

CASH OUTFLOWS
Purchased store (no land—just the store) €600,000
Purchase of equipment 21,000
Purchase of furniture 11,000
Interest paid to bank (11 months) 31,350
Cash paid to vendors for baking and other supplies 280,000
Cash paid to Jacques for his salary 40,000
Cash paid to you 5,000
Total Cash Outflows (disbursements) €988,350

Ending Cash Balance €41,650

APPENDIX B
2018 Cash Transactions for Gilles’ Cupcake Bakery
Beginning Cash Balance €0
CASH INFLOWS
Initial investment €75,000
Cash from customers 550,000
Total Cash Inflows (receipts) €625,000

CASH OUTFLOWS
Purchase of equipment €24,000
Purchase of delivery truck 30,000
Cash paid to vendors for baking and other supplies 480,000
Cash paid to Gilles for his salary 40,000
Rent payments (15 months) 21,000
Total Cash Outflows (disbursements) €595,000

Ending Cash Balance €30,000

Issues in Accounting Education

Volume 33, Number 4, 2018
50 Bailey and Samuels

CASE LEARNING OBJECTIVES AND IMPLEMENTATION GUIDANCE

Case Learning Objectives

Many graduate and executive education programs require an accounting orientation session to familiarize students with
basic financial statements and accounting concepts, either prior to the start of the term or during the first regular class session
(Reisner 2012; Symonds 2013). Such sessions often include explaining the purpose of the basic financial statements (balance
sheet and income statement) as well as concepts such as accrual accounting and the use of estimates in accounting. These
orientation sessions attempt to ‘‘level the playing field’’ by helping students who have varying accounting knowledge or
experience to begin formal coursework with a minimum level of proficiency, and to motivate students to put in the necessary
effort once the course begins (Capozzoli and Gundersen 2010; Jackson 2014). Additionally, research has found that M.B.A.
students who do well in an orientation session are more likely to perform at higher levels in their formal M.B.A. courses (Gupta
and Turek 2015).
Accordingly, the primary objectives of this case are for students to:
(1) comprehend the principles of accrual accounting,
(2) differentiate among the three basic financial statements,
(3) evaluate company performance,
(4) describe how estimates are used in preparing financial statements, and
(5) recognize how legal issues (e.g., company structure, stock ownership, international accounting) affect financial
statements.
This relatively simple case focuses on accrual accounting concepts, specifically the accounting principle that companies
recognize revenue (expenses) when earned (incurred), regardless of when cash is exchanged. To help level the playing field for
graduate students, a key discussion involves the different purposes and uses of the three basic financial statements. Students
need to understand the differences among a balance sheet, an income statement, and a statement of cash flows. In addition,
understanding what constitutes net income and the comparison of the financial performance of different companies are
fundamental concepts in learning accounting.
While non-accountants often believe that accounting is an exact measurement of transactions by a company, this case
demonstrates that estimates, such as potential bad debts and depreciation, are an inherent part of preparing financial statements.
Finally, the legal structure of a business (e.g. company structure and ownership) influences its accounting and financial
reporting. Additionally, with an increase in global business, a brief discussion of United States Generally Accepted Accounting
Principles (GAAP) versus International Financial Reporting Standards (IFRS) is often an important starting point for many
graduate accounting courses.
Teaching these basic learning objectives is an important aspect of accounting orientation sessions and using a simple case
is an effective means of accomplishing these objectives. However, few cases exist that appear to be targeted for this purpose.
We reviewed several case journals for cases that could be used during an accounting orientation2 and searched the internet
using words such as ‘‘MBA Accounting Boot Camp Case’’ and ‘‘MBA Accounting Orientation Case.’’ While we found several
cases that instructors could use in an introductory graduate financial accounting course (e.g., Shanklin and Ehlen 2017; Bible
and Sincerbeaux 2014; Hornik and Thornburg 2010; Anthony 2004; Peters, Shaw, and Thompson 2002), these cases typically
focus either strictly on specific accounting mechanics (e.g., t-accounts, the accounting equation), on the construction of
financial statements and ratio calculations, or on a single business entity.
Five cases that instructors could use to teach basic financial accounting concepts and the learning objectives identified
above include: Arborista, Inc. (Picconi, Smith, and Woods 2013), Christy’s Lemonade Stand (Cushing 1997), Baron Coburg3
(Andrews 1974), Hi and Dri (Kemerer 2008), and Sheepherders Game (Carlson, Higgins, and Lewis 1992), with the latter three
cases involving a comparison of two farmers. The Arborista, Inc. case uses a single business entity with two contracts that
differ in the timing of cash flow and revenue (expense) recognition. Students prepare financial statements (i.e., balance sheet,
income statement, statement of cash flows), which require focusing primarily on the differences between cash flows and net
income. The Christy’s Lemonade Stand case explains three days of cash transactions and students discuss how to best
determine earnings. The Baron Coburg case describes a baron who gives two peasants the use of land, an ox, a plow, and some
grain. At the end of the season, the peasants are left with worn assets and more grain, and students determine which peasant

2
In addition to ABI/Inform, we found the accounting education literature reviews by Apostolou, Dorminey, Hassell, and Rebele (2017, 2016, 2015),
Apostolou, Dorminey, Hassell, and Watson (2013), and Apostolou, Hassell, Rebele, and Watson (2010) especially useful in identifying potential cases.
3
Several M.B.A. programs, including those of Harvard University, use the Baron Coburg case (Broughton 2008). Accounting Text and Cases by
Anthony, Hawkins, and Merchant (2010) includes it as an end-of-chapter case.

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Analyzing Two Investments—An Instructional Case to Introduce Basic Financial Accounting Concepts 51

performed better. The Hi and Dri case is similar to Baron Coburg (except that the storyline involves aliens who are harvesting
moisture), as well as the Sheepherders Game (which includes sheep, goats, land, and wool).
Our case combines the best aspects of these previous cases, yet provides a more robust opportunity for discussing basic
financial accounting concepts than is currently available in the case literature. Like the Arborista, Inc. and Christy’s Lemonade
Stand cases, this case focuses on differences between cash and accrual accounting. However, our case includes numerous
accrual accounting issues (inventory, prepaid expenses, accrued expenses, accrued revenue), and allows the instructor to
expand the case and have students: (1) discuss legal issues that affect financial statements, (2) prepare financial statements, and
(3) calculate financial ratios. Similar to the farmer-type cases, our case focuses on basic transactions and asks the students to
determine which company performed better. However, the farmer-type cases use items in different units of measure (e.g., an ox,
a plow, sacks of grain; amounts of moisture; sheep) that must be translated into a given unit of currency. Such a translation is
not only cumbersome but the scenario is less useful for today’s M.B.A. students. Unlike those cases, and because our case
includes businesses located in France with a U.S. investor, it provides the opportunity to discuss international aspects of
incorporation, currency, and financial reporting. In addition, our case includes both a business start-up scenario and an
international setting, which are especially appealing to M.B.A. students who often seek graduate degrees in business to start a
business and/or who express a strong interest in international business (Graduate Management Admissions Council [GMAC]
2016).
While an instructor could use actual financial statements from a publicly traded company to teach basic financial
accounting concepts, we have found that real-world financial statements can be overwhelming for students who are
unfamiliar with accounting. For example, students often become preoccupied with the complexities of actual financial
statement accounts such as ‘‘deferred tax liability,’’ ‘‘treasury stock,’’ and ‘‘accumulated other comprehensive income.’’
Therefore, we believe it is better to use a simplified case to teach the basics of accrual accounting, the purpose of financial
statements, and the use of estimates; accounting complexities can then be discussed during the formal financial accounting
course.

Suggested Case Questions and Teaching Issues

We purposely omitted required questions from the body of the case. Instructors may choose one or more of the following
questions, depending on their objectives, when discussing the case:
1. How many companies exist? Will separate financial records be kept for each company or will the records be combined
into one set of financial records?
2. Who owns the company or companies?
3. In what unit of currency should the financial statements be prepared? U.S. Dollars? Euros?
4. You live in the U.S. but the businesses are located in France. Which ‘‘accounting rules’’ would most likely be used?
International Financial Reporting Standards (IFRS) or U.S. Generally Accepted Accounting Principles (GAAP)?
5. What should be considered when deciding who ‘‘did better’’?
a. Since Jacques received more cash from customers and has more cash in the bank, does that indicate he did better
than Gilles?
b. How much revenue should each company report for 2018?
c. Does the fact that Gilles may not collect all of the cash owed to him affect his reported revenue?
d. How much interest expense should Jacques report for 2018?
e. How much rent expense should Gilles report for 2018?
f. Each company incurs costs for baking and other supplies. How much should Gilles report for these costs? What
about Jacques?
g. Are Jacques’ purchases of equipment, a building, furniture, and a delivery van reported as expenses in 2018?
h. Is the dividend check for €5,000 that Jacques paid to you reported as an expense?
i. If one company reports more profit before tax than another company, does that mean it did better?
6. How can ratio analyses help determine which company did better?

Implementation Guidance
The intent of this case, which serves as a basic introduction to financial accounting, is to stimulate student thinking about
how financial accounting can be useful. We wrote this case primarily for use in graduate M.B.A.-type programs (e.g., M.B.A.,
Executive M.B.A., Master’s in Management) prior to the start of the first financial accounting course or for the first day of class.
Instructors could also use the case as a part of a class discussion and/or as a class assignment after introducing basic financial
accounting concepts.

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52 Bailey and Samuels

We have successfully used this case with graduate business students in M.B.A.-type programs.4 Since the case presents an
open-ended setting that allows the instructor to ask a wide variety of questions, using the case in class requires a total of 60 to
120 minutes, depending on the number of questions used and the depth of the ensuing discussion. When distributing the case,
instructors can have students derive the necessary cash transactions from the information in the case or give students the
appendices at the end of the case (i.e., Appendix A and Appendix B), which include a summary of the cash receipts and
disbursements for each business (see Appendix C for the downloadable versions of Appendices A and B).
Begin by asking the students to form groups of three to five people and to spend 20 to 30 minutes reading the material and
discussing the case questions. Instructors can write the selected questions on the board, include them in a PowerPoint
presentation, or distribute them directly to the students along with the case itself (see Appendix C for the downloadable version
of the case questions). Students generally will not be able to answer all of the questions during that time but they will identify
some of the major issues involved in the case. Instructors can use the remainder of the time to lead a class discussion in greater
depth.
Instructors can eliminate several of the questions if using the case in a 60-minute class (with 20 minutes for student-group
discussion and 40 minutes for class discussion). Alternatively, if the instructor has a 90- to 120-minute class, he or she can go
into greater depth, prepare financial statements, and/or introduce financial ratios (30 minutes for student-group discussion and
60 to 90 minutes for class discussion). The instructor can also assign the financial statements and/or ratio calculations as a
homework assignment for the first day of class after the orientation session. Finally, instructors can use some of the questions as
a take-home project or an exam to assess student learning.
For example, the first author/instructor often has 120 minutes to present and discuss the case. This instructor prefers not to
distribute Appendices A and B but asks students to prepare a statement of cash flows for Jacques and for Gilles as a homework
assignment for the first day of class. This instructor will often have the students spend 20 minutes in small groups discussing
the first four questions so that students have more time to create a balance sheet, an income statement, and ratios for both
Jacques and Gilles. This approach works especially well if an instructor wants to emphasize detailed T-accounts or journal
entries. The instructor discusses the first four questions to help the students understand how the balance sheet and income
statements are generated.
The first instructor generally approaches the class discussion in one of two ways: (1) by helping the students create the
balance sheet, income statement, statement of cash flows, and ratios for Jacques, followed by having the students attempt to
prepare the same information for Gilles in small groups at the end of the orientation; or (2) simultaneously creating both sets of
balance sheets, income statements, and ratios so as to better compare and contrast the accounting for Jacques and Gilles. At the
end of the orientation session, the first instructor will often distribute Exhibits 1–4 from the Teaching Notes so that the students
may refer to them later in the course. The first instructor will often end the orientation session by asking the students to create
basic cash flow statements for Jacques and Gilles for the first day of class and to prepare to discuss which company did better.
The second author/instructor has used this case in 60- to 75-minute orientation sessions and at a case demonstration for
prospective graduate students. Due to the shorter time frame, this instructor distributed a handout to the students that included
the case, the appendices, and the first five questions (omitting the clarifying questions under question 5). The instructor formed
student groups and gave them approximately 20 minutes to read the case and discuss the questions. While the students were not
able to answer all of the questions in that time frame, they were able to appreciate the complexities of the case. This instructor
then approached the class discussion by covering each of the five questions. Typically, very few students know how to respond
to question 5; the instructor used the subparts of Question 5 to lead the discussion. This instructor’s goal was not to create the
financial statements during this session but to simply teach the meaning of the basic financial statements, the underlying
principles of accrual accounting, and the use of estimates to derive accounting numbers. For shorter orientation sessions (e.g.,
60 minutes), this instructor discusses some of the questions at a very high level without calculating the amounts (e.g., questions
5f and 5g).

Classroom Validation
Both authors have used this case in approximately 11 orientation sessions with either online M.B.A.s (attending an in-
person orientation), face-to-face M.B.A.s, and Master’s in Management (MiM) current and prospective students. We collected

4
These M.B.A.-type programs included (1) a Master’s in Management program, (2) an online M.B.A. program with a face-to-face orientation session,
and (3) an M.B.A./Master’s of Accounting dual degree program. The M.B.A./Master’s of Accounting dual degree program is a program in which
students simultaneously earn an M.B.A. and a Master’s in Accounting. These students are typically liberal arts graduates with little or no accounting
background prior to entering this program. We used this case in the dual program’s orientation sessions prior to any accounting courses, just like we did
for the full-time M.B.A.s. Since the students are similar to full-time M.B.A.s when they completed this case at the beginning of their program, we will
refer to them as ‘‘M.B.A.s’’ for the remainder of this paper.

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Volume 33, Number 4, 2018
Analyzing Two Investments—An Instructional Case to Introduce Basic Financial Accounting Concepts 53

TABLE 1
Demographic Information
Post-Case Assessment Only Pre- and Post-Case Assessment
Prospective
M.B.A. MiM M.B.A. MiMa
Number of Participants 48 30 59 11
Gender
Male 44% 61% 68% Not Collected
Female 56% 39% 32%
Age (Std) 25.6 24.7 25.3 Not Collected
(3.5) (2.0) (4.4)
Work Experience (Std) 1.9 0.9 2.3 Not Collected
(2.3) (1.3) (4.1)
a
These students were undergraduate non-business students who were considering applying to the Master’s in Management (MiM) program. They attended
a free session that explained the MiM program and, as part of this session, participated in this case as an example of both the type of business information
they would learn in the MiM program and what a case was like.

feedback data for the most recent orientation sessions at two different universities. In addition to answering case-related
questions, we asked students to complete a brief self-assessment questionnaire about the orientation session using two different
sets of questions.5 In the first set, we only solicited post-orientation responses and we refer to this group as Post-Case
Assessment Only. In the second set, we solicited both pre- and post-orientation responses. We refer to this group as Pre- and
Post-Assessment. We present demographic information for both groups in Table 1. None of these students had any formal
graduate accounting coursework prior to the orientation session. We include the mean responses (along with standard
deviations) to the pre and/or post questions in Table 2 (Post-Case Assessment Only) and Tables 3 and 4 (Pre- and Post-Case
Assessment). Taken together, we believe these results demonstrate that, overall, students felt that the case helped meet the
learning objectives and was a valuable learning experience.6
As noted above, we had an opportunity to collect pre- and post-case assessments during two orientation sessions, one
Master’s in Management (MiM) and one M.B.A./Master’s of Accounting (M.B.A.) session. As reported in Table 3,
participants’ post-case responses were significantly higher than pre-case responses for both groups. Interestingly, students in the
M.B.A. orientation session also completed a pre-program online tutorial that was designed to help them learn basic financial
accounting concepts and financial statement preparation. The prospective MiM students did not complete any pre-session
material. Although sample sizes are vastly different, the prospective MiM students (who did not complete the pre-program
online tutorial) reported significantly lower pre-case assessments (p , 0.02) than the M.B.A. students. At the same time, the
ending post-case assessments do not differ (p . 0.15) between the groups. We believe this demonstrates that the case helps
improve self-assessed understanding of basic accounting concepts, regardless of whether the students completed pre-work
assignments. In short, we believe that this helps provide some additional evidence that this case can help ‘‘level the playing
field’’ for students who have differing levels of accounting knowledge.

TEACHING NOTES AND STUDENT VERSION OF THE CASE

Teaching Notes and the Student Version of the Case are available only to non-student-member subscribers to Issues in
Accounting Education through the American Accounting Association’s electronic publications system at http://aaapubs.org/.
Non-student-member subscribers should use their usernames and passwords for entry into the system where the Teaching Notes

5
We use self-assessment questions primarily because the goal of a ‘‘boot camp’’ orientation is as much about ‘‘leveling the playing field’’ and motivating
students as it is about achieving specific learning objectives. While the correlation between self-assessments of knowledge and learning is often
moderate at best, the correlation between self-assessments and motivation or other affective measures (e.g., satisfaction, effectiveness) is moderate to
large (Sitzmann, Ely, Brown, and Bauer 2010).
6
With the exception of the question ‘‘The case helped me identify how company performance can be evaluated,’’ untabulated statistics report no statistical
differences in the ending self-assessments between the Post-Case Assessment Only and the Pre- and Post-Case Assessment M.B.A.s (p-value . 0.05).
The difference in the performance question is most likely due to the instructor choosing to teach most of the cash flow analysis on the first day of class
rather than during the orientation session.

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Volume 33, Number 4, 2018
54 Bailey and Samuels

TABLE 2
Summary of Student Feedback for Post Assessment Onlya
M.B.A. MiM
(n ¼ 48) (n ¼ 30)
Questions on Learning Objectives
1. The case helped me comprehend that transactions are recorded when they occur rather than when cash is 4.38b 4.47
exchanged (i.e., accrual accounting). (0.57) (0.63)
2. The case helped me recognize how legal issues (e.g., company structure and stock ownership) affect 3.45 4.07
financial statements. (0.78) (0.69)
3. After the case, I can describe how estimates (e.g., depreciation and bad debts) are used in financial 4.47 3.97
statements. (0.58) (0.76)
4. The case helped me understand the different financial statements (e.g., Balance Sheet, Income Statement). 4.65 4.57
(0.57) (0.63)
5. The case helped me identify how company performance can be evaluated (e.g., Net Income versus Ending 4.22 4.13
Cash). (0.59) (0.78)
Questions on General Feedback
6. I feel more confident with the material after using this case. 4.35 4.25
(0.57) (0.70)
7. I thought the case was a valuable learning experience. 4.52 4.54
(0.51) (0.58)
a
Survey scale was 1 to 5 where 1 was ‘‘Strongly Disagree’’ and 5 was ‘‘Strongly Agree.’’
b
Means are presented in the table with standard deviations in parentheses.

TABLE 3
Summary of Student Feedback for Pre- and Post-Assessmenta
M.B.A. Prospective MiM
(n ¼ 59) (n ¼ 11)
Pre- Std. Post- Std. Pre- Std. Post- Std.
Questions on Learning Objectives Case Dev. Case Dev. t-stat. Case Dev. Case Dev. t-stat.

Pre: I understand what accrual accounting is. 3.58b (0.86) 4.17 (0.59) 4.80* 1.91 (0.94) 4.45 (0.82) 6.96*
Post: The case helped me comprehend that
transactions are recorded when they occur
rather than when cash is exchanged (i.e.,
accrual accounting).
Pre: I can describe how estimates (e.g., 3.22 (0.85) 3.95 (0.73) 5.72* 2.55 (1.04) 4.27 (0.79) 5.68*
depreciation and bad debts) are used in
financial statements.
Post: After the case, I can describe how
estimates (e.g., depreciation and bad debts)
are used in financial statements.
Pre: I understand the different financial 4.17 (0.75) 4.53 (0.63) 2.90* 3.00 (1.00) 4.73 (0.47) 5.68*
statements (e.g., Balance Sheet, Income
Statement).
Post: The case helped me understand the
different financial statements (e.g., Balance
Sheet, Income Statement).
* Indicates significant differences in the pre-case and post-case t-statistics (p , 0.01).
a
Survey scale was 1 to 5 where 1 was ‘‘Strongly Disagree’’ and 5 was ‘‘Strongly Agree.’’
b
Means are presented in the table with standard deviations in parentheses.

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Volume 33, Number 4, 2018
Analyzing Two Investments—An Instructional Case to Introduce Basic Financial Accounting Concepts 55

TABLE 4
Summary of Student Feedback for Pre- And Post-Assessmenta
M.B.A. Prospective MiM
(n ¼ 59) (n ¼ 11)
Questions on Learning Objectives
Post Only: The case helped me identify how company performance can be evaluated (e.g., Net 3.86b 4.18
Income versus Ending Cash). (0.78) (0.60)
Questions on General Feedback
Post Only: I feel more confident with the material after using this case. 4.17 4.09
(0.62) (0.70)
Post Only: I thought the case was a valuable learning experience. 4.36 4.45
(0.61) (0.69)
a
Survey scale was 1 to 5 where 1 was ‘‘Strongly Disagree’’ and 5 was ‘‘Strongly Agree.’’
b
Means are presented in the table with standard deviations in parentheses.

can be reviewed and printed. The ‘‘Student Version of the Case’’ is available as a supplemental file that is posted with the
Teaching Notes. Please do not make the Teaching Notes available to students or post them on websites.
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running/#300847b95d3a

APPENDIX C
iace-52254_Appendices A and B: http://dx.doi.org/10.2308/iace-52254.s01
iace-52254_Case Questions: http://dx.doi.org/10.2308/iace-52254.s02

Issues in Accounting Education

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