Is intro to accounting supposed to be this hard?
March 7, 2020 1:29 PM Subscribe
Just did pretty poorly on the timed portion of my midterm for my first part time class. Am I destined for failure?
I'm currently in an online accounting certification program part time. I work full time in a customer service field that is unrelated to accounting and I don't have an accounting background, but my math skills are strong.
I've been doing really well on the homework for the course as well as on the first open book test (and probably on the open book portion of the midterm although I haven't received the score back for that yet). I've been reading the chapters, taking extensive notes, and made flash cards for myself.
The problem is that with a full time job, home management, and a family that all require a hefty chunk of brain space, I'm finding it difficult to retain all the rules and formulas in order to do on-the-spot recall. The course is also asynchronous so there really aren't full lectures to review, just textbook chapters. As a result while I know where to locate the right concepts and apply them, I'm having a much more challenging time without the written resources at hand than I would in a typical school setting. I did fairly poorly on the timed closed book portion of the midterm (71%).
Because I'm doing this course online, I don't have a frame of reference as to how the rest of the class is doing or if this is normal for accounting. Is it normal for Intro to Accounting to be this difficult?
I'm betting later classes build off these concepts. What can I do with my already limited time to make it easier to retain information?
I'm currently in an online accounting certification program part time. I work full time in a customer service field that is unrelated to accounting and I don't have an accounting background, but my math skills are strong.
I've been doing really well on the homework for the course as well as on the first open book test (and probably on the open book portion of the midterm although I haven't received the score back for that yet). I've been reading the chapters, taking extensive notes, and made flash cards for myself.
The problem is that with a full time job, home management, and a family that all require a hefty chunk of brain space, I'm finding it difficult to retain all the rules and formulas in order to do on-the-spot recall. The course is also asynchronous so there really aren't full lectures to review, just textbook chapters. As a result while I know where to locate the right concepts and apply them, I'm having a much more challenging time without the written resources at hand than I would in a typical school setting. I did fairly poorly on the timed closed book portion of the midterm (71%).
Because I'm doing this course online, I don't have a frame of reference as to how the rest of the class is doing or if this is normal for accounting. Is it normal for Intro to Accounting to be this difficult?
I'm betting later classes build off these concepts. What can I do with my already limited time to make it easier to retain information?
Best answer: When I first went to college, at age 48, one of my first classes was accounting. The instructor told us to each build a reference chart of formulas, terminology, etc. for ourselves, and we would at one point turn it in and receives points for completeness and accuracy. I suggest to you, if you're not already doing it, to create a "cheat sheet" for yourself. The act of writing the information and daily review of it might help you to remember details better. It worked for me.
posted by ydaltak at 1:52 PM on March 7, 2020 [3 favorites]
posted by ydaltak at 1:52 PM on March 7, 2020 [3 favorites]
Well, if you're doing well on the open-book, maybe this comment isn't relevant. But here goes; my experience.
I took accounting in a couple night courses in my 30s. The teacher said at the start something like this, "If you try to make sense of accounting, you won't do well in this course. Accounting is a set of conventions. If everyone in business applies the conventions in a rigorous way, one gets measures that are comparable across businesses. Not necessarily true, but conventional measures." (And this teacher was a member of the FASB board!)
So for example, depreciation sometimes reflects a real loss of value but in other uses is a way of expensing an asset over time that may not depreciate. The terms "asset" and "debit" don't have the meanings they have in normal English but are the conventions of double-entry accounting. Have you covered "good will" yet? Talk about conventions.
Don't think. Just do.
In the classes I took, there was often a turning point where the students who were going to do well in the course started doing better, in part, because they stopped trying to make accounting make sense.
This advice is easier to hear than to actualize.
posted by tmdonahue at 2:50 PM on March 7, 2020 [6 favorites]
I took accounting in a couple night courses in my 30s. The teacher said at the start something like this, "If you try to make sense of accounting, you won't do well in this course. Accounting is a set of conventions. If everyone in business applies the conventions in a rigorous way, one gets measures that are comparable across businesses. Not necessarily true, but conventional measures." (And this teacher was a member of the FASB board!)
So for example, depreciation sometimes reflects a real loss of value but in other uses is a way of expensing an asset over time that may not depreciate. The terms "asset" and "debit" don't have the meanings they have in normal English but are the conventions of double-entry accounting. Have you covered "good will" yet? Talk about conventions.
Don't think. Just do.
In the classes I took, there was often a turning point where the students who were going to do well in the course started doing better, in part, because they stopped trying to make accounting make sense.
This advice is easier to hear than to actualize.
posted by tmdonahue at 2:50 PM on March 7, 2020 [6 favorites]
If you try to make sense of accounting, you won't do well in this course. Accounting is a set of conventions.
This is very much my experience and I’m an accountant. I was doing really poorly at my introductory stuff whilst I tried to make sense of it. Once I started to treat it like times tables or prime numbers and just learnt the basics by heart I was unstoppable.
The terms you should know are assets, liabilities, equity, income and expense. Every account slots into these five categories.
The conventions you should learn are that 1/ there has to always be a dr and a cr, 2/ assets and expenses get bigger with dr and smaller with a cr. 3/ all other categories work the other way round.
That’s it and should get you through any introductory accounting exam.
I am a bit confused because you mention formulas. You’ll note that I didn’t mention any formulas. If you actually need formulas I am wondering if you’re doing valuations or cost accounting? That does not tend to be what people do as 101 type course though.
posted by koahiatamadl at 3:17 PM on March 7, 2020 [1 favorite]
This is very much my experience and I’m an accountant. I was doing really poorly at my introductory stuff whilst I tried to make sense of it. Once I started to treat it like times tables or prime numbers and just learnt the basics by heart I was unstoppable.
The terms you should know are assets, liabilities, equity, income and expense. Every account slots into these five categories.
The conventions you should learn are that 1/ there has to always be a dr and a cr, 2/ assets and expenses get bigger with dr and smaller with a cr. 3/ all other categories work the other way round.
That’s it and should get you through any introductory accounting exam.
I am a bit confused because you mention formulas. You’ll note that I didn’t mention any formulas. If you actually need formulas I am wondering if you’re doing valuations or cost accounting? That does not tend to be what people do as 101 type course though.
posted by koahiatamadl at 3:17 PM on March 7, 2020 [1 favorite]
Adding my voice to the “don’t try too hard to make sense” crew. I wouldn’t say I “know” accounting, but I had to learn some stuff a few years ago because my company’s software included an accounting component. It made no sense at all to me, but then I stopped trying to understand the logic and just figure out what the software was doing. Once I saw it as just a database structure and some predefined functions, it got a lot easier. YMMV if you’re not a software person, but the larger point is to not ask why and just accept the conventions as a given.
posted by kevinbelt at 4:14 PM on March 7, 2020
posted by kevinbelt at 4:14 PM on March 7, 2020
Are you being asked to do analysis? Things like a quick ratio?
I found that accounting is simple logic once I grasped the concept of two sided entries and that for every debit there is an offsetting credit. For example if someone gave your company $100, you would debit cash and credit equity. And thank them as my teacher would say.
I have no way of knowing if 71% is a good score or otherwise. In intro accounting, it is my experience that people either got it and got in the 90s or missed the concept altogether. The teacher could be purposely trying to scale the test.
One thing that helped me was to try to apply the concepts to my everyday life. If I purchased say toilet paper, I would try to figure out the entries. Credit cash bc reduced it and cash is an asset and debit bathroom supplies since you increased the asset of TP. That sort of thing.
posted by AugustWest at 6:13 PM on March 7, 2020
I found that accounting is simple logic once I grasped the concept of two sided entries and that for every debit there is an offsetting credit. For example if someone gave your company $100, you would debit cash and credit equity. And thank them as my teacher would say.
I have no way of knowing if 71% is a good score or otherwise. In intro accounting, it is my experience that people either got it and got in the 90s or missed the concept altogether. The teacher could be purposely trying to scale the test.
One thing that helped me was to try to apply the concepts to my everyday life. If I purchased say toilet paper, I would try to figure out the entries. Credit cash bc reduced it and cash is an asset and debit bathroom supplies since you increased the asset of TP. That sort of thing.
posted by AugustWest at 6:13 PM on March 7, 2020
Best answer: If it's mostly a question of recalling discrete facts and formulas, then using a spaced-repetition flash card system will let you memorize things more reliably. It will probably save you time overall. If you already have flash cards made up you could easily just type them in to a system like this.
Anki is a free option. The interface is not very polished but it does work. You can set up a system with paper flash cards and boxes as well, but I think the gradations and scheduling used by the computerized systems are more sophisticated.
One problem people have described that I think is probably true, is that using these systems feels more difficult, because you spend most of your time studying things that are most difficult for you to remember. But this is what makes them so efficient.
posted by vogon_poet at 6:49 PM on March 7, 2020 [2 favorites]
Anki is a free option. The interface is not very polished but it does work. You can set up a system with paper flash cards and boxes as well, but I think the gradations and scheduling used by the computerized systems are more sophisticated.
One problem people have described that I think is probably true, is that using these systems feels more difficult, because you spend most of your time studying things that are most difficult for you to remember. But this is what makes them so efficient.
posted by vogon_poet at 6:49 PM on March 7, 2020 [2 favorites]
I've had a second thought. If the course involves formulas and ratios, is it really financial accounting or is it management accounting or financial analysis? Both of those involve ratios a lot. But they're really hard to grasp without some background in financial accounting.
Management accounting gives managers internal data to help decision making. So, for example, a big firm might have two divisions and some of the output of division A becomes part of the input for division B. For financial accounting, it's all the same thing. But managers would want figures to aid decision making, thinks like, contribution margins and transfer prices.
Financial analysis uses the three standard public outputs of financial accounting-- the balance sheet, profit/loss statement, and sources of funds-- to compare the quarterly or annual reports of separate businesses. I can't remember the ratios anymore, but productivity per employee is surely one, where companies in the same general line of business could be profitably compared.
Other posters: please correct my descriptions of management accounting and financial analysis, since it's been years since I learned them and my career after getting my MBA wound up mostly in the not-for-profit sector.
posted by tmdonahue at 1:36 PM on March 8, 2020
Management accounting gives managers internal data to help decision making. So, for example, a big firm might have two divisions and some of the output of division A becomes part of the input for division B. For financial accounting, it's all the same thing. But managers would want figures to aid decision making, thinks like, contribution margins and transfer prices.
Financial analysis uses the three standard public outputs of financial accounting-- the balance sheet, profit/loss statement, and sources of funds-- to compare the quarterly or annual reports of separate businesses. I can't remember the ratios anymore, but productivity per employee is surely one, where companies in the same general line of business could be profitably compared.
Other posters: please correct my descriptions of management accounting and financial analysis, since it's been years since I learned them and my career after getting my MBA wound up mostly in the not-for-profit sector.
posted by tmdonahue at 1:36 PM on March 8, 2020
Response by poster: Thanks for the answers everyone! I really appreciate the study techniques. We are being asked to do analysis (quick ratio, future value, days sales in inventory, etc.) and I really think a giant reference chart might do the trick in keeping them all distinct.
The funny thing is that when I'm reading through the concepts they do make sense to me. I'm just having a hard time keeping track of all of them.
posted by donut_princess at 7:26 PM on March 8, 2020
The funny thing is that when I'm reading through the concepts they do make sense to me. I'm just having a hard time keeping track of all of them.
posted by donut_princess at 7:26 PM on March 8, 2020
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If not, maybe that just means your memorization skills aren't the best which, frankly, is probably not actually important for doing the job, but probably is important for the course. Can you go back and try to figure out what you didn't memorize that you should have? Is it equations? Concepts? How to apply equations to the concepts? Some of those are likely to be more significant than others.
As someone who teaches a quantitative subject at the college level (Astronomy/Physics in my case), I care not at all if someone has memorized an equation, but very much want them to have a quantitative understanding of the ideas -- so, they understand the ideas, but also understand how to attack a problem in that area using math.
posted by Betelgeuse at 1:48 PM on March 7, 2020 [1 favorite]