Accounting Elements Financial Statements and the Cultivation of Financial Basic Skills

Accounting Elements Financial Statements and the Cultivation of
Financial Basic Skills
WU Haomin
School of Economics & Business, ShiHeZi University, Xin-Jiang, China, 83200
[email protected]
Abstract: The Principles of Accounting is an important foundation for professional courses, which aims
to popularize the “three basis”. This paper centers on the interrelation among the accounting elements,
financial reporting and financial management skills, and based on the integrated use of induction and
deduction methods and the integrated use of empirical research and normative research methods to
renovate and improve the financing and accounting’s teaching methods
Keywords: Accounting elements; Financial statements; Basic skills of Financial; the teaching of
Principles of Accounting
1. Introduction
The Principles of Accounting is an important and basic curriculum of economic management
specialties particularly is an elementary course of finance and economics specialized. The curriculum of
finance and economics, especially the major of accounting, financial management, financial and other
professions in every university are all set it to be the basic and compulsory courses. The Principles of
Accounting, management principle, statistics principle and the western economics are called the “four
principles” of economic management specialties. This fully proves the course’s fundamental position in
the curriculum of finance and economics. If not master the Principles of Accounting, the students in the
specialties of finance and economics can not have the comparatively systematic basic skills of financial
management and their professional learning process will also be blocked. And therefore, how to learn
the Principles of Accounting becomes an important restrictive factor related to whether to learn the
financial economy classes better particularly accounting, financial management and financing and so on.
2. the Principles of Accounting's curriculum location, function and its
characteristics
Accounting is a branch of financial economics, based on the curriculum system reform experiments
of Brigham Yung University and the Illinois University in United States and other famous universities
and my own insight, this paper shows the position and function of the Principles of Accounting in
curriculum system of financial economics through figure 1.
Figure 1: The status and function of the Principles of Accountings in financial economics curriculum
Financial economics
（
Financing macro-level
）
（
Accounting micro-level
Financial institutes
+ Financial market
+ Financial theory et al.
Corporate finance
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）
Investment
（
Preliminary accounting Accounting cycle Sales and Gathering, Merchandise and Payment, Payroll and
Performance evaluation, Carry forward and Stock, Prepare statement et al.
Financial analysis
Financing
decision
Capital investment decision.
）
Through learning of the Principles of Accounting, students can master the basic financial theories,
methods and operating skills, and pave the way for the studying of the following core curriculums as
financial accounting, financial management and financial report analysis and other professional
foundational courses. All of these determine inherently the Principles of Accounting’s teaching methods
should be defined as “three basis” training, so that students can hold “three-quality” throughout of the
whole professional learning process. Just as an proverb says, “To know truly is to know by cause”, to
converge around, the learning of the Principles of Accounting is to carry it’s point of holding the
knowledge’s interrelations of cause and effect and applied it flexibly. But to a large extent, the approach
of the teaching methods determines the effectiveness of the above objectives, the teaching of the
principles is of essential to the learning of it. Therefore, the paper puts forward a new teaching methods
that we should base on the purpose of cultivate effectively students’ basic financial skills and center on
an issue of accounting elements and financial statements’ learning, and use the teaching methods which
unifies induction and deduction, the standard and the real diagnosis research synthetically and flexibly.
3. Defects of traditional teaching methods
The content of specialized teaching materials in our country mostly follow the order which
compiles from part to whole, from general to concrete and from the theory to practice, and stressed the
expatiation and mastering of theoretical elementary knowledge. Therefore, constrained by that law, the
educational model mostly rigidly adheres old-style; the classroom instruction also follows the traditional
deductive methods. This is quite different from the thinking of empirical analysis in Western and the
United States where the accounting teaching methods and research are just follow the sequence which
being from part to whole, from general to concrete and from the theory to practice, and paying more
attention to the process which through observation and experiment to verify the conclusions. Different
models, even if no distinction between high and low quality, but for the sake of improving teaching
effectiveness more effectively, we should essentially use for reference from the modern teaching
methods and relative models.
Nowadays the shortcomings of Chinese current financial professional teaching model has been
highlighted that the pre-and post of teaching content has no cohesion and connection. And professional
teachers especially the Principles of Accounting’s face many unsolved problems such as the single
teaching method, dull teaching environment, lack of practical skills, out of date teaching materials. The
teaching of the Principles of accounting rigidly adheres to the compiling modes of textbooks and
explains sedulously theoretical knowledge in order. These lead to the worse results that college students
could not know the use of account system, accounting assumption, accounting affirmation and
accounting measurement after learning it, and could not know the meaning of the accounting categories
after programming it, and could not know the interrelations among financial statements and accounts
after frequent accounting treatments.
4. The innovation of accounting teaching methods
4.1 Comparison of old and new teaching models
In view of that background and conditions, to corrects the shortcomings, we should ponder
positively the profits and draw lessons from European and American experiences about accounting
teaching to innovate our existing educational model, and advocate and apply strongly the modern
methods or thinking such as induction and empirical research. There are two ways to do that, the first
one is that we can use the teaching methods which unifies induction and deduction, the standard and the
real diagnosis research synthetically and flexibly based on the present compiling modes of textbooks.
And the second one is that we could use the above new methods to innovate the compiling modes of our
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textbooks and existing educational model. Comparatively speaking, the first one that is the modified
method is the most realistic choice. Based on this point, this paper points out the differences between
the new and old educational models and the operating path of new teaching method as in figure 2.
Figure 2: the differences between new and old educational modes and operating path of the new teaching
method
Induction and Positive methods
Result
Reason
Teaching Methods
Deduction methods
：
Accounting
methodologies
Effect-2
：
Financial
decision
Analysis on
behavior patterns
：
Dynamic Processes of
Behavior Decision
Effect-1
Analysis of
Financial statement
Marketing mode
System of
Accounting knowledge
Static Processes of knowledge
communication
Planning mode
Obviously, the traditional teaching methods of the Principles of Accounting rigidly adhere to the
compiling modes of textbooks and explain sedulously theoretical knowledge in order and mainly use
deduction methods. And the teaching contents either seldom involve the practical cases or make various
research and discussion of it. Though the traditional teaching method pays great attention to the
knowledge reserve, resembling has the great potential of “inconvenience should be changing”,
Compared to the fast changing in modern economic life and the increasingly complex actual practice in
financial economics, it (the static knowledge reserve) has been out-of-date and difficult to meet the need
of the society. High efficiency of the market competition and limitations of the traditional teaching
method enable the old teaching mode hard to cope with new situations and provide fully knowledge
supports for the dynamic financial decision-making process. Therefore, the effective cultivation of
financial skills are meaningless under those cirmstances,
4.2 The inherent requirements of accounting subject
The traditional accounting teaching lay stress on the logicality and tightness of subject system and
emphasizes the systematization and continuity of professional knowledge, and pay attention to slowly
reserves knowledge so as to prepare practical needs. However, the traditional teaching methods fail to
recognize the dynamic characteristics of the specialized knowledge in teaching process and explain “all
of” the professional knowledge regardless of useful or useless, sedulously follow the old curriculum
system and structure regardless of outdate or not. The old teaching mode fails to hold fully the balance
of accounting subject’ s original system and its newly development, and the balance of the tightness of
subject and its prospective study. These lead to the single, parochial, experience-based and technify
tendency in accounting teaching and research.
As a branch of financial economics, accounting discipline itself has a characteristic of marginal
subjects, that is, it simultaneously has the features of social and technical sciences. Based on this,
accounting’s disciplinary system should simultaneously have advancement and foreseeing. However,
because of only bringing those relatively stable or mature subjects into the present course system, the
accounting curriculum system has lagged behind. Under this cirmstances, if the teaching of the
Principles of Accounting still deliberately and rigidly adhere to the established curriculum and teaching
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model, and still only indoctrinate the old theories and explain sedulously according to sequence, the
accounting teaching would be far away from its truly teaching purpose and its aim of financial basic
skills’ cultivation. And the accounting teaching would deviate from practice and the realization of
educational objectives can only be engaged in idle theorizing. Based on the present compiling modes of
textbooks, the new teaching methods breakthrough the rigid constraint of present compiling order in
classroom teaching, and arrange the teaching contents and problems by comprehensive use of the
methods of induction and deduction, normative research and positive research etc. and apply the new
operating path which being from part to whole, from general to concrete and from the theory to practice,
and paying more attention to the combination of practical cases and discussion of subject frontier
knowledge. As to the teaching order and the arrangement of course difficult points, we should explain
quickly and try best to memorize the basic knowledge of the Principles of Accounting, and pay more
attention to the teaching of financial statements and their interrelation around accounting elements and
financial statement analysis. Only in this way, the accounting teaching can realize the effectiveness of
“bi-directional irradiation”(cause and effect’s, and theory and practice’s), and promote the effect of
teaching and learning.
Figure 3: the interrelation among accounting elements, financial statement analysis and the cultivation of
financial basic skills
Accounting
Treatment
Subject, Account
Accounting entry and
Equation
Preparing and analysizing of statement
Analysis of accounting elements,
Structure of financial statement,
Relevant information and Influencing
factors
Accounting
Treatments
Principle of double entry
bookkeeping, Accounting
assumptions, principle and
theory
4.3 Accounting elements, financial statement analysis and financial basic skills
Accounting elements are the different manifestation of economic interest in accounting, and the
financial statements are the information carrier which comprehensively reflects different accounting
elements namely the fluctuations and changes of different stakeholders’ economic interests. The
financial reporting is the final product of accounting work. The financial basic skills of financial
statements analysis is closely related to the cultivation of financial quality. The process of financial
decision-making incarnates the accountants’ comprehensive judgment and evaluation on firms’ financial
situation through the procedures of financial statements analysis and so on. Therefore, in this process,
understanding the production and transmission process of financial statements, and understanding the
quality of financial statements and its influencing factors will become the basic requirements of
financial personnel. During the teaching of accounting principle, the inspiring and training of financial
reporting analysis’ capabilities help to promote the effectiveness of studying and pave well the way for
future professional learning.
5. Conclusion
In a word, the new teaching methods are more appropriate for following the advancement of the
development of the course, the modern educational thoughts and theory and the achievements of
economy, and help to realize the timely update of the level of subject and concept. The mode of
accounting research in America does emphasizes the construction of the accounting subject’s tightness
and also gives much consideration to the tracing research on relative courses and new economic
developments. It is necessary for us to draw lessons from American and other modern countries’. As this
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paper says, based on the multi-relationship among financial statements and through the analysis of
accounting elements, we could truly realize a completely new effect and enable the accounting teaching
more natural and vivid.
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