A Comprehensive Set of Introductory Financial Accounting Review Exercises: An Effect to Cause Approach

Most undergraduate and graduate financial accounting exercises follow a “forward based” pedagogical approach where students learn how accounting events (causes) are captured in the accounting system and appear on the financial statements (effects). While these forward based approaches are necessary and effective ways to teach the fundamentals of accounting, they provide a relatively narrow procedural perspective on how to use such knowledge. The reality is that many students will be required to solve problems where the ultimate goal is to discern the causes of financial statement outcomes. To solve such problems, “backward based” procedural knowledge is required. Research in cognitive psychology indicates students need exposure to problems that require different procedural knowledge to develop the flexible problem solving schemas necessary to address problems with different end goals (Chen & Mo, 2004). We present a series of financial accounting exercises designed to help students develop skills associated with analyzing financial statement outcomes (effects) to determine the causal accounting events. The exercises also provide a comprehensive review of the primary financial accounting topics typically addressed in introductory accounting courses. This allows the exercises to be used as an ongoing end of chapter review problem or as a comprehensive course review exercise.