An interactive, team-based simulation that offers students the opportunity to learn core functionalities of accounting by making them CFOs tasked with producing an annual report.
Crafted in collaboration with renowned Wharton Professor of Accounting Catherine Schrand, this immersive, web-based application creates the exacting conditions for learning proper accounting techniques in a corporate setting, as users explore how financial statements fit together in a year-end report.
Build-a-Bottom-Line (BABL, pronounced “babble”) provides an unparalleled method for teaching students the extent to which subjectivity in fiscal estimates drives the reported amounts in departmental or company-wide financial statements – a concept that inherently requires demonstration beyond the textbook.
Working on small teams, students collectively represent a Chief Financial Officer in the throes of putting together an annual report. As such, they review the increases and decreases of various account transactions – learning along the way that the amounts recorded require significant scrutiny and careful assessment before their true impact on the year-end financial reporting can be known.
Specifically, in the course of the simulation the CFOs are tasked with:
- deciding how to account for five events/transactions.
- adjusting the trial balance to reflect group decisions.
- preparing an annual report for the company based on the adjusted trial balance.
Upon logging into BABL, users are provided with an extensive amount of background information regarding the company and current accounting tasks at hand (as well as directions on how to complete these tasks using the app’s interactive toolkit).
For each transaction under review, students – who are handily equipped with a drop-down journal for making entries – are empowered to edit or add line-items as needed. Once a group is done with an entry, BABL will:
- prepare an Income Statement that reflects their decisions.
- automatically close temporary accounts.
- prepare a Balance Sheet for team review.
- produce a Statement of Cash Flows, which must then be manually adjusted.
BABL also allows users to create a complete annual report that includes the CFO/team-adjusted financial statements, footnotes (which can be uploaded as .pdf files), and other textual components reflective of standard reporting practices.
BABL‘s administrative interface permits instructors to view the final submissions for each group. Its diagnostic tools include a link to easily check answers as well as a link that calculates the mean, min, and max values for all of the groups’ entries. Professors can also choose to download the financial reports and footnotes for all groups simultaneously, which makes grading this assignment simple and straightforward.