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Get your students to THINK about financial statements! This activity is a class favorite!
My students love putting the text down and take a break from the computer to use markers to dissect an income statement and balance sheet.
Students will need a set of markers or colored pencils. They will also need a basic understanding of account classifications. Some accounts don’t fit in a neat and tidy category…but this activity opens up dialogue about those mysterious accounts and allows me to bring a real world example in my classroom that introduces some terms and accounts that perhaps were not covered in the text. Ex: Goodwill Accounts, Cost of Merchandise Sold, and Research and Development.
Students are prompted to color each of the account classifications (assets, liabilities, owner’s equity, expenses, and revenue) various colors as well as identify various parts of the financial statements.
Students are then given 3 tasks. They are to locate various evidence pertaining to the financial statements that they just reviewed. I included some evidence to help the students with analyzing these tasks.
I do this activity with my level one accounting students just after completing income statements and balance sheets.