“I have really got into the groove of writing these KCQs, it is something that initially I dreaded but as time went on I looked forward to writing up my reflections for each chapter. While I should feel relieved that this is the last chapter and I can now focus all my attention on the important last steps of ASS#2, I am actually feeling a little sad, I am going to miss writing up my chapter reflections…”
“I look back at how much I have already accomplished and with a feeling of pride that I have conquered my fear of Microsoft Excel and dread of accounting. I am quite amazed at how much I have learnt over the past 11 weeks – who would have thought that I would ever create my own Blog!!!”
“I still believe that reading is not my strength and passion; nevertheless, I have learnt how to read properly. Instead of just reading through all the contents of a book, and roughly summarizing what the author says as I did in the past, I now know how to further my understanding, as well as ask questions to expand my knowledge.
We are marking each Step on KCQs progressively tougher as we go through the term, as people get used to what is expected. Generally, the standard of everyone’s KCQs in Step 6 was quite a bit higher than in previous Steps; although the average mark is much the same.
Many people are personally connecting well to some of the key concepts in the reading. For example, quite a few people are ‘paying a personal cost’ in deciding to study at university; and quite a few are determined to work hard to achieve something new for themselves. Your teaching staff, and fellow students, are here to work with you to help you realise your dreams. And, just as we saw in the reading this week that there is a time value of money, so people connected to the value of time to us personally:
“My favourite quote from this chapter is:
“Dost thou love life? Then do not squander time, for that’s the stuff life is made of.” Benjamin Franklin.
I find this quote just resonates with me and why I’m taking this unit in the first place. I want something meaningful out of my life, so I’m going to work hard for it. I’m not going to sit around and waste the precious time I have 😊.”
It is a privilege to be working with each of you in our unit, and (along with the rest of our teaching and marking staff) to support you in your learning about accounting, learning and online communication.
Many people have become much better at communicating their personal connections to some of the key concepts:
“In my lifetime, I have made many decisions. Some good, some bad. They have all affected my life in some way. All the decisions were not always good; some made me regret them. In high school, I chose to study maths, physics and chemistry instead of maths, English and literature. The results: my English was zero and I had to pay money to study English in Australia. And now I am sitting here, in my tiny rented room, trying my best to do this assessment in English: not using science equations or Vietnamese.”
“I will be missing this reflection for a couple of months. Honestly, I am happy because of this I was able to practice my English since this is not my first language and I have a hard time to speak and write English in many forms, but I’m proud that I can communicate well with other people; what I’m trying to say, is that I want to become more fluent in many ways.”
And, I would add, (like a number of people in our unit) you are writing your ASS#2 Step 6 in better and better English with each of your ‘KCQ Steps’; as step-by-step you are further developing and strengthening your written English communication skills.
Some people are also finding connections with the concepts we are studying in the Study Guide and their own life and in the real world around them:
“These concepts of accountancy keep chasing me everywhere. While shopping groceries, I try to guesstimate the CM for items on the shelf. These study chapters and the concepts I learnt so far have changed my way of thinking.”
Most people are getting the idea of not simply writing a summary of other people’s ideas (such as those of the author of the reading); but instead also giving our own responses and opinions to the key concepts in the reading, as we seek to develop our own understanding and personal meaning of these concepts.
A lot of people (but by no means everyone) expressed some sadness at coming to the end of the Study Guide and of the journey of being introduced to Accounting while doing the readings and writing our KCQs:
“Chapter 8 is the last chapter of the Study Guide for me to read. It feels both good and a little bit sad knowing this is the last chapter of this unit. I cannot believe how quickly this unit has gone and how much fun it has actually been!”
“Holy moly, this is the last KCQ’s of the semester, I have surprisingly really enjoyed this unit – it has been daunting, and frustrating, but I feel like I’ve learned a lot, and continue to learn new things … with each assessment.”
And as we get to the final chapter in the Study Guide, some found ‘whether to be sad or elated; this is the question’:
“Coming into chapter 8 I was engulfed by a feeling of uncertainty. For once it wasn’t due to the content itself or my evolving relationship with numbers, but due to the fact that I am embarking on the final chapter in the unit. I was unsure whether to be elated to have managed to conquer the Study Guide, or a little saddened to know that I am nearing the conclusion of my reflecting journey. It feels like many moons ago that I had my first taste of writing a chapter reflection and whilst initially I found them quite emotionally draining as a task, I have also found them to be quite a joy to write. It has been a wonderful experience to express my thoughts and feelings on a text for university in such a colloquial manner without the stressors of referencing and ensuring my work sounded more intellectual than how I would express myself in daily life.”
Not everyone was sad to finish their last KCQs; and a few were pleased they were not doing any more, particularly if they were finding it hard to get the ‘hang of them’ and to get good marks for them:
“The only thing I have learn’t about KCQs and writing my reflections and reactions is: the better I think I have understood the chapter the worse marks I got. Sorry Martin, but I am glad they are over.”
And quite a few people expressed the feeling that they had started to enjoy reflecting on the key concepts in the reading and writing their own KCQs and responses to these concepts:
“Over these last couple of weeks, believe it or not, I’ve actually started to enjoy writing KCQs! The unit coordinator has cleverly built up the unit, making sure that the students actually DO read the readings, but also giving the students a chance to learn in a more comprehensive way.”
“So here it is, the final KCQs I have to compile for this unit. Honestly, I have enjoyed completing [them] as they have helped me more actively participate in the accounting journey. No, I am not just saying this because I feel it is something the author likes to hear. Over the past few months, I have learnt and remembered more concepts based on accounting than I have done in any other unit in my first year of university. The accounting equation, accrual accounting, key cost relationships; they have all stuck so far.”
When people started the reading for this final chapter in the Study Guide, quite a few felt a feeling of excitement and expectation that various key concepts we have been studying about accounting and its role in decision making in business may come together for them:
“I feel like I am nearing the end of the journey and I am about to find out how to actually use accounting for decision making. I approach this chapter a little excited, in a nerdy kind of way.”
“After reading the introduction for this chapter I became excited … throughout this unit I have become engrossed in the idea that accounting could be a hindrance to a firm and knowing that this chapter will focus on this issue is exciting, I cannot wait to finally discover the answer.”
Also, many people commented that they liked how the readings connected many of the key concepts to ‘real life’, which supported them to be able to better understand the concepts (and also made it more interesting and enjoyable to learn about them):
“Reading Martin’s chapters is enjoyable … he links a lot of the new concepts to real life situations. This helps me to understand what is being explained … I think this is part of the reason that I don’t particularly hate reading about accounting, because it is all linked back to real life.”
And there was still a degree of nervousness about doing KCQs, as people were continuing to face the challenges of understanding the key concepts and relating it to their prior knowledge and previous experience, rather than simply ‘pretending’ to learn it by regurgitating material without really understanding it for themselves:
“This is my final KCQs, and personally I have found them quite difficult to write because I have never had to express my own thoughts and opinions on the topics. Usually, a summary is what is required but the KCQs were something very different to what I have experienced before. I struggled to not summarise the readings and gave it my best shot to actually critique the readings and say my thoughts and feelings. Connecting the concepts in the readings to my own knowledge and experience helped me to gain a better understanding of the topics. I have learnt that there is a lot of guess work in accounting and many assumptions and judgements are required.”
Quite a few people commented on the concept of opportunity cost and its importance in making decisions in business and in life. There is quite a degree of confusion about what the concept of opportunity cost is exactly. In part, this is because the concept of opportunity cost in accounting is slightly different to that in economics. In economics, the concept of opportunity cost is usually seen as the second best opportunity foregone, with the assumption being that what the firm is actually doing is the best choice. This is because of the ‘rational person’ assumption underlying much of economics: we are assumed to be all rational people and make the ‘best’ or ‘perfect’ choices.
In accounting, we know this is not true in reality. Accounting sees opportunity cost as being all the other things a firm could be doing with the limited resources it has rather than the thing it is actually doing; and that some of these other things it could be doing may be a better use of resources than what the firm is actually doing. A subtle, but critical, difference with economics.
Quite a few considered the concepts of sunk costs and also those of differential or incremental costs:
“A sunk cost is not relevant as it has already been committed and it won’t affect the cash flow of my business, however a differential cost is the difference between alternatives and therefore will impact on the cash flow of a firm.”
“Focus on what is relevant! Something … I tend to do when working through any assignment, and even at work is overwhelm myself with every single thing that I need to accomplish in a given timeframe! This does nothing but cause me stress and anxiety. Reading through Chapter 8.1 helped ground me, while also focusing on only what I need to in order to get to the next step! There is no point … focusing on all the mistakes we’ve made in the past, or the money that’s been wasted, rather focus on how we can flip that and change the outcome for the future!”
Many also considered the concept of contribution; and most people communicated a strong understanding of this concept:
“CM (contribution margin) = S (sales revenue) – VC (variable costs)!!! My boyfriend thought I was crazy when I started getting excited about contribution margins (Chapter 8.2) and talking out loud to myself. Being a store manager I have to look at monthly contribution reports, and they do my head in every time simply because I have never had them explained to me, so I didn’t understand. Reading through this section made me realize the simple fact, that all it is, is a break-down of variable costs against your sales revenue! These are so important in looking at where our firm’s costs are actually going, and where we need to improve!! This was by far my biggest ‘ah-ha’ moment of the chapter!”
Many people are still unclear what the concept of time value of money is. Some people are still holding onto the common misconception about the time value of money that money is worth more today because of inflation (it is often – though not always – cheaper to buy things today than in the future) or because we could invest money we have today, say, in the bank and earn interest whereas we cannot do that today with money we do not receive until sometime in the future:
“A dollar today buys us less in the future due to inflation.”
Although both these common misconceptions about the time value of money are true to some extent: we do value money today more than money in the future because of inflation (prices tend to rise on average over time) and because we can invest money we have today. However, the major reason why we value money more today compared to the ‘promise’ of an uncertain sum in the future is because money today is certain; we have it in our hands, or in our pocket. Money in the future is uncertain, because the future is uncertain. And we tend to value certainty:
“When you think about a dollar now and a dollar in the future … is it worth more to us because of its … certainty…”
“…anyone would prefer a dollar in hand today rather than being promised a dollar in the future, as the future is so uncertain…”
This is a good definition of the time value of money:
“… there is only certainty of what is in the now. Who knows what tomorrow will bring? Money is of more value today because who knows what will happen down the track or around the corner…The now is certain, the future of a firm is unknown.”
So quite a few people ‘got it’ and had a good sense of what the time value of money is: it is about the risk of the future and how we can tend to prefer the certainty of the present.
So, the key reason why we tend to value a dollar today more than a dollar in the future is not inflation, or the fact we could invest a dollar today in the bank and earn a return on it, although this is part of it; the key reason is risk. The dollar in the future is not certain, because the future is not certain; but the dollar today in our pocket is certain as we already have it.
Most people had a pretty good handle on the concept of payback period, including how it did not take into account cash flow after the payback period; and that there were benefits in understanding risk by looking at the payback period, that is at how long it would take to get your money back from an investment (after which time you can no longer lose money on the investment, because you have now got all of your money back that you invested):
Although most people struggled with the concepts of NPV and IRR and with making decisions involving cash flows that were projected many years into the future, some people did discuss well their developing insights and reflections about some of these concepts:
“I think that firms would only be able to look so far into the future without getting false results. I think the further into the future managers try to see, the more mistakes will be made.”
Time value of money is the discount applied to money as time progresses. The internal rate of return (IRR) of a potential investment is the rate of return where the present value of the expected future cash flow of the investment is equal to zero. Net present value discounts all expected future cash flows and then returns a dollar figure that is either negative or positive. Managers should only choose investments which return a positive figure or else they will be destroying value within their firm.
Some people commented that they were concerned they did not fully understand about discounted cash flows, NPV and IRR. Some also said it would have been great if we had done some practical examples in the reading.
Do not worry. Understanding – real understanding and developing our own personal meaning – rather than simply rote learning things with little or no real understanding takes time, and effort; and we will have the chance to use NPV and IRR (and payback period) in our ASS#2 Step 9.
And you know the great thing about making the effort to really understand something, and make our own sense of it? It is a lot more fun than simply rote learning (which can become very boring and tedious after a while, if that is all we do in our learning). And if we only rote learn something without also understanding it, we will find we quickly forget it, because it only ever gets into our short-term memory. So after we have completed an assessment, we will no longer need this informaton in our short-term memory and it will quickly get cleaned out so our short-term memory is ready for the next new thing.
But if we understand something we usually find we cannot forget it; it just stays with us, because our learning becomes part of us and can change the way we view aspects of the world around us. Some people in our unit have been experiencing their learning about accounting in this way, actually developing their own understanding about some of the key concepts and how they relate to the real world in which we live. And as we change the way we view the world (for example, the world of business) we can also change as people. Watch out, real learning (even about accounting!) can change our lives.
And quite a few people discussed the issue of qualitative factors and how decision making by managers is not just about plugging numbers into a spread sheet, but requires judgements:
“I feel that … using accounting to make a decision is a professional’s guessing game. While you have all these tools in which to compare and contrast data, and try to stay one step ahead of the game, you can still lose. “
Also, quite a few are seeing the connection between accounting and other business disciplines they may be interested in, for example marketing:
“One of the main things I am getting out of studying this subject is that I am not only learning about accounting, but also about business and how accounting can help or hinder business decisions. Accounting is somewhat the heart and soul of a business. Although I don’t have any interest in accounting, I am starting to understand the role accounting plays in what I am interested in and am studying – marketing. When I first saw that accounting was a core subject for my marketing degree I thought ‘..seriously?’ and decided I would take the subject as soon as possible to get it out of the way … But after learning more and more about accounting I am realising why it is a core subject. Accounting and marketing interconnect on more levels than I ever considered… product-mix decisions … another layer of the similarities between accounting and marketing.”
Quite a few people commented on their experience of learning for understanding and personal meaning:
“This is my last KCQs for this subject and I can honestly say that even with the large amount of assignment work, I have really enjoyed this subject … I honestly feel … I have a thorough understanding of the subject matter that I don’t believe I would have achieved in a conventionally designed unit.
I have enjoyed being left to navigate a topic and then have it addressed the following week in class. I have enjoyed being left to comment and formulate on concepts and ideas. I believe it is a great learning tool to be allowed to essentially identify areas by our self that we don’t understand and then address them. I believe the constant level of work required (which is well within capabilities) really ensures the many concepts are ingrained into our understanding. Thanks for providing a really different and enjoyable learning experience.”
Quite a number of people have also commented in their Step 6 on aspects of their learning in the unit. Some people have commented that they have learnt some useful lessons on ‘how to learn’ from doing the KCQs, including being proactive (rather than passive) learners. Quite a few people have commented that they have enjoyed how the unit has been run:
“At the beginning of the subject it felt like I was learning just to pass the subject, as the unit went on I realised how the knowledge I gained from ACCT11059 could be applied in real world environments from workplace applications to purchasing a personal investment property. In summary, Chapter 8 clarified for me why I should understand accounting, to make intelligent informed financial decisions in the workplace and in my personal life.”
Although some have found it to be frustrating, others have greatly benefited from the experience of learning in a ‘different way’ to simply ‘rote-learning’ material with limited personal understanding.
And lots of people are developing their own views and opinions about whether accounting can help, or hinder, managers and equity investors (and potentially others) to better understand and connect to what is really going on in a firm; and thus make better, or worse, decisions.
Some said accounting is part of the information and story people will use to make decisions, but that more is needed than just blindly following ‘numbers’; that accounting does not ‘make the decisions for us’:
“Ultimately the decisions of a manager are their own. Although there is so much useful information in accounting and what the past looks like and how bright the future may or may not be; they are still in control and they cannot blame the accounting if something does not work out. They also need to use their experiences and the evidence around them, to make the best decision for their firm.”
Some others particularly saw the benefit of accounting to making long-term decisions, where the ‘stakes’ and risks can often be very high for a business:
“Short term decisions aren’t a problem for me as it’s the here and now, it’s envisioning what the future may hold and having to make long term decisions that scares me a little. I guess that’s where the question that’s being continually asked in each chapter, which is ‘Can accounting help or hinder managers in making decisions’. After reading the full chapter I came to the conclusion that yes, in making long term decisions, accounting can definitely help the manager of the firm to make informed decisions.”
Others have commented on the value of accounting in making decisions about the future, even though it tells us about what happened in the past; and also the importance of whether accounting figures and information are accurate (and not ‘dressed up’ in some way to tell stories management may want others to believe):
“… the question of whether accounting can help or hinder a manager in making decisions on the future … over the past few weeks I have begun to see [how] accounting does help [us] make these decisions. I find myself thinking that without the view on the past that accounting provides, it is going to be very difficult for a manager to make decisions that are relative to their [existing] achievements. It’s all very well and good for a manager to set substantial goals, but if these goals are so out of touch with what has been achieved in the past and the trends that can be found when looking at the past, I believe they will be unreachable … ‘you can’t look forward without first looking at where you have come from.’
One point that I must make in relation to my positive opinion on accounting being used for decision making is … the ability of accounting to truly be of benefit to decision makers, is if the information provided by accountants is ‘real’ … the information … provided must be true and provided without manipulation to portray a particular viewpoint and without error.”
One of the questions I asked people in our Pre-Unit Survey when we started this term, was what do you think accounting is? Some people have commented about how their view of what accounting is has changed while studying our unit; and a number of people are developing some great initial insights. These developing insights will lay a wonderful foundation for those going on to study more accounting, either in the Bachelor of Accounting or as a major in the Bachelor of Business 0r other degrees:
“Thinking back over the study guide in its entirety and my personal reflections on the text contained, I have discovered that accounting is much more than mere numerical values displayed in various reports. For I now feel that accounting has more to do with the relationships between those within a firm and their interactions with the outside world, with financial figures just being one component of assisting firms to understand and expand their relationships.”
One definition of learning, is the process of changing our minds. And who would have thought that accounting might have something to do with relationships and interactions in the wonderful world of business; as we interact with each other within businesses and with others in the product, input and capital markets.
A few have commented about what they have learnt about accounting in our unit is changing the way they view aspects of the world of business around them:
“Upon finishing this chapter of the study guide and completing the last KCQs for this semester, I start to reflect back on what I have learnt. I seemed to have been feeling that I haven’t learnt much over this semester but now I have a bit of a different perspective. After spending the weekend helping my partner to decide whether or not to put one more worker onto one of his contracts for his company, I realized how much I had learnt over the past ten weeks. I found myself looking at this whole decision in a completely different way to what I would have in the past and I was just so pleased. I have gained so much information from this semester of accounting…”
A number of people have become supportive of the approach of using the KCQs (and PeerWise) to support people to read the Study Guide materials reflectively and for understanding as we progress through the unit:
“As the unit is drawing closer to the end it is good to know I have almost finished the entire Study Guide and having been on PeerWise and writing all my ‘KCQ Steps’ has been a good way to reflect … and [it] gets me thinking about all the material I read and studied. Might not be a bad idea to incorporate this into other units but it would definitely need to be weighted differently in terms of grades. 5% isn’t enough for the work as I think 7.5%-10% would be more encouraging for students. Overall, well done Martin!”
Also, one of the things I love about writing the Study Guide is that thousands of people over the years read it and then comment to me how they are experiencing reading it, including sometimes giving me suggestions and ideas about how to improve it for future students:
“I have reached the final chapter in the Study Guide, and although it has been a bumpy ride getting here I can’t say that I am walking away without learning anything. They have not only helped me in my accounting unit, but I believe they have helped me in everyday life, which has been valuable. I read through this chapter with ease, being able to understand each concept so easily was great. The concepts were so easy to relate to, and the fact that I could see how they were related to other concepts, from different chapters in the Study Guide was very interesting for me. This was a great ending to the Study Guide!”
“I have to confess I have no intention of being an accountant and am only doing this unit because it is a core subject. I expected it to be something to endure rather than enjoy. I expected this whole unit to be boring but it has been far from it.
I am surprised about how many things other than accounting that Martin has made me think about during this unit. I have really enjoyed Martin’s approach and found this unit to be extremely refreshing. Something I do find boring is the need to continually cite peer-reviewed journals and the referencing, referencing, referencing required in all of my other units.
Thank you, Martin, for giving me a different and unexpected experience of academic learning. I am also grateful that Martin has written his own study guide with personal experiences (and some great quotes) instead of getting everyone to buy a $150 textbook they’ll never look at again. Maybe that is due to his appreciation of accounting and he would consider that a bad investment!
I have found myself contemplating really big, non-accounting related, life issues when reading Martin’s study guide. The most profound being the true cost of everything being the thing you don’t get to do because you chose to do what you did. Wow!”
And as many people are feeling a little bit sad about reaching the end of their KCQ journey it is, of course, just the ‘start of something new’ as we take our learning with us; and especially for those who may have discovered an interest in accounting. The ‘start of something new’ is particularly apt for those studying the Bachelor of Accounting (or Accounting majors in other degrees), where many of us will be building on what we learn this term, as next term we study ACCT11081 Introductory Financial Accounting:
“I’m a little bit sad to say that this is my last key concepts and questions ever … *starts to tear up a little bit*. However, I think that it tells me that I’ve overcome some initially intimidating topics. I believe that it goes to show that some things can come to a happy ending! But wait! It’s not the ending, it’s the start of something new!“
And here is the last word on our last KCQs and our last chapter of the Study Guide:
“This being my last chapter reflection I am actually a little sad, I have come to love writing these KCQs. To begin with I couldn’t put my finger on why Martin wanted to hear about our thoughts on each chapter, however I now know that the intention of these KCQs is to get us to look deeper and gain a greater understanding. By asking questions and relating what we have learnt to our own experiences we are able to truly understand what we have read and not just regurgitate facts. Often when reading we can read without really taking anything in; writing our KCQs is a way of negating this tendency. I think I will finish off my last chapter review with my favourite quote from Chapter 8:
My interest is in the future because I am going to spend the rest of my life there.
Charles F. Kettering“
We look forward to working with you over the next two weeks; and also to reading your ASS#2 Steps 7-10.
And when you are checking out the ASS#2 Step 6 Exemplars on Moodle, don’t forget to ‘have your say’ by completing your student survey.