Need assignment done on concept maps

Concept Mapping - A Graphical Tool to Enhance Learning in an Introductory Cost or

Managerial Accounting Course

Sheila A. Handy, Ph.D., CPA, and Ralph S. Polimeni, Ph.D., CPA East Stroudsburg University, Hofstra University

Accounting education has been criticized for its principally rule-based mem- orization approach to teaching accounting. This paper provides a different teaching approach, known as concept mapping that can be utilized to promote meaningful learning. Concept maps are graphical tools used to organize and represent knowledge [Novak and Cañas, 2008] and can enable students to connect what they are learning with prior knowledge. The framework underlying concept mapping is presented along with a review of studies assessing their effectiveness in teaching accounting and examples that can be used in the teaching of an introductory cost or managerial accounting course. The concepts presented in this paper can also be applied to other courses.

Keywords: Accounting Education, Assessment, Concept Mapping Disciplines of Interest: Accounting

INTRODUCTION

The Accounting Education Change Commission was created in 1990 to address perceived problems in accounting education in existence at that time [AECC, 1990]. In its Position Statement #1, the commission affirmed that accounting programs should prepare students to become accountants and not be accountants when they enter the profession, and that accounting education should be the basis for life-long learning. Years later, Albrecht and Sack [2000] stated that “. . . accounting education, as currently structured, is outdated, broken, and needs to be modified significantly” (p. 1). It is clear that many constituencies have seen the need for major improvements to how accounting is taught. One criticism, related to the rule-based and memorization approach to teaching accounting skills might be addressed by employing Ausubel’s [1963] theory of meaningful learning. Ausubel defined meaningful learning by stating that “. . . meaningfully learned materials are related to existing objects in cognitive structure in ways making possible the understanding of various kinds of significant (e.g., derivative, qualifying, correlative) relationships” (p. 23). Ausubel had made a

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contrast between meaningful learning and rote learning and stated that in order to “learn meaningfully, students had to relate new knowledge (concepts and proposi- tions) to what they already know.” Novak’s [1998] conviction about meaningful learning that follows Ausubel’s theory seems to parallel the sentiments of those who have been critical about accounting education:

“The more we learn and organize knowledge in a given domain, the easier it is to acquire and use new knowledge in that domain. The curse is that when we try to learn new knowledge in a domain where we know little, and/or what we know is poorly organized, meaningful learning is difficult, usually time consuming, and tiring. Too often, we may escape the challenge by resorting to rote learning, even though we know that what we learn will soon be forgotten and it will not be of value in future learning (p. 24).”

Although Ausubel postulates that meaningful learning is more effective than rote learning, he did state that “. . . some classroom learning approaches the rote level (such as letters of the alphabet or foreign language vocabulary)” [1968, p. 25]. Therefore, although accounting educators should not promote only rote learning, it does have its place. For example, accounting students must memorize the accounting equation, the rules of debits and credits, and the components of the financial state- ments. However, if educators want to provide students with more than accounting content delivered by traditional lectures that they might memorize and quickly forget, then employing pedagogies that encourage meaningful learning is critical. Concept mapping is a technique that is founded on linking new knowledge to prior knowledge. This paper presents a discussion and examples of concept mapping for cost or managerial accounting based on Ausubel’s [1963] theory of meaningful learning and concept mapping which was developed by Novak and Gowin [1984].

CONCEPT MAPPING

As defined by Novak and Cañas, “Concept maps are graphical tools for organizing and representing knowledge. They include concepts, usually enclosed in circles or boxes of some type, and relationships between concepts indicated by a connecting line between two concepts” [2008, p. 1]. Concept maps are used to link concepts and knowledge and may allow students to achieve learning at higher levels than rote memorization. Concept maps originated in the area of science education, where in their most basic form consist of “two concepts connected by a linking word” [Novak and Gowin, 1984]. Novak and Gowin utilized three of Ausubel’s learning theories as the basis of concept mapping:

• “Hierarchical structure means that a learner recognizes knowledge as part of an inclusive framework.

• Progressive differentiation means a learner develops more ideas and concepts as knowledge deepens.

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• Integrative reconciliation means a learner perceives interrelationships” [Maas and Burgess-Wilkerson, 2012, p. 217].

While concept maps often look similar to flowcharts and diagrams, they are distinctly different. Flowcharts are “diagrammatic representations that illustrate the sequence of operations to be performed to get the solution of a problem” (Edraw.com) and diagrams are “graphic designs that explain rather than repre- sent” (merriam-webster.com). The principal distinction between the approaches is that concept mapping is the only one to use prior knowledge to create new knowledge in an organized fashion.

ASSESSMENT OF THE EFFECTIVENESS OF USING CONCEPT MAPPING IN TEACHING ACCOUNTING

Accounting educators have reported on the effectiveness of concept mapping in financial accounting classes [Chiou, 2008; Irvine, Cooper & Jones, 2006; Leauby, Szabat, and Maas, 2010; Mass & Leuby, 2005; Simon, 2007]. For example, students in an advanced accounting class in Taiwan who used concept mapping in the study of consolidated balance sheets achieved significantly higher scores on a course examination than those that learned the material in a traditional manner. Re- sponses to an assessment satisfaction questionnaire revealed that 97 percent of the students stated that “concept mapping helped me learn accounting” [Chiou, 2008, p. 381]. Table 1 reproduces the full results of the assessment satisfaction ques- tionnaire quoted from the study reported by Chiou [2008, p. 382].

In another study, researchers discovered that students who created concept maps in conjunction with reading two papers on earnings management indicated that their understanding of the material increased after preparing the concept maps [Irvine, Cooper & Jones, 2006]. However, in one study it was found that introductory financial accounting students who supplemented traditional instruction with con- cept maps did not achieve significantly higher test scores than those subjected to only traditional instruction [Leauby, Szabat, and Maas, 2010]. Instructors should not be discouraged however, as Todd and Kirk [1995] noted that the use of concept maps in an introductory course can provide students with a life-long skill. In a limited study of the efficacy of concept maps as a learning method, Maas and Leauby [2005] found that second semester introductory accounting students who used concept maps earned statistically higher grades on semester exams than those who were exposed to only traditional instruction. Students in a United Kingdom upper level financial accounting theory course indicated that concept mapping enhanced their learning, although there was no measure of achievement noted [Simon, 2007]. Although concept mapping was not directly mentioned, Schadewald and Limberg [1992] noted that routine problem solving skills of students in a tax class improved when students were given pictorial information in addition to written text. Park [1989] illustrated cost-volume-profit relationships

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using three-dimensional graphs, and Duffy [1990] reported employing a graphical analysis to teach interest capitalization. A more recent study discussed using concept maps to teach cost or managerial accounting [Greenberg & Wilner, 2015]. The authors provided examples of concept maps that are appropriate for teaching job order and process costing. Although the paper did not provide assessment data, the authors also cited the efficacy of the use of concept maps in improving students’ thinking skills.

USING CONCEPT MAPPING IN INTRODUCTORY COST/MANAGERIAL ACCOUNTING

Educators have used concept maps, in a limited fashion, as a learning aid in introductory financial accounting classes. As noted above, a review of the liter- ature on this topic revealed limited research on the use of concept mapping in introductory cost/managerial accounting classes. Concept maps span the range of simple to complex depending on the subject matter presented. While every attempt should be made to make a concept map as simple as possible, it is not always feasible when many interrelationships are involved. In fact, one of the major benefits of concept mapping is the ability to depict complex interrelation- ships which often necessitates a detailed concept map.

In a cost/managerial accounting course, an instructor can utilize concept mapping to introduce and connect a new topic, such as internal financial state- ments and reports, and show how it is similar to and differs from the external

Table 1. Perceptions of the Experimental Class Toward Concept Mapping

Perceptions % 1. Concept mapping helped me learn accounting 97 2. Concept mapping helped me integrate and clarify the interrelationships

among curriculum contents 97

3. Concept mapping learning strategy stimulated me to learn and think independently

95

4. Concept mapping helped me reduce the barriers and enhance my interest in learning accounting

89

5. Concept mapping can be a new accounting teaching and learning approach

95

6. I think the concept mapping strategy can be easily used in other curricula 95 7. I will consider using the concept mapping learning strategy in other

curricula 95

8. I was satisfied with using concept mapping to learn accounting 90 9. I liked using concept mapping to assist me to learn accounting 84

10. I can soon adapt to concept mapping 58

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financial statements that were covered in the preceding financial accounting course. Instructors can provide students with self-constructed maps (the authors developed examples of six concept maps which are presented in this paper) to be used as a teaching tool [Croasdell, Freeman, and Urbaczewski, 2003]. This could help students in an introductory cost/managerial accounting course visualize and relate to knowledge obtained in the introductory financial accounting course. Then, in upper-level classes, instructors can provide lessons in constructing concept maps. Encouraging students to take a more active role in their learning will benefit them not only during their education, but throughout their lives.

NATIONAL STANDARDS FOR BUSINESS EDUCATION

The National Standards for Business Education: What America’s Students Should Know and Be Able to Do in Business [NBEA, 2013], published by the National Business Education Association (NBEA), are standards for business educa- tion that are “based on a vision and a set of competencies designed to prepare students to become knowledgeable and ethical decision makers as they fulfill their roles as consumers, workers, and citizens in an increasingly global environment” (p. ix). Following are two of the relevant learning goals, as set forth by NBEA [2013], that apply to all the examples of concept maps presented in this paper:

All students should be able to do the following:

• Understand how businesses operate, and • Understand that the various functions of a business are not separate but

are interrelated, and that each one impacts the others (p. viii).

EXAMPLES OF CONCEPT MAPS SUITABLE FOR INTRODUCTORY COST/MANAGERIAL ACCOUNTING

The following six maps will be presented:

Figure 1 – Break-Even (B/E) Point Figure 2 – Relationship between B/E, Cost-Volume-Profit (CVP), and Margin of Safety (M of S) Figure 3 – Job Order Costing (JOC) versus Process Costing (PC) Figure 4 – Relationship between External and Internal Financial Statements Figure 5 – Master Budget of a Manufacturing Company Figure 6 – Relationship between Capital and Revenue Expenditures in a Manufacturing Company

Figure 1—Break-Even (B/E) Point

This map uses concepts from financial accounting (total revenue and total cost) as well as those studied in earlier chapters of the cost/managerial course

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(fixed and variable costs and contribution margin). By organizing the concepts in a hierarchical structure, the map allows students to follow the process of the break-even point calculation and understand the flow rather than simply memorize the formula.

Figure 2—Relationship between B/E, Cost-Volume-Profit (CVP), and Margin of Safety (M of S)

The purpose of break-even analysis is to determine the level of sales neces- sary to reach the point at which total revenue (TR) equals total costs (TC). This concept map builds on the knowledge learned in Figure 1 and can be used to show that margin of safety and cost-volume-profit analysis is an extension of break- even analysis and is built on those concepts. It allows the student to deepen

Figure 1. Break-Even Point

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knowledge of break-even analysis to calculations based on the basic B/E model, thus employing progressive differentiation.

Figure 3—Job Order Costing (JOC) versus Process Costing (PC)

This concept map shows that the principal difference between JOC and PC is how costs are accumulated through the work-in-process inventory account. Under JOC unit costs are developed for each job while under PC unit cost is computed for an entire department. This map builds on previously learned concepts including direct materials, direct labor, and manufacturing overhead, as well as raw materials and work-in-process inventories. Students will be able to visualize the relationships between individual jobs or departments, thus deepening their learning through inte- grative reconciliation. They can also associate finished goods inventories with pur- chased inventories learned in the introductory financial accounting course.

Figure 4 —Relationship between External and Internal Financial Statements

A concept map can be used to build on the knowledge of the elements of external financial statements presented in the financial accounting course and relate it through progressive differentiation to internal-use financial statements, which are commonly prepared under the concept of direct (or variable) costing, that present costs in their variable and fixed formats. Using direct costing is useful for decision making because it facilitates the control of costs. Students will see that the term gross profit is used on an external statement while contribution margin is used on an internal statement.

Figure 2. Relationship Between Break-Even (B/E), Cost-Volume-Profit (CVP), and Margin of Safety (M of S)

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While the term net income is used for both external and internal financial statements, net income might differ between formats because fixed factory overhead (commonly referred to as capitalized inventory cost) is included in inventories for external financial statements while it is excluded from inventories under direct costing.

Figure 5—Master Budget of a Manufacturing Company

A master budget for a manufacturing company has many components that grow out of the sales budget. Students studied sales, inventories, the balance sheet, income statement, and cash flow statement in the preceding financial

Figure 3. Job Order Costing (JOC) Versus Process Costing (PC)

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accounting course and can link this knowledge to the creation of a master budget. A concept map can be used to show how these budgets interrelate within the master budget and how the end result (budgeted balance sheet, income statement, and cash flow statement) is attained. The map will allow students to learn through

Figure 4. Relationship between External and Internal Financial Statements

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both progressive differentiation (from raw materials inventory to finished goods inventory) and integrative reconciliation (interrelationships among and between the budgets and the financial statements).

Figure 6 —Relationship between Capital and Revenue Expenditures in a Manufacturing Company

Students often have difficulty understanding the difference between capital and revenue expenditures and how these items take different paths on their journey to the income statement and balance sheet. A concept map can be very useful in providing a “big picture” of the process and illustrate how capital and

Figure 5. Master Budget of a Manufacturing Company

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revenue expenditures are interrelated. In the preceding financial accounting course, students learned the difference between recording expenditures as assets (capital) and as expenses (revenue). This concept map expands on that knowledge by relating costs to assets, product costs, selling general and administrative costs, and losses. Students will perceive the hierarchical structure of the two types of expenditures, see the

Figure 6. Relationship between Capital and Revenue Expenditures in a Manufacturing Company

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accumulation of previously understood costs into new inventories (progressive dif- ferentiation), and visualize the interrelationships between the financial statements through the flow of costs (integrative reconciliation).

CONSTRUCTING CONCEPT MAPS

The approach presented in this section, adapted from Novak & Cañas [2008], was utilized to develop the concept maps in this article. Figure 1 on break-even analysis will be used to explain how the following steps were employed:

1. Identify the topics that would benefit from a concept map. A concept map helps present a “big picture” of what is going on in a topic. Presentation of topics that require interrelated key words are usually good candidates for a concept map. For example, the break-even analysis from Figure 1 depicts the relationship between total revenue and total costs which are further subdivided into various components.

2. Identify the key words in the topic. Select the key words or terms that relate to a specific topic [Novak & Cañas, 2008]. The following key words were utilized to construct the break-even analysis concept map: Total Revenue; Total Costs; Variable Cost; Fixed Cost; Contribution Margin; Contribution Margin per Unit; Break-even Point in Units and Net Income or Net Loss. Each key word or term is placed in a circle or box on the map.

3. Depict the relationships between the key words by linking them together. Show how one key word or concept relates to or is derived from another key word or concept [Novak & Cañas, 2008]. For example, break-even analysis starts by computing total revenues and total costs. Once total costs are determined it is subdivided into variable and fixed costs, etc. The key words are linked, also referred to as “cross-links” [Novak & Cañas, 2008] via lines with arrows depicting the direction. When appropriate, insert a description of what happens between the circles. For example, the lines and arrows going from total cost to variable cost and fixed costs have the description “separates into” as a description in the break-even concept map.

Concept maps are often developed from top down, with the most important key words at the top or using a center concept with the most important key words being closer to the center. As noted by Cañas & Novak [2009], “Concept maps tend to be hierarchical in nature, with more general concepts at top and more specific concepts to the bottom. However, the hierarchical nature does not necessarily imply a physi- cally hierarchical structure, as concept maps can just as well be cyclical [Safayeni et al., 2005] or have more than one root concept.” The presentation format is a matter of preference and subject matter. General software programs, such as Excel, can be utilized to draw the concept maps; however, dedicated desktop software programs are

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available that create the concept maps [Clark, 2011], such as Cmap Tools, Inspiration (http://cmap.ihmc.us/), and Xmind (http://www.xmind.net/).

CONCLUSION

This paper has presented a discussion of concept mapping and examples of six concept maps that can be used as instructional aids in an introductory cost/managerial accounting course. In addition to serving as a method of relating new course content to that learned in a prior course, the concept maps provide students with useful visual aids that can assist them in mastering course content. Studies have indicated that concept mapping can help foster more meaningful learning and should be viewed as an additional pedagogical tool that is available to enhance student learning in a cost/managerial accounting course.

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