Do all business students taking financial accounting really need to know about the double-entry system of accounting with all of those debits and credits?

Some accounting educators believe that we should minimize the teaching of debits and credits in financial accounting. In fact, there are currently a number of accounting textbooks on the market that give light coverage of debits and credits or even avoid mentioning debits and credits entirely. Some educators believe that by eliminating debits and credits in financial accounting we can take the sting out of accounting and make it a little easier to digest for the non-accounting majors taking the course.

Mastering debits and credits is difficult according to most accounting educators. Through the elimination of difficult material in the introductory financial accounting course some accounting educators feel that far more students will enjoy their first course in accounting and maybe their instructor evaluations (student ratings) might even improve as well. Some educators might even make a strong case about avoiding debits and credits in financial accounting courses so that they can attract (instead of turn off) a greater number of business students to ultimately major in accounting. The topic of whether or not to teach debits and credits is a hot issue and is likely to generate a very lively discussion at any gathering of accounting educators.

I am not fully convinced that eliminating the coverage of debits and credits in financial accounting is in the best educational interest of the business students at our colleges and universities. Accounting is often called "The Language of Business," and business people in corporations regularly use debit and credit terminology. When shopping in any grocery store or department store, you will more than likely be asked if you are going to use a debit or a credit card for your transaction. Therefore, I believe that students of business should have some elementary understanding of how the double-entry system of accounting works. Eventually, the theory of debits and credits must be understood by accounting majors anyway.

I always enjoy hearing other accounting educators say, "Let the Intermediate Accounting Professors teach students about debits and credits." Actually, the standard at many business schools today is to offer just one Introductory Financial Accounting course as opposed to the two Principles of Accounting courses, which used to be the norm. Basically, the reduction to just one Introductory Financial Accounting course at many schools has already resulted in the need to cover additional topics in more detail in the Intermediate Accounting course sequence.

Most students and their family members have some sort of bank account whether it is a checking or savings account, and almost everyone has at least one debit and/or one credit card. Basically, our students have already been exposed to the accounting terminology of debits and credits. We cannot isolate our students from situations in business where they will be exposed to the usage of debit and credit terminology, so why not just illustrate how pervasive the usage of accounting really is?

I always have felt confident that students at the college level should be able to master the theory of debits and credits if we build upon their prior exposure and experience with debits and credits.

Our challenge as accounting educators is to expect the best from all of our financial accounting students-not just the accounting majors. Accounting educators should also try to minimize the misconceptions and confusion surrounding basic debit and credit terminology for all business students.

In every accounting class that I have taught there are always at least a few students in the class that firmly believe that debits are bad (- negative) and credits are good (+ positive). A short classroom discussion of the transactions illustrated in this article demonstrates to students why they might have this misconception about debits and credits. Spending class time discussing the following illustrations often helps to clarify the rules of double-entry accounting for students that are having a difficult time of grasping the basics.

Every term I go through an explanation of the fact that a debit or credit may turn out to be positive or negative depending on the type of accounts that we are dealing with. I also include in my explanation a couple of illustrations that deal with business transactions that most students are familiar with.

I am sure that many professors go through some sort of explanation to clarify the correct way to view the rules for debits and credits. However, I have often felt that it would be helpful if an author could present something like the following illustrations in an accounting textbook to eliminate the confusion that students have regarding the rules of debits and credits.

The "T" accounts below reflect how the County Kerry Bank handled the personal business transactions that Marisa Michaels engaged in during the month of June.

County Kerry Bank recorded the business transactions in the following accounts: