The effect of using analogies to integrate system dynamics concepts in accounting education

ABSTRACT

This paper analyses whether using analogies to integrate knowledge from other scientific areas increases the level of accounting knowledge. We defined two sets of analogies, one between the physical states of water and the economic and cash flows, and another between the concepts of stock, flow and feedback that were taken from the System Dynamics field and the financial statements. An experimental study was conducted with students from a European university, who participated in an accounting revision class. The grades of the students who attended the revision class using the analogies were higher than of those who did not attend this class. These findings reinforce the power of analogies as a useful tool and validate the benefits of integrating knowledge from other areas in accounting education.

KEYWORDS:

• Accounting education
• analogies
• system dynamics
• experimental study

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 These multiple-choice questions include, for example, the following: Which of the following statements is correct? a) The Balance sheet aims to measure the entity's financial position, as it presents the changes in the entity's assets, liabilities, and equity during a reporting period. b) The Balance sheet aims to measure the entity's financial position, as it presents the accumulated value of the entity's assets, liabilities, and equity at the end of the reporting period. c) The Income Statement aims to measure the entity's return, as it presents all the changes that occurred in the entity's assets and liabilities during a reporting period. d) The Income Statement aims to measure the entity's financial position, as it presents the accumulated value of the entity's income and expenses at the end of the reporting period.

2 These single numerical answers include, for example, the following: What is the cumulative effect of the following 6 transactions carried out in Year N on the amount of cash flows from operating activities in Year N?- Purchase of a warehouse to store raw materials for 600,000 euros, with payment in N+1. – Sale of goods, in cash, for 80,000 euros, the cost of which was 50,000 euros. – Obtaining a bank loan in the amount of 400,000 euros, to be repaid in 4 semiannual installments of the same amount, starting in January of N+1. – Electricity consumption, in the amount of 10,000 euros, payable in N+1. – Reimbursement of a debt to suppliers, in the amount of 30,000 euros. – Purchase of goods, on credit, for 70,000 euros.