HCYHongye Chris Yang
Undergraduate introductory accounting

Interactive Balance Sheet Lab

Build Atlas Analytics from its first owner investment through sales, receivables, payables, operating expense, and depreciation. Every displayed balance is derived from the journal-entry ledger.

Lesson design

Learning objectives and sequence

The lesson moves from transaction classification to entries, statements, and the income-to-equity bridge. It is designed for a first exposure to accrual accounting, not as a speed exercise.

Students should be able to

  1. Explain why Assets = Liabilities + Equity after every valid transaction.
  2. Classify common accounts and identify their normal debit or credit balance.
  3. Predict how a transaction changes at least two accounts before viewing the entry.
  4. Distinguish cash movement from revenue recognition and expense recognition.
  5. Read a simple journal entry and connect temporary accounts to net income.
  6. Explain how net income flows into ending retained earnings.
  7. Construct and verify an ending balance sheet from a transaction ledger.

Suggested 75-minute class

Lesson sequence
TimeTeaching move
0–10 minutesAccounting equation, normal balances, and Atlas Analytics setup
10–35 minutesGuided Transactions 1–6 with prediction and explanatory feedback
35–50 minutesTransactions 7–10; cash versus income recognition
50–60 minutesJournal entries, temporary accounts, net income, and retained earnings
60–70 minutesFive misconception-based concept checks
70–75 minutesReconstruct and explain the ending balance sheet
Before the first entry

Normal balances are classification rules

Debit and credit identify sides of an account. They do not mean increase and decrease by themselves; the account’s normal balance determines the direction of an increase.

Normal-balance guide used in this lesson
Account classNormal balanceExamplesHow it reaches the statements
Assets and expensesDebitCash, A/R, Inventory, Equipment, COGS, Operating ExpenseAssets remain on the balance sheet; expenses reduce net income.
Liabilities, contributed equity, and revenueCreditA/P, Notes Payable, Common Stock, Sales Revenue, Service RevenueLiabilities and Common Stock remain on the balance sheet; revenue increases net income.
Contra-assetsCreditAccumulated DepreciationDisplayed as a reduction of the related asset without removing original cost.
Interactive lesson

Work through the Atlas Analytics ledger

Use the prediction feedback to diagnose reasoning, then connect the entry to the balance sheet, journal, transaction history, and retained-earnings bridge. No learner response is transmitted or stored.

Mode
0 of 10 transactions recorded
Transaction 1 of 10

Founder invests cash

The founder invests $60,000 cash in Atlas Analytics in exchange for common stock.

What is the overall effect on the accounting equation?
Predict before viewing the journal entry.
Assets $0Liabilities $0Equity $0
Atlas Analytics — Assets
AccountBalance
Total assets$0
Liabilities and equity
AccountBalance
Liabilities
Equity
Total liabilities and equity$0

Every valid journal entry is balanced before it reaches these statements.

Assessment

Check the accounting logic

Each item targets a common misconception. Feedback explains the accounting rule rather than merely marking an answer wrong.

1. Which transaction changes only the composition of assets?
Select one response.
2. Why is the bank loan not revenue?
Select one response.
3. Why does collecting Accounts Receivable not create revenue?
Select one response.
4. The company collects $10,000 for inventory that cost $6,000. What reaches retained earnings before other expenses?
Select one response.
5. Why can depreciation reduce net assets without reducing cash?
Select one response.
Instructor package

Class-ready materials

The four files use the same transaction authority and ending balances as the browser lesson. The answer key and rubric are separate from the student handout. These PDFs are print adjuncts and are not tagged PDFs; use the Accessible HTML materials as the primary accessible versions.

Student handout

Learning objectives, transaction prompts, journal-entry workspace, concept checks, and final statement template.

Download PDFAccessible HTML

Instructor guide

75-minute lesson sequence, discussion prompts, expected responses, misconception interventions, and facilitation notes.

Download PDFAccessible HTML

Answer key

All ten journal entries, income statement, retained-earnings bridge, ending balance sheet, and concept-check explanations.

Download PDFAccessible HTML

Grading rubric

A 100-point rubric covering transaction analysis, entries, statement construction, and explanatory accounting logic.

Download PDFAccessible HTML
Facilitation

Common misconceptions to surface

These are intended discussion points, not traps. The instructor guide maps each misconception to a question, expected diagnosis, and corrective explanation.

Cash is not automatically revenue

Owner investment and borrowing increase cash but do not represent earned income.

Cash payment is not automatically expense

Paying Accounts Payable settles a prior obligation; buying equipment exchanges one asset for another.

Inventory cost waits for the sale

Purchased inventory remains an asset until the related goods are sold and their cost becomes COGS.

Retained earnings is derived

Current-period revenue and expenses remain temporary accounts until net income is calculated and carried into ending retained earnings.