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In this age of increasingly global capital markets, rapid advances in technology, and a growing recognition of the importance of information as a business asset, it probably does our reputation as accountants-or academics-no good that the most heated debate in accounting education today is about, of all things, debits and credits. Accounting educators have yet to reach a consensus on the question: "Is teaching debits and credits essential in elementary accounting?" Never one to shrink from a good debate, I willingly answer this question in the negative. Teaching debits and credits in the introductory course is NOT essential.
Before I detail the logic behind my answer, let me make one thing clear. I have nothing against debits and credits. In fact, like most accountants, I find them a thing of both beauty and practicality-a rare blend indeed. In my own introductory accounting course materials, Core Concepts of Accounting Information, here is the first thing I say about double-entry bookkeeping (Pincus 1997, I-1-12):
If David Letterman were to create a list of the top ten reasons why accounting has progressed, the number-one spot on the list might well go to a conceptual tool: double-entry accounting systems.
I believe all accounting majors, and some non-majors, should be thoroughly versed in the details of debits and credits before they graduate. Yet, I also believe we are making a mistake to continue to focus on transaction recording and one-size-fits-all financial statement preparation as the central purpose of an introductory accounting course. In doing so, we are failing to heed what is happening in the real world we are supposedly readying our students to face.
Rick Elam, then Director of Relations with Educators for the AICPA, argued in the May 1995 issue of The CPA Letter that double-entry bookkeeping is rapidly losing its relevance in the real world. Newer software-such as the increasingly popular SAP-provides the capacity to collect a broader range of financial and nonfinancial information, more flexibility in report design, and better analytical support without maintaining a general ledger. Even at the low end of the market, simple accounting software, such as QuickBooks, has made transaction processing more user friendly than following a journal-entry format. Elam (1995) suggests that double-entry bookkeeping is becoming a dead language:
Traditional double-entry...