Key Stage(s) / KS4 and KS5
Subject(s) / Accounting, Business Studies& Economics
Objectives / Understand the information contained in a Balance Sheet and its relationship to the Cash account and Profit-and-Loss account.
Developa better understanding of specific financial terms.
Apply use of accounting records.
Experience benefits of using a spreadsheet to record transactions.
Duration / 90 minutes depending on experience of playing the game, players’ understanding of accounting records and whether paper or spreadsheet version is used.
In brief / The penultimate level of playing Business on the Move.Players no longer use cash, but instead log all their transactions using bespoke accounting records.
Page 24 of the ‘Guide for Delivering Learning’ that is part of Business on the Move describes Level 6 of the game as the ‘Accounting’ level. The Excel spreadsheet at the heart of this activity provides the accounting records to play this level of the game.
It is essential that learners have previously played Business on the Move in the ‘traditional’ manner using the banknotes provided in the game box.
Adopting this approach means learners will be familiarwith the rules and can concentrate on the challenges that this accounting level will bring.
PREPARATION:
The 7 illustrative turns found in the ‘Example’ tab on the spreadsheet ~ see lines 51-66 ~ constitute the quickest way to relate the spreadsheet to the workings of the board game.
Print off sufficient copies of the Accounts to provide a copy for every learner (available on the ‘Print’ tab of the spreadsheet).This can be staggered in two stages:
- Use of the Cash Account alone (especially appropriate if using the game to introduce accounting).
- Use of the three accounts together ~ Cash, Profit & Loss and Balance Sheet.
If the (Game) spreadsheet is to be used, the Banker for each game will require access to Excel using the separate spreadsheet tabs available for each company.
INTRODUCTION:
We recommend initially introducing the Cash Account on its own.
Two different ways of doing this are:
a)By asking players how realistic they think the game is. What makes it realistic? Mention of recognisable brands and multimodal transport options are likely. On the other hand what is particularly unrealistic about the game? Responses inevitably will include throwing dice and the costings used in the game, but does anyone mention that cash or banknotes are rarely used in modern business? Businesses record transactions in their accounts.
b)By ‘Newsflash’: This ‘surprise’ announcement works especially well if the players are well versed with the rules and are playing the game apparently ‘as normal’. At an appropriate point announce through a newsflash that the Government is increasingly concerned about the security and wastage issues associated with the use of banknotes. All businesses must:
- Add up their current cash balances and confirm them with the Bank
- Receive instead a credit for their ‘ Cash brought forward’ in a new bank account
- Record all future transactions on the Cash Account provided
Learners continue playing the game without bank notes and filling in the Cash Account instead.
At the end of the game the Cash Balance (line 15) is copied over into the standard balance sheet document to work out the winner in the usual manner.
PROGRESSION ~ PAPER-BASED RECORDS:
Players canbuild on their ‘Cash Account’ figures to create both a Profit-and-Loss Account and a Balance Sheet.
The ‘Example’ in the spreadsheetcan be used to demonstrate how inputting just 6 other figures (shown in orange on lines 20-33 in the ‘Example’) generates both a Profit-and-Loss Account and a Balance Sheet.
Players then continue playing the game and complete the full accounting record every turn.
At the end of the game, in addition to determining the winner by highest total asset value, results can be analysed by comparing key data:
- Cash balance (line 15)
- Stock fluctuations (lines 19 & 20)
- Gross profit (line 21)
- Net profit (lines 25 & 26)
- Net working capital (line 39)
Throughout the course of play it is very clear too that Total assets (line 41) match Total liabilities (line 48) ~ the balance sheet always balances.
PROGRESSION ~ USING THE (GAME) SPREADSHEET
Of course, completing paper records may help understanding but more realistically accounting records are recorded electronically.
Subject to the availability of computer/laptop screens, the Banker for each game can display the relevant Excel spreadsheet tab for each company and generate the accounting record automatically.
The orange digits in the spreadsheet indicatedata that mustbe inputted every turn.
SPECIAL NOTE:
If the spreadsheet is to be introduced in the middle of an ongoing game, it is recommended the paper balance sheet is completed as a necessary interim step. This will provide crucial values that need to be inputted under Period ‘0’ in the spreadsheet for each business:
Line 15: Cash balance
Line 20: Value of (undelivered) containers
Line 26: Cumulative profit so far
Line 30: Value of Planes
Line 31: Value of Ships
Line 32: Value of Trains
Line 33: Value of Trucks
Inserting these 7 figures under Period ‘0’ in the spreadsheet is a prerequisite to provide an accurate baseline for period ‘1’.
Thereafter overtyping theorange digitsin successive periods shouldenable the spreadsheet to operate smoothly from Period ‘1’ onwards.
Discussion after the game is over is similar to the above but, of course, the data is calculated automatically and trends can be more easily tracked.
The final four tabs on the spreadsheet display charts comparing players’ financial performance ~ Cash balance, Net profits, Net working capital and Total asset value (or business valuation).
For example, comparative net profits over a game lasting 10 periods/turns per player:
And, similarly, the different total asset values over the same 10 periods:
This method is heavy on IT resources but a very powerful way to demonstrate the efficiency and effectiveness of spreadsheets and accounting today.
EXTENSION TASKS:
(1)Imagine you play the game again from the very start at Period 1. Everything goes as well as it possibly can. Using the full accounts (from the Game spreadsheet) present a comprehensive record to show how successful you were by the end of Period 10.
(2)Repeat Task (1) except this time everything seems to go wrong. Through full accounting records, show just how it went so badly wrong that your bank finally decided to refuse your request to extend your overdraft.
(3)Use the financial data that the game has created to identify examples of:
- Income
- Expenditure
- Positive cash flow
- Negative cash flow
- Gross and net profit to sales ratios
- Liquidity ratios
- Return on capital employed
(4)Reinforce your understanding of precise financial definitions by tackling the learning activity, ‘Give Us a Clue’.
Note: Special thanks for his advice on all matters ‘accounting’ go to
Martin Firth of Chipchase Manners in Middlesbrough.