Betty's Bookkeeping Simulation
BETTY'S ACCURATE BOOKKEEPING - SIMULATION OVERVIEW & LEARNING OBJECTIVES
1. WHAT THE SIMULATION DOES
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Betty's Bookkeeping (titled "Betty's Accurate Bookkeeping") is a meta-simulation
where the student is hired to perform bookkeeping for a newly formed professional
service firm: a professional bookkeeping and accounting consultancy founded by
sole proprietor Betty Vance.
The student acts as Betty's lead bookkeeper over a two-month operating period
(spanning 56 sequential business transactions and month-end closing procedures
across October and November).
A core pedagogical feature of the simulation is its dual-system delivery:
1. Manual Bookkeeping System: Students record entries using traditional paper/
spreadsheet-style ledgers, journals, and multi-column workpapers.
2. Automated Bookkeeping Web Application: An interactive browser engine featuring
automated posting, real-time ledger generation, validation checks, and
instantaneous financial report generation.
*Purpose of the Dual System:* By experiencing both formats, students directly
observe why modern computerized accounting software eliminates tedious manual
posting errors, transposition mistakes, and mechanical cross-footing.
Key Operational Workflow & Scope:
- 56 Business Transactions & Adjustments across Months 1 and 2:
* Initial equity funding ($15,000 personal capital injection by Betty Vance).
* Office asset capitalization (computer workstations, furniture, office equipment).
* Upfront prepaid outlays (commercial office lease, professional licensing,
security systems, ethics and industry certifications).
* Service billing & revenue recognition across professional client accounts
(e.g., Acme Consulting, Summit Logistics, Precision Trades, Oak & Stone Cafe).
* Trade payables management with suppliers (Office Depot, CleanPro Janitorial,
Local Media Group, Apex Security).
* Managing temporary professional subcontractor help (AccountStaff Pro).
* Monthly client cash collections and partial vendor payoffs.
- Interactive Specialized Journals:
* Cash Receipts Journal (CR)
* Cash Disbursements Journal (CD)
* Sales / Billings on Account Journal (SA)
* Purchases on Account Journal (PA)
* General Journal (adjusting and closing entries)
- Workpapers & Financial Reports:
* Chronological General Journal and live General Ledger with running balances.
* Customer-level Accounts Receivable Subsidiary Ledger.
* Vendor-level Accounts Payable Subsidiary Ledger.
* Unadjusted & Adjusted Trial Balances.
* Monthly (October & November) and Comparative Income Statements and Balance Sheets.
2. WHAT THE STUDENT LEARNS
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The simulation provides practical training in service-firm accounting, trade credit,
and professional practice management:
A. Service Firm Revenue Recognition & Billing:
- Differentiating service revenue (billed professional hours, setup fees,
consulting, catch-up bookkeeping) from retail merchandising sales.
- Recording receivables at the time of client invoice issuance (SA entries)
and subsequent cash collections (CR entries), reinforcing accrual accounting.
B. Professional Services Expense Classification:
- Categorizing expenditures unique to service practices:
* Professional memberships, credentials, and ethics certifications.
* Temporary staffing and subcontracting help.
* Office leases, digital security monitoring, software, and advertising.
- Properly classifying consumable office/cleaning supplies as current assets
versus immediate expenses.
C. Accounts Receivable & Accounts Payable Sub-Ledger Reconciliation:
- Managing individual client ledgers (tracking open invoices and payments).
- Managing vendor accounts payable ledgers on credit terms (Net 30, partial payments).
- Reconciling individual client/vendor sub-balances to control accounts
(Account 1020 - Accounts Receivable and Account 2010 - Accounts Payable).
D. Capital Asset Acquisition & Startup Accounting:
- Capitalizing long-term office furniture and computing hardware (Office Equipment).
- Recording initial sole proprietorship owner equity (Betty Vance, Capital).
- Managing owner draws vs. operating expenses.
E. Manual vs. Automated System Comparison:
- Experiencing the exact operational friction, time cost, and risk of transposition
errors inherent in manual ledger posting and cross-footing.
- Understanding how automated database systems update general ledgers, sub-ledgers,
and trial balances simultaneously upon journal entry approval.
F. Multi-Period Financial Synthesis:
- Comparing Month 1 (startup costs, heavy setup overhead, ramp-up billings) with
Month 2 (stabilized billings, ongoing collections, recurring vendor expenses).
- Analyzing operating profitability, working capital liquidity, and net worth
growth on the comparative Balance Sheet and Income Statement.
Instructions and Answers are included.
What does the simulation look like ?
How Much ? Not an arm and a leg - $19.95.
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