1. WHAT THE SIMULATION DOES

--------------------------------------------------------------------------------

Leaking Plumbing LLC is an interactive, scenario-based bookkeeping simulation

designed around a multi-owner trade service business. The business owners—humorously

named "Smelly Smith" and "Stinky Brown"—have fired their previous bookkeeper after

becoming dissatisfied with messy records, and they hire the student on a

three-month trial basis to clean up and maintain their company books.

The student acts as the firm's head bookkeeper across a full operational quarter,

recording all routine service transactions, contractor activities, vendor purchases,

and period-end adjustments.

Core System Mechanics & Features:

 - Multi-Month Accounting Cycle:

     * Covers 3 consecutive operating months of high-volume service transactions

       ( 103 transactions) and period-close procedures.

 - Interactive Journalizing Platform:

     * Students evaluate business vouchers/source documents and record transactions

       into the General and Special Journals.

     * Includes automated entry validation and error checks to prevent unposted or

       unbalanced debits and credits from corrupting the general ledger.

 - Service Business & Trade Accounting Workflow:

     * Billing clients for plumbing services rendered (labor and service calls).

     * Tracking plumbing parts and supplies consumed on job sites.

     * Managing vendor accounts payable for plumbing supply houses, tools, and pipe fittings.

     * Managing customer billings, credit terms, and cash collections on account.

     * Recording truck/vehicle expenses, tool depreciation, licenses, and insurance.

 - Multi-Member LLC Equity & Partner Distributions:

     * Tracks individual partner equity balances (Smith Capital, Brown Capital).

     * Records partner draws and profit/loss sharing distributions.

 - Dynamic Real-Time Financial Statements & Workpapers:

     * Dynamic General Journal and detailed General Ledger (T-Accounts).

     * Trial Balance ensuring Total Debits equal Total Credits.

     * Monthly and Cumulative Income Statements (Service Revenue vs. Operating Expenses).

     * Month-End Balance Sheets illustrating the accounting equation (A = L + E).

2. WHAT THE STUDENT LEARNS

--------------------------------------------------------------------------------

The simulation provides practical training in trade contracting, service-sector

bookkeeping, and partnership accounting:

A. Service vs. Merchandising Business Model:

  - Understanding revenue recognition for service businesses where revenue is

    derived primarily from labor, service calls, and billable hours rather than

    traditional retail merchandise markup.

  - Recording parts and supplies inventory or expensing job materials used on site.

B. Trade Credit & Working Capital Management:

  - Managing trade receivables (invoicing commercial and residential plumbing

    clients on net payment terms).

  - Managing trade payables (purchasing pipe, fixtures, and fittings from wholesale

    plumbing supply houses on credit).

  - Tracking customer receipts, deposits, and vendor check disbursements.

C. Fixed Asset Capitalization & Equipment Depreciation:

  - Capitalizing major long-term assets such as service vans, trenchers, snakes,

    and diagnostic camera equipment.

  - Calculating and recording monthly depreciation expense and maintaining

    contra-asset accounts (Accumulated Depreciation).

D. Month-End Adjustments & Accruals:

  - Journalizing monthly adjusting entries for prepaid items (commercial vehicle

    insurance, contractor bond premiums).

  - Accruing unbilled utility expenses, payroll, and interest on equipment financing.

E. Partnership / Multi-Member LLC Accounting:

  - Maintaining separate capital and drawing accounts for each partner (Smelly Smith

    and Stinky Brown).

  - Distinguishing between personal partner withdrawals (Drawings) and legitimate

    business operating expenses.

  - Allocating quarterly net income between the two owners and observing how closing

    entries update their equity on the Balance Sheet.

F. Multi-Period Financial Synthesis:

  - Analyzing monthly trends in service revenues, vehicle/tool maintenance costs,

    and net operating profit.

  - Confirming trial balance equilibrium and interpreting financial statements

    to provide actionable business health insights to the owners.

Leaking Plumbing LLC (Sample of 1st 5 Transactions)