The Income Approach.

Abstract Beginning students usually find their introduction to nominal accounts and accruals the hardest spot in their first semester. A large part of the confusion may often be due to the undigested condition of illogical material presented earlier, nominal accounts and accruals themselves should not be hard to grasp. But even though they do present difficulty to the student they should be strongly stressed very early because in them is the essence of the accrual basis of accounting which accountants are so anxious to see replace the cash basis. In fact so completely do nominal accounts and accrued items embrace the heart of modern accounting that they might well be made the foundation of the introductory work itself. This would mean a start based upon the Income Statement rather than the Balance Sheet. Instruction in elementary accounting is still very much under the influence of age-old traditional methods of teaching bookkeeping. Bookkeeping instruction traditionally aims at teaching a balanced recording methodology, it appeals to imitative faculties rather than reasoning processes, it over-simplifies a naturally complex subject by artificial rules of thumb, it introduces personal debts very early, presumably merely because external transactions and personal accounts bulked large in early bookkeeping.