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An Empirical Test of Mnemonic Devices to Improve

Learning in Elementary Accounting
Gregory Kenneth Laing
a

University of the Sunshine Coast, Maroochydore DC, Queensland, Australia

Available online: 13 Feb 2011

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Accounting, Journal of Education for Business, 85:6, 349-358
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JOURNAL OF EDUCATION FOR BUSINESS, 85: 349358, 2010

C Taylor & Francis Group, LLC
Copyright

ISSN: 0883-2323
DOI: 10.1080/08832321003604946

An Empirical Test of Mnemonic Devices to Improve

Learning in Elementary Accounting
Gregory Kenneth Laing

Downloaded by [201.47.27.211] at 07:07 26 April 2012

University of the Sunshine Coast, Maroochydore DC, Queensland, Australia

The author empirically examined the use of mnemonic devices to enhance learning in firstyear accounting at university. The experiment was conducted on three groups using learning
strategy application as between participants factors. The means of the scores from pre- and
posttests were analyzed using the student t test. No significant difference was found between
the groups for the pretest; however, both treatment groups performed significantly better in the
posttest than did the control group. The findings support the literature that mnemonic devices
can accelerate the rate at which new information is acquired and improve formal reasoning. A
model is introduced for assessing the characteristics which affect memory recall.
Keywords: accounting education, memory cue, mnemonic devices

Mnemonic devices are strategies used to enhance memory.

The term mnemonic is derived from the name of the ancient
Greek goddess of memory, Mnemosyne. Mnemonic literally
means to aid the memory (Bourne, Dominowski, Loftus,
& Healy, 1986). Mnemonic devices have proven effective
in helping students to remember new information (Joyce &
Wiel, 1986). Mnemonic devices linking new information to
something already familiar to a student were found to be the
most effective. That is, they were very helpful for recalling
conventions that were not logically connected to content students had already conceptualized. Subsequently, mnemonic
devices, such as acrostics, acronyms, narratives, and rhymes,
can assist in making abstract material and concepts more
meaningful for individuals. To clarify the terminology, an
acrostic is a phrase or poem in which the first letter of each
word or line functions as a cue (e.g., Every Good Boy Deserves Fruit [used to identify musical notes]). An acronym
is a word formed out of the letters of a series of words (e.g.,
FACE is used in teaching music). A narrative is a story that
incorporates the words in the appropriate order (e.g., Every
Good Boy Deserves Fruit, which is also used in teaching
music). A rhyme accentuates the sound between words (e.g.,
i before e except after c is used to teach spelling).
Kiewra (1989), Palinscar and Brown (1989), and King
(1992, 1994) identified learner- and teacher-based strate-

Correspondence should be addressed to Dr. Gregory Kenneth Laing,

University of the Sunshine Coast, Faculty of Business, Maroochydore DC,
QLD 4558, Australia. E-mail: glaing@usc.edu.au

gies that facilitated learners memory of material presented

in lectures or in texts. Woloshyn, Willoughby, Wood, and
Pressley (1990), Pressley et al. (1992), and Wood, Needham, Williams, Roberts, and Willoughby (1994) examined
an associative learning strategy, elaborative interrogation,
which enhanced memory through the use of responses to
why questions. They found that student performance could
be improved by elaborations that provided more meaning to
material being taught.
Research has found that learning can be improved in
knowledge domains that are abstract and highly structured
by the use of more directive teaching strategies (Carroll,
1994; Debrowski, Wood, & Bandura, 2001; Sweller, 1999;
Tuovinen & Sweller 1999). The educational literature is replete with research that identifies the benefits of the use of
mnemonic teaching strategies. In particular, mnemonic devices have been found to accelerate the rate at which new
information is acquired (Levin & Pressley, 1985; Wang &
Thomas, 1996), improve problem-solving tasks involving
both analytical thinking as well as formal reasoning (Levin &
Levin, 1990), and be beneficial in terms of long-term memory
(Marschark & Hunt, 1989).
Using mnemonics as a teaching strategy does not signify
acquiescence to rote learning. Ausbel (1963) stressed the importance of cognitive structures on learning. He placed heavy
emphasis on meaningful verbal learning, that is, the acquiring of information with various links to other ideas. This
stands in direct contrast to rote learning, which emphasizes
memorization of specific information without examining relationships within the material. Anderson and Armbruster

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350

G. K. LAING

FIGURE 1

Model for assessing characteristics of a memory cue.

(1984) concluded that asking students to create mental images of new material, make inferences, and draw networks
of relationships all increased learning. For this reason, it is
important that in the use of any mnemonic device the lecturer has a clear and concise plan for addressing the relevance
and relationship to the specific context. A mnemonic may be
useful to develop deep learning even in students who would
normally favor surface learning.
Although mnemonic devices have been shown to be effective, there is a lack of research to explain why mnemonics
work (Eysenck & Keane, 1995). To address this gap in the
literature a model (Figure 1) has been constructed drawing on various aspects of the literature regarding memory
in an attempt to provide a method to examine the design
and the potential usefulness of any memory cue (such as the
mnemonic device). Note that for the purpose of the model
the term memory cue (Brown & McNeil, 1966) is used because the mnemonic device is a form of memory cue and the
basic principles addressed in the model should apply equally
to assessing other types of memory cues. To commence it
is necessary to determine a set of attributes pertaining to
the material being covered. A memory cue may take the
form of a mnemonic, simile, acronym or acrostic. Basically,
whichever form the memory cue takes, the intention is for it
to act as a stimulus to help gain access to memories (Brown
& McNeil). Although other terms have been used to describe
memory cues, such as memory hooks, a peg system, and
method of loci (Bower, 1970), these serve the same purpose,
which is to stimulate and provide recall of memory.
Having selected an appropriate type of memory cue, the
next stage is to consider whether the cue is succinct making it
easier to commit to memory. The memory cue should be kept
to a reasonable size to accommodate an individuals capacity
for memorization. In the seminal paper by Miller (1956) an

individuals short-term memory capacity was identified as

being limited to seven items of information, plus or minus
two (note that the information referred to may be numbers,
letters or syllables). For the purpose of designing a memory
cue it is therefore important to consider the number of items
to be used as this could render the memory cue ineffective.
Having satisfied the need to keep the memory cue brief,
the next stage is to determine whether the cue has distinct
or unique characteristics that make it easier to recall. The
distinctiveness theory (Eysenck & Eysenck, 1980) holds that
memory cues that are distinctive or unique in some way are
more readily retrievable than those that are not, and in this
way long-term memory is affected by the distinctiveness of
the memory cue. This leads to the next point for consideration, which is that retention depends on the information
being well organized or structured. Ericksson and Polson
(1988) found that retention was greatly increased when the
information in the memory cues was well organized. Bower
(1970) also found that hierarchical organization was particularly helpful for retention of memory cues.
The next stage in the model deals with producing more
durable memories. According to Craik and Lockhart (1972),
memories that are better remembered and more easily recalled depend on the type of encoding or, more simply, the
level of processing involved. They proposed that deeper levels of processing result in longer lasting memory. The types of
encoding proposed by Craik and Lockhart are the following:
structural, which emphasizes the physical structure of the
cue or stimulus (shallow processing); phonemic structure,
which emphasizes the sound (intermediate processing); and
semantic structure, which emphasizes meaning and involves
thinking about the objective and action the cue represents
(deep processing). Therefore, it is important to consider the
three types of encoding when evaluating the memory cue.

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EMPIRICAL TEST OF MNEMONIC DEVICES

Having satisfied the requirements of the model to this

point, the next stage focuses on the activation of recall or
retrieval of the information suggested by the memory cue.
According to Mandler (1980), recognition and subsequent
retrieval of the information is dependent on the familiarity
with the memory cue. Thus if the level of familiarity is high
the retrieval process occurs more rapidly. The desired outcome is for the memory cue to activate a recall of the set of
attributes established at the beginning. The intention is for
the students to gain experience in the use of the memory cue
and thereby enhance their learning.
In the educational literature, learning and experience appear to be interrelated constructs. As Kolb (1984) explained,
Learning is the process whereby knowledge is created
through the transformation of experience (p. 38). According to Kolb and Webb (2006), active involvement encourages accelerated learning and can accommodate difference
in learning styles. In the cognitive literature, a distinction has
been drawn between declarative (figurative) knowledge and
operative (procedural) knowledge. Fundamentally, declarative knowledge comprises the skills we know; procedural knowledge comprises the skills we know how to perform (Anderson, 1980, p. 222). The cognitive processes
involved in professional judgment are the result of the use of
problem-solving and critical-thinking skills (Facione & Facione, 2008). According to Facione and Facione, the goal of
the judgment process is to decide what to believe or what to do
in a given context, in relation to the available evidence, using
appropriate conceptualizations and methods, and evaluated
by the appropriate criteria. Cognitive processes such as analysis and critical thinking share common attributes with Piagets (1972) concept of formal operational thought. Piagets
theory of cognitive development has a focus on operative
knowledge and the development of reasoning skills. According to Piagets theory, reasoning at the level of formal operational thought (formal reasoning) involves demonstrating abstract thinking and hypotheticaldeductive reasoning, which
are arguably important learning objectives at university.
There are discernible differences in the teaching at university between disciplines, and this may be due to actual
differences in the fields of learning, such as the distinction
between social sciences and natural sciences (Smeby, 1996).
Accounting, for example, is a field of learning in which the
concepts are relatively abstract and yet interconnected, which
can make it difficult for some students to comprehend. In this
respect it shares some similarities with the study of statistics
(Gal & Garfield, 1997). For example, the concept of the accounting equation with its subsequent development of the
notion of debits and credits, which are all essential knowledge of the accounting procedure to correctly identify and
record a business transaction. Students therefore have to first
know the elements of the equation and the nature of debits
and credits before they can comprehend the accounting procedures. This illustrates the hierarchical nature of accounting
knowledge. That is, accounting knowledge is highly struc-

351

tured because of the interconnectivity of the concepts and the

hierarchical nature of those concepts.
In the accounting discipline there is an emphasis on procedural knowledge, particularly in the elementary stage, which
is concerned with the application of a set of rules for determining which economic events constitute accounting transactions. The accounting process, as is usually explained in
first-year accounting textbooks (for example Hoggett, Edwards, Medlin, & Tilling, 2009), involves identification, classification, and recording of economic events. This cognitive
process requires an analysis of the transactions in which a
judgment has to be reached by answering questions such as
the following:
What type of ledger accounts are involved? (e.g., rent,
land, wages)
What category is each of the accounts? (e.g., asset, liability, revenue)
What is the nature of the account? (e.g., debit, credit)
Is this an increase or decrease to the account?
Which account is to be debited and which is to be credited?
This process involves analysis, interpretation, inference,
and the ability to explain or justify the decision. The extent to
which an accounting student has to be able to apply the basic
principles in order to make a judgment about an economic
transaction requires formal reasoning skills and it is in this
regard that the mnemonic device has the potential to assist
the learning process.
The use of mnemonic devices for teaching is widely
acknowledged in the fields of medicine (Wilding, Rashid,
Gilmore, & Valentine, 1986), psychology (Gumar & Martin,
1990), and education (Lockavitch, 1986; Miller, Peterson,
& Mercer, 1993). In the discipline of accounting, opportunities have yet to be fully explored in the literature on how
mnemonic devices may be used to improve learning. In this
article, two mnemonic devices are examined to determine
their usefulness in promoting learning within a first year introductory accounting course. The two mnemonic devices
are PALER and ALORE and their application to teaching introductory accounting concepts is explained and illustrated
in Appendixes A and B, respectively. Appendixes A and B
provide a clear and concise plan for addressing the relevance
and relationship to the specific context as suggested by Anderson and Armbruster (1984).
The first mnemonic device, PALER, has many good points
to recommend it as a teaching tool. This mnemonic is consistent with the model presented in Figure 1, which follows
the following principles:
1. The set of attributes are identified (for further detail,
refer to Appendix A).
2. The memory cue selected in this instance is a
mnemonic device.

352

G. K. LAING

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3. The number of letters in the mnemonic is five, which

is within the prescribed parameters.
4. The mnemonic is distinct or unique in nature in so far
as it relates to accounting.
5. It is organized in accordance with the accounting equation.
6. The level of processing in this circumstance is related
to the manner and process involved in teaching or explaining the relevance of the cues.
7. Recognition and retrieval are dependant on familiarity,
which comes from reinforcing the use of the memory
cue (mnemonic).
However, experience has revealed that some students
found the use of this mnemonic to be complex and when
under the stress of exams there existed a high potential to
become confused.
An alternative mnemonic used for the same purpose of introducing students to the concepts of accounting is ALORE.
This mnemonic also adheres to the principles established
previously in accordance with the model (Figure 1). The use
of this mnemonic device has proven to be less problematic
for students, especially pertaining to recall and application
in exam situations. This acronym repositions the letters and
refers to Assets, Liabilities, Owners Equity, Revenue, and
Expenses. The simplicity of this mnemonic for students is
that they have less to remember and the principles underpinning the device are more intuitively logical.
Positive comments from students from the previous use
of PALER included the following:
I didnt get the debit and credits thing until you showed us
PALER.
I couldnt get the idea of all this debit and credit jazz and
assets and whatever until we were shown PALER.
PALER helped me work out what goes where and made
accounting easy.

Negative comments from students from the previous use

of PALER included the following:
I got confused in the exam with the arrows.
Took me longer to get debits and credits in the exam. . . needs
to be easier way.

Comments from students from the previous use of

ALORE included the following:

These comments suggest that both devices have proven

to be useful learning tools, with ALORE purportedly being
simpler and easier to apply. However, there was no evidence
to substantiate the claims that they were useful learning tools
in general or that one device promoted learning at a greater
level than the other. To test the usefulness of these devices
in the learning of accounting and to compare the efficacy
between the two devices, an experiment was conducted.
This research contributes to the literature by empirically
testing the use of mnemonic devices within the accounting
discipline, as well as examining the difference between two
mnemonic devices being used to teach the same knowledge
and enhance learning. The study makes a further contribution
with regard to the use of mnemonic devices by presenting a
model for assessing the potential strengths or weaknesses of
the characteristics of memory cues in general. This model
is the first step in addressing a major gap in the literature
(Eysenck & Keane, 1995).
A pedagogical justification for the use of mnemonic devices is based on the literature, which suggests that such
devices can contribute to student learning and aid in the development of cognitive skills. Students who participated in
the experiment were therefore expected to exhibit greater understanding and ability in applying the accounting principles.
These expectations lead to the formulation of the following
null hypothesis (H 0 ).
H 0a : There would be no difference in the ability to correctly answer basic accounting questions among the
three groups prior to the introduction of the mnemonic
device.
H 0b : There would be no difference in the ability to correctly answer basic accounting questions among the
three groups after the introduction of the mnemonic device.
H 0c : There would be no difference in the ability to correctly
answer basic accounting questions between the two
treatment groups after the introduction of the mnemonic
device.

METHOD
A total of 59 introductory accounting students participated
in the experiment as a tutorial exercise. The experiment was
divided into three groups containing 20, 18, and 21 students,
respectively, in the tutorial groups (see Table 1). A 2 3
factorial design was used with learning strategy (PALER,
ALORE, and control group with no mnemonic) and application as between-participant factors.

ALORE was so much easier to follow than PALER.

ALORE was a great thing for me now I get it.
Hey face it ALORE is better than PALER its just so much
more simple.

Mnemonic Device Conditions

Students were first tested to assess their basic knowledge
of accounting issues. The pretest instrument consisted of a
short set of multiple-choice questions, which took 5 min.

EMPIRICAL TEST OF MNEMONIC DEVICES

TABLE 1
Demographic Data for the Groups
Group
Device
Students

TABLE 3
Age Groupings of Students

PALER
20

ALORE
19

Control
21

Following the pretest, students were then introduced to the

mnemonic device and taken step by step through its application. Discussion focused on the relevance in answering
set homework questions, which occurred over a period of
30 min. Having completed the introduction, a posttest was
implemented. This consisted of multiple-choice questions
(some of which were similar in nature to the pretest) and additional question designed to illicit the use of the mnemonic
device. The posttest was for a period of 10 min. The pre- and
posttest instruments are provided in Appendixes C and D,
respectively.

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353

Control Group Condition

The control group condition followed much the same pattern
of testing and instruction as did the mnemonic device groups,
except that no mnemonic device was taught or mentioned
during the 30 min of discussion on homework. The pre- and
posttest instruments were identical in each group.
The Treatment Group 1 consisted of 12 (60%) women
and 8 (40%) men, Treatment Group 2 consisted of 11 (58%)
women and 8 (42%) men, and the control group had 10
(48%) women and 11 (52%) men (see Table 2). The three
groups were compared using a t test and were found not to
be significantly different, for 1:2, t(37) = 0.130, = .897;
for 1:3, t(39) = .781, = .439; for 2:3, t(38) = .637, =
.528. Therefore, gender was not expected to affect the results
of this study (Lipe, 1989; Lopus 1997).
The ages of the students in the three groups were collapsed
into categories (Table 3). Comparisons were made using a t
test, for 1:2, t(37) = .022, = .983; for 1:3, t(39) = .568, =
.573; for 2:3, t(38) = .556, = .581, indicating that there was
no significant difference in the ages between the three groups.
RESULTS
The first null hypothesis involved comparing the results from
the pretest between the three groups. For the purpose of anal-

Age
18 <
1922
2326
2730
31 >
Total

Treatment
group 1
(PALER)

Treatment
group 2
(ALORE)

Control group
(group 3)

6
11
2
1
0
20

5
12
1
1
0
19

8
11
1
1
0
21

ysis, the means of the student scores are reported. The pretest
results as summarized in Table 4 reveal that the mean of the
control group was higher than that of both the PALER group
and the ALORE group. Analysis of the means and standard
deviations were conducted using the student t test and the
results are presented in Table 5. The PALER treatment group
did not perform better in the pretest than the control group.
The ALORE treatment group did not perform better in the
pretest than the control group. The PALER treatment group
did not perform better in the pretest than the ALORE treatment group. The t tests reveal that there was no significant
difference between the groups. Subsequently, the first null
hypothesis could not be rejected. The finding is that there
was no significant difference between the groups at the commencement of the tutorial.
The second null hypothesis focused on the scores from the
posttest as identified in Table 6 below. Analysis of the means
and standard deviations were conducted using the student
t test and the results are presented in Table 7. The scores
from the posttest for both treatment groups were significantly
higher than for the control group. The PALER treatment
group performed better in the posttest than the control group.
The ALORE treatment group performed better in the posttest
than the control group. The null hypothesis was therefore
rejected.
The third null hypothesis focused on the difference between the two treatment groups. The ALORE treatment
group performed better in the posttest than the PALER treatment group refer to Table 7 for the result of the t test. The
null hypothesis was therefore rejected.

TABLE 2
Gender of Students

TABLE 4
Pretest Scores as a Function of Learning
Condition

Gender

Treatment
group 1
(PALER)

Treatment
group 2
(ALORE)

Control group
(group 3)

Women
Men
Total

12
8
20

11
8
19

10
11
21

Condition
PALER
ALORE
Control

SD

2.00
2.05
2.10

0.973
1.026
0.995

354

G. K. LAING
TABLE 5
t Test Results Between Learning Conditions for
Pretest Scores

TABLE 7
Posttest Scores as a Function of Learning Condition
Condition

Condition
PALER
ALORE

Control

ALORE

t(39) = .310, = .759

t(38) = .133, = .895

t(37) = .164, = .870

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DISCUSSION
The pretest provided evidence that all three groups were
relatively equivalent in their knowledge of accounting as
there was no significant difference between their pretest
scores. However, a difference was found between the treatment groups and the control group in the posttest scores. The
treatment groups both achieved higher scores than the control group in the posttest and these scores were found to be
significantly different.
In addition, the ALORE treatment group performed better
in the posttest than the PALER treatment group. The scores
proved to be significantly higher when subjected to the t
test. This finding is consistent with the comments made by
previous students and supports the claims that the mnemonic
ALORE was simpler and easier to apply even under the stress
and time pressures of the test.
Overall, the results of this study are consistent with prior
research, which suggested that a mnemonic device would
likely accelerate the rate at which new information is acquired (Levin & Pressley, 1985; Wang & Thomas, 1996).
The time frame of the learning was restricted to the tutorial
and the results indicate that both the mnemonic devices were
influential in promoting learning. The results are also consistent with the findings of Levin and Levin (1990) that a
mnemonic device could improve solving tasks involving formal reasoning. The posttest consisted of tasks that required
formal reasoning.
There are a number of indications that the mnemonic device is an effective learning tool, one that individuals are able
to become comfortable with quickly. The findings provide evidence that instruction involving the use of mnemonic devices
does enhance a students formal reasoning skills and that this
has the potential for application of knowledge to more varied
tasks. Instruction of elementary accounting principals at the
university level has been shown to be strengthened by the use
of mnemonic devices.
TABLE 6
t Test Results Between Learning Conditions for
Post-Test Scores
Condition
PALER
ALORE

Control

ALORE

t(39) = 2.203, = .034

t(38) = 4.538, = .000

t(37) = 2.103, = .042

PALER
ALORE
Control

SD

12.85
15.63
9.62

4.660
3.483
4.727

Finally, the model presented in this article offers an opportunity to assess the strengths or weaknesses of existing memory cues. In regard to the difference between the mnemonics
ALORE and PALER, the stronger results for ALORE appear
to be related the fewer number of steps and the simpler concept with regard to the identification of a debit or credit as
a result of an increase or decrease. The strength of ALORE
can be linked to the fewer memory constraints and that it
is more intuitively easier to follow the organization of the
information, which contributes to better retention and recall.
This assessment is also supported by the comments made by
the students. Future researchers using the model may provide greater insight into the characteristics which contribute
to one memory cue being superior or more effective than
another.

NOTES
1. The mnemonic PALER was handed down by associate
professor John Williams, and I have merely embellished its application for use in my teaching.
2. The mnemonic ALORE was handed down by Damian
Ringelstein as an alternative and arguably more simple
form of mnemonic.

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Appendix A
Accounting Mnemonic Device PALER
PALER refers to Proprietorship, Assets, Liabilities, Expenses, and Revenues. It is a useful tool for explaining the
elements of accounting equation, the notion of debits and
credits, and the principles of the basic accounting cycle.
Step 1, introduce the term, be sure to leave space at the
beginning and between each letter!
Figure 1.
PALER Step 1
Step 2, introduce the concept of Debit and Credit and start
with what happens with a Debit entry to one of the elements.
Figure 2.
PALER Step 2
Step 3, use arrows to indicate the effect that a debit
would have to each of the particular elements. (What effect
would posting a debit to each account have?) [A debit would
reduce Proprietorshipincrease an Asset etc.] Conversely
the effect of a credit to each of the particular elements
would have the opposite effect. [A credit would increase
Proprietorshipreduce an Asset etc.]Following the direction of the arrows up or down as the case may be.
Figure 3.
PALER Step 3

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G. K. LAING

Step 4, explain that the arrows can be used to establish

the nature of each element. (That is if a debit to the Proprietorship account will reduce itthen logicallyit must be
the opposite signit must therefore be a credit by nature!)
[Write the sign above each element to reinforce the concept!]
{It is also useful to point out at this time that the Proprietorship is a liability to the business, which is consistent with the
separate entity concept!}
Figure 4.
PALER Step 4

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Step 5, draw a line between the L and the E, explain that

this indicates the difference between Balance Sheet items
and Profit & Loss or Income Statement items! (Revenue less
Expenses equals profit or loss!)
Figure 5.
PALER Step 5

Step 6, explain that the Profit and Loss or Income Statement items are temporary accounts which must be closed
at the end of the financial period. (This reinforces the concept of accrual accounting, in that, the balance sheet represents a particular point in time in contrast to the profit
and loss or income statement which is for a period. The
implication is that adjustments are required to compare the
revenue earned in a period with the costs associated with
earning that revenue. Finally, the profit or loss goes to
the owner this is further confirmation that the Proprietorship account is a credit, since both revenue and profit are
credits!)
Figure 6.
PALER Step 6

Appendix B
Accounting Mnemonic Device ALORE
ALORE refers to Assets, Liabilities, Owners Equity, Revenues, and Expenses. It is also a useful tool for explaining
the elements of accounting equation, the notion of debits and
credits, and the principles of the basic accounting cycle. The
additional benefits associated with this mnemonic are that it
is simpler to recall having greater relevance to the accounting
equations that underpin the Balance Sheet and the Income
Statement.
Step 1, introduce the term, be sure to leave space at the
beginning and between each letter!
Figure 7.
ALORE Step 1

Step 2, introduce the concept of Increasing the value of an

element using Debits and Credits! In effect, identify whether
a debit (DR) or credit (CR) will increase the type of account.
Students find this is easier to remember particularly when it
is pointed out to them that the first and last letter only are
debit (DR) accounts and therefore the three in the middle
are credit (CR) accounts. This also explains the nature of
each element that is whether it should have a debit or credit
balance.
Figure 8.
ALORE Step 2

Step 3, introduce the concept of what would be required

to decrease an element! In effect the converse of what is
required to increase an element. The students report that this
is much more logical than the use of arrows as required in
the PALER approach.
Figure 9.
ALORE Step 3

Step 4, draw a line between the O and the R, explain that

this indicates the difference between Balance Sheet items
and Profit and Loss or Income Statement items! (Revenue
less Expenses equals profit or loss!)
The juxtaposition of the R (revenue) and E (expenses)
and the repositioning of the Owners Equity is far more consistent with the accounting equations. Specifically, Assets
minus Liabilities equals Owners Equity and Revenue minus
Expenses equals profit.

EMPIRICAL TEST OF MNEMONIC DEVICES

Figure 10.
ALORE Step 4

c)

357

A Sales Assistant is hired at $400 a week to commence

next week.

d) Paid $2,000 for two months rent in advance.

The recording of a sale to a customer on account is
recorded as:
a)

Debit Sales Revenue, Credit Cash at Bank.

b) Debit Accounts Receivable, Credit Sales Revenue.

c) Debit Accounts Receivable, Credit Owners, Capital.
d) Debit Sales Revenue, Credit Accounts Payable.

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Appendix D
Appendix C

Posttest

Pretest

Part AMultiple-choice questions:

In accounting, debit entries to a general ledger account
cause:

Multiple-choice questions:
In accounting, debit entries to a general ledger account
cause:
a)

Increases in owners equity, decreases in liabilities and

increases in assets.
b) Decreases in liabilities, increases in assets, and decreases
in owners equity.
c)

Decreases in assets, decreases in liabilities, and increases

in owners equity.

d) Decreases in assets, increases in liabilities, and increases

in owners equity.

a)

Decreases in liabilities, increases in assets, and decreases

in owners equity.
b) Increases in owners equity, decreases in liabilities and
increases in assets.
c)

Decreases in assets, increases in liabilities, and increases

in owners equity.

d) Decreases in assets, decreases in liabilities, and increases

in owners equity.
The purchase of a computer on account (credit) is recorded
as:

Which of the following accounting procedures requires

the greatest knowledge of generally accepted accounting
principles?

a) Debit Computer, Credit Owners, Capital.

b) Debit Computer, Credit Cash at Bank.

a) Journalising business transactions.

b) Posting Journal entries to General Ledger accounts.

c) Debit Accounts Receivable, Credit Computer.

d) Debit Computer, Credit Accounts Payable.

c) Preparing a Trial Balance.

d) Locating errors in a Trial Balance.

Picard Refreshments had the following transactions in the

month of April.

The purchase of office furniture on account (credit) is

recorded as:

J. Picard started the business by depositing $100,000 cash

in the business bank account.
Purchased $50,000 of equipment by paying a $20,000
cheque and agreed to pay the remainder with in 60 days
(on credit account).
Paid $13,000 on the amount owing for the equipment.
J Picard withdrew $2,000 cash from the business for his
personal use.

a) Debit Office Furniture, Credit Cash at Bank.

b) Debit Accounts Receivable, Credit Office Furniture.
c) Debit Office Furniture, Credit Owners, Capital.
d) Debit Office Furniture, Credit Accounts Payable.
Which of the following is not a transaction?
a)

The Owner contributes $50,000 to start the business.

b) Office Furniture is purchased on credit for $15,000.

From the above information answer the following questions.

What is the balance in the J. Picard, Capital Account at
the end of April?

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G. K. LAING

a) $98,000
b) $115,000
c) $100,000
d) $102,000
What is the balance in the General Ledger Cash at Bank
Account of the business as at the end of April?
a) $100,000 Debit
b) $ 65,000 Debit
c) $ 65,000 Credit
d) $80,000 Credit

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What is the balance in the General Ledger Equipment

Account of the business at the end of April?
a) $50,000 Credit
b) $33,000 Debit
c) $50,000 Debit
d) $17,000 Credit
Part BGeneral Ledger Accounts:
Below is a list of general ledger accounts for Damian
Interiors, followed by a series of transactions. Indicate the
accounts that would be debited and credited to record each

transaction by placing the appropriate account number (or

numbers) in the space provided. (note more than one account
may be either debited or credited!)
1 Cash
2 Accounts Receivable
3 Land
4 Buildings

5 Office Equipment
6 Bills Payable
7 Accounts Payable
8 Damians, Capital

Transaction
Damian invested cash in the
business.
Received payment from a
client for money owed on
account.
Purchased Land and Building,
paying a deposit and signing
a Bill Payable for the
balance owing.
Sold an item of office
equipment at cost, received
a deposit in cash and
balance to be paid in 60
days on account.
Paid amount owing on account.
Purchased Office Equipment
on account.

Account(s)
Debited

Account(s)
Credited