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close this bookAccounting for the Microbusiness - A Teaching Manual (Peace Corps, 1975, 105 p.)
close this folderThe system
View the document(introduction...)
View the documentThe preliminary interview
View the documentLesson # 1
View the documentLesson # 2
View the documentLesson # 3
View the documentLesson # 4
View the documentInstallation of the system
View the documentFollow-up visits
View the documentMonth end financial statements
View the documentAnalysis



The MICRON accounting system and teaching method have been founded on points "A" and "B" of the introduction. Whenever possible abstract accounting concepts have been simplified and the teaching method streamlined to be as efficient and dynamic as possible. The effectiveness of point "C" (Instructors that understand and respect this class of owner) is, of course, in the hands of you, the instructor. If you are interested and want to teach these people, you will successfully instruct them. If it is a chore you would rather not do, then no system can motivate your students, and it would be best if you worked in something else.

MICRON is based upon a few changes in accounting principles that from some professionals often elicit the same response, "That is not right! " These professionals are correct if one considers standard accounting rules a gospel rather than a guide. But, if one looks at the larger aims of accounting - the accurate registration and representation of business transactions - there may be more than one way to gain the same result. MICRON is another "way" and whether dr not it meets "standard accounting principles" is besides the point. This system works and it is tailored to meet a specific audience who cannot grasp the complexities of those "standard principles".

The primary simplication in this accounting relates to the definition of debits and credits. Here, all debits are "more" of something of value while all credits are "less" of something of value. This is to eliminate the troublesome redefinition of debit and credit on the liabilities side of the balance sheet. The change is made possible by a special organization of the accounts into two distinct groups with two sets of books. This division is between cash and credit transactions.

The first group of accounts consists of all cash transactions and is organized into what might be called a large checkbook The second group, consisting of credit transactions, is in a book or books designed much like auxiliary accounts payable and accounts receivable books.

The success of MICRON lies in this conceptual and organizational separation of cash and credit transactions. Prototypes to this system attempted to unite the two books into one page and' although it is mechanically possible, the results were not satisfactory It was found that those owners who could not under stand the unified approach could easily use the separated version that distinguishes between cash and credit transactions. Therefore, we urge you not to take a step backwards by using one instead of two books; save yourself the frustration!

The teaching method is one based on both individual and class instruction with a very strong emphasis upon a "trial and error" approach to understanding. The procedure is to teach basic ideas and the fundamentals of bookkeeping in a classroom atmosphere and then immediately emerse the owner into the "practice" by openning the company's books. Follow-up visits check the students progress and serve as sessions to further explain theory or particular book entries. As you will see, those owners who have a genuine desire to learn wild quickly assimilate the material.

It is felt that this quick assimilation is due to two factors. First, the student is not given time to be bored as he immediately sees and experiences theory changed into action. Secondly, after only 5 lessons the student himself becomes the central participant in a very relevant project his own company This immediate transfer of responsibility from teacher to student creates a sink or swim situation where the owner realizes that his success rests totally upon his own abilities. If the instructor makes periodic visits to help and encourage the student, the student realizes that he has no one to blame but himself for failure. Therefore, the ultimate success of this system rests upon the participation and responsibility of the student. We are only trying to "help him help himself".

Our teaching experience has shown that this process can be accomplished in an average of 33 hours instruction time. The following line graph will serve as a guide:


The Teaching Plan


Explanation of the Financial Statements


Explanation of: Transactions
The System
Cash Book


Explanation of the Credit Books and the purchase of the Accounting Books


Explanation of Auxiliary Sections and Review


Openning of the Books, elaboration of the initial Balance Statement, and entering the first transactions.


8 follow-up visits


Instructions to elaborate Financial Statements


Elaboration of the Financial Statements


Seminar on Financial Analysis


Review and Analysis of Financial Statements


Review transactions during month


Elaboration and analysis of Financial Statements

Sessions should never be more than two hours to avoid losing the students attention. If the students cannot grasp a point, divide a lesson into two sessions. Also it is suggested that the classes be held on consecutive days and that the system be immediately installed. This will insure quick movement from the theory to the practice.

Before explaining the lesson plan a few other important points must be mentioned ...

First, it is imperative that each instructor understand the mechanics of this system perfectly before attempting to teach it.

Included in the "Financial Statements" section of this manual are a trial balance, beginning and ending balance sheets, and an income statement for the transactions of "Colombia Industries" during the month of July. During the lesson, if one follows the commercial movements of this company, the evolution of the system from the beginning balance sheet to the elaboration of month end statements will become clear.

Other aids to greater proficiency are provided by the sections entitled "Additional Controls" and "Odd Entries". However' it is assumed that the instructor knows or has had experience in accounting. Many small businesses often conduct transactions that are, to say the least, odd and experience in accounting comes in handy when deciding what to debit and credit. Such rare entries become an intellectual challenge but we have yet to find one that can't be handled In short, be imaginative. MICRON is as effective as its application.

Second, it is preferred that the instructor initially teach two or three companies on a personal non-classroom basis to gain mastery of the system and teaching method The benefits of the "trial and error" method of learning can be of use to teachers as well as students. It should also be suggested that the number of students per teacher be kept to manageable levels At month end statement time 4 or 5 companies are a lot.

Third, the teacher must remember that his audience has a short attention span. Again, we emphasize as many visual and dynamic teaching techniques as possible. Asking spot questions taking examples from the students' industries reviewing important concepts from new points of view, etc. will make a boring session into an exciting one. A good teacher is an actor ... so let yourself get into it!

Fourth, the selection of students should be a careful process. Whether the students be business owners, their wives, children or trusted employees, the first consideration must be desire. Only those who want to learn will learn and you will be wasting both your time and theirs if there isn't this important common denominator, For those of you who work with credit related institutions, it might be noted that those students who are awaiting approval of loans often have shown more desire before receiving the money than after. Consequently, we discourage teaching those awaiting loan approval as their motives might be camouflaged.

If during the preliminary interview the person shows desire and has a company that might be judged "ongoing" rather than in a "liquidation" state, the final decision rests upon his intellectual capabilities. Years of education are not necessarily indicative of a person's ability to assimilate new ideas, make rational judgments, and show common sense. This is your value judgment. We urge you not to accept obvious failures for instruction as only ill-will will result.

Given the classroom situation, it is best to group those of equal intellectual capabilities. Also if they can be drawn from the same industrial sector or have similar types of business transactions, the teaching process will be easier.

Finally, if someone other than the owner is to be bookkeeper, it is very important that the owner also attend classes and learn some accounting. Experience has shown that where the owner knows nothing of the accounting, he often ignores it or may even distrust it.

Fifth, it is recommended that a pencil, not a pen be used to make all entries. Students are expected to make errors at first (it is part of the teaching method) and they will probably continue doing so even after the system is mastered ... we are all human. Just because something is written in pen does not make it more correct ... only harder to erase.

Now that you have an overview of MICRON and its teaching method, we have organized approach, lesson, and follow-up outlines that can either serve as a step by step reference to class instruction or as a guide to one-on-one teaching. The basic structure of these outlines will be a listing of the objectives teaching or instructional aids and the recommended procedural approach to each session.

Included in this manual is a detachable "Teaching and Instructural Aids" section that will prove to be quite helpful. It consists of a chronological sequence of questionnaires visual aids, handouts, and examples that are numbered to conform to the session outlines. They will not only help explain the system to you and your students, but should add an important visual dimension to what is generally a very boring subject to teach,

Finally, good lucks You are about to make accounting both relevant and dynamic to an economic sector that desperately needs the help. You should also have a very satisfying experience as those you teach will be most appreciative of your assistance.