Abstract Solution of application of funds statement problems seems to be accomplished by many students more as a result of their memorization of rules and processes than because they have a basic understanding of what the statement seeks to accomplish. The student who understands the essential nature of the funds statement is not baffled easily when confronted by a unique situation, which his previous homework or classroom demonstration problems did not parallel. In an effort to achieve the desired sound grounding in fundamentals of funds statements the writer has reduced his first class discussions to a very elementary level. The result has been more satisfactory than previous efforts to teach the topic by conventional and more erudite approaches. The extreme simplification process is presented primarily on the blackboard. The writer has found that after use of this technique and a few transitional remarks the average student better understands the usual application of funds worksheet and works problems from reason and not by rote.