Why is it that so many students struggle with accounting exams? Is it the ambiguity of the concepts or the way in which the subjects are taught in our Universities?
This area has been a focus for me over the past few years. After tutoring several hundred students and seeing the variety of courses available through Universities, both undergraduate and post-graduate, there are usually a number of techniques, that while may seem relatively simple, are usually the reason for the downfall in students not passing he dreaded accounting exam. Its amazing that passing accounting can sometimes be the difference between a few marks and that is why its important to maximise your marks.
Here are my list of top tips for passing the accounting exam and can also apply to other topic areas as well. While they may seem to be generic, this is typically what lets students down and the reason for having to repeat a class again:-
1. Read the Question carefully - while this may seem obvious, you’d be surprised to see how many students fail to actually read and understand what the question is asking of them. Accounting concepts can be broken down into the various topic areas and once understand what types of questions belong into what topic area, you can learn the technique to answer these questions. For example posting journal entries, creating a trial balance and financial statements, ratio analysis etc..
2. Read the question prior to reading the supporting material – a number of students, particularly in accounting, spend their time during reading time absorbing all of the facts rather than pin pointing what the questions is asking, then fishing for the right information. This is a technique that will guarantee you to focus on the right answer.
3. Include narrations and workings – this is typical for accounting journal questions and it is important to lay out your assumptions and narrate what the transaction is for. You never know the marker may give you extra marks if he can see where you went wrong, yet your presentation and logic were almost correct. So use this technique to be clear in your responses.
4. Ensure to include the correct format - i’ve seen questions where the marker can offer you a mark purely for putting the right format such as a cash flow statement or balance sheet. Just by putting in the company name, report name, period & correct sub-headings can make a massive difference.
5. Time management - work out the number of minutes for the exam and divide by the number of marks. So for example a 3 hours exam work 100 marks should be work 1.8 minutes per mark. It is important to plan this out during reading time and then to stick to this time frame, which will make a massive difference during the actual exam, if you can be this disciplined. If a question is incomplete, just move on to the next question.
6. Prioritise the question from easiest to hardest - this can be planned out during reading time and this technique helps you to maximise your marks. So for example if there is a question on T-accounts versus doing a cash flow statement, you may be able to start with the t-accounts, if you find this easier. That way you are maximising your marks to help your chances of passing the course.
7. Think in concepts rather than rote learning – the biggest problem in accounting exams is that students rote learn material rather than thinking in concepts. Taking a much higher level view and thinking and understanding the concept will guarantee you a much more successful preparation and pass mark for your course.
8. Everything comes back to the basic principles – at the end of the day Accounting isn’t rocket science and all come back to basic principles which appear simple, yet are the foundation of understanding more advanced principles. Everything comes back to the accounting equation, understanding your debits and credits etc…
9. Accounting follows a standard structure – nearly all accounting courses start off with the same principles of A = L + OE, then move onto the various elements, then onto T-accounts, ledgers & preparing the trial balance, adjusting entries, preparing financial statements, ratio analysis etc… Likewise with management accounting there is a pretty common theme of concepts such as cost accounting, cost volume profit analysis, overhead and allocations, budgets & forecasting, investment decisions, value-chain / retail accounting etc… So once you learn the structure and what type of questions belong into what type of topic area you will find it a lot easier to know how to approach these types of questions.
10. Check your calculations – simple easy marks can be lost through careless calculations and by not checking your figures, you can lose out which can cost you the difference between a pass and fail grade.
All of these tips sounds simple in theory, yet require discipline to implement in practice.