Accounting is the first ACA exam most students sit and it is one of the hardest because it has the biggest jump from where you start to where you need to get to in terms of technical knowledge. Understanding financial statements is fundamental to the ACA qualification and the content covered in Accounting is developed in several of the later exams; performing well here will set you up nicely for the rest of your ACA journey.
In order to pass Accounting, you need a comprehensive understanding of how financial statements are prepared. This is not a subject where you can get through on loosely knowing the facts and writing well – these exams are more scientific and you need to know the exact answer. Further, the examiners test you in a way that makes sure you know the content inside and out. There really is nowhere to hide.
The long question accounts for 40% of the marks. You will be required to prepare either a P&L and SFP or a cash flow statement. Your performance on this question will have a significant impact on your overall mark. If you obtain the full 16 marks here (see video below which demonstrates how to do this) then you only need to get 6 of the 24 multiple-choice questions correct in order to pass. Whereas if you perform poorly on the long question and only score 4 of the available 16 marks, then you will need to get 18 of the 24 multiple-choice questions correct in order to pass – quite a tall order. It might be tempting to think the multiple-choice questions are more straightforward, but they are by no means easy and some of the options are almost correct - one small error in your calculation will lead you to one of the incorrect options and a false confidence that you are correct.
In my experience, the two most common mistakes made by students are 1) not fully understanding the underlying technical concepts, and 2) not working on their exam technique. Therefore, when you are working through a topic, do not try to learn by rote – make sure you completely understand the principles of what you are doing and why. My other tip is to develop a good exam technique so that you can be quick and efficient; all the ACA exams are time pressured, and you need to develop the skill of scoring marks in as little time as possible.
A key weakness area for most students is the cash flow statement, both in Accounting and the later exams. I think there are a lot of students who go into the exam hoping that they do not get a cash flow statement as their long question! This is a risky strategy given how important a good performance on the long question is.
Students who perform well in Accounting are those who have a comprehensive understanding and know why they are doing everything they are doing. If the questions are different from those they have seen previously, they are able to apply their technical understanding to get to the right answer.
The video below demonstrates how to score 100% in the long question. The other videos from our Accounting course can be found here.
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About the Author
Kieran Doe is a Senior ACA Tutor at ACA Masters. Kieran won ICAEW prizes for his performance in Financial Accounting and Reporting, Tax, Financial Management, Audit, Business Strategy and Case Study. This is in addition to winning several prizes at university for various Accounting, Management, Business and Economics subjects.
Kieran’s tuition is based around the learning techniques and exam strategies which enabled him to win prizes for all the subjects he teaches. Under his guidance, several of his ACA students have also won ICAEW prizes.