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Succeeding in any field of study requires the use of a solid strategy and accounting is no exception. As an undergraduate student in accounting, I many times had classmates in my accounting courses that would vent to me their frustration with their inability to consistently achieve above average exam grades. In response, I would ask them their strategy for studying for the course. In 9 out 10 cases, they had no clearly defined strategy and that's exactly what I call a recipe for failure. Successful studies in the field of accounting require a structured approach. While I never did exceptionally well in college, I was however able to do better than average in all my accounting classes because I developed and adopted effective learning habits very early on. Before going any further, I would like to mention that the study skills I am about to share with the whole world are not a one size fits all. You are thereby invited to tweak them for the purpose of achieving optimum results. With the disclaimer out of the way, let's take a look together at the study habits that enabled me to fare better than most throughout each of my accounting classes. These learning habits were stacked up in four chronological phases: before the lecture, during the lecture, after the lecture, and before the test.
- Before the lecture: Before showing up for every lecture, there were two things that I would do. First, I would read the assigned chapter's opening story. Reading the opening story was very helpful to me because it enabled me to get a good feel for the issues to be discussed throughout the lecture. The other activity that I completed as part of preparing for the lecture was to print out then read the assigned chapter's powerpoint slides hosted on the textbook's website. If any worked problem was included in the slides, I would make every effort to solve it without looking at the solution. By the time I was finished working with the slides, I had become well acquainted with most of the topics to be covered in the lecture.
- During the lecture: I always made sure to show up for the lecture on time and equipped with the chapter's powerpoint slides, the textbook, a basic scientific calculator, a notebook, etc. As I listened to the lecture, I would write anything that the instructor mentioned that was not included in the notes. If the professor singled out topics or types of problems that were highly likely to appear in the exam, I would also write that down. Last but not least, I made every effort to ask questions whenever I felt confused and I could not find the answers in the textbook.
- After the lecture: My first year in college, I had a bad habit of not reviewing my class notes nor completing any additional reading in a timely manner. That strategy seemed to work well until the semester of my Intermediate Accounting I course. The instructor was going through the chapters so fast that my procrastination ended up becoming a serious liability. It didn't take me too long to realize that a change of strategy was badly needed. It is right then that I decided that I was going to strive as much as possible to review my class notes and complete any further reading within 36 hours of the completion of a class session. Additionally, I committed to working out all chapter assigned problems over the weekend. These small adjustments in my study habits turned out to be very instrumental in helping me turn the semester around after I got off to a bad start in my Intermediate I accounting course.
- Before the exam: Once I became accustomed to consistently completing phases 1 through 3, my exam preparation became less tedious. Obviously I still needed to do things like review my class notes, read over the powerpoint slides, and rework some of the assigned problems with higher difficulty levels. I also did put a special emphasis on knowing how to solve every problem worked in class and in the textbook. This is because, from personal experience, in almost 85% percent of the cases, the tests questions will be modeled after the lecture's and or textbook's solved illustrations or problems. To complete my preparation for the exam, I would go on the textbook's website take a quiz and a true or false questionnaire for each of the chapters I was going to be tested on. Not only did this final step help me hone in my exam taking skills, but it did also assist me in assessing my level of readiness for the exam I was about to give.
These guidelines are not meant to apply to very student's situation because learning styles vary from one individual to the other. Nonetheless, any person is welcomed to adapt the study habits I just outlined to her own set of circumstances. If you find yourself reading this post, please take a few minutes to contribute to the discussion by sharing some of the study techniques that worked or are working for you in your accounting courses or in your other business classes.
If you think that getting through your tax and financial accounting classes was challenging, please hold your breath because you ain't see nuthin yet…pardon my English. Before walking at your graduation ceremony, you will have to win your battle with the ultimate ceremony's gatekeeper: Auditing. You will be surprised by the overwhelming number of students that give up pursuing an accounting degree just because they are unable to pass through the funnel that is Auditing. Auditing is really a different animal because it requires a lot of memorization along with a healthy dose of critical thinking. Most accounting students naively overlook the complexity of auditing because there is little mathematical computations involved in it. The lack of math is largely compensated by the fact that you will be dealing with a lot of situational issues. Not only will you have to memorize the rules but you will also need to pare them to the different auditing cases you will be asked to solve during your tests. It is primordial that you allot plenty of study hours for your Auditing class if you wish to earn a passing grade your first time around. There is indeed no easy chapter in the typical Auditing curriculum. You can't get complacent throughout the whole semester or you will get burned. There are a few things that one needs to accomplish if he or she desires to position him/herself to jump over Auditing:
- Never miss a class session unless you have to.
- Always complete your reading assignments. Plan for at least 15 hours a week studying for auditing. Like I said earlier, there is a lot of memorization that will take place and please do not ask me why.
- Ask as many questions as you deem necessary during the lecture, being shy is not an excuse!
- Find a motivated studying buddy and feed off each other because it will be a long, emotionally charged, and laborious semester.
- Find yourself a good preparation book for the auditing section of the CPA then work the questions related to the topics being covered in the classroom. This will allow you to better handle your exams' questions.
When it is all said and done, you will need to show some resolve because your will is going to be tested throughout every exam you will be given. Good luck!
So you cleared Principles of Accounting and you are now ready to take on the double headed monster known as Intermediate Accounting. Intermediate Accounting is the only two-semester course sequence that you have to go through in order to obtain your bachelor of science in accounting. Because of the depth and breadth of the topics covered in a typical Intermediate Accounting course, I gave it a nick name: The Two Headed Monster. I also came up with a nick name for Auditing but it will be revealed when I write a post on the auditing course. For now, just do yourself a favor by accepting de facto that intermediate accounting is going to test your resolve. Going through the two semester course sequence is often a very labor intensive process. You will need to devote 10 to 15 hours a week digesting what you will be taught in the classroom. The purpose of intermediate accounting is to help you understand, prepare, and use financial information. Most of your understanding of financial accounting and reporting will take place during the two semesters you will devote to this course. I often wonder why they call this course Intermediate Accounting as apposed to Applied Financial Reporting which seems to be a more suggestive appellation. Rather than debating on what would be the most appropriate name for Intermediate Accounting, you will be better served if I forewarn you about the most challenging topics that you will likely encounter while taking this two-semester course sequence of accounting. The following is a list of topics that I have personally found very difficult to assimilate. Please be mindful that this list is not intended to be exhaustive nor universal.
I) Conceptual Framework Underlying Financial Accounting: (1)Basic assumptions of accounting: Economic entity, Going concern, Monetary unit, and periodicity. (2)Application of the basic principle of accounting: Historical cost principle, Revenue recognition principle, Matching principle, and Full disclosure principle. (3)Impact of constraints on the reporting of accounting information: Cost benefit relationship, materiality, industry practices, and conservatism.
II) Income Statement and Related Information: Reporting irregular items, Discontinued operations, extraordinary items, unusual gains and losses, Change in accounting principle, Change in accounting estimate, Special reporting issues, and Intra-period tax allocation.
III) Cash Flows Statement: Content and format of the statement of cash flow, Preparation of the statement of cash flows, Classification of cash flows, and Sources of information.
IV) Accounting and the Time Value of Money: Single sum problems, Annuities, Valuation of long term bonds, and Present value measurement.
V) Cash and Receivables: Valuation of accounts receivable, Recognition of notes receivable, Valuation of notes receivable, Disposition of accounts and notes receivables.
VI) Inventory: Effects of inventory errors on the financial statements, Cost flow assumptions, Special issues related to LIFO, and Lower of cost or market.
VII) Acquisition, Valuation, and Disposition of Property, Plant, and Equipment: Pick your poison!
VIII) Depreciation, Impairment, and Depletion: Pick your poison!
IX) Characteristics, Valuation, Amortization, and Impairment of Intangible Assets: Pick your poison!
X) Long Term Liabilities: Issuance and Valuation of Bonds (Discount and Premium), Effective interest method, Cost of issuing bonds, Issuance and valuation of long term notes payable, Extinguishment of debt, Trouble debt restructuring, and Off balance sheet financing.
XI) Stockholder's Equity: Accounting for and reporting treasury stock, Dividend policy, Dividend preferences, and Book value per share.
XII) Dilutive Securities and Earnings per Share: Accounting for the issuance, conversion, and retirement of convertible securities, Accounting for stock warrants, Accounting for stock compensation plans under GAAP, and Computing earnings per share in both simple and complex capital structure.
XIII) Investments: Held to maturity securities, available for sale securities, trading securities, and Investments in equity securities.
XIV) Revenue Recognition: At point of sale, Percentage completion method, Completion of production basis, Installment sales accounting method, Cost recovery method, Accounting for losses on completed contract, and Bargain purchases.
XV) Accounting for Income Taxes: Pick your poison!
XVI) Accounting for Pensions and Retirement Benefits: Pick your poison!
XVII) Accounting for Leases: Pick your poison!
XVIII) Accounting Changes and Error Analysis: Pick your poison! Have you caught your breath yet? It was indeed a very lengthy list and it could get shorter or lengthier depending on your personal situation. Because both Intermediate Accounting courses will be very time consuming, having access to very well written lecture notes will save you quite a good amount of time on your preparation before each lecture. Trust me, you will be so swamped with waves of new information pouring over your head that you will start looking for new time efficient ways of studying for Intermediate Accounting. Luckily for you, I have been down that road before. I took Intermediate Accounting about two years after taking Principles of Accounting. Not only did I have to contend with being a little rusty, but I also had to deal with taking a full course load and keeping busy with extra curricular activities. You can imagine how much juggling I had to do just to make sure that I never fell behind throughout the semester. Actually, I did occasionally fall behind but I would always find some innovative ways to catch up within no time. For instance, I relied heavily on free lecture notes available on the internet. In addition, whenever there was an accounting concept that puzzled me, I would look it up on Google or Wikipedia to see if I could find some easier to understand definition and illustration of that concept. Last but not least, I would always seek additional explanation from my classmates and most importantly from my accounting professors. Regardless of your personal circumstances, it's important that you always remind yourself that a true understanding of how a particular accounting procedure is applied demands a clear understanding of why it is applied. PS: Now proceed to the "Accounting Lecture Notes" page for some study aids related to Intermediate Accounting.
This week, I am going to cover the area of management accounting (often referred as managerial accounting or cost accounting): a division of accounting that is given little to no consideration by most students majoring in accounting. Little attention is given to management accounting because most students equate their post bachelor accounting career to working as either auditors or tax accountants. However, the Institute of Management Accountants states "In fact, of the five million finance function professionals in the U.S., more than 90% work inside organizations as management accountants and finance professionals". Indeed, only 35% of students graduating with a bachelor in accounting do end up in public accounting. The other 65% join the ranks of the private sector working in businesses accounting divisions or some other areas unrelated to accounting. I do however have some bad news for those of you who firmly believe that you will be among the 35% going to work in public accounting. Only 50% of those who start a career in public accounting will remain within the industry after five years. I will devote one of my future posts to employment trends within the accounting profession and why is it only a small percentage of students with accounting degrees are able to achieve a successful career in public accounting. The point I am trying to make with all those statistics is that most students holding a bachelor in accounting will end up working in the private sector. This entails that management accounting is going to most likely come back haunt most of you unless you give it the respect that it deserves while you are in college. The Institute of Management Accountants(IMA) states "Management accounting is the internal business building role of accounting and finance professionals who work inside organizations. These professionals are involved in designing and evaluating business processes, budgeting and forecasting, implementing and monitoring internal controls, and analyzing, synthesizing, and aggregating information—to help drive economic value.The role of management accounting differs from that of public accounting, since management accountants work at the “beginning” of the value chain, supporting decision making, planning and control, while audit and tax functions involve checking the work after the fact. Management accountants are valued business partners, directly supporting an organization's strategic goals. With a renewed emphasis on good internal controls and sound financial reporting, the role of the management accountant is more important than ever." I could not have have come up with a better explanation of the role of the management accountant and how it differs from that of a public accountant. In other words, you will need a specific set of skills if you wish to become an effective management accountant. Indeed, depending on your level of experience you will be called upon to perform a variety of tasks including but not limited to variance analysis, buy vs. lease analysis, product profitability, cost analysis, sales management scorecard, sales and financial forecasting, capital budgeting, and annual budgeting. Because there is a lot of computing and analysis involved in management accounting, it does require more technical skills than financial accounting and reporting. Consequently, I would strongly advise any student majoring in accounting to wait for the last semester to schedule the management accounting (i.e cost accounting or managerial accounting) course. At some institutions it's a two course sequence. If you happen to be in that situation, you should take the two classes in your last two semesters. Since there is no way of telling how soon, if ever, you will go work in the private sector, taking management accounting last will make it easier for you to refresh your memory a few years after your graduation from college. Another advantage of saving management accounting for last is the added benefit of a smoother preparation for the CPA exam. Should you take management accounting sooner than you senior year, it is very likely that you will be laboring while reviewing for the CPA exam because management accounting is a very unique area of accounting. As a matter of fact, I like to think that courses such as auditing, business law, tax I, tax II, and management accounting must be taken in your senior year if you wish to maximize your chances of beating the CPA exam on your first two tries. No matter how good of a student you are, you must strive to always be able to hedge your bets. A good mastery of management accounting is certainly one proven way to ensure that you remain immune to the unwanted side effects of having to transition from public accounting to management accounting. PS: Now proceed to the "Accounting Lecture Notes" page for some study aids related to management accounting.
Principles of Accounting ( referred as “P. Acct” from here then on) is the introductory accounting course at the undergraduate level in most US colleges and universities. Most students who have taken this course would agree that its difficulty level is about average. In fact, getting a B in “P. Acct” doesn't require much effort at all. This is because “P. Acct” related exams only test general accounting lingo along with some customary journal entries here and there. Consequently, a good memorization of key concepts and a few hours of homework every week are all you will need to get a B or sometimes a A if the professor is nice enough to curve the grades. Unfortunately, having good grades in “P. Acct” is a poor predictor of how well one will perform in upper level accounting courses. That's why a majority of those “P. Acct” overachievers are stunned by how challenging upper level accounting courses are. They in fact struggle to even make a C. What students don't realize while enrolled in “P. Acct” is the fact that almost everything they are being taught will carry over to their intermediate and advanced accounting courses. Antoine Lavoisier, considered by many to be the "father of modern chemistry", once said the following that “Nothing is lost, nothing is created. Everything is transformed”. This famous law of chemistry holds true for the field of accounting as well. Fundamental accounting concepts such as the matching principle, the revenue recognition principle, and the segregation of duties will undoubtedly reappear under varying circumstances as you progress towards the completion of your bachelor degree in accounting. Failure to truly grasp the gist of all the fundamental accounting concepts will certainly cost you dearly as you take on the intermediate and advanced accounting courses. Thus far, I have tried to impress upon you how crucial it is to have a good mastery of most if not all the concepts and rules that will be presented to you in your introductory undergraduate accounting course. From here then on, I am going to share with you some study habits that can potentially help you make of “P. Acct” the robust foundation on which will be erected the building that is your accounting education. Pardon the imagery! For starters, you need to show up for your “P. Acct” lectures with a serious minded attitude. In other words you want to show up for class on time; you also need to bring along your tools such as your textbook, your notebook, and your calculator; and last be not least you want to stay focused during the lecture while taking good notes and asking questions as your comprehension of the lecture gets clouded. Another thing that you need to realize is that most of your learning will happen away from the classroom whether it be in your living quarters, at the library, or at the coffee shop. Besides doing the assigned homework, you must prepare for each lecture by actively reading your textbook. Active readers predict, make inferences, compare and contrast, and draw conclusions. You have got to be able to visualize and conceptualize what you are reading if you expect to get any real meaning out of it. Your first attempts to read actively are not going to be easy but you need to persevere. After all, practice makes permanent! If you can think of anything else that will help you get the most out of your “P. Acct” course, I would suggest you use that as well. Also, the study habits that I have mentioned here are very adaptable therefore feel free to make them your own. At the end of the semester, be careful not to throw away your notes and not to trade nor sell your textbook. You will be surprised by how often you are going to need a little refresher on some basic concepts as your further your accounting education. I would strongly advise that you maintain a portfolio of all your accounting notes for all your undergraduate accounting courses because it will make your CPA exam preparation much less laborious. There is however one more subject that I want to quickly cover before my closing arguments. As you will come to find out, most accounting instructors are poor communicators even though they are highly qualified to teach in at the university level. Consequently, if you ever suspect that you won't be able to get much out of your “P. Acct” lecture sessions as well as the course textbook (not all textbooks are created equal), I recommend that you buy the used and older edition (9th) of Financial Accounting by Albrecht, Stice, Stice, Skousen. This textbook is the gold standard for all college introductory accounting textbooks. It is very well written with each chapter offering pertinent illustrations of the key concepts. If after reading a chapter of this book, you don't come away as more informed about accounting then you have got to switch majors! I personally keep it by my bedside as it has proven to be so resourceful over the years. As an accountant, you will often find yourself in situations where your credibility is going to be tested. It is therefore very important that your professional title reflects the education that you have received while in college. You wouldn't want to find yourself scrambling for answers after your professional opinion was challenged by either a client or a colleague. The best way to prevent those rather embarrassing situations is to do the heavy lifting in the university hallways and that starts with your Principles of Accounting course. PS: Now proceed to the "Accounting Lecture Notes" page for some study aids related to principles of accounting.
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I am currently enrolled in a Master of Professional Accounting program at UWG. I intend to develop expertise in Fraud Examination and Business Advisory. The Student CPA is a blog that strives to provide learning resources for accounting courses, graduate business school admission tips, information about careers in accounting, and job search strategies.
Wednesday, 21st of April 2010 at 11:50:06 PM
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