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Studying for financial accounting exams differs from doing so in other subject areas, because of the need to both learn theoretical concepts and to be able to apply those concepts to various financial accounting scenarios. To be well-prepared for the average financial accounting test, students should be able to answer questions on assets and liabilities, earning processes and the balance between costs and benefits. They also should be able to prepare at least one sample financial report, such as a balance sheet, an income statement or a cash flow statement. Practice is the key when it comes to creating these accounting documents in order to catch mistakes that could otherwise appear on the ones submitted as part of the actual exam.
Vocabulary in financial accounting is an area that often gives beginners trouble, but having a good grasp of all terms is essential to doing well on financial accounting exams. Short-answer or multiple-choice test questions can specifically relate to the differences between concepts such as current market value and expected sale prices. Other questions can also test knowledge of different actions that are taken at different periods in the accounting cycle. For students struggling with learning accounting terminology, handwritten or electronic flashcards have been consistently proved to be effective study tools.
Financial accounting classes stress the proper procedures of recording and summarizing different types of financial transactions. Any topic related to cash flowing in or out of a business commonly appears more than once on financial accounting exams. Another integral part of learning financial accounting is the correct use of ledgers and journals to record any type of event such as a change in inventory or existing bank balances.
Information technology plays a key role in financial accounting — more so now than in the past. To become a financial accountant, proficiency with specialized bookkeeping software is a must. Most of these software packages come with built-in templates for creating a variety of financial reports. Many have error-checking features for immediate feedback on areas that should be further reviewed before taking financial accounting exams. Supplemental tutorials also are available online for financial accounting training and test preparation, some of which are free of charge.
A final pointer for studying for financial accounting exams: procrastination never works. The material covered in this subject builds upon itself and should ideally be reviewed daily. Students also should address any questions to their instructors right away in order to ensure that they understand every topic well in advance of an exam.