ACCA Financial Accounting
The purpose of this article is to introduce you to ACCA Financial Accounting, particularly the applied knowledge level within financial accounting, which focuses on the way businesses work as well as the basics of accountancy and how an accountant's role fits into the world of business.
There are three papers for this level
Business and Technology
This looks at business strategy and the all-pervasive and underlying technology that currently affects business performance.
This looks at financial reporting and how accountants report to external stakeholders in the business.
Focuses on the internal role of the accountant; to help improve business performance by guiding better decision making.
The financial accounting paper looks at the reasons behind financial reporting and provides context in each of their purpose. It introduces students to high quality financial information and the various different characteristics displayed within it. It also looks at double entry bookkeeping, accounting systems and how transactions and events are recorded within those systems.
Students will work towards producing a trial balance, for example: identifying problems within a trial balance and rectifying them ahead of preparing basic financial statements for both incorporated and unincorporated entities.
Consolidated financial statements (group accounts) are also a focus in this level. For example, it looks at how group accounts are prepared, as well as how financial statements are read and interpreted for a group setting.
It's a computer-based, two-hour paper with a 50% pass mark. The exam is an objective test; much broader than simply answering multiple choice questions. For example, you may be given a small scenario and you have to select a correct answer from a list, sometimes you will be asked to select a ‘true’ or ‘false’ answer, you may be asked to select multiple answers or you may even be asked to select an answer from a drop-down list. You may also need to enter correct figures in a blank space to answer a question.
The exam is split into two sections
Section A covers 70% of the exam - 70 marks out of 100 (35 two-mark questions).
Section B covers 30% of the exam – 30 marks out of 100 (2 fifteen-mark multi-task questions).
For section B, the two multi-task questions will each include a scenario followed by several tasks. This section of the exam also focuses on consolidation and accounts preparation.
During your exam, you may also be required to interpret your prepared consolidated accounts for either a sole trader or a limited company.
Useful exam tips
- Time management is important. You have 2 hours in total, so use your time wisely!
- For section A, aim to answer approximately 10 questions every 20 minutes, and complete the section in 115 minutes.
- For section B, aim to spend 20-25 minutes per multi-task question.
Keep a close eye on the clock. Don’t spend too long trying to work out an answer
- When doing the exam, it’s important to pay close attention to negatively worded questions. For example, sometimes you may be asked to give answers to questions, such as ‘What is the least? / What is not correct? It can be easy to respond with positive answers if you don’t pay close attention to negatively worded questions, so read each one carefully!
- Don’t choose too few options if a question asks you to select 2 or more answers. If you are asked to select more than one answer and you select just one, then the whole question will be marked as wrong.
- Similar to point 2, always read the questions and scenarios carefully. It’s important not to get lost and lose focus.
- If you are struggling to answer a particular question in the exam then these tips may be useful:
- Try to eliminate all answers that you are certain are incorrect. This will leave you with a higher probability of getting a right answer. Sometimes, the right answer becomes clear when you eliminate any wrong ones.
- Perhaps you can look at the options that you are given and work backwards. For example, you could use some of the answer options as being potential answers to see if they work or make sense when rotating the question!
- You may even notice that some potential answers are very similar. In this case, it’s likely that one of them is the correct answer, so try to work out which of the 2 makes more sense.
- If you really need to guess a choice from a list, beware of outliers; answers that look very different to all the others, which MAY suggest that they are incorrect, although this is not always the case.
Book your exam early!
It’s a great idea to set an exam date and get it booked it at the very start. Accountants, like most of us, are very deadline driven! Having that date set in the diary is great for overall motivation while studying. You will have the drive to set yourself studying goals to prepare for your exam and you will feel more motivated whilst doing so! Get lots of practice behind you on the run up to your exam. Do this on a computer so it’s similar to the real exam. Use tools that replicate exam conditions and use them as often as you can.
Here at Practice Tests Academy, we have the best tools to help you study in the most effective way! ACCA also have a practice platform on their website.
In the run up to your exam, practice the whole syllabus. Don't just pick areas where you feel most comfortable. That might give you some confidence, but you’re actually not helping yourself if you're not focusing on the whole syllabus. There are no optional questions in this exam, so you must go in fully prepared. You should be focusing on stuff that you CAN’T understand clearly in the run-up to your exam.
For effective studying, keep a diary. Set yourself study days throughout the week in the run up to your exam. Write down goals and achieve them!
Try to have a study break for at least 1 day a week, if possible.
Take regular breaks even if you don't feel like it. If you're sitting down to study for three or four hours, stop and have a 10-minute break after 45 minutes; have a drink, walk around, avoid the feeling of being tired and drained after studying for too long without breaks.
Overall, remember this: it's relatively short-term pain for long-term gain. The rest of your career will benefit from passing these exams. You can do this!
We wish you the very best with your studies and the very best of luck with your exam.