How to master Financial Accounting long-form questions
Sitting Financial Accounting (FA) long-form, and wondering how to tackle the question? Stephanie Pentland and Matt Hall share the five key steps that you should use for success for the paper-based and computer-based exams.
The FA long-form questions are marked out of 16 and account for 40% of the final exam. You will be presented with a trial balance (‘TB’), and this will be accompanied by notes that indicate what needs to be done to finalise the financial statements.
You will be creating journals from these notes one at a time, and adjusting the TB figures, which are then transferred into a pro-forma profit and loss (‘P/L’) and balance sheet (‘B/S’).
The following five-step approach should be used:
Review the TB and related notes, identifying all line items which are affected by the notes.
Calculate any necessary workings and create the journal entry.
Post the journal entry using amounts from your TB and transfer the final figure to the related pro-forma line items.
Post any line items which the notes do not affect, directly from the TB.
Complete the pro-forma financial statements by casting your numbers, not forgetting to add your profit to (or deduct your loss from) opening retained earnings in the TB. You need this to get your statement of financial position to balance.
Things to remember:
- The approach for the paper-based exam and computer-based exam is exactly the same.
- You might find it helpful to take notes as you go – make use of the exam paper or wipe-dry board provided to help you remember key points.
- You should repeat steps 1 to 3 above for every note in the exam. Once you’ve made adjustments for all of the notes, you can finish off your accounts with steps 4 and 5.
- You don’t need to do the notes in order – if you’re struggling with one, move on and come back to it later!
- Always round your answer to the nearest pound.
- Anything can come up in the long-form question – it’s the same technical content as you need for the multiple-choice questions!
- The long form question will always be a limited company – as you saw in module 16.
- Get plenty of question practice: make sure you have attempted your module 16 workshop exercises (WSE), sample paper and revision paper, and ensure you have revisited your progress test 2 (PT2) and mock exam.