MGT120H5 Chapter Notes - Chapter 1: Cash Flow Statement, Accrual, Retained Earnings
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MGT120H5 Full Course Notes
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Document Summary
It is not enough to memorize the material, you must know how to apply it. In order to do that, you must understand the relationship between the elements of the financial statements. For example, if you are asked to prepare journal entries, you must know which accounts are affected and whether they should be debited or credited. Too often, students prepare t-accounts when asked for journal entries and end up losing a lot of marks. Too often, students skim the question and assume they know what it is going to ask rather than read it thoroughly. If you are asked to prepare financial statements, you must know which element belongs to the appropriate statement, ie, balance sheet: assets + liabilities = equity. Income statement: revenue expenses = net income. Statement of equity - common shares and retained earnings. Practice on as many questions as you can.
