Accounting on Level II – How to Beat the Beast

I am not an accountant. They say there are 2 types of people 1) those that get accounting 2) those that don’t. I don’t get it and I also hate it. I find it to be a tedious series of rules. If you are like me, there is a temptation to say, “Oh – I will just do well on the rest of the test and not worry about accounting.” Trust me, that is not an apporach you want to take. As a matter of fact, I would not blow any sections of the Level II exam other than maybe stats. But I digress…

Here is what I did and it worked for me.

Know this – there are other parts of the exam like fixed income that get a lot of coverage in the notes but are not tested on the exam. Accounting is not like that. They will test you on any and all concepts. Translation – you have to know it all.

OK – so you have to know it all but what level of depth do you need to know it down to?

In my case, the first time I took level 2, I learned it maybe down to level 2 assuming 4 levels of depth. This is not the section you want to go for a sort of “big picture” level of understanding becuase it is not tested that way. Learn it down to Level 4 of depth.

In terms of a practical approach to study, I recommend going through your schweser notes or whatever you use to get the basics down and then go through the CFAI book. Work the CFAI examples and problems at the end of the chapters. In my experience, if you know it to that level of detail, you will do fine.

Note: do a lot of practice with ratioss o that you can quickly figure out how the ratio is going to respond.