The best way to take accounting notes

Most students take notes the way they do in every other subject. They open the textbook, find an important-looking paragraph and copy it out neatly. In accounting this feels productive but achieves very little.

Accounting is a set of procedures to perform, more than a body of facts to memorise. Notes that copy prose from a book do almost nothing to help you perform them. Good accounting notes look different from history or biology notes, and learning to make them is one of the most useful habits you can build.

Why copying the textbook does not work

Copying feels like studying because your hand is busy and the page fills up. But your attention is on the shapes of the words, not their meaning.

You can copy a whole section on accruals without once asking why an accrual is added to an expense. You end up with a tidy page that taught you nothing.

The test is to close the book and use what you copied. If you cannot reproduce the method, the notes were decoration.

A textbook is also written to explain a topic to someone who has never met it. Your notes have a different job. They should remind someone who has already met the topic exactly how to do it.

Notes for a doing subject

Capture actions, not descriptions. For each topic, ask “what would I have to do, step by step, if a question on this appeared?” instead of “what does the book say?”

Notes written this way become instructions to yourself. They are easier to revise and test than paragraphs of explanation.

The page will then hold worked layouts, short numbered methods, small examples and a few exact definitions. It is less pretty and far more useful.

Build a library of worked pro-formas

Your most valuable notes are clean pro-formas: the standard layouts for the statements and accounts you will be asked to prepare. Examples are a blank, correctly ruled income statement, a statement of financial position with every heading in order, and the layout of a control account.

Every question hangs on these skeletons. Reproducing them from memory saves time and prevents errors.

Do not photocopy them. Draw each one by hand until you can produce it from a blank page with the headings, subtotals and order correct.

A pro-forma you have built yourself several times is one you own. One you have only looked at is one you will fumble under pressure.

Write method summaries in your own words

Keep short method summaries for recurring tasks, each with a handful of ordered steps:

• how to deal with a bad debt and the related provision;
• how to bring a set of adjustments into the accounts;
• how to work from a trial balance to the final statements.

They must be in your own words. Squeezing a textbook explanation into your own five-step method forces you to understand it, and that is where the learning happens.

If you cannot summarise a method, you do not yet understand it. It is better to find that out while there is time to fix it.

Use your own examples

A method written in the abstract is easy to misremember. Anchor each one with a small worked example using figures you have invented. Show the accrual being added, the depreciation being calculated, and the entry going to the correct side.

Inventing your own numbers matters. It forces you to run the method yourself, not watch someone else run it. When you revise, that example will bring the method back faster than a definition.

Keep definitions separate and precise

Accounting has terms that must be stated exactly, such as prudence, the accounting equation, and the difference between capital and revenue expenditure. Give them their own notes, short and exact, apart from your method pages, so you can test yourself on them.

Write each definition as tightly as you can, then check it against a reliable source. A vague definition fails you when a question turns on the exact meaning of a term.

Leave room to improve your notes

Your first version is rarely your best. As you practise, you will find that a method needs an extra step, a layout has a heading you keep forgetting, or an example missed the awkward case.

Leave space to add to your notes, and rewrite any page that stops being clear. A note you have improved three times is worth far more than one you wrote once.

It is easy to slip back into copying. One of our teachers can show your child how to build pro-formas, method summaries and worked examples from their own class notes. Book a trial class