How to study accounting: journal entries, accounts and the why behind each one

If you're wondering how to study accounting, here's the short answer: with a pencil, with practice problems, and with one question you ask yourself on every entry, "why does this go here?". Accounting is one of those courses you can understand while reading and still fail. The idea of double-entry bookkeeping fits on a single page; recording twenty transactions in a row, getting the trial balance to tie out, and figuring out why it didn't is a different skill entirely.

What makes accounting its own kind of course (whether you're an accounting major or taking Financial Accounting for a business or economics degree) is that it mixes two very different things. On one side, mechanics you learn by doing: journal entries, T-accounts, adjusting entries, financial statements. On the other, a lot of theory delivered on lecture slides: standards, measurement rules, definitions that look alike and that the exam wants word-perfect. Students who only study one half struggle on the exam.

It's not my major: I study computer science. What follows comes from looking closely at how accounting courses are studied and graded, plus what we know about how people learn, applied to that kind of exam.

Start with the equation, not the chart of accounts

Almost everything in intro accounting rests on one idea: assets equal liabilities plus equity. What the business owns, funded by what it owes and by what the owners put in (plus what it has earned since). Every transaction changes that equation somehow, and double entry is just the way to record the change without breaking it.

So before you try to memorize the chart of accounts, run every transaction from class through three questions:

• What changed? Inventory came in, cash went out, a debt was created, revenue was earned.
• Which part of the equation does it touch? Assets, liabilities, equity, or a revenue or expense account (which ends up in equity).
• Did it go up or down? That tells you whether it's a debit or a credit.

Buying inventory on account, for example: assets go up (debit Inventory) and liabilities go up (credit Accounts Payable). If you can say that out loud before writing the entry, you're not recalling it anymore, you're reasoning it out. And reasoning holds up when the professor changes the problem.

Practice problems from week one

The most common mistake in accounting is saving the practice for after you "get the theory". In this course it works the other way around: you get the theory by doing the problems.

A routine that tends to work:

1. One problem on the topic the same day as the lecture. Even a short one. Don't wait until finals week to find out you never learned how to record depreciation.
2. Solve it without looking at the answer key. If you get stuck, look only at the entry you're missing, close the key, and start over from the top.
3. Write one sentence next to each entry explaining why. "Assets go down because cash left the bank; liabilities go down because I paid off the debt."
4. Post the entries to T-accounts and build the trial balance. If it doesn't balance, hunt for the mistake yourself before checking the solution. Finding where the difference is teaches you more than any summary.
5. Repeat the same type of problem a few days later, with different numbers. Getting it right once might be memory; getting it right a week later means you've learned it.

Finding your own mistake beats copying ten correct answers. The classic errors repeat (swapping debits and credits, forgetting sales tax, recording an expense as an asset), so keep a page where you write each one down when it happens. The night before the exam, that page is worth more than your notes.

The theory on the slides: one card per concept

The other half of the course arrives as lecture slides: the conceptual framework, the qualities of useful financial information, recognition and measurement rules, and whichever standards your course follows (US GAAP or IFRS). These concepts look a lot alike, and exams expect precision: an expense is not a loss, and a liability is not a contingency.

What works for this half:

• One card per concept, with the definition in your own words, an example from a real or made-up company, and how it differs from the concept people usually confuse it with.
• Comparison tables whenever there are competing methods: inventory costing (FIFO, LIFO, weighted average), depreciation methods, accrual versus cash basis. Same columns for every row: what it is, when it's used, how it affects net income.
• Quiz yourself without looking. Cover the definition and say it; cover the example and come up with a new one. That's active recall, and in a course full of near-identical definitions it's what separates "that sounds familiar" from "I know this".

How you're graded and how to prepare

Accounting exams usually pair a long problem (record a period's transactions, make the adjusting entries, prepare the balance sheet and income statement) with theory questions, sometimes multiple choice and sometimes short answer. On the problem, time is the enemy: plenty of students can do it, just not in the time they're given.

So:

• Work through past exams with a timer. Accounting problems repeat a lot from one year to the next. I wrote about how to get the most out of them in how to use past papers.
• Keep your page tidy. Numbered entries, dates, one column for debits and one for credits. A grader is kinder to work they can follow.
• Check as you go. Every few entries, add up debits and credits. Catching the gap at entry five is much better than catching it at the end.
• For theory, practice the written answer. A definition, an example and the difference from the neighboring concept usually make a complete answer.

Spreadsheets are a great practice tool (building a ledger in Excel or Google Sheets forces you to understand every formula), but many exams are paper and a calculator. Practice that way too, especially in the last week.

Accounting within your degree

Intro Financial Accounting is the gateway, and behind it come Managerial Accounting, Intermediate Accounting, Cost Accounting, Auditing and Tax. They all build on the first one. That's why whatever you skip early on comes back later, and it's worth asking your questions in office hours right away instead of letting them pile up until the end of the semester.

If you're a business or economics student and accounting is one of your required courses, the logic is the same: the numbers half is learned by doing, the theory half by comparing. In how to study business administration I wrote about how it fits with the rest of the courses in that major.

Your professor's slides

A big part of accounting theory comes in slides: standards, tables of methods, diagrams of the accounting cycle, sample financial statements laid out as tables. Often the professor explains them in the lecture and the deck keeps only the skeleton, which is hard to rebuild weeks later.

For that part you can use Filmina, a web app that explains your lecture slides out loud, one at a time, pointing at the part it's talking about. It also reads each slide as an image, so it explains tables and diagrams along with the text. Then you can ask Mina, the chat that answers from your own material ("what's the difference between an expense and a loss?"), and practice with questions built from what it explained. It has limits: it needs an internet connection, it can't read a scanned deck, and it won't solve your problems for you. It helps with the theory so that the pencil work stays yours.

Frequently asked questions

Is accounting hard?

It's harder at first than it looks, because understanding isn't enough: you have to practice. Students who work problems from the first week and ask why behind every entry usually find it much more manageable than those who study it by reading.

How do I learn debits and credits?

Before each entry, say what changed, which part of the accounting equation it touches, and whether it went up or down. That tells you whether it's a debit or a credit. Then repeat the same type of transaction with different numbers a few days later.

How do I study for an accounting exam?

Work past exams with a timer, keep a list of the mistakes you tend to make, and check your debits and credits as you go. For the theory questions, make one card per concept and quiz yourself without looking.

Can you memorize accounting?

Not the mechanics: if you memorize entries, you'll get lost the moment the problem changes a little. What you do need to know precisely are the definitions and rules from the theory, and those stick better by quizzing yourself than by rereading.