Tackling CAT T6

This is considered the easiest paper of CAT advanced level papers, but again the difficulty level is actually the same as other advanced level papers. The syllabus of financial accounting covered in this paper is very basic, therefore you can easily understand the topics especially by doing the past year papers. The 14 past year papers have actually covered the full syllabus of T6. Here are some advices on each syllabus area.

1. General framework
Here you will learn about the IASB framework including conceptual framework and regulatory framework. This is the most basic knowledge that one should have as an accountant, although man think that this is just theory and not important, it is actually very important especially when you go further in financial accounting. You should read through and try to understand the concepts (especially the quantitative characteristics of financial statement) and also be able to explain the role of IASC, IASB, IFRIC and SAC and the standard-setting process.

2. Preparing financial statements
This includes financial statements for limited company and also partnership. IAS may not be important in this paper, practice every question in past year papers related to limited company and partnership, one of them will definitely come out in exam. This syllabus area is relatively straightforward and many found them easy to handle with time available.

3. Statement of cash flows
IAS 7 is relevant for this, you should learn the direct and indirect method of preparing statement of cash flows although indirect method is recommended by IASB and exam will focus on indirect method. This is just about format, showing the cash flows from operating activities, cash flows from investing activities and cash flows from financing activities, the words "operating", "investing" and "financing" tell you what you need to include, this area is again the easy one.

4. Interpretation of financial statements
The calculations of ratios are straightforward, you just need to know the formula for each ratio. However many marks are given for commenting on the ratios. To give a good comment, your comment should:
(a) Compare the ratio with a benchmark's ratio, the benchmark is normally the previous year, other company or industry average.
(b) Give possible causes of the ratios relevant to background information (if available).
This syllabus area is simple and helpful when you proceed further in ACCA.

5. Consolidated accounts
You will only have one subsidiary and you are in the point of view of the parent company. Three workings will be needed to complete the consolidation:
(a) Goodwill calculation.
(b) Consolidated retained earnings.
(c) Non-controlling interest (NCI).
For the other workings, you can do them in the income statement and statement of financial position so that you can save time. Questions on consolidation will be straightforward in T6 without any complicated issue. The theory about associate will be important for you to gain some marks, probably 3-5 marks, explaining the significant influence relationship. You can master this area by doing the related past year questions.

In conclusion, to pass T6:
1. Do as many past year questions as you can.
2. Time is always enough, but manage it well, use reading time to go through every question instead of staying at one question.
3. Present the answer according to format.
4. Do not ignore theory part of the syllabus, at least read through.