The exam's real difficulty is reading under time

Two passes, then the accounts

Students who sat the final describe it as "a slight time crunch with a lot of reading comprehension" and "pure application". The accounting in a mini-case is rarely hard; what costs marks is a fact missed on a fast first read, or a trap the narrative planted in plain sight. So read every narrative twice, with a different question each time:

1. Facts pass — for each sentence: what date, what amount, did cash move, was an obligation created, and which sub-question needs it?
2. Traps pass — for each sentence: is this an event at all, and is it what it claims to be?

Only then open an account.

Worked example — an eight-sentence Northlake narrative

> Northlake Nordic Centre Inc. applies ASPE and has a 31 December year end. (1) On 1 December it signed a contract with a school board to run ski lessons in February for $12,000; nothing has been paid. (2) On 3 December it received a $4,000 deposit from a corporate group for a January retreat. (3) On 10 December it bought $2,500 of café supplies on account. (4) On 15 December it collected $18,000 of day-pass sales in cash. (5) On 22 December it received a $3,100 invoice from its groomer mechanic for December servicing, unpaid at year end. (6) On 1 September it had borrowed $60,000 at 6 % per year; interest is payable at maturity in two years. (7) On 28 December it paid $9,600 of December wages. (8) On 30 December it paid the $2,500 owed for the café supplies.

Facts pass — build the table before anything else:

#  date    event                       cash?   obligation?   amount   needed by
1  1 Dec   contract signed, unperformed  no     no (mutual)   12,000   (d) explain
2  3 Dec   deposit received              in     yes: liability 4,000   (a) entry
3  10 Dec  supplies bought on account    no     yes: payable   2,500   (a) entry
4  15 Dec  day passes sold               in     no            18,000   (a) entry
5  22 Dec  mechanic invoice received     no     yes: payable   3,100   (a) entry
6  1 Sep   note, interest at maturity    no     yes: accrue    60,000   (c) compute
7  28 Dec  wages paid                    out    no             9,600   (a) entry
8  30 Dec  payable settled               out    reduced        2,500   (a) entry

Traps pass — four of the eight sentences are not what a fast reader takes them to be:

• Sentence 1, the signed contract. No cash, no service, no asset, no liability: a mutually unperformed contract is not a transaction. Recording $12,000 of anything is a phantom. It is there so you can explain in sub-question (d) why nothing is recorded.
• Sentence 2, the deposit. Cash came in, so the reflex is revenue. But the retreat is in January; Northlake owes the group a retreat or its money back. Dr Cash / Cr Unearned Revenue — a liability.
• Sentence 5, the invoice. Unpaid at year end, so the reflex is "record it when we pay". But the servicing was done in December: Dr Repairs Expense / Cr Accounts Payable now.
• Sentence 6, the note. "Interest is payable at maturity" describes when cash moves, not when the cost is incurred. Four months of interest — $60{,}000 \times 6\,\% \times \frac{4}{12} = \$1{,}200$ — is an expense of this year and a liability at 31 December. Accrue it.

Sentences 3, 4, 7 and 8 are straightforward, and that is also typical: a case is mostly ordinary events with a few traps salted through them. The fact table is what stops the traps from hiding among the ordinary.

Then answer in mark order

With the table done, map facts to sub-questions and answer the highest-mark sub-question first. The (a) entries usually carry the most marks and take the least reading; the (d) explanation needs the table's reason column and comes last.