How to hammer down technicals?
Going through the 400 M&I questions. I know I'm late but better late than never. I'm still on the basic accounting section and I'm already encountering questions I'm just absolutely lost on. At first I thought the learning process would be quite simple but I always end up in a rabbit hole that I can't get out of. How did people go through this and make it out the other hand actually understanding everything?
My current process is:
Read question. Maybe attempt to answer it. Then, read answer. If I don't understand a term or a concept in the answer provided, google it and Investopedia or some other source should clear it up.
The problem is, I'd google something I dont know and fall into the rabbit hole of concepts I don't understand and end up being more lost.
E.g., Question is "can shareholder's equity be negative?"
Answer provided is "Yes. 2 possible scenarios. 1st is LBO with dividend recap - owner takes equity out, sometimes turning the number negative. 2nd is declining retained earnings." That's not the complete answer but I'm just summarizing it here. I understood the 2nd scenario so no problems there, but for the 1st scenario I hv no idea what it means and how exactly it ends up with the owner taking out equity and thus turning the equity number negative. So, I google "LBO with dividend recap" - and there's a fuckton of resources that talk about LBOs, and resources that talk about dividend recaps, but not explain to me at what point the owner takes out equity and thus turn shareholder's equity negative.
Help :(
The other thing I'm worried about is, let's say I find an answer to my confusion above. But, I'm only familiar with that exact question in that exact scenario. I'm not sure if I actually have a fundamental understanding of the concepts, which I know is more important than memorizing things or learning specific answers to specific problems. So, even if I figure out an answer I understand to the confusion above, it feels like at the end I still haven't learned anything.
UWorld is a helpful resource (gives you two months free access). I would check out the business analysis section under CFA prep.
If you have time maybe try teaching the technicals to someone else?
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