The first approach is far better. I am writing this by experience. I have followed the second approach, and I do not remember a lot now when doing the revision. Revision and taking tests are giving me a tough time, and in exams like GATE, you cannot afford to be in a situation like mine.
At the time of writing, I still have TOC, Compilers, Discrete Maths, and DS and Algorithms left for revision. I am very stressed out. :(
For the ME test series, they do have plenty of errors. Had I known about this earlier, I would have saved my 900+ Rupees.