Step 2 - Identify test statistic and its probability distribution

t-statistic:
It can be used when the population variance is unknown for large samples and small samples with normally distributed population. Comparing the t-statistic with critical value that comes from Student’s t table.

Critical value from Student’s t table

• Look up df=n-1, p=significance for 1-sided test or p=significance/2 for 2-sided test

Note:

• Since it is flatter, it's more difficult to reject H0 than using z-distribution.

z- statistic:
Same test statistic as t-test but critical value comes from normal distribution. It can be used when population is normally distributed with known variance; also for large samples with unknown variance.

Test statistic
A quantity taken from a sample that is used as the basis for testing the null hypothesis (rejecting or failing to reject the null).
Test statistic = (Sample statistic - Hypothesized value) / Standard error

Where: Standard error = Sample standard deviation / n^1/2

My tips:
Be remembered some commonly used values from z-table:

Singificant level Critical Value (1-sided) Critical Value (2-sided)
0.10 1.280 1.645
0.05 1.645 1.960
0.01 2.330 2.575