QCAA Accounting common mistakes
QCAA Accounting · Understand the traps and how to avoid them.
Recording a credit sale by debiting the bank account instead of accounts receivable, then later recording the receipt as a second revenue entry, so revenue is double counted.
Candidates treat the word 'sale' as automatically meaning cash has moved, skipping the recognition step that separates the transaction from the settlement.
What to do instead
Before writing any entry, ask 'has cash moved yet?' If not, the debit goes to accounts receivable. Practise by writing the two-entry pair (sale, then receipt) side by side for every credit transaction until the pattern is automatic.
Posting a transaction to the correct side of the wrong account, for example debiting repairs expense when equipment was purchased, so the trial balance still balances and the error goes undetected.
Candidates rely on the trial balance to catch mistakes; because error of principle and error of original entry do not disturb the balance, the check gives false reassurance.
What to do instead
Classify each transaction by its nature (asset, liability, equity, revenue, expense) before choosing an account name. Learn the specific error types that a trial balance cannot detect and apply that list as a deliberate second check.
Omitting or misstating closing and adjusting entries, such as failing to accrue wages owing or to record depreciation, so profit and the balance sheet are both wrong.
Candidates treat the unadjusted trial balance as the finished set of accounts and do not run through the accrual, prepayment, depreciation and inventory adjustments systematically.
What to do instead
Use a fixed adjustment checklist in the same order every time (accrued expenses, prepaid expenses, accrued revenue, unearned revenue, depreciation, inventory, doubtful debts) and show the effect of each on profit and on the balance sheet before preparing statements.
Preparing a balance sheet that does not balance and then plugging the difference into a suspense or 'other' line rather than locating the error.
Time pressure and the belief that any balancing figure is acceptable; candidates do not know that a genuine suspense account is only for a one-sided posting error.
What to do instead
If it does not balance, work backwards: recheck the profit figure from the income statement, then recheck each classification (current versus non-current), then recheck additions. Never insert a plug; if a suspense account is used, state the specific error it corrects.
Calculating contribution margin per unit using total costs, or mixing fixed cost per unit with variable cost per unit, so break-even and target-profit figures are wrong.
Candidates memorise the formula without understanding that contribution excludes fixed costs, and they carry over an absorption-costing figure into a marginal-costing calculation.
What to do instead
Always separate costs into fixed and variable in a two-column table before calculating. Write the contribution formula in words (selling price minus variable cost per unit) and check that fixed costs are subtracted only once, at the total level.
Treating a sunk cost, such as the original purchase price of equipment, as relevant to a decision, or excluding an opportunity cost because no cash changes hands.
Candidates equate 'relevant' with 'involves money' rather than 'differs between alternatives and lies in the future'.
What to do instead
For every decision, list each cost and test it against two questions: does it differ between the options, and is it in the future? Exclude anything failing either test, and explicitly label opportunity costs as relevant even though they are not recorded in the ledger.
Preparing a cash budget by including non-cash items such as depreciation, bad debts or accrued expenses, or by recording GST collected as revenue.
Candidates copy figures straight from the income statement instead of rebuilding the timing of receipts and payments, and they confuse profit with cash flow.
What to do instead
Build the cash budget only from expected cash receipts and cash payments, month by month. Add a column for non-cash items and mark them 'excluded' so the reasoning is visible, and treat GST as a pass-through held for the tax authority.
Designing an internal control recommendation that is too vague, such as 'improve security' or 'check the records more often', without specifying who does what and how often.
Candidates know the general principle (segregation of duties, physical control) but have not practised turning a principle into an operational procedure.
What to do instead
Write every control in the form: who performs it, what exactly they do, how often, and what evidence is left behind. For example, 'the office manager, not the cashier, reconciles the bank account monthly and signs and dates the reconciliation'.
Identifying a weakness in a control system but not linking it to a specific risk, or recommending a control that duplicates an existing one because the scenario was not read closely.
Candidates answer from a memorised list of controls rather than reading the scenario to see which controls already operate and where the gap actually is.
What to do instead
For each weakness, write the chain: weakness leads to risk leads to recommended control leads to how the control reduces that risk. Cross out any recommendation that already appears in the scenario before finalising the answer.
Recommending an investment on the basis of payback period alone, or comparing accounting rate of return with a cost of capital as if they were the same measure.
Candidates treat all capital budgeting techniques as interchangeable and do not recognise that payback ignores cash flows after the cut-off and the time value of money.
What to do instead
For each technique, state what it measures and its main limitation before using it. Present payback, net present value or accounting rate of return together and justify the recommendation by weighing the results, noting explicitly that payback ignores later cash flows.