BCS Written Accounting common mistakes
BCS Written Accounting · Understand the traps and how to avoid them.
Writing journal entries and final accounts without first posting a trial balance check, so debits and credits are balanced only by luck and an imbalance is discovered after the schedule of figures is already drafted.
Candidates treat the trial balance as a formality rather than a control, and under time pressure they jump straight to the income statement and statement of financial position, losing the one checkpoint that catches transposition and one-sided errors.
What to do instead
Build a mandatory two-minute checkpoint: total the trial balance before drafting any statement, and if it does not agree, run the difference through the standard diagnostic sequence (difference divisible by 9 suggests transposition, divisible by 2 suggests a reversed entry, a round difference suggests a missing posting). Practise this on timed past-style questions until it becomes automatic.
Treating a bank reconciliation as a listing exercise, adjusting the cash book for unpresented cheques and uncredited deposits, and thereby producing a corrected cash book balance that is wrong.
Candidates memorise the format without understanding which items are timing differences in the bank's records and which are errors in the entity's own records, so they apply adjustments to the wrong side.
What to do instead
Learn the ownership rule explicitly: items the entity has not yet recorded (bank charges, standing orders, direct credits, dishonoured cheques) adjust the cash book; items the entity has recorded but the bank has not (unpresented cheques, lodgements not yet credited) adjust the bank statement. Before writing anything, label each item 'cash book' or 'bank statement' in the margin, then reconcile.
Computing equivalent units and process costs by counting opening and closing work in progress at full unit value, or by mixing the weighted average and FIFO methods within one answer.
Candidates know the layout of a process account but not the logic of degree of completion, so they treat partially completed units as whole units and produce a distorted cost per equivalent unit.
What to do instead
State the valuation method at the top of the answer and apply only that method. Convert physical units to equivalent units using the stated degree of completion for each cost element (materials, labour, overhead) separately, and show the working as a table with columns for physical units, equivalent units and cost per equivalent unit. Check that total cost assigned to completed output plus closing WIP equals total cost input.
Answering an absorption versus marginal costing question by calculating profit under one method only, or by computing the fixed overhead volume variance without linking it to the profit difference.
Candidates see the two methods as alternative formats rather than as a reconciliation, so they omit the step that explains why the two profit figures differ by the change in inventory multiplied by the fixed overhead absorption rate.
What to do instead
Always produce both profit figures and then a reconciliation statement: difference in profit equals change in inventory units times fixed overhead absorption rate, with the direction explained (absorption profit higher when inventory rises). Write the reconciliation as a labelled line item, not a footnote, so the marker can see the link.
Describing audit procedures generically ('check the invoices', 'review the records') instead of specifying the assertion tested, the population, the direction of testing and the evidence obtained.
Candidates confuse describing an audit area with designing a test, and examination answers reward precise procedures tied to assertions rather than narrative about what an auditor does in general.
What to do instead
Use a fixed sentence structure for every procedure: action verb, source document or record, sample basis, assertion addressed, and conclusion drawn. For example, 'For a sample of 25 sales invoices selected from the sales day book, agree the invoice to the despatch note and to the customer order to test occurrence and completeness.' Practise converting vague statements into this structure.
Concluding on audit risk by listing inherent, control and detection risk as definitions rather than applying them to the specific entity and identifying which financial statement line items and assertions are most exposed.
Candidates reproduce textbook definitions because that is how the topic was learned, but the question asks for risk assessment of a given scenario and marks are allocated to entity-specific identification.
What to do instead
For each scenario, write three short paragraphs: the identified risk, the financial statement area and assertion affected, and the audit response (nature, timing, extent). Anchor every risk to a fact given in the scenario, quoting the fact in the sentence, and avoid any sentence that would be equally true of any company.
Calculating taxable income by starting from accounting profit and adjusting only the obvious items, omitting disallowable expenditure, capital allowances and the treatment of exempt income.
Candidates treat the tax computation as a single subtraction rather than a structured reconciliation, and they are unsure which expenses are deductible, so they default to accepting the accounting figure.
What to do instead
Use a standard pro-forma every time: accounting profit, add back disallowables (depreciation, fines and penalties, entertaining where disallowed, general provisions), deduct non-taxable income, deduct capital allowances, then apply the rate. Keep a one-page revision sheet of the specific add-back and deduction rules for the relevant jurisdiction and reproduce the pro-forma headings before inserting numbers.
Answering a company law question on directors' duties or meetings by describing the general principle but omitting the statutory provision, the consequence of breach and the procedural step required.
Candidates learn business law as narrative and do not realise that marks are earned for the statutory reference, the remedy and the practical procedure, each of which is a discrete mark.
What to do instead
Structure every law answer in four moves: identify the legal issue, state the rule with the statutory section or case name, apply it to the facts given, and state the consequence or procedure. If a section number is not known with confidence, name the statute and the rule rather than inventing a number, and flag it for review.
Computing a net present value or weighted average cost of capital by feeding accounting profit figures into the cash flow schedule, or by using book values of debt and equity as weights without adjustment.
Candidates carry over profit-based thinking from financial accounting and forget that investment appraisal is cash-based and that capital structure weights should reflect market values where available.
What to do instead
Before calculating, write a one-line statement of the principle: 'NPV uses incremental after-tax cash flows, excluding sunk costs, allocated overhead and non-cash items; financing costs are captured in the discount rate.' Then build the cash flow table with a separate line for each year and a clearly labelled discount factor column, and state the source of the weights used in the WACC.
Presenting public sector financial statements on a pure accruals basis without reconciling to the budget outturn, or omitting the budget-to-actual comparison and the note on basis of preparation.
Candidates apply private sector formats from financial accounting revision and are unaware that public sector reporting requires a comparison of outturn against the approved budget and explicit disclosure of the accounting basis.
What to do instead
Memorise the required statements for the relevant framework (statement of financial position, statement of financial performance, statement of cash flows, and the statement comparing budget and actual on a comparable basis) and always include the basis-of-preparation note and the budget comparison. Where the framework requires it, show the reconciliation between the budget basis and the accruals basis as a separate schedule.
Describing internal controls in a computerised accounting information system as general narrative about 'passwords and backups' without distinguishing general IT controls from application controls or linking them to specific risks.
Candidates learn the topic as a list of technologies and cannot map controls to the audit assertions or fraud risks they mitigate, so answers lack the specificity markers require.
What to do instead
Use a two-column table: control category (general IT control such as access management, change management, business continuity; application control such as input validation, sequence checks, exception reports) against the risk it addresses and the test of control the auditor performs. Populate it from the scenario facts rather than from memory, and name at least one test per control.