Cameroon GCE A-Level Accounting common mistakes
Cameroon GCE A-Level Accounting · Understand the traps and how to avoid them.
When entering adjustments in the final accounts of a sole trader, the candidate writes the adjustment into the trial balance figures instead of showing it as a separate line in the trading, profit and loss account or balance sheet, so the effect of the adjustment is lost or double-counted.
Candidates memorise the list of year-end adjustments (accruals, prepayments, depreciation, closing stock, bad debts, drawings of goods) but never learn the double entry behind each one, so they treat the trial balance as a worksheet to be edited rather than a set of ledger balances awaiting adjustment.
What to do instead
For every adjustment, first write the double entry in ledger T-account form (e.g. Dr Rent expense, Cr Accruals), then decide which leg is a profit and loss item and which is a balance sheet item. Practise by taking a trial balance, listing adjustments, and producing a two-column working showing each ledger account's original balance, the adjustment, and the final figure used in the statements.
In partnership accounts, the candidate appropriates profit by simply sharing the residual profit in the profit-sharing ratio and ignores interest on capital, partners' salaries, interest on drawings, and the distinction between the appropriation account and the current accounts.
The mechanics of the appropriation account are taught as a formula to memorise rather than as a sequence, so candidates forget that interest on capital and salaries are deducted before the residual ratio split, and they post drawings directly against capital instead of through current accounts.
What to do instead
Build the appropriation account in a fixed vertical order every time: profit for the year, less interest on capital, less partners' salaries, add interest on drawings, then residual shared in ratio. Separately draw up the current account for each partner with opening balance, salary, interest on capital, share of residual profit on the credit side and drawings and interest on drawings on the debit side, and check that the total of all current accounts plus capital accounts reconciles to total partners' funds.
When preparing a bank reconciliation statement, the candidate adjusts the cash book balance for items that belong only in the bank statement (unpresented cheques, uncredited deposits) or adjusts the bank statement balance for items that belong only in the cash book (bank charges, standing orders, dishonoured cheques), producing a statement that never reconciles.
Candidates confuse the two stages of the reconciliation: updating the cash book for items the business has not yet recorded, and then explaining the remaining difference between the corrected cash book and the bank statement using timing items. The terminology 'bank statement balance' and 'cash book balance' is used interchangeably in their notes.
What to do instead
Use a strict two-step layout: Step 1, cash book balance per ledger, add credit transfers and dividends received not yet entered, less bank charges, standing orders, direct debits and dishonoured cheques, giving the adjusted cash book balance. Step 2, start from the bank statement balance, add unpresented cheques, less uncredited lodgements, and prove it equals the adjusted cash book balance. Label every line with the side of the reconciliation it belongs to before writing any figure.
When correcting errors, the candidate writes a journal that corrects the symptom (for example, debiting the account that is wrong) rather than the difference between what was recorded and what should have been recorded, and cannot compute the suspense account entry for errors of partial omission or commission.
Candidates treat each correction as a fresh double entry instead of a delta. They also fail to check whether the original error affected the trial balance agreement at all, so they create suspense entries for errors that never entered the suspense account.
What to do instead
For each error, write the entry that was actually made and the entry that should have been made, then post only the net difference to each affected account. State explicitly whether the error caused the trial balance to disagree (errors of partial omission, one-sided entries, addition errors, transposition affecting one side only) or not (errors of principle, complete omission, compensating errors, transposition affecting both sides equally). Reconcile the opening and closing suspense account balance as a final check.
In company financial statements, the candidate presents the statement of financial position without separating share capital, share premium, revaluation reserve, retained earnings and non-controlling interest, and treats a debenture issue as share capital or omits the accrued debenture interest from the profit and loss charge.
Candidates carry over the sole trader format and add 'share capital' as a single line. They do not distinguish equity from liabilities, and they forget that debenture interest is a finance cost accruing over time regardless of whether it has been paid.
What to do instead
Draw up the equity section in fixed order: ordinary share capital, preference share capital, share premium, revaluation reserve, retained earnings (opening balance plus profit for the year less dividends declared), and non-controlling interest separately. Put debentures under non-current liabilities at nominal value plus any premium not yet written off, and charge the full year's debenture interest in the profit and loss account with any unpaid portion as an accrual.
When computing depreciation and disposals, the candidate charges a full year's depreciation in the year of acquisition and in the year of disposal, or calculates the profit or loss on disposal from the sale proceeds against the original cost rather than the net book value at the date of disposal.
Candidates copy the depreciation figure from the prior year and fail to apply the business's policy on part-year charges. The disposal account is treated as a single subtraction rather than a working that clears accumulated depreciation, removes cost, records proceeds, and balances to the profit or loss on disposal.
What to do instead
Always open a disposal account: debit it with the cost of the asset, credit it with accumulated depreciation to the date of disposal, credit it with sale proceeds, and balance the account to the profit and loss account. Apply the stated policy explicitly, for example a full year in the year of acquisition and none in the year of disposal, and show the depreciation charge for each class of asset as a separate working before it enters the profit and loss account.
In manufacturing accounts, the candidate includes administration and selling overheads in factory overhead, omits work in progress adjustments, or values closing finished goods at prime cost rather than at factory cost, so gross profit and the manufacturing profit are both wrong.
Candidates do not understand that the manufacturing account ends at factory cost and that the trading account begins there. They also confuse raw material purchases with raw materials consumed and forget to adjust for opening and closing stock of raw materials and work in progress.
What to do instead
Build the manufacturing account in sequence: direct materials consumed (opening stock plus purchases less closing stock), direct labour, direct expenses, prime cost, factory overheads, add opening work in progress, less closing work in progress, giving factory cost of goods completed. Transfer that figure to the trading account as the cost of goods manufactured, then add opening finished goods and deduct closing finished goods. Keep administration and selling costs strictly in the profit and loss account.
When answering budgeting or decision-making questions, the candidate prepares a budget without identifying the limiting factor, or makes a make-or-buy or accept-or-reject decision on total cost per unit instead of relevant (incremental) cost, treating fixed costs and sunk costs as relevant.
Candidates default to absorption costing figures because that is what appears in the accounts, and they have not practised ranking products by contribution per unit of scarce resource. They also include apportioned fixed overheads in decisions where those costs do not change.
What to do instead
For any scarce-resource question, compute contribution per unit, then contribution per unit of the limiting factor, then rank. For make-or-buy and special-order decisions, list only future cash flows that differ between alternatives, exclude sunk costs and apportioned fixed overheads, and include opportunity costs of using scarce capacity. State the decision rule and the resulting recommendation explicitly.
In cash flow statements, the candidate starts from the profit figure without adjusting for non-cash items and working capital movements, or classifies interest paid, dividends paid and taxation in the wrong section, so the statement does not reconcile to the movement in cash and cash equivalents.
Candidates learn the three headings but not the logic of converting accrual profit to cash. They also guess at classifications instead of applying a consistent convention, and they forget to reconcile the opening and closing cash and cash equivalents as a final proof.
What to do instead
Work through the operating section in a fixed order: profit before tax, add depreciation, amortisation and any loss on disposal (deduct profit on disposal), deduct interest received and add interest paid if classified as operating, then adjust for increases and decreases in inventory, receivables and payables. Show investing and financing sections separately, and finish with a proof that net cash flow equals the change in cash and cash equivalents between the two balance sheet dates.
In not-for-profit and public sector questions, the candidate prepares a trading and profit and loss account and a capital account for the organisation, or treats subscriptions in arrears and in advance as income of the current period without adjusting, and ignores the distinction between the receipts and payments account and the income and expenditure account.
Candidates apply the sole trader template to every organisation. They do not grasp that a receipts and payments account is a cash summary while an income and expenditure account is prepared on an accruals basis, and they forget that a surplus is not profit and accumulated fund is not capital.
What to do instead
Convert the receipts and payments account into an income and expenditure account by adjusting for accruals, prepayments, subscriptions written off and depreciation, then prepare a statement of financial position showing accumulated fund plus surplus for the year plus life membership or donations capitalised. Practise a subscriptions working that starts with cash received and ends with the income for the period after adjusting for opening and closing arrears and advances.