CHSE Odisha Elective Accountancy common mistakes
CHSE Odisha Elective Accountancy · Understand the traps and how to avoid them.
When posting a compound journal entry, the candidate debits one account for the full total but credits only the first named account, or writes a single 'To Sundry' line instead of itemising each credit with its own amount, so the ledger posting and trial balance go out by the omitted leg.
Compound entries are taught as one narration line, and candidates copy the journal format mechanically without checking that total debits equal total credits before posting. The habit is reinforced because simple two-line entries always balance, so the error only surfaces later in the trial balance.
What to do instead
Before posting, write the debit total and credit total in the margin of the journal page and tick them off. Post each named account separately, then verify the trial balance agreement immediately after posting rather than at the end of the chapter. Practise five compound entries daily (purchase with carriage and GST, sale with discount and freight, bad debt recovered) until the itemisation becomes automatic.
The candidate records a cash discount allowed to a customer as a debit to Discount Allowed but credits the customer's account with the gross amount, or omits the discount entry entirely, so the debtor's balance in the ledger does not match the actual amount received.
Candidates conflate trade discount (deducted on the invoice, never recorded separately) with cash discount (a separate expense or income). Because both reduce the amount the customer pays, they treat them as the same thing and skip the discount account.
What to do instead
Fix the rule in memory: trade discount never enters the books; cash discount always does, through a Discount Allowed (expense) or Discount Received (income) account. For every receipt from a debtor, write the three-line entry (Bank Dr, Discount Allowed Dr, To Debtor) and check that the debtor's account is credited with the invoice amount, not the cash amount.
In the Bank Reconciliation Statement the candidate starts from the cash book balance and then adds or subtracts items using the direction that applies to the pass book balance, for example adding cheques deposited but not yet credited when starting from the cash book, which doubles the error.
Candidates memorise a list of 'add' and 'subtract' items without anchoring them to the starting point. The same item moves in opposite directions depending on whether the statement starts from the cash book or the pass book, and candidates do not fix the starting point first.
What to do instead
Write the starting balance at the top of the answer and label it 'Cash Book (Dr)' or 'Pass Book (Cr)'. Then reason item by item: 'If the bank had recorded this, would my cash book balance be higher or lower than the pass book?' Derive the direction each time rather than recalling it. Do one statement from each starting point for the same data and confirm they reconcile to the same pass book balance.
When rectifying errors, the candidate passes a fresh entry that repeats the original wrong entry instead of correcting only the difference, for example debiting a customer with the full Rs 5,000 again when the original sale of Rs 5,000 was wrongly posted as Rs 500.
Candidates treat rectification as 're-doing' the transaction rather than computing the net effect of the error. They do not analyse which account was overstated or understated and by how much.
What to do instead
For every error, write two columns: 'amount recorded' and 'amount correct', then take the difference. Ask which account is short and which is excess, and pass an entry only for the difference. For one-sided errors, use a Suspense Account and prove it clears to nil. Practise with errors of principle, compensating errors, and errors of omission side by side so the distinction is clear.
The candidate computes depreciation on the opening book value for every year under the written-down value method, or charges a full year's depreciation on an asset purchased mid-year, instead of charging depreciation on the reducing balance and prorating by months of use.
The straight-line formula (cost minus scrap, divided by life) is learned first and over-applied. Candidates also overlook the date of purchase in the question because they focus on the rate and the years.
What to do instead
Before calculating, underline the method named in the question and the date of purchase. For written-down value, build a year-by-year working note showing opening value, depreciation at the given rate, and closing value, carrying the closing figure forward each year. For mid-year purchases, compute depreciation for the exact number of months held. Show the asset account and depreciation account in the answer so the examiner sees the working.
In bills of exchange questions the candidate treats the discounting of a bill as a sale, or fails to record the noting charges and the dishonour entry, so the drawee's account is not debited with the bill amount plus noting charges on dishonour.
The three-party structure (drawer, drawee, payee) and the sequence of events (acceptance, discounting, endorsement, dishonour) are not held in a single timeline, so candidates post the wrong party's account or omit the charges.
What to do instead
Draw a timeline for every bill question: date of drawing, tenure, due date (adding three days of grace), discounting or endorsement, and dishonour. Write the party names above each account before posting. Memorise that on dishonour the drawee is debited with the bill amount plus noting charges, and the drawer or holder is credited accordingly. Always compute the due date explicitly rather than assuming the tenure end date.
When preparing the final accounts with adjustments, the candidate records an adjustment in only one place, for example crediting outstanding wages to the wages account in the trading account but forgetting the liability in the balance sheet, or omitting the adjustment from the profit figure altogether.
Adjustments are read as separate items to be 'mentioned' rather than as double-entry events that always touch two places. Candidates also run out of time and skip the second leg.
What to do instead
Adopt a fixed routine: for each adjustment, write the double entry in the margin (which account is debited, which credited), then tick where each leg appears (trading account, profit and loss account, or balance sheet). Common pairs to memorise: outstanding expense (expense account plus liability), prepaid expense (expense reduced plus asset), accrued income (income plus asset), depreciation (expense plus asset reduction), and goods drawn by proprietor (capital reduced plus purchases reduced).
On admission of a partner, the candidate credits the new partner's capital account with the premium for goodwill but does not write off the existing goodwill already appearing in the balance sheet, or distributes the premium in the old profit-sharing ratio instead of the sacrificing ratio.
Candidates confuse the sacrificing ratio with the old ratio and forget that any goodwill already in the books must be written off among the old partners before the new arrangement is recorded.
What to do instead
Compute the sacrificing ratio first (old share minus new share) and use it for the premium. Then, if goodwill already appears in the balance sheet, write it off entirely among the old partners in their old ratio. Set out a working note for each partner showing old share, new share, sacrifice or gain, and the goodwill amount, before writing any journal entry.
In share capital questions the candidate records the application money received as share capital immediately, instead of parking it in Share Application Account until allotment, and then fails to transfer the excess application money to Share Allotment or Share Capital as the question requires.
The sequence of calls (application, allotment, first and final call) and the treatment of oversubscription are treated as one lump receipt. Candidates also ignore the 'pro-rata' instruction and allot shares evenly.
What to do instead
For every issue, draw a table with columns for application, allotment and each call, and rows for shares applied, shares allotted, money received and money due. Post application money to the Share Application Account first, then transfer to Share Capital on allotment, routing any excess to allotment or refund as instructed. Handle oversubscription and pro-rata allotment in a separate working note before touching the journal.
In ratio analysis the candidate computes the current ratio using average inventory or mixes closing and opening figures, or uses the closing balance sheet figure for a ratio that requires an average (such as debtors turnover), producing a ratio that does not match the expected answer.
Formulas are memorised as strings without attention to whether the input is a point-in-time balance or a flow, and candidates do not check whether opening balances are available in the question.
What to do instead
Write the formula with the input type beside each term (average inventory, average debtors, closing current assets) before substituting numbers. If opening figures are not given, state the assumption that closing equals average and proceed. After computing, sanity-check the result against the industry norm or the previous year's figure, and show the working so partial credit is available.