Korea Computerized Tax Accounting Level 1 common mistakes
Korea Computerized Tax Accounting Level 1 · Understand the traps and how to avoid them.
Recording a purchase of office supplies as an expense in full when the item is a depreciable asset above the company's capitalization threshold, then failing to correct the entry before closing.
Candidates memorize the general rule that consumables are expensed and skip the threshold test; under Korean tax practice the capitalization threshold and the distinction between consumables and tangible assets are tested directly, and the candidate has no habit of checking the threshold before choosing an account.
What to do instead
Before every asset purchase, apply a two-step decision: (1) does the item have a useful life beyond one period, and (2) does the unit price exceed the company's capitalization threshold? If both are yes, debit the tangible asset account and plan depreciation; if no, expense it. Practice with mixed item lists so the threshold check becomes automatic.
Building the trial balance by entering the opening balances and the period's transactions into the same journal batch, so debits and credits still balance but individual account balances are double-counted.
The software accepts any balanced batch, so no error message appears; candidates assume a balanced trial balance means correct data and never reconcile opening balances to the prior period's closing figures.
What to do instead
Enter opening balances in a separate opening-entry batch dated the first day of the period, then post transactions from the next day onward. After posting, reconcile each account's opening balance to the prior period closing balance statement before proceeding.
Creating a new customer or vendor master record for a counterparty that already exists under a slightly different name, producing duplicate partner codes and split receivables.
The search function is used with an exact string only; candidates do not search by business registration number, and the system's duplicate-check prompt is dismissed to save time.
What to do instead
Always search by the 10-digit business registration number first, then by name fragment. If a duplicate is suspected, use the master-data merge function rather than creating a new code, and verify the partner ledger totals after merging.
Entering a VAT-inclusive invoice amount into the supply value field and letting the system compute VAT on top, overstating both the expense and the input VAT.
Supplier invoices often show the total prominently; candidates transcribe the largest number without checking whether the document states supply value and tax separately.
What to do instead
Read the invoice header for the supply value, VAT, and total. Enter the supply value and let the system calculate tax, then compare the computed total to the invoice total; if they differ, the entry basis is wrong. Make this three-way check a fixed step for every purchase voucher.
Posting a sales return as a negative sales entry in the revenue account instead of using the sales return contra account, distorting gross sales and the VAT return's sales base.
A negative entry balances and looks tidy, and the candidate does not know that the VAT return separates gross sales from returns and allowances.
What to do instead
Use the designated sales return and allowance account for all returns. After posting, confirm that the VAT return's gross sales line still shows the original sales figure and that returns appear on their own line.
Filing the VAT return using the ledger total of output VAT without reconciling it to the tax invoice issuance system, so omitted or cancelled electronic tax invoices are not reflected.
Candidates treat the accounting ledger as the single source of truth and are unaware that issued and cancelled electronic tax invoices are reported separately and must be matched.
What to do instead
Before filing, run the output VAT reconciliation between the sales ledger and the electronic tax invoice issuance records, investigate every difference (cancellations, amended invoices, invoices issued outside the ledger), and document the reconciliation as a working paper.
Treating exempt and zero-rated sales identically when preparing the VAT return, so input VAT on exempt sales is deducted when it should be excluded.
Both categories show no output VAT on the sales line, and the candidate assumes the same treatment applies to related input VAT.
What to do instead
Classify each sales line by tax type before computing input VAT deduction. Remember that zero-rated sales generally allow input VAT credit while exempt sales do not; allocate common input VAT by a reasonable basis and show the calculation.
Running the year-end closing routine before all adjusting entries such as depreciation, accrued expenses, and bad debt provisions are posted, locking the period with incomplete figures.
Closing is presented as a single menu action; candidates execute it as soon as the last transaction is entered, without a checklist of required adjustments.
What to do instead
Prepare a closing checklist ordered by dependency: physical counts, depreciation, accruals and deferrals, provisions, then closing. Post and review each adjustment in a trial balance before executing the period close, and keep a printed pre-closing trial balance for comparison.
Reversing the prior year's closing entries manually in the new period when the system already carries forward retained earnings, doubling the effect on equity accounts.
Candidates who learned manual bookkeeping carry the habit of reversing closing entries into the software, not knowing that the system performs the carry-forward automatically at period open.
What to do instead
Check the opening balance of retained earnings and the current-year earnings account immediately after period open. If the system has carried balances forward, post no reversal; verify equity totals against the prior year's closing balance sheet instead.
Leaving the same user ID with full posting and approval rights for all staff because setting up roles takes time, defeating the segregation of duties the system provides.
Small accounting teams share logins, and candidates focus on getting transactions entered rather than on access configuration; the control weakness is invisible in the ledgers.
What to do instead
Configure roles so that entry, approval, and master-data maintenance are separate permissions, and assign each person only what their duties require. Review the user-role matrix and the audit trail of approvals before closing each period, and document any compensating control where staffing is too small to separate roles fully.