Bookkeeping NC III common mistakes
Bookkeeping NC III · Understand the traps and how to avoid them.
When posting a transaction, the candidate enters the debit amount in the credit column (or vice versa) and then balances the trial balance by force-fitting a plug figure instead of locating the error.
Candidates memorize 'debit the receiver, credit the giver' as a slogan without linking it to the accounting equation, so under time pressure they default to whichever column they wrote first.
What to do instead
Before writing any entry, state the two affected accounts and their normal balances aloud or in the working space; then post each amount to the column matching that account's normal side. If a trial balance does not agree, compute the difference and test it against the transposition and slide rules (difference divisible by 9) before touching any figure.
The candidate records a purchase of inventory or equipment as an expense in the period paid, ignoring accrual and capitalization rules, so profit and the balance sheet are both misstated.
Candidates conflate 'cash went out' with 'expense was incurred' because they have practiced only simple cash receipts and payments, not accrual adjustments.
What to do instead
For every disbursement, ask three questions in order: does this create future benefit (asset), does it consume benefit now (expense), or does it settle a prior obligation (liability)? Practice classifying ten sample transactions into these three buckets before attempting full entries.
The candidate prepares a bank reconciliation by adjusting the cash book for items that belong only on the bank statement (such as unpresented cheques) or by adjusting the bank statement for items that belong in the cash book.
Candidates treat the reconciliation as 'make the two numbers equal' rather than as a controlled two-column adjustment process, so they post corrections to whichever side seems convenient.
What to do instead
Draw a strict two-column layout: items already in the cash book but not yet on the statement (unpresented cheques, deposits in transit) go to the bank side; items on the statement not yet in the cash book (bank charges, interest, direct credits, dishonoured cheques) go to the cash book side. Only the cash-book column generates adjusting journal entries.
The candidate calculates gross pay to net pay without correctly sequencing statutory deductions, applying the contribution base or ceiling wrongly, or deducting from the wrong base (for example computing contributions on net pay instead of gross).
Candidates learn each deduction in isolation and never build a mental payroll ladder, so sequencing errors and wrong bases slip through, especially when a ceiling or floor applies.
What to do instead
Write the payroll ladder explicitly on scratch paper before computing: gross pay, then each employee deduction on its correct base, then employer contributions as a separate cost, then net pay. Recompute one employee by hand from the top of the ladder and compare to the software output.
The candidate omits employer-side statutory contributions and payroll liabilities from the payroll journal, recording only the net wages expense, so liabilities and total payroll cost are understated.
Candidates focus on what the employee receives and forget that employer contributions are an additional cost with a matching liability until remitted.
What to do instead
After computing net pay, list every liability created by the payroll run (net wages payable, each employee deduction payable, each employer contribution payable) and confirm the journal's debits equal the sum of gross pay plus employer contributions.
The candidate files a statutory return using the wrong period, wrong due date, or wrong rate/table for the period, or reports gross figures where the return requires taxable or net figures.
Candidates treat the return as a copy of the ledger rather than a form with its own definitions, and they do not check which rate schedule or threshold applies to the filing period.
What to do instead
Before completing any return, write down the filing period, the statutory due date, and the applicable rate or table version, and confirm each from the current official guidance. Map each box on the return to a specific ledger total and note the source of each figure.
The candidate produces a set of financial statements whose subtotals do not agree (for example a balance sheet that does not balance, or a profit figure in the income statement that differs from the retained earnings movement).
Candidates prepare each statement independently and never perform cross-statement checks, so a single misposted figure propagates silently.
What to do instead
Build a fixed check sequence: net profit from the income statement must equal the movement in retained earnings, and total assets must equal total liabilities plus equity. Run both checks before submitting and trace any difference back to the journal, not to the statement.
The candidate posts an entry directly to a control account (such as the bank or receivables control) instead of to the individual ledger or subsidiary record, so the control account no longer reconciles to its supporting detail.
Candidates take the shortest path in the software and pick the first account that matches the description, bypassing the subsidiary ledger entirely.
What to do instead
Establish the rule that control accounts are updated only through the subsidiary ledger or the reconciliation process. After any batch of postings, compare the control account balance to the sum of the subsidiary ledger and investigate any difference before proceeding.
The candidate relies on the accounting software's automatic defaults (tax codes, account codes, dates, currency) without verifying them, and never reviews the audit trail or exception reports after posting.
Candidates assume the software 'knows' the correct treatment and skip setup verification, so default tax codes and auto-filled dates silently corrupt the records.
What to do instead
Before data entry, confirm the company file settings, tax code defaults, and period lock. After entry, run the transaction listing and exception reports (unreconciled items, out-of-balance, duplicate entries) and clear each exception before closing the period.
The candidate stores or handles financial records and passwords without regard to confidentiality and workplace safety procedures, for example leaving records unsecured, sharing login credentials, or ignoring an identified hazard in the work area.
Candidates treat safety and confidentiality as separate from bookkeeping tasks and do not see them as assessable performance criteria.
What to do instead
Apply the same checklist discipline to records as to figures: confirm access controls, secure storage, and backup before ending the session, and report any hazard or breach through the workplace reporting channel and record the action taken.