Accounting can be a tough subject to handle, especially considering the fact that it involves numerous concepts and is entirely based on calculations, which is not the strongest area of most individuals. Many O/A level students are haunted by the subject and are unable to figure out how to tackle it. Like any other subject though, there are certain techniques which can be applied, along with a combination of hard work and practice to enhance your accounting skill. However, practice without concepts is just like shooting an arrow in the dark without a proper target. You can try as hard as you can but unless the basics aren’t clear, there is very little chance of progress. From the statement of financial position not balancing to the difficulties in understanding the process of debit and credit; let us take a look at the 5 most common problems faced by accounting students.
- Balance sheet not balancing
The biggest nightmare of accounting students is that they will be unable to balance their statement of financial position in their CIE examinations. All accounting students can relate to the feeling of emptiness which is caused by this situation. You can be extremely cautious and record all the transactions carefully, yet at the end for some reason your balancing figure doesn’t match. Depending on the transactions which you have missed or recorded inaccurately, you can lose anywhere from 2 to 10 marks. The most frustrating part about the entire situation is the fact that it is incredibly hard to detect the error and in order to completely eliminate your mistake, you have to essentially repeat the entire process which consumes significant time. Moreover, in case you choose to move to the next question, it becomes terribly hard to focus, all you think about is why you weren’t able to get an accurate answer in the previous question.
- The mystery of debiting expense account
“Yeh jab paise ja rahe Hain tu hum debit kyon ker rahe hain”. This is the common dilemma among the O/A level students. All accounting students will be familiar with the fact that the focal point of the subject is the double entry system which comprises of two elements known as Debit and Credit. While the literal meaning of these terms is Value received and value given, many students are confused with the fact that if the business is losing out on cash because of expenses, why does it need to debit the item.
Hey but we didn’t pay any cash for the fall in the value of assets. Yes, that is another common confusion encountered by many students studying the subject. Depreciation is a non-cash expense hence; a business doesn’t actually lose cash when incurring the expense. On the contrary, the business also doesn’t lose out on actual cash in case of loss on disposal at the time of sale of assets. The entire process sometimes confuses students as to why they need to record all these activities in the first place. However, the basic reason why they don’t understand these activities is because of lack of understanding about the concepts such as the matching principles.
- Incomplete records
Most O/ A level students will agree that one of the trickiest topics of the entire course is incomplete records. In the topic, students are given fragments of information which they use to extract full information in order to reconstruct accounts through the process of reverse accounting. If the previous sentence confuses you, we have some good news; you are not alone. A single entry is just like using different pieces to solve a complicated puzzle. The topic is a favorite among CIE examiners and is generally repeated every year.
- The mystery of un-credited and un-presented checks
Another topic that sends accounting students in mental trauma is bank reconciliation statements. The main adjustments required in this topic include adjusting the un-credited and un-presented checks to reconcile the business’s cash book with its bank statements. Many students claim to understand the two, however; it is not uncommon for them to confuse the two types of checks when solving questions. Moreover, the concept becomes even more confusing when reconciling an account which has overdrawn balance.
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