A mixed beech and spruce forest soil was incubated under potential denitrification assay (PDA) condition with 10% acetylene (C₂H₂) in the headspace of soil slurry bottles. Nitrous oxide (N₂O) concentration in the headspace, as well as nitrate, nitrite and ammonium concentrations in the soil slurries were monitored during the incubation. Results show that nitrate disappearance rate was higher than N₂O production rate with C₂H₂ blockage during the incubation. Sum of nitrate, nitrite, and N₂O with C₂H₂ blockage could not recover the original soil nitrate content, showing an N imbalance in such a closed incubation system. Changes in nitrite and ammonium concentration during the incubation could not account for the observed faster nitrate disappearance rate and the N imbalance. Non-determined nitric oxide (NO) and N₂ production could be the major cause, and the associated mechanisms could vary for different treatments. Commonly applied PDA measurement likely underestimates the nitrate removal capacity of a system. Incubation time and organic matter/nitrate ratio are the most critical factors to consider using C₂H₂ inhibition technique to quantify denitrification. By comparing the treatments with and without an antibiotic, the results suggest that microbial N uptake probably played a minor role in N balance, and other denitrifying enzymes but nitrate reductase could be substantially synthesized during the incubation.