AAT Level 2 Introduction to Bookkeeping Practice Test

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• What is the VAT control account used for?
• Which statement best describes the role of a trial balance?
• Paying a supplier early with a discount involves which arrangement?
• What is a cash book and what does it record?
• Which entry correctly records a cash discount received when paying a supplier early?
• Which document is used to request payment after delivery?
• What is the purpose of the Sales Ledger Control Account?
• In a petty cash arrangement, which statement is true about payments?
• Which item is a fixed asset?
• What is the normal balance for the Purchases Returns (Purchase Returns) account?
• Which components are recorded to determine net VAT payable?
• Which statement describes a cash sale?
• Trade receivables are money owed to the business by whom?
• What is the purpose of the cash flow statement, and is it required at Level 2?
• Which document requests payment for a specific sale?
• A business makes a cash sale to a customer for £1000 which two accounts are affected?
• Which statement about the sales ledger is correct?
• What is the reduced rate of VAT?
• Which book would post entries to the payables ledger control account for discounts received?
• If the gross value including 5% VAT is 105, what is the net value?
• If input VAT exceeds output VAT, what happens?
• How would you record a cash sale with no VAT?
• Which statement correctly describes the effect of a cash sale on accounts?
• What is a Receivables ledger?
• Which item indicates when payment is due on a sales invoice?
• What is VAT and how is it generally shown in bookkeeping?
• In recording a purchase return, which account is debited?
• Which item identifies a specific sales transaction on an invoice?
• In a cash sale with no VAT, which entry is correct?
• Which of the following is defined by the DEAD mnemonic?
• A Liability is defined as which of the following?
• Which document summarizes all transactions with a supplier over a period?
• Under accrual accounting, when should revenue be recognised?
• With prompt payment discounts, do you use the net or gross amount to calculate the discount?
• Which ledgers collectively are considered subsidiary ledgers?
• In the purchases day book, what does the net totals represent?
• What is the normal balance for the Purchases account?
• What is the standard rate of VAT?
• Which statement shows revenue and expenses over a period?
• What is the normal balance for the Sales (Sales Revenue) account?
• Imprest petty cash system is best described as what?
• How is VAT calculated from the net and gross values?
• Which statement about the VAT control account is true?
• What is the primary purpose of a petty cash fund?
• Which of the following is a common reason for an overpayment on an invoice?
• Define double-entry bookkeeping and explain how it keeps accounts balanced.
• How do you replenish petty cash under an imprest system?
• What is the purpose of bookkeeping?
• Why might the Supplier Statement have a different amount to the payables ledger?
• Are cash book payments, which reduce the cash in the bank, debits or credits?
• What does the payables ledger control account represent?
• Which journal entry records a cash sale of 1,200 including 20% VAT?
• What is a balance sheet?
• Reasons for underpayment may include which of the following?
• What is the difference between trade debtors and the sales ledger?
• Receivable ledger and Payables ledger are examples of which broader category?
• If the debit total is greater, the carried down balance is on which side for the next period?
• How do you obtain the net value from a 20% gross value?
• What is the proper treatment for a sales return to a customer?
• The business receives a rent invoice for £100 which two accounts are affected?
• Which statement best defines capital expenditure?
• When balancing ledger accounts, when is the balance brought down?
• Which of the following is a current asset?
• Which business type has a separate legal identity from its owners?
• Where is the total value of trade payables recorded in the general ledger?
• What happens if output VAT collected exceeds input VAT suffered?
• Why don't you add VAT to credit sales in the cash book receipts?
• True or False: There must always be a balancing double entry when posting to the general ledger.
• What does the subsidiary payables ledger contain?
• If the credit total is higher, what would be carried down at the end of an accounting period?
• Which of the following should be checked regarding the date on a cheque?
• Which of the following is an expense?
• Exempt from VAT examples include which of the following?
• Which statement best defines a sole trader?
• What term is defined by the CLIC mnemonic?
• Which statement best describes the liability of a sole trader?
• What is the formula for gross profit?
• What is an error of original entry and how does it affect the trial balance?
• If the credit amount is higher, what would be brought down at the start of a new accounting period?
• For the purchases day book, what is debited and what is credited in a double-entry posting?
• Which of the following is a liability?
• In double-entry bookkeeping, what ensures the accounting equation remains balanced?
• What is a trial balance and why is it prepared?
• Which account is typically increased when a owner adds personal funds to the business?
• Which entry records a credit purchase?
• What is the key principle of the accrual basis of accounting?
• In a T-account, on which side do credits appear?
• Which of the following is typically included on a sales invoice?
• When a sole trader puts £5,000 of their own money into the business, which two accounts are affected?
• Capital income occurs when you sell an asset that was treated as capital expenditure. Which is an example?
• What is a Payables ledger?
• The business sells goods on credit for £500 which two accounts are affected?
• If the debit amount is higher, what is brought down at the start of the new accounting period?
• Which of the following statements correctly identifies VAT treatment when reclaiming VAT?
• When balancing ledger accounts, when is the balance carried down?
• Revenue expenditure is money spent in a way that affects the business short term. Which is an example?
• Which statement about credit notes is correct?
• Which statement best describes a delivery note?
• If a customer forgets to subtract a credit note when paying, what is the likely result?
• Output VAT is defined as the VAT charged on what?
• What is the difference between a purchases day book and a purchases ledger?
• Which statement is true about cheque payments?
• Zero rate VAT applies to which of the following?
• When the sole trader takes £1,000 from the business for personal use, which two accounts are affected?
• What is the VAT amount on a net value of 200 with 20% VAT?
• Which transaction increases a liability?
• Capital expenditure is money spent to acquire an asset that will be owned for several years. Which is an example?
• What does the payables ledger control account contain?
• Zero rate VAT applies to which of the following categories?
• Bulk Discount is best described as which?
• Which ledger shows the balances for individual suppliers?
• Which ledger would you consult to see how much customers owe you?
• What is the purpose of the payables ledger control account?
• For a purchase on credit, which accounts are affected?
• Given Net Sales 60,000 and Cost of Goods Sold 38,000, what is Gross Profit?
• Why is keeping accurate ledgers and a trial balance important for external reporting?
• What is the difference between assets and liabilities? Provide examples.
• What is a purchase return and how do you record it?
• Give an example of a journal entry for buying goods on credit.
• What does an income statement (profit and loss) show?
• Which statement correctly describes the combined balances of Purchases and Sales Revenue accounts?
• What is the difference between a credit note and a debit note?
• Which statement about a credit note is correct?
• Entries will be made into the payables ledger control account from which book?
• Revenue income describes the day-to-day sales of a business. Which of the following is revenue income?
• For every debit entry in double-entry bookkeeping, there must be an equal what?
• If a supplier is paid by cheque for 500, what entry is made?
• What is the difference between gross pay and net pay?
• Expenses are defined as which of the following?
• What should a business ensure and check for when a payment is being made by cheque?
• How do you correct a simple posting error that has upset the trial balance?
• In a ledger account using a T-account shape, on which side do debits appear?
• In an imprest system, replenishment restores the petty cash fund to what?
• What is the purpose of the Sales Returns account?
• Where are the individual trade payables recorded?
• For the returns day book, what is debited and what is credited in a double-entry posting?
• When a sale is recorded on credit, what is the normal balance of the Sales account?
• Which document is used to reflect payments from the petty cash fund?
• Income is best described as which statement?
• Which of the following best describes capital income?
• What is a remittance advice used for?
• Where are the books of prime entry transferred to?
• What is the difference between an invoice and a supplier's statement?
• Non-imprest petty cash system is best described as what?
• A Current Asset is best described as which?
• What is VAT?
• In the returns day book, which amounts are debited to the payables ledger control account?
• What is the purpose of the trial balance's other use besides checking debits equal credits?
• Trade payables are money the business owes to whom?
• Which of the following is income?
• What is Input VAT?
• How would you treat a cash discount offered by a supplier for early payment?
• Which item is typically charged at the reduced rate of 5% VAT?
• If posting to the general ledger with a cash book that is a book of prime entry and isn't part of a double-entry system, what will be credited?
• What is the difference between a cash book and a bank statement?
• Which statement would you consult to assess liquidity at a specific date?
• Which description matches a partnership?
• What is the purpose of a sales day book?
• The business pays a salary of £250 which two accounts are affected?
• What is a petty cash book and what is its purpose?
• If the gross value including 20% VAT is 240, what is the net value?
• Trade Discounts describe which of the following?
• Which ledger would you consult to see how much is owed to suppliers?
• What is the purpose of a petty cash imprest system?
• If the debit total is greater, which side contains the carried down balance for the next period?
• Which entries correctly record a purchase of inventory on credit including VAT of 20%?
• Wages payable at the end of the period if not yet paid should be recorded as?
• What is the function of the Sales Ledger Control Account?
• What is an error of omission and how is it identified?
• How do you obtain the net value from a 5% gross value?
• Which description best characterizes a limited company?
• Which transaction increases trade receivables?
• What is a control account?
• Prompt payment (early settlement) discounts are what kind of discounts?
• If a discount is taken for early payment, which accounts are affected and how?
• What is the effect of Sales Returns on total sales revenue?
• Who should authorise payments?
• Is depreciation typically covered in Level 2 Introduction to Bookkeeping?
• How would you record a purchase on credit that affects the Purchases account?
• Which statement describes a credit sale?
• Which document accompanies the delivery of goods to confirm what was sent and is not the invoice?
• What does the general ledger contain?
• How would you classify an expense such as rent paid in cash in the accounts?
• A Fixed Asset is defined as which of the following?
• Are cash book receipts, which increase the cash in the bank, debits or credits?
• If the debit total is higher than the credit total, what balance is carried down at the end of the period?
• Which of the following best describes a trade creditor?
• What is the effect on the trial balance if a purchase return is recorded incorrectly as a purchase?
• What is a petty cash voucher?
• How do you record cash received from a debtor in the cash book?
• If total debits in a trial balance equal 50,000 and total credits equal 50,000, what does this indicate?
• What does the term 'brought down' refer to in ledger balancing?