AAT ITBK Cheat Sheet

Cheat sheet AAT ITBK Cheat Sheet Practice Questions Study Guide Print / Save PDF

Set Up Bookkeeping Systems 20% of exam Business Documents Books of Prime Entry Coding Systems Accounting Equation Debits and Credits

Process Customer Transactions 20% of exam Invoice Documents Sales Discounts Sales Daybook Columns Customer Receipts VAT on Sales

Process Supplier Transactions 20% of exam Supplier Documents Purchases Daybook Columns Discounts Received Supplier Payments Reconciliation

Process Receipts and Payments 20% of exam Cash Book Petty Cash Imprest VAT Extraction Recurring Entries Reimbursement

Process Ledger Accounts 20% of exam Ledger Types Posting Daybooks Balancing Accounts Control Accounts Trial Balance

Quick Facts Exam AAT ITBK Credential AAT Level 2 Certificate Format Computer-based (CBA) Time 1h 30m Pass 70% Outcomes 5 x 20% Level AAT Level 2 GLH 65 hours VAT rate 20% standard Blueprint Q2022 v5.5

DEAD CLIC BO Debit Expenses Assets Drawings, Credit Liabilities Income Capital D: Debit side E: Expenses A: Assets D: Drawings C: Credit side L: Liabilities I: Income C: Capital

Debit vs Credit BO

Debit (DEAD) Assets increase Expenses increase Drawings increase

Credit (CLIC) Liabilities increase Income increase Capital increase DEAD debits, CLIC credits

Which Daybook to Use BO Credit sale invoice issued → Sales daybook Credit sale return accepted → Sales returns daybook Credit purchase invoice received → Purchases daybook Credit purchase return sent → Purchases returns daybook Cash or bank movement → Cash book Small cash expense paid → Petty cash book PPD allowed to customer → Discounts allowed daybook PPD received from supplier → Discounts received daybook

Business Documents BO Invoice Request payment for sale Credit note Reduces amount owed Remittance advice Confirms payment sent Statement of account Lists outstanding balance Petty cash voucher Evidences small expense Bank statement Bank transaction record

Accounting Equation BO Assets equals Liabilities plus Capital always A = L + C Capital = Assets − Liabilities Must always balance

Books of Prime Entry vs Ledgers BO

Books of Prime Entry Record transactions first Daybooks and cash book

Ledgers Second-stage accounts Posted from daybook totals Record first, then post

Books of Prime Entry BO Sales daybook Records credit sales Sales returns daybook Records sales returns Purchases daybook Records credit purchases Purchases returns daybook Records purchase returns Discounts allowed daybook Records PPD given Discounts received daybook Records PPD received Cash book Prime entry plus ledger

Coding Systems BO Customer code Identifies customer account Supplier code Identifies supplier account Product code Identifies item type General ledger code Identifies nominal account Alphanumerical code Letters plus numbers

Accounting Equation and Classification BO Assets What business owns Liabilities What business owes Capital Owner's investment Income Revenue earned Expenses Costs incurred Equation Assets = Liabilities + Capital Formula

Trade Discount vs Bulk Discount CU

Trade Discount Given to trade buyers Fixed % off list price

Bulk Discount Given for large orders Scales with order volume Both deducted before VAT

Discount and VAT Order CU Trade discount given → Deduct before VAT Bulk discount given → Deduct before VAT PPD offered at sale → Adjust via credit note Need VAT amount → Apply 20% after discounts PPD taken by customer → Issue credit note Extracting VAT from gross → Multiply by 1/6

Customer Invoice Documents CU Quotation Estimated price offer Customer order Confirms items wanted Delivery note Confirms goods delivered Price list Standard item prices Discount policy States discount terms

PPD vs Trade and Bulk Discount CU

Prompt Payment Discount Rewards early payment Adjusted via credit note

Trade and Bulk Discount Fixed at time of sale No credit note needed Timing differs; both reduce total

Sales Discounts CU Trade discount Reduces price at sale Bulk discount Reduces price for volume Prompt payment discount Reward for early payment PPD PPD adjustment Via credit note only Discount order Trade, bulk, then VAT

Sales Daybook Columns CU Customer name Buyer identification Customer account code Links to receivables ledger Net column Amount before VAT VAT column Tax on sale Total column Gross invoice amount Analysis column Splits by product code

Processing Customer Receipts CU Full payment Clears whole invoice Part payment Clears partial balance Against invoice Matched to specific invoice Against credit note Offsets returned goods Underpayment Customer paid too little Overpayment Customer paid too much

Supplier Documents SU Purchase order Confirms goods requested Goods received note Confirms goods arrived Delivery note Accompanies delivered goods Goods returned note Confirms goods sent back Supplier statement Lists account activity

Purchases Daybook Columns SU Supplier name Seller identification Supplier account code Links to payables ledger Net column Amount before VAT VAT column Tax on purchase Total column Gross invoice amount Analysis column Splits by product code

Supplier Payment Checks SU Reconciliation Match statement to ledger Payment terms Agreed date to pay Discounts received Trade, bulk or PPD Timing difference Payment not yet recorded Duplicated transaction Entered more than once

VAT Extraction from Gross RE Divide gross by 6 for VAT Gross includes VAT Net excludes VAT 20% standard UK rate VAT = gross ÷ 6

Imprest vs Non-Imprest Petty Cash RE

Imprest System Fixed float amount Reimburse to restore float

Non-Imprest System Variable float amount Reimburse amount actually spent Imprest always restores fixed level

Petty Cash Reimbursement RE Imprest system in use → Top up to float Non-imprest system in use → Reimburse amount spent Voucher missing signature → Query before reimbursing Float below minimum level → Request reimbursement now

Analysed Cash Book RE Date column Transaction date Details column Transaction description Cash column Physical cash movement Bank column Bank transaction movement Analysis columns Splits by expense type VAT column Tax on transaction

Petty Cash and Imprest RE Imprest system Restores fixed float Non-imprest system Reimburses variable amount Float Fixed starting balance Reimbursement Tops up cash spent Petty cash voucher Evidences each expense

VAT Basics RE Standard VAT rate 20% in the UK HMRC Extract VAT from gross Multiply gross by 1/6 Add VAT to net Multiply net by 20% Gross amount Net plus VAT Net amount Price before VAT

Recurring Entries RE Recurring entry Repeats on a schedule Standing order Fixed recurring bank payment Direct debit Variable recurring bank payment Digital automation System repeats entry automatically

Trial Balance Blind Spots LE Trial balance can still hide errors Omission: entry missing entirely Commission: posted to wrong account Original entry: wrong amount both sides Compensating errors cancel out

Control Account vs Subsidiary Ledger LE

Control Account Single summary total Sits in general ledger

Subsidiary Ledger Individual customer or supplier balances Must reconcile to control Control checks the detail

Ledger Posting Picker LE Customer owes the business → Post to receivables ledger Business owes a supplier → Post to payables ledger Asset expense or income → Post to general ledger Checking ledger accuracy → Compare to control account Daybook totals ready → Post totals to ledgers Balances don't match → Recheck control account

Ledger Types LE Receivables ledger Individual customer balances Payables ledger Individual supplier balances General ledger All nominal accounts Control account Summary total check

Balancing and Trial Balance LE Balance carried down Closing balance this period c/d Balance brought down Opening balance next period b/d Debit balance Total debits exceed credits Credit balance Total credits exceed debits Trial balance Lists all ledger balances Trial balance purpose Checks debits equal credits

Common Traps

PPD ≠ Cash Book Discount Column PPD uses credit notes ≠ No discount column needed

Trade Discount ≠ Prompt Payment Discount Trade fixed at sale ≠ PPD depends on payment timing

Daybook ≠ Ledger Daybook records first ≠ Ledger posts from daybook

Imprest ≠ Non-Imprest System Imprest restores fixed float ≠ Non-imprest reimburses variable spend

Trial Balance ≠ Error-Free Proof Balancing doesn't mean correct ≠ Some errors self-cancel

Gross ≠ Net Amount Gross includes VAT ≠ Net excludes VAT

Control Account ≠ Individual Ledger Control is summary total ≠ Ledger holds individual balances

Last Minute 1 . Pass mark is 70% 2 . Five learning outcomes, each 20% 3 . Assessment time: 1 hour 30 minutes 4 . Standard UK VAT rate: 20% 5 . PPD adjusted via credit notes only 6 . Deduct trade and bulk discounts first 7 . DEAD debits, CLIC credits 8 . Daybooks record first, ledgers post second 9 . Imprest system restores a fixed float 10 . VAT extraction uses 1/6 fraction 11 . Trial balance doesn't guarantee zero errors 12 . Control accounts check subsidiary ledger totals

AAT Level 2 Certificate in Accounting (Q2022) - Introduction to Bookkeeping (ITBK) Practice Questions 132 questions Study Guide 16 topics Cheat Sheet 92 facts Flashcards 50 cards Shorts 1 short Podcast

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