AAT 1.1

Question 1

Types of Accounting Codes & their Domains

Answer 1

Ledger codes/GL Codes: Unique reference for different kinds of income, expenses, assets & liabilities.
Customer Account Codes: Unique ID for each customer
Supplier Account Codes: Unique ID for each supplier
Product Code: Unique code for each product

Question 2

Types/Styles of Codes

Answer 2

Sequential Codes: Ordered number/letter for a simple list
Block Codes: A band of numbers that align with a category
Significant Digit: Numbers and letters used represent features of the object
Faceted: eg the date 01/01/2020, Each separated facet corresponds to a different type of information. The difference between F & S code is F code is numerical only
Dewey Decimal/ Hierarchical: each sig fig is an additional layer of detail

Question 3

Separate Entity Principle

Answer 3

From a businesses perspective, the owner of the buisness is a completely separate entity to the buisness.

Subsequently Capital invested is considered a liability.

Question 4

Duel Effect

Answer 4

For every transaction, there are two equal (and opposite) financial effects.

Question 5

Accounting Equation

Answer 5

Assets = { Liabilities(l) + {Capital(c) + Profit - Drawings}}

Question 6

Docs of a sale

Answer 6

Seller Purchaser The conversation
Price Quote This is what we have for this much
Purchase Order Ok we want x amount of y thing
Sales Order You have ordered X of Y
Delivery note (+ Goods) Here is an object, with a description of that object
Sales Invoice We want this much money, and request payment
Credit Note An amount we owe you in credit based on an
even that occurred during our transaction
Payment Here is the money we owe you

Question 7

Statement of Account

Answer 7

Shows all the invoices & credit notes that have been
sent to/received by a particular entity, along side anything outstanding from last month.

Done in date order
Transactions listed
Debit & credit Columns
You are showing the balance, at each transaction

Question 8

Remittance Advice

Answer 8

A blank doc that the customer completes with a payment, showing the total payment and what is being paid off

Question 9

Cheques: How Valid?

Answer 9

• Cheques are only valid for 6 Months
  
  • Payee name needs to be the same as the one on the accounting being paid to
  • Written word of cheque should agree with the numerical figure
  • The Cheque needs to be signed

Question 10

Imprest system: Errors

Answer 10

• Theft
• Forgetting/loosing vouchers
• Error in counting money

Question 11

Offering Credit

Answer 11

• For Existing Customers

    ○ What is the state of their account
    ○ Do they owe anything 
    ○ Have they been paying in a timely manner 
    ○ Will they exceed any credit limit 

  • For New Customers
    ○ Trade reference
    ○ Creditworthyness check through external agency

Question 12

Dead Clic

Answer 12

D: Expences Assets Drawings, C: Liabilities, Income, Capital

Question 13

BoPE Name & Description

Answer 13

Book Description
Sales/Purchase Day Book: For all initial credit s/p
Sales/Purchase Returns Day Book: For all s/p returns
Cash book: Records all Cash receipts & Payments, that
can also be part of the GL

Petty Cash Book: For recording small misc purchases the
buisness might make in their day to day

Discounts Allowed/Received Day Book: For recording any discounts not recorded
during the original PoS, eg PPD

Question 14

Credit Sales PPD, Payment

Answer 14

During PaymentYou calculate the Delta, where
dG: SLCA
dV: VAT
dN: Discount Allowed Account

With the actual cash ammount doing a reg Credit interaction

Question 15

Sub Ledger: Internal External Divide

Answer 15

D: Money Owed to the Buisness
C: Money Owed by/payed to the buissness

Question 16

Sales Returns Effects?

Answer 16

Sales Return Account D, VAT D, Bank C