AAT L2 Bookkeeping Controls 4

Question 1

A payment of £340 for office expenses was debited to the office equipment account. This error is corrected by:

Accepted Answer

Debit Office Expenses £340, Credit Office Equipment £340

Answer

The expense was wrongly debited to an asset account (error of principle). To correct it, debit Office Expenses (where it should have gone) and credit Office Equipment (to remove the incorrect entry).

Question 2

The sales ledger control account is an example of a:

Accepted Answer

Personal account

Answer

The sales ledger control account is a personal account in the general ledger that represents the total of all individual trade receivable balances. It is part of the double entry system and appears on the statement of financial position.

Question 3

A contra entry of £300 has been made between the sales ledger and purchase ledger. What is the double entry in the control accounts?

Accepted Answer

Debit Purchase Ledger Control Account £300, Credit Sales Ledger Control Account £300

Answer

A contra entry offsets a trade receivable against a trade payable for the same entity. The purchase ledger control account is debited (reducing the amount owed to the supplier) and the sales ledger control account is credited (reducing the amount owed by the customer).

Question 4

Which of the following would cause the trial balance to fail to balance?

Accepted Answer

Posting the debit entry of a transaction but not the credit entry

Answer

If only one side of the double entry is recorded, the total debits will not equal total credits, and the trial balance will not balance. The other errors maintain equal debits and credits.

Question 5

When preparing a bank reconciliation, which items would appear on the bank reconciliation statement (as opposed to being adjusted in the cash book)?

Accepted Answer

Unpresented cheques and outstanding lodgements

Answer

Unpresented cheques and outstanding lodgements are timing differences — they are correctly recorded in the cash book but have not yet appeared on the bank statement. They appear on the reconciliation statement but do not require cash book adjustments.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Bookkeeping Controls 4