AAT L2 Bookkeeping Transactions 2

Question 1

A credit note is issued when:

Accepted Answer

Goods are returned by the customer or an error on the invoice needs correcting

Answer

A credit note is issued by the seller to the buyer to reduce the amount owed, typically because goods have been returned, were damaged, or there was an overcharge on the original invoice.

Question 2

The purchases returns day book is used to record:

Accepted Answer

Credit notes received from suppliers

Answer

The purchases returns day book records credit notes received from suppliers when goods are returned to them. It is a book of prime entry that feeds into the general ledger.

Question 3

A sole trader receives a prompt payment discount of 2% on an invoice of £1,000 plus 20% VAT. If the discount is taken, how much does the trader pay?

Accepted Answer

£1,176.00

Answer

Under current UK rules, VAT is calculated on the discounted price when a prompt payment discount is offered. Net amount: £1,000 × 98% = £980. VAT: £980 × 20% = £196. Total: £980 + £196 = £1,176.

Question 4

What does the term 'footing' mean in bookkeeping?

Accepted Answer

Adding up a column of figures

Answer

Footing means totalling a column of figures in an account or day book. It is a basic bookkeeping procedure to ensure columns are correctly added up before posting.

Question 5

Which of the following best describes a remittance advice?

Accepted Answer

A document sent with payment to inform the supplier which invoices are being paid

Answer

A remittance advice is sent by the buyer to the seller alongside payment. It details which invoices and credit notes the payment covers, helping the supplier allocate the payment correctly.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Bookkeeping Transactions 2