AAT L2 Bookkeeping Transactions 4

Question 1

A business receives a statement from a supplier showing a balance of £3,200. The purchase ledger account shows a balance of £2,800. Which of the following could explain the difference?

Accepted Answer

A credit note for £400 has been recorded in the purchase ledger but not yet on the statement

Answer

If a credit note for £400 was recorded in the purchase ledger (reducing the balance to £2,800) but not yet reflected on the supplier's statement (still showing £3,200), this would explain the £400 difference.

Question 2

Which of the following errors would be revealed by a trial balance?

Accepted Answer

A single-sided entry where only the debit was recorded

Answer

A single-sided entry means only one side of the double entry has been recorded. This causes the trial balance to be out of balance. The other errors listed maintain equal debits and credits, so the trial balance still balances.

Question 3

Goods costing £200 taken by the owner for personal use should be recorded as:

Accepted Answer

Debit Drawings £200, Credit Purchases £200

Answer

When the owner takes goods for personal use, it is treated as drawings. Purchases are reduced (credited) because the goods are no longer business stock, and drawings are increased (debited) to reflect the owner's withdrawal.

Question 4

A sales invoice for £560 was entered in the sales day book as £650. This is an example of:

Accepted Answer

An error of original entry

Answer

An error of original entry occurs when the wrong amount is entered in the book of prime entry. The incorrect figure is then posted to both sides of the double entry, so the trial balance still balances but the amounts are wrong.

Question 5

Which account is debited when a business pays for carriage inwards?

Accepted Answer

Purchases account or carriage inwards account

Answer

Carriage inwards is the cost of delivering goods from the supplier to the business. It is debited to either a separate carriage inwards account or added to purchases, as it forms part of the cost of acquiring goods for resale.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Bookkeeping Transactions 4