AAT L2 Using Accounting Software 3 — Questions and Answers
Question 1: A journal entry in accounting software is typically used for:
- Recording routine sales and purchase invoices
- Non-routine transactions such as year-end adjustments, error corrections, and transfers (Correct answer)
- Printing cheques
- Reconciling the bank statement
Correct answer: Non-routine transactions such as year-end adjustments, error corrections, and transfers
Journals are used for non-routine transactions that cannot be processed through the standard modules (sales, purchases, bank). Examples include year-end accruals and prepayments, depreciation entries, error corrections, and transfers between accounts.
Question 2: When processing a petty cash payment in accounting software, the entry is made through:
- The sales module
- The purchase invoices module
- The bank payments module using the petty cash bank account (Correct answer)
- The journal module only
Correct answer: The bank payments module using the petty cash bank account
Petty cash is treated as a separate bank account in accounting software. Payments from petty cash are processed through the bank payments function, selecting the petty cash account as the bank account and the appropriate expense nominal code.
Question 3: A customer account in accounting software stores:
- Only the customer's name
- The customer's details, outstanding invoices, credit notes, and payment history (Correct answer)
- Only the total amount owed
- The customer's bank details for HMRC
Correct answer: The customer's details, outstanding invoices, credit notes, and payment history
A customer account in accounting software maintains a complete record including contact details, credit terms, all invoices raised, credit notes issued, payments received, and the current outstanding balance. This forms the individual account in the sales ledger.
Question 4: To restore a backup of accounting data, you would typically:
- Re-enter all transactions manually
- Use the software's restore function to load a previously saved backup file (Correct answer)
- Contact HMRC for a copy
- Print all reports and re-key them
Correct answer: Use the software's restore function to load a previously saved backup file
Accounting software includes backup and restore functions. A backup file contains all the accounting data at the point it was saved. The restore function loads this data back into the software, returning it to the state at the time of the backup.
Question 5: Batch processing in accounting software means:
- Processing one transaction at a time
- Entering a group of similar transactions together before posting them all at once (Correct answer)
- Automatically generating invoices
- Deleting old transactions in bulk
Correct answer: Entering a group of similar transactions together before posting them all at once
Batch processing allows multiple similar transactions (e.g., several sales invoices or supplier payments) to be entered together and then posted to the ledgers as a group. This is efficient and allows checking before posting.
Question 6: When setting up a new supplier in accounting software, which of the following details is essential?
- The supplier's favourite colour
- The supplier's name, address, and default nominal code for purchases (Correct answer)
- Only the supplier's phone number
- The supplier's annual turnover
Correct answer: The supplier's name, address, and default nominal code for purchases
Essential supplier setup information includes the business name, address, contact details, payment terms, default nominal code (to categorise purchases), and VAT registration status. This ensures transactions are recorded correctly and the supplier can be paid.
AAT L2 Using Accounting Software 3
A journal entry in accounting software is typically used for: