AAT L2 Using Accounting Software 5

Question 1

A credit limit set on a customer account in accounting software:

Accepted Answer

Sets the maximum amount of credit the business will extend to that customer

Answer

A credit limit is the maximum outstanding balance a customer is allowed to have. If an invoice would take the customer's balance above the limit, the software may warn the user or prevent the invoice from being processed, helping to manage credit risk.

Question 2

Payment terms of '30 days net' on a supplier account means:

Accepted Answer

The full invoice amount is due within 30 days of the invoice date

Answer

Payment terms of '30 days net' mean the full amount of the invoice is due for payment within 30 days from the date of the invoice. No discount is offered — the net (full) amount must be paid by the due date.

Question 3

When setting up VAT codes in accounting software, the standard rate VAT code in the UK should be set to:

Accepted Answer

20%

Answer

The current UK standard rate of VAT is 20%, which has been in effect since 4 January 2011. The software must be configured with the correct rate to ensure VAT is calculated accurately on applicable transactions.

Question 4

A refund to a customer in accounting software should be processed by:

Accepted Answer

Issuing a credit note and then processing a bank payment for the refund amount

Answer

A customer refund requires two steps: first, issue a credit note to reduce the customer's outstanding balance and adjust the sales and VAT figures. Then process a bank payment to the customer for the refund amount, allocated against the credit note.

Question 5

The trial balance generated by accounting software:

Accepted Answer

Lists all account balances and should have equal debit and credit totals if the software has been used correctly

Answer

The trial balance lists all nominal account balances from the software. If the double entry has been maintained correctly (which the software should ensure), total debits will equal total credits. However, errors such as posting to wrong accounts can still occur.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Using Accounting Software 5