AAT L2 Using Accounting Software 1

Question 1

When setting up a new business in accounting software, which of the following must be entered first?

Accepted Answer

The chart of accounts and opening balances

Answer

Before processing any transactions, the chart of accounts (list of nominal codes) must be set up and opening balances entered. This establishes the framework within which all transactions will be recorded.

Question 2

A chart of accounts in accounting software is:

Accepted Answer

A structured list of all nominal ledger accounts used by the business

Answer

The chart of accounts is a comprehensive, structured list of all the nominal (general) ledger accounts used by the business. Each account has a unique code number and name. It organises accounts into categories such as assets, liabilities, income, and expenses.

Question 3

When entering a customer invoice in accounting software, the software automatically:

Accepted Answer

Calculates and posts the double entry including VAT

Answer

When a sales invoice is entered, accounting software automatically calculates the VAT (if applicable) and posts the double entry: debiting trade receivables with the gross amount, crediting sales with the net amount, and crediting the VAT account.

Question 4

When processing a supplier payment in accounting software, you must:

Accepted Answer

Allocate the payment against specific outstanding invoices

Answer

When recording a payment to a supplier, the payment should be allocated against the specific invoices being paid. This ensures the purchase ledger is accurate and the supplier's outstanding balance is correctly reduced.

Question 5

A recurring transaction in accounting software is used for:

Accepted Answer

Transactions that occur regularly at set intervals, such as monthly rent

Answer

Recurring transactions automate the entry of regular, repeated transactions such as monthly rent, standing orders, or subscription payments. The software posts the transaction automatically at the set frequency, saving time and reducing errors.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Using Accounting Software 1