AAT L3 Advanced Bookkeeping 5

Question 1

When a credit note is issued to a customer for goods returned, the double entry is:

Accepted Answer

Debit Sales Returns, Credit Trade Receivables

Answer

Debit Trade Receivables, Credit Sales Returns

Answer

Debit Cash, Credit Sales Returns

Answer

Debit Sales, Credit Cash

Question 2

Which of the following describes the purpose of the nominal (general) ledger?

Accepted Answer

To contain all accounts used to prepare the trial balance and financial statements

Answer

To record individual customer account balances

Answer

To record individual supplier account balances

Answer

To process payroll transactions

Question 3

The recoverability of a debt is doubtful. An allowance for doubtful debts is created by:

Accepted Answer

Debit Irrecoverable Debts Expense (or Allowance Adjustment), Credit Allowance for Doubtful Debts

Answer

Debit Trade Receivables, Credit Allowance for Doubtful Debts

Answer

Debit Allowance for Doubtful Debts, Credit Irrecoverable Debts Expense

Answer

Debit Cash, Credit Allowance for Doubtful Debts

Question 4

Which of the following would increase the balance on the sales ledger control account?

Accepted Answer

Sales invoices issued to customers

Answer

Cash receipts from customers

Answer

Irrecoverable debts written off

Answer

Discounts allowed to customers

Question 5

An error of transposition occurs when:

Accepted Answer

Two digits in an amount are accidentally reversed (e.g., £54 posted as £45)

Answer

A transaction is posted to the wrong account

Answer

A transaction is omitted entirely

Answer

The same transaction is posted twice

Question 6

When a direct debit payment appears on the bank statement but has not been entered in the cash book, the cash book must be:

Accepted Answer

Updated with a credit entry to record the payment

Answer

Updated with a debit entry to record the payment

Answer

Left unchanged until the next reconciliation

Answer

Adjusted only if the amount exceeds £100