AAT L3 Advanced Bookkeeping

Question 1

Which accounting concept requires transactions to be recorded in the period to which they relate, not when cash is received or paid?

Accepted Answer

Accruals concept

Answer

Going concern concept

Answer

Prudence concept

Answer

Consistency concept

Question 2

A debit entry on a customer's account in the sales ledger indicates:

Accepted Answer

The customer owes money to the business

Answer

The customer has paid their invoice

Answer

The business owes money to the customer

Answer

A credit note has been issued

Question 3

Which of the following would be recorded as a debit in the cash book?

Accepted Answer

A receipt from a customer

Answer

A payment to a supplier

Answer

A bank charge

Answer

A dishonoured cheque

Question 4

The trial balance checks the arithmetic accuracy of the ledger. Which error will NOT be revealed by a trial balance?

Accepted Answer

Posting the correct amount to the wrong account type

Answer

A transposition error in posting a debit

Answer

A single-sided entry omitting the credit

Answer

An incorrect balance on the sales ledger

Question 5

Contra entries in the sales and purchase ledgers occur when:

Accepted Answer

A customer is also a supplier and the balances are set off

Answer

A credit note is issued to a customer

Answer

A supplier gives a discount

Answer

Two invoices are combined into one payment

Question 6

What is the double entry for recording depreciation in the general ledger?

Accepted Answer

Debit Depreciation Expense, Credit Accumulated Depreciation

Answer

Debit Non-current Asset, Credit Depreciation Expense

Answer

Debit Accumulated Depreciation, Credit Cash

Answer

Debit Retained Earnings, Credit Non-current Asset