AAT L2 Cheat Sheet 2026

The 30 highest-yield AAT L2 facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. The balance on the VAT control account shows a credit balance of £3,400. This means: → The business owes HMRC £3,400
2. Which report from accounting software shows the financial position of the business at a specific date? → Statement of financial position (balance sheet)
3. Production overheads include: → Factory heating and lighting
4. A credit note is issued when: → Goods are returned by the customer or an error on the invoice needs correcting
5. The aged payables report shows: → How much the business owes each supplier, analysed by age
6. Using AVCO (Average Cost) method, if a business has 100 units at £5 and purchases 200 units at £8, what is the weighted average cost per unit? → £7.00
7. A contract requires which of the following essential elements to be legally binding? → Offer, acceptance, consideration, intention to create legal relations, and capacity
8. Which document is issued by a seller to a buyer to confirm the details and price of goods or services to be provided? → Quotation
9. A chart of accounts in accounting software is: → A structured list of all nominal ledger accounts used by the business
10. The term 'limited liability' in relation to a limited company means: → The shareholders' liability is limited to the amount they have invested or guaranteed
11. When setting up a new supplier in accounting software, which of the following details is essential? → The supplier's name, address, and default nominal code for purchases
12. What is the purpose of the general ledger? → To contain all the accounts needed to prepare the financial statements
13. When entering an opening balance for a trade receivables control account, it is entered as a: → Debit balance
14. A product sells for £60 and has a profit margin of 25%. What is the total cost of the product? → £45.00
15. The principle of integrity in accounting ethics means: → Being straightforward and honest in all professional and business relationships
16. Which of the following cost behaviours describes a royalty paid per unit of output? → Variable cost
17. A manufacturing business produces 10,000 units. Fixed costs are £50,000 and variable costs are £3 per unit. What is the total cost? → £80,000
18. An error of commission occurs when: → A transaction is posted to the correct type of account but the wrong specific account
19. When a business changes from a credit balance to a debit balance on the bank statement, this indicates: → The business has moved from a positive balance to an overdraft
20. The formula for calculating total cost is: → All of the above are correct
21. Goods costing £200 taken by the owner for personal use should be recorded as: → Debit Drawings £200, Credit Purchases £200
22. A variable cost is one that: → Changes in total in direct proportion to the level of activity
23. Statutory redundancy pay in the UK is calculated based on: → The employee's age, length of service, and weekly pay (subject to a statutory cap)
24. A debit entry on the VAT control account represents: → Input VAT on purchases that can be reclaimed from HMRC
25. Which of the following is the correct treatment of a dishonoured cheque from a customer in the cash book? → Credit the cash book (bank column)
26. An unpresented cheque is one that has been: → Written by the business but not yet cleared through the bank
27. A refund to a customer in accounting software should be processed by: → Issuing a credit note and then processing a bank payment for the refund amount
28. A bank statement shows a direct credit of £1,200 that has not been entered in the cash book. What entry is needed in the cash book? → Debit £1,200 on the debit side of the cash book
29. An irrecoverable debt of £300 plus VAT at 20% is written off. What is the total debit to the irrecoverable debts account? → £300
30. A credit limit set on a customer account in accounting software: → Sets the maximum amount of credit the business will extend to that customer