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Bookkeeping Transactions Flashcards

6 cards from real AAT L2 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Bookkeeping Transactions flashcards as text

  1. A debit entry on the VAT control account represents:

    Answer: Input VAT on purchases that can be reclaimed from HMRC

    Input VAT (VAT paid on purchases) is recorded as a debit on the VAT control account because it is reclaimable from HMRC. Output VAT (charged on sales) is a credit. The balance shows the net amount due to or from HMRC.

  2. A business operates the imprest petty cash system with a float of £150. At the end of the week, the petty cash box contains £37.50. How much is needed to restore the imprest?

    Answer: £112.50

    Under the imprest system, the float is restored to its original level. Amount to restore = Original float - Remaining cash = £150 - £37.50 = £112.50. This equals the total of petty cash vouchers for the period.

  3. Which of the following correctly describes the purpose of a goods received note (GRN)?

    Answer: To confirm to the accounts department that goods ordered have been received and checked

    A goods received note is an internal document prepared by the warehouse or receiving department to confirm that goods have arrived and been inspected. It is checked against the purchase order and delivery note before the invoice is authorised for payment.

  4. A business sells goods for £840 including VAT at 20%. What is the net value of the sale?

    Answer: £700

    To find the net (ex-VAT) amount from a VAT-inclusive figure at 20%, divide by 1.2: £840 / 1.2 = £700. Alternatively, use the VAT fraction: VAT = £840 × 1/6 = £140, so net = £840 - £140 = £700.

  5. Carriage outwards is classified as:

    Answer: A selling and distribution expense

    Carriage outwards is the cost of delivering goods to customers. It is classified as a selling and distribution expense in the statement of profit or loss, unlike carriage inwards which forms part of the cost of goods.

  6. The balance on the purchases ledger control account represents:

    Answer: Total amount owed to all credit suppliers

    The purchases ledger control account summarises all individual supplier accounts. Its balance represents the total trade payables — the amount the business owes to all its credit suppliers at that date.