Advanced Bookkeeping Flashcards
6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Advanced Bookkeeping flashcards as text
Which accounting concept requires transactions to be recorded in the period to which they relate, not when cash is received or paid?
Answer: Accruals concept
The accruals concept (also called the matching concept) requires income and expenditure to be recognised in the accounting period to which they relate, irrespective of when cash is exchanged.
A debit entry on a customer's account in the sales ledger indicates:
Answer: The customer owes money to the business
In the sales ledger, debit entries represent amounts owed by customers — sales invoices increase the debit balance, payments and credit notes reduce it.
Which of the following would be recorded as a debit in the cash book?
Answer: A receipt from a customer
Receipts of cash increase the bank balance, which is an asset — assets increase with debit entries. Payments decrease the bank balance (credit entries).
The trial balance checks the arithmetic accuracy of the ledger. Which error will NOT be revealed by a trial balance?
Answer: Posting the correct amount to the wrong account type
Posting the correct amount to the wrong class of account (e.g., debit to the wrong expense account) keeps debits equal to credits, so it does not cause a trial balance difference — this is an error of commission.
Contra entries in the sales and purchase ledgers occur when:
Answer: A customer is also a supplier and the balances are set off
A contra entry reduces both the trade receivable balance (in the sales ledger) and the trade payable balance (in the purchase ledger) when the same entity is both a customer and a supplier.
What is the double entry for recording depreciation in the general ledger?
Answer: Debit Depreciation Expense, Credit Accumulated Depreciation
Depreciation is recorded as debit Depreciation Expense (increases the expense) and credit Accumulated Depreciation (increases the contra-asset, reducing the net book value of the asset).