AAT L4 Cheat Sheet 2026

The 30 highest-yield AAT L4 facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Under Companies Act 2006, the filing deadline for private company accounts at Companies House is: → 9 months after the accounting reference date
2. For a limited company, which of the following is a statutory reserve that cannot be distributed as a dividend? → Share premium account
3. When recommending changes to an accounting system, which stakeholder consideration is MOST important? → Staff training needs and resistance to change
4. The cash operating cycle (cash conversion cycle) is calculated as: → Inventory days + receivables days − payables days
5. When preparing a statement of cash flows under the indirect method, which of the following is deducted from operating profit? → An increase in inventories
6. A system of internal controls can never provide absolute assurance against fraud because: → Controls can be circumvented through management override or collusion between employees
7. The writing down allowance (WDA) on the main pool of plant and machinery is: → 18% per annum reducing balance
8. Which of the following would appear in the statement of changes in equity? → Total comprehensive income for the year
9. A company revalues a property upward by £200,000. The revaluation surplus is recorded in: → Other comprehensive income and the revaluation reserve in equity
10. For capital gains purposes, indexation allowance for companies: → Reduces the gain by adjusting the cost for inflation up to December 2017
11. For CT purposes, which of the following is a 'balancing charge'? → An amount added back to taxable profits when a disposal proceeds exceed the pool balance
12. Under FRS 102, the threshold test for a 'small' company covers turnover, gross assets, and employees. The turnover limit is: → £10.2 million
13. Which financial statement ratio best indicates whether a company generates sufficient cash flow to service its debt obligations? → Interest cover ratio
14. Under FRS 102, a lease that conveys substantially all risks and rewards of ownership should be classified as a finance lease by the lessee and recognised as: → A right-of-use asset and a corresponding lease liability (under post-FRS 102 amendments)
15. The direct materials usage variance is: → (Standard quantity for actual output − Actual quantity used) × Standard price
16. Which Capital Gains Tax relief allows deferral of a gain when proceeds are reinvested in qualifying business assets? → Business Asset Rollover Relief
17. Sensitivity analysis in decision-making is best described as: → Testing how sensitive the outcome is to changes in each key variable
18. A company's earnings per share (EPS) is 45p and its share price is £9.00. What is the price-earnings (P/E) ratio, and what does a high P/E ratio indicate? → P/E = 20; a high P/E indicates the market expects strong future earnings growth
19. Throughput accounting focuses on maximising throughput (sales minus direct material cost) per unit of: → Bottleneck resource time
20. Under a two-part tariff system for transfer pricing, how does the buying division pay for transferred units? → A fixed fee plus variable cost per unit transferred
21. The direct materials price variance is: → (Standard price − Actual price) × Actual quantity purchased
22. Under ISA 700, the auditor's report must include a section describing Key Audit Matters (KAMs) for: → Listed entities and, where required by law or regulation, other public interest entities
23. The purpose of physical controls (e.g., locked safes, restricted access) is to: → Safeguard physical assets and confidential records from theft, loss, or damage
24. An organisation with a very short cash conversion cycle compared to industry peers would typically: → Require less working capital financing and be more efficient
25. Under ISA 265, a significant deficiency in internal control must be communicated to: → Those charged with governance in writing
26. An accounting system review (systems evaluation) typically results in a report that: → Identifies weaknesses in the current system and recommends improvements
27. For the tax year 2024/25, the personal allowance is: → £12,570
28. Residual income (RI) encourages divisional managers to accept projects that: → Earn a return above the minimum required return (cost of capital)
29. What does a favourable labour efficiency variance indicate? → Fewer hours were worked than standard for the actual output achieved
30. How are qualifying charitable donations treated for Corporation Tax purposes? → Deducted from total profits as a qualifying charitable donation