AAT Level 3
Accounts Preparation
AAT Level 3
Accounts Preparation - Summary
ACPR is the first of the two Level 3 financial accounting units. Covering accounting principles and concepts, accounting for non-current assets and advanced bookkeeping, it takes the student from Level 2 foundation knowledge and skills and prepares them for further development in FSTP wherethey will be preparing financial statements for sole traders and partnerships.
Session 1 - Objectives
Learning objectives:At the end of this sesson you will be able to:• Understand the basic principles of accounting
including the accounting equation.• Account for transactions in ledger accounts as
part of the general ledger.• Balance off ledger accounts in order to
prepare an initial trial balance.
The Ledger Accounts
Question 2 – Vera
Entering transactions into the ledgers
Balancing off the accounts
(You will need to draw 10 ‘T’ accounts!)
Complete Question 5
Post to the ledgersBalance off accountsPrepare a Trial Balance
The Trial Balance & the Journal
Dealing with Errors
Errors!
Which errors would affect the trial balance?
Error of Commission
Correct type of account has been usedBUT
the wrong account in that ledger
Example
A sales invoice for customer A is debited to customer B account in the Sales Ledger
Omission?
Error of Omission
The transactions has been omitted from the accounts completely
Example
A payment for cash purchases has not been entered in the Cash book OR the Purchases account
Error of Principle
The transactions has been posted to the wrong TYPE of account
Example
A payment for a new computer has been posted to the computer maintenance account rather than the Computer asset account.
Reversal?
Error of Reversal
Debits and Credits are the wrong way round
Example
A payment for telephone costs has been credited to the Telephone account.
Error of Original Entry
Transaction amount is entered incorrectly
Example
A payment for the telephone costs of £750 have been posted as £570
Compensating Error
The errors cancel each other out
Six Types of ErrorError of Commission
Error of Omission
Error of Principle
Compensating Error
Error of Original Entry
Complete Reversal of Entries
Error Correction
Opening Balances
PayrollBad Debt Write Off
The Journal
The Journal - LayoutDate Ref Details Dr
£
Cr
£
Question 6 – Kelly 1
Account names Dr£
Cr£
Question 7
Now your turn
Question 7 Answer
Account names Dr£
Cr£
Irrecoverable debts 548.60 VAT 109.72 Receivables a/c 658.32 Drawings 659 Motor Expenses 659 Discount allowed 84 Sales ledger control / receivables 84
Question 8
Errors and the Suspense Account
Question 9
Errors and the Suspense Account
Question 10
Destination of the Trial Balance