Bookkeeping Controls 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 Controls flashcards as text
When a business changes from a credit balance to a debit balance on the bank statement, this indicates:
Answer: The business has moved from a positive balance to an overdraft
On a bank statement, a credit balance means the bank holds money for the customer (positive for the business). A debit balance means the customer owes the bank money (overdraft). Moving from credit to debit means the business has gone into overdraft.
The sales day book was overcast by £1,000. The correcting journal entry is:
Answer: Debit Sales £1,000, Credit Suspense £1,000
If the sales day book was overcast (totalled too high), too much was posted to the sales account (overcredited) and the trial balance would not balance. Debit Sales £1,000 to reduce it to the correct amount, and credit Suspense £1,000 to clear the imbalance.
A provision for doubtful debts is:
Answer: An estimate of the amount of trade receivables that may not be collected
A provision for doubtful debts (allowance for doubtful debts) is an estimate of the portion of trade receivables that may not be collected. It reduces the trade receivables figure on the statement of financial position to show a more realistic value.
The petty cash book had an opening imprest of £200. During the week, vouchers totalling £163.50 were recorded, and the cash remaining was £34.00. What action should be taken?
Answer: Restore the imprest with £163.50 and investigate the £2.50 shortage
Expected cash remaining: £200 - £163.50 = £36.50, but only £34 is in the box — a shortage of £2.50. The imprest should be restored with £166 (£200 - £34) to bring it back to £200, and the £2.50 discrepancy must be investigated.
Which of the following is the correct treatment of a dishonoured cheque from a customer in the cash book?
Answer: Credit the cash book (bank column)
When a cheque is dishonoured, the bank reverses the receipt. In the cash book, the bank column is credited to reduce the balance (the money did not actually clear). The trade receivable is reinstated by debiting the customer's account.
A business discovers that a purchase invoice for £250 was debited to the purchases account as £520. The correcting entry is:
Answer: Debit Suspense £270, Credit Purchases £270
Purchases were debited with £520 instead of £250 — overstated by £270. To correct: credit Purchases by £270 to reduce the balance to the correct amount. If this error caused the trial balance to be out of balance, debit Suspense by £270.