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
What is the main purpose of a bank reconciliation?
Answer: To verify that the cash book and bank statement can be reconciled, identifying timing differences and errors
A bank reconciliation compares the cash book balance with the bank statement balance to identify timing differences (unpresented cheques, outstanding lodgements) and errors, ensuring the accuracy of the bank balance in the accounts.
An unpresented cheque is one that has been:
Answer: Written by the business but not yet cleared through the bank
An unpresented cheque has been written and sent by the business (so it appears in the cash book) but has not yet been presented to and cleared by the bank (so it does not yet appear on the bank statement).
A trial balance is prepared to:
Answer: Check that the total debits equal total credits as an initial check on the accuracy of the double entry
The trial balance lists all ledger account balances to verify that total debits equal total credits. While it does not guarantee all entries are correct (some errors are not detected), it is a fundamental accuracy check.
The sales ledger control account has a balance of £15,600. The total of the individual customer accounts in the sales ledger is £15,200. Which of the following could explain the difference?
Answer: A sales invoice for £400 was not posted to the customer's individual account
If a sales invoice of £400 was posted to the control account (increasing it) but missed from the individual customer account in the sales ledger, the control account would be £400 higher than the list of balances. The control account shows £15,600 and the ledger shows £15,200 — a £400 difference.
Which of the following errors would NOT be detected by the trial balance?
Answer: A transaction completely omitted from the books
An error of complete omission means the transaction was not recorded at all — neither the debit nor the credit was made. Since both sides are missing equally, the trial balance still balances and the error is not detected.
A suspense account is used to:
Answer: Temporarily hold the difference when the trial balance does not balance, until the errors are found and corrected
When the trial balance does not balance, a suspense account is opened for the difference. This allows the financial statements to be prepared while errors are investigated. Once errors are found and corrected, the suspense account balance should be cleared to zero.