Using Accounting Software 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 Using Accounting Software flashcards as text
When setting up a new business in accounting software, which of the following must be entered first?
Answer: The chart of accounts and opening balances
Before processing any transactions, the chart of accounts (list of nominal codes) must be set up and opening balances entered. This establishes the framework within which all transactions will be recorded.
A chart of accounts in accounting software is:
Answer: A structured list of all nominal ledger accounts used by the business
The chart of accounts is a comprehensive, structured list of all the nominal (general) ledger accounts used by the business. Each account has a unique code number and name. It organises accounts into categories such as assets, liabilities, income, and expenses.
When entering a customer invoice in accounting software, the software automatically:
Answer: Calculates and posts the double entry including VAT
When a sales invoice is entered, accounting software automatically calculates the VAT (if applicable) and posts the double entry: debiting trade receivables with the gross amount, crediting sales with the net amount, and crediting the VAT account.
When processing a supplier payment in accounting software, you must:
Answer: Allocate the payment against specific outstanding invoices
When recording a payment to a supplier, the payment should be allocated against the specific invoices being paid. This ensures the purchase ledger is accurate and the supplier's outstanding balance is correctly reduced.
A recurring transaction in accounting software is used for:
Answer: Transactions that occur regularly at set intervals, such as monthly rent
Recurring transactions automate the entry of regular, repeated transactions such as monthly rent, standing orders, or subscription payments. The software posts the transaction automatically at the set frequency, saving time and reducing errors.
The purpose of nominal codes in accounting software is to:
Answer: Classify and organise ledger accounts by a numerical coding system
Nominal codes are unique numbers assigned to each ledger account in the chart of accounts. They classify accounts into categories (e.g., 1000-1999 for assets, 4000-4999 for sales) and allow the software to organise and report financial information.