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Spreadsheets for Accounting Flashcards

6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. The Excel NETWORKDAYS function calculates:

    Answer: The number of working days (excluding weekends and optionally holidays) between two dates

    NETWORKDAYS(start_date, end_date, [holidays]) returns the number of working days between two dates, automatically excluding Saturdays, Sundays, and any specified bank holidays.

  2. An accountant is asked to produce a cash flow forecast in Excel. To ensure the forecast updates automatically when assumptions change, the accountant should:

    Answer: Link all forecast outputs to clearly labelled assumption input cells using formulas

    Linking outputs to labelled input cells (assumptions) means changing an assumption (e.g., interest rate, growth rate) automatically recalculates all affected forecasts — this is the key advantage of using a well-structured Excel model.

  3. Which Excel function returns the position (row number) of a value within a range?

    Answer: MATCH

    MATCH(lookup_value, lookup_array, match_type) returns the relative position of a value within a range (e.g., 3 if it is the third item). Often used in combination with INDEX to create a flexible two-way lookup.

  4. When sharing an Excel workbook containing confidential client data, the most secure method is:

    Answer: Password-protecting the workbook and sending via an encrypted, secure channel

    Protecting confidential data requires both file-level security (password protection) and secure transmission (encrypted email or secure file transfer). Unprotected files sent via unsecured channels risk data breach.

  5. The Excel SUMPRODUCT function is useful for accounting because it can:

    Answer: Multiply corresponding values in two or more ranges and sum the results — useful for weighted averages and invoice totals

    SUMPRODUCT multiplies corresponding values in two or more arrays and sums the results — for example, multiplying quantities by unit prices across a range to calculate total revenue without a helper column.

  6. In an Excel profit and loss template, circular references would occur if:

    Answer: A formula directly or indirectly refers back to its own cell, creating a calculation loop

    A circular reference occurs when a formula's calculation chain leads back to the same cell — for example, if the total cell is inadvertently included in the range being summed. Excel warns about these as they prevent normal calculation.