ITBK Pocket Notes 2024-25

AAT Introduction to Bookkeeping Pocket Notes

  • Supports study for the following AAT qualifications:

    • AAT Level 2 Certificate in Accounting

    • AAT Level 2 Certificate in Bookkeeping

    • AAT Certificate in Accounting at SCQF Level 6

Publication Information

  • Published by: Kaplan Publishing UK

  • ISBN: 978-1-83996-901-0

  • © Kaplan Financial Limited, 2024

  • All rights reserved.

Table of Contents

  • A guide to the assessment

  • Chapter 1: Business documents and books of prime entry

  • Chapter 2: Double entry bookkeeping – an introduction

  • Chapter 3: Ledger accounting

  • Chapter 4: Accounting for sales and purchases

  • Chapter 5: Control accounts and subsidiary ledgers

  • Chapter 6: Payments and receipts

  • Index

Preface

  • Pocket Notes contain key exam information in a visual format, aimed to facilitate revision.

  • Produced by experienced lecturers focusing on quality and accuracy.

  • Errors can be reported to Kaplan for future corrections.

A Guide to the Assessment

  • Introduction to Bookkeeping (ITBK) is a financial accounting unit of the Certificate in Accounting.

  • Examination Format: Computer-Based Assessment (CBA) with 11 tasks to be completed in 1½ hours.

  • Learning Outcomes:

    • Set up bookkeeping systems (20%)

    • Process customer and supplier transactions (20% each)

    • Process receipts and payments (20%)

    • Ledger account transactions (20%)

  • Pass Mark: 70% or more, contributing 25% of the total for the Certificate in Accounting.

Chapter 1: Business Documents and Books of Prime Entry

  • Business Documents for Credit Transactions:

    • Sales order, sales invoice, quotation, delivery note, goods received note, purchase order, credit note.

  • Books of Prime Entry include:

    • Sales Day Book

    • Purchases Day Book

    • Cash Receipts Book

    • Cash Payments Book

    • Petty Cash Book

Types of Discounts

  • Trade Discount: Percentage off the list price shown on the invoice.

  • Bulk Discount: Reduction based on quantity purchased.

  • Prompt Payment Discount: Offered for early payment of invoices.

Accounting for Sales and Purchases

  • VAT and Discounts:

    • Trade discounts deducted before calculating VAT.

    • Prompt payment discounts do not impact VAT calculation until used.

  • Double Entry for Sales and Purchases:

    • Sales:

      • Debit Receivables (gross)

      • Credit VAT, Sales (net)

    • Purchases:

      • Debit Purchases (net), VAT

      • Credit Payables (gross)

Control Accounts and Subsidiary Ledgers

  • Introduction to Control Accounts: Total accounts for receivables and payables.

  • Posting Sales Day Book: Results in changes across the general ledger (double entry).

Payments and Receipts

  • Aged Debt Analysis: Analyzes outstanding amounts, helps in identifying slow-paying customers

  • Cash Receipts Book: Records incoming payments, including detailed VAT and income from receivables.

  • Cash Payments Book: Records all outgoing payments.

  • Petty Cash System: Manages small expenses; requires security, tracking via petty cash vouchers.