Exam (elaborations)
AAT level 2 Bookkeeping transactions Questions and Answers
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AAT level 2 Bookkeeping transactions
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AAT level 2 Bookkeeping transactionsasset - answer Something owned by the business e.g property, vehicles, computers,
stock of goods, cash at bank, amounts owed to us by customers (trade
receivables/debtors)
trade receivables/ debtors - answer the value of payments to be received from
customers who have bought goods on credit
liability - answer An amount owed by the business to someone else e.g. bank loans,
overdrafts, amounts owed to suppliers of good (trade payables/ creditors) and unpaid
tax.
Trade payables / creditors - answer Amount owed to suppliers of goods
Expense - answer Costs incurred by the business, such as purchase of goods, salaries,
rent and electricity bills.
dual effect - answer the principle stating that all business transactions are recorded as
having at least two effects on the basic accounting elements (assets, liabilities, and
owner's equity)
VAT - answer Indirect tax charged on goods and services. Usually 20%. ALWAYS
round down to the nearest 1p.
NET value - answerTransaction value before tax (after discounts)
GROSS value - answerAmount after vat is added
expenditure - answeran expense; the amount needed to be paid out
capital expenditures - answerExpenditures on equipment the business will use for many
years.
Revenue expenditure - answerThe payment of an operating expense necessary to earn
revenue e.g paying salaries
Capital income - answerIncome generated by selling something that was capital
expenditure
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