AAT Level 2 - Bookkeeping Transactions
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What is the purpose of accounting? - To record and classify the
businesses transactions accurately.
What are the three types of business entities? - Sole Trader
Partnership
Limited Company
What ...
What is the purpose of accounting? - ✔✔To record and classify the
businesses transactions accurately.
What are the three types of business entities? - ✔✔Sole Trader
Partnership
Limited Company
What is a sole trade business? - ✔✔The simplest form of business which is
managed and owned by one person who is responsible for the profits and
debts of the business.
What is a partnership? - ✔✔A business owned by 2+ people where profits
and debts are shared according to a profit sharing agreement.
What is a limited company? - ✔✔A business in which the shareholders
cannot be sued for the debts of the business.
What is revenue? - ✔✔Income from sales
, What are cash and credit sales and purchases? - ✔✔Cash
sales/purchases happen when money exchanges hands at the time of the
transaction whereas credit sales/purchases are invoiced at the time of
transaction but paid some time after.
What are the risks with credit sales? - ✔✔The person may not pay or pay
late
What is the sales process? - ✔✔Quotation is requested
Order is placed
Goods are dispatched
Payment Requested/Invoiced
(Goods may be returned to vendor by credit note)
Payment/Remittance Advice Note
What should be checked for accuracy on financial documents? - ✔✔Are
the names correct?
Goods/Services correct?
Product codes?
Price Per Unit?
Quantities?
Arithmetic?
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