Will Boardman: Every AAT Student needs to know for ITBK exams

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Will Boardman: Every AAT Student needs to know for ITBK exams

The AAT level 2 Introduction to Bookkeeping exam will often be the first exam that you as a student will sit on your AAT journey.

And although far from one of the hardest AAT exams it can be difficult to shake those exam nerves especially when going into something for the first time. Fear not though because I’m here to break down what you can expect to see and hopefully give you that extra confidence that you need when sitting this exam.

For the Introduction to Bookkeeping exam, you’ll have 1 hour and 30 minutes to complete 11 tasks. There are 100 marks on offer and for all AAT exams, you’re required to achieve 70% or above meaning that you’ll need 70 marks or above to achieve that all-important pass.

The Introduction to Bookkeeping exam currently sits at an 84.2% pass rate within the UK so as you can see it is very positive.

Task Breakdown

Having a good idea of what could come up on each task can really help to settle your nerves. Let’s take a look at what you can expect to see on each task:

Task 1 This task covers the purpose of documents used in an accounting environment and the process of coding and recording transactions in daybooks and ledgers. I would expect these tasks to be predominantly multiple-choice or drop-down-style questions. Being able to identify appropriate documents to use in different situations and knowing how to code those documents will be key to this task.

Task 2 – This task covers the principles of double-entry bookkeeping. You should able to categorise transactions into their respective categories such as assets and liabilities. Using a system such as PEARLS or DEADCLIC can prove really useful here. Also being familiar with the accounting equation and how posting transactions will have an effect on each element will be key.

Task 3 – This task covers calculating invoice and credit note amounts and making entries in relevant daybooks. In this task, you need to be able to calculate trade, bulk and prompt payment discounts and know their effect on the invoice values.

Task 4 – This task covers checking receipts from customers for accuracy and allocating amounts received to individual transactions. You should be able to reconcile financial documents, having attention to detail is going to be key to getting through this task.

Task 5 – This task covers checking supplier invoices and credit notes for accuracy and making entries in relevant daybooks. Similar to task 4 you need to be able to reconcile between financial documents but this time from a supplier perspective. Again being able to record transactions in the daybooks relating to purchases will be essential to achieving the required competency on this task.

Task 6 – This task covers preparing payments to suppliers using a variety of source information and identifying discrepancies in amounts that suppliers request. Within this task, you need to be able to identify payments made to suppliers and those which are still outstanding. Being able to identify where any discounts may have been taken such as prompt payment discounts will also be key to this task.

Task 7 – This task covers entering receipts and payments into a cash book and calculating totals and balances. For this task, you’ll need to be comfortable with how to complete a cashbook. Although it can be asked in several different ways as long as you’re competent in filling out a cashbook then you should be able to answer this question comfortably.

Task 8 – This task covers entering receipts and payments into a petty cash book and calculating totals and balances. Similar to task 7 but this time using a petty cash book, as long as you’re comfortable with how to fill out the petty cash then the question shouldn’t cause any issues.

Task 9 – This task covers processing recurring receipts and payments. Attention to detail will be paramount to achieving competency in this task, although it should be relatively straight forward you need to be selecting the correct information when setting up the recurring payments.

Task 10 – This task covers transferring data from books of prime entry to ledger accounts. Having a solid knowledge and being able to apply your double entry is required throughout this task. Get to know your debits and credits like the back of your hand and you should be able to fly through this question!

Task 11 – This task covers the totalling and balancing of ledger accounts. Get comfortable with your balance carried down and brought down and this last task should be a breeze.

Examiners Report

The examiner’s report is available to all students and to access this you can head over to the AAT lifelong learning portal and go to the Introduction to Bookkeeping unit where you can find the PDF to download.

The report shows the performance on the exam by task and gives keys strengths and weaknesses for each task.

Two points that jump out on this exam are firstly, on task 2 not being able to identify the dual effect of accounting transactions. This is often down to still not being comfortable with double-entry bookkeeping so do make sure you’re understanding transactions rather than memorising them.

The second point is failing to identify the correct side of the account on which the balance carried down should go. Remember that the balance c/d should always go on the lower side of the account to balance the account off at the end of the period.

Final Thoughts

Double-entry bookkeeping can be one of the most confusing things when starting your career in accountancy. If you’re still not 100% that’s ok because it does take time to fully understand but give it time, use the resources available to you, speak to your tutor and I guarantee you it will start to click! As I’ve said at the beginning of this article, this will often be the first exam on your AAT journey, take your time to prepare, complete your mock exams and utilise the resources available to you and you’ll have no problems getting through it!

If you need further help please don’t hesitate to get in touch with your tutor.

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Will Boardman

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