Will Boardman: What every AAT Student needs to know about POBC exams
The AAT level 2 Principles of Bookkeeping Controls exam should always follow on from the Introduction to Bookkeeping (ITBK) exam. Now this exam is known to be a little trickier than ITBK and will certainly take your understanding of double-entry bookkeeping to new heights!
For the Principles of Bookkeeping Controls exam, you’ll have 1 hour and 30 minutes to complete 8 tasks. There are 80 marks on offer and as usual, you’re required to achieve 70% or above meaning you’ll need a minimum of 56 marks to achieve that all-important pass.
The Principles of Bookkeeping Controls exam currently sits at a UK average of 68% pass rate.
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 – is worth 10 marks and is all about preparing control accounts. Here I’d expect to see questions on either the receivables ledger control, payables ledger control or VAT control. As long as you’re comfortable with being able to populate the control accounts you should be picking up the vast majority of marks on this exam.
Task 2 – is worth 10 marks and is still on the same theme of control accounts but this time rather than preparing control accounts this time it’s about reconciling control accounts. A large part of this task will be about comparing the control account to the respective ledger, such as the receivables control account to the receivables ledger and being able to identify what could have caused the difference between the two.
Task 3 – is worth 8 marks and is on payment methods and reconciling the cashbook to the bank statement. Here I’d expect you to have to identify appropriate methods of payment in relation to various transactions. I’d also make sure you’re comfortable with identifying outstanding lodgements and unpresented cheques and get to know when an adjustment needs to be made to the cashbook or whether you just need to wait for it to appear on the bank statement.
Task 4 – is worth 12 marks and is specifically on bank reconciliations, here I’d expect you to have to complete a bank reconciliation, this should be second nature by the time you get to the exam. Follow the process as you would have done previously and this shouldn’t cause any problems.
Task 5 – is worth 10 marks and is all about journals here’s where your double-entry knowledge will really come into play, now there is a wide range of topics covered under this question but all of them will be linked to journals. Make sure you’re confident with double-entry bookkeeping, especially the wages journals.
Task 6 – is worth 10 marks and is on journals again but this time how they’re used to correct errors. Again having an understanding of double-entry bookkeeping will be paramount, making sure you’re not just remembering the sides that transactions go on but actually learning why. Knowing the behaviour of accounts and how they increase and decrease in value will provide you with far greater long-term success.
Task 7 – is worth 10 marks and is on extracting a trial balance. Now for this task, you’ll be completing either a full or partial trial balance. Again this task you’d expect to breeze through as long as you’ve put the practice in because as long as you can balance off accounts comfortably and know which sides of the trial balance accounts go on, you’re good to go!
Task 8 – is worth 10 marks and is also on the trial balance, but this time you’ll need to amend an existing trial balance for adjustments made to certain accounts.
According to the examiner’s report, the lower-performing tasks are 2 and 6. There are a couple of points in particular on those two tasks which are easy mistakes to make but could cause students to lose essential marks. The first is on task 2 when you’re required to add up the balances in either the payables ledger or receivables ledger, it’s not uncommon for them to include a negative balance amongst the list of either suppliers or customers, it’s really common that students miss this and just add all the balances together. Be very wary that if there’s a negative balance this needs to be taken off the other customer or supplier balances otherwise your total figure will be incorrect.
The other point that I’d like to highlight is on task 6 where it states that students who are failing to recognise that amounts to correct the reversal of entries should remove the incorrect entry and record the correct entry. The reason this confuses students so much is because it’s the same journal twice, it might look strange but it is correct. The first entry removes the initial reversal of entries and the second enters the transaction as it should have been in the first place.
Final Thoughts
The Principles of Bookkeeping Controls exam is a step up from the Introduction to Bookkeeping exam. This is, in general, due to the increased understanding needed in double-entry bookkeeping, tested heavily within the journals and trial balance section of the exam. Master this and you’ll walk through this exam with no problem at all, but if you’re still too reliant on memorising entries then it may prove very tricky!
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