TheoryFree AAT Level 2 Accounting Prep Practice Test PDF
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Free AAT Level 2 Accounting Prep PDF with 30 questions
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The PDF includes 30 AAT Level 2 Accounting Prep questions with answers and explanations.
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Q1A business incurred £2,000 for machine repairs but debited the Machinery at Cost account. Depreciation is charged at 20% per annum (straight-line). What is the impact on the Net Profit?
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✓ Correct answer: Net profit overstated by £1,600
Capitalizing the repair overstates profit by £2,000. The resulting depreciation charge ($$2,000 \times 20\%$$) reduces profit by £400. The net effect is an overstatement of $$2,000 - 400 = 1,600$$.
Q2The Receivables Control Account balance is £15,500. Calculate the adjusted control account balance using the discovered errors listed below. Error Description Amount Sales Day Book overcast £100 Sales return omitted from Control Account £50 Customer balance omitted from List of Balances £150
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✓ Correct answer: £15,350
Start with £15,500. Deduct £100 for the Sales Day Book overcast and £50 for the omitted return. The list omission does not affect the control account. Adjusted balance: $$15,500 - 100 - 50 = 15,350$$.
Q3Calculate the closing balance of the VAT Control Account (Standard Rate 20%) using the figures below. The opening balance was zero. Transaction Type Net Amount Sales £50,000 Purchases £22,000 Bad Debt Relief (VAT portion) £200
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✓ Correct answer: £5,400 Credit
Output VAT on sales = $$$50{,}000 \times 20\% = 10{,}000$$$ (Credit). Input VAT on purchases = $$\(22,000 \times 20\% = 4,400\)$$ (Debit). Bad debt relief is a reclaim of output VAT previously paid, treated as Input VAT = 200 (Debit). Balance: $$\(10{,}000\ (\mathrm{Cr}) - 4{,}400\ (\mathrm{Dr}) - 200\ (\mathrm{Dr}) = 5{,}400\)$$ Credit.
Q4The initial trial balance total is £250,000. What is the redrafted trial balance total after processing the adjustments below? Adjustment Required Amount Accrue for electricity £500 Prepay for insurance £200
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✓ Correct answer: £250,500
Accruals increase expenses (Dr) and liabilities (Cr), adding £500 to both trial balance column totals. Prepayments increase assets (Dr) and decrease expenses (Cr Expense -> Dr decrease, effectively shifting Dr balance from Expense to Asset). Prepayments do not change the total Dr or Cr value, only the classification. New total: $$$250{,}000 + 500 = 250{,}500$$$.
Q5A suspense account shows a debit balance of £150. Which single error could explain this balance?
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✓ Correct answer: Sales account overcast by £150
A suspense debit implies trial balance credits exceed debits. Overcasting Sales (a credit account) creates excess credits. This mismatch requires a balancing debit entry in the suspense account.
Q6A contra entry of £400 is agreed to offset a balance in the purchases ledger against the sales ledger. Select the correct journal entry.
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✓ Correct answer: Dr PLCA £400, Cr SLCA £400
Contras reduce both balances. PLCA is a liability (debit to decrease). SLCA is an asset (credit to decrease).
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