1. AAT Level 3
Accounts Preparation

2. Accounts Preparation - Summary
AAT Level 3
Accounts Preparation - Summary
ACPR is the first of the two Level 3 financial accounting units. Covering accounting principles and concepts, accounting for non-current assets and advanced bookkeeping, it takes the student from Level 2 foundation knowledge and skills and prepares them for further development in FSTP where
they will be preparing financial statements for sole traders and partnerships.

3. Session 1 - Objectives Learning objectives:
At the end of this sesson you will be able to:
Understand the basic principles of accounting including the accounting equation.
Account for transactions in ledger accounts as part of the general ledger.
Balance off ledger accounts in order to prepare an initial trial balance.

4. Entering transactions into the ledgers Balancing off the accounts
The Ledger Accounts
Question 2 – Vera
Entering transactions into the ledgers
Balancing off the accounts
(You will need to draw 10 ‘T’ accounts!)
Do on the board as a class – and include drafting a Trial Balance
Extension is questions 3 & 4 – do for homework if not finished in class

6. Complete Question 5
Post to the ledgers Balance off accounts Prepare a Trial Balance
Flip charts for T accounts? Each student responsble for their own account?

7. The Trial Balance & the Journal
Dealing with Errors

8. Which errors would affect the trial balance?

9. Error of Commission Example
Correct type of account has been used
BUT
the wrong account in that ledger
Example
A sales invoice for customer A is debited to customer B account in the Sales Ledger

10. Omission?

11. The transactions has been omitted from the accounts completely
Error of Omission
The transactions has been omitted from the accounts completely
Example
A payment for cash purchases has not been entered in the Cash book OR the Purchases account

12. The transactions has been posted to the wrong TYPE of account
Error of Principle
The transactions has been posted to the wrong TYPE of account
Example
A payment for a new computer has been posted to the computer maintenance account rather than the Computer asset account.

13. Reversal?

14. Debits and Credits are the wrong way round
Error of Reversal
Debits and Credits are the wrong way round
Example
A payment for telephone costs has been credited to the Telephone account.

15. Error of Original Entry
Transaction amount is entered incorrectly
Example
A payment for the telephone costs of £750 have been posted as £570

16. The errors cancel each other out
Compensating Error
The errors cancel each other out

17. Six Types of Error Error of Commission Error of Omission
Error of Principle
Compensating Error
Error of Original Entry
Complete Reversal of Entries

18. The Journal Opening Balances Error Correction Bad Debt Write Off
Payroll

20. The Journal - Layout
Date
Ref
Details Dr Cr

21. Question 6 – Kelly 1 Account names Dr £ Cr
Work through as a class – Need 7 T Accounts on the small whiteboard &

22. Question 7
Now your turn
Read through question as a class

23. Question 7 Answer Account names Dr £ Cr Irrecoverable debts 548.60 VAT
VAT
109.72
Receivables a/c
658.32
Drawings
659
Motor Expenses
Discount allowed 84
Sales ledger control / receivables

24. Errors and the Suspense Account
Question 8
Errors and the Suspense Account
Demo this as a class

25. Errors and the Suspense Account
Question 9
Errors and the Suspense Account
Class to do

26. Destination of the Trial Balance
Question 10
Destination of the Trial Balance
Use hand-out blank to write up on the board