1. AAT Level 3 Accounts Preparation

2. 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. Accounting Equation Assets = Capital + Liabilities

5. Accounting Equation Assets = Capital + Liabilities 1. Purchase of a Delivery Van for £10,000 funded by 20% personal capital invested and a bank loan for the balance

6. Accounting Equation Assets =Capital + Liabilities Van=Owner + Loan

7. Accounting Equation Assets = Capital + Liabilities Van= Owner + Loan £10,000= £2000 + £8000

8. A production machine bought for £10,000 on credit Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 Continuing from previous slide

9. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=+ Van10,000 Machine10,000 2. A production machine bought for £10,000 on credit

10. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+ 2. A production machine bought for £10,000 on credit

11. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+18,000 2. A production machine bought for £10,000 on credit

12. 3. Stock is bought for £1,000 on credit Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+18,000

13. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+18,000 3 21,000=+ 3. Stock is bought for £1,000 on credit

14. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+18,000 3 21,000=2,000+ 3. Stock is bought for £1,000 on credit

15. Assets=Capital+Liabilities 1 10,000=2,000+8,000 2 20,000=2,000+18,000 3 21,000=2,000+19,000 3. Stock is bought for £1,000 on credit

16. Accountng Equation Question 1 State the ‘accounting equation’ and explain the meaning of each of the terms used in the equation.

17. The Ledger Accounts Question 2 – Vera Entering transactions into the ledgers Balancing off the accounts (You will need to draw 10 ‘T’ accounts)

18. Calculating VAT Question 3 & 4

19. Complete Question 5 Post to the ledgers Balance off accounts Prepare a Trial Balance

20. The Trial Balance & the Journal Dealing with Errors

21. Errors! Which errors would affect the trial balance?

22. Error of Commission 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

23. Omission?

24. 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

25. 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.

26. Reversal?

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

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

29. Compensating Error The errors cancel each other out

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

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

33. The Journal - Layout DateRefDetails Dr £ Cr £

34. Question 6 Kelly 1

35. Question 7 Now your turn

36. Question 8 Errors and the Suspense Account

37. Question 9 Errors and the Suspense Account