AAT Accounting Assessment
Practice Package
This test bank covers key modules across AAT qualifications, including Bookkeeping
Controls, Costing Principles, Financial Accounting, Tax Processes, Management
Accounting, Ethics for Accountants, and Financial Performance.
Question 1
A business's Sales Ledger Control Account (SLCA) shows a closing balance of £45,200.
Upon reconciliation, the accountant discovers that an irrecoverable debt write-off of
£350 was correctly posted to the bad debt account but omitted entirely from the SLCA.
What is the corrected SLCA balance?
A. £45,550
B. £44,850
C. £44,850
D. £45,200
Correct Answer: C
Explanation: Writing off an irrecoverable debt reduces the overall amount owed by credit
customers, so £350 must be credited to the SLCA (£45,200 - £350 = £44,850). Option A
incorrectly adds the write-off to the balance, which would increase receivables instead of
reducing them.
Question 2
Under the AAT Code of Ethics, which fundamental principle requires an accounting
technician to maintain professional knowledge and skill at the level required to ensure
that a client receives competent professional service?
A. Professional Competence and Due Care
B. Professional Behavior
,C. Integrity
D. Confidentiality
Correct Answer: A
Explanation: Professional Competence and Due Care mandates that members keep their
technical skills up to date and act diligently in accordance with applicable standards.
Option B refers to complying with relevant laws and avoiding actions that discredit the
profession.
Question 3
A company purchases a new delivery van for £24,000 including VAT at 20%. The
business is VAT-registered. How should the capital cost of the van (excluding VAT) and
the input VAT be recorded in the general ledger?
A. Non-current assets: £24,000; VAT account: £0
B. Non-current assets: £20,000; Profit & Loss: £4,000
C. Non-current assets: £24,000; VAT account: £4,000 Debit
D. Non-current assets: £20,000; VAT account: £4,000 Debit
Correct Answer: D
Explanation: Registered businesses reclaim input tax, so the asset account records the
net value (£24,.20 = £20,000) while £4,000 is debited to the VAT control account.
Option A incorrectly capitalizes the gross amount, failing to separate recoverable VAT.
Question 4
In FIFO (First In, First Out) inventory valuation, during a period of steadily rising raw
material costs, which of the following statements is true regarding closing inventory and
cost of goods sold (COGS)?
A. Closing inventory is undervalued; COGS is overstated
B. Closing inventory is valued at recent higher prices; COGS is based on earlier lower
prices
C. Closing inventory is valued at earlier lower prices; COGS is based on recent higher
prices
D. Closing inventory and COGS are both valued at the average cost during the period
, Correct Answer: B
Explanation: FIFO assumes older, cheaper stock is used first in production (reducing
COGS), while remaining stock reflects current higher purchase prices. Option C describes
the effect of LIFO rather than FIFO.
Question 5
Which internal control procedure is specifically designed to ensure the completeness of
sales recorded in the financial records?
A. Matching supplier invoices with goods received notes
B. Sequentially pre-numbering dispatch notes and sales invoices
C. Reconciling bank statements on a monthly basis
D. Requiring dual authorization for all cash disbursements
Correct Answer: B
Explanation: Pre-numbered dispatch documents allow auditors to verify that every item
shipped results in an issued invoice and recorded sale. Option A focuses on trade
payables rather than sales completeness.
Question 6
A sole trader uses the straight-line method of depreciation at 20% per annum. Equipment
purchased on 1 January Year 1 for £15,000 (residual value estimated at £3,000) is sold on
30 June Year 3 for £8,500. What is the profit or loss on disposal?
A. Loss of £500
B. Profit of £500
C. Profit of £1,300
D. Loss of £500
Correct Answer: D
Explanation: Annual depreciation is (£15,000 - £3,000) × 20% = £2,400 per year. By 30
June Year 3 (2.5 years), accumulated depreciation is £6,000, leaving a carrying value of
£9,000 (£15,000 - £6,000). Selling for £8,500 yields a loss of £500 (£8,500 - £9,000).
Option C fails to account for the half-year depreciation in Year 3.
Practice Package
This test bank covers key modules across AAT qualifications, including Bookkeeping
Controls, Costing Principles, Financial Accounting, Tax Processes, Management
Accounting, Ethics for Accountants, and Financial Performance.
Question 1
A business's Sales Ledger Control Account (SLCA) shows a closing balance of £45,200.
Upon reconciliation, the accountant discovers that an irrecoverable debt write-off of
£350 was correctly posted to the bad debt account but omitted entirely from the SLCA.
What is the corrected SLCA balance?
A. £45,550
B. £44,850
C. £44,850
D. £45,200
Correct Answer: C
Explanation: Writing off an irrecoverable debt reduces the overall amount owed by credit
customers, so £350 must be credited to the SLCA (£45,200 - £350 = £44,850). Option A
incorrectly adds the write-off to the balance, which would increase receivables instead of
reducing them.
Question 2
Under the AAT Code of Ethics, which fundamental principle requires an accounting
technician to maintain professional knowledge and skill at the level required to ensure
that a client receives competent professional service?
A. Professional Competence and Due Care
B. Professional Behavior
,C. Integrity
D. Confidentiality
Correct Answer: A
Explanation: Professional Competence and Due Care mandates that members keep their
technical skills up to date and act diligently in accordance with applicable standards.
Option B refers to complying with relevant laws and avoiding actions that discredit the
profession.
Question 3
A company purchases a new delivery van for £24,000 including VAT at 20%. The
business is VAT-registered. How should the capital cost of the van (excluding VAT) and
the input VAT be recorded in the general ledger?
A. Non-current assets: £24,000; VAT account: £0
B. Non-current assets: £20,000; Profit & Loss: £4,000
C. Non-current assets: £24,000; VAT account: £4,000 Debit
D. Non-current assets: £20,000; VAT account: £4,000 Debit
Correct Answer: D
Explanation: Registered businesses reclaim input tax, so the asset account records the
net value (£24,.20 = £20,000) while £4,000 is debited to the VAT control account.
Option A incorrectly capitalizes the gross amount, failing to separate recoverable VAT.
Question 4
In FIFO (First In, First Out) inventory valuation, during a period of steadily rising raw
material costs, which of the following statements is true regarding closing inventory and
cost of goods sold (COGS)?
A. Closing inventory is undervalued; COGS is overstated
B. Closing inventory is valued at recent higher prices; COGS is based on earlier lower
prices
C. Closing inventory is valued at earlier lower prices; COGS is based on recent higher
prices
D. Closing inventory and COGS are both valued at the average cost during the period
, Correct Answer: B
Explanation: FIFO assumes older, cheaper stock is used first in production (reducing
COGS), while remaining stock reflects current higher purchase prices. Option C describes
the effect of LIFO rather than FIFO.
Question 5
Which internal control procedure is specifically designed to ensure the completeness of
sales recorded in the financial records?
A. Matching supplier invoices with goods received notes
B. Sequentially pre-numbering dispatch notes and sales invoices
C. Reconciling bank statements on a monthly basis
D. Requiring dual authorization for all cash disbursements
Correct Answer: B
Explanation: Pre-numbered dispatch documents allow auditors to verify that every item
shipped results in an issued invoice and recorded sale. Option A focuses on trade
payables rather than sales completeness.
Question 6
A sole trader uses the straight-line method of depreciation at 20% per annum. Equipment
purchased on 1 January Year 1 for £15,000 (residual value estimated at £3,000) is sold on
30 June Year 3 for £8,500. What is the profit or loss on disposal?
A. Loss of £500
B. Profit of £500
C. Profit of £1,300
D. Loss of £500
Correct Answer: D
Explanation: Annual depreciation is (£15,000 - £3,000) × 20% = £2,400 per year. By 30
June Year 3 (2.5 years), accumulated depreciation is £6,000, leaving a carrying value of
£9,000 (£15,000 - £6,000). Selling for £8,500 yields a loss of £500 (£8,500 - £9,000).
Option C fails to account for the half-year depreciation in Year 3.
