Certificate in Bookkeeping

Transcription

1 Certificate in Bookkeeping Standards and guidance Number of units: 8 Total QCF credits: 13 Total GLH: 98 1

2 Basic accounting I standards Title Credit value 2 the learner will: 1. Understand the role of the books of prime entry. Principles of recording and processing financial transactions (17 GLH) the learner can: 1.1 Outline the purpose, content and format of the books of prime entry. 1.2 Outline the purpose and content of a range of business documents to include: petty cash voucher invoice credit note remittance advice 1.3 Identify when authorisation is required. 1.4 Explain how transactions are entered in the books of prime entry: sales and sales returns day books purchase and purchase return day books cash book petty cash book 2. Understand the principles of coding. 3. Understand the double entry bookkeeping system. 4. Understand the various types of discount. 2.1 Describe the need for a coding system for financial transactions within a double entry bookkeeping system. 2.2 Describe the use of coding within a filing system. 3.1 State the accounting equation. 3.2 Explain how the accounting equation relates to a double entry bookkeeping system. 3.3 Outline how the books of prime entry integrate with a double entry bookkeeping system. 3.4 Explain how to process financial transactions from the books of prime entry into the double entry bookkeeping system. 3.5 Define, and distinguish between, capital income and capital expenditure. 3.6 Define, and distinguish between, revenue income and revenue expenditure. 4.1 Explain the difference between settlement, trade and bulk discount. 4.2 Describe the effect that settlement discount has on the sales tax (for example, VAT) charged. 5. Understand the use of the Journal 5.1 Describe the reasons for maintaining a Journal. 5.2 Describe the content and format of the Journal. 5.3 Give examples of the types of transactions that might be entered into the bookkeeping system by using the Journal: bad debts wages/salaries PAYE/NIC liability opening balances 6. Understand control accounts. 6.1 Describe the purpose of control accounts as a checking device to aid management and help identify bookkeeping errors. 6.2 Describe the specific purpose of the following control accounts: sales ledger purchase ledger sales tax account (for example, VAT) 6.3 Explain why it is important to reconcile the Sales and Purchase ledger control accounts regularly. 6.4 Describe the usefulness of an aged debtor analysis for monitoring debtors. 6.5 Explain the need to deal with discrepancies quickly and professionally. 2

3 Title Credit value 2 the learner will: 1. Prepare the financial documents to credit customers. 2. Enter sales invoices and credit notes into the appropriate books of prime entry. 3. Process payments from customers. 4. Process suppliers invoices and credit notes. 5. Enter supplier invoices and credit notes into the appropriate books of prime entry. 6. Prepare payments to suppliers. Preparing and recording financial documentation (16 GLH) the learner can: 1.1 Use difference source documents to prepare sales invoices and credit notes. 1.2 Calculate relevant sales tax (for example, VAT), trade discount and settlement discount. 1.3 Produce statements of account to be sent to credit customers. 2.1 Code sales invoices and credit notes. 2.2 Enter invoices and credit notes into the books of prime entry. 3.1 Check the accuracy and validity of receipts against relevant supporting information. 3.2 Identify and deal with any discrepancies. 4.1 Check the accuracy of supplier invoices and credit notes against purchase orders, goods received and delivery notes. 4.2 Check agreed trade, bulk and settlement discounts where appropriate. 5.1 Code supplier invoices and credit notes. 5.2 Enter supplier invoices and credit notes into the books of prime entry. 6.1 Reconcile supplier statements. 6.2 Calculate the payments due to suppliers from relevant documentation. 6.3 Prepare remittance advices to accompany payments to suppliers. Title Credit value 2 the learner will: 1. Process ledger transactions from the books of prime entry. 2. Prepare ledger balances and an initial trial balance. Processing ledger transactions and extracting a trial balance (17 GLH) the learner can: 1.1 Transfer data correctly from the day books to the ledgers. 1.2 Transfer data correctly from the cashbook to the ledgers. 1.3 Transfer data correctly from the petty cash book to the ledgers. 1.4 Balance ledger accounts clearly showing balances carried down and brought down as appropriate. 1.5 Extract an initial trial balance. 3

4 Basic accounting I guidance Introduction Please read this document in conjunction with the standards for all relevant units. Basic Accounting I is the first of two financial accounting assessments at level 2 that comprise the bookkeeping qualification. Once Basic Accounting I has been achieved two full QCF units will be gained, and part of a third unit will be tested but not gained until Basic Accounting II has been achieved: preparing and recording financial documentation. processing ledger transactions and extracting a trial balance. principles of recording and processing financial transactions (part)*. *The remainder of this QCF unit, and five other units, is tested in Basic Accounting II. The purpose of the learning area This learning area comprises the QCF units stated in the introduction and is designed to introduce the candidate to the double entry bookkeeping system and associated documents and processes. The learner is taken to the stage of extracting an initial trial balance, before any adjustments are made. Learning objectives This learning area will enable candidates to develop an understanding of a manual double entry bookkeeping system. Candidates will develop the necessary knowledge and skills to deal with documents that are sent to and from organisations, and to code and file those documents appropriately. They will need to know how to make entries in sales, purchases and returns day books, and to transfer those totals, and cash book and petty cash book totals, to the sales, purchases and general ledgers. Candidates will be able to produce an initial trial balance. This learning area consists of 12 learning outcomes. 1. Understand the role of the books of prime entry. 2. Understand the principles of coding. 3. Understand the double entry bookkeeping system. 4. Understand the various types of discount. 5. Prepare the financial documents to be sent to credit customers. 6. Enter sales invoices and credit notes into the appropriate books of prime entry. 7. Process payments from customers. 8. Process suppliers invoices and credit notes. 9. Enter supplier invoices and credit notes into the appropriate books of prime entry. 10. Prepare payments to suppliers. 11. Process ledger transactions from the books of prime entry. 12. Prepare ledger balances and an initial trial balance. 4

5 Delivery guidance The topics which will be tested in this learning area are: Books of prime entry Sales and sales returns day books, purchases and purchases returns day books, including VAT, and analytical columns where appropriate. Understanding the purpose, content, format and relationship with the double entry bookkeeping system. PRP 1.1, PRP 3.3 Entering invoices and credit notes into books of prime entry. PRF 2.2, 5.2, PRP 1.1, 1.4 Transferring data from day books to sales, purchases and general ledgers, including control accounts. PLT 1.1, PRP 3.4 Cash book (with bank, VAT and settlement discount columns) Transferring data from the cash book to sales, purchases and general ledgers, including control accounts. Data includes cash sales, cash purchases, discounts received and discounts allowed, payments to suppliers, receipts from customers and other payments and receipts. The learner will not be required to make entries in the cash book in Basic Accounting I. Understanding the use of the cash book as part of the double entry system or a book of prime entry. PLT 1.2, PRP 3.3, 3.4. Petty cash book Transferring receipts and expenses from an analysed petty cash book to the general ledger. The learner will not be required to make entries in the petty cash book in Basic Accounting I. Understanding the use of the petty cash book as part of the double entry system or a book of prime entry. PLT 1.3, PRP 3.3, 3.4. Understanding coding within a double entry bookkeeping system Coding includes account code, product code and general ledger code. Understanding the use of coding within a filing system. Coding includes customer code, supplier code, and document number. PRP 2.1, 2.2. Double entry bookkeeping Understanding the accounting equation and relationship with the double entry bookkeeping system. PRP 3.1, 3.2. Identifying and understanding capital income and capital expenditure. PRP 3.5. Identifying and understanding revenue income and revenue expenditure. PRP 3.6. Making entries in the sales ledger, purchases ledger and general ledger, including entries in control accounts. Entries include cash sales, cash purchases, discounts received and discounts allowed, payments to suppliers, receipts from customers and other payments and receipts. PRP 3.4 PLT 1.1, 1.2, 1.3. Balancing ledger accounts. PLT 2.1. Extracting an initial trial balance. PLT 2.2. Trade, bulk and settlement discounts Understanding the reasons for offering discounts. Understanding the application of discounts. Understanding the effect of each discount on the VAT calculation. PRP 4.1,

6 Document preparation, checking and coding Understanding the purpose and content of petty cash vouchers, invoices, credit notes and remittance advice notes. PRP 1.2. Preparing and coding sales invoices and credit notes, including trade, bulk and settlement discount(s) and VAT, from quotations, price lists, customer orders, delivery notes or discount policy. PRF 1.1, 1.2, 2.1, PRP 1.2, 4.2. Preparing statements of account to be sent to trade receivables. PRF 1.3 (sic). Checking receipts from customers are accurately calculated and valid against supporting information, and identifying and dealing with discrepancies in amounts, including. under/overpayments and taking discounts incorrectly. Supporting information includes the customer remittance advice note, statement of account, sales invoices and the sales ledger. PRF 3.1, 3.2. Checking supplier invoices and credit notes against purchase orders, goods received notes and delivery notes, including discounts. Identifying discrepancies including non-delivery of goods, incorrect goods, incorrect calculations or incorrect discounts. PRF 4.1, 4.2. Coding supplier invoices and credit notes. PRF 5.1. Reconciling supplier statements with the purchase ledger, noting discrepancies. PRF 6.1. Calculating payments due to suppliers from ledgers and supplier statements. PRF 6.2. Preparing remittance advice notes. PRF 6.3. Understanding when authorisation is required. PRP 1.3. Note: this learning area does not require the learner to: make entries into the cash book and petty cash book, only to transfer data from those books reconcile control accounts, only to make entries to those accounts understand or prepare journal entries. These topics will be dealt with in Basic Accounting II. For assessment purposes sales and purchases ledger control accounts will be contained in the general ledger forming part of the double entry. The terms sales and purchases ledger control accounts will be used throughout the assessment for consistency. The individual accounts of trade receivables and trade payables will be in the sales and purchases ledgers and will therefore be regarded as subsidiary accounts. 6

7 Assessment strategy Assessment name Basic Accounting I Duration Competency QCF Level descriptor 2 hours For the purpose of assessment the competency level for AAT assessment is set at 70%. The level descriptor below describes the ability and skills students at this level must successfully demonstrate to achieve competence. Summary Achievement at level 2 reflects the ability to select and use relevant knowledge, ideas, skills and procedures to complete well-defined tasks and address straightforward problems. It includes taking responsibility for completing tasks and procedures and exercising autonomy and judgement subject to overall direction or guidance. Knowledge and understanding Use understanding of facts, procedures and ideas to complete well-defined tasks and address straightforward problems. Interpret relevant information and ideas. Be aware of the types of information that are relevant to the area of study or work. Application and action Complete well-defined, generally routine tasks and address straightforward problems. Select and use relevant skills and procedures. Identify, gather and use relevant information to inform actions. Identify how effective actions have been. Autonomy and accountability Take responsibility for completing tasks and procedures. Exercise autonomy and judgement subject to overall direction or guidance. Basic Accounting I (BAI) is the first of two financial accounting assessments at level 2. We recommend that BAI is studied and taken before BAII. The BAI assessment consists of 16 tasks, 6 in Section 1 and 10 in Section 2. Once BAI is achieved the following units will be awarded: preparing and recording financial documentation processing ledger transactions and extracting a trial balance. The following unit is assessed in both BAI and BAII and will only be awarded once both BAI and BAII have been achieved. Principles of recording and processing financial transactions. The BAI learning area is designed to introduce the candidate to the double entry bookkeeping system and associated documents and processes. The learner is taken to the stage of extracting an initial trial balance, before any adjustments are made. Learners will normally be assessed by computer-based assessment and will be required to demonstrate competence in both sections of the assessment. 7

8 Basic accounting II standards Title Credit value 2 the learner will: 1. Maintain a three column analysed cashbook. 2. Reconcile a bank statement with the cashbook Maintaining and reconciling the cashbook (12 GLH) the learner can: 1.1 Enter receipts and payments details from relevant primary records into the three column analysed cashbook. 1.2 Enter settlement discounts to relevant customer and supplier accounts. 1.3 Enter sales tax (for example, VAT) where applicable. 1.4 Total, balance and cross cast the cashbook. 1.5 Identify and deal with discrepancies. 2.1 Check individual items on the bank statement accurately against the cashbook to identify differences. 2.2 Update the cashbook from the bank statement, direct debit and standing order schedules. 2.3 Prepare a bank reconciliation statement. Title Credit value 1 the learner will: 1. Prepare sales and purchase ledger and tax control accounts. 2. Reconcile sales and purchase ledger and tax control accounts. Maintaining Control Accounts (8 GLH) the learner can: 1.1 Prepare a sales ledger control account from information extracted from the books of prime entry. 1.2 Balance the sales ledger control account. 1.3 Prepare a purchase ledger control account from information extracted from the books of prime entry. 1.4 Balance the purchase ledger control account. 1.5 Prepare a tax control account from information extracted from the books of prime entry. 2.1 Reconcile the balance on the sales ledger control account with a list of debtors. 2.2 Reconcile the balance on the purchase ledger control account with a list of creditors. 2.3 Reconcile the balances on the tax control account. 8

9 Title Credit value 2 the learner will: 1. Open a new set of double entry bookkeeping records using the Journal. 2. Use the Journal to correct errors disclosed and not disclosed by the trial balance. 3. Create and clear a suspense account using the Journal. 4. Use the Journal to record other transactions. Maintaining the Journal (15 GLH) the learner can: 1.1 Prepare the journal entries to open a double entry set of bookkeeping records for a new and existing business. 1.2 Record the journal entries in the ledger accounts. 2.1 Identify and record journal entries in the general ledger to correct errors not disclosed by the trial balance. 2.2 Identify the types of errors in a bookkeeping system that are not disclosed by extracting a trial balance. 2.3 Identify the types of errors in a bookkeeping system that are disclosed by extracting a trial balance: Addition errors in individual ledger accounts Single entry transactions Recording two debits or two credits for a transaction Errors transferring balances from the general ledger to the trial balance Omission of a general ledger account 2.4 Re-draft a trial balance following the correction of errors. 3.1 Balance a trial balance by recording the difference in a suspense account. 3.2 Prepare Journal entries to correct bookkeeping errors and clear the balance on a suspense account. 3.3 Record the journal entries in the general ledger to clear the suspense account. 3.4 Re-draft a trial balance following the correction of errors and the elimination of a suspense account. 4.1 Prepare journal entries to write off a bad debt. 4.2 Enter the journal entries in the general ledger to write off a bad debt including the sales tax (for example, VAT) where appropriate. 4.3 Prepare and enter the journal entries in the general ledger to process payroll transactions. 9

10 Title Level 1 Credit value 1 the learner will: 1. Understand the banking process. 2. Understand document retention and storage requirements. Banking procedures (6 GLH) the learner can: 1.1 Identify the main services offered by banks and building societies. 1.2 Describe how the banking clearing system works. 1.3 Identify different forms of payment which include: cash cheques credit cards debit cards direct payments 1.4 Identify the information required to ensure the following payments are valid: cash cheque credit card debit card 1.5 Describe the processing and security procedures relating to the different forms of payments. 2.1 Explain why it is important for an organisation to have a formal document retention policy. 2.2 Identify the different types of documents that may be stored. Title Level 1 Credit value 1 learners will: 1. Complete a petty cash voucher. 2. Maintain an analysed petty cash book. 3. Maintain the petty cash balance Maintaining petty cash records (7 GLH) learners can: 1.1 Prepare petty cash vouchers. 1.2 Calculate the purchase tax (for example, VAT) where the expense includes it. 2.1 List the petty cash vouchers into an analysed petty cash book ensuring that the expenses are entered and analysed. 2.2 Account for any tax paid for example, VAT. 2.3 Total and cross cast the petty cash book 3.1 Balance off the petty cash book using the imprest system. 3.2 Reconcile the petty cash book with cash in hand. 3.3 Prepare a petty cash reimbursement request or equivalent. 3.4 Show the reimbursement of the petty cash expenditure in the petty cash book. 10

11 Basic Accounting II - guidance Introduction Please read this section in conjunction with the standards for all relevant units. Basic Accounting II is the second of two financial accounting assessments at level 2 that comprise the bookkeeping qualification. Once Basic Accounting II has been achieved five full QCF units will be gained, and the final part of another unit: Maintaining petty cash records Maintaining and reconciling the cash book Maintaining the journal Maintaining control accounts Banking procedures *Principles of recording and processing financial transactions (part) *The first part of this QCF unit is tested in Basic Accounting I. The purpose of the learning area This learning area comprises the QCF units stated in the introduction and is designed to build on Basic Accounting I which focuses on the double entry bookkeeping system up to an initial trial balance. Basic Accounting II looks in more detail at the cash book and petty cash book and introduces the reconciliation of control accounts. The learner will also be required to make adjustments through the journal and re-draft the initial trial balance once adjustments have been made. Learning objectives This learning area will enable candidates to further develop their understanding of the double entry bookkeeping system. Candidates will develop the necessary knowledge and skills to use the journal to record a variety of transactions. They will need to know how to process transactions through the ledgers, cash book and petty cash book, and carry out reconciliation procedures. Candidates will be able to re-draft the initial trial balance, following adjustments. The learning objectives are closely linked to the delivery guidance shown below. The learner will be able to answer questions and perform tasks within the range of activities shown. This learning area consists of 15 learning outcomes: 1. Complete a petty cash voucher. 2. Maintain an analysed petty cash book. 3. Maintain the petty cash balance. 4. Maintain a three column analysed cash book. 5. Reconcile a bank statement with the cash book. 6. Understand the use of the journal. 7. Open a new set of double entry bookkeeping records using the journal. 8. Use the journal to correct errors disclosed and not disclosed by the trial balance. 9. Create and clear a suspense account using the journal. 10. Use the journal to record other transactions. 11. Understand control accounts. 12. Prepare sales and purchase ledger and tax control accounts. 13. Reconcile sales and purchase ledger and tax control accounts. 14. Understand the banking process. 11

12 15. Understand document retention and storage requirements. Delivery guidance The topics which will be tested in this learning area are: preparing petty cash vouchers, including calculating the VAT content of VAT inclusive amounts where appropriate. MPC 1.1, 1.2 preparing petty cash reimbursement documentation to restore the imprest amount. MPC 3.3 making entries in an analysed petty cash book to record expenses, with or without VAT. MPC 2.1, 2.2, PRP 1.4 making entries in a petty cash book to record the reimbursement of cash to restore the imprest amount. MPC 3.4 totalling and balancing the petty cash book. MPC 2.3, 3.1 reconciling the petty cash book with the amount of cash in the petty cash box. MPC 3.2 understanding the use of the petty cash book as part of the double entry system or a book of prime entry making entries in a three column analysed cash book to record receipts and payments, using relevant primary records: - in this instance the three columns are bank, cash and settlement discount, with VAT being part of the analysis columns - primary records may include paying in slip stubs, cheque book stubs, automated payment records, remittance advice notes, receipts, bank statement, sales invoices and purchase invoices - entries include cash sales, cash purchases, discounts received and discounts allowed, payments to suppliers, receipts from customers, dishonoured cheques and other payments and receipts. MRCB 1.1, 1.3, PRP 1.4 making entries in customer and supplier accounts to record settlement discounts. MRCB 1.2 totalling and balancing the cash book. MRCB 1.4 updating the cash book using the bank statement and direct debit and standing order schedules. MRCB 1.5, 2.1, 2.2 reconciling the bank statement with the cash book and preparing a bank reconciliation statement. MRCB 1.5, 2.1, 2.3 understanding the use of the cash book as part of the double entry system or a book of prime entry. understanding the purpose and use of the journal including correction of errors that are, and are not, disclosed by the trial balance. MJ 2.1, 2.2, 2.3, PRP 5.1 preparing journal entries and subsequently posting them to the general ledger: PRP 5.2, 5.3, MJ 1.1, 1.2, 3.2, 3.3, 4.1, 4.2, opening entries - irrecoverable debts written off, including VAT - payroll transactions including gross pay, income tax, employer s and employees NIC, employer s and employees pension and voluntary deductions - opening and clearing a suspense account. identifying errors and types of errors, preparing journal entries, and subsequently posting them to the general ledger to correct errors not disclosed by the trial balance: errors of omission, commission, principle, original entry, reversal of entries, or compensating error. MJ 2.1, 2.2 identifying errors and types of errors, preparing journal entries and subsequently posting them to the general ledger to correct errors disclosed by the trial balance: calculation errors in ledger accounts, single entry transactions, recording two debits or two credits for a transaction, errors transferring balances to the trial balance or omission of a general ledger account in the trial balance. MJ 2.3 balancing the trial balance using a suspense account. MJ 3.1 redrafting a trial balance following the correction of errors and elimination of the suspense account. MJ 2.4, 3.4 understanding the purpose of control accounts (sales and purchases ledger control accounts and VAT control account), and the importance of regular reconciliation to identify and deal with discrepancies quickly and professionally. PRP 6.1, 6.2, 6.3, 6.5 understanding the use of an aged trade receivables analysis for monitoring debts. PRP

13 preparing, balancing and reconciling control accounts (sales ledger control account, purchases ledger control account, VAT control account). MCA 1.1, 1.2, 1.3, 1.4, 1.5, 2.1, 2.2, 2.3, PRP 6.1, 6.2 understanding the main services offered by banks and building societies, and the bank clearing system. BP 1.1, 1.2 understanding different forms of payment and the checks to be made on each: cash, cheques, credit cards, debit cards, automated payments. BP 1.3, 1.4 understanding the bank processing and security procedures of cash, cheques, dishonoured cheques, credit cards and debit cards. BP 1.5 understanding document retention requirements in relation to banking BP 2.1, Types of documents retained - Importance of document retention policy. Note: this learning area does require the learner to understand the double entry bookkeeping system and be able to perform double entry bookkeeping tasks. For assessment purposes sales and purchases ledger control accounts will be contained in the general ledger forming part of the double entry. The terms sales and purchases ledger control accounts will be used throughout the assessment for consistency. The individual accounts of trade receivables and trade payables will be in the subsidiary ledgers and will therefore be regarded as subsidiary accounts. 13

14 Assessment strategy Assessment name Duration Competency QCF Level Descriptor Basic Accounting II 2 hours For the purpose of assessment the competency level for AAT assessment is set at 70%. The level descriptor below describes the ability and skills students at this level must successfully demonstrate to achieve competence. Summary Achievement at level 2 reflects the ability to select and use relevant knowledge, ideas, skills and procedures to complete well-defined tasks and address straightforward problems. It includes taking responsibility for completing tasks and procedures and exercising autonomy and judgement subject to overall direction or guidance. Knowledge and understanding Use understanding of facts, procedures and ideas to complete well-defined tasks and address straightforward problems. Interpret relevant information and ideas. Be aware of the types of information that are relevant to the area of study or work. Application and action Complete well-defined, generally routine tasks and address straightforward problems. Select and use relevant skills and procedures. Identify, gather and use relevant information to inform actions. Identify how effective actions have been. Autonomy and accountability Take responsibility for completing tasks and procedures. Exercise autonomy and judgement subject to overall direction or guidance. Basic Accounting II (BAII) is the second of two financial accounting assessments at level 2. We recommend that BAI is studied and taken before BAII.The BAII assessment consists of 14 tasks, 6 in Section 1 and 8 in Section 2. Once BAI is achieved the following units will be awarded: Maintaining petty cash records Maintaining and reconciling the cash book Maintaining the journal Maintaining control accounts Banking procedures The following unit is assessed in both BAI and BAII and will only be awarded once both BAI and BAII have been achieved: Principles of recording and processing financial transactions The BAII learning area is designed to build on Basic Accounting I which focuses on the double entry bookkeeping system up to an initial trial balance. Basic Accounting II looks in more detail at the cash book and petty cash book and introduces the reconciliation of control accounts. The learner will also be required to make adjustments through the journal and re-draft the initial trial balance once adjustments have been made. Learners will normally be assessed by computer-based assessment and will be required to demonstrate competence in both sections of the assessment. 14