Home For AAT student members AQ 2013 AAT Level 2 (Level 5 in Scotland)

Hallo and can you help me please?

annefreemanannefreeman Settling In NicelyRegistered Posts: 21
Hi all,

Many thanks for the really informative threads and answers on here. You guys rock. I'm actually studying Level 3 AAT, was put straight in at this level (at my own request) as I'd had experience of various finances over the year. I'm getting to grips with it all quite well, and am covering some of the basics from the foundation year in with my level 3 (basically I get a double whammy of college work to do from home as well at attending a day a week).

I've managed to get myself confused this afternoon and hope that somebody can unravel my confusion please. It's taken me a little while to get to grips with credits and debits and what goes under dr and what goes under cr etc and I've worked with the dead and clic methods (which are invaluable to me). I've been doing a balance sheet this afternoon and I wanted to put the vehicle, office and fixtures assets of the (example) company under the dr column as they're an asset. But going by previous examples and work I've done, they should be under the cr column and I can't for the life of me remember why. I've started confusing myself now by thinking well they're an asset, so they must go under the dr column, but they don't.

Can anybody please unravel my mind and explain why I've managed to overcomplicate it for myself?

Thanks in advance for any help you can offer.

Comments

  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    Those accounts are assets and therefore debit balances.

    Are you getting confused with the layout of the balance sheet (the columns aren't debit and credit) the left hand column is the detail of the figures in the right i.e. a breakdown of debtors and creditors which makes up the net current assets/liabilities figure.
  • annefreemanannefreeman Settling In Nicely Registered Posts: 21
    aha................that's where I've gone wrong. For some reason (despite having done balance sheets since early September and cramming up on the foundation level stuff), I've still today assumed the balance sheet has debit and credit columns and it doesn't. You've just trigged a bit of my brain to remind me that the left hand column is really a breakdown of the right hand column. Thank you so so much. You're a star.
  • Brent.UBrent.U New Member Registered Posts: 11
    I've been using Deal/Clip.
    I found it better than dead clic. Of course we all remember things differently so it may not be for everyone.
    D ebit
    E xpense
    A sset
    L oss

    C redit
    L iabilities
    I ncome
    P rofit

    Good luck.
  • LaureenLaureen Just Joined Registered Posts: 4
    Confused !!

    Oh now youve really confused me, I understand that assets are debits, but the balance sheet thing has worried me, Is there something I am missing, Duhhhh ! Feeling very thick at the moment. We had a mock test today and it completely threw me !
  • welshwizardwelshwizard Trusted Regular South WalesRegistered Posts: 465
    Lauren

    We have 4 basic types of account Assets (things we can turn into cash), Expenses (what we pay out) Income (where we get our money from during the year) Liabilities (things we are liable to pay others at some point in the future). All accounts, be it sales, machinery, electricity and gas or laons can be categorised as one of those account types.

    The only things that should appear in a Profit & Loss account are Expenses and Income - after all
    Profit = Income - Expenses
    doesn't it?

    A balance sheet has the other two types of accounts Assets and Liabilities (include Capital as a Liability). This goes right back to basics in the Accounting Equation:
    Assets - Liablilities = Capital
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