Accounts Prep need help :(

amybu22

Failed the exam once the only thing I seem to be able to do is the ETB and the non current asset register.

The reconciliations always confuse me. I think I'm doing them right but how can I check I'm doing them right?
And the prep for the trial balance where you have to adjust things.

I'm just really confused got my retake on Thursday and still failing the practice xams

ariadne

Any chance you can delay the resit? You really need to 'get' the whole thing to do well as it's too difficult to just memorise bits. I'm sitting this next week for the first time so I'm ready to, hopefully, pass.

My technique has been to go over the L2 basic accounting concepts by trying a few practice exams at L2 and sitting with a book to consult when I got stuck. I found it much easier then to pick up the new concepts. I found the ETB bit really helpful to underpin the double entry knowledge. The income statement items are either income or expenses, so income goes on the Credit side and Expenses goes on the Debit side.

If you need to increase the Expense (D) for an adjustment you add to it, so debit the account. To decrease the amount of expense you credit the account. An accrual increases the expense for the year (a debit) for example, while a prepayment decreases the amount (a credit).

For income it is the opposite sides, credit to increase, debit to decrease. So accrued income increases income (a credit) and a prepayment decreases the income (a debit).

The items for inclusion in the statement of financial position are assets and liabilities - assets are the debits and liabilities are the credits. As well as money in the bank and assets this includes money or services owed to you, so the receivables account is an asset - a debit, as is money owed for accrued income or services for a prepayment or VAT owing to you from purchases if a debit balance is calculated in the VAT account. While liabilities are capital and loans but also money or services you owe, so an accrued expense is money you owe along with payables, along with prepaid income as you owe goods or services, and again if you owe HMRC for VAT on sales.

I also found it helpful to think about transaction as relating to the bank account, so money into the bank = debit and money out = credit. This means the opposite entry is on the opposite side. The purchase and sales control accounts are like holding entries for the bank. The mnemonic DEAD CLIC is helpful (Debits are expenses, assets and drawings. Credits are liabilities, income and capital).

Have you done all the e learning of MyAAT and have you read through the feedback form on there? It goes through the style or subject of question for each section and gives feedback on student performance across a period - the non current asset register and ETB are the best answered usually so you aren't alone in finding the other bits tricky. There is also information on typical mistakes and tips to answer them better. There are videos online and a webinar on MyAAT on accruals and prepayments.

When doing the practice, and real exam, write out the entries so you can visualise, it is sometime just a little too complex to just do it in your head. It is help with the errors especially to write out what happened and what should've happened originally. This shows were the error was made and how much is needed to resolve it.

If you can delay the exam try to get another text book to work through, see if that helps to explain it in a different way. And get a question book, BPP have loads of practice tests in their question books, ebay will be good as this topic won't change much. Practice and writing out how the transactions look really help.

Stop practicing the questions you find easy and concentrate on the tough ones. I wrote a list of the topics/types of questions covered which helped me to focus, although it's the old style it's mostly the same as the new which seems a little condensed so the numbers will be different.

1.1 Non Current Asset Register

1.2 Accounting for Non Current Asset (could be disposal, buying new or part exchange)

2.1 Accounting for Accruals and Prepayments (really understand how accruals and prepayments work and how to calculate the full year cost and which side each entry goes to, income and expenses. Know how to close accounts, which goes to the income statement and SFP. Remember opening entries are the opposite of closing entries - watch the webinar on MyAAT for this)

2.2 Preparing a Trial Balance (this is the adjustments question. So transfer the entries already in the table to C or D, transfer the amounts given in the accounts above without the accrual/prepayment and finally read the info on the accruals and prepayments accounts. If the adjustment has been made on the account then transfer the figure down as it is, otherwise made the adjustment and then enter in the trial balance. For the accrual/prepayment, carefully write out the way the account is changed and the entry will be the opposite for the accrual or prepayment account - take care reading whether this is an income or expense).

2.3 Adjustments - either in the journal or ETB (carefully write out the what happened and now what needs to be added or subtracted, you need both entries so if there is only one consider whether this error/omission would've led to creating the suspense account which could be the opposite entry. Write it out to help guide your answers. An entry on closing inventory is one a couple of exams, read it carefully and remember the 'lower of cost and realisable net value' rule', there may be a closing entry task to transfer to IS or SFP (income/expense or asset/liability respectively).

2.4 Extended Trial Balance (needs no explanation, just remember to calculate the profit/loss to balance the IS and then transfer to FSP column to balance that too. And remember the label in the far left column)

2.5 Reconciliations - Either Bank to Bank Statement or Control to sales/purchase sub ledger (Write out the entries and see how the affect the totals, have a practice of the L2 questions to recap too. Read the question carefully to identify which account the adjustments need to refer to).

2.6 Accounts Prep Knowledge (random questions on general principles in accounts prep. Think of the definitions and concepts included in the book. Make sure you check the answers to see where you go wrong and remember what the right answer is and find out why if not clear. This is the worst answered question along with the reconciliations).

Sorry that's long but this is helping me to prepare. I hope there is something here that helps you too. I think it's just the adjustment for debt allowance that isn't quite in my head at the moment.