COMPUTERISED ACCOUNTING Qualifications and Credit Framework Level 2 Certificate in AccountingCOMPUTERISED ACCOUNTING British Library Cataloguing-in-Publication Data ‘A catalogue record for this book Is available from tho British Library. Published by Kaplan Publishing UK Unit2, Tho Business Centre Molly Milars Lane ‘Wokingham Berkshire RG41 202 ISBN 976-0-85792-594-5 The text in this material and any others made available by any Kaplan Group company does not ‘amount to advice on a particular matter and should not be taken as such. No rellanca should be placed on the content as the basis for any invesiment or other decision or in'connecion with any ‘advice given to third parties. Plaase consult your appropriate professional adviser as necossary Kaplan Publishing Limited and all other Kaplen group companies expressly disclaim all billy to ‘any person in respect of any tosses or other claims, whethor direct, indirect, incidental, ‘consequential or otherwise arising in relation to the use of such materials. © Kaplan Financial Limited, 2012 Printed and bound in Great Britain, \We are grateful to the Association of Accounting Technicians for permission to reproduce past ‘essossment materials and exampie tasks based on the new syllabus, The solutions to past ‘answers end similar activities in tha siyle of tne new syabus have been prepared by Keplan Publishing. We are grateful to HM Revenue and Customs for the provision of tax forms, which are Crown Copyright and are reproduced here with kind permission from the Office of Public Sector Information All rights reserved. No part of this publication may be reproduced, stored in a retieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording’ or otherwise, without the prior witen permission of Kaplan Publishing, KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING CONTENTS Introduction 7 Unit guide vii The assessment xi Study skills xv STUDY TEXT AND WORKBOOK Chapter Page No. 1 Anintroduction to computerised accounting 1 2 Installing SAGE for the first time 15 3. Setting up your company 7 4 Navigating SAGE 25 5 Setting up your suppliers’ details a 6 Setting up your customers’ details 57 7 The nominal ledger 7” 8 — Entering transactions 87 9 Journals 119 40 Bank reconciliation 125 44 Useful reports 135 42 Amending company details and managing data 149 Practice assessment questions 159 Practice assessment answers 189 Index M4 KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING KAPLAN PUBLISHING |COMPUTERISED ACCOUNTING INTRODUCTION HOW TO USE Bislaist MATERIALS ‘These Kaplan Publishing learning materials hav® been carefully designed to make your learning experience 28 easy as possible and to tive you the best chance of success In Your ‘AAT assessments. ‘They contain a number of features to help you in the study process. ‘The sections on the Unit Guide, the Assessment and Study Skills The id be read before you commence your Stucies. They are designed to familiarise you with the nature and content of the seezesment and to give you tips on how best 0 approach your studies. STUDY TEXT ‘This study text has been specially prepared for the revised AAT qualification introduced in July 2010. Ituses a case study approach to guide you through the syllabus and tatide up your knowledge and skils chapter DY chapter. The text is pased upon Sage Instant Account V6, but ca also be followed if you pasticing Sage Line 60 of other versions of Sage Instant Accounts.COMPUTERISED ACCOUNTING KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING UNIT GUIDE Computerised Accounting consists of one unit. tte kas Patni The AAT has stated that the general purpose of this unit is about using @ computerised accounting application to: tnput and process data for business transactions including sales and purchases, receipts and payments, and prepare ‘management and period end reports. Perrin osu sce (On completion of this unit the Jearner will be able to: Access, enter and edit accounting information. “gelect and use tools and techniques to process business transactions. Produce accounting documents and summary reporis to meet requirements.COMPUTERISED ACCOUNTING Knowledge To perform this unit effectively you will need to know and understand the following: Chapter 1 Access, enter and edit accounting information 11 Describe the sources and characteristics of accounting 1 data ‘ 1.2 Set up and create new accounting data records 3,5,6,7 accurately to meet requirements 1.3. Locate and display accounting data records to meet 3,5, 6,7: requirements 1.4 Check data records meet needs using IT tools, making 4 corrections as necessary 1,8 Respond appropriately to data entry error messages 4 1.6 Describe the risks to data security and procedures 1 used for data protection 1,7 Apply local and/or legal guidelines forthe storage ana 4 use of data 2 Select and use tools and techniques to process business transactions Select and use appropriate tools and techniques to a9 enter and process transactions 2. 2.2 Review transaction process and indentify any errors 8, 9, 10, 12 2:3 Respond appropriataly to any transaction’ errors and’ 8, 9, 40,42 problems 2.4 Select and use appropriate tools and techniques to 8,9, 10 process period end routines KAPLAN PUBLISHINGCOMPUTERISED: Act Chapter 3 Produce accounting documents and summary reports to meet requirements 3.4. Describe what information is required:and how to 44 presenti 3.2. Prepare and generate accounting documents "1 33. Prepare and generate management reports as 4 required 3.4 Import and export data and link to other systems and 12 software Pa tec ‘The AAT have provided delivery guidance giving further detals of the Way in which the unit will be assessed. Learners must be able to take and print sereen shots of thelr work and be ‘pie to refer to the help guidelines Included in the software package. ‘Access, enter and edit accounting information 4.4 Leamers need to understand ‘what source documentation is used to enter data on to the computer They must also be able fo understand why oping is needed within the aocountiAg system and how to allocate codes eosustomers’ and suppliers’ accounts: Students also ned to understand the legal requirements for document retention. 4.2, 1.3 Learners should be able fo get the software system date, be. today’s date, as required. They ‘should set up, use and amend records and ledger accounts for new and OY ieting credit customers and credit suppliers, using data entry \natructions or the appropriate Softwar tool (the wizard). This inctuces sntering credit control details, opening (vances, brought forward andlor ri ‘opening balances. Learners should be able to sot uP and use general ledger accounts, using data entry instructions OF the appropriate software tool. This includes: . Select accounts from the default list of accounts provided by the software . Amending the account names used in the default list ‘of accounts provided by the software, for ‘example change ‘ordinary share capital’ to ‘capital «Adding new accounts to the default list of accounts provided PY the ‘softwareCOMPUTERISED ACCOUNTING * Entering opening balances . Checking ‘opening entries using the trial balance 1.4, 1.5 Leamers need to check their own work for accuracy at all times and use appropriate software tools to verify data is correct. Make Corrections within limits of responsibilty, or follow organisational procedures for reporting errors and problems. 1.6, 1.7 Students need to understand: * The risks to data such as loss and/or theft, ilegal copying, poor Storage, viruses, unauthorised access in confidential information, and * The-possible consequences of these risks, and * Ways to reduce these risks such as use of passwords, how to choose a password in accordance with best practice, back up of dala, the use of appropriate file names, proper storage of data including back up copies and virus protection Learners need to be aware of the basic requirements of the Data Protection Act and relevant organisational Policy in relation to security and ack up procedures. The back up of data to a suitable storage device at regular intervals, Select and use tools and techniques to process business transactions 24, 2.2, 2.3, 2.4 Learners need to be able to process transactions involving different rates of VAT. The rate of VAT will always be given: * Standard rated * Zero rate VAT * VAT not applicable ost entries to record sales and purchase invoices and credit notes, in batches or singly, using if necessary, general ledger accounts not previously set up Post payments received ftom credit customers and payments made fo credit suppliers, Payments in this instance can compromise cash, cheques, automated payments and set off payments (contra entries). Settlement discounts may apply. Learners must be able to post entries to record: * Gash purchases and sales ~ payments made/received by cash, cheque or debit card, but NOT credit card KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING «Sundry income received by cash or cheque «Payments for items other than the purchase of goods, made by cash, Gheque or debit card, but NOT credit card + Petty cash transactions including re-imbursements of petty cash float + Standing orders and direct debits . Transfers between bank accounts . Bad debts written off = Bankinterest paid and received Leatners must post journal entries, or use an appropriate tool in the software package where relevant to: + Amend opening balances «Remove duplicate entries ® Correct given and own errors Process period end routines: «Extract atrial balance. Trace and correct own errors «Update the bank account where necessary from a bank statement and prepare a bank reconciliation statement. if the bank reconolliation statement does not agree trace and correct own errors: Clear month end turnover totals produce accounting documents and summary reports to meet requirements 3A, 3.2, 3.3 Learners must understand who requires accounting data and in what form itis required. Data includes details of customers and suppliers, ledger balances, bank reconciliation statement, audit trail, aged debtor/creditor analysis, statement ‘of account, monthly sales figures. Prepare and print: © Customer and supplier lists «Sales, purchases and returns day books 5 Sales ledger accounts, or specific accounts only «Purchases ledger accounts, or specific accounts only «General ledger accounts, or specific accounts only «petty cash and all bank accounts, or specifi accounts onlyCOMPUTERISED ACCOUNTING * — The journal *¢ Atrial balance * Bank reconciliation statement * Audit trail * Aged debtor/creditor analysis * Statements of account to be sent to credit customers * Letters to customers re overdue accounts 3.4 Learners must be able to import and export data and link to other systems and software. Process simple data export tasks to other systems and software such as: + Export a customer statement for email * Export aged debtor/creditor analysis to a spreadsheet . Screen shots Be aware of and able to answer questions on: * _Allltypes of data that can be exported to other systems and software * Types of data that can be imported from other systems and software and in what format Learners will NOT be required to * Set up company details or the accounting year * Generate profit and loss accounts and balance sheets * Post depreciation or accruals and prepayments * Prepare or update budgets . Prepare invoices or credit notes * Create or use product/stock records KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING THE ASSESSMENT The format of the Prats ‘Tho purpose of the assessment sto allow the learner fo demonstrate the skills and knowledge necessary fo use computerised accounting software at level 2. “The assessment is designed to allow the use of any accounting software package and isthe form of a project intl. In the short term itis likely to be your local tuition provider who assess your work, although the AAT do hope to introduce a computer based test with immediate results in the near future. Work based evidence can also be submitted for this unit and would be assessed by your local tuition provider. Part 4, This consists of an assignment asking the learner {0 input data into a computerised accounting package and produce documents and reports. ‘This can be completed over a period of four sessions {0 replicate the workflow in an office environment. Part 2. Contains several short written tasks which must be completed in ‘one session Section 2 covers: «Develop skills and knowledge to meet pefsonal and organisational needs : Leamers will be required to complete tasks, based upon @ Ce study, come of which may require further research by the learner. The leamer's completed answers to the set tasks will be presented for assessment in (erty ofa file as part ofthis unitis about communication, literacy and Tameracy skills. The presentation of the finished work is extremely important and will be assessed as well as the content of the answers. ‘The assessment material wil normally be provided by the AAT, delivered dine and assessed locally, Learners will be required fo demonstrate competence in both sections of the assessment, Alternatively, with guidance and suppor from training providers learners tan provide workplace evidence to be assessed locally by their training provider. The training provider will be required fo ensure that all assessment criteria are covered. KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING KAPLAN PUBLISHINGCOMPUTERISED ACCOUN’ STUDY SKILLS eu RG Devise a study plan Determine which times of the week you will study. Split these times into sessions of at least one hour for study of new material. Any shorter periods could ‘be used for revision or practice. Put the times you plan to study onto a study plan for the weeks from now until the assessment and set yourself targets for each period of study - in your sessions make sure you cover the whole course, activities and the associated questions in the workbook at the back of the manual. Ifyou are studying more than one unit a a time, try to vary your subjects ae this can help to keep you interested and see subjects as part of wider knowledge. When working through your course, compare your progress with your plan and, Itnecessary, re-plan your work (perhaps including extra sessions) or, if you are ahead, do some extra revision / practice questions. Bice ia) Active reading You are not expected to Jearn the text by rote, rather, you must understand what you are reading and be able to use it to pass the assessment and develop good practice. ‘A qood technique is to use SQ3Rs - Survey, Question, Read, Recall, Review: 4 Survey the chapter Look at the headings and read the introduction, knowledge, skills and Content, 80 as to get an overview of what the chapter deals with. 2 Question Whilst undertaking the survey ask yourself the questions you hope the chapter will answer for you. KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING 3 Read Read through the chapter thoroughly working through the activities and, at the end, making sure that you can meet the learning objectives highlighted on the first page, 4 Recall At the end of each section and at the end of the chapter, try to recall the main ideas of the section / chapter without referring to the text This is best done after short break of a couple of minutes after the reading stage. | 5 Review | Check that your recall notes are correct. You may also find it helpful to re-read the chapter to try and see the topic(s) it deals with as a whole. Note taking Taking notes is a useful way of learning, but do not simply copy out the text. The notes must: * be in your own words * be concise * cover the key points + well organised * be modified as you study further chapters in this text or in related ones, Trying to summarise a chapter without referring to the text can be a useful way of determining which areas you know and which you don’t. Three ways of taking notes 1 Summarise the key points of a chapter 2 Make linear notes A list of headings, subdivided with sub-headings listing the key points. Ifyou use linear notes, you can use different colours to highlight key points and keep topic areas together. Use plenty of space to make your notes easy to use. KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING 3 Trya diagrammatic form The most common of which is a mind map. To make a mind map, put the main heading in the centre of the paper and put a circle around it] Draw lines radiating from this to the main sub-headings which again have circles around them, Continue the process from the sub-headings to sub-sub-headings. Highlighting and underlining ‘You may find it useful to underline or highlight key points in your study text — but do be selective. You may also wish to make notes in the margins. rar eel) In addition to this text, you should also read the “Student section” of the “Accounting Technician” magazine every month to keep abreast of any guidance from the examiners, KAPLAN PUBLISHINGCOMPUTERISED ACCOUNTING KAPLAN PUBLISHING