AAT Level 2 Certificate in
Accounting
Qualification specification
Version date: July 2014
Ofqual qualification number: 60069090
1
Purpose statement
Who is this qualification for?
The AAT Level 2 Certificate in Accounting (QCF) is suitable for learners who are new to finance who
wish to gain a thorough grounding in accountancy knowledge and skills from costing and double-entry
bookkeeping to computerised accounting. It offers an excellent base for students to move directly into
junior accountancy roles in business.
The Level 2 Certificate is also included in the Intermediate Apprenticeship in Accounting and allows
progression to higher levels of apprenticeship.
Learners need no prior qualifications to complete this qualification.
What does this qualification cover?
The AAT Level 2 Certificate in Accounting (QCF) consists of 5 mandatory units (210 guided learning
hours).
On completion of this qualification students will be able to:
 use cost recording systems reflecting the income and expenditure of an organisation,
comparing actual verses expected figures.
 communicate their findings using spreadsheets
 securely use a computerised accounting system, passwords and backup routines.
 understand ethical issues and sustainability
 understand the double entry bookkeeping system and associated processes
 understand the banking system
 process financial documents,
 maintain the journal and control accounts, reconcile balances and make corrections.
What could this qualification lead to?
This qualification equips learners with the skills they need to secure, and succeed in, junior
accounting roles such as Accounts Assistant, Finance Assistant, Credit Control Assistant or Purchase
Ledger Clerk.
The AAT Level 2 Certificate is part of the full AAT suite of accountancy qualifications. Learners can
begin their studies at Level 2 and progress through to the Level 4 Diploma in Accounting to become
qualified Accounting Technicians and AAT members.
AAT also offers the Level 2 Diploma in Accounting and Business at this level. The Level 2 Diploma
includes additional units on study and employability skills to complete a full-year programme of study.
For those students who already have these skills, the Certificate offers a more focused approach and
may be completed in a shorter period.
Will the qualification lead to further learning?
The AAT Level 2 Certificate in Accounting is a component of the Intermediate Apprenticeship.
Completion of the Level 2 qualification also allows for progression to the higher levels of the AAT
Accounting Qualification (Level 3 and Level 4).
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Who supports this qualification?
This qualification is supported by CIPFA and the professional arm of AAT.
In addition we have received support from the following employers:
 Futures for Children
 North Yorkshire County Council
 Hampshire County Council
 Birch Cooper
 Complete Bookkeeping
Further information on the qualification, and supporting statements, can be found here.
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The qualification at a glance
What you’ll learn
The Level 2 Certificate in Accounting is made up of five mandatory units, assessed by a mixture of
computer based tests (CBT) and projects (CBP).
Competency in all five units is required for award and certification of the Level 2 Certificate in
Accounting.
Qualification number: 60069090
Unit
Unit title
Level
GLH
QCF
credit
1
Processing bookkeeping transactions
2
45
9
2
Control accounts, journals and the
banking system
2
40
8
3
Basic costing
2
60
8
4
Work effectively in accounting
and finance
2
40
5
5
Computerised accounting
2
25
4
210
34
Total
Assessment
method
CBT
2 hours
10 tasks
CBT
2 hours
12 tasks
CBT
2 hours
17 tasks
CBT
2 hours
11 tasks
CBP
2 hours
Assessment strategy
CBT
Students will normally be assessed by computer-based assessment and will be required to respond to
CBT tasks in a variety of ways, for example using multiple choice, true/false, drag and drop, pick lists,
text select, linking boxes, gapfill tools and AAT purpose built question types to reflect real workplace
activities.
CBP
Assessment of this unit is via a computer based project, or workplace evidence, both of which are
locally assessed by the training provider. AAT’s assessment will be based on a business organisation
and comprise a series of tasks.
Level 2 Assessment 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
4
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
Title
Processing bookkeeping transactions
Level
2
GLH
45
Credit value
9
Unit reference number
D/504/3974
Learning outcomes
The learner will:
Assessment criteria
The learner can:
1
2
3
4
Understand the principles of
processing financial transactions
Understand the double entry
bookkeeping system
Understand discounts
Prepare and process financial
documentation for customers
1.1
Outline the purpose and content of these business documents:
 petty cash voucher
 invoice
 credit note
 remittance advice
 statement of account.
1.2
Explain the purpose and content of the books of prime entry.
1.3
List the ways in which customers may pay an organisation and
an organisation may pay its suppliers
2.1
Explain the accounting equation and how it relates to a double
entry bookkeeping system.
2.2
Outline how the books of prime entry integrate with the double
entry bookkeeping system.
2.3
Describe the function of a coding system within a double entry
bookkeeping system.
2.4
Describe the processing of financial transactions from the
books of prime entry into the double entry bookkeeping system.
2.5
Define capital income and capital expenditure.
2.6
Define revenue income and revenue expenditure.
3.1
Describe default surcharge and the stages involved.
3.2
Determine whether a default surcharge applies and the penalty
due.
4.1
Use source documents to prepare invoices or credit notes
4.2
Calculate invoice or credit note amounts reflecting any:
 trade discount
 bulk discount
 settlement discount
 sales tax
4.3
Enter sales invoices and credit notes into books of prime entry
using suitable codes
5
5
6
7
8
Process supplier invoices and
credit notes and calculate
payments
Maintain the cash book
Maintain petty cash records
Process ledger transactions and
extract a trial balance
4.4
Check the accuracy of receipts from customers against relevant
supporting documentation
4.5
Produce statements of account to send to credit customers
5.1
Check accuracy of supplier invoices and credit notes against
these source documents:
 purchase orders
 goods received notes
 delivery notes.
5.2
Enter supplier invoices and credit notes into books of prime
entry using suitable codes.
5.3
Reconcile supplier statements to purchase ledger accounts.
5.4
Calculate payments due to suppliers.
6.1
Enter receipts and payment details from relevant primary
records into a three column analysed cashbook.
6.2
Total and balance the cashbook.
7.1
Enter petty cash transactions into an analysed petty cash book,
accounting for tax where appropriate.
7.2
Total and balance the petty cash book.
7.3
Reconcile the petty cash book with the cash in hand.
7.4
Enter the reimbursement of the petty cash expenditure in the
petty cash book using the imprest system.
8.1
Transfer data from the books of prime entry to the ledgers.
8.2
Total and balance ledger accounts, clearly showing balances
carried down and brought down.
8.3
Extract an initial trial balance.
Unit aim(s)
Learners will be able to understand the double entry bookkeeping system and associated processes. Learners
will be able to process financial documents into books of prime entry and ledger accounts, and produce an initial
trial balance.
6
Title
Control accounts, journals and the banking system
Level
2
GLH
40
Credit value
8
Unit reference number
H/504/3975
Learning outcomes
The learner will:
Assessment criteria
The learner can:
1
2
3
4
Understand the purpose and use
of control accounts and journals
Maintain and use control
accounts
Maintain and use the journal
Reconcile a bank statement with
the cash book
1.1
Describe the general purpose of control accounts.
1.2
Describe the specific purpose of the following control accounts:
 sales ledger
 purchase ledger
 tax (VAT).
1.3
Explain the importance of reconciling the sales and purchase
ledger control accounts regularly.
1.4
Describe the purpose of an aged trade receivables analysis.
1.5
Explain the need to deal with discrepancies quickly and
professionally.
1.6
Describe the reasons for maintaining the journal.
1.7
Explain the content and format of the journal.
1.8
Identify errors that are corrected through the journal.
2.1
Prepare these control accounts:
 sales ledger
 purchases ledger
 tax (VAT).
2.2
Reconcile sales and purchase ledger control accounts with the
relevant ledgers.
2.3
Verify the balance on the tax control account.
3.1
Create journal entries to record these transactions:
 a new set of double entry bookkeeping records
 an irrecoverable debt written off
 wages and salaries.
3.2
Create journal entries to correct errors not disclosed by the trial
balance.
3.3
Create journal entries to open a suspense account to balance the
trial balance.
3.4
Create journal entries to correct errors disclosed by the trial
balance and to clear the suspense account.
3.5
Record journal entries in the ledger accounts.
3.6
Redraft the trial balance following adjustments.
4.1
Identify differences between individual items on the bank
statement and in the cashbook.
4.2
Update the cashbook from the bank statement.
4.3
Prepare a bank reconciliation statement.
7
5
6
Process supplier invoices
and credit notes and
calculate payments
Understand retention and
storage requirements relating
to banking documents
5.1
Identify the main services offered by banks and building societies.
5.2
Explain when funds banked are cleared and available for use.
5.3
Identify other forms of payment:
 cash
 cheques
 credit cards
 debit cards
 automated payments.
5.4
Identify the information required to ensure the following payments are
valid:
 cheque
 credit card
 debit card.
5.5
Describe procedures to ensure the security of receipts and payments.
5.6
Describe the effect that different forms of payment will have on an
organisation’s bank balance.
6.1
Explain the importance of a formal document retention policy for an
organisation.
6.2
Identify the different types of documents that should be stored
securely.
Unit aim(s)
Learners will be able to maintain the journal and control accounts, reconcile balances and make corrections, and
redraft the trial balance. They will also understand the banking system.
Title
Basic costing
Level
2
GLH
60
Credit value
8
Unit reference number
L/504/3971
Learning outcomes
The learner will:
Assessment criteria
The learner can:
1
2
Understand the cost
recording system within an
organisation
Be able to use the cost
recording system to record
or extract data
1.1
Explain the nature of an organisation’s business transactions in
relation to its accounting systems.
1.2
Explain the purpose and structure of a costing system within an
organisation.
1.3
Identify the relationship between the costing and accounting systems
within an organisation.
1.4
Identify sources of income and expenditure information for historic,
current and forecast periods.
1.5
Identify types of cost, profit and investment centres.
2.1
Explain how materials, labour and expenses are classified and
recorded.
2.2
Explain different methods of coding data.
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3
Be able to use spreadsheets
to provide information on
actual and budgeted income
and expenditure
2.3
Classify and code cost information for materials, labour and expenses.
2.4
Classify different types of inventory as:
 raw materials
 part-finished goods (work in progress)
 finished goods.
2.5
Calculate inventory valuations and issues of inventory using these
methods:
 first in first out (FIFO)
 last in first out (LIFO)
 weighted average.
2.6
Use these methods to calculate payments for labour:
 time rate
 piecework rate
 bonuses.
2.7
Explain the nature of expenses and distinguish between fixed, variable
and semi-variable overheads.
2.8
Calculate the direct cost of a product or service.
3.1
Enter income and expenditure data into a spreadsheet.
3.2
Explain how spreadsheets can be used to present information on
income and expenditure and to facilitate internal reporting.
3.3
Enter budgeted and actual data on income and expenditure into a
spreadsheet to provide a comparison of the results and identify
differences.
3.4
Use basic spreadsheet functions and formulas.
3.5
Format the spreadsheet to present data in a clear and unambiguous
manner and in accordance with organisational requirements
Unit aim(s)
Learners will be able to use cost recording systems to prepare information relating to the income and
expenditure of an organisation. They will be able to make comparisons and identify differences between actual
and expected figures, and communicate their findings using spreadsheets.
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Title
Work effectively in accounting and finance
Level
2
GLH
40
Credit value
5
Unit reference number
Y/504/3973
Learning outcomes
The learner will:
Assessment criteria
The learner can:
1
2
3
4
5
6
Understand the accounting
or payroll function within an
organisation
1.1
Explain the role of accountancy or payroll functions within an
organisation.
1.2
Identify the contribution of those in accounting or payroll functions to
maintaining the smooth running, solvency and legal compliance of an
organisation.
1.3
Identify appropriate reporting lines within the working environment.
1.4
Identify organisational policies or procedures that affect the
workplace.
Be able to use a range of
communication skills
2.1
Prepare information using effective numeracy and literacy skills.
2.2
Present information in these formats using organisational house
styles/guidelines:
 business report
 letter
 email or memo.
Work independently or as
part of a team
3.1
Manage work to prioritise routine and non-routine tasks.
3.2
Identify the impact that the completion or non-completion of work can
have on colleagues.
3.3
Explain how dissatisfaction can occur within a team and when it is
appropriate to refer to a manager.
Develop skills and
knowledge to meet personal
and organisational needs
4.1
Explain the importance of continuing professional development.
4.2
Identify appropriate activities to meet development needs and
objectives.
Understand ethical values
and principles
5.1
Identify the fundamental principles of ethical behaviour.
5.2
Explain the importance of confidentiality.
5.3
Identify situations when a conflict of interest may arise.
6.1
Identify organisational initiatives which support sustainability.
6.2
Explain the benefits of sustainable initiatives on an organisation and
the environment.
Understand sustainable
values
Unit aim(s)
Learners will be able to apply the skills of literacy and numeracy in their work and gain skills of self-management
and time management. Learners will also gain an appreciation of ethical issues and sustainability.
10
Title
Computerised accounting
Level
2
GLH
25
Credit value
4
Unit reference number
R/504/3972
Learning outcomes
The learner will:
Assessment criteria
The learner can:
1
2
3
4
5
6
7
Enter accounting data
at the beginning of an
accounting period
Record customer
transactions
Record supplier
transactions
Record and reconcile
bank and cash
transactions
1.1
Set up general ledger accounts, entering opening balances where
appropriate.
1.2
Set up customer accounts, entering opening balances where
appropriate.
1.3
Set up supplier accounts, entering opening balances where
appropriate.
2.1
Process sales invoices and credit notes, accounting for VAT.
2.2
Allocate monies received from customers in partial or full payment of
invoices and balances.
3.1
Process purchase invoices and credit notes, accounting for VAT.
3.2
Allocate monies paid to suppliers in full or partial settlement of
invoices and balances.
4.1
Process receipts and payments for non-credit transactions.
4.2
Process recurring receipts and payments.
4.3
Process petty cash receipts and payments, accounting for VAT.
4.4
Perform a periodic bank reconciliation.
Be able to use journals
to enter accounting
transactions
5.1
Process journals for accounting transactions.
5.2
Use the journal to correct errors.
Produce reports
6.1
Produce these routine reports for customers and suppliers:
 day books
 account activity
 aged analysis
 statements or remittance advice notes.
6.2
Produce these routine reports from the general ledger:
 trial balance
 audit trail
 account activity.
7.1
Make a copy of accounting data using the backup function of the
accounting software.
7.2
Use a software password to protect accounting information.
Maintain the safety and
security of data held in
the computerised
accounting system
Unit aim(s)
Learners will be able to use a computerised accounting system to enter accounting transactions, perform a
reconciliation, correct errors and produce a range of reports. They will also be able to maintain the security of
accounting information using passwords and backup routines.
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