Introduction to Bookkeeping | AAT Level 2
This unit provides students with an understanding of manual and digital bookkeeping systems, including the associated documents and processes.
Exam Duration
1 hour 30 minutes
Pass Mark
70%
Students
30,000+
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Introduction to Bookkeeping — overview
This unit provides students with an understanding of manual and digital bookkeeping systems, including the associated documents and processes. Students will learn the basic principles that underpin the double-entry bookkeeping system and will learn that digital accounting systems are automating some of the stages in the process.
Students will learn how to check the accuracy of invoices, credit notes, remittance advices, statements of account and petty cash vouchers. They will know how to use these documents to make entries in sales and purchases daybooks, sales and purchases returns daybooks, and discounts allowed and received daybooks using account codes, as well as how to transfer those totals to the sales, purchases and general ledgers. They will learn that entering these into a digital bookkeeping system is the same process as entering the transactions manually, although the way they are entered will vary from system to system.
The United Kingdom (UK) government department responsible for collecting taxes, HM Revenue & Customs (HMRC), offers more than one method of accounting treatment when prompt payment discount (PPD) is allowed and received. However, students at this level are only required to use credit notes to adjust for PPD. Using this approach, credit notes are recorded in separate daybooks, a discounts allowed and/or a discounts received daybook, which removes the need for discount columns in the cash book. There is no requirement at this level for students to understand how to account for PPD by any other method. This unit refers to value added tax or VAT. This is an indirect tax operating in the UK, but this type of tax may also operate and be known by another name in other countries.
What You'll Learn
- Understand how to set up bookkeeping systems
- Process customer transactions
- Process supplier transactions
- Process receipts and payments
- Process transactions into the ledger accounts
Career Relevance
Completing the Level 2 Certificate opens the door to entry-level finance roles such as Accounts Administrator, Accounts Assistant, Accounts Payable Clerk, Purchase/Sales Ledger Clerk, Trainee Accounting Technician, or Trainee Finance Assistant — and it builds the double-entry foundation you need to progress to Level 3.
Exam Format
- Duration:1 hour 30 minutes
- Pass Mark:70%
- Format:5 learning outcomes, assessed by a single computer-based exam.
Prerequisites
AAT does not set formal entry requirements for the Level 2 Certificate. A good standard of English and maths is recommended — you'll be working with numbers and communicating with colleagues, customers, and suppliers throughout the qualification. Use AAT Skillcheck if you're unsure whether you're ready.
Introduction to Bookkeeping syllabus
The topics you'll cover in Introduction to Bookkeeping and their assessment weightings.
- Business documents (invoice, credit note, remittance advice, statement of account)
- Books of prime entry and the cash book
- Ledgers: receivables, payables, general
- Coding systems and the trial balance
- The dual effect of transactions — debits and credits
- Calculating invoice and credit note amounts (VAT, trade, bulk, PPD)
- Entering customer invoices and credit notes into books of prime entry
- Processing receipts from customers and allocating payments
- Checking supplier invoices and credit notes for accuracy
- Entering purchase invoices and credit notes into books of prime entry
- Processing payments to suppliers, including PPD
- Entering receipts and payments into the analysed cash book
- Petty cash book — imprest and non-imprest systems
- Totalling, balancing, and carrying down cash book balances
- Processing recurring receipts and payments
- Transferring data from books of prime entry to the ledgers
- Totalling and balancing ledger accounts (carried down, brought down, debit and credit balances)
Introduction to Bookkeeping exam format
Everything you need to know about how Introduction to Bookkeeping is assessed.
Computer-based exam
1 hour 30 minutes
5 learning outcomes, assessed by a single computer-based exam.
On demand throughout the year
70%
How to pass Introduction to Bookkeeping
Expert tips from Learnsignal's AAT tutors to help you prepare effectively.
Drill double-entry until it's automatic
Every task in this exam comes back to debits and credits. Practise the same transaction types — sales, purchases, receipts, payments — until you can write the journals without looking up which side goes where.
Learn the daybooks cold
The six books of prime entry (sales, sales returns, purchases, purchases returns, discounts allowed, discounts received) are the spine of this exam. Know what each one is for and which ledger it feeds.
Practise PPD the AAT way
Prompt payment discount is handled by credit note at Level 2 — not by adjusting the cash book. The exam tests this specifically, so practise until you default to the right method.
Get comfortable with the digital question style
The CBA uses journal grids, dropdowns, and gap-fill questions. Use the AAT sample assessments on MyAAT at least twice before your real sit — the interface catches people out more than the content.
Balance your cash book and petty cash book
Totalling, balancing, and carrying down balances on the cash book and petty cash book is almost always tested. Practise imprest and non-imprest systems for petty cash until they're second nature.
Check everything — accuracy is graded
Pass mark is 70%. The exam gives you time to review — use it. Check totals add up, debits equal credits, and your entries are in the right daybook.
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See AAT pricing →Introduction to Bookkeeping — frequently asked questions
Common questions about Introduction to Bookkeeping — what's covered, how it's assessed, and how to prepare.
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