Level II Certificate in Manual Bookkeeping

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Syllabus Information

Type of Examination: Timed assessment at an exam centre

Prior Knowledge:

Competence in basic bookkeeping.

Prerequisites:

Candidates must have achieved the following ICB Bookkeeping examinations, or gained exemptions from them, before applying:

Level I Certificate in Basic Bookkeeping

Candidates must also:

have completed the preceding ICB qualification within the last two years
hold valid ICB student registration or ICB membership

Syllabus Detail:

Students must be able to demonstrate their ability to understand and carry out the following functions:

(1) Accounting for VAT

Understand the process of accounting for VAT and completing a VAT Return. Be able to:

explain the need for a business to register for VAT
identify the form and content of a VAT invoice
define the terms

- Input tax
- Output tax
- Standard rate
- Zero Rate
- Exempt Supplies
- Tax Point

account for VAT using a VAT control account
explain the process of bad debt relief
prepare a VAT Return

(2) The Cash Book and Petty Cash Book

2.1 Understand the purpose and need to record petty cash. Be able to:

explain the purpose of the imprest system
prepare and authorise petty cash vouchers
code the expenditure
record the transactions in the petty cash book
balance off and restore the imprest
post to ledger accounts

2.2 Understand the purpose and use of a three column cash book. Be able to:

accurately record receipts and payments in a three-column cash book
balance off cash and bank columns and bring down balances
complete the double entry to main and subsidiary ledgers

(3) Bank Reconciliation Statement

3.1 Understand the need to balance bank transactions and the bank reconciliation statement. Be able to:

compare individual items on the bank statement with those in the cash book
update the cash book
prepare the bank reconciliation statement

(4) Control Accounts and Reconciliation of Sales and Purchase Ledger Accounts

Understand the purpose and use of control accounts. Be able to:

prepare sales and purchase ledger control accounts
total and balance off accounts in the subsidiary ledgers
reconcile control accounts with the total from subsidiary ledger

(5) Correction of Errors and the Suspense Account

Understand the need to correct errors and use a suspense account until errors have been clearly identified. Be able to:

open a suspense account
correct errors through the journal
prepare the suspense account

(6) Depreciation of Fixed Assets

Understand the need to depreciate fixed assets and calculate depreciation using appropriate rates and methods. Be able to:

record Capital Expenditure in appropriate records
calculate and record the charge for depreciation using both straight line and reducing balance method
prepare a schedule of fixed assets showing clearly their net book value
understand the effects of depreciation on the accounts

(7) Accruals and Prepayments

Understand the need for accruals and prepayments.

Apply the accruals or matching concept by:

calculating accruals
calculating pre-payments
accounting for accruals and prepayments
understand the effect of accruals and prepayments on final accounts

(8) Bad Debts

Understand the need to recognise and deal with writing off a bad debt. Be able to:

recognise when a debt becomes classed as ‘bad'
prepare a journal entry to write off a bad debt
post the transaction to both the bad debts accounts and the debtors account
understand the effect of bad debts on final accounts

(9) Final Accounts of a Sole Trader

Prepare the Trading and Profit & Loss Accounts of a Sole Trader and be able to:

explain the role and purpose of final accounts
prepare a trading and profit and loss account from a trial balance to include adjustments for:

- accruals and pre-payments
- depreciation (straight line and reducing balance)
- write off of a bad debt
- Prepare a Balance Sheet in good (vertical) form showing clearly the main categories of assets and liabilities