Understanding the Concepts of Accounting and Aat Level 2 Qualification

AAT Level 1 is an introductory training program. Level 1 gives you a basic, fundamental knowledge of the subject which is perfect for those already employed in the financial industry, or those planning to start working in such a field. Level 1 covers topics from simple bookkeeping to balance sheet, with both computer-assisted and manual methods used. It is designed primarily for people entering the financial services professions and provides training on the key terminology and processes involved aat level 2.


A full course in AAT Bookkeeping can be split into two main sections, each providing at least the fundamental concepts. The first segment, called ‘breech balance’, deals with the basic concepts and techniques of bookkeeping. This covers the basics like profit and loss, balance sheets, debits and credits, loans, expenditure and ownership. It also goes into the topic of debentures, promissory notes, securities, bonds and securities lending.


The second segment is known as ‘due diligence’ aat level 3. It covers the more advanced concepts and practices commonly associated with accounting. Concepts covered in this segment include accrued interest, cost accounting, internal/external financing, internal/external balance sheet, asset valuation, corporate finance, equity analysis and qualitative analysis, tax accounting, non-financial debt instruments, financial statement analysis, portfolio management and financial reporting. One should attain an equivalent to AAT level 2 before proceeding to the next segment, known as ‘corporate finance’. This deals with all the policies and procedures of a company related with its financial activities, including issues related to borrowing, capital budgeting, mergers and acquisitions, private equity, partnerships and ownership.


The four modules, which constitute the aat level 2, are broken down as follows: Accounting Policies, Auditing Policy, Core Principles, Issues in Auditing Processes, Principles, Key Assumptions and Valuations. An individual who has obtained his/her diploma from a recognized accounting institute may choose to continue his education by enrolling for an online course, which offers the same curriculum as the traditional courses. There are many colleges and universities that offer a variety of online courses that meet the requirements of a qualified accounting professional.


To complete the at level 2, an individual needs to have a firm understanding about the concepts and principles covered in the first two semesters. At the end of the first year, students need to pass the exam and obtain a permanent degree. Students who wish to improve their chances of getting jobs in this field should consider taking further education and gaining knowledge about subjects like trial balance and banking. While taking further education, a student should learn how to use spreadsheets. It is important to understand the spreadsheet programs that are used in a bank.


The third semester covers topics such as financial statements, corporate finance and business case analysis. It is important to improve one’s ability in managing financial transactions, allocation of resources and allocation of costs. At the end of the third year, students will be required to take a case-study test that covers the concepts that were learnt in the first two semesters. Students who successfully passed the unit assessment and the synoptic assessment are awarded a full and qualification.

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