Starting Out: What does the AAT Level 2 Syllabus cover?

Starting a journey to a career in accounting and finance can be exciting and challenging. And the AAT Level 2 Accounting qualification is the first step for many people. But what does the AAT Level 2 syllabus cover? In this article, we'll break down the syllabus and what you will learn.

Introduction to AAT Level 2 Accounting

The AAT Level 2 syllabus introduces the fundamental principles of accounting and finance. It’s a starting point which establishes a strong understanding of financial processes, basic bookkeeping, and essential accounting practices. It is structured to provide theoretical knowledge and practical skills, setting a solid foundation for more advanced levels of study.

What you will learn at Level 2

After completion of the AAT Level 2 Accounting qualification, students will have a solid grasp of foundational accounting concepts and practices. They will be able to perform essential bookkeeping tasks, including accurately recording financial transactions and reconciling accounts. Learners will also have a basic understanding of how costs are classified and calculated, enabling them to contribute meaningfully to financial decision-making processes within an organisation.

AAT Level 2 units

The four units detailed below comprise the AAT level 2 Certificate in Accounting. AAT also offer a separate bookkeeping qualification and the Level 2 bookkeeping qualification is actually just two of the units featured below: Introduction to Bookkeeping, and Principles of Bookkeeping Controls.

1. Introduction to Bookkeeping

This unit is worth 25% of the overall qualification grade.

Understanding the basics of double-entry bookkeeping, including recording financial transactions, understanding debits and credits, and maintaining financial records.

Students will be expected to be able to:

• Understand how to set up bookkeeping systems
• Process customer transactions
• Process supplier transactions
• Process receipts and payments
• Process transactions into the ledger accounts

2. Principles of Bookkeeping Controls

This unit is worth 25% of the overall qualification grade.

Exploring the importance of maintaining accuracy and control in financial records, covering topics such as banking procedures, reconciling statements, and identifying errors.

Students will be expected to be able to:

• Use control accounts
• Reconcile a bank statement with the cash book
• Use the journal
• Produce trial balances

3. Principles of Costing

This unit is worth 20% of the overall qualification grade.

This introduces learners to basic costing principles, focusing on identifying costs, cost classification, and how costs impact pricing and decision-making within a business.

Students will be expected to be able to:

• Understand the cost recording system within an organisation
• Use cost recording techniques
• Provide information on actual and budgeted cost and income
• Use tools and techniques to support cost calculations

4. The Business Environment

This unit is worth 30% of the overall qualification grade.

This unit tackles key business concepts. It gives students an understanding of the legal system and the fundamentals of contract law. It also fosters an awareness of the legal consequences associated with business establishment and its potential ramifications. Moreover, this unit offers insight into organisational structures and the integration of the finance function within them.

Students will be expected to be able to:

• Understand the principles of contract law
• Understand the external business environment
• Understand the key principles of corporate social responsibility (CSR), ethics and sustainability
• Understand the impact of setting up different types of business entity
• Understand the finance function within an organisation
• Produce work in appropriate formats and communicate effectively
• Understand the importance of information to business operations

Unit grades and weighting

The final grade will be determined by combining the weighted scores from the unit assessments. This will result in an overall qualification grade, which can be classified as Pass, Merit, or Distinction.

Grade definitions and thresholds

Unit weightings

Benefits of studying Level 2

The AAT Level 2 Accounting qualification is not just about acquiring theoretical knowledge; it's about gaining practical skills. Skills that are directly applicable in real-world scenarios. After gaining the qualification, students are better equipped to pursue entry-level positions in accounting, finance, and related fields. Level 2 is a stepping stone to higher-level AAT qualifications which tackle advanced accounting principles and practices.

In Summary

The AAT Level 2 syllabus is an essential foundation for anyone interested in a career in accounting and finance. It equips learners with the knowledge and abilities needed for entry-level positions. Whether you're a recent graduate or a career switcher, the AAT Level 2 Accounting qualification can open doors to a dynamic and rewarding field, with plenty of scope for career advancement.

Accountext offer self-study textbooks and question banks for AAT units across levels 2, 3 and 4.