ACCOUNTANCY WORK EXPERIENCE TOOLKIT - ICAEW

ACCOUNTANCY WORK 

EXPERIENCE TOOLKIT 

EMPLOYER INFORMATION 

BUSINESS WITH confidence 

icaew.com/careers

contents 

SECTION 

Page 

1 Introduction 01 

2 Work experience 02 

What is work experience 02 

Benefits to organisations 02 

Benefits to students 03 

Designing a work experience placement 03 

How to get started 04 

Becoming an Authorised Training 

Employer (ATE) 04 

3 Organisation information 05 

Guidance for organisations 05 

Suggested work experience placement 

Week one 06 

Week two 06 

Day one – Introduction 06 

4 Useful addresses and websites 07 

Further reading 07 

5 Acknowledgements 07 

APPENDICES 

Page 

A Checklist for organisation’s briefing 

TO studENTS 08 

General 08 

Workplace hazards 08 

Safety precautions 08 

Emergency procedures 08 

B Suggested answers to Supplementary 

Question Bank 10 

Basic bookkeeping 11 

Accruals and prepayments questions 13 

C Suggested answers to case study – 

Activities 1 to 5 14 

Worksheet 1 Payments listing 14 

Worksheet 2 Payments cash book 15 

Worksheet 3 Petty cash book 16 

Worksheet 4 Receipts listing 17 

Worksheet 5 Receipts cash book 18 

Worksheet 6 Bank accounts 

and reconciliation 19 

Worksheet 7 Extract from bank statement 20 

Worksheet 8 Fixed asset register 21 

Worksheet 9 VAT account 22 

Worksheet 10 Trial balance 23 

Worksheet 11 Profit and loss account 24 

Worksheet 12 Balance sheet 25 

© ICAEW 2012

1 Introduction 

The successful future of all businesses 

depends on high quality employees. 

So it’s important that organisations and 

educational establishments work together 

to ensure that students are properly 

prepared for the world of work, with 

the necessary skills and motivation. 

One key way in which organisations and local schools can 

collaborate is through work experience placements for 

students. Such placements offer many benefits and 

opportunities: students can develop their knowledge and 

understanding of the world of work; and organisations 

can help students learn about the skills and attitudes 

expected by a business, and raise their awareness of the 

various career opportunities on offer. 

ICAEW is fully aware that today’s school students are 

tomorrow’s business advisers. So we have put together 

this toolkit to help you develop a finance-related work 

experience placement for students in their last two years 

of compulsory schooling. It is made up of two parts: 

• employer’s information 

• student’s information. 

Both toolkits include lots of information about the 

placement, as well as a series of activities and worksheets. 

(We recommend that you photocopy or download 

the student information so that you can re-use the 

activity sheets.) 

Students should work through the activities during 

their time with you, asking you and your colleagues for 

help along the way. Although they can complete the 

hardcopy worksheets, they will learn more by creating 

their own spreadsheets on a PC. 

The employer toolkit includes the same worksheets, 

but with the answers, in red. 

Although this toolkit provides a structured guide for 

work experience students it is not a step-by-step guide 

to designing a work experience programme, nor does 

it give guidance on the legal aspects of these 

programmes and placements. We recommend that 

you also consult your local Education Business Link 

Consortia, Local Education Authority (LEA), Skills 

Funding Agency (SFA) or other similar organisations 

for more detailed and/or local guidance on work 

experience placements. You will find a list of useful 

contacts in Sections 4 and 5. 

Work Experience Toolkit – Employer Information 

01

2 work experience 

WHAT IS WORK EXPERIENCE? 

According to the DCSF Work Experience: A guide 

for employers, work experience may be defined as: 

A placement on employer’s premises in which a 

student carries out a particular task or duty, or a 

range of tasks or duties, more or less as would an 

employee, but with the emphasis on the learning 

aspects of the experience. 

Work experience is governed by the Education 

Act 1996, as amended by the School Standards 

& Framework Act 1998. The main features of work 

experience are: 

• only students in their last two years of compulsory 

schooling, or students taking post-16 courses, 

are eligible; 

• placements occur on employers’ premises; and 

• the vast majority of pre-16 placements last for 

one or two weeks, but post-16 placements can be 

more varied in length depending on the course 

being followed. 

Placements are more likely to be successful if 

they provide a genuine opportunity, both for 

the employer and the student. So you will need 

to consider: 

• time and resources available; 

• which departments, activities and roles 

are suitable; 

• health and safety; 

• how complex the tasks are, how long they will take 

to complete; 

• when will placements cause the least disruption; 

and 

• when do education establishments in your local area 

release students for placements. 

BENEFITS TO ORGANISATIONS 

There are several benefits of these programmes for 

employers, including raising your profile among 

schools and potential future employees and 

consequently improving the number of quality 

students applying for your vacancies in the future. 

The type of programme you will be able to offer will 

depend upon the nature and size of your organisation. 

The education establishment you are working with will 

need to consider how the experience relates to the 

student’s work at school. 

I would like to take this opportunity to say Thank You very much 

for allowing us to trial the Accountancy Work Experience Toolkit. 

We do struggle to find appropriate work and time to supervise 

as this is normally a very busy time of year for us. Therefore this 

did help us a lot this year … It is always difficult to give work 

experience pupils a flavour of what accountants do in such a 

short period of time and this was certainly a useful first taste. 

Sarah Risdon, Potter Baker Chartered Accountants 

02 


BENEFITS TO STUDENTS 

For many students, work experience placements 

have a great impact on their personal, social and career 

development. It helps them develop financial capability 

and technical skills, as well as developing creativity, 

risk-taking, and the drive to make ideas happen. 

For many school students, the adult workplace is a 

great unknown. So a big benefit of a placement is 

enabling a young person to experience the world of 

work first hand. Any placement should be designed 

to help young people to: 

• prepare for working life by learning to meet 

the appropriate standards of company behaviour 

(eg, time keeping, dress sense, conduct and the 

business culture/ethos); 

• learn general work-related, transferable skills that 

can be developed over the course of the placement; 

• learn about the way a business operates, its jobs 

and working conditions, and the rights and 

responsibilities in the workplace; 

• develop an understanding of work and/or skills 

needed for enterprise and employability; 

• undertake a range of tasks as an employee 

would; and 

• learn about a specific industry, or sector, which will 

help them make informed career choices. 

DESIGNING A WORK EXPERIENCE PLACEMENT 

Work placements should include three main types 

of activity: 

• work shadowing 

• helping staff with tasks that can be easily delegated 

• structured activities – small projects that can be 

completed independently. 

Work shadowing 

Shadowing individual members of staff gives the 

student a varied and interesting overview of your 

company’s work, while causing minimal disruption 

to your company’s routine. It is particularly effective if 

interesting events and meetings are taking place while 

the student is there. Ideally, you should arrange a 

schedule that lets the student spend time with staff 

in different departments. If structured carefully, 

the student will gain an excellent overview of the 

organisation’s work, observing meetings and events 

that have taken place as part of the organisation’s 

normal work. 

Delegated tasks 

Many of the objectives of a work placement are met 

by a student: 

• spending time in the workplace 

• observing how the organisation operates 

• participating in routine activities. 

So you can legitimately include routine administrative 

tasks in the placement. It is perfectly reasonable to 

expect a student to spend time helping with tasks such 

as opening and sorting post, filing documents, ordering 

stationery, preparing meeting papers, and so on. 

Students also benefit from learning to use office 

equipment that they may not encounter in other 

environments so, again, it’s perfectly reasonable for 

you to ask them to help with photocopying, franking 

mail, laminating, faxing and other tasks. They can 

also benefit from using ICT skills in a professional 

environment so they could help you with data entry, 

preparing presentations or mail merges. 

These sorts of activities should only take up 

a proportion of the student’s time, but don’t 

underestimate the value to you of having an extra 

pair of hands in a busy office. 

Structured activities 

As well as giving a focus to the placement, these are 

useful for the times when your staff are busy with their 

own work. 

Structured projects and activities enable students to 

learn key skills such as working independently, project 

planning, time management, report writing, practical 

research and using IT in the workplace. They are also 

similar to the type of tasks that entry-level staff might 

have to do. 

This ICAEW Accountancy Work Experience Toolkit 

provides structured activities for students undertaking 

a one or two week work experience placement. They 

cover some of the basic accountancy activities, based 

on a fictitious company. You have the answers in your 

employer information. 


03

Don’t forget that there is more to work than projects 

and activities. Try to include your student in some of 

the following: 

• work shadowing 

• work observation or visits 

• work-based projects 

• company briefings 

• mock interviews 

• mentoring. 

HOW TO GET STARTED 

Once you have decided to offer work experience 

placements, the first thing you should do is contact 

the education manager of your local Learning and Skills 

Council (LSC) or local Education Business Link (EBL) 

consortia about the arrangements in place in your 

local area. 

Demand is high for work experience placements and in 

most areas, the EBL consortia, Trident organiser or even 

our Student Recruitment Team will liaise between local 

education establishments seeking placements and 

organisations offering them. These organisations can 

also give you help and advice on all aspects of work 

experience programmes and placements, and help you 

to recruit suitable students. 

Once you have confirmed what arrangements are 

in place in your local area, you can then make direct 

contact with the education establishment or local 

coordinating agency and meet with the relevant 

teacher or contact to clarify your mutual aims and 

objectives. 

It’s vital that you plan the placement carefully so that 

it happens smoothly, with minimum disruption to your 

normal working practices, and so that the student can 

get as much out of it as possible. When planning your 

placement you should consider: 

• dates and duration 

• location and hours of work 

• duties and responsibilities of the post 

• dress and conduct 

• arrangements for transport and meals 

• position regarding Employers’ Liability and Public 

Liability policies 

• risks and control measures 

• confirmation of any mid-placement visit by a 

representative of the school 

• name and telephone number of the student’s line 

manager 

• name and telephone number of the contact at the 

workplace in case of difficulties. 

Becoming an Authorised training 

employer (ATE) 

If you want to train ACA students, authorisation is 

usually free and is not an overly time-consuming 

process. The authorisation process helps ensure all 

students, wherever they train, receive the same levels 

of support and guidance. Visit icaew.com/employers 

for more details. 

The toolkit is a useful tool enabling students to gain an introduction 

to accountancy/bookkeeping. It enables them to understand more 

the work they carry out as their placement progresses. It also prevents 

the student being used as free labour for number crunching activities 

and general utilisation. 

David Cornish, Thomas Westcott Chartered Accountants 

04 


3 ORGANISATION INFORMATION 

GUIDANCE FOR ORGANISATIONS 

The activities in the student information toolkit take 

students through a series of activities and questionnaires 

that they should do during their work experience 

placement in an accountancy firm or department. 

The various exercises are designed to introduce them to: 

• accounts preparation which forms the basis of much 

of the work in an accountancy function; and 

• specific concepts and terminology used 

by accountants. 

The main activities are based around a case study 

company called Props ‘n’ Frocks Limited which sells 

fancy dress costumes. The company’s year end is 

31 July 20XX and students are asked to carry out some 

of the accounts preparation work in order to put 

together a profit and loss account for the month to 

31 July 20XX and a balance sheet as at 31 July 20XX. 

The tasks are not supposed to be a test and we 

encourage students to ask questions along the way. 

The tasks that your student will be asked to carry out 

are contained within the student’s information toolkit; 

we recommend that you keep a copy of this for your 

own records. The model answers to the activities 

and questions are shown in the appendices to this 

employer’s guide. You can choose whether to give 

out the answers after each stage of the accounts 

preparation process, or at the end of the week when 

the student has completed the case study. 

As well as the structured activities, there are additional 

questions included in the student’s information toolkit 

which are designed to be a stop gap either at the end 

of each day as suggested in the training plan, or at the 

end of the week if you prefer. These general questions 

build on student information and the work carried out 

in the case study. Again, the answers are included in 

the appendices to this employer’s guide. 

Within the student information toolkit there is 

introductory material which explains the types of 

business structures, the purpose of keeping accounting 

records and introduces a profit and loss account and 

balance sheet. It would be helpful to the student if a 

member of your staff could show them examples of 

client records, an accounts file and the final profit and 

loss account and balance sheet. 

The tasks have been designed so that the student 

can complete them during one week. However, if 

the placement is for a fortnight it is easy to expand 

the tasks to cover a longer period. As the activities 

mirror real-life accounting activities, once a student has 

completed a practice activity, it would be helpful if you 

could arrange for the student to complete the same 

activity on a real client. This could either be done after 

each activity, or after the student has completed all of 

the practice activities. 


05

SUGGESTED WORK EXPERIENCE PLACEMENT – WEEK ONE 

DAY ACTIVITY MATERIALS 

One 

Two 

Three 

Four 

Five 

Introduction day 

Day one of the work experience is a general introduction day 

for the student to your firm, the staff and the work that you do. 

We recommend that you arrange for the student to have a tour 

of the office and a health and safety induction. 

• Explain the plan for the week or two-week period 

• Induction questionnaire 

• Information on accounting in business 

• What are accounting records? 

• Why does a business have to prepare accounts? 

• What goes in an accounts preparation file? 

• What is a profit and loss account? 

• What is a balance sheet? 

• All about VAT 

Activity one 

• Recording transactions 

• Begin supplementary questions 

Activity two 

• Balancing off and reconciling 

• Supplementary questions 

Activity three 

• Fixed assets and depreciation 

Activity four 

• VAT 

• Supplementary questions 

Activity five 

• Trial balance 

• Complete supplementary questions 

Student toolkit – section 3 












WEEK TWO 

If the student is completing two weeks of work experience, consider letting them build on the initial accounts work 

done in the case study by allowing them to carry out the initial analysis work and bank reconciliation on a real client 

or business situation. 

06 


4 USeFUL ADDRESSES AND WEBSITES 

ADDRESSES 

Accountancy Learning Ltd 

Southernhay Lodge 

Barnfield Crescent 

Exeter 

EX1 1QT 

www.accountancylearning.co.uk 

DCSF Publications 

Prolog 

Sherwood Park 

Annesley 

Nottingham NG15 0DJ 

T 0845 600 8147 

F 0845 603 3360 

E DCSF@prologistics.co.uk 

www.dfes.gov.uk/publications 

Department for Education 

Castle View House 

East Lane 

Runcorn 

Cheshire 

WA7 2GJ 

T +44 (0)1928 794248 

www.education.gov.uk 

Health & Safety Executive (HSE) 

Rose Court 

2 Southwark Bridge 

London SE1 9HS 

T +44 (0)207 717 6000 

F +44 (0)207 717 6417 

www.hse.gov.uk 

ICAEW 

Student Recruitment 

Metropolitan House 

321 Avebury Boulevard 

Milton Keynes 

MK9 2FZ 

icaew.com/careers 

Skills Funding Agency 

Cheylesmore House 

Quinton Road 

Coventry 

CV1 2WT 

T 0845 377 5000 

E info@skillsfundingagency.bis.gov.uk 

www.skillsfundingagency.bis.gov.uk 

Royal Society for the Prevention 

of Accidents (RoSPA) 

Edgbaston Park 

353 Bristol Road 

Edgbaston 

Birmingham 

B5 7ST 

www.RoSPA.com 

www.youngworker.co.uk 

USEFUL WEBSITES 

Department for Business, 

Innovations and Skills 

www.bis.gov.uk 

Young People 

www.direct.gov.uk/en/YoungPeople 

Federation of Education Business 

Links Consortia 

www.feblc.org 

National Mentoring Network 

www.nmn.org.uk 

Oxford Cambridge RSA Examinations 

(OCR) Work-Related Learning Page 

www.ocr.org.uk 

FURTHER READING 

Work Experience: A guide for employers 

DCSF publications 

For ordering quote reference: 

DCSF-1471-2005 

Be Safe! An Introductory guide to Health 

and Safety: For Students 

LSC Publication 


LSC/AA000/0912/04 

Managing health and safety 

on Work Experience: 

A guide for organisers 

HSE Books 

For ordering quote reference: HSG199 

Work-Related Learning and the Law 

DCSF publications 


DCSF-0340-2006 

Young People at Work – 

A guide for employers 

HSE Books 

For ordering quote reference: HSG165 

5 acknowledgements 

ICAEW would like to thank Simon Deane FCA, 

Sally Antrobus ACA and Claire Eardley of Accountancy 

Learning Ltd and APlus Learning Innovations Ltd for 

their help in putting together this ICAEW Accountancy 

Work Experience Toolkit. 

Work Experience Toolkit – Employer Information 07

appendix a 

checklist for organisation’s briefing to students 

This checklist contains some of the common issues 

which you should cover in an induction. You may 

need to modify or expand it to suit your placement 

programme, type of work, or the age range of the 

students. It’s often best to do this briefing while 

showing the students around the areas which they 

are going to visit, or in which they will be working. 

GENERAL 

Line manager 

Explain who will be responsible for the student in the 

workplace and ensure that the managers are aware of 

their responsibilities under health and safety legislation. 

Safety policy 

Explain the policy and point out any aspects that apply 

to students in particular. Emphasise the student’s 

personal responsibilities. 

Safety literature 

Distribute and explain any relevant safety literature, 

taking into account the student’s age, the length of 

the placement, and their likely exposure to hazards. 

You can find more guidance in the DCSF booklet 

Be Safe!, which you can get free of charge from 

DCSF Publications. 

Key safety people 

Introduce them to the student or give them their 

names, locations and responsibilities. 

Prohibited areas 

Tell the student about any areas which they must not 

visit for safety reasons and explain why. 

WORKPLACE HAZARDS 

Machinery 

Explain to the student that they must never operate 

any machine without permission from the supervisor. 

They must also never try to repair any machine on 

their own, but report all faults to the supervisor. 

Dangerous substances 

Explain how important it is that everyone complies 

with the rules on the handling of chemicals and the 

advice given on container labels, as detailed in the 

Control of Substances Hazardous to Health Regulations 

1999 (COSHH). Ensure that students know they must 

ask the supervisor if they are not sure of the 

precautions they should take. 

Lifting heavy and awkward objects 

Any work like this should have been assessed under 

the Manual Handling Operations Regulations 1992. If 

necessary, arrange for students to be shown the right 

way to lift objects and explain why it is important. 

Housekeeping 

Explain the importance of, for example, keeping 

drawers and cupboard doors shut; safe positioning of 

loose telephone and computer cables etc; safe storage 

of material; keeping the work area clean and tidy. 

SAFETY PRECAUTIONS 

Safe systems of work 

Describe any hazards associated with the work the 

students are to do/watch and explain the importance 

of safe working practices. Make sure students get any 

necessary further briefing before they move on to 

something new. 

Protective clothing 

Where applicable, describe what is provided, when 

and why it must be used and how to make any 

necessary adjustments. 

Safety equipment 

Explain when and why it must be used, where it is kept 

and how to use it. 

Hygiene 

Tell students where the lavatories and washing facilities 

are. Where applicable, explain the use of barrier creams 

etc and tell students where they can be found. 

EMERGENCY PROCEDURES 

First aid 

Explain the first aid facilities and make sure the student 

knows who is a first aider. 

Accident procedure 

Explain that all accidents must be reported and that all 

injuries, no matter how small, must be entered in the 

accident book. Tell the student where the accident 

book is kept and to whom they should report in the 

event of any accident. 

Fire alarm 

Explain what students should do if they discover a fire. 

Describe what they will have to do if the alarm is 

raised. 

Emergency evacuation 

Explain the procedure for emergency evacuation, 

including the route to be taken, the use of emergency 

exits, assembly points and reporting procedures. 

Finally 

Make sure students understand the importance of 

following the health and safety rules and the possible 

consequences if they don’t. Tell students that, if they 

are unsure about any aspect, they should ask the 

supervisor, or another nominated individual if the 

supervisor is not available. 

08 


Work Experience Toolkit – Employer Information 09

appendix B 

SUGGESTED ANSWERS TO SUPPLEMENTARY QUESTION BANK 

Section 7 in the Student toolkit 

When answering these questions please look back over 

the work and the activities already completed. 

1 In the table below write a brief description for the 

three different ways a business can be owned. 

Business 

Sole Trader 

Partnership 

Limited Company 

Description 

2 List four ways that could be used to make a 

payment to a business. (Examples of these can be 

found in your cash book.) 

3 Give an example of an expense that could be paid 

by standing order. 

4 Give an example of an expense that could be paid 

by direct debit. 

5 Where are receipts and payments recorded? 

6 What are outstanding cheques? 

Person owning the business on their own. 

Persons sharing the ownership 

and management of a business. 

Business is owned by shareholders and 

run by directors. These can both be the 

same people. 

Cheque, standing order, direct debit, cash, credit card, 

BACS. 

Rent, hire purchase payment, loan payments. Any other 

similar items that are an expense with the same amount each 

month are acceptable. 

Phone bill, internet/broadband charge, leasing payments, 

insurance. 

In the cash book. 

Cheques that have been written before the period end and 

included in the cash book, but have not yet worked their 

way through the banking system and so do not appear on 

the bank statements as at the period end. 

9 What does the term ‘drawings’ mean? 

Personal expenses of the owner paid for with business funds. 

10 Give three reasons why accounting records are 

kept by businesses. 

Any three from the following. 

• To provide a permanent record of transactions occurring 

in the business. 

• To provide information so a set of financial accounts and 

management reports can be prepared. 

• To control assets. 

• To provide necessary information for decision making. 

• To comply with statutory requirements. 

11 Give three reasons why financial accounts should 

be prepared. 

Any three from the following. 

• To provide information for owners who do not work 

directly with the business. 

• Provides a basis of calculating tax liabilities. 

• To comply with statutory requirements. 

• To give information to suppliers and loan companies to 

support applications for credit etc. 

12 Name two main statements that would be 

included in a set of financial accounts. 

Profit and loss account, balance sheet. 

13 Give two examples of an asset. 

Stock, debtors, property, vehicles, cash at the bank. 

14 Give two examples of a liability. 

Creditors, bank overdraft, loan. 

15 Give an example of an expense from the profit and 

loss account. 

Wages, rent, electricity, depreciation, postage, loan interest. 

7 List three items that could be un-ticked on the 

bank statement, after entries have been checked 

and ticked against the cash book. 

Bank interest, direct debits, bank transfers, standing orders. 

8 What are outstanding lodgements? 

Items that have been paid into the bank account before 

the period end but which do not yet appear on the bank 

statement. 

10 


16 Below is a profit and loss account for Sweet 

Dreams Surprise. Calculate the net profit. 

17 Give an example of a fixed asset. 

Property, motor vehicle, fixtures and fittings, 

office equipment. 

18 Give an example of a current asset. 

Stock, debtors, cash in hand. 

19 What is input VAT? 

VAT suffered on business purchases and expenses. 

20 What is output VAT? 

VAT charged by a business on its sales. 

£ £ 

Sales 285,000 

Cost of sales (100,000) 

Gross profit 185,000 

Less: expenses 

Wages 25,500 

Rent 11,400 

Heat and light 600 

Depreciation 1,200 (38,700) 

Net profit £146,300 

21 What will happen if your input VAT exceeds 

output VAT? 

The business recovers the difference from HMRC. 

22 You buy some material at a gross cost of £150, 

what is the VAT on the material? 

£150 x 20/120 = £25 

£150 x 1/6 = £25 

23 Give an example of a standard rated item 

(rated at 20%) 

Sweets, chocolate, adult clothes, stationery etc. 

24 Give an example of a zero rated item. 

Books and newspapers, children’s clothes, groceries etc. 

25 Will VAT on a purchase be debited or credited to 

the VAT account? 

Debited 

26 Why do we adjust for accruals in the accounts? 

To adjust for an expense that has incurred in the accounting 

period but has not yet been billed (eg, accountancy fees). 

27 What is depreciation? 

An amount charged as an expense against income to write 

off the cost of a fixed asset over its useful life. 

28 Give two methods of calculating depreciation. 

Straight-line and reducing balance. 

BASIC BOOKKEEPING 

Fill in the boxes to show whether the transactions listed 

would be debit or credit entries. 

You might need some help with this exercise if you are 

not familiar with basic bookkeeping. 

The first step is to determine whether the account is 

an income, expense, asset or liability account, then 

decide whether you are increasing or decreasing the 

account and then you can go on to decide whether 

the transaction described would be a debit or a 

credit entry. 

Debits (DR) – increase expenses and assets or decrease 

income and liabilities. 

Credits (CR) – increase income and liabilities or 

decrease expenses and assets. 

This is how you should show your answers: 

Increase in telephone account 

Income Expense Asset Liability 

+ or – + or – + or – + or – 

DR or CR DR or CR DR or CR DR or CR 

Now have a go at the following transactions. 


11

Increase in sales account 


+ or – + or – + or – + or – 


Increase in motor expenses account 


+ or – + or – + or – + or – 


Increase in director’s salary 


+ or – + or – + or – + or – 


Increase in rent and rates account 


+ or – + or – + or – + or – 


Decrease in insurance account 


+ or – + or – + or – + or – 


Increase in sundry sales account 


+ or – + or – + or – + or – 


Increase in interest received account 


+ or – + or – + or – + or – 


Increase in purchase returns account 


+ or – + or – + or – + or – 


Increase in drawings account 


+ or – + or – + or – + or – 


Increase in motor vehicles 


+ or – + or – + or – + or – 


Decrease in bank account 


+ or – + or – + or – + or – 


Decrease in bank loan 


+ or – + or – + or – + or – 


Increase in sales returns account 


+ or – + or – + or – + or – 


Increase in bank charges 


+ or – + or – + or – + or – 


Increase in office equipment account 


+ or – + or – + or – + or – 


Decrease in sales account 


+ or – + or – + or – + or – 


Increase in wages account 


+ or – + or – + or – + or – 


Increase in cash account 


+ or – + or – + or – + or – 


12 


Accruals and Prepayments Questions 

Annual accounts are usually prepared on an accruals 

basis. This means that they should include all income 

earned and expenses incurred for the year regardless 

of whether money has actually changed hands as at 

the year-end date. Therefore there may be some expenses 

that are paid for in advance, such as insurance, or for 

which a bill has not yet been received at the year end, 

such as electricity. 

An accrual is an adjustment for an expense incurred 

during the year but where the bill has not been 

received by the year end. 

A prepayment is an adjustment for an expense which 

has been paid during the year for a benefit/service that 

extends for a period beyond the year-end date. 

Use the above information, and help from your host 

employer if you need it, to calculate the necessary 

accrual or prepayment for the following situations. 

The year end is 31 March 20XX. 

1 The last electricity bill received was for the 

quarter ending 31 December 20XX-1 and 

amounted to £450. What accrual is required in 

the annual accounts to ensure all electricity is 

accounted for the year ending 31 March 20XX? 

Electricity will have been incurred for the quarter 

to 31 January 20XX but not yet billed so we need to 

include an accrual based on the previous quarter’s 

bill being £450. So, 2/3 x £450 = £300. 

Accrual = £300. 

2 Annual insurance of £860 was paid on 5 July 20XX-1 

for the year ended 30 June 20XX. What prepayment 

is required to ensure the correct insurance figure is 

included in the accounts to 31 March 20XX? 

The insurance paid is for a period in excess of 

31 March 20XX and so we need to take out of 

the accounts the additional cost by way of a 

prepayment. This would amount to £860 x 3/12 

as the amount paid exceeds 31 March 20XX by 

three months. Prepayment = £215. 

3 The council tax bill amounting to £1,500 was 

received on 1 March 20XX-1 for the year ended 

31 March 20XX and in error the administrator 

paid it on 25 March 20XX-1. What action should 

be taken to correct the accounts? 

As the accounts stand they include too much for 

council tax rates as they include a payment for the 

year ended 31 March 20XX. Therefore to correct 

the accounts we will need to make a prepayment 

adjustment for the full amount paid of £1,500. 

4 Staff wages for March 20XX were paid as usual 

on 28 March 20XX. On 30 March 20XX one 

employee submitted a late claim for overtime 

amounting to £250. What action should be 

taken to ensure this amount is included in the 

annual accounts? 

The overtime incurred relates to the year ended 

31 March 20XX even though it has not yet been 

paid. Therefore in order to include it in the wages 

expense for the year we would need to include an 

accrual for £250 in the accounts. 


13

appendix C 

SUGGESTED ANSWERS TO CASE STUDY – 

WORKSHEETS 1 TO 12 

Worksheet 1 – Payments listing 

DATE AMOUNT SUPPLIER DESCRIPTION 

BANK OR 

PETTY CASH 

VAT RATE 

2-Jul 22.98 DC Witches R Us Purchases Bank 20 

4-Jul 5.80 Cash Frangelwort Supermarket Biscuits PC 20 

5-Jul 102.38 120456 Dress to Impress Purchases Bank 20 

4-Jul 153.66 120457 Party Accessorize Ltd Purchases Bank 20 

1-Jul 2.66 Cash Post Office Stamps PC 0 

2-Jul 15.98 Cash Corner Shop Wrapping paper PC 20 

3-Jul 19.38 Cash DIY Shop Shelf and hooks PC 20 

5-Jul 850.00 SO Mungo Dir's salary Bank os 

4-Jul 26.19 DC Simply Stationery Stationery Bank 20 

8-Jul 227.29 120458 Wizards Magic Purchases Bank 20 

8-Jul 91.47 120459 Devils Surprise Ltd Purchases Bank 20 

9-Jul 89.31 120460 Spooky Timers Purchases Bank 20 

10-Jul 26.19 DC PB Garages Fuel Bank 20 




11-Jul 20.37 DC Frangelwort Supermarket Biscuits Bank 20 

11-Jul 1,545.23 DD HMRC VAT June XX Bank os 

12-Jul 116.98 120461 Merlin's Madness Purchases Bank 20 

15-Jul 262.45 120462 Devils Surprise Ltd Purchases Bank 20 



16-Jul 1,200.00 DC Sew 'n' Sew Sewing Bank 20 

16-Jul 80.66 120463 Dress to Impress Purchases Bank 20 


17-Jul 159.78 DC Sparks and Spencers Lunch Bank 20 



18-Jul 80.23 DC Cars R Us Repairs to pool car Bank 20 


19-Jul 46.63 120464 PB Garages Fuel Bank 20 

19-Jul 65.97 DD Electricity Company Electricity Bank 5 

22-Jul 77.66 DD Frangelwort Water Board Water rates Bank 0 

23-Jul 235.56 120465 Mungo Private Bank private 



24-Jul 2,553.19 120466 Computer Crazy New PCs for office Bank 20 


24-Jul 356.56 120467 Inland Revenue NIC Bank os 

25-Jul 24.07 Cash DIY Shop Hooks for pictures PC 20 

26-Jul 3,564.23 DD Wages Wages Bank os 


30-Jul 444.56 SO Frangelwort Council C Tax Bank os 

31-Jul 15.99 DC Frangelwort Supermarket Biscuits Bank 20 



12,918.53 NB Electricity has a special VAT rate of 5% 

Key: DC debit card SO standing order DD direct debit 120456 cheque number 

VAT Key: os outside the scope 0 zero rated/exempt private private expenditure – VAT n/a 20 standard rated 20% 5 special rate of 5% 

14 


Worksheet 2 – Payments cash book 

DATE SUPPLIER TOTAL VAT net PURCH’s 

POST, 

STAt’Y 

CAPITAL 

REPAIRS, 

renew’ls 

MOTOR 

WAGES 

NIC, VAT 

ENTER- 

TAINING 

HEAT, 

LIGHT 

RATES, 

WATER 

SUNDRY 

DIR’S 

SALARY 

2-Jul Witches R Us 3 22.98 3.83 19.15 19.15 

4-Jul Party Accessorize 3 153.66 25.61 128.05 128.05 

4-Jul Simply Stationery 3 26.19 4.36 21.83 21.83 

5-Jul Dress to Impress 3 102.38 17.06 85.32 85.32 

5-Jul Mungo 3 850.00 850.00 850.00 

8-Jul Wizards Magic 3 227.29 37.88 189.41 189.41 

8-Jul Devils Surprise Ltd 3 91.47 15.24 76.23 76.23 

9-Jul Spooky Timers 3 89.31 14.88 74.43 74.43 

10-Jul PB Garages 3 26.19 4.36 21.83 21.83 


11-Jul Frangelwort Supermarket 3 20.37 3.39 16.98 16.98 

11-Jul HMRC 3 1,545.23 1,545.23 1,545.23 

12-Jul PB Garages 3 47.58 7.93 39.65 39.65 

12-Jul Merlin’s Madness 3 116.98 19.49 97.49 97.49 

15-Jul Devils Surprise Ltd 3 262.45 43.74 218.71 218.71 


16-Jul Sew ‘n’ Sew 3 1,200.00 200.00 1,000.00 1,000.00 

16-Jul Dress to Impress 3 80.66 13.44 67.22 67.22 

17-Jul Sparks and Spencers 3 159.78 26.63 133.15 133.15 

17-Jul PB Garages 3 26.20 4.36 21.84 21.84 

18-Jul Cars R Us 3 80.23 13.37 66.86 66.86 

19-Jul PB Garages 46.63 7.77 38.86 38.86 

19-Jul Electricity Company 3 65.97 3.14 62.83 62.83 

22-Jul Frangelwort Water Board 3 77.66 77.66 77.66 

22-Jul PB Garages 3 57.66 9.61 48.05 48.05 

23-Jul Mungo 235.56 235.56 235.56 


24-Jul Computer Crazy 2,553.19 425.53 2,127.66 2,127.66 

24-Jul PB Garages 3 90.13 15.02 75.11 75.11 

24-Jul Inland Revenue 356.56 356.56 356.56 

26-Jul Wages 3 3,564.23 3,564.23 3,564.23 

26-Jul PB Garages 3 26.79 4.46 22.33 22.33 

30-Jul Frangelwort Council 3 444.56 444.56 444.56 

30-Jul PB Garages 3 48.68 8.11 40.57 40.57 

31-Jul Frangelwort Supermarket 3 15.99 2.66 13.33 13.33 


12,805.16 947.30 11,857.86 956.01 99.00 3,127.66 0.00 375.10 5,466.02 133.15 62.83 522.22 30.31 1,085.56 

* 

* 

3,564.23 

356.56 

1,545.23 

5,466.02 

Key: 3 agreed to bank statement 


15

Worksheet 3 – Petty cash book 

DATE TOTAL VAT post, stationery repairs, renewals sundry 

01-Jul 2.66 2.66 

02-Jul 15.98 2.66 13.32 

03-Jul 19.38 3.23 16.15 

04-Jul 5.80 0.96 4.84 

10-Jul 14.50 14.50 

16-Jul 2.56 2.56 

16-Jul 9.19 1.53 7.66 

18-Jul 15.98 2.66 13.32 

18-Jul 3.25 3.25 

25-Jul 24.07 4.01 20.06 

113.37 15.05 30.63 36.21 31.48 

PETTY CASH RECONCILIATION 

Balance as at 30 June 20XX 78.50 

Receipts 1/7/XX Bank 100.00 

Payments -113.37 

Balance as at 31 July 20XX 65.13 

16 


Worksheet 4 – Receipts listing 

DATE Amount customer 

2-Jul 1,180.82 Abracadabra Ltd 

3-Jul 576.21 Sizzlewitch Dramatics 

4-Jul 153.46 Sizzlewitch Dramatics 

4-Jul 217.70 Witty Wigs 

5-Jul 90.54 Party Accessorize Ltd 


5-Jul 67.64 Knotwise Events 

4-Jul 237.51 Fairys R Us 

5-Jul 46.18 Bloosom Roosevelt 

10-Jul 611.38 Meliot Proudfoot 

10-Jul 466.03 Abracadabra Ltd 

15-Jul 114.62 Knotwise Events 

15-Jul 1,133.85 Sizzlewitch Dramatics 

16-Jul 24.07 Bloosom Roosevelt 

16-Jul 66.62 Merlin’s Madness 

22-Jul 33.34 Lily Gangee 

17-Jul 466.36 Muncho Danderfluff 


19-Jul 91.56 Clowns Topsy Turvey Town 

25-Jul 46.63 Ruby Knotwise 

25-Jul 1,139.38 Party Accessorize Ltd 

26-Jul 91.56 Fairys R Us 

26-Jul 113.83 Orange Blossom 

28-Jul 1,251.39 Sizzlewitch Dramatics 

29-Jul 56.84 Meliot Proudfoot 

31-Jul 76.11 Merlin’s Madness 

31-Jul 1,597.51 Crazy Costumes 

31-Jul 57.66 Clowns Topsy Turvey Town 

10,225.44 


17

Worksheet 5 – Receipts cash book 

DATE customer total VAT NET SALES 

02-Jul Abracadabra Ltd 1,180.82 196.80 984.02 3 

03-Jul Sizzlewitch Dramatics 576.21 96.03 480.18 3 

04-Jul Sizzlewitch Dramatics 153.46 25.57 127.89 3 

04-Jul Witty Wigs 217.70 36.28 181.42 3 

04-Jul Fairys R Us 237.51 39.58 197.93 3 

04-Jul Witty Wigs 148.66 24.77 123.89 3 

05-Jul Party Accessorize 90.54 15.09 75.45 3 

05-Jul Knotwise Events 67.64 11.27 56.37 3 

05-Jul Bloosom Roosevelt 46.18 7.69 38.49 3 

10-Jul Meliot Proudfoot 611.38 101.89 509.49 3 

10-Jul Abracadabra Ltd 466.03 77.67 388.36 3 

15-Jul Knotwise Events 114.62 19.10 95.52 3 

15-Jul Sizzlewitch Dramatics 1,133.85 188.97 944.88 3 

16-Jul Bloosom Roosevelt 24.07 4.01 20.06 3 

16-Jul Merlin’s Madness 66.62 11.10 55.52 3 

17-Jul Muncho Danderfluff 466.36 77.72 388.64 3 

18-Jul Witty Wigs 67.98 11.33 56.65 3 

19-Jul Clowns Topsy Turvey Town 91.56 15.26 76.30 3 

22-Jul Lily Gangee 33.34 5.55 27.79 3 

25-Jul Ruby Knotwise 46.63 7.77 38.86 3 

25-Jul Party Accessorize 1,139.38 189.89 949.49 3 

26-Jul Fairys R Us 91.56 15.26 76.30 3 

26-Jul Orange Blossom 113.83 18.97 94.86 3 

28-Jul Sizzlewitch Dramatics 1,251.39 208.56 1,042.83 

29-Jul Meliot Proudfoot 56.84 9.47 47.37 

31-Jul Merlin’s Madness 76.11 12.68 63.43 

31-Jul Crazy Costumes 1,597.51 266.25 1,331.26 

31-Jul Clowns Topsy Turvey Town 57.66 9.61 48.05 

10,225.44 1,704.14 8,521.30 

Key: 3 agreed to bank statement 

18 


Worksheet 6 – Bank accounts and reconciliation 

£ £ 

Balance as at 1 July 20XX 12,456.23 

Total payments for July -12,805.16 

Total receipts for July 10,225.44 

Cash withdrawal -100.00 

Balance per cash book as at 31 July 20XX 9,776.51 

Bank reconciliation £ £ 

Balance per bank statement 31 July 20XX 9,928.94 

Add: unpresented lodgements 

Sizzlewitch Dramatics 1,251.39 

Meliot Proudfoot 56.84 

Merlin’s Madness 76.11 

Crazy Costumes 1,597.51 

Clowns Topsy Turvey Town 57.66 

Less: outstanding cheques 

PB garages -46.63 

Mungo -235.56 

Computer Crazy -2,553.19 

Inland Revenue -356.56 


Opening balance reconciliation £ 

Balance per bank statement as at 1 July 20XX 12,701.83 

Less: outstanding cheques as at 1 July 20XX 120455 -245.60 



19

Worksheet 7 – Extract from bank statement 

DATE CUSTOMER payment type dEbit £ credit £ 


1-Jul Cash Withdrawal 100.00 

2-Jul Cheque Payment 120455 245.60 5 

2-Jul Witches R Us DC 22.98 3 

2-Jul Credit 1,180.82 3 

3-Jul Credit 576.21 3 

4-Jul Simply Stationery DC 26.19 3 





5-Jul Mungo SO 850.00 3 







10-Jul PB Garages DC 26.19 3 

10-Jul Credit 611.38 3 

10-Jul Credit 466.03 3 



11-Jul HMRC DD 1,545.23 3 

11-Jul Frangelwort Supermarket DC 20.37 3 





15-Jul Credit 114.62 3 

15-Jul Credit 1,133.85 3 



16-Jul Sew 'n' Sew 1,200.00 3 

17-Jul Sparks and Spencers DC 159.78 3 


17-Jul Credit 466.36 3 

18-Jul Cars R Us DC 80.23 3 


19-Jul Electricity Company DD 65.97 3 



22-Jul Frangelwort Water Board DD 77.66 3 







25-Jul Credit 1,139.38 3 

26-Jul A/C 256645 (wages) DD 3,564.23 3 



26-Jul Credit 113.83 3 

30-Jul FCC SO 444.56 3 


31-Jul Frangelwort Supermarket DC 15.99 3 



Key: DC debit card SO standing order DD direct debit 3 agreed to cashbook 5 agreed to opening bank reconciliation 

20 


Worksheet 8 – Fixed asset register 

Asset 

Date of 

Purchase 

Depreciation 

Rate 

Orig Cost 20XX-6 20XX-5 20XX-4 20XX-3 20XX-2 20XX-1 

nBV at 31 

jul 20XX-1 

20XX 

nBV at 31 

jul 20XX 

Office furniture 11/04/20XX-6 25% rb 11,423.00 2,855.75 2,141.81 1,606.36 1,204.77 903.58 677.68 2,033.05 508.26 1,524.79 

Sewing machines 12/08/20XX-5 25% rb 25,450.00 6,362.50 4,771.87 3,578.91 2,684.18 8,052.54 2,013.13 6,039.41 

Fabric cutter 25/10/20XX-5 15% rb 18,666.00 2,799.90 2,379.92 2,022.92 1,719.49 9,743.77 1,461.57 8,282.20 

Template machine 04/04/20XX-4 15% rb 12,356.00 1,853.40 1,575.39 1,339.08 1,138.22 6,449.91 967.49 5,482.42 

Computers 05/11/20XX-4 3 yrs sl 8,522.00 2,840.67 2,840.67 2,840.66 0.00 0.00 

Laptops 26/08/20XX-3 3 yrs sl 5,123.00 1,707.67 1,707.67 1,707.66 1,707.66 0.00 

Server 02/02/20XX-2 3 yrs sl 2,456.00 818.67 818.67 818.66 818.66 0.00 

Software 18/04/20XX-1 3 yrs sl 1,555.00 518.33 1,036.67 518.33 518.34 

Fabric dye machine 01/06/20XX-1 15% rb 15,456.00 2,318.40 13,137.60 1,970.64 11,166.96 

Sewing machines 02/07/20XX 25% rb 1,000.00 250.00 750.00 

Laptop 05/07/20XX 3 yrs sl 2,127.66 709.22 1,418.44 

Total 104,134.66 42,979.86 10,924.96 35,182.56 

Check: 42,979.86 + 2,127.66 + 1,000.00 - 10,924.96 = 35,182.56 

Sewing machines are depreciated at 25% rb 

Computer equipment is depreciated straight line over three years 


21

Worksheet 9 – VAT account 

£ 

Balance brought forward 1 July 20XX 1,545.23 

Output VAT (ie on sales) July 20XX 1,704.14 

Less: 

Input VAT from payments cash book July 20XX -947.30 

Input VAT from payments petty cash book July 20XX -15.05 

Less: 

Amount paid to HMRC in month -1,545.23 

Balance due to/from (delete as applicable) HMRC as at 31 July 20XX 741.79 

* Remember to add together VAT from payments cash book and petty cash book 

22 


Worksheet 10 – Trial balance 

INSTRUCT 

(see page 11) 

STEP 1 

BALANCE 

30 JUNE (£) 

MOVEMENT 

JULY (£) 

TB FIGURE (£) 

STEP 2 

DEBIT (£) CREDIT (£) STATEMENT 

Fixed assets i 42,979.86 -7,797.30 35,182.56 35,182.56 Bsheet 

Stock – closing ii 25,000.00 25,000.00 Bsheet 

Stock – closing ii 25,000.00 25,000.00 P&L acc 

Debtors ii 12,967.00 12,967.00 Bsheet 

Bank and Cash iii 12,534.73 -2,693.09 9,841.64 9,841.64 Bsheet 

Creditors ii 12,500.00 12,500.00 Bsheet (c) 

VAT iv 1,545.23 -803.44 741.79 741.79 Bsheet (c) 

Director's loan account ii 5,500.00 5,500.00 Bsheet (f) 

Share capital 1,000.00 1,000.00 Bsheet 

Profit and loss account 52,864.00 52,864.00 Bsheet 

Sales v 169,323.19 8,521.30 177,844.49 177,844.49 P&L acc 

Purchases v 97,569.56 956.01 98,525.57 98,525.57 P&L acc 

Opening stock ii 11,256.00 11,256.00 11,256.00 P&L acc 

Director's salary v 9,350.00 1,085.56 10,435.56 10,435.56 P&L acc 

Wages v 34,962.27 3,564.23 38,526.50 38,526.50 P&L acc 

Tax, NIC v 3,846.00 356.56 4,202.56 4,202.56 P&L acc 

Postage, stationery v 564.00 129.63 693.63 693.63 P&L acc 

Heat, light v 1,125.00 62.83 1,187.83 1,187.83 P&L acc 

Rates, water v 2,145.00 522.22 2,667.22 2,667.22 P&L acc 

Motor expenses v 5,646.00 375.10 6,021.10 6,021.10 P&L acc 

Repairs, renewals v 2,314.00 36.21 2,350.21 2,350.21 P&L acc 

Depreciation vi 10,924.96 10,924.96 P&L acc 

Entertaining v 1,546.00 133.15 1,679.15 1,679.15 P&L acc 

Sundry v 3,927.00 61.79 3,988.79 3,988.79 P&L acc 

275,450.28 275,450.28 


23

Worksheet 11 – Profit and loss account 

transfer all the figures from the trial balance marked p&l account £ £ 

Sales 177,844.49 

Less: 

Cost of sales 

Opening stock 11,256.00 

Purchases 98,525.57 

Less closing stock -25,000.00 84,781.57 

Gross profit 93,062.92 

Less expenses: 

Director's salary 10,435.56 

Wages 38,526.50 

Tax, NIC 4,202.56 

Postage and stationery 693.63 

Heat, light 1,187.83 

Rates, water 2,667.22 

Motor expenses 6,021.10 

Repairs, renewals 2,350.21 

Depreciation 10,924.96 

Entertaining 1,679.15 

Sundry 3,988.79 

Net profit (balancing figure) 10,385.41 

24 


Worksheet 12 – Balance sheet 

transfer all the figures from the trial balance marked BALANCE SHEET £ £ 

Fixed assets a 35,182.56 

Stocks b 25,000.00 

Debtors b 12,967.00 

Bank and cash b 9,841.64 

47,808.64 

Less: 

Creditors (amounts falling due within one year) c 13,241.79 

Net current assets d 34,566.85 b - c 

Total assets less current liabilities e 69,749.41 a + d 

Less: 

Creditors (amounts falling due after more than one year) f 5,500.00 

Net assets 64,249.41 e - f 

Financed by: 

Share capital g 1,000.00 

Profit and loss account 

Balance as at 1 August 20XX h 52,864.00 

Profit for the period i 10,385.41 

Balance as at 31 July 20XX j 63,249.41 h + i 

64,249.41 g + j 


25

Developed in association with Accountancy Learning Ltd 

ICAEW is a world leading professional membership organisation that 

promotes, develops and supports over 140,000 chartered accountants 

worldwide. We provide qualifications and professional development, share 

our knowledge, insight and technical expertise, and protect the quality and 

integrity of the accountancy and finance profession. 

As leaders in accountancy, finance and business our members have the 

knowledge, skills and commitment to maintain the highest professional 

standards and integrity. Together we contribute to the success of individuals, 

organisations, communities and economies around the world. 

Because of us, people can do business with confidence. 

ICAEW is a founder member of Chartered Accountants Worldwide and 

the Global Accounting Alliance. 

www.charteredaccountantsworldwide.com 

www.globalaccountingalliance.com 

ICAEW 

Chartered Accountants’ Hall Moorgate Place London EC2R 6EA UK 

T +44 (0)1908 248 250 

E careers@icaew.com 

icaew.com/careers 

facebook.com/ICAEWstartingpoint 

icaew.com/itfac 

© ICAEW 2013 LPDPLN114 05/13

ACCOUNTANCY WORK EXPERIENCE TOOLKIT - ICAEW

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?