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AAT tips

Who stole the tips?

Our best friends at Sutton Coldfield College give you timely advice about the December exam sitting. As we promised in the magazine, the missing tips are included here

We thought we would change the format a little this tips time and concentrate on one paper, with some highlights of the others. The main theme that appears to be running throughout all of the AAT papers is don't rest on your laurels (very Christmassy!). In the past, we could say that examiners didn't, on the whole, change formats dramatically, including the type of question asked. Even though there have been very few examiner changes over the past few years, this doesn't appear to be 100% true today. The old saying about being prepared, going through past papers, looking at the examiners' comments and answers, ensuring that you don't question spot is still true. But to ensure success, you really do need to have covered the entire syllabus and know your onions! Anyway, on to the revision tips, we here you say:

FOUNDATION
PLB
There were quite a few 'unexpected' tasks in the June '08 paper when compared with previous papers. VAT refunds, for example, appear in various places, and double entry was heavily tested. The bank reconciliation had several items to adjust for, including a variance in the opening bank balance (so this could be an issue for time management purposes). Could this be a move in paper format? Only time will tell and the prepared student still shouldn't have any problems with this paper. Go through the past papers, they are still a good source of practice. However, ensure that your double entry is spot on and you can adapt it to the various situations, ensure you understand the principles of VAT and maybe consider looking at the bank rec. first, to ensure you will have enough time to complete (although again, the prepared student shouldn't have any problem completing this paper in time).

ECR (UNIT 6)
One of the main issues with this paper is that students don't read the question properly, and even when they do, they often answer a question other than the one they were asked! Practice reading questions, consider what the examiner is asking and then check the answers. Do they match up with what you would have answered? Students need to work at the written parts of past exam papers, make sure in your revision you write down the answers to the short questions – one mark can make such a difference!
Marginal/variable costing: Students need to know how to produce a marginal costing statement, so you need to know its format. This will then help you consider cost per unit or even whether an extra additional order should be undertaken or not. Oh, and remember marginal cost equals variable cost; they are the same thing. You will tend to find the more 'UK' based use marginal, 'US' based use variable.
Absorption/full costing: All costs, i.e. variable costs + fixed costs. There appears some confusion among students over this one – you absorb ALL of the costs to find the absorption or full cost.
PV ratio = CS ratio: They are the same thing. The 'easy' way to remember how to calculate is CS ratio = contribution/sales (or contribution divided by sales) then
x 100 to turn it into a percentage.
Break even analysis: You should know all variations of the ratios used here, for example know how to calculate margin of safety in units as well as a percentage; target profit; PV/CS ratio.
Limiting factors: Consider which cost per unit (CPU) you should be applying to each situation and use it correctly! Students often use the original CPU rather than the revised CPU when making analysis, and make sure the CPU is the correct one (for the unit being considered!)
Investment aappraisal: Work on your written theory; this is where accounting students are weak – writing! It's not that you don't know what to say; often it is how to put it into words.
Most students cope well with the calculations, but don't forget to deal with income and expenditure correctly; namely income means you add and expenditure/costs means you take away. Also, be careful that you have considered the whole task before making any decisions. For example, with a NPV analysis, if you are looking at a project, the one with the highest positive NPV is normally the best (from a purely financial view point); if you are considering which way to acquire a machine (lease, buy, hire) then the lowest negative NPV is the most viable.
Under/over absorption: This calculation seems to baffle some students, as well as its double-entry. Be careful as well about which method you use, labour intensive lends itself to using labour hours, a product which is machine intensive would use machine hours.
Process costing: This is generally one of the weakest areas. You should make sure that you can do all methods, and know the theory as well. So revise everything, including all the way from normal losses and gains, through scrap value, to abnormal losses and gains (and scrap value!). This is an area that the examiner has said will develop over time, so just because past papers haven't asked a question about 'the next step' don't think this paper won't.
Labour and stock questions don't appear to cause much concern, although this is not to say you don't need to revise, often it's the 'easier' areas that people feel happy with that they fail on, because they don't revise them!
Overhead apportionment/ allocation: Again, there doesn't appear to be a cause for concern here. One tip: check the totals overall, add the 'bottom' line up and it will come back to the original cost (if you have done it right).

FRA (Unit 5):
There is not a lot to say about the FRA paper. To be honest the FRA paper is nowhere near as hard as it used to be. If a student has a very sound understanding of double entry and has covered all of the subject area and understands it they will pass. Yes! This is common sense but what I am saying is that there shouldn't be any nasty surprises.
You know that you need to understand and be able to calculate depreciation and that you may have to show a disposal or a part exchange. You just need to make sure you get the right method and read the question properly.
There will be ways you can gain all available marks by showing your workings, using the full and correct account names and being neat and tidy.
In other words "don't cut corners". Take your time. Learn the layout of the trading, profit and loss accounts and balance sheet and use it fully, including titles. It's about preparing and then being alert in the exam by answering each question fully and as set.

TECHNICIAN
On the whole, the technician papers have become the marmite level. Some you will love, DFS for example appears to be following a trend and bringing some good reviews about continuity. So, if all goes to plan, this paper should still offer a good opportunity for the prepared student to pass.
Likewise PEV, practice the past papers and ensure that you have covered the full standards and you shouldn't have a problem with this paper either.
However, PCR and to a lesser extent the tax papers appear to be offering another side of the coin. Expect the unexpected, know the whole of the standards and be able to 'mold' you knowledge. This is actually where the learner rather than the crammer does come into their own, being able to adapt your knowledge to different circumstances is a must here, rote learning just wont payoff - and that does go for ALL of the technician papers.
On Personal Tax, expect forms to be there - somewhere. New forms from HMRC include income from property and employment, so make sure you are OK with those. Also a question on the due dates and electronic filing which changed from 07/08.
Apart from that, we really wouldn't like to make any guesses, which is just what they would be.
On a last point, have you accessed the full services offered to you by the AAT? Have you been on the discussion forum for example? Have you looked what e-learning there is available? At least you have probably found the send results by email button. Log onto www.aat.org.uk and have a look at what is on offer, and don't forget, you can leave feedback direct with AAT on the exams you have sat.

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