The full AAT qualification has three levels, from Foundation to Professional. As you move through each level, you’ll cover similar elements but in more depth, gradually building up a detailed knowledge of professional accounting.
The running themes throughout all of the levels are financial accounts and management accounts. Let’s take a look at what you’ll learn about these broad areas at each stage of your studies.
Financial accounts in AAT
At Foundation level (level 2) you learn the very basics of financial accounting. This starts with an understanding of double entry bookkeeping, which is the basis of the accounting system.
At Advanced level (level 3) you build on this understanding, learning to create the final accounts for sole traders and partnerships, including the profit and loss account and the balance sheet.
At Professional level (level 4) this knowledge is built on further. This time the final accounts statements are created for limited companies, and the knowledge learnt at both of the previous levels is required to be able to do this.
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Management accounts in AAT
On the Foundation Certificate you learn the fundamentals of cost accounting. This includes understanding what cost accounting is and why it is required.
On the Advanced Diploma this is built on, and you’ll see how cost accounting is used to work out pricing for products, and the importance of tracking the costs associated with these products. Budgeting is introduced so that you can see the importance of any company tracking its costs and sticking to a well-defined budget.
This knowledge is expanded on again during the Professional Diploma, where there is a unit dedicated to budgeting and the calculations required. There is also a unit that focuses specifically on business performance, and this builds on the basics from Foundation level and the calculations (such as break-even point and margin of safety) at Advanced level.
Additional AAT units
At all levels there are additional units that complement the financial and management accounting units.
At Foundation level the use of computerised accounts is covered, and this works together with the manual bookkeeping units looked at above.
At Advanced level there is a unit specifically about ethical behaviour in accountancy. This supports the financial and management accounting units, as it is important to behave ethically regardless of the type of accountancy role you have.
At Professional level you can undertake optional units. The two tax units build on the knowledge of financial statements learnt at the lower levels.
The key when studying the AAT qualification is to not think of the units as isolated, but to see how they link together and build on each other to give you a broader, better understanding of accountancy in theory and in practice.