How to become an accountant ...BLOG

How To Become An Accountant

We are frequently asked the question “How do I become an Accountant”.

This is a very short question with a very long answer! If you want to know how to become an Accountant, the first part of the answer must unfortunately be another question:

“What sort of an Accountant do you want to become?”

There are lots of different types of accountant, e.g.

  • Chartered Accountant ACA or CA
    There are different national variants of this, e.g. ICAEW (the Institute of Chartered Accountants in England and Wales); ICAS (Scotland); ICAI (Ireland)
    There are also Institutes in Australia, Canada, Australia, New Zealand and South Africa
  • Chartered Certified Accountant (ACCA)
  • Chartered Management Accountant (CIMA)
  • Chartered Public Finance Accountant (CIPFA)
  • Chartered Institute of Taxation

There are also other Professional Accounting Bodies, including:

  • IFA – Institute of Financial Accountants
  • AIA – Association of International Accountants Other Accounting Technician, Professional Accountant or Bookkeeping bodies include:
  • AAT – The Association of Accounting Technicians
  • ICB – Institute of Certified Bookkeepers
  • IAB – International Association of Bookkeepers
  • ATT – Association of Tax Technicians

The above list is not exhaustive and in addition to other UK bodies there will be other professional accountancy bodies in other countries.

(PS. If you see an FCA instead of an ACA, this stands for Fellow Chartered Accountant, which can only be applied for 10 years after qualifying)

  • IAB goes up to Level 3 qualifications
  • AAT goes up to Level 4
  • IFA goes up to Level 5
  • ACA and the other Chartered qualifications go up to Level 7

Click HERE to see a graphical representation of this.

Back to the question – “How do I become an Accountant?”

So, what is your starting point and what sort of Accountant do you want to become?

  • Are you a school leaver with GCSEs, AS levels or A Levels?
  • Are you a graduate with a relevant (accounting) degree or a non-relevant degree?If a graduate, you can start studying for a Chartered qualification. You can also do this with A Levels in certain circumstances, but you would normally be encouraged to start at a lower level and then work your way up. However, and it is a BIG however, one of the main limiting factors for following this route is that you will be required to obtain a specified amount (and range) of work experience within a Training Organisation / Employer approved by the Professional Body you are studying towards. i.e. you need to be offered a training contract of some form. You can get started on your studies but you won’t be able to finish them and become a member, without that crucial work experience in an approved training office, normally a minimum of 3 years. Without this, you can be left high and dry, part qualified and unable to qualify. For the ACA route, these training places are very hard to come by and competition for them is fierce. When I qualified, 98% of ACA trainees were graduates. However, there are a growing number of trainees who leave school after “A” level; they then undertake an Apprenticeship in Accounting to complete their AAT qualification and after that, progress to ACA, claiming exemptions from some of the Certificate Level papers. There are also exemptions for progression to ACCA and CIMA.  The AAT is a great building block for this and a way of getting one’s foot in the door with an employer.
  • Do you have a number of years’ experience in accounting but no accounting qualifications? If this is the case, then we would (obviously!) recommend that you complete the AAT qualifications so that you have a recognised qualification, with professional credibility, that both reflects your current knowledge/skills and enhances upon them. The question is where to start – at what level.

Click HERE for a brief summary of the entry routes and progression options

Alternatively, your can request a comprehensive “FREE Guide To Your AAT Studies” by contacting us HERE

This will explain the various entry options and which might be best for your particular circumstances. We do get a lot of students, who despite having prior experience, start with the (Level 2) Foundation Certificate in Bookkeeping in order to a) remind themselves of and refresh those double entry principles and b) get back into a study routine on a topic they understand and c) get used to the AAT terminology and the computer based exam process. They then progress to the full (Level 3) Advanced Diploma in Accounting.

  • Are you someone who has no experience in accounting but are thinking of a career change and thought that accountancy might suit you?

Well – as the song goes “Let’s start at the very beginning…..”!!

(When you read you begin with ABC; when you sing you begin with Do-re-mi; with us you begin with accounts that are T) (Sorry for that. I couldn’t stop myself!?!)

We would generally recommend that you start with the (Level 2) Foundation Certificate in Accounting.  If you are able to put in about 8 hours of study each week, you could plan to complete this in 8 months (we have had a very keen student complete it in 15 weeks).

You could then progress to the (Level 3) Advanced Diploma in Accounting and then to the (Level 4) Professional Diploma in Accounting, taking 12 months and 13 months respectively on the same 8 hours of study per week. It could take you longer or you could complete it quicker. Pete, who was one our students and who now works for us, will have taken around 14 months to complete all 3 levels. Mind you he is very motivated and pretty bright……but don’t tell him I said this!

  • What do you want to end up doing?
  • Do you want to be an Accountant? Or, do you want to be a Bookkeeper and offer bookkeeping services to small clients – and then pass the really technical stuff, (including tax advice), onto a friendly firm of accountants?

If so, then you probably would prefer to undertake a Bookkeeping qualification. However, this will be the subject of another Blog!  Having said that, the AAT exams that cover the AAT bookkeeping qualifications are also included as part of the wider range of exams that are included in the AAT accounting qualifications. So, if you want to, you can start with the bookkeeping exams and when you find you love it, progress to the full accounting qualification, making use of the exams you have already passed!


If you think that starting with the AAT qualification is right for you but you would like to talk to someone to discuss your options in more detail, do give us a call – or fill in an enquiry form HERE and we will call you (UK only otherwise the phone bill will cost us a fortune!)

Boris's Top 10 AAT Study Tips

How To Study AAT Via Distance Learning – Boris’s Top 10 AAT Study Tips

Undertaking an AAT distance learning course can be a real challenge. So, we asked AL team member Boris (aka the Southernhay Cat) to compile his best tips on keeping you motivated in achieving your goals:

1. “This is MY space”

Boris's Study Tips BLOG - This is my space

Creating a good study space is really important. It’s no good trying to study with your laptop on your knees and lots of clutter everywhere around you.

Instead, create a good working space where you have everything you need to hand. (You don’t want to be getting up every 5 minutes to find your pencil, rubber, ruler, calculator, more paper…!)

2. “It’s all about ME”

Boris's Study Tips BLOG - It's all about me

It’s important to recognise your achievements and give yourself some ‘love’. Choosing to undertake your course already shows a level of commitment to improving your knowledge and skills.

With every practice paper completed and every exam passed, you are getting closer and closer to achieving your goal. Maybe one day, someone will write about a book about how great you are!

3. “I’m staying on track”

Boris's Study Tips BLOG - I'm staying on track

We provide all our students with an individual learning plan – this includes target dates for completing your progress tests, practice assessments and sitting exams; a great way for you to keep track of your progress.

We also provide a blank learning plan so that dates can be adjusted to suit your own study hours – here’s Boris updating his own learning plan to reflect his 2 week study break (he’ll be on holiday enjoying his favourite pastimes of bird watching and drinking 5* milk).

P.S. he’s very elderly, so don’t worry about the ‘birds’!

4. “I’m just taking a nap”

Boris's Study Tips BLOG - I'm just taking a nap

There is no point trying to study when you are too tired. You won’t be in the right frame of mind, your brain will struggle to process anything, so you’ll just end up getting frustrated. If you are too tired to study, DON’T! Go to bed and tackle it again tomorrow when your mind is fresh.

It’s important that you associate your studies with success! Don’t spend your time getting annoyed and wishing you weren’t studying.

5. “Can I help you?”

Boris's Study Tips BLOG - Can I help you

Don’t let people interrupt you when you are studying! If you have set aside time to study, let people know that you don’t want to be disturbed – this is YOUR time.

Whether you are studying in the office or at home, distractions are your worst enemy when it comes to productive studying. Turn off your phone, switch off your emails, shut the door and enjoy your successful study time!

6. “I can’t believe I did that!”

Boris's Study Tips BLOG - I can't believe I did that

It’s important to recognise that you will make mistakes – we all do! You will send your work in to be marked and you may answer some questions incorrectly; you will add up the same numbers 4 times and get a different answer at each attempt; you will get quiz questions wrong and you may not achieve an AAT green light at the first attempt… BUT, KEEP GOING! You will get there.

Mistakes are all part of the learning process, and once you’ve made them, you shouldn’t make them again. Have confidence and you’ll pass those exams in no time.

7. “Just a little further…”

Boris's Study Tips BLOG - Just a little further

As you are studying, remember why you started your course in the first place – remember what your goals are.

It may seem like a long way off but you WILL achieve – you just have to keep your focus and be persistent. Keep your dreams and goals in mind as you power your way through your qualifications.

8. “This doesn’t look like studying to me Sir!”

Boris's Study Tips BLOG - That doesn't look like studying

Having a study buddy is a great way to keep you on track. Maybe you know someone else studying AAT and you can help each other out, or maybe you just need someone to hold you accountable for your studies.

Much like people have gym buddies (“Come on, it’s Tuesday, put down the takeaway menu and get to aerobics”), you could have your own study buddy (“Come on, it’s Wednesday, turn off the TV, put your phone away, its study time – you need to submit that practice assessment this evening!”)

Having someone else involved in your learning journey will help keep you accountable for your goals… and you will have someone to celebrate your successes with!

9. “Ain’t no party like a study-break party!”

Boris's Study Tips BLOG - Aint no party

It’s obviously important that you set aside time to study each week to ensure that you are making good progress – getting into a study routine is vital.

However, you should not think of studying as a hindrance to other areas of your life. Let’s say you have Thursday evening set aside as ‘study time’ – does that mean you can’t go out for your friend’s birthday dinner? Of course not!

The beauty of distance learning is that you are not chained to specific hours of attendance each week. If you know you won’t be able to study during a particular day, then do it the day before, or the day after – the learning materials won’t have moved on without you, so you won’t fall behind. (Just make sure that you don’t neglect your studies too frequently!)

10. “You WILL achieve your goals!”

Boris's Study Tips BLOG - You will achieve your goals

One day, your studies will be completed, you will have passed all your exams and your AAT certificate will be proudly displayed on your wall. Think about how you will feel once you have achieved your qualification – what will it mean to you?

Do you want a promotion from your current position; are you looking to set up your own bookkeeping business or do you want to start a whole new career and sit in the best chair in the office?

Whatever your goal, keep up the hard work and make your dream a realityYOU CAN DO IT!


Not started your AAT journey yet? Well, we’ve got a fabulous offer on at the moment – check it out here


Accruals and Prepayments BLOG Featured Image

How To Make Sense Of AAT Accruals And Prepayments Part 2

Accruals And Prepayments Example No. 2

As students often take a little while to get their heads round accruals and prepayments, we thought we would work through another example. So here it is:

Have you seen our Accruals and Prepayments BLOG Part 1? If not, then please view that one first – you can read it HERE:


Step 1: During the year ended 31st January 2016, we paid £6,900 for advertising expenses invoiced to us. During February 2016 (i.e. after the year-end), we received an invoice for £1,325 that related to advertising undertaken in January.

We have therefore accrued for this in the 2016 accounts. The two T accounts we will use are:

a) The Advertising Expenses Account (in the SPL / P&L A/C), and

b) The Accrued Expenses Account (SoFP / BS)

These are shown below. The Advertising Expenses Account shows the bank payment of £6,900 plus the accrued expense of £1,325, amounting to a total to be transferred to the SPL of £8,225.  The Accrued Expenses Account shows the balance of £1,325 which will be included in Creditors in the SoFP (Statement of Financial Position)

Accruals & Prepayments BLOG Taccount 1

Accruals & Prepayments BLOG Taccount 2

At the start of the year ended 31.01.17 (i.e. on 01.02.16), we reverse the accrued expense and transfer it back to the Advertising Expenses Account – as shown below.

Accruals & Prepayments BLOG Taccount 3

Accruals & Prepayments BLOG Taccount 4

This leaves a nil balance on the Accrued Expenses Account and a credit balance on the Advertising Expenses Account of £1,325

During the year to 31st January 2017 we paid £7,500 for advertising expenses, including paying the accrued invoice of £1,325 when it was received. The Advertising Account now looks like this.

Accruals & Prepayments BLOG Taccount 5

After the year end, an invoice of £1,500 was received. This relates to a 3 month advertising campaign in the local paper, covering December 2016, January 2017 and February 2017. Therefore 2/3rds of the £1,500 related to the year ended 31st January 2017 and will need to be accrued – i.e. £1,000

As with the previous year, we do this by debiting the expense account (we are increasing the expense to reflect the true cost in the year). The two Accounts will now look like this:

Accruals & Prepayments BLOG Taccount 7

Accruals & Prepayments BLOG Taccount 8

We now need to balance off both, transferring the balance on the Expenses Account to the SPL and carrying down the balance on the Accrued Expenses Account and including it in the SoFP (aka Balance Sheet as it is a summary of the Balances……and the debits and credits should balance!)

The Accounts will now look like this:

Accruals & Prepayments BLOG Taccount 9

Accruals & Prepayments BLOG Taccount 6

Looking at this in the form of an equation, the expense for the year is made up of:

Accruals and Prepayments BLOG

Another way to look at this is to see how the SLCA and PLCA accounts work:

These accounts effectively work in the same way, in that they accrue for income not yet received, and for expenses not yet paid.

Re the SLCA, you create an invoice for a credit customer but you don’t get paid for the goods/services until 30 days later. You still record the sale (CR Sales account). However, as the invoice hasn’t been paid yet, you “accrue” the sale in the SLCA (DR SLCA) until it is paid – very similar to how the Accrued Income account works.

The PLCA account works in a similar way.

The principle is that the SPL (P&L A/C) should recognise the income earned and the expenses incurred during the year, irrespective of whether or not they have been invoiced or paid.

Happy studying!

If you found this BLOG valuable and would like to know more about Accruals and Prepayments (as well as other key topics), you might want to consider the AAT Advanced Diploma in Accounting (or the Advanced Certificate in Bookkeeping) – you can read more about this internationally recognised qualification HERE:

Accruals and Prepayments Blog

How To Make Sense Of AAT Accruals and Prepayments

Whilst marking various progress tests and practice assessments, I find there are certain areas that regularly cause students problems. In the AAT Level 3 Advanced Diploma (and within Accounts Preparation / Advanced Bookkeeping), one of the problem areas tends to be Accruals and Prepayments (yes I saw you shudder and pull a face!) Below are the latest results from the related AAT exam (Task 3 is Accruals and Prepayments):

AAT Level 3 ACPR Results 2016

When I was studying my AAT Level 3, I was taught the clever trick – Accruals has a cr in it – this works well with expenses, as accrued expenses build up on the credit side. Then I reverse it for income, if this is what the question is looking for. I also reverse it for prepayments of expenses. Originally, this was enough to get me started and then I established the logic behind it i.e. I started to understand why I was debiting and crediting the various accounts.

When looking to see if I could find any clever tips for remembering these dreaded concepts, I came across shops – Dorothy Perkins (Debit Prepayments), C&A (Credit Accruals). This is helpful, although it may be worth trying to remember other items – find your interest and try and link it in – this works for me as I love to shop!

As an exam tip I would suggest that you write DEAD CLIC at the top of your page and keep referring back to it; making little notes like this can help, and it never hurts to go back to the basics.

New to AAT qualifications? Before we get started, you might find it useful to know what the AAT Advanced Diploma includes – you can read more about it HERE:

Accrued Expense:

This is effectively a liability because the business owes it. Therefore, it must build up on the CR side of the Accrued Expenses account (until it has been paid).

Accrued Income:

This is income that the business has earned but for which it has not yet raised a sales invoice or been paid (if it had, it would have been included in debtors or cash (Dr Debtors; Cr Sales or Dr Cash; Cr Sales). This is therefore an asset i.e. money that is owed to the business; therefore it builds up on the DR side of the Accrued Income account.

Prepayment of an Expense:

This is also effectively an asset, because the business has paid for something it has not yet received. Therefore, it must build up on the DR side of the Prepaid Expenses account.

Prepaid Income:

This is effectively a liability, because the business has not yet earned the value of the invoice that it sent out. For example: you receive a payment for rent in January, which relates to January, February and March. However, we haven’t reached February and March yet, therefore it must build up on the CR side of the Prepaid Income account.

Example 1:

Let’s go with an example and put this practice into place. You have been given the following information:

Sundry Income: there was an opening accrued balance of £550 on 1/1/2016 in the Sundry Income account. There have been receipts during 2016 of £6,300. These include £350 that relate to the first month of the following year.


Let’s start with what happened at the end of last year:

You had not yet raised an invoice for the Sundry Income of £350, therefore you needed to ‘Accrue’ for this by adjusting the Income (CR) side of the Sundry Income account. This provides us with the actual income for the year (in accounting terms) of £7,750:

Acrruals & Prepayments Example - T-account 1

Acrruals & Prepayments Example - T-account 2

At the start of the current year, you raise and are paid for this outstanding amount. Therefore, the bank receipts figure for 2016 of £6,300 includes £550 that relates to income earned last year (i.e. 2015). We therefore need to remove it from income in the 2016 accounts. This is done by transferring the balance on the accrued income account back to the Sundry Income Account. See below:

Acrruals & Prepayments Example - T-account 3

Acrruals & Prepayments Example - T-account 4

At the moment, the Accrued Income account has a Nil balance and the Sundry Income account has a balance of £5,750 (being the bank receipts of £6,300 less the receipts of £550 that relate to last year’s earned income.

Now let’s carry on with the rest of the year’s transactions:

We have been told  that the balance brought down as at 1.1.2016 is £550 (accrued), and that the balance carried down at 31.12.16 is £350 (prepaid) – these would both be entered on the Debit side of the Sundry Income account as above.

A prepayment is money which the business has received but not yet earned, so it also reduces the figure that will be entered on the Statement of Profit/Loss (because it doesn’t relate to this year’s accounts). We therefore need to transfer this prepayment to the Prepaid Income Account and then calculate the balancing figure for the Sundry Income Account. This is £5,400 on the Debit side and so the other side of the double entry will be a Credit in the Statement of Profit/Loss (i.e. Income).

Acrruals & Prepayments Example - T-account 5

Acrruals & Prepayments Example - T-account 6

I hope this has helped – look out for Accruals and Prepayments Part 2 next week.

In the meantime, happy studying!

P.S. Did you know that you can now apply for AAT Licensed Bookkeeper* status – it means that you can put AATQB after your name. Find out more about it HERE:

(*You will need to have achieved the AAT Advanced Certificate in Bookkeeping or the AAT Advanced Diploma in Accounting)

Dissenters Cemetery in Exeter

A Grave Situation for Exeter Dissenters!

FAO Exeter Dissenters – our Blogs are, understandably normally about accounting. However, I have been reliably informed that there is more to life than accountancy. I know that this is hard to believe, but I try to be open minded!?!

We therefore thought it would be good to add the occasional blog about something else.

Our main office is in Exeter. Like many English cities, it has a medieval core, albeit much of it was destroyed in the Baedeker Bombings of the 2nd World War. However it has a much longer history, predating the fortification of the city by the Romans (who named it ISCA) in around 55AD.

I was taking a lunchtime constitution the other day as part of my New Year’s Resolutions and whilst walking to see Bull Meadow, I passed a small, walled, graveyard. There was a plaque on the wall that explained it as being The Dissenters Graveyard 1748 – 1854. I stopped to learn more.

“Dissenters” was a term used from the 17th Century onwards to describe those English Protestants who did not accept the authority of the Church of England. They formed separate congregations, often referred to as “Meetings”. They also rejected the Book of Common Prayer. As this was a requirement for Anglican burials, the Dissenters had to establish burial grounds of their own.

In 1747, three local Meetings leased land near Bull Meadow for such a graveyard, with the first burial being of Mary Green (the Minister’s wife), in 1748.

Overall, there were nearly 2,000 burials there, with the last burial being that of Emma Tompson in 1854. The site was owned by the Dissenting groups until the mid-1980s. Since then, it has passed through the hands of a number of property developers. However, the council refused to allow planning permission which has allowed it to have been acquired (quite recently), by the Exeter Dissenters Graveyard Trust.

After the restoration of Charles II, it was difficult for Dissenters to enter the established professions, so many of them entered commerce, industry and the sciences. Occupants of the graveyard include wool and cloth merchants, a banker, two lawyers and five accountants.

Arguably, (by their insistence on freedom of expression and belief), the Dissenters have played a major part in establishing the freedoms most of us enjoy today. In the early 19th century, Dissenters made up nearly 40% of the Protestant population in Exeter and so they were a significant minority.

100 yards further down the lane, lies a dedicated Jewish graveyard, also now owned by the local Jewish Community (purchased in 1977 for £750).

The preservation of both of the above sites was only made possible by the willingness of Exeter City Council to refuse planning permission for exhumation and re-development and to allow the sale of the freeholds to the supporting charities. I find it encouraging to see the long history of tolerance that recognises the rights of peoples within a community to hold different beliefs, to maintain their individual identity but still be part of that community.

When drafting a set of financial statements, although they are all governed by a single community (a set of Financial Reporting Standards), it is our job as accountants to ensure that each set of accounts properly reflects the individual nature of the business or organisation for which the accounts are reporting.

It is interesting to note that the original purchases of the land for the above graveyards all seemed to be for leasehold, not freehold. If an organisation owns the leasehold of a graveyard, I suppose establishing an amortisation policy could have two meanings!?!

P.S. When going out at lunch today – have a look at what historical legacy you are walking past.

You can find more information on the Dissenters Cemetery here

BLOG Was it Friday 13th last week, or is it today

Wasn’t It Friday 13th Last Week?!!!

Was It Friday 13th Last Week, Or Is It Today?!!!

Friday 20th January is the day when, every 4 years at 12.00 noon, the inauguration is held for the President of the United States of America.

The swearing-in ceremony takes place at the U.S. Capitol and is organized by the Joint Congressional Committee on Inaugural Ceremonies. It is usually followed by a parade along Pennsylvania Avenue.

The US inauguration has been held on the 20th January since the second term of Franklin D Roosevelt in 1937. Prior to this, they had been held on 4th March since George Washington took office for the second time, in 1793, having been first inaugurated on April 30th 1789, as the first President of the USA.

Americans to achieve political autonomy

It is also interesting to note that on January 21st in 1793,  Louis XVI of France was executed. The two events (i.e. the achievement by America of Independence from the British Crown and the French Revolution) were closely linked by the philosophy that underpinned the former. The success of the Americans to achieve political autonomy, inspired the French people to aspire to the same independence. The previous French support for the American war of independence had also put them into serious debt, undermining the French economy and providing the seedbed for revolution.

At the time of the American Revolution, there were 20 British colonies. However, only 13 supported the revolution. Those in current Canada resolutely maintained their neutrality, despite American overtures and in fact a failed invasion by them of Quebec. The American Revolution was also a civil war and over 100,000 loyalists fled as a result of it, mainly to Canada.

Ideas are powerful

The philosophy of the time was much influenced by the English philosopher, John Locke (1632 to 1704). Locke propounded a theory of natural rights, arguing that governments had obligations to their citizens and could ultimately be overthrown by those citizens under certain circumstances. Interestingly, Locke’s father served with the Parliamentary forces in the English Civil War. Ideas are powerful. Fortunately these days, with universal suffrage we are able to have elections instead of revolutions to achieve these results. With a set limit on the term of any government with the requirement for a subsequent populist vote, the need for revolution is hopefully replaced by the right to vote.

Financial Reporting  Standards Provide Consistency

2016 was perhaps a vivid example of this and perhaps Friday 20th January is a chance to reflect on this.  Things continually change, but if something works why change it. Double entry bookkeeping was “invented” in 1494 but is still with us today. Accountancy is a universal language, and financial reporting standards are international. They provide consistency across the globe and a common financial language for all peoples. Bravo Luca Pacioli!

Trump that!?!

You can read more about US Presidential Inuaguration here


Markup vs Margin BLOG

How to Calculate Margins and Markups

Do you confuse your Margins and Markups? Do you know what they are?

People often get confused between margins and markups and sometimes incorrectly use them interchangeably. Hopefully the explanation below will help.

For Example:

You buy baked beans from your supplier for £0.50 per can.

You sell them for £1.00


This is a mark-up of £0.50

This can also be expressed as a mark-up of 100% i.e. you have added a profit of £0.50 (100% of the original cost).


Your profit of £0.50 is 50% of the sales price

This can be expressed as making a margin of 50%


Most retail and wholesale businesses will operate in this way. A shopkeeper will have a range of markups depending on the types of goods that they are selling.

Luxury goods typically have a much bigger mark up.

Quite often the supplier will suggest a mark-up by showing on their invoice the recommended retail price, but then deducting a trade discount. The trader can simply add the trade discount back when pricing up the goods.

For Example:

A baked bean supplier might show on their invoice to the shop:

Margins & Markups BLOG Example 1

We express margin and markup in percentage terms.

Let’s look at this in terms of the annual trading account,
(for ease, we’ll assume that opening stock and closing stock are the same).

Margins & Markups BLOG Example 2


The Markup = C / B  i.e. 60,000/60,000 x 100 = 100%

(We have marked up the cost of goods sold of £60,000 by 100% to arrive at our sales figure of £120,000)


The Margin = C / A  i.e. 60,000/120,000 x 100 = 50%


Here are a range of margins and markups for you to see the inter-relationship between them – and to practice your algebra!!

Margins & Markups BLOG Example 3


We hope this makes the difference between your margins and markups clearer for you.

Did you find this BLOG valuable? Would you like to know more about Margins and Markups (as well as other key topics)? If a ‘YES’, then you might want to consider the AATs Advanced Diploma in Accounting – you can read more about it HERE:

2017 goals

New Year’s Resolutions 2017 – What’s On Your Bucket List?

How long do your New Year’s Resolutions last?

Each year we come up with lots of New Year’s resolutions such as starting a diet, going to the gym to get fit, planning that dream holiday, buying a new house, getting your life out of a rut by training towards a new career, and so on. But how long do these good intentions go on for? A month or so if we’re lucky!

I was no different – during one family Christmas gathering (9 of us), we all decided to write down our New Year’s resolutions and put them into a sealed envelope to be reviewed again the following year – you can probably guess how successful we all were… we had stuck to very few of the things we had felt so strongly about the year before.

Do you have a vision board?

What can we all do to help us stick to the plans and goals we set for ourselves? Well, a while back I heard about ‘Vision Boards’ – a largish (at least A3) board where you pin or stick images and messages that focus on how you want to feel, not just pictures of the material things that you want (although these can definitely go on there too) – see example below.

Vision Board Example

Visualisation exercises to improve your performance

Now this might all sound a bit ‘namby pamby’ but in fact, there is a simple explanation about why these work so well – it is all about ‘visualisation’.

Having a vision board in a space where you frequently see it, means that you are essentially doing short visualisation exercises every day. It is common knowledge that Olympic athletes having been using visualisation techniques for decades to improve performance. Psychology Today1 reported that the brain patterns activated when a weightlifter lifts heavy weights are similarly activated when the weightlifter just imagined lifting heavy weights – wow!

So what should go onto a vision board?

Anything that inspires and motivates you – think about what your goals are in the following areas: relationships, career, finances, home, travel, personal growth. Images could include pictures of your loved ones with hand written messages about how you feel (or want to feel) about your relationships with them; would you like a family holiday next year? Research where you want to go and put a photo of your holiday destination on the board (it must be specific though e.g. a photo of the hotel that you will be staying in). Do you want a new car? Which model? What colour? Put a photo of it on the board. If you want a career change, think about why you want it; how will it make you feel to have achieved it – write a message etc.

I now have a vision board (not the one shown above!) and it is truly amazing how it can focus your mind on all the goals you want to achieve – why not give it a go; you’ve got nothing to lose, and just maybe….


Seeing is believing!


Emily's Santa Abseil

Emily’s Christmas Charity Abseil

I don’t like heights. I don’t do adventure sports. I do not see the fun in teetering over the edge of the building on a rope. So, when I saw a sponsored abseil from the roof of a multi storey car park advertised, I of course thought I should take part. And then I thought I shouldn’t’. I registered whilst at my desk and Jodie will confirm my levels of wavering, self-convincing, sudden dawn of realisation and whinging “but I really don’t want to do it!”

My only experience of abseiling is when I was 11 and on a school residential adventure course. I hated it. I have memories of being forced over this cliff against my will. I cried all the way down. I lost my footing. It was the worst “sport” I have ever attempted. It has left me with no desire to ever do it ever again.

So, why am I doing it? I completed a charity skydive a few years ago, and honestly, I was really excited about it (I do understand it seems strange I was happy to do that and not this, but I didn’t actually have to throw myself from the plane, someone does that bit for you.) Since then, I feel like I have needed to do something for charity that I actually didn’t want to do, and therefore more deserved of sponsorship. I don’t support people asking for sponsorship for running half marathons when they go running all the time and love doing it – where is the trial and tribulation on their part? I therefore hope if people are aware this really is an effort for me, I can raise that little bit more for charity.

The charity in question is an excellent one; YMCA Exeter. They help young people facing homelessness amongst other problems such as abuse and neglect, aiming to provide them with support to ensure they have a promising future. There is a sad case of homelessness in Exeter which can’t be ignored by those of us living and working here, so if young people can be supported and given a safe place early on, hopefully they won’t find themselves in that position in the years to come, and can be the awesome members of society they have the potential to be.

Save 3rd December in your diary!

My abseil is confirmed for 10am on the 3rd December, where I will be descending Princesshay car park in central Exeter.  Oh, and I forgot the mention – I will be in a Santa suit! (as much as I don’t want to abseil I do like any excuse for a bit of dressing up so I’m clinging onto this factor). If you are in the area, do come along and show your support to not only me, but the 59 other people just as mad who will put their life in a rope, throughout the day.

If you would like to sponsor me and help some deserved young people get a better life (and make me more convinced leaning backwards over a building is worthwhile), you can go to my JustGiving page

More about the YMCA in Exeter

More about YMCA Exeter can be found at and there may still be spots for you to sign up yourself!

Thank you for your support and wish me luck!


BLOG Colosseum: revaluation of asset previously impaired

Is Your Understanding of the Treatment of Revaluations “Impaired”?

Here’s a question for AAT Level 4 (Professional Stage) Students:

“Is a revaluation gain included in the P&L to the extent that an asset was previously impaired, with any further gain being recognised in the revaluation reserve?”
(27 words)

Answer 1. Yes
(1 word)

Answer 2
(324 words!)

The reason is that:

  • Because the previous impairment was written off Reserves, any increase in value, up-to the original cost (i.e. to the amount of the impairment) will be added back to Reserves. This will leave the financial position as it was before the impairment.
  • The impairment was a reduction in realised (and therefore distributable (as dividends)) reserves
  • The increase up to cost, is therefore an increase in realised reserves
  • Any increase in value beyond this (i.e. above original cost) will be transferred to the Revaluation Reserve (unrealised and un-distributable)

Watch out in the office though as the position under FRS102 can be different for Investment Properties where the revaluation goes straight to Revenue Reserves. (Mind you, they are still not distributable and so you need to keep a separate note to know what can be paid out as dividends and what can’t be).

However, don’t worry about this as it is beyond the current AAT syllabus. They will need to tackle FRS102 next September probably. For more information on FRS102, click here.

With reference to my first point above, it is a little akin to the treatment of Capital Allowances and Capital Gains Tax.

Buying Plant and Equipment

When you buy plant and equipment you will claim initial investment allowances (capital allowances). This will reduce the written down value of the assets for tax purposes by the amount of the capital allowances.

If you subsequently sell the assets:

  • For less than the WDV (Written Down Value), you claim a Balancing Allowance
  • For more than the WDV (Written Down Value), you pay a Balancing Charge

However the Balancing Charge is limited to the amount of Capital Allowances that you have claimed.

The maximum Balancing Charge is = Cost – WDV

If you sell the asset for more than Cost, then the excess over Cost is subject to Capital Gains Tax

As with the valuation example, you need to be aware of the original cost and therefore need to keep sufficient records to evidence this.

If you have any further questions on this, please email


Page 1 of 512345