What software is used in the EDI Level 2 Computerised Book-keeping exam?

The most common software is Sage 50 Accounts, but some centres may use QuickBooks or other HMRC-recognised software. Check with your training provider. The exam focuses on core functions that are similar across packages, such as entering sales and purchase invoices, processing payments, and reconciling bank accounts. You will be tested on your ability to use the software accurately, not on memorising menu paths.

How is the EDI Level 2 Computerised Book-keeping assessed?

The assessment is typically a practical computer-based exam lasting about 2 hours. You will be given a scenario with source documents (e.g., invoices, bank statements) and asked to set up a company, enter transactions, reconcile the bank, and produce reports like the trial balance and aged debtors. The exam is marked on accuracy and completeness. Some centres may also have a multiple-choice theory test, but the main focus is on practical skills.

Do I need to know VAT for this qualification?

Yes, VAT is often included, especially if the scenario involves a VAT-registered business. You need to understand how to apply VAT codes (e.g., standard rate, zero rate, exempt) and how the software calculates VAT. You may also need to produce a VAT return summary. If you are not confident with VAT, review the basics of VAT accounting before the exam.

What happens if I make a mistake during the exam?

You can correct mistakes using the software's correction features, such as editing a transaction or posting a journal. However, you should avoid deleting transactions as this may break the audit trail. The examiner will look for a clear audit trail, so it's better to correct errors properly. If you realise an error late, you may lose marks for accuracy, but partial credit may be given for correct method.

Can I use the software's help function during the exam?

Usually, yes. Most exam centres allow you to use the software's built-in help or user guide. However, you cannot use the internet or your own notes. Familiarise yourself with the help function before the exam so you can quickly find information if you get stuck. But relying on help too much may slow you down, so practice until you are confident with common tasks.

How does this qualification help my career?

This award is highly valued by employers because it proves you can use accounting software effectively. It is often a requirement for entry-level roles like accounts assistant, bookkeeper, or finance clerk. It also provides a solid foundation for further study, such as AAT Level 3 or ACCA. Many students find that having this qualification on their CV makes them stand out in job applications.

Setting up accounting software to manage accounting information

PEARSON EDI

vocational

This subtopic focuses on the essential skills for initialising and configuring computerised accounting software to capture financial transactions and produce management reports. Learners will practice setting up a chart of accounts, entering opening balances, processing sales and purchase cycles, recording payments and receipts, and generating standard reports, thereby establishing a solid foundation for computerised bookkeeping in a business environment.

Learning Outcomes

Assessment Guidance

Key Skills

Key Terms

Assessment Criteria

Assessment criteria

EDI Level 2 Award in Computerised Book-keeping Skills (QCF)

Topic Overview

The EDI Level 2 Award in Computerised Book-keeping Skills (QCF) introduces you to the practical use of accounting software to record financial transactions. This qualification covers the core principles of double-entry bookkeeping, but applied through a computerised system such as Sage 50 or QuickBooks. You will learn how to set up a new business, enter customer and supplier invoices, process payments, reconcile bank accounts, and produce key reports like the trial balance and aged debtors/creditors summaries. Mastering these skills is essential for any modern accounting role, as most businesses now rely on software to manage their finances efficiently.

This award is part of the Pearson EDI QCF framework, meaning it is a recognised vocational qualification that demonstrates your ability to perform real-world bookkeeping tasks. It builds on manual bookkeeping knowledge but focuses on the speed and accuracy that software provides. You will also learn how to correct errors, handle VAT (if applicable), and generate reports that help managers make informed decisions. By the end of the course, you should be confident in using a computerised system to maintain accurate financial records, which is a fundamental skill for roles such as accounts assistant, bookkeeper, or finance officer.

In the wider context of accounting and finance, computerised book-keeping is the backbone of financial data management. It links directly to financial accounting, management accounting, and even auditing, as all these areas rely on accurate transaction recording. This qualification is often a stepping stone to higher-level studies, such as AAT or ACCA, and is highly valued by employers who need staff to hit the ground running with practical software skills.

Key Concepts

Core ideas you must understand for this topic

→Double-entry bookkeeping in software: Every transaction must be entered with a debit and credit entry, but the software automates much of the double-entry process. You still need to understand which accounts are affected (e.g., bank, sales, purchases) to select the correct nominal codes.
→Customer and supplier accounts: You must set up and maintain individual accounts for each customer and supplier. This includes recording invoices, credit notes, payments, and reconciling statements to ensure the aged debtors and creditors reports are accurate.
→Bank reconciliation: This is a critical control process where you match the software's bank account transactions against the bank statement. Discrepancies must be investigated and corrected, often using the reconciliation screen in the software.
→Trial balance and error correction: The trial balance lists all nominal ledger balances. If it doesn't balance, you need to identify and correct errors, such as mispostings or omissions. Software often provides reports to help locate errors.
→VAT treatment (if applicable): For VAT-registered businesses, you must correctly apply VAT codes to transactions. The software calculates the VAT automatically, but you need to ensure the correct rate is used and that VAT returns can be generated.

Learning Objectives

What you need to know and understand

Restore company data and enter opening balances at the start of a financial year.
Configure asset, liability, capital, and budget accounts within the chart of accounts.
Process customer and supplier invoices along with corresponding credit notes.
Record receipts from customers and payments to suppliers accurately.
Enter non-credit transactions such as cash sales and cash purchases.
Create and post journal entries for adjustments and corrections.
Generate and customise financial reports using selection criteria and parameters.

Assessment Criteria

Key criteria assessors look for in your portfolio

Award credit for successfully restoring a backup file and validating the data integrity.
Demonstrate correct classification of accounts by type (e.g., fixed assets, current liabilities) when setting up the chart of accounts.
Allocate credit for accurately entering invoice details including dates, amounts, and VAT codes.
Expect evidence of matching receipts to outstanding invoices and correct allocation.
Look for appropriate application of payment terms and prompt payment discounts.
Award marks for correctly drafting journals with narrative and ensuring debits equal credits.
Examiners should see reports filtered by date range, supplier, or customer as specified.

Assessment Guidance

Guidance for achieving higher grades

💡Practice restoring from a sample backup multiple times to ensure you can do it under timed conditions.
💡Memorise the standard chart of accounts numbering scheme to quickly set up new accounts.
💡Always run an aged receivables/payables report after processing transactions to check for errors.
💡Double-check journal entries by previewing the trial balance before posting.
💡Read report requirements carefully; note any specific criteria like date range or customer group.
💡Tip 1: Always double-check the date and reference when entering transactions. Examiners often include errors like wrong dates or duplicate invoice numbers. Use the software's audit trail to verify your entries before finalising.
💡Tip 2: For bank reconciliation, start by clearing all transactions that appear on both the bank statement and the software. Then, investigate any remaining differences. Show your workings clearly if required, as partial marks may be awarded for correct method even if the final answer is wrong.
💡Tip 3: When correcting errors, use the appropriate correction method (e.g., journal entries for mispostings, credit notes for invoice errors). Do not delete transactions unless instructed, as this breaks the audit trail. Always keep a record of corrections.

Common Mistakes

Common errors to avoid in your coursework

Confusing data backup with data restoration; learners may overwrite current data accidentally.
Misclassifying accounts (e.g., treating a loan as income) leading to incorrect financial statements.
Forgetting to apply VAT to invoices or credit notes where applicable.
Entering payments without allocating against specific invoices, leaving unmatched amounts.
Posting journals with unbalanced debits and credits due to calculation errors.
Selecting incorrect report parameters resulting in incomplete or misleading reports.
Misconception: 'The software does everything, so I don't need to understand double-entry.' Correction: While software automates many calculations, you still need to know which accounts to debit and credit. If you enter a transaction incorrectly, the software will still process it, leading to errors in reports. Understanding the underlying principles is essential for troubleshooting.
Misconception: 'Bank reconciliation is just matching amounts.' Correction: It's more than matching. You must also check for timing differences (e.g., unpresented cheques, bank charges) and ensure all transactions are recorded. Simply ticking off matching amounts can miss errors like duplicate entries or missing transactions.
Misconception: 'The trial balance always balances if I've entered everything correctly.' Correction: A balanced trial balance does not guarantee accuracy. Errors like posting to the wrong account or omitting a transaction entirely can still leave the trial balance balanced. You need to use other checks, such as reviewing the audit trail or comparing with source documents.

Frequently Asked Questions

Common questions students ask about this topic

Before You Start

Prior knowledge that will help with this topic

•A basic understanding of manual double-entry bookkeeping (debits and credits, the accounting equation).
•Familiarity with common business documents such as invoices, credit notes, and bank statements.
•Basic computer literacy, including the ability to use a mouse, keyboard, and navigate software menus.

Key Terminology

Essential terms to know

System Initialisation and Data Restoration
Chart of Accounts Configuration
Sales and Purchase Ledger Processing
Bank and Cash Transactions
Journal Entries and Adjustments
Financial Reporting and Parameterisation

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Setting up accounting software to manage accounting information

Assessment criteria

Topic Overview

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Assessment Guidance

Common Mistakes

Frequently Asked Questions

Before You Start

Key Terminology

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