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ATD LEVEL I

INTRODUCTION TO FINANCIAL ACCOUNTING

WEDNESDAY: $24$ April $2024.$ Morning Paper.

Time Allowed: $2$ hours.

This paper is made up of fifty $(50)$ Multiple Choice Questions. Answer ALL questions by indicating the letter $($A$,$ B$,$ C or D$)$ that represents the correct answer. Each question is allocated two $(2)$ marks. Do NOT write anything on this paper.

When a cheque is dishonored after being deposited into bank it should be credited to

A$.$ Bank Account

B$.$ Cash Account

C$.$ Drawer's Account

D$.$ Dishonoured Account

$(2$ marks$)$

Which accounting principle states that revenue should be recognised when it is earned and expenses should be recognised when they are incurred?

A$.$ Accrual principle

B$.$ Cost principle

C$.$ Going concern principle

D$.$ Consistency principle

Webex Ltd$.,$ a company dealing with sales of factory machines, sold factory machines and tools in the month of March $2024.$ The company incurred Sh$\mathrm{.}50,000$ as carriage outwards on the machines. Carriage expenses incurred should be debited to account.

A$.$ Machinery

B$.$ Carriage outwards

C$.$ Purchases

D$.$ Trading

$(2$ marks$)$

What does the term "debit" generally refer to in accounting?

A$.$ An increase in assets or expenses

B$.$ A decrease in assets or expenses

C$.$ An increase in liabilities or equity

D$.$ A decrease in liabilities or equity

$(2$ marks$)$

What is the main purpose of International Financial Reporting Standards $($IFRS$)?$

A$.$ To create different accounting standards for different countries

B$.$ To provide a single set of global accounting standards for listed companies

C$.$ To help small businesses with their bookkeeping practices

D$.$ To regulate the financial markets internationally

$(2$ marks$)$

What does the term "accounting period" refer to in the context of a business?

A$.$ The specific calendar year the business operates in

B$.$ Any chosen period of time used to measure the financial performance of the business

C$.$ The period between the founding of the business and its closure

D$.$ The tax year as defined by the government

$(2$ marks$)$

Which of the following is NOT a source document used to record revenue transactions?

A$.$ Invoice

B$.$ Receipt

C$.$ Purchase order

D$.$ Cheques

$(2$ marks$)$

AD$11$ Page $1$

Out of $7$

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