📘 International CPA/ACCA Foundation Exam Paper
Title: Fundamentals of Financial Accounting & Business – Foundation Level
Level: Foundation / Beginner (ACCA Applied Knowledge equivalent)
Duration: 2.5 Hours
Total Marks: 100
Standard: ACCA-aligned, IFRS-compliant
🔹 SECTION A – MULTIPLE CHOICE QUESTIONS (20 MARKS)
(Each question is worth 1 mark. Choose the most appropriate answer.)
1. A company purchases inventory for €5,000 on credit. What is the
correct double-entry?
A. Debit trade payables, credit inventory
B. Debit inventory, credit trade payables
C. Debit expenses, credit bank
D. Debit inventory, credit capital
✅ Answer: B
2. Which financial statement shows the financial performance of a
business over a period?
A. Statement of financial position
B. Cash flow statement
C. Statement of profit or loss
D. Statement of changes in equity
✅ Answer: C
3. Under the accrual basis of accounting, when are expenses recognised?
A. When cash is paid
, B. When the invoice is received
C. When incurred, regardless of payment
D. At year-end
✅ Answer: C
4. An asset costing €12,000 is depreciated over 4 years. What is the
annual depreciation under the straight-line method (no residual value)?
A. €2,000
B. €3,000
C. €4,000
D. €6,000
✅ Answer: B
5. Which of the following is NOT a stakeholder in a business?
A. Employees
B. Shareholders
C. Suppliers
D. Competitors
✅ Answer: D
6. What is the purpose of the trial balance?
A. To show profit for the year
B. To detect all types of errors
C. To ensure that debits equal credits
D. To file tax returns
✅ Answer: C
7. Which of the following best describes an ethical accountant?
A. One who works fast
Title: Fundamentals of Financial Accounting & Business – Foundation Level
Level: Foundation / Beginner (ACCA Applied Knowledge equivalent)
Duration: 2.5 Hours
Total Marks: 100
Standard: ACCA-aligned, IFRS-compliant
🔹 SECTION A – MULTIPLE CHOICE QUESTIONS (20 MARKS)
(Each question is worth 1 mark. Choose the most appropriate answer.)
1. A company purchases inventory for €5,000 on credit. What is the
correct double-entry?
A. Debit trade payables, credit inventory
B. Debit inventory, credit trade payables
C. Debit expenses, credit bank
D. Debit inventory, credit capital
✅ Answer: B
2. Which financial statement shows the financial performance of a
business over a period?
A. Statement of financial position
B. Cash flow statement
C. Statement of profit or loss
D. Statement of changes in equity
✅ Answer: C
3. Under the accrual basis of accounting, when are expenses recognised?
A. When cash is paid
, B. When the invoice is received
C. When incurred, regardless of payment
D. At year-end
✅ Answer: C
4. An asset costing €12,000 is depreciated over 4 years. What is the
annual depreciation under the straight-line method (no residual value)?
A. €2,000
B. €3,000
C. €4,000
D. €6,000
✅ Answer: B
5. Which of the following is NOT a stakeholder in a business?
A. Employees
B. Shareholders
C. Suppliers
D. Competitors
✅ Answer: D
6. What is the purpose of the trial balance?
A. To show profit for the year
B. To detect all types of errors
C. To ensure that debits equal credits
D. To file tax returns
✅ Answer: C
7. Which of the following best describes an ethical accountant?
A. One who works fast
