ATD Level I: Foundations of Accounting, Law, Enterprise and ICT
What the level tests
ATD Level I builds the foundation: the accounting equation and double entry; books of original entry, ledger, trial balance and basic financial statements; essential business law (contract, agency, sale of goods, negotiable instruments); entrepreneurship and communication; and basic ICT for records and office work.
Concepts to master
Know the accounting equation A = C + L and how each transaction affects it. Be able to post to T-accounts, balance off, extract a trial balance and correct errors before preparing a simple statement of profit or loss and statement of financial position. In law, distinguish offer from invitation to treat, condition from warranty, and agent from principal. In communication, know the purpose and structure of a memo, report and business letter. In ICT, know hardware, software, data versus information, and basic spreadsheet formulas.
Traps
Questions often mix capital and revenue expenditure, or ask for the effect of a transaction on the accounting equation rather than the journal entry. In law, an acceptance that changes terms is a counter-offer. In statistics-type items, do not confuse a population with a sample. Read the verb: 'state' needs a brief point, 'explain' needs a reason.
Worked rule
Rule of thumb: for every transaction, name the two accounts, decide their class, then apply DEAD CLIC - debits increase expenses, assets and drawings; credits increase liabilities, income and capital.
Example: the business buys equipment for cash 50,000. Equipment (asset) increases, so debit equipment 50,000; cash (asset) decreases, so credit cash 50,000. The equation stays balanced: one asset up, another down.