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Intuit Bookkeeping Professional Certificate exam
Questions & Answers 2025 Latest
What are the 5 Account Types?
- Assets
- Liabilities
- Equity
- Revenue
- Expenses What is the accounting formula? Assets = Liabilities + Equity What does DEA/LER stand for?
- Debit Expenses and Assets
- Credit Liabilities Equity Revenue What are the 5 steps of the Accounting-Cycle?
- Identify transactions
- record transactions
- run reports
- adjusting entries
- close the books What are the 4 Types of financial statements?
- The income statement (aka P&L statement: Income, COGS, expenses)
- The balance sheet (assets, liabilities, equity)
- The statement of equity
- The statement of cash flow What are the 4 types of accounting adjustments?
- Deferrals
- Accruals
- Missing Transactions
- Tax Adjustments What tasks would a bookkeeper do?
- Handle bank feeds and reconciles bank accounts, managing accounts receivable/payable, and record financial transactions Mary Smith is the owner and operator of Smith Construction. At the end of the company's accounting period, December 31, 2020, Smith Construction has assets totaling $760,000 and liabilities totaling $240,000. Use the accounting equation to calculate what Mary's Owner Equity would be as of December 31, 2020.
- $520,
A way of bookkeeping that tracks which accounts increase and which decrease for a given transaction is known as:
- Double-entry Accounting Which of the following best defines a credit as it's used in double-entry accounting?
- A decrease in assets/expenses and an increase in liabilities/owner's equity and revenue. Which of the following best defines a debit as it's used in double-entry accounting?
- An increase in assets/expenses and a decrease in liabilities/owner's equity and revenue. You purchased inventory from your vendor and paid cash. The accounts affected are the inventory account and the cash account. In your journal entry, which account would you debit?
- Inventory account An owner invests $1000 in the company. This transaction impacted the checking account and the owner's equity account. In your journal entry, which account do you credit?
- Owner's equity account A sales manager purchases office supplies with the company credit card. This transaction impacts the accounts payable and the office supplies accounts. In your journal entry, which account do you credit?
- Accounts payable
The company pays off the credit card bill. This transaction impacts the accounts payable and the cash accounts. In your journal entry, which account do you credit?
- Cash account Debits are always represented on what side of a T-chart?
- The left. Short-term Investments would be an example of what kind of account?
- An asset account. Accounts payable would be an example of what kind of account?
- A liability account. Accounts receivable would be an example of what kind of account?
- An asset account. True or False: Your client was paid in cash for a service that they provided. They've asked you to leave it off their financial records. Since you are employed by the client, you should do what they ask.
- False A schedule that contains all accounts needed to prepare financial statements is known as:
- The General Ledger
Sydney is entering a transaction in QuickBooks. What are the two steps of manual accounting that will happen simultaneously as she does this?
- Creating a journal entry and posting to the ledger The digits of the account numbers assigned to general ledger accounts often have significance. For example, an account number beginning with a "1" might signify that the account is an asset account, a "6" might signify an operating expense, etc.
- True A trial balance where total debits equal total credits indicates:
- The ledger is in balance. Zach needs to determine what his company's financial position was on March 31st of last year. Which of the following would be the best report to look at?
- Balance sheet Which of the following financial statements reports the sources and uses of cash by a business?
- Statement of Cash Flow Which of the following lists general ledger account balances at the end of a reporting period, before any adjusting entries are made?
- Unadjusted Trial Balance A trial balance that is prepared after taking into account all the adjusting entries is known as:
- Adjusted Trial Balance The preparation of financial statements and closing the books is the ______ step of the accounting cycle.
- last Rudiger has just recorded and posted his business transactions to the ledger. His next step in the accounting cycle is to _______.
- prepare an unadjusted trial balance Francis enters a $100 check received from a customer into QuickBooks online. If she views the Transaction Journal, which account would show as being debited $100?
- Business bank account The double-entry system of bookkeeping normally results in which of the following balances in the ledger accounts?
- Debit: Assets and expenses
- Credit: Liabilities, equity, and revenue In the first month of operations, Pepper Consulting's total debit entries to the cash account amounted to $900, and the total credit entries to the cash account amounted to $600. The cash account has a:
- $300 debit balance
Which of these accounts would have a balance of $0 at the beginning of each new accounting period?
- Revenue A business owner performs a service and is paid when the job is performed. The owner would then enter this transaction into accounting software as:
- A Sales Receipt A business owner performs a service but is not paid when the job is performed. Using their accounting software, the owner would enter the transaction as:
- An Invoice True or False: The ending cash balance on the Statement of Cash Flow should not equal the cash balance reported on the Balance Sheet.
- False A customer paid in advance for a service. They need to cancel the service. If the business owner wishes to apply that money towards the customer's next service, the owner would enter that transaction into their accounting software as:
- A Credit Memo True or False: In order to complete a Statement of Equity, you will need the net profit from the Income Statement.
- True
True or False: Business owners should use the General Ledger to make business decisions.
- False A Balance Sheet has four parts: a heading, assets, liabilities, and ______.
- equity True or False: Financial reports should be produced before any adjustments have been made.
- False An owner has deposited several payments they've received from customers into the business's bank account. The owner would then enter this transaction in their accounting software as:
- A Bank Deposit After the Unadjusted Trial Balance is created, the process of going back and updating information is known as:
- Making adjustments An owner brought in a piece of equipment for servicing and paid for the repair with a check. The owner would then enter the transaction into their accounting software as:
- A Vendor Check The document that shows all of the account balances after adjustments have been made is known as:
- All companies accounting transactions MUST be verified through invoices, billing statements, receipts, and bank statements. What is the Full Disclosure Principle?
- All information relative to the business that is important to a lender or invested MUST be disclosed in financial statements or notes in the statements What is the Conservatism Assumption?
- When bookkeepers are uncertain and need to determine how to report an item.
- Choose the option that shows less income or asset benefit
- Potential losses can be recorded, potential gains, CANNOT. When a bookkeeper is using the US dollar as currency in accounting and is not considering changes in the value of that currency she is employing the:
- Monetary Unit Assumption This assumption / principle is very subjective and should be used with caution outside of rounding to the nearest dollar when entering financial information.
- Materiality Principle A company is considered a Going Concern when it:
- Is stable, able to operate and able to meet its financial obligations.
Cecilia Tubular sells 1980s themed enamel pins. She has a huge inventory she purchased in 1984 at $0.10 each. They are now worth $1 each. According to the Monetary Unit Assumption, you:
- Keep the value of the pins at $0.10 each. If a business is using the Consistency Principle they will:
- Adopt a specific accounting method and will enter all similar items in the exact same way in the future. True or False: According to the Periodicity Assumption, companies can only review their financial health at the end of their fiscal year?
- False Question 2 A client owns a small vinyl sign printing company called Printing Pros. They completed a print job for a customer on August 10, but the customer did not pay for the service until October 15. In which month should the revenue be recognized for this big print job?
- August Printing Pros had another big job to do in April and needed to hire additional help to make their deadline. The new employee received their first paycheck at the beginning of May. When should Printing Pros recognize the expense of paying their employee?
- April According to the Revenue Recognition Principle, when should a business recognize its revenue?
- When it is earned
assets, liabilities, equity, expenses, income or revenue (typically) 5 Bookkeeping Ethics
- objectivity
- competence
- integrity
- confidentiality
- professional conduct What is a liablity? Other's claims What is equity? Your claims Statement of Cash Flows A financial statement that provides financial information about the cash receipts and cash payments of a business for a specific period of time.
- operating activities
- investment activities
- financing activities Statement of Equity
Financial statement showing the beginning balance, additions to and deductions from, and the ending balance of the shareholders' equity account, for a specified period. Also called statement of shareholders equity. double-entry accounting The recording of debit and credit parts of a transaction Deferred Expense An asset created when a business makes advance payments of future expenses. accrued expenses expenses incurred but not yet paid in cash or recorded Deferred Revenue A liability created when a business collects cash from customers in advance of completing a service or delivering a product. Accrued Revenues revenues for services performed but not yet received in cash or recorded Accrual assumption Transactions are recorded using the accrual basis of accounting, where the recognition of revenues and expenses arises when earned or used, respectively. If this assumption is not true, a business should instead use the cash basis of accounting
Accrual Basis Accounting reporting income when it is earned and expenses when they are incurred Cash Basis Accounting Reporting income when the cash is received and expenses when the cash is paid. Natural Accounts the categories to which various costs are charged in the normal financial accounting cycle current assets cash and other assets expected to be exchanged for cash or consumed within a year long term assets assets that are expected to be used in business operations for longer than one year Accounts Receivable Amounts to be received in the future due to the sale of goods or services Accounts Payable Amounts to be paid in the future for goods or services already acquired
Depreciation Expense The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life. retained earnings An amount earned by a corporation and not yet distributed to stockholders. Payroll Form 941 Employer's quarterly federal tax return Payroll Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return W-2 / W-3 Tax Form Form you fill out that shows how much you have earned and paid in taxes What payroll forms are required to file with the state? Quarterly state unemployment insurance forms, annual state withholding forms What is the connection between equity and income statement? Whatever net income doesn't get paid out as dividends serves to increase equity
