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INTUIT BOOKKEEPING PROFESSIONAL
CERTIFICATE EXAM 2024 | ALL
QUESTIONS AND CORRECT ANSWERS
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Jason's Medicinal Juniper Farm recently leased a stump drilling machine for 12 months on an operating lease. Will he be able to account for disposition of this equipment at the end of the lease? ------CORRECT ANSWER---------------No Why is deferred revenue considered a liability? ------CORRECT ANSWER-- -------------Because it is technically for goods or services still owed to customers In the same state, shoes, bananas, and a haircut would all be subject to the same sales tax rate. ------CORRECT ANSWER---------------False/it depends Funds in the Sales Tax Payable account can be treated as if they were Sales Revenue ------CORRECT ANSWER---------------False The following could be payroll deductions on an employee's paystub, expect: ------CORRECT ANSWER---------------SUTA
The following are examples of employee-related items on a paystub, expect: ------CORRECT ANSWER---------------FUTA; Federal Unemployment Tax Payroll reports are for internal use only ------CORRECT ANSWER------------- --False The process of systematically repaying a loan over time is referred to as: --- ---CORRECT ANSWER---------------Amortization If I use the balance sheet approach for reconciling the books each month, all of the following accounts would be reconciled except: ------CORRECT ANSWER---------------Bank Statement Which of the following is not considered an element of a source document? ------CORRECT ANSWER---------------Company Logo Which of the following best describes the Transactional Method of Reconciliation? ------CORRECT ANSWER---------------The method of reviewing existing transactions & source documents to confirm the amount was spent Which of the following best describes the Report Method of Reconciliation? ------CORRECT ANSWER---------------The method of comparing the amount listed on a source document to the actual ending balance listed on the balance sheet
True or False. The Direct Write-Off method of accounting for "Bad Debt" adheres to the matching principle ------CORRECT ANSWER--------------- False True or False. A perprtual inventory system is one that updates the inventory account at specified intervals ------CORRECT ANSWER------------- --False The inventory cost flow assumption which supposes that inventory flows through the system from oldest to newest is defined as what assumption? - -----CORRECT ANSWER---------------First In, First Out (FIFO) True or False. Inventory errors will self-correct after two years (assuming no other errors occur.) ------CORRECT ANSWER---------------True True or False. PP&E and expenses are treated the same when it comes to taxes. ------CORRECT ANSWER---------------False True or False. Depreciation expense is recorded on the balance sheet below PP&E. ------CORRECT ANSWER---------------False When using QBO software, depreciation expense must be entered as a: --- ---CORRECT ANSWER---------------Journal Entry
A kind of lease in which ownership of the asset is intended at the end of the lease is called: ------CORRECT ANSWER---------------A capital lease A capital lease will show up on the profit and loss statement ------ CORRECT ANSWER---------------False In a lease agreement, the party that is paying rent is referred to as the: -----
- CORRECT ANSWER---------------Lessee Big Boss Building Company purchased some construction equipment to keep up with demand. The new bookkeeper booked this as an expense , is this correct? ------CORRECT ANSWER---------------No Aubergine's Antiques took out a capital lease for a moving van to transport heavier antiques. Will they be able to depreciate this equipment? ------ CORRECT ANSWER---------------Yes Ade just purchased $75 worth of new staplers for her Honey Helpers Bees business. She wants to book this as a noncurrent asset. Is that correct way to book it? ------CORRECT ANSWER---------------No Deferred Revenue is an account that is found in: ------CORRECT ANSWER---------------Current Liability Long-Term debt securities issued by the company are called: ------ CORRECT ANSWER---------------Bonds Payable
Which ratio would you calculate to view a business's capacity to generate adequte income to repay interest on its debt? ------CORRECT ANSWER---- -----------Coverage Ratio What are the 5 Account Types? ------CORRECT ANSWER---------------- Assets
- Liabilities
- Equity
- Revenue
- Expenses What is the accounting formula? ------CORRECT ANSWER--------------- Assets = Liabilities + Equity What does DEA/LER stand for? ------CORRECT ANSWER---------------- Debit Expenses and Assets
- Credit Liabilities Equity Revenue What are the 5 steps of the Accounting-Cycle? ------CORRECT ANSWER-- -------------1. Identify transactions
- record transactions
- run reports
- adjusting entries
- close the books
What are the 4 Types of financial statements? ------CORRECT ANSWER--- ------------- 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? ------CORRECT ANSWER---------------- Deferrals
- Accruals
- Missing Transactions
- Tax Adjustments What tasks would a bookkeeper do? ------CORRECT ANSWER---------------- 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. ------CORRECT ANSWER---------------- $520, Mike Anderson is the owner and operator of Anderson Consulting. At the end of 2019, the company's assets totaled $500,000 and its liabilities totaled $175,000. Assuming that over the 2020 fiscal year, assets increased by $120,000 and liabilities increased by $72,000, use the accounting equation to determine what Mike's Owner's equity will be as of December 31, 2020? ------CORRECT ANSWER---------------- $373,
Which of the following best defines a debit as it's used in double-entry accounting? ------CORRECT ANSWER---------------- 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? ------CORRECT ANSWER------------- --- 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? ------CORRECT ANSWER---------------- O wner'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? ------ CORRECT ANSWER---------------- 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? ------CORRECT ANSWER---------------- Cash account Debits are always represented on what side of a T-chart? ------CORRECT ANSWER---------------- The left.
Short-term Investments would be an example of what kind of account? -----
- CORRECT ANSWER---------------- An asset account. Accounts payable would be an example of what kind of account? ------ CORRECT ANSWER---------------- A liability account. Accounts receivable would be an example of what kind of account? ------ CORRECT ANSWER---------------- 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. ------CORRECT ANSWER---------------- False A schedule that contains all accounts needed to prepare financial statements is known as: ------CORRECT ANSWER---------------- The General Ledger Reorganizing journal entries and grouping them by account is known as: --- ---CORRECT ANSWER---------------- Posting to the ledger A listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger is known as a: ------CORRECT ANSWER---------------- Chart of Accounts
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? ------CORRECT ANSWER---------------- Balance sheet Which of the following financial statements reports the sources and uses of cash by a business? ------CORRECT ANSWER---------------- 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? ------CORRECT ANSWER---------------- Unadjusted Trial Balance A trial balance that is prepared after taking into account all the adjusting entries is known as: ------CORRECT ANSWER---------------- Adjusted Trial Balance The preparation of financial statements and closing the books is the ______ step of the accounting cycle. ------CORRECT ANSWER---------------
- last Rudiger has just recorded and posted his business transactions to the ledger. His next step in the accounting cycle is to _______. ------CORRECT ANSWER---------------- 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? ------CORRECT ANSWER---------------- Business bank account The double-entry system of bookkeeping normally results in which of the following balances in the ledger accounts? ------CORRECT ANSWER-------- -------- 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: ------CORRECT ANSWER---------------- $300 debit balance Pepper Consulting bought computers with credit from PYO Suppliers and entered the purchase into QuickBooks. The transaction journal for Pepper Consulting would show the following entry: ------CORRECT ANSWER-------- -------- Debit: Computers
- Credit: PYO Credit Payable Which of the following financial statements provides a summary of a company's revenue and expenses over a period of time? ------CORRECT ANSWER---------------- The Income Statement Which of the following financial statements provides you with the owner's change in capital over time? ------CORRECT ANSWER---------------- The Statement of Equity
True or False: The ending cash balance on the Statement of Cash Flow should not equal the cash balance reported on the Balance Sheet. ------ CORRECT ANSWER---------------- 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: ------CORRECT ANSWER---------------- A Credit Memo True or False: In order to complete a Statement of Equity, you will need the net profit from the Income Statement. ------CORRECT ANSWER---------------
- True True or False: Business owners should use the General Ledger to make business decisions. ------CORRECT ANSWER---------------- False A Balance Sheet has four parts: a heading, assets, liabilities, and ______. - -----CORRECT ANSWER---------------- equity True or False: Financial reports should be produced before any adjustments have been made. ------CORRECT ANSWER---------------- 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: ------CORRECT ANSWER-- -------------- A Bank Deposit
After the Unadjusted Trial Balance is created, the process of going back and updating information is known as: ------CORRECT ANSWER-------------- -- 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: ------CORRECT ANSWER---------------- A Vendor Check The document that shows all of the account balances after adjustments have been made is known as: ------CORRECT ANSWER---------------- The Adjusted Trial Balance Becky provided a service to a customer, and they have yet to pay. Which type of journal entry would need to be made? ------CORRECT ANSWER---- ------------ An Accrual True or False: The depreciation of a vehicle is not something that can be entered as an adjustment. ------CORRECT ANSWER---------------- False Which accounting assumption allows bookkeepers to break a company's financial life into smaller chunks of time? ------CORRECT ANSWER---------- ------ The Periodicity Assumption Caren Cosmos is the world's most popular soft rock folk singer. She sold t- shirts online last year and made $7,000. The money from these sales went directly into her personal banking account which she used for her personal
This assumption / principle is very subjective and should be used with caution outside of rounding to the nearest dollar when entering financial information. ------CORRECT ANSWER---------------- Materiality Principle A company is considered a Going Concern when it: ------CORRECT ANSWER---------------- 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: ------CORRECT ANSWER---------------- Keep the value of the pins at $0.10 each. If a business is using the Consistency Principle they will: ------CORRECT ANSWER---------------- 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? ------ CORRECT ANSWER---------------- 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? -----
- CORRECT ANSWER---------------- 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? ------CORRECT ANSWER---------------- April According to the Revenue Recognition Principle, when should a business recognize its revenue? ------CORRECT ANSWER---------------- When it is earned Which of the following best describes the Periodicity Assumption? ------ CORRECT ANSWER---------------- Companies can assume that business activity can be broken up into smaller measurements of time Cash Flow Statement: 3 types, definition & purpose ------CORRECT ANSWER---------------A summary that shows total income and spending for a given time period
- operating activities
- investment activities
- financing activities What is a journal entry? ------CORRECT ANSWER---------------a way to document an accounting entry lists debits & credits & includes a description of the transaction Which of the following statements would best describe the Matching Principle? ------CORRECT ANSWER---------------- Expenses like
