Intuit Academy Bookkeeping Professional Certificate: Liabilities and Equity Questions with complete solution 2025/2026

Intuit Academy Bookkeeping
Professional Certificate: Liabilities and
Equity Questions with complete
solution 2025/2026
Accounting Equation - correct answer ✔Assets = Liabilities + Owner's Equity



Current Liabilities - correct answer ✔Will be paid in 1 year (I.E Accounts payable, Payroll and benefits
Liabilites, Lines of Credit, Credit Cards, Income Tax Liabilities, Deferred Revenue)



Noncurrent Liabilities - correct answer ✔Due in 1 year or more (I.E Long term loans; Notes Payable:
mortgage, car loan, promissory loan; Bonds payable; Deferred income tax)



Liquidity - correct answer ✔The ability to generate sufficient current assets to pay current liabilities



Solvency - correct answer ✔Ability to meet company obligations in future



Debt to Equity Ratio - correct answer ✔Tracks increases and decreases in liabilities as a percentage of
equity.



Accounts Receivable Turnover Rate - correct answer ✔How fast accounts receivable are collected



Income Tax - correct answer ✔Taxes payed to the state and federal government on wages earned by
employees



Bonds Payable - correct answer ✔long term debt securities issued by a company which promises to pay
back the principal at some specified point in the future