1|Page
INTUIT BOOKKEEPING PROFESSIONAL CERTIFICATE
EXAM 2026 TEST BANK VERIFIED QUESTIONS
ANSWERS 2026
You're the bookkeeper for Tom, who is a sole proprietor of a car repair
shop. He wants to know how much money he made in the past year
and how much money he has invested in his business. You have the
following information from his financial records:
-He started the year with a balance of $25,000 in his Owner's
Investment account.
-He invested another $10,000 in the business during the year to buy
new tools and equipment.
-He withdrew $15,000 from the business for his personal use during the
year.
-His income statement shows that he had a total revenue of $120,000
and a total expense of $80,000 for the year.
Question: What is Tom's net income for the year, and what is his total
owner's equity at the end of the year? - ANSWER -Net Income: $40,00
Owners Equity: $60,000
(Total Revenue ($120,00) - Total Expenses ($80,000) = Net Income
($40,000)
Capital Contribution ($25,000 + $10,000) + Net Income ($40,000) - Draw
($15,000) = Owner's Equity ($60,000))
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Fit Trainers inc. issues 500 shares of common stock for $10 each. How
does this transaction affect the accounting equation? - ANSWER -assets
increase by $5,000, and equity increase by $5,000
The owner of a small nail salon invests $10,000 of their own cash in the
business. How does this transaction affect the accounting equation? -
ANSWER -assets increase by $10,000, and equity increases by $10,000
RST Company withdraws $15,000 of cash from the business for personal
use. How does this transaction affect the accounting equation? -
ANSWER -Assets decrease by $15,000, and equity decrease by $15,000
What event would most likely cause an auditor to issue a negative
ongoing concern opinion for a company? - ANSWER -the company has
a high debt to equity ratio and it facing liquidity problems
what is the main purpose of the adjusting process in accounting -
ANSWER -to correct error and misstatements in final statements that
can result from inaccurate records or faulty assumptions.
to record transactions that have not been entered in the accounting
records during the accounting period
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Which of the following statements best describes the difference
between assets and liabilities - ANSWER -assets are what a company
own, and liabilities are what a company owes
What type of liability is mortgage payable? - ANSWER -non-current
liability
Which of the following are considered non-current liabilities? -
ANSWER -monthly lease payment on a 10-year lease, employee
pension, and bondswith a maturity date of 5 years.
Stellar Consultants inc. is a service company that provides consulting
and training to clients. On June 30, Stellar Consultants, Inc. had the
following balances in its liability accounts:
Accounts payable: $30,000
Loans payable: $48,000
Taxes payable: $10,000
Deferred revenue: $12,000
On July 1, Stellar Consultants, Inc. pays $5,000 to one of its suppliers
and $2,000 to the bank as part of the loan repayment.
Question: What is the total amount of liabilities that Stellar Consultants,
Inc. should report on its balance sheet as of July 1? - ANSWER -$93,000
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Power Tool & Die, Inc. is a manufacturing company that needs to
purchase a piece of new equipment for $50,000. In June, the company
obtains a 5-year loan from the local credit union with an interest rate of
6% per annum, compounded monthly. The loan requires equal monthly
payments of $966.64, starting from the end of the first month. The
company records the loan using the amortization method.
Question: What is the journal entry that Power Tool & Die Inc. should
make at the end of the first month to record the loan payment? -
ANSWER -Debit Interest Expense $246.58, Debit Notes Payable $720.06,
Credit Cash $966.64
Selma owns a beauty salon and buys various products and supplies
from different vendors. She records her purchases in her accounting
system using either cash or accounts payable, depending on the
payment terms.
Question: Which of the following statements is true about her
purchases? - ANSWER -Accounts payable purchases are recorded as
credits to accounts payable and debits to expenses or assets
Johan runs a small woodworking business and sells his products to
customers on credit. He also buys wood, paint, varnish, and other
supplies from various suppliers on credit. At the end of the month, he
records his transactions in his accounting system.
Question: Which of the following transactions will increase his
liabilities? - ANSWER -He buys $800 worth of wood from a new
supplier on credit
INTUIT BOOKKEEPING PROFESSIONAL CERTIFICATE
EXAM 2026 TEST BANK VERIFIED QUESTIONS
ANSWERS 2026
You're the bookkeeper for Tom, who is a sole proprietor of a car repair
shop. He wants to know how much money he made in the past year
and how much money he has invested in his business. You have the
following information from his financial records:
-He started the year with a balance of $25,000 in his Owner's
Investment account.
-He invested another $10,000 in the business during the year to buy
new tools and equipment.
-He withdrew $15,000 from the business for his personal use during the
year.
-His income statement shows that he had a total revenue of $120,000
and a total expense of $80,000 for the year.
Question: What is Tom's net income for the year, and what is his total
owner's equity at the end of the year? - ANSWER -Net Income: $40,00
Owners Equity: $60,000
(Total Revenue ($120,00) - Total Expenses ($80,000) = Net Income
($40,000)
Capital Contribution ($25,000 + $10,000) + Net Income ($40,000) - Draw
($15,000) = Owner's Equity ($60,000))
,2|Page
Fit Trainers inc. issues 500 shares of common stock for $10 each. How
does this transaction affect the accounting equation? - ANSWER -assets
increase by $5,000, and equity increase by $5,000
The owner of a small nail salon invests $10,000 of their own cash in the
business. How does this transaction affect the accounting equation? -
ANSWER -assets increase by $10,000, and equity increases by $10,000
RST Company withdraws $15,000 of cash from the business for personal
use. How does this transaction affect the accounting equation? -
ANSWER -Assets decrease by $15,000, and equity decrease by $15,000
What event would most likely cause an auditor to issue a negative
ongoing concern opinion for a company? - ANSWER -the company has
a high debt to equity ratio and it facing liquidity problems
what is the main purpose of the adjusting process in accounting -
ANSWER -to correct error and misstatements in final statements that
can result from inaccurate records or faulty assumptions.
to record transactions that have not been entered in the accounting
records during the accounting period
,3|Page
Which of the following statements best describes the difference
between assets and liabilities - ANSWER -assets are what a company
own, and liabilities are what a company owes
What type of liability is mortgage payable? - ANSWER -non-current
liability
Which of the following are considered non-current liabilities? -
ANSWER -monthly lease payment on a 10-year lease, employee
pension, and bondswith a maturity date of 5 years.
Stellar Consultants inc. is a service company that provides consulting
and training to clients. On June 30, Stellar Consultants, Inc. had the
following balances in its liability accounts:
Accounts payable: $30,000
Loans payable: $48,000
Taxes payable: $10,000
Deferred revenue: $12,000
On July 1, Stellar Consultants, Inc. pays $5,000 to one of its suppliers
and $2,000 to the bank as part of the loan repayment.
Question: What is the total amount of liabilities that Stellar Consultants,
Inc. should report on its balance sheet as of July 1? - ANSWER -$93,000
, 4|Page
Power Tool & Die, Inc. is a manufacturing company that needs to
purchase a piece of new equipment for $50,000. In June, the company
obtains a 5-year loan from the local credit union with an interest rate of
6% per annum, compounded monthly. The loan requires equal monthly
payments of $966.64, starting from the end of the first month. The
company records the loan using the amortization method.
Question: What is the journal entry that Power Tool & Die Inc. should
make at the end of the first month to record the loan payment? -
ANSWER -Debit Interest Expense $246.58, Debit Notes Payable $720.06,
Credit Cash $966.64
Selma owns a beauty salon and buys various products and supplies
from different vendors. She records her purchases in her accounting
system using either cash or accounts payable, depending on the
payment terms.
Question: Which of the following statements is true about her
purchases? - ANSWER -Accounts payable purchases are recorded as
credits to accounts payable and debits to expenses or assets
Johan runs a small woodworking business and sells his products to
customers on credit. He also buys wood, paint, varnish, and other
supplies from various suppliers on credit. At the end of the month, he
records his transactions in his accounting system.
Question: Which of the following transactions will increase his
liabilities? - ANSWER -He buys $800 worth of wood from a new
supplier on credit
