1
Intuit Bookkeeping Exam Actual Exam
2026/2027 | Complete Exam-Style Questions |
100% Verified – Detailed Rationales – Pass
Guaranteed – A+ Graded
TABLE OF CONTENTS
Section 1 | Bookkeeping Fundamentals and Chart of Accounts | Q1 – Q21
Section 2 | Recording Transactions and Journal Entries | Q22 – Q42
Section 3 | Adjusting Entries and Trial Balance | Q43 – Q63
Section 4 | Financial Statements | Q64 – Q84
Section 5 | Bank Reconciliations and Closing Process | Q85 – Q105
Instructions: Choose the single best answer. Pass: 75% in 120 minutes.
══════════════════════════════════════
SECTION 1: BOOKKEEPING FUNDAMENTALS AND CHART OF ACCOUNTS Q1 – Q21
══════════════════════════════════════
Question 1 of 105
A freelance graphic designer is setting up their books for the first time and wants to ensure they
follow the Generally Accepted Accounting Principles (GAAP) required for potential tax filings.
They need to decide whether to record revenue when the invoice is sent or when the cash arrives.
Which accounting method must they choose to adhere to the accrual basis?
A. Cash Basis
B. Accrual Basis
C. Modified Cash Basis
D. Tax Basis
,2
A. Cash Basis
B. Accrual Basis ✓ CORRECT
C. Modified Cash Basis
D. Tax Basis
Correct Answer: B
Under the accrual basis of accounting, revenue is recorded when it is earned, which typically
occurs when the invoice is sent, not when cash is collected. The cash basis records revenue only
upon receipt of funds. While the IRS allows cash for some small businesses, GAAP generally
requires the accrual method for accurate financial reporting.
Question 2 of 105
While reviewing the Chart of Accounts for a retail clothing store, you notice that the account for
"Inventory" is classified as a specific type of account. Which classification applies to the asset
account representing the goods held for sale?
A. Current Liability
B. Long-Term Asset
C. Current Asset
D. Owner's Equity
A. Current Liability
B. Long-Term Asset
C. Current Asset ✓ CORRECT
D. Owner's Equity
Correct Answer: C
,3
Inventory is a current asset because it is expected to be sold or converted into cash within one
year or the operating cycle of the business. Current liabilities are debts due within a year, while
long-term assets are held for more than a year, like buildings or equipment.
Question 3 of 105
A small business owner pays for a two-year insurance policy upfront to cover the shop. The
bookkeeper needs to record the initial payment in the correct asset account before it is used up
over time. Which account should be debited at the time of payment?
A. Insurance Expense
B. Prepaid Insurance
C. Cash
D. Accounts Payable
A. Insurance Expense
B. Prepaid Insurance ✓ CORRECT
C. Cash
D. Accounts Payable
Correct Answer: B
Since the payment covers a future period, it is recorded as an asset called Prepaid Insurance
initially, not as an expense. Cash is credited because it is paid out, not debited. The expense will
be recognized gradually as the insurance coverage expires over the two years.
Question 4 of 105
A company receives a utility bill for electricity used in the current month but plans to pay it next
month. According to the accrual basis of accounting, how should the bookkeeper record this
transaction today?
A. No entry is required until payment is made.
, 4
B. Debit Utility Expense, credit Accounts Payable.
C. Debit Accounts Payable, credit Utility Expense.
D. Debit Utility Expense, credit Cash.
A. No entry is required until payment is made.
B. Debit Utility Expense, credit Accounts Payable. ✓ CORRECT
C. Debit Accounts Payable, credit Utility Expense.
D. Debit Utility Expense, credit Cash.
Correct Answer: B
The expense has been incurred in the current month, so it must be recorded with a debit to Utility
Expense, even though cash hasn't left yet. The credit goes to Accounts Payable because a liability
has been created. Recording the expense only when paid violates the matching principle of
accrual accounting.
Question 5 of 105
When organizing a new Chart of Accounts for a service company, the owner wants to ensure that
account numbers follow a logical sequence for easy identification. Which numbering range is
typically assigned to Asset accounts in a standard Chart of Accounts?
A. 1000 - 1999
B. 2000 - 2999
C. 3000 - 3999
D. 4000 - 4999
A. 1000 - 1999 ✓ CORRECT
B. 2000 - 2999
C. 3000 - 3999
Intuit Bookkeeping Exam Actual Exam
2026/2027 | Complete Exam-Style Questions |
100% Verified – Detailed Rationales – Pass
Guaranteed – A+ Graded
TABLE OF CONTENTS
Section 1 | Bookkeeping Fundamentals and Chart of Accounts | Q1 – Q21
Section 2 | Recording Transactions and Journal Entries | Q22 – Q42
Section 3 | Adjusting Entries and Trial Balance | Q43 – Q63
Section 4 | Financial Statements | Q64 – Q84
Section 5 | Bank Reconciliations and Closing Process | Q85 – Q105
Instructions: Choose the single best answer. Pass: 75% in 120 minutes.
══════════════════════════════════════
SECTION 1: BOOKKEEPING FUNDAMENTALS AND CHART OF ACCOUNTS Q1 – Q21
══════════════════════════════════════
Question 1 of 105
A freelance graphic designer is setting up their books for the first time and wants to ensure they
follow the Generally Accepted Accounting Principles (GAAP) required for potential tax filings.
They need to decide whether to record revenue when the invoice is sent or when the cash arrives.
Which accounting method must they choose to adhere to the accrual basis?
A. Cash Basis
B. Accrual Basis
C. Modified Cash Basis
D. Tax Basis
,2
A. Cash Basis
B. Accrual Basis ✓ CORRECT
C. Modified Cash Basis
D. Tax Basis
Correct Answer: B
Under the accrual basis of accounting, revenue is recorded when it is earned, which typically
occurs when the invoice is sent, not when cash is collected. The cash basis records revenue only
upon receipt of funds. While the IRS allows cash for some small businesses, GAAP generally
requires the accrual method for accurate financial reporting.
Question 2 of 105
While reviewing the Chart of Accounts for a retail clothing store, you notice that the account for
"Inventory" is classified as a specific type of account. Which classification applies to the asset
account representing the goods held for sale?
A. Current Liability
B. Long-Term Asset
C. Current Asset
D. Owner's Equity
A. Current Liability
B. Long-Term Asset
C. Current Asset ✓ CORRECT
D. Owner's Equity
Correct Answer: C
,3
Inventory is a current asset because it is expected to be sold or converted into cash within one
year or the operating cycle of the business. Current liabilities are debts due within a year, while
long-term assets are held for more than a year, like buildings or equipment.
Question 3 of 105
A small business owner pays for a two-year insurance policy upfront to cover the shop. The
bookkeeper needs to record the initial payment in the correct asset account before it is used up
over time. Which account should be debited at the time of payment?
A. Insurance Expense
B. Prepaid Insurance
C. Cash
D. Accounts Payable
A. Insurance Expense
B. Prepaid Insurance ✓ CORRECT
C. Cash
D. Accounts Payable
Correct Answer: B
Since the payment covers a future period, it is recorded as an asset called Prepaid Insurance
initially, not as an expense. Cash is credited because it is paid out, not debited. The expense will
be recognized gradually as the insurance coverage expires over the two years.
Question 4 of 105
A company receives a utility bill for electricity used in the current month but plans to pay it next
month. According to the accrual basis of accounting, how should the bookkeeper record this
transaction today?
A. No entry is required until payment is made.
, 4
B. Debit Utility Expense, credit Accounts Payable.
C. Debit Accounts Payable, credit Utility Expense.
D. Debit Utility Expense, credit Cash.
A. No entry is required until payment is made.
B. Debit Utility Expense, credit Accounts Payable. ✓ CORRECT
C. Debit Accounts Payable, credit Utility Expense.
D. Debit Utility Expense, credit Cash.
Correct Answer: B
The expense has been incurred in the current month, so it must be recorded with a debit to Utility
Expense, even though cash hasn't left yet. The credit goes to Accounts Payable because a liability
has been created. Recording the expense only when paid violates the matching principle of
accrual accounting.
Question 5 of 105
When organizing a new Chart of Accounts for a service company, the owner wants to ensure that
account numbers follow a logical sequence for easy identification. Which numbering range is
typically assigned to Asset accounts in a standard Chart of Accounts?
A. 1000 - 1999
B. 2000 - 2999
C. 3000 - 3999
D. 4000 - 4999
A. 1000 - 1999 ✓ CORRECT
B. 2000 - 2999
C. 3000 - 3999
