INTUIT BOOKKEEPING EXAM (2025/2026) COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS ( DETAILED & ELABORATED) ACTUAL EXAM 2026 TEST!!
Question 1
Which of the following represents the four key elements of bookkeeping ethics?
A) Honesty, Transparency, Integrity, and Confidentiality
B) Honesty, Objectivity, Confidentiality, and Professionalism
C) Integrity, Professionalism, Punctuality, and Accuracy
D) Objectivity, Fairness, Profitability, and Honesty
E) Confidentiality, Objectivity, Profitability, and Sustainability
Correct Answer: B) Honesty, Objectivity, Confidentiality, and Professionalism
Rationale: Bookkeeping ethics are the moral principles that govern the behavior of a
bookkeeper. Honesty ensures truthful reporting; objectivity prevents bias; confidentiality
protects sensitive client data; and professionalism ensures the bookkeeper maintains the
standards and reputation of the field.
Question 2
In the acronym DEALER, which accounts are increased by a debit?
A) Dividends, Expenses, and Assets
B) Liabilities, Equity, and Revenue
C) Dividends, Equity, and Assets
D) Debt, Expenses, and Assets
E) Dividends, Expenses, and Liabilities
Correct Answer: A) Dividends, Expenses, and Assets
Rationale: The DEALER acronym helps bookkeepers remember account balances.
Dividends, Expenses, and Assets (DEA) have normal debit balances, meaning they increase
with debits. Liabilities, Equity, and Revenue (LER) have normal credit balances, meaning
they increase with credits.
Question 3
What is the fundamental accounting equation?
A) Assets + Liabilities = Equity
B) Assets = Liabilities - Equity
C) Assets = Liabilities + Equity
D) Equity = Assets + Liabilities
E) Liabilities = Assets + Equity
Correct Answer: C) Assets = Liabilities + Equity
Rationale: The accounting equation is the foundation of double-entry bookkeeping. It states
that everything a company owns (Assets) is financed either by borrowing money
(Liabilities) or by the owners' investments and retained earnings (Equity). The balance
sheet must always reflect this equality.
, 2
Question 4
Which financial statement shows the company's revenues and expenses during a specific period
of time?
A) The Balance Sheet
B) The Statement of Equity
C) The Statement of Cash Flow
D) The Income Statement
E) The Trial Balance
Correct Answer: D) The Income Statement
Rationale: The Income Statement, also known as the Profit and Loss (P&L) statement,
measures a company's financial performance over a specific period. It subtracts total
expenses from total revenues to determine the Net Income or Net Loss.
Question 5
What does the Balance Sheet report?
A) Revenues and expenses for the month
B) Changes in owner capital over a year
C) Sources and uses of cash
D) Assets, liabilities, and equity at a specific point in time
E) A list of all journal entries made during the cycle
Correct Answer: D) Assets, liabilities, and equity at a specific point in time
Rationale: Unlike the Income Statement which covers a period of time, the Balance Sheet is
a "snapshot" of a business's financial health on a specific date. It details what the business
owns, what it owes, and the value remaining for the owners.
Question 6
The Statement of Equity reports which of the following?
A) The daily cash balance of the company
B) Changes in equity from the opening balance to the end of the period
C) The market value of the company’s stock
D) Only the dividends paid to shareholders
E) The total liabilities owed to creditors
Correct Answer: B) Changes in equity from the opening balance to the end of the period
Rationale: The Statement of Equity (or Statement of Retained Earnings) bridges the gap
between the Income Statement and the Balance Sheet by showing how net income and
dividends affected the owner's stake in the business during the period.
Question 7
The Statement of Cash Flow is used primarily to:
VERIFIED ANSWERS ( DETAILED & ELABORATED) ACTUAL EXAM 2026 TEST!!
Question 1
Which of the following represents the four key elements of bookkeeping ethics?
A) Honesty, Transparency, Integrity, and Confidentiality
B) Honesty, Objectivity, Confidentiality, and Professionalism
C) Integrity, Professionalism, Punctuality, and Accuracy
D) Objectivity, Fairness, Profitability, and Honesty
E) Confidentiality, Objectivity, Profitability, and Sustainability
Correct Answer: B) Honesty, Objectivity, Confidentiality, and Professionalism
Rationale: Bookkeeping ethics are the moral principles that govern the behavior of a
bookkeeper. Honesty ensures truthful reporting; objectivity prevents bias; confidentiality
protects sensitive client data; and professionalism ensures the bookkeeper maintains the
standards and reputation of the field.
Question 2
In the acronym DEALER, which accounts are increased by a debit?
A) Dividends, Expenses, and Assets
B) Liabilities, Equity, and Revenue
C) Dividends, Equity, and Assets
D) Debt, Expenses, and Assets
E) Dividends, Expenses, and Liabilities
Correct Answer: A) Dividends, Expenses, and Assets
Rationale: The DEALER acronym helps bookkeepers remember account balances.
Dividends, Expenses, and Assets (DEA) have normal debit balances, meaning they increase
with debits. Liabilities, Equity, and Revenue (LER) have normal credit balances, meaning
they increase with credits.
Question 3
What is the fundamental accounting equation?
A) Assets + Liabilities = Equity
B) Assets = Liabilities - Equity
C) Assets = Liabilities + Equity
D) Equity = Assets + Liabilities
E) Liabilities = Assets + Equity
Correct Answer: C) Assets = Liabilities + Equity
Rationale: The accounting equation is the foundation of double-entry bookkeeping. It states
that everything a company owns (Assets) is financed either by borrowing money
(Liabilities) or by the owners' investments and retained earnings (Equity). The balance
sheet must always reflect this equality.
, 2
Question 4
Which financial statement shows the company's revenues and expenses during a specific period
of time?
A) The Balance Sheet
B) The Statement of Equity
C) The Statement of Cash Flow
D) The Income Statement
E) The Trial Balance
Correct Answer: D) The Income Statement
Rationale: The Income Statement, also known as the Profit and Loss (P&L) statement,
measures a company's financial performance over a specific period. It subtracts total
expenses from total revenues to determine the Net Income or Net Loss.
Question 5
What does the Balance Sheet report?
A) Revenues and expenses for the month
B) Changes in owner capital over a year
C) Sources and uses of cash
D) Assets, liabilities, and equity at a specific point in time
E) A list of all journal entries made during the cycle
Correct Answer: D) Assets, liabilities, and equity at a specific point in time
Rationale: Unlike the Income Statement which covers a period of time, the Balance Sheet is
a "snapshot" of a business's financial health on a specific date. It details what the business
owns, what it owes, and the value remaining for the owners.
Question 6
The Statement of Equity reports which of the following?
A) The daily cash balance of the company
B) Changes in equity from the opening balance to the end of the period
C) The market value of the company’s stock
D) Only the dividends paid to shareholders
E) The total liabilities owed to creditors
Correct Answer: B) Changes in equity from the opening balance to the end of the period
Rationale: The Statement of Equity (or Statement of Retained Earnings) bridges the gap
between the Income Statement and the Balance Sheet by showing how net income and
dividends affected the owner's stake in the business during the period.
Question 7
The Statement of Cash Flow is used primarily to:
