INTUIT ACADEMY BOOKKEEPING GLOSSARY QUESTIONS AMS AND ANSWERS LATEST
UPDATE 2025-2026
Things that are considered Liabilities( credit) + Equity( credit) - Answers Account payable, Notes
payable, Accrued expenses, Long-term debt, Shareholder's Equity
Account reconciliation - Answers Compare two sets of records at the end of a particular
accounting period . Verify that account balances are correct, identify discrepancies, and make
adjustments to the account as required in order to record the correct values in the books .
Accountant - Answers An accountant keeps track of business transactions and financial
records to issue financial statements and determine how a business is doing on a financial level
.
Accounts payable - Answers Money a business owes to others for goods or services
Accounts payable reconciliation - Answers Compare statements or invoices provided by
vendors to the accounts payable in the books . Verify there are no discrepancies in the amount a
vendor is charging for the goods or services received, and the amount recorded in the books
matches the amount charged by the vendor
Accounts receivable - Answers Money that is owed to a business for providing a good or service
Accounts receivable aging report - Answers Accounts receivable aging is a periodic report that
categorizes a business's accounts receivable according to the length of time an invoice has
been outstanding . It is used as a gauge to determine the financial health and reliability of a
business's customers
Accounts receivable doubtful - Answers An allowance for doubtful accounts is considered a
"contra asset," because it reduces the amount of an asset, in this case the accounts receivable .
The allowance, sometimes called a bad debt reserve, represents management's estimate of the
amount of accounts receivable that will not be paid by customers
Accounts receivable reconciliation - Answers Compare the outstanding customer invoices and
balances to the accounts receivable as entered in the general ledger . Verify amounts, uncover
errors and irregularities, and identify fraudulent activity
Accounts uncollectible - Answers Accounts uncollectible are receivables, loans, or other debt
that will not be paid by a debtor .
Accrual - Answers An entry to record a future revenue or expense in the current period, even if
money hasn't been paid or received yet
Accrual accounting - Answers Revenues and expenses are reported or recognized on financial
reports when they are earned or incurred, rather than when the payment is made or received
,Accumulated depreciation - Answers Accumulated depreciation is the total amount of
depreciation expense that has been allocated for an asset since the asset was put into use
Adjusted trial balance - Answers Listing of the ending balances in all accounts after adjusting
entries have been prepared
Adjusting entries - Answers Creating new entries to record depreciation and accrual
adjustments; these are provided to bookkeepers by a CPA or accountant
Amortization - Answers The structure process of paying both the principal and interest over a
period of time
Assets - Answers Anything the business owns of value or a resource of value that has the
potential to be transformed into cash
Average cost method (AVCO) - Answers Inventory value is based on the average cost of all
materials purchased during the reporting period
Bad debt - Answers Bad debt is the term used for any loans or outstanding balances that a
business deems uncollectible . For businesses that provide loans and credit to customers, bad
debt is normal and expected .
Bad debt expenses - Answers A bad debt expense is recognized when a receivable is no longer
collectible because a customer is unable to fulfill their obligation to pay an outstanding debt due
to bankruptcy or other financial problems . Companies that extend credit to their customers
report bad debts as an allowance for doubtful accounts on the balance sheet, which is also
known as a provision for credit losses .
Balance sheet - Answers The balance sheet is a financial statement that reports a business's
assets, liabilities, and equity at a specific point in time .
Balances (account balances) - Answers A total amount in an account at any given time .
Bank deposit receipt (slip) - Answers A bank form used to document the money the customer
intends to deposit into their bank account .
Bank reconciliation - Answers Compare the books to the statement issued by the bank .
Compare every transaction in the bank statement to the business's internal records (including
bank deposit slips and canceled checks) to verify both records are matching .
Bill - Answers Record to show what business owes vendor for goods/ services
Book balance - Answers The ledger balance as of a certain date
Bookkeeper - Answers Bookkeepers document transactions, manage accounts, and record
financial data
, Budget - Answers A forecast of revenue and expenses for a future period of time
C Corp - Answers A business structure that is owned by one or more shareholders, but they do
not carry any personal liability .
Capital - Answers The financial monies the business uses for operations and growth, such as
cash, debt, or equity .
Capital contribution - Answers The money or assets given to the business by the owner or
partners
Cash - Answers Assets that exist in cash form or can be immediately converted into cash
Cash payments - Answers Cash receipts are the collection of money, typically from a customer,
which increases (debits) the cash balance recognized on a business's balance sheet
Cash sales - Answers Cash sales refers to transactions where the customer pays for the goods
or services immediately with cash, check, or a credit or debit card .
Cash-basis accounting - Answers Revenues and expenses are reported or recognized on
financial reports when the payment is received or made, rather than when work is performed
Chart of accounts - Answers Lists all of the accounts and sub-accounts used to categorize
transactions
Check - Answers A monetary instrument directing the financial institution to pay the bearer a
specified sum of money .
Close the books - Answers Completing all necessary accounting tasks and procedures at the
end of a financial period including finalizing financial statements, reconciling accounts, making
adjusting entries, and preparing the accounts for the next accounting period .
Commercial loans - Answers A debt-based funding arrangement between a business and a
financial institution (traditional model of loan)
Common stock - Answers Refers to the capital the business received in exchange for issuing
stock to stockholders
Compensating error - Answers Two or more errors cancel each other out, for example f ixed
assets account is incorrectly understated $600 and rent account is incorrectly overstated $600
Complete reversal of entries - Answers The correct amount is posted to the correct accounts
but the debits and credits are reversed, for example debiting an account that should have been
credited
Confidentiality - Answers Clients entrust bookkeepers with very sensitive financial information,
and a business owner must be able to trust that their bookkeeper will treat their data with the
UPDATE 2025-2026
Things that are considered Liabilities( credit) + Equity( credit) - Answers Account payable, Notes
payable, Accrued expenses, Long-term debt, Shareholder's Equity
Account reconciliation - Answers Compare two sets of records at the end of a particular
accounting period . Verify that account balances are correct, identify discrepancies, and make
adjustments to the account as required in order to record the correct values in the books .
Accountant - Answers An accountant keeps track of business transactions and financial
records to issue financial statements and determine how a business is doing on a financial level
.
Accounts payable - Answers Money a business owes to others for goods or services
Accounts payable reconciliation - Answers Compare statements or invoices provided by
vendors to the accounts payable in the books . Verify there are no discrepancies in the amount a
vendor is charging for the goods or services received, and the amount recorded in the books
matches the amount charged by the vendor
Accounts receivable - Answers Money that is owed to a business for providing a good or service
Accounts receivable aging report - Answers Accounts receivable aging is a periodic report that
categorizes a business's accounts receivable according to the length of time an invoice has
been outstanding . It is used as a gauge to determine the financial health and reliability of a
business's customers
Accounts receivable doubtful - Answers An allowance for doubtful accounts is considered a
"contra asset," because it reduces the amount of an asset, in this case the accounts receivable .
The allowance, sometimes called a bad debt reserve, represents management's estimate of the
amount of accounts receivable that will not be paid by customers
Accounts receivable reconciliation - Answers Compare the outstanding customer invoices and
balances to the accounts receivable as entered in the general ledger . Verify amounts, uncover
errors and irregularities, and identify fraudulent activity
Accounts uncollectible - Answers Accounts uncollectible are receivables, loans, or other debt
that will not be paid by a debtor .
Accrual - Answers An entry to record a future revenue or expense in the current period, even if
money hasn't been paid or received yet
Accrual accounting - Answers Revenues and expenses are reported or recognized on financial
reports when they are earned or incurred, rather than when the payment is made or received
,Accumulated depreciation - Answers Accumulated depreciation is the total amount of
depreciation expense that has been allocated for an asset since the asset was put into use
Adjusted trial balance - Answers Listing of the ending balances in all accounts after adjusting
entries have been prepared
Adjusting entries - Answers Creating new entries to record depreciation and accrual
adjustments; these are provided to bookkeepers by a CPA or accountant
Amortization - Answers The structure process of paying both the principal and interest over a
period of time
Assets - Answers Anything the business owns of value or a resource of value that has the
potential to be transformed into cash
Average cost method (AVCO) - Answers Inventory value is based on the average cost of all
materials purchased during the reporting period
Bad debt - Answers Bad debt is the term used for any loans or outstanding balances that a
business deems uncollectible . For businesses that provide loans and credit to customers, bad
debt is normal and expected .
Bad debt expenses - Answers A bad debt expense is recognized when a receivable is no longer
collectible because a customer is unable to fulfill their obligation to pay an outstanding debt due
to bankruptcy or other financial problems . Companies that extend credit to their customers
report bad debts as an allowance for doubtful accounts on the balance sheet, which is also
known as a provision for credit losses .
Balance sheet - Answers The balance sheet is a financial statement that reports a business's
assets, liabilities, and equity at a specific point in time .
Balances (account balances) - Answers A total amount in an account at any given time .
Bank deposit receipt (slip) - Answers A bank form used to document the money the customer
intends to deposit into their bank account .
Bank reconciliation - Answers Compare the books to the statement issued by the bank .
Compare every transaction in the bank statement to the business's internal records (including
bank deposit slips and canceled checks) to verify both records are matching .
Bill - Answers Record to show what business owes vendor for goods/ services
Book balance - Answers The ledger balance as of a certain date
Bookkeeper - Answers Bookkeepers document transactions, manage accounts, and record
financial data
, Budget - Answers A forecast of revenue and expenses for a future period of time
C Corp - Answers A business structure that is owned by one or more shareholders, but they do
not carry any personal liability .
Capital - Answers The financial monies the business uses for operations and growth, such as
cash, debt, or equity .
Capital contribution - Answers The money or assets given to the business by the owner or
partners
Cash - Answers Assets that exist in cash form or can be immediately converted into cash
Cash payments - Answers Cash receipts are the collection of money, typically from a customer,
which increases (debits) the cash balance recognized on a business's balance sheet
Cash sales - Answers Cash sales refers to transactions where the customer pays for the goods
or services immediately with cash, check, or a credit or debit card .
Cash-basis accounting - Answers Revenues and expenses are reported or recognized on
financial reports when the payment is received or made, rather than when work is performed
Chart of accounts - Answers Lists all of the accounts and sub-accounts used to categorize
transactions
Check - Answers A monetary instrument directing the financial institution to pay the bearer a
specified sum of money .
Close the books - Answers Completing all necessary accounting tasks and procedures at the
end of a financial period including finalizing financial statements, reconciling accounts, making
adjusting entries, and preparing the accounts for the next accounting period .
Commercial loans - Answers A debt-based funding arrangement between a business and a
financial institution (traditional model of loan)
Common stock - Answers Refers to the capital the business received in exchange for issuing
stock to stockholders
Compensating error - Answers Two or more errors cancel each other out, for example f ixed
assets account is incorrectly understated $600 and rent account is incorrectly overstated $600
Complete reversal of entries - Answers The correct amount is posted to the correct accounts
but the debits and credits are reversed, for example debiting an account that should have been
credited
Confidentiality - Answers Clients entrust bookkeepers with very sensitive financial information,
and a business owner must be able to trust that their bookkeeper will treat their data with the
