INTUIT BOOKKEEPING EXAM QUESTIONS WITH CORRECT DETAILED
ANSWERS A+ VERIFIED LATEST VERSION (2026-2027)
1. What is the Purpose of a balance sheet: To determine the financial health of an organization
at a point in time.
2. Financial elements on the income statement:: Expenses, Revenue
3. Financial elements on the balance sheet:: Assets, Capital, and Liabilities
4. Accounts that increase with debit: Cash, equipment, assets, expenses, and dividends
5. Accounts that increase with credit: Contra-Asset : Accumulated Depreciation, Account Payable,
common stock, equity, revenue and liability
6. Lou has a landscaping company. He received a $10,000 payment for a
landscaping job that he completed for the Rose family. How would you record
this transaction?: Debit $10,000 to Cash; Credit $10,000 to Service Revenue - Landscaping
7. Definition of a debit in double-entry accounting: An increase in assets/expenses and a
decrease in liabilities/owner's equity and revenue.
8. General Ledger: The debits and credits posted to the company's line of credit during the last 6 months
9. Transaction Journal: The debits and credits recorded for a rental equipment expense
10. income statement (profit and loss statement): Report of all revenue and expenses for the
month
11. Is the ending balance for the inventory on Balance Sheet?: Yes, Ending balance for
the inventory
12. Reasons for making adjusting journal entries (Choose 3): a. To record expiration of
prepaid insurance. b. To record depreciation. c. To recognize unpaid salaries for the current period.
13. Economic Entity Assumption: The business is a separate entity, so the activities of a business must
be kept separate from any other financial activities of its business owners.
14. Reliability Assumption: Makes mandatory for companies to record only accounting transactions that
can be verified through invoices, billing statements and bank statements.
15. Full Disclosure Principle: All information that is relative to the business and is important to a lender
or investor has to be provided in financial statements or in the notes of the statements.
16. Conservatism Assumption: When bookkeepers are uncertain and need to determine how to report
an item, this guides them to choose the option that shows less income or asset benefit.
17. Going Concern Assumption: Refers to a business that is now stable enough to operate and meet
its obligations for the foreseeable future.
18. Monetary Unit Assumption: Refers to one monetary unit being used throughout all of the account-
ing activities.
, INTUIT BOOKKEEPING EXAM QUESTIONS WITH CORRECT DETAILED
ANSWERS A+ VERIFIED LATEST VERSION (2026-2027)
19. Consistency Principle: Refers to when a business adopts a specific accounting method that it will enter
all similar items in the exact same way in the future.
20. Materiality Principle: Refers to an accounting standard that can be ignored if the impact has such a
small ettect on the financial statements that it would not be misleading.
21. On February 28, ABC Company received an invoice for $1,200 for running
social media ads in February. The invoice will be paid in March. Assuming
ABC Company uses the accrual method of accounting, which is correct for
February?: Expenses are increased by $1,200.
22. Which of the following accounts is not considered a long term asset?: Inventory
23. Difference between current assets and long-term assets: Current assets are expected
to be converted to cash within one year, while Long-term assets are expected to extend beyond a year from the
reporting date.
24. Normal (natural) Debit balance account types: Asset and Expense
25. Normal (natural) Credit balance account types: Liabilities, Equity, and Revenue
26. What is the Maximum amount of time that a business owner should wait
to correct inventory errors?: Annually
27. A business owner of a specialty foods store does a full review of the inven-
tory on hand and discovers items that have perished. What is the accounting
journal entry that should be made to adjust the books?: Credit to the Inventory Asset
Account and a Debit to the Obsolete Inventory Expense.
28. It is the end of the month, and you are reviewing your company's Trial
Balance Report. As part of your review, you notice that Depreciation Expense
has a credit balance. Is this noteworthy?: Depreciation Expense does not normally have a credit
balance, so additional review is needed.
29. You are recording the month-end depreciation expense entry for a factory
building. For each account, Accumulated Depreciation, Depreciation Expense,
Building, and Cash, select whether you should Debit the account, Credit the
account, or make No Change to the account.: Credit - Accumulated Depreciation, Debit -
Depreciation Expense
No Change - Building and Cash
30. You are the bookkeeper for a small coffee shop. At the end of the day, you
receive the cash register sales report to record in the company's accounting
ANSWERS A+ VERIFIED LATEST VERSION (2026-2027)
1. What is the Purpose of a balance sheet: To determine the financial health of an organization
at a point in time.
2. Financial elements on the income statement:: Expenses, Revenue
3. Financial elements on the balance sheet:: Assets, Capital, and Liabilities
4. Accounts that increase with debit: Cash, equipment, assets, expenses, and dividends
5. Accounts that increase with credit: Contra-Asset : Accumulated Depreciation, Account Payable,
common stock, equity, revenue and liability
6. Lou has a landscaping company. He received a $10,000 payment for a
landscaping job that he completed for the Rose family. How would you record
this transaction?: Debit $10,000 to Cash; Credit $10,000 to Service Revenue - Landscaping
7. Definition of a debit in double-entry accounting: An increase in assets/expenses and a
decrease in liabilities/owner's equity and revenue.
8. General Ledger: The debits and credits posted to the company's line of credit during the last 6 months
9. Transaction Journal: The debits and credits recorded for a rental equipment expense
10. income statement (profit and loss statement): Report of all revenue and expenses for the
month
11. Is the ending balance for the inventory on Balance Sheet?: Yes, Ending balance for
the inventory
12. Reasons for making adjusting journal entries (Choose 3): a. To record expiration of
prepaid insurance. b. To record depreciation. c. To recognize unpaid salaries for the current period.
13. Economic Entity Assumption: The business is a separate entity, so the activities of a business must
be kept separate from any other financial activities of its business owners.
14. Reliability Assumption: Makes mandatory for companies to record only accounting transactions that
can be verified through invoices, billing statements and bank statements.
15. Full Disclosure Principle: All information that is relative to the business and is important to a lender
or investor has to be provided in financial statements or in the notes of the statements.
16. Conservatism Assumption: When bookkeepers are uncertain and need to determine how to report
an item, this guides them to choose the option that shows less income or asset benefit.
17. Going Concern Assumption: Refers to a business that is now stable enough to operate and meet
its obligations for the foreseeable future.
18. Monetary Unit Assumption: Refers to one monetary unit being used throughout all of the account-
ing activities.
, INTUIT BOOKKEEPING EXAM QUESTIONS WITH CORRECT DETAILED
ANSWERS A+ VERIFIED LATEST VERSION (2026-2027)
19. Consistency Principle: Refers to when a business adopts a specific accounting method that it will enter
all similar items in the exact same way in the future.
20. Materiality Principle: Refers to an accounting standard that can be ignored if the impact has such a
small ettect on the financial statements that it would not be misleading.
21. On February 28, ABC Company received an invoice for $1,200 for running
social media ads in February. The invoice will be paid in March. Assuming
ABC Company uses the accrual method of accounting, which is correct for
February?: Expenses are increased by $1,200.
22. Which of the following accounts is not considered a long term asset?: Inventory
23. Difference between current assets and long-term assets: Current assets are expected
to be converted to cash within one year, while Long-term assets are expected to extend beyond a year from the
reporting date.
24. Normal (natural) Debit balance account types: Asset and Expense
25. Normal (natural) Credit balance account types: Liabilities, Equity, and Revenue
26. What is the Maximum amount of time that a business owner should wait
to correct inventory errors?: Annually
27. A business owner of a specialty foods store does a full review of the inven-
tory on hand and discovers items that have perished. What is the accounting
journal entry that should be made to adjust the books?: Credit to the Inventory Asset
Account and a Debit to the Obsolete Inventory Expense.
28. It is the end of the month, and you are reviewing your company's Trial
Balance Report. As part of your review, you notice that Depreciation Expense
has a credit balance. Is this noteworthy?: Depreciation Expense does not normally have a credit
balance, so additional review is needed.
29. You are recording the month-end depreciation expense entry for a factory
building. For each account, Accumulated Depreciation, Depreciation Expense,
Building, and Cash, select whether you should Debit the account, Credit the
account, or make No Change to the account.: Credit - Accumulated Depreciation, Debit -
Depreciation Expense
No Change - Building and Cash
30. You are the bookkeeper for a small coffee shop. At the end of the day, you
receive the cash register sales report to record in the company's accounting
