BOOKKEEPING COMPREHENSIVE EXAM 2026
QUESTIONS AND SOLUTIONS GRADED A+
◉ Accounts receivable Money that is owed to a business for providing a
good or service.
◉ General bookkeeping responsibilities - Record financial transactions
Document all financial transactions in the appropriate books or software
to ensure accurate records of income and expenses.
◉ General bookkeeping responsibilities - Reconcile bank accounts
Match and verify the business's financial records with its bank
statements to ensure consistency and accuracy.
◉ General bookkeeping responsibilities - Manage accounts receivable
and accounts payable Track money owed to the business (receivables)
and money the business owes to others (payables) for efficient cash flow
management.
◉ General bookkeeping responsibilities - Work with tax preparers and
assist with tax compliance Collaborate with tax professionals to ensure
that the business meets tax obligations, including accurate filings and
adherence to regulations.
,◉ General bookkeeping responsibilities - Generate financial statements
Prepare key financial reports like income statements, balance sheets, and
cash flow statements to provide insights into the business's financial
health.
◉ Bookkeeper Oath I will uphold the bookkeeper oath by choosing to
act with honesty, objectivity, confidentiality, and professionalism in all
interactions with my clients and on behalf of my clients to the best of my
ability and judgment.
◉ Foundation of a balance sheet Assets = Liabilities + Equity
Assets: Anything the business owns of value or a resource of value that
has the potential to be transformed into cash.
Liabilities: What the business owes to others.
Equity: Owner's stake in the business, representing how much they have
invested or withdrawn.
◉ Balance Sheet A financial statement that reports the assets and claims
to those assets at a specific point in time.
◉ Revenue The total income generated by a business from its normal
operations, typically from selling goods or services.
,◉ Expenses The costs incurred by a business in the process of earning
revenue, such as salaries, rent, utilities, and supplies.
◉ Debits Debits represent an increase in assets or expenses, or a
decrease in liabilities, owner's equity, or revenue.
◉ Credits Credits represent a decrease in assets, or expenses, or an
increase in liabilities, owner's equity, or revenue.
◉ T/F
The cardinal rule of bookkeeping: debits and credits need to be equal.
It's like a balancing act where the numbers on both sides of the stage
should always match up True
◉ T/F
When recording the purchase of office supplies on account, you would
credit the accounts payable (liability) to reflect the increase in the
amount owed. True: Purchasing on account increases liabilities. Credit
accounts payable to reflect the amount owed and debit office supplies to
record the purchase.
, ◉ T/F
You should debit the salary expense (expense) and credit the cash (asset)
when recording the payment of salaries to employees. Debit salary
expense to recognize the cost of paying employees and credit cash to
reduce the asset as payment is made.
◉ Four accounting principles: Economic entity assumption This
principle states that a business is treated as a separate entity from its
owner or other businesses, ensuring its financial records are distinct.
◉ Four accounting principles: Reliability assumption The Reliability
Assumption mandates that companies record only verifiable transactions
supported by invoices, billing statements, receipts, and bank statements.
◉ Four accounting principles: Full disclosure principle This principle
requires that all relevant financial information is fully disclosed to
stakeholders to provide a complete picture of the business's financial
situation.
◉ Four accounting principles: Conservatism assumption This principle
advises accountants to choose solutions that minimize overstatement of
income or assets in cases of uncertainty, favoring caution.
QUESTIONS AND SOLUTIONS GRADED A+
◉ Accounts receivable Money that is owed to a business for providing a
good or service.
◉ General bookkeeping responsibilities - Record financial transactions
Document all financial transactions in the appropriate books or software
to ensure accurate records of income and expenses.
◉ General bookkeeping responsibilities - Reconcile bank accounts
Match and verify the business's financial records with its bank
statements to ensure consistency and accuracy.
◉ General bookkeeping responsibilities - Manage accounts receivable
and accounts payable Track money owed to the business (receivables)
and money the business owes to others (payables) for efficient cash flow
management.
◉ General bookkeeping responsibilities - Work with tax preparers and
assist with tax compliance Collaborate with tax professionals to ensure
that the business meets tax obligations, including accurate filings and
adherence to regulations.
,◉ General bookkeeping responsibilities - Generate financial statements
Prepare key financial reports like income statements, balance sheets, and
cash flow statements to provide insights into the business's financial
health.
◉ Bookkeeper Oath I will uphold the bookkeeper oath by choosing to
act with honesty, objectivity, confidentiality, and professionalism in all
interactions with my clients and on behalf of my clients to the best of my
ability and judgment.
◉ Foundation of a balance sheet Assets = Liabilities + Equity
Assets: Anything the business owns of value or a resource of value that
has the potential to be transformed into cash.
Liabilities: What the business owes to others.
Equity: Owner's stake in the business, representing how much they have
invested or withdrawn.
◉ Balance Sheet A financial statement that reports the assets and claims
to those assets at a specific point in time.
◉ Revenue The total income generated by a business from its normal
operations, typically from selling goods or services.
,◉ Expenses The costs incurred by a business in the process of earning
revenue, such as salaries, rent, utilities, and supplies.
◉ Debits Debits represent an increase in assets or expenses, or a
decrease in liabilities, owner's equity, or revenue.
◉ Credits Credits represent a decrease in assets, or expenses, or an
increase in liabilities, owner's equity, or revenue.
◉ T/F
The cardinal rule of bookkeeping: debits and credits need to be equal.
It's like a balancing act where the numbers on both sides of the stage
should always match up True
◉ T/F
When recording the purchase of office supplies on account, you would
credit the accounts payable (liability) to reflect the increase in the
amount owed. True: Purchasing on account increases liabilities. Credit
accounts payable to reflect the amount owed and debit office supplies to
record the purchase.
, ◉ T/F
You should debit the salary expense (expense) and credit the cash (asset)
when recording the payment of salaries to employees. Debit salary
expense to recognize the cost of paying employees and credit cash to
reduce the asset as payment is made.
◉ Four accounting principles: Economic entity assumption This
principle states that a business is treated as a separate entity from its
owner or other businesses, ensuring its financial records are distinct.
◉ Four accounting principles: Reliability assumption The Reliability
Assumption mandates that companies record only verifiable transactions
supported by invoices, billing statements, receipts, and bank statements.
◉ Four accounting principles: Full disclosure principle This principle
requires that all relevant financial information is fully disclosed to
stakeholders to provide a complete picture of the business's financial
situation.
◉ Four accounting principles: Conservatism assumption This principle
advises accountants to choose solutions that minimize overstatement of
income or assets in cases of uncertainty, favoring caution.
