1
INTUIT BOOKKEEPING CERTIFICATION
EXAMINATION – EXAM PREP GUIDE | LATEST
UPDATE 2026/2027 | PRACTICE QUESTIONS AND
ANSWERS.
Table of Contents
Accounting Basics
Accounting for Assets and Sales Transactions
Accounting for Liabilities, Equity, and Purchase Transactions
Reconciliation and Financial Statements
Payroll and Adjusting Entries
Internal Controls and Ethics
Question 1: What is the fundamental accounting equation?
A) Assets = Revenue - Expenses
B) Assets = Liabilities + Owner's Equity
C) Liabilities = Assets + Equity
D) Equity = Assets + Liabilities
Correct Answer: B
The fundamental accounting equation states that Assets = Liabilities + Owner's
Equity. This equation must always remain in balance after every transaction, as
,2
everything the business owns (assets) is financed by creditors (liabilities) or
owners (equity).
Question 2: What is the primary purpose of the accounting equation?
A) To calculate profit for the year
B) To ensure that total assets always equal total liabilities plus owner's equity
C) To determine the company's tax liability
D) To track employee salaries
Correct Answer: B
The accounting equation (Assets = Liabilities + Owner's Equity) is the foundation
of double-entry bookkeeping. It must always remain in balance after every
transaction, serving as the self-checking mechanism for the entire accounting
system.
Question 3: In double-entry bookkeeping, every transaction must:
A) Affect at least two accounts, with total debits equaling total credits
B) Affect only one account
C) Be recorded twice in the same account
D) Have more debits than credits
Correct Answer: A
Double-entry bookkeeping requires that every transaction affect at least two
accounts, with total debits equaling total credits. This self-checking structure keeps
the accounting equation intact, and an unbalanced entry cannot post in
QuickBooks or any proper accounting system.
Question 4: A debit entry will always:
A) Increase an account balance
B) Decrease an account balance
C) Be on the left side of the journal entry
D) Be on the right side of the journal entry
Correct Answer: C
A debit entry is always on the left side of the journal entry. Debits increase assets,
expenses, and dividends/draws, while credits increase liabilities, equity, and
revenue.
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Question 5: To increase an Asset account, you would:
A) Credit the account
B) Debit the account
C) It cannot be increased
D) Debit and Credit simultaneously
Correct Answer: B
To increase an Asset account, you must debit the account. Assets have a normal
debit balance. The DEA-LER logic applies: Debits increase Dividends/draws,
Expenses, and Assets.
Question 6: To increase a Liability account, you would:
A) Credit the account
B) Debit the account
C) It cannot be increased
D) Debit and Credit simultaneously
Correct Answer: A
To increase a Liability account, you must credit the account. Liabilities have a
normal credit balance, along with equity and revenue.
Question 7: The normal balance for an Expense account is a:
A) Credit
B) Debit
C) Zero
D) It depends on the transaction
Correct Answer: B
The normal balance for an Expense account is a debit. Expenses decrease owner's
equity, and they increase with debits.
Question 8: The normal balance for a Revenue account is a:
A) Credit
B) Debit
C) Zero
D) It depends on the transaction
, 4
Correct Answer: A
The normal balance for a Revenue account is a credit. Revenue increases owner's
equity, and it increases with credits.
Question 9: What are the five account types in bookkeeping?
A) Assets, Liabilities, Equity, Revenue, Expenses
B) Cash, Inventory, Equipment, Sales, Rent
C) Debits, Credits, Journals, Ledgers, Statements
D) Income, Expenses, Profit, Loss, Cash Flow
Correct Answer: A
The five account types are Assets, Liabilities, Equity, Revenue, and Expenses.
These form the backbone of the accounting system and are classified under the
accounting equation.
Question 10: What does DEALER stand for in accounting?
A) Debits, Expenses, Assets = Liabilities, Equity, Revenue
B) Dividends + Expenses + Assets = Liabilities + Owner's Equity (beginning) +
Revenue
C) Debits Equal Assets, Liabilities, Equity, Revenue
D) Deposits, Expenses, Assets, Liabilities, Equity, Revenue
Correct Answer: B
DEALER stands for Dividends + Expenses + Assets = Liabilities + Owner's Equity
(beginning) + Revenue. This mnemonic helps bookkeepers remember the normal
balances of each account type and the relationship between debits and credits.
Question 11: What is the "Going Concern" principle?
A) The business will be sold in the near future
B) The business will continue to operate indefinitely
C) The business will only make profitable decisions
D) The business will have consistent monthly revenue
Correct Answer: B
The Going Concern principle assumes that a business will continue to operate
indefinitely. This assumption allows businesses to defer certain costs and is
fundamental to financial reporting.
INTUIT BOOKKEEPING CERTIFICATION
EXAMINATION – EXAM PREP GUIDE | LATEST
UPDATE 2026/2027 | PRACTICE QUESTIONS AND
ANSWERS.
Table of Contents
Accounting Basics
Accounting for Assets and Sales Transactions
Accounting for Liabilities, Equity, and Purchase Transactions
Reconciliation and Financial Statements
Payroll and Adjusting Entries
Internal Controls and Ethics
Question 1: What is the fundamental accounting equation?
A) Assets = Revenue - Expenses
B) Assets = Liabilities + Owner's Equity
C) Liabilities = Assets + Equity
D) Equity = Assets + Liabilities
Correct Answer: B
The fundamental accounting equation states that Assets = Liabilities + Owner's
Equity. This equation must always remain in balance after every transaction, as
,2
everything the business owns (assets) is financed by creditors (liabilities) or
owners (equity).
Question 2: What is the primary purpose of the accounting equation?
A) To calculate profit for the year
B) To ensure that total assets always equal total liabilities plus owner's equity
C) To determine the company's tax liability
D) To track employee salaries
Correct Answer: B
The accounting equation (Assets = Liabilities + Owner's Equity) is the foundation
of double-entry bookkeeping. It must always remain in balance after every
transaction, serving as the self-checking mechanism for the entire accounting
system.
Question 3: In double-entry bookkeeping, every transaction must:
A) Affect at least two accounts, with total debits equaling total credits
B) Affect only one account
C) Be recorded twice in the same account
D) Have more debits than credits
Correct Answer: A
Double-entry bookkeeping requires that every transaction affect at least two
accounts, with total debits equaling total credits. This self-checking structure keeps
the accounting equation intact, and an unbalanced entry cannot post in
QuickBooks or any proper accounting system.
Question 4: A debit entry will always:
A) Increase an account balance
B) Decrease an account balance
C) Be on the left side of the journal entry
D) Be on the right side of the journal entry
Correct Answer: C
A debit entry is always on the left side of the journal entry. Debits increase assets,
expenses, and dividends/draws, while credits increase liabilities, equity, and
revenue.
,3
Question 5: To increase an Asset account, you would:
A) Credit the account
B) Debit the account
C) It cannot be increased
D) Debit and Credit simultaneously
Correct Answer: B
To increase an Asset account, you must debit the account. Assets have a normal
debit balance. The DEA-LER logic applies: Debits increase Dividends/draws,
Expenses, and Assets.
Question 6: To increase a Liability account, you would:
A) Credit the account
B) Debit the account
C) It cannot be increased
D) Debit and Credit simultaneously
Correct Answer: A
To increase a Liability account, you must credit the account. Liabilities have a
normal credit balance, along with equity and revenue.
Question 7: The normal balance for an Expense account is a:
A) Credit
B) Debit
C) Zero
D) It depends on the transaction
Correct Answer: B
The normal balance for an Expense account is a debit. Expenses decrease owner's
equity, and they increase with debits.
Question 8: The normal balance for a Revenue account is a:
A) Credit
B) Debit
C) Zero
D) It depends on the transaction
, 4
Correct Answer: A
The normal balance for a Revenue account is a credit. Revenue increases owner's
equity, and it increases with credits.
Question 9: What are the five account types in bookkeeping?
A) Assets, Liabilities, Equity, Revenue, Expenses
B) Cash, Inventory, Equipment, Sales, Rent
C) Debits, Credits, Journals, Ledgers, Statements
D) Income, Expenses, Profit, Loss, Cash Flow
Correct Answer: A
The five account types are Assets, Liabilities, Equity, Revenue, and Expenses.
These form the backbone of the accounting system and are classified under the
accounting equation.
Question 10: What does DEALER stand for in accounting?
A) Debits, Expenses, Assets = Liabilities, Equity, Revenue
B) Dividends + Expenses + Assets = Liabilities + Owner's Equity (beginning) +
Revenue
C) Debits Equal Assets, Liabilities, Equity, Revenue
D) Deposits, Expenses, Assets, Liabilities, Equity, Revenue
Correct Answer: B
DEALER stands for Dividends + Expenses + Assets = Liabilities + Owner's Equity
(beginning) + Revenue. This mnemonic helps bookkeepers remember the normal
balances of each account type and the relationship between debits and credits.
Question 11: What is the "Going Concern" principle?
A) The business will be sold in the near future
B) The business will continue to operate indefinitely
C) The business will only make profitable decisions
D) The business will have consistent monthly revenue
Correct Answer: B
The Going Concern principle assumes that a business will continue to operate
indefinitely. This assumption allows businesses to defer certain costs and is
fundamental to financial reporting.
