Intuit Academy Bookkeeping
Professional Certificate: Liabilities
and Equity Questions And
Answers
Accounting Equation - (correct answer) -Assets = Liabilities + Owner's
Equity
Current Liabilities - (correct answer) -Will be paid in 1 year (I.E Accounts
payable, Payroll and benefits Liabilites, Lines of Credit, Credit Cards,
Income Tax Liabilities, Deferred Revenue)
Noncurrent Liabilities - (correct answer) -Due in 1 year or more (I.E Long
term loans; Notes Payable: mortgage, car loan, promissory loan; Bonds
payable; Deferred income tax)
Liquidity - (correct answer) -The ability to generate sufficient current
assets to pay current liabilities
Solvency - (correct answer) -Ability to meet company obligations in future
Debt to Equity Ratio - (correct answer) -Tracks increases and decreases in
liabilities as a percentage of equity.
Accounts Receivable Turnover Rate - (correct answer) -How fast accounts
receivable are collected
Income Tax - (correct answer) -Taxes payed to the state and federal
government on wages earned by employees
Bonds Payable - (correct answer) -long term debt securities issued by a
company which promises to pay back the principal at some specified point
in the future
Deferred Income Tax - (correct answer) -The result of the disparity
between income recognition and accounting methods; Represents the
difference between the amount of depreciation expense on financial
statements vs. the amount reported on inc tax return.
Vendor lines of credit - (correct answer) -A vendor lends money to your
client so that they can buy supplies and pay them back later; Your client
Professional Certificate: Liabilities
and Equity Questions And
Answers
Accounting Equation - (correct answer) -Assets = Liabilities + Owner's
Equity
Current Liabilities - (correct answer) -Will be paid in 1 year (I.E Accounts
payable, Payroll and benefits Liabilites, Lines of Credit, Credit Cards,
Income Tax Liabilities, Deferred Revenue)
Noncurrent Liabilities - (correct answer) -Due in 1 year or more (I.E Long
term loans; Notes Payable: mortgage, car loan, promissory loan; Bonds
payable; Deferred income tax)
Liquidity - (correct answer) -The ability to generate sufficient current
assets to pay current liabilities
Solvency - (correct answer) -Ability to meet company obligations in future
Debt to Equity Ratio - (correct answer) -Tracks increases and decreases in
liabilities as a percentage of equity.
Accounts Receivable Turnover Rate - (correct answer) -How fast accounts
receivable are collected
Income Tax - (correct answer) -Taxes payed to the state and federal
government on wages earned by employees
Bonds Payable - (correct answer) -long term debt securities issued by a
company which promises to pay back the principal at some specified point
in the future
Deferred Income Tax - (correct answer) -The result of the disparity
between income recognition and accounting methods; Represents the
difference between the amount of depreciation expense on financial
statements vs. the amount reported on inc tax return.
Vendor lines of credit - (correct answer) -A vendor lends money to your
client so that they can buy supplies and pay them back later; Your client
