Intuit Bookkeeping Exam 2026–2027
Latest Version — Questions with Verified Correct Answers & Rationales
Accounting Principles • Financial Statements • QuickBooks Online • Bank Reconciliation • A/P & A/R •
Payroll • Inventory & COGS • Sales Tax • Internal Controls • Closing the Books
Section 1: Brief Introduction
The Intuit Bookkeeping certification examination verifies mastery of professional
bookkeeping fundamentals and QuickBooks practice: double-entry accounting and the
accounting equation, accrual versus cash basis, financial statement preparation and
interpretation, QuickBooks Online workflows (invoicing, bills, bank feeds, items), bank and
credit card reconciliation, accounts receivable and payable management, payroll
accounting, inventory and cost of goods sold, sales tax compliance, internal controls and
ethics, and month-end/year-end closing procedures. Each question below is immediately
followed by its correct answer (bold, cyan) and a rationale grounded in accounting
principles and QuickBooks functionality.
Section 2: The Complete Exam
1. The fundamental accounting equation is:
A. Liabilities = Assets + Equity
B. Assets = Revenue - Expenses
C. Equity = Assets + Liabilities
D. Assets = Liabilities + Equity
Rationale: The accounting equation underpins double-entry bookkeeping: everything the
business owns (assets) is financed by creditors (liabilities) or owners (equity). Every
transaction keeps this equation in balance—the foundation of the balance sheet.
2. 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
Rationale: Double entry requires balanced debits and credits across at least two accounts—
this self-checking structure keeps the accounting equation intact. An unbalanced entry cannot
post in QuickBooks or any proper accounting system.
3. A debit INCREASES which types of accounts?
, A. Liabilities and revenue
B. Equity and revenue
C. All accounts equally
D. Assets and expenses (and draws/dividends)
Rationale: DEA-LER logic: Debits increase Dividends/draws, Expenses, Assets; Credits
increase Liabilities, Equity, Revenue. Reversing this is the most common bookkeeping student
error—memorize the normal balance of each account type.
4. When a business purchases $500 of office supplies with cash, the journal entry is:
A. Debit Office Supplies (or Supplies Expense) $500; Credit Cash $500
B. Credit both accounts $500
C. Debit Accounts Payable $500; Credit Supplies $500
D. Debit Cash $500; Credit Supplies $500
Rationale: The asset/expense (supplies) increases via debit; cash (asset) decreases via credit.
Reversing the entry misstates both accounts—direction of increase/decrease drives every
entry.
5. A business invoices a customer $2,000 for services on account. The entry is:
A. Debit Accounts Receivable $2,000; Credit Service Revenue $2,000
B. Debit Revenue $2,000; Credit A/R $2,000
C. Debit Cash $2,000; Credit Revenue $2,000
D. Debit A/P; Credit Cash
Rationale: Sales on credit create a receivable (asset, debit) and recognize revenue (credit).
Cash is not involved until payment; QuickBooks records this automatically when you create an
Invoice (versus a Sales Receipt for immediate payment).
6. When the customer later pays that $2,000 invoice, the entry is:
A. No entry needed
B. Debit Revenue; Credit Cash
C. Debit A/R; Credit Revenue again
D. Debit Cash (or Undeposited Funds) $2,000; Credit Accounts Receivable
$2,000
Rationale: Payment converts the receivable to cash—revenue was already recognized at
invoicing (accrual basis). Recording revenue again would double-count income; in
QuickBooks this is the Receive Payment function.
7. Purchasing $3,000 of equipment with a loan is recorded as:
A. Debit Equipment $3,000; Credit Notes/Loan Payable $3,000
, B. Debit Loan Payable; Credit Equipment
C. Debit Expense; Credit Equity
D. Debit Equipment; Credit Cash
Rationale: The asset increases (debit) and the liability increases (credit)—no cash moves and
no expense is recognized (equipment is capitalized, then depreciated). Crediting cash would
misstate the bank balance.
8. The chart of accounts is:
A. A list of customers only
B. The organized list of all accounts used to categorize transactions—assets,
liabilities, equity, income, and expenses
C. The bank statement
D. A payroll register
Rationale: The COA is the backbone of the books; QuickBooks organizes it by account type,
driving financial statement placement. Thoughtful COA design (not too granular, not too
vague) is a core bookkeeping setup skill.
9. Cash basis accounting recognizes revenue when:
A. Cash is received (and expenses when paid), while accrual basis recognizes
revenue when earned and expenses when incurred
B. Invoices are created regardless of payment
C. Inventory is ordered
D. The fiscal year closes
Rationale: Cash basis = money movement; accrual basis = economic events (invoices/bills).
QuickBooks reports can toggle between bases; accrual gives truer performance pictures while
cash basis tracks actual cash—many small businesses file taxes on cash basis.
10. Under accrual accounting, a December service invoiced in December but paid in
January is revenue in:
A. Whichever month the bookkeeper prefers
B. January when cash arrives
C. December—when earned—regardless of the January payment
D. Neither month
Rationale: Accrual recognition follows the earning event, not payment timing. On a cash-
basis report, the same transaction would appear in January—understanding how the same
facts move between reports is exam-tested.
11. The matching principle requires:
, A. Expenses to be recorded in the same period as the revenues they helped
generate
B. Assets expensed immediately always
C. Revenue delayed until year-end
D. All expenses recorded only when paid
Rationale: Matching pairs costs with related revenue (e.g., COGS with the sale, December
wages accrued into December). It underlies adjusting entries, depreciation, and accrual
accounting's superiority for measuring profitability.
12. A trial balance is prepared to:
A. Replace the balance sheet
B. Verify that total debits equal total credits across all general ledger accounts
C. Calculate sales tax owed
D. List only unpaid invoices
Rationale: The trial balance sums every account's balance, confirming mechanical balance
(though it cannot catch wrong-account or omitted entries). QuickBooks generates it under
Reports—an essential period-end review tool.
13. Which error would a trial balance NOT detect?
A. Posting the correct amounts to the wrong accounts (e.g., debiting Utilities
instead of Rent)
B. Adding account balances incorrectly
C. A $500 debit matched with a $50 credit
D. A debit posted without its credit
Rationale: The trial balance only proves debits = credits; misclassifications, omissions of
entire transactions, and duplicate balanced entries all slip through. This limitation motivates
reconciliations and account reviews.
14. Owner's draw in a sole proprietorship is:
A. Revenue
B. Payroll wages
C. A reduction of equity—NOT a business expense—recorded by debiting
Owner's Draw
D. A deductible business expense on the P&L
Rationale: Draws distribute equity to the owner and never touch the income statement;
treating draws as expenses is a common small-business error that understates profit.
Corporations use distributions/dividends; owner compensation via payroll applies to certain
entity types (S corp shareholder-employees).
Latest Version — Questions with Verified Correct Answers & Rationales
Accounting Principles • Financial Statements • QuickBooks Online • Bank Reconciliation • A/P & A/R •
Payroll • Inventory & COGS • Sales Tax • Internal Controls • Closing the Books
Section 1: Brief Introduction
The Intuit Bookkeeping certification examination verifies mastery of professional
bookkeeping fundamentals and QuickBooks practice: double-entry accounting and the
accounting equation, accrual versus cash basis, financial statement preparation and
interpretation, QuickBooks Online workflows (invoicing, bills, bank feeds, items), bank and
credit card reconciliation, accounts receivable and payable management, payroll
accounting, inventory and cost of goods sold, sales tax compliance, internal controls and
ethics, and month-end/year-end closing procedures. Each question below is immediately
followed by its correct answer (bold, cyan) and a rationale grounded in accounting
principles and QuickBooks functionality.
Section 2: The Complete Exam
1. The fundamental accounting equation is:
A. Liabilities = Assets + Equity
B. Assets = Revenue - Expenses
C. Equity = Assets + Liabilities
D. Assets = Liabilities + Equity
Rationale: The accounting equation underpins double-entry bookkeeping: everything the
business owns (assets) is financed by creditors (liabilities) or owners (equity). Every
transaction keeps this equation in balance—the foundation of the balance sheet.
2. 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
Rationale: Double entry requires balanced debits and credits across at least two accounts—
this self-checking structure keeps the accounting equation intact. An unbalanced entry cannot
post in QuickBooks or any proper accounting system.
3. A debit INCREASES which types of accounts?
, A. Liabilities and revenue
B. Equity and revenue
C. All accounts equally
D. Assets and expenses (and draws/dividends)
Rationale: DEA-LER logic: Debits increase Dividends/draws, Expenses, Assets; Credits
increase Liabilities, Equity, Revenue. Reversing this is the most common bookkeeping student
error—memorize the normal balance of each account type.
4. When a business purchases $500 of office supplies with cash, the journal entry is:
A. Debit Office Supplies (or Supplies Expense) $500; Credit Cash $500
B. Credit both accounts $500
C. Debit Accounts Payable $500; Credit Supplies $500
D. Debit Cash $500; Credit Supplies $500
Rationale: The asset/expense (supplies) increases via debit; cash (asset) decreases via credit.
Reversing the entry misstates both accounts—direction of increase/decrease drives every
entry.
5. A business invoices a customer $2,000 for services on account. The entry is:
A. Debit Accounts Receivable $2,000; Credit Service Revenue $2,000
B. Debit Revenue $2,000; Credit A/R $2,000
C. Debit Cash $2,000; Credit Revenue $2,000
D. Debit A/P; Credit Cash
Rationale: Sales on credit create a receivable (asset, debit) and recognize revenue (credit).
Cash is not involved until payment; QuickBooks records this automatically when you create an
Invoice (versus a Sales Receipt for immediate payment).
6. When the customer later pays that $2,000 invoice, the entry is:
A. No entry needed
B. Debit Revenue; Credit Cash
C. Debit A/R; Credit Revenue again
D. Debit Cash (or Undeposited Funds) $2,000; Credit Accounts Receivable
$2,000
Rationale: Payment converts the receivable to cash—revenue was already recognized at
invoicing (accrual basis). Recording revenue again would double-count income; in
QuickBooks this is the Receive Payment function.
7. Purchasing $3,000 of equipment with a loan is recorded as:
A. Debit Equipment $3,000; Credit Notes/Loan Payable $3,000
, B. Debit Loan Payable; Credit Equipment
C. Debit Expense; Credit Equity
D. Debit Equipment; Credit Cash
Rationale: The asset increases (debit) and the liability increases (credit)—no cash moves and
no expense is recognized (equipment is capitalized, then depreciated). Crediting cash would
misstate the bank balance.
8. The chart of accounts is:
A. A list of customers only
B. The organized list of all accounts used to categorize transactions—assets,
liabilities, equity, income, and expenses
C. The bank statement
D. A payroll register
Rationale: The COA is the backbone of the books; QuickBooks organizes it by account type,
driving financial statement placement. Thoughtful COA design (not too granular, not too
vague) is a core bookkeeping setup skill.
9. Cash basis accounting recognizes revenue when:
A. Cash is received (and expenses when paid), while accrual basis recognizes
revenue when earned and expenses when incurred
B. Invoices are created regardless of payment
C. Inventory is ordered
D. The fiscal year closes
Rationale: Cash basis = money movement; accrual basis = economic events (invoices/bills).
QuickBooks reports can toggle between bases; accrual gives truer performance pictures while
cash basis tracks actual cash—many small businesses file taxes on cash basis.
10. Under accrual accounting, a December service invoiced in December but paid in
January is revenue in:
A. Whichever month the bookkeeper prefers
B. January when cash arrives
C. December—when earned—regardless of the January payment
D. Neither month
Rationale: Accrual recognition follows the earning event, not payment timing. On a cash-
basis report, the same transaction would appear in January—understanding how the same
facts move between reports is exam-tested.
11. The matching principle requires:
, A. Expenses to be recorded in the same period as the revenues they helped
generate
B. Assets expensed immediately always
C. Revenue delayed until year-end
D. All expenses recorded only when paid
Rationale: Matching pairs costs with related revenue (e.g., COGS with the sale, December
wages accrued into December). It underlies adjusting entries, depreciation, and accrual
accounting's superiority for measuring profitability.
12. A trial balance is prepared to:
A. Replace the balance sheet
B. Verify that total debits equal total credits across all general ledger accounts
C. Calculate sales tax owed
D. List only unpaid invoices
Rationale: The trial balance sums every account's balance, confirming mechanical balance
(though it cannot catch wrong-account or omitted entries). QuickBooks generates it under
Reports—an essential period-end review tool.
13. Which error would a trial balance NOT detect?
A. Posting the correct amounts to the wrong accounts (e.g., debiting Utilities
instead of Rent)
B. Adding account balances incorrectly
C. A $500 debit matched with a $50 credit
D. A debit posted without its credit
Rationale: The trial balance only proves debits = credits; misclassifications, omissions of
entire transactions, and duplicate balanced entries all slip through. This limitation motivates
reconciliations and account reviews.
14. Owner's draw in a sole proprietorship is:
A. Revenue
B. Payroll wages
C. A reduction of equity—NOT a business expense—recorded by debiting
Owner's Draw
D. A deductible business expense on the P&L
Rationale: Draws distribute equity to the owner and never touch the income statement;
treating draws as expenses is a common small-business error that understates profit.
Corporations use distributions/dividends; owner compensation via payroll applies to certain
entity types (S corp shareholder-employees).
