Intuit Bookkeeping Professional
Certificate Part 3 Practice Test Questions
and Answers
1. Which of the following statements best describes the difference
between assets and liabilities:
ANS assets are what a company own, and liabilities are what a company owes
2. What type of liability is mortgage payable
ANS non-current liability
3. Which of the following are considered non-current liabilities
ANS monthly lease payment on a 10-year lease, employee pension, and bonds with a maturity
date of 5 years.
4. Stellar Consultants inc. is a service company that provides
consulting and training to clients. On June 30, Stellar Consultants,
Inc. had the following balances in its liability accounts:
Accounts payable: $30,000
Loans payable: $48,000
Taxes payable: $10,000
Deferred revenue:
$12,000
1/
7
, On July 1, Stellar Consultants, Inc. pays $5,000 to one of its suppliers
and $2,000 to the bank as part of the loan repayment.
Question: What is the total amount of liabilities that Stellar
Consultants, Inc. should report on its balance sheet as of July 1
ANS $93,000
5. Power Tool & Die, Inc. is a manufacturing company that needs to
purchase a piece of new equipment for $50,000. In June, the company
obtains a 5-year loan from the local credit union with an interest rate of
6% per annum, compounded monthly. The loan requires equal
monthly payments of $966.64, starting from the end of the first
month. The company records the loan using the amortization
method.
Question: What is the journal entry that Power Tool & Die Inc. should
make at the end of the first month to record the loan payment
ANS Debit Interest Expense $246.58, Debit Notes Payable $720.06, Credit Cash $966.64
6. Selma owns a beauty salon and buys various products and
supplies from different vendors. She records her purchases in her
accounting system using either cash or accounts payable,
depending on the payment terms. Question: Which of the following
statements is true about her purchases
ANS Ac- counts payable purchases are recorded as credits to accounts payable and debits to
expenses or assets
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Certificate Part 3 Practice Test Questions
and Answers
1. Which of the following statements best describes the difference
between assets and liabilities:
ANS assets are what a company own, and liabilities are what a company owes
2. What type of liability is mortgage payable
ANS non-current liability
3. Which of the following are considered non-current liabilities
ANS monthly lease payment on a 10-year lease, employee pension, and bonds with a maturity
date of 5 years.
4. Stellar Consultants inc. is a service company that provides
consulting and training to clients. On June 30, Stellar Consultants,
Inc. had the following balances in its liability accounts:
Accounts payable: $30,000
Loans payable: $48,000
Taxes payable: $10,000
Deferred revenue:
$12,000
1/
7
, On July 1, Stellar Consultants, Inc. pays $5,000 to one of its suppliers
and $2,000 to the bank as part of the loan repayment.
Question: What is the total amount of liabilities that Stellar
Consultants, Inc. should report on its balance sheet as of July 1
ANS $93,000
5. Power Tool & Die, Inc. is a manufacturing company that needs to
purchase a piece of new equipment for $50,000. In June, the company
obtains a 5-year loan from the local credit union with an interest rate of
6% per annum, compounded monthly. The loan requires equal
monthly payments of $966.64, starting from the end of the first
month. The company records the loan using the amortization
method.
Question: What is the journal entry that Power Tool & Die Inc. should
make at the end of the first month to record the loan payment
ANS Debit Interest Expense $246.58, Debit Notes Payable $720.06, Credit Cash $966.64
6. Selma owns a beauty salon and buys various products and
supplies from different vendors. She records her purchases in her
accounting system using either cash or accounts payable,
depending on the payment terms. Question: Which of the following
statements is true about her purchases
ANS Ac- counts payable purchases are recorded as credits to accounts payable and debits to
expenses or assets
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