Intuit Academy Bookkeeping
Professional Certificate: Liabilities and
Equity Questions with 100% Correct
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
Professional Certificate: Liabilities and
Equity Questions with 100% Correct
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
