1|Page
INTUIT BOOKKEEPING PREP EXAM
QUESTIONS UPDATED 2025–2026 WITH ALL
NEW QUESTIONS AND EXACTLY RIGHT
ANSWERS | A+ QUALITY GUARANTEE
What is the Purpose of a balance sheet
To determine the financial health of an organization at a point in time.
Financial elements on the income statement:
Expenses, Revenue
Financial elements on the balance sheet:
Assets, Capital, and Liabilities
Accounts that increase with debit
Cash, equipment, assets, expenses, and dividends Accounts that increase with
credit
Contra-Asset : Accumulated Depreciation, Account Payable, common stock,
equity, revenue and liability
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Lou has a landscaping company. He received a $10,000 payment for a landscaping
job that he completed for the Rose family. How would you record this transaction?
Debit $10,000 to Cash; Credit $10,000 to Service Revenue - Landscaping
Definition of a debit in double-entry accounting
An increase in assets/expenses and a decrease in liabilities/owner's equity and
revenue.
General Ledger
The debits and credits posted to the company's line of credit during the last 6
months
Transaction Journal
The debits and credits recorded for a rental equipment expense income statement
(profit and loss statement)
Report of all revenue and expenses for the month
Is the ending balance for the inventory on Balance Sheet? Yes, Ending balance for
the inventory
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Reasons for making adjusting journal entries (Choose 3)
a. To record expiration of prepaid insurance.
b. To record depreciation.
c. To recognize unpaid salaries for the current period.
Economic Entity Assumption
The business is a separate entity, so the activities of a business must be kept
separate from any other financial activities of its business owners.
Reliability Assumption
Makes mandatory for companies to record only accounting transactions that can be
verified through invoices, billing statements and bank statements.
Full Disclosure Principle
All information that is relative to the business and is important to a lender or
investor has to be provided in financial statements or in the notes of the statements.
Conservatism Assumption
INTUIT BOOKKEEPING PREP EXAM
QUESTIONS UPDATED 2025–2026 WITH ALL
NEW QUESTIONS AND EXACTLY RIGHT
ANSWERS | A+ QUALITY GUARANTEE
What is the Purpose of a balance sheet
To determine the financial health of an organization at a point in time.
Financial elements on the income statement:
Expenses, Revenue
Financial elements on the balance sheet:
Assets, Capital, and Liabilities
Accounts that increase with debit
Cash, equipment, assets, expenses, and dividends Accounts that increase with
credit
Contra-Asset : Accumulated Depreciation, Account Payable, common stock,
equity, revenue and liability
,2|Page
Lou has a landscaping company. He received a $10,000 payment for a landscaping
job that he completed for the Rose family. How would you record this transaction?
Debit $10,000 to Cash; Credit $10,000 to Service Revenue - Landscaping
Definition of a debit in double-entry accounting
An increase in assets/expenses and a decrease in liabilities/owner's equity and
revenue.
General Ledger
The debits and credits posted to the company's line of credit during the last 6
months
Transaction Journal
The debits and credits recorded for a rental equipment expense income statement
(profit and loss statement)
Report of all revenue and expenses for the month
Is the ending balance for the inventory on Balance Sheet? Yes, Ending balance for
the inventory
, 3|Page
Reasons for making adjusting journal entries (Choose 3)
a. To record expiration of prepaid insurance.
b. To record depreciation.
c. To recognize unpaid salaries for the current period.
Economic Entity Assumption
The business is a separate entity, so the activities of a business must be kept
separate from any other financial activities of its business owners.
Reliability Assumption
Makes mandatory for companies to record only accounting transactions that can be
verified through invoices, billing statements and bank statements.
Full Disclosure Principle
All information that is relative to the business and is important to a lender or
investor has to be provided in financial statements or in the notes of the statements.
Conservatism Assumption
