Intuit Bookkeeping Professional Certification Exam
ACTUAL EXAM 2026/2027 | Bookkeeping Financial
Records Assessment | Verified Q&A | Pass
Guaranteed - A+ Graded
SECTION 1: ACCOUNTING FUNDAMENTALS & CHART OF ACCOUNTS (Q1–Q15)
Q1. A business purchases a delivery van for $35,000 cash. In the accounting equation (Assets = Liabilities
+ Equity), this transaction:
A. Increases assets and increases liabilities
B. Decreases assets and decreases equity
C. Has no net effect on total assets [CORRECT]
D. Increases equity and decreases liabilities
Correct Answer: C
Rationale: Purchasing a vehicle for cash exchanges one asset (Cash) for another asset (Vehicle), leaving
total assets unchanged. The accounting equation remains in balance with no change to liabilities or
equity.
Q2. In double-entry accounting, when a company borrows $10,000 from a bank, the journal entry
includes:
A. Debit Cash $10,000; Credit Revenue $10,000
B. Debit Cash $10,000; Credit Loans Payable $10,000 [CORRECT]
C. Debit Loans Payable $10,000; Credit Cash $10,000
D. Debit Expense $10,000; Credit Cash $10,000
Correct Answer: B
Rationale: Borrowing cash increases the Cash asset (debit) and creates a liability obligation to repay the
loan (credit to Loans Payable). This follows the fundamental rule: assets increase with debits, liabilities
increase with credits.
,Q3. Which account type normally has a debit balance?
A. Accounts Payable
B. Revenue
C. Cash [CORRECT]
D. Owner's Capital
Correct Answer: C
Rationale: Asset accounts, including Cash, normally carry debit balances. Debits increase asset accounts,
while credits decrease them. Liability, equity, and revenue accounts normally carry credit balances.
Q4. A company pays $2,400 for a 12-month insurance policy upfront. The initial journal entry includes:
A. Debit Insurance Expense $2,400; Credit Cash $2,400
B. Debit Prepaid Insurance $2,400; Credit Cash $2,400 [CORRECT]
C. Debit Cash $2,400; Credit Insurance Expense $2,400
D. Debit Accounts Payable $2,400; Credit Cash $2,400
Correct Answer: B
Rationale: Paying for insurance in advance creates a prepaid asset (Prepaid Insurance) because the
benefit extends into future periods. The debit to Prepaid Insurance recognizes the asset, while the credit
to Cash records the outflow. Expense recognition occurs monthly as the policy period elapses.
Q5. In QuickBooks Online, the Undeposited Funds account is used to:
A. Track customer invoices that have not been paid
B. Track payments received from customers that have not yet been deposited to the bank [CORRECT]
C. Track bank fees and service charges
D. Track outstanding vendor bills
Correct Answer: B
Rationale: The Undeposited Funds account in QuickBooks Online serves as a temporary holding account
for customer payments received but not yet deposited to a bank account. It allows grouping multiple
payments into a single deposit that matches the bank statement.
Q6. A company issues an invoice to a customer for $5,000 of services rendered on account. The journal
entry includes:
A. Debit Cash $5,000; Credit Revenue $5,000
B. Debit Accounts Receivable $5,000; Credit Revenue $5,000 [CORRECT]
, C. Debit Revenue $5,000; Credit Accounts Receivable $5,000
D. Debit Accounts Payable $5,000; Credit Revenue $5,000
Correct Answer: B
Rationale: Services rendered on account create a right to collect payment in the future. Accounts
Receivable (asset) increases with a debit, and Revenue (equity) increases with a credit, reflecting the
earned income under accrual accounting.
Q7. Which of the following is classified as a current asset?
A. Land
B. Equipment
C. Inventory [CORRECT]
D. Goodwill
Correct Answer: C
Rationale: Inventory is a current asset because it is expected to be sold, consumed, or converted to cash
within one year or the operating cycle. Land, equipment, and goodwill are non-current (long-term)
assets.
Q8. A business owner invests $50,000 of personal cash into the business. The journal entry includes:
A. Debit Cash $50,000; Credit Revenue $50,000
B. Debit Cash $50,000; Credit Owner's Capital $50,000 [CORRECT]
C. Debit Owner's Capital $50,000; Credit Cash $50,000
D. Debit Expense $50,000; Credit Cash $50,000
Correct Answer: B
Rationale: An owner's capital contribution increases the business's Cash (asset) and increases Owner's
Capital (equity). This is not revenue because it does not result from business operations; it represents an
investment in the business.
Q9. The accounting equation expands to include revenues and expenses as:
A. Assets = Liabilities + Owner's Capital + (Revenues – Expenses) [CORRECT]
B. Assets = Liabilities + Owner's Capital + (Expenses – Revenues)
C. Assets = Liabilities + Owner's Capital – Net Income
D. Assets = Liabilities – Owner's Capital + Revenues
ACTUAL EXAM 2026/2027 | Bookkeeping Financial
Records Assessment | Verified Q&A | Pass
Guaranteed - A+ Graded
SECTION 1: ACCOUNTING FUNDAMENTALS & CHART OF ACCOUNTS (Q1–Q15)
Q1. A business purchases a delivery van for $35,000 cash. In the accounting equation (Assets = Liabilities
+ Equity), this transaction:
A. Increases assets and increases liabilities
B. Decreases assets and decreases equity
C. Has no net effect on total assets [CORRECT]
D. Increases equity and decreases liabilities
Correct Answer: C
Rationale: Purchasing a vehicle for cash exchanges one asset (Cash) for another asset (Vehicle), leaving
total assets unchanged. The accounting equation remains in balance with no change to liabilities or
equity.
Q2. In double-entry accounting, when a company borrows $10,000 from a bank, the journal entry
includes:
A. Debit Cash $10,000; Credit Revenue $10,000
B. Debit Cash $10,000; Credit Loans Payable $10,000 [CORRECT]
C. Debit Loans Payable $10,000; Credit Cash $10,000
D. Debit Expense $10,000; Credit Cash $10,000
Correct Answer: B
Rationale: Borrowing cash increases the Cash asset (debit) and creates a liability obligation to repay the
loan (credit to Loans Payable). This follows the fundamental rule: assets increase with debits, liabilities
increase with credits.
,Q3. Which account type normally has a debit balance?
A. Accounts Payable
B. Revenue
C. Cash [CORRECT]
D. Owner's Capital
Correct Answer: C
Rationale: Asset accounts, including Cash, normally carry debit balances. Debits increase asset accounts,
while credits decrease them. Liability, equity, and revenue accounts normally carry credit balances.
Q4. A company pays $2,400 for a 12-month insurance policy upfront. The initial journal entry includes:
A. Debit Insurance Expense $2,400; Credit Cash $2,400
B. Debit Prepaid Insurance $2,400; Credit Cash $2,400 [CORRECT]
C. Debit Cash $2,400; Credit Insurance Expense $2,400
D. Debit Accounts Payable $2,400; Credit Cash $2,400
Correct Answer: B
Rationale: Paying for insurance in advance creates a prepaid asset (Prepaid Insurance) because the
benefit extends into future periods. The debit to Prepaid Insurance recognizes the asset, while the credit
to Cash records the outflow. Expense recognition occurs monthly as the policy period elapses.
Q5. In QuickBooks Online, the Undeposited Funds account is used to:
A. Track customer invoices that have not been paid
B. Track payments received from customers that have not yet been deposited to the bank [CORRECT]
C. Track bank fees and service charges
D. Track outstanding vendor bills
Correct Answer: B
Rationale: The Undeposited Funds account in QuickBooks Online serves as a temporary holding account
for customer payments received but not yet deposited to a bank account. It allows grouping multiple
payments into a single deposit that matches the bank statement.
Q6. A company issues an invoice to a customer for $5,000 of services rendered on account. The journal
entry includes:
A. Debit Cash $5,000; Credit Revenue $5,000
B. Debit Accounts Receivable $5,000; Credit Revenue $5,000 [CORRECT]
, C. Debit Revenue $5,000; Credit Accounts Receivable $5,000
D. Debit Accounts Payable $5,000; Credit Revenue $5,000
Correct Answer: B
Rationale: Services rendered on account create a right to collect payment in the future. Accounts
Receivable (asset) increases with a debit, and Revenue (equity) increases with a credit, reflecting the
earned income under accrual accounting.
Q7. Which of the following is classified as a current asset?
A. Land
B. Equipment
C. Inventory [CORRECT]
D. Goodwill
Correct Answer: C
Rationale: Inventory is a current asset because it is expected to be sold, consumed, or converted to cash
within one year or the operating cycle. Land, equipment, and goodwill are non-current (long-term)
assets.
Q8. A business owner invests $50,000 of personal cash into the business. The journal entry includes:
A. Debit Cash $50,000; Credit Revenue $50,000
B. Debit Cash $50,000; Credit Owner's Capital $50,000 [CORRECT]
C. Debit Owner's Capital $50,000; Credit Cash $50,000
D. Debit Expense $50,000; Credit Cash $50,000
Correct Answer: B
Rationale: An owner's capital contribution increases the business's Cash (asset) and increases Owner's
Capital (equity). This is not revenue because it does not result from business operations; it represents an
investment in the business.
Q9. The accounting equation expands to include revenues and expenses as:
A. Assets = Liabilities + Owner's Capital + (Revenues – Expenses) [CORRECT]
B. Assets = Liabilities + Owner's Capital + (Expenses – Revenues)
C. Assets = Liabilities + Owner's Capital – Net Income
D. Assets = Liabilities – Owner's Capital + Revenues
