Intuit Bookkeeping Professional
Certification Exam ACTUAL EXAM
2026/2027 | 60 Q&A | Bookkeeping &
Financial Records Competency |
Guaranteed Pass - A+ Graded
1. Which of the following correctly represents the fundamental Accounting Equation?
A. Assets + Liabilities = Equity
B. Assets = Liabilities + Equity [CORRECT]
C. Assets + Equity = Liabilities
D. Liabilities = Assets + Equity
Correct Answer: B
Rationale: The accounting equation must always balance. Everything a company owns
(Assets) is financed by what it owes (Liabilities) or what the owners put in (Equity).
2. When an owner invests personal cash into the business, what is the effect on the
accounting equation?
A. Assets increase and Liabilities increase.
B. Assets increase and Equity increases. [CORRECT]
C. Liabilities decrease and Equity increases.
D. Assets decrease and Equity decreases.
Correct Answer: B
Rationale: Cash (Asset) goes up, and Owner’s Capital/Equity goes up because the
owner now has a larger claim on the business assets.
,3. Which of the following is considered a Current Asset?
A. Land
B. Equipment
C. Accounts Receivable [CORRECT]
D. Notes Payable (due in 5 years)
Correct Answer: C
Rationale: Current assets are resources expected to be converted to cash or used up
within one year. Accounts Receivable is usually collected quickly. Land and Equipment
are long-term assets.
4. What is "Owner's Draw" or "Dividends"?
A. An expense of doing business.
B. A distribution of earnings to the owners. [CORRECT]
C. An investment made by the owner.
D. A liability to a creditor.
Correct Answer: B
Rationale: Draws and Dividends represent the taking of profits out of the business by
the owners. They are not business expenses; they are a reduction of Equity.
5. Which account typically has a Credit (Cr) normal balance?
A. Cash
B. Accounts Receivable
C. Accounts Payable [CORRECT]
D. Rent Expense
Correct Answer: C
Rationale
: Liabilities and Equity accounts normally have credit balances. Assets and Expenses
normally have debit balances.
, 6. If a company purchases supplies on account (credit), what is the impact?
A. Assets increase and Equity decreases.
B. Assets increase and Liabilities increase. [CORRECT]
C. Liabilities increase and Assets decrease.
D. Equity increases and Liabilities decrease.
Correct Answer: B
Rationale: Supplies (Asset) increase because you have more stuff, and Accounts
Payable (Liability) increases because you owe money.
7. Which of the following is a Current Liability?
A. Mortgage Payable (due in 20 years)
B. Accounts Payable [CORRECT]
C. Common Stock
D. Retained Earnings
Correct Answer: B
Rationale: Current liabilities are debts due within one year. Accounts Payable is typically
due in 30 to 60 days. Mortgage is long-term; Common Stock and Retained Earnings are
Equity.
8. Which principle states that businesses should report expenses in the same period as
the revenues they help generate?
A. Revenue Recognition Principle
B. Matching Principle [CORRECT]
C. Cost Principle
D. Conservatism Principle
Correct Answer: B
Rationale: The Matching Principle dictates that expenses must be recorded in the period
in which the related revenue is recognized to accurately show profitability.
Certification Exam ACTUAL EXAM
2026/2027 | 60 Q&A | Bookkeeping &
Financial Records Competency |
Guaranteed Pass - A+ Graded
1. Which of the following correctly represents the fundamental Accounting Equation?
A. Assets + Liabilities = Equity
B. Assets = Liabilities + Equity [CORRECT]
C. Assets + Equity = Liabilities
D. Liabilities = Assets + Equity
Correct Answer: B
Rationale: The accounting equation must always balance. Everything a company owns
(Assets) is financed by what it owes (Liabilities) or what the owners put in (Equity).
2. When an owner invests personal cash into the business, what is the effect on the
accounting equation?
A. Assets increase and Liabilities increase.
B. Assets increase and Equity increases. [CORRECT]
C. Liabilities decrease and Equity increases.
D. Assets decrease and Equity decreases.
Correct Answer: B
Rationale: Cash (Asset) goes up, and Owner’s Capital/Equity goes up because the
owner now has a larger claim on the business assets.
,3. Which of the following is considered a Current Asset?
A. Land
B. Equipment
C. Accounts Receivable [CORRECT]
D. Notes Payable (due in 5 years)
Correct Answer: C
Rationale: Current assets are resources expected to be converted to cash or used up
within one year. Accounts Receivable is usually collected quickly. Land and Equipment
are long-term assets.
4. What is "Owner's Draw" or "Dividends"?
A. An expense of doing business.
B. A distribution of earnings to the owners. [CORRECT]
C. An investment made by the owner.
D. A liability to a creditor.
Correct Answer: B
Rationale: Draws and Dividends represent the taking of profits out of the business by
the owners. They are not business expenses; they are a reduction of Equity.
5. Which account typically has a Credit (Cr) normal balance?
A. Cash
B. Accounts Receivable
C. Accounts Payable [CORRECT]
D. Rent Expense
Correct Answer: C
Rationale
: Liabilities and Equity accounts normally have credit balances. Assets and Expenses
normally have debit balances.
, 6. If a company purchases supplies on account (credit), what is the impact?
A. Assets increase and Equity decreases.
B. Assets increase and Liabilities increase. [CORRECT]
C. Liabilities increase and Assets decrease.
D. Equity increases and Liabilities decrease.
Correct Answer: B
Rationale: Supplies (Asset) increase because you have more stuff, and Accounts
Payable (Liability) increases because you owe money.
7. Which of the following is a Current Liability?
A. Mortgage Payable (due in 20 years)
B. Accounts Payable [CORRECT]
C. Common Stock
D. Retained Earnings
Correct Answer: B
Rationale: Current liabilities are debts due within one year. Accounts Payable is typically
due in 30 to 60 days. Mortgage is long-term; Common Stock and Retained Earnings are
Equity.
8. Which principle states that businesses should report expenses in the same period as
the revenues they help generate?
A. Revenue Recognition Principle
B. Matching Principle [CORRECT]
C. Cost Principle
D. Conservatism Principle
Correct Answer: B
Rationale: The Matching Principle dictates that expenses must be recorded in the period
in which the related revenue is recognized to accurately show profitability.
