INTUIT BOOKKEEPING EXAM REVIEW SOLVED QUESTIONS COMPLETE ANSWERS GRADED
A PLUS
●● What are the steps of the accounting cycle ?. Answer: 1) Analyze and
record transactions.
2) Post transactions to ledger
3) Prepare an unadjusted trial balance
4) Prepare adjusted entries at the end of the period
5) Prepare adjusted trial balance
6) Prepare financial statements
●● If a customer pays at the time of sale, you record it as a. Answer:
Sales Receipt
●● If a customer does NOT PAY at the time of sale, you must enter it as
an. Answer: Invoice
●● When a customer pays an invoice, you go to.... Answer: "Receive
Payment" to record that the payment has been made.
●● After you record a Sales Receipt or Receive Payment, you follow up
by making a.... Answer: Bank Deposit.
,-> Sales Receipt or Receive Payment shows that you've received money
from the customer.
-> Bank Deposit means you're putting that money into your bank
account.
●● Step 4 of the Accounting Cycle: Preparing Adjusting Entries
includes:. Answer: 1) Deferrals
2) Accruals
3) Missing Transactions
4) Tax Adjustments
●● Deferral. Answer: Delaying the recognition of a transaction to a
future period
-> It's waiting to recognize that income or expense until the right time
(like when the insurance coverage starts)
●● Reliability assumption. Answer: Only transactions that can be proven
should be recorded in accounting practices.
-> Businesses must be able to prove transactions through such things as
receipts, billing statements, invoices, and bank statements.
●● Full Disclosure Principle. Answer: All info that is relative to the
business and is important to a lender or investor has to be disclosed in
financial statements or in the notes of the statements.
, ●● Conservatism Assumption. Answer: When choosing between two
solutions, one that will be least likely to overstate assets and income
should be selected.
●● Materiality Principle. Answer: An amount can be ignored if its effect
on the financial statements is small and not misleading.
●● Consistency principle. Answer: Once you adopt an accounting
principle or method, continue to follow it consistently in future
accounting periods so that the results reporting from period to period are
comparable.
●● Monetary Unit Assumption. Answer: One currency is used
throughout all accounting activities. In the US the dollar is the currency
used in accounting. When this currency is used, inflation is not a
consideration in recording finances.
-> That is, even if prices rise due to inflation, accounting records do not
automatically adjust for those changes in value.
-> Inflation does not affect how transactions are recorded.
●● Going Concern Assumption. Answer: Refers to a business that is
stable enough to operate and meet its obligations for the future.
A PLUS
●● What are the steps of the accounting cycle ?. Answer: 1) Analyze and
record transactions.
2) Post transactions to ledger
3) Prepare an unadjusted trial balance
4) Prepare adjusted entries at the end of the period
5) Prepare adjusted trial balance
6) Prepare financial statements
●● If a customer pays at the time of sale, you record it as a. Answer:
Sales Receipt
●● If a customer does NOT PAY at the time of sale, you must enter it as
an. Answer: Invoice
●● When a customer pays an invoice, you go to.... Answer: "Receive
Payment" to record that the payment has been made.
●● After you record a Sales Receipt or Receive Payment, you follow up
by making a.... Answer: Bank Deposit.
,-> Sales Receipt or Receive Payment shows that you've received money
from the customer.
-> Bank Deposit means you're putting that money into your bank
account.
●● Step 4 of the Accounting Cycle: Preparing Adjusting Entries
includes:. Answer: 1) Deferrals
2) Accruals
3) Missing Transactions
4) Tax Adjustments
●● Deferral. Answer: Delaying the recognition of a transaction to a
future period
-> It's waiting to recognize that income or expense until the right time
(like when the insurance coverage starts)
●● Reliability assumption. Answer: Only transactions that can be proven
should be recorded in accounting practices.
-> Businesses must be able to prove transactions through such things as
receipts, billing statements, invoices, and bank statements.
●● Full Disclosure Principle. Answer: All info that is relative to the
business and is important to a lender or investor has to be disclosed in
financial statements or in the notes of the statements.
, ●● Conservatism Assumption. Answer: When choosing between two
solutions, one that will be least likely to overstate assets and income
should be selected.
●● Materiality Principle. Answer: An amount can be ignored if its effect
on the financial statements is small and not misleading.
●● Consistency principle. Answer: Once you adopt an accounting
principle or method, continue to follow it consistently in future
accounting periods so that the results reporting from period to period are
comparable.
●● Monetary Unit Assumption. Answer: One currency is used
throughout all accounting activities. In the US the dollar is the currency
used in accounting. When this currency is used, inflation is not a
consideration in recording finances.
-> That is, even if prices rise due to inflation, accounting records do not
automatically adjust for those changes in value.
-> Inflation does not affect how transactions are recorded.
●● Going Concern Assumption. Answer: Refers to a business that is
stable enough to operate and meet its obligations for the future.
