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PART 2 PRACTICE TEST FOR INTUIT
BOOKKEEPING PROFESSIONAL
CERTIFICATE QUESTIONS WITH
DETAILED VERIFIED ANSWERS
which of the following are considered current assets? Ans: cash. AR.
inventory, marketable securities. Prepaid expenses. Etc.
Assets Ans: resources that belong to a business and help it earn
economic benefits in the future. They include current, capital, and
intangible assets
Current assets Ans: assets that can be converted into cash within one
year, such as cash, accounts receivable, and inventories
Long-term assets Ans: Capital assets that are used for continuing or
long-term operations, such as buildings, plant and equipment, and land
Intangible assets Ans: assets that have no physical form, such as
goodwill, patents, and software
what accounts have a natural debit balance Ans: Cash, accounts
receivable, inventory, expenses
You're the bookkeeper for the Pampered Pooch, a small mobile dog
grooming business. The business received a $1,000 loan from their local
credit union and signed a promissory note. How should you record this
transaction in the accounting records? Ans: debit the cash account by
$1,000 and credit the notes payable account by $1,000
John owns a small retail store that sells clothing. On monday, he sold
$500 worth of merchandise to a customer who paid in cash. On Tuesday,
he sold $300 worth of merchandise to a customer who paid using a credit
card. Question: Which of the following statements correctly describes the
effect of these sales transactions on the accounting equation for John's
retail store? Ans: Both sales increase assets and owner's equity
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You're the Bookkeeper for Between the Covers Booksellers, a small book
resale business. The company uses the accrual accounting method. You
receive the following sales transaction detail (Note, for this question we
are not posting transactions for inventory to COGS):
-On January 1, the company sells 250 books for $20 each to John, who
pays in cash. The sales tax rate is 10%.
-On January 2, the company sells 300 books for $15 each to Mary, who
agrees to pay within 30 days. The sales tax rate is 10%. Question: How
should these transactions be recorded in the accounting records? Ans:
Debit Cash $5,500 and Accounts Receivable $4,950, Credit Sales
Revenue $5,000 and $4,500, Credit Sales Tax Payable $500 and $450
Which statements are true about the differences between notes
receivable and accounts receivable? Ans: Notes receivable are interest-
bearing assets, while accounts receivable are non-interest-bearing
assets. Notes receivable are written promises that an outside entity will
pay the business on or before a specified date, while accounts receivable
are invoices with short term due dates. Notes receivable are long-term
assets, while accounts receivable are current assets
Between the Covers Booksellers, sold a pallet of books to a local library
for $100,000 on account. The terms of the sale were 2/10, n/60,
meaning that the library could get a 2% discount if it paid within 10 days
or pay the full amount within 60 days. However, the library failed to pay
within the credit period. After 90 days of nonpayment, the bookshop
agreed to convert the account receivable into a note receivable. The note
receivable was for the amount due plus a 5% penalty fee, and it had a
maturity date of six months from the date of issue. The note also carried
an annual interest rate of 12%. Question: How would you record this
transaction in its accounting records? Choose the best answer from the
options given. Ans: Debit Notes Receivable for $105,000, credit
Accounts Receivable for $100,000, and Penalty Revenue for $5,000
You're a bookkeeper for Office and More, a small company that sells
office supplies. You use the direct write-off method to account for
uncollectible accounts. At the end of the year, you review the accounts
receivable ledger and identify three customers who have not paid their
invoices for more than six months. The total amount of these invoices is
PART 2 PRACTICE TEST FOR INTUIT
BOOKKEEPING PROFESSIONAL
CERTIFICATE QUESTIONS WITH
DETAILED VERIFIED ANSWERS
which of the following are considered current assets? Ans: cash. AR.
inventory, marketable securities. Prepaid expenses. Etc.
Assets Ans: resources that belong to a business and help it earn
economic benefits in the future. They include current, capital, and
intangible assets
Current assets Ans: assets that can be converted into cash within one
year, such as cash, accounts receivable, and inventories
Long-term assets Ans: Capital assets that are used for continuing or
long-term operations, such as buildings, plant and equipment, and land
Intangible assets Ans: assets that have no physical form, such as
goodwill, patents, and software
what accounts have a natural debit balance Ans: Cash, accounts
receivable, inventory, expenses
You're the bookkeeper for the Pampered Pooch, a small mobile dog
grooming business. The business received a $1,000 loan from their local
credit union and signed a promissory note. How should you record this
transaction in the accounting records? Ans: debit the cash account by
$1,000 and credit the notes payable account by $1,000
John owns a small retail store that sells clothing. On monday, he sold
$500 worth of merchandise to a customer who paid in cash. On Tuesday,
he sold $300 worth of merchandise to a customer who paid using a credit
card. Question: Which of the following statements correctly describes the
effect of these sales transactions on the accounting equation for John's
retail store? Ans: Both sales increase assets and owner's equity
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You're the Bookkeeper for Between the Covers Booksellers, a small book
resale business. The company uses the accrual accounting method. You
receive the following sales transaction detail (Note, for this question we
are not posting transactions for inventory to COGS):
-On January 1, the company sells 250 books for $20 each to John, who
pays in cash. The sales tax rate is 10%.
-On January 2, the company sells 300 books for $15 each to Mary, who
agrees to pay within 30 days. The sales tax rate is 10%. Question: How
should these transactions be recorded in the accounting records? Ans:
Debit Cash $5,500 and Accounts Receivable $4,950, Credit Sales
Revenue $5,000 and $4,500, Credit Sales Tax Payable $500 and $450
Which statements are true about the differences between notes
receivable and accounts receivable? Ans: Notes receivable are interest-
bearing assets, while accounts receivable are non-interest-bearing
assets. Notes receivable are written promises that an outside entity will
pay the business on or before a specified date, while accounts receivable
are invoices with short term due dates. Notes receivable are long-term
assets, while accounts receivable are current assets
Between the Covers Booksellers, sold a pallet of books to a local library
for $100,000 on account. The terms of the sale were 2/10, n/60,
meaning that the library could get a 2% discount if it paid within 10 days
or pay the full amount within 60 days. However, the library failed to pay
within the credit period. After 90 days of nonpayment, the bookshop
agreed to convert the account receivable into a note receivable. The note
receivable was for the amount due plus a 5% penalty fee, and it had a
maturity date of six months from the date of issue. The note also carried
an annual interest rate of 12%. Question: How would you record this
transaction in its accounting records? Choose the best answer from the
options given. Ans: Debit Notes Receivable for $105,000, credit
Accounts Receivable for $100,000, and Penalty Revenue for $5,000
You're a bookkeeper for Office and More, a small company that sells
office supplies. You use the direct write-off method to account for
uncollectible accounts. At the end of the year, you review the accounts
receivable ledger and identify three customers who have not paid their
invoices for more than six months. The total amount of these invoices is
