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ALBERTA BOOKKEEPING CERTIFICATION EXAM
QUESTIONS AND CORRECT ANSWER(VERIFIED
ANSWERS) PLUS RATIONALE 2026 Q&A|INSTANT
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1 โ 10: Bookkeeping Basics
1. Bookkeeping is the process of: A. Designing websites B. Recording financial transactions C. Marketing products D. Auditing companies Answer: B Rationale: Bookkeeping involves recording daily financial transactions. 2. A bookkeeper primarily works with: A. Legal documents B. Financial records C. Software development D. Engineering plans Answer: B Rationale: Focus is on financial data management. 3. The accounting equation is: A. Assets = Expenses + Revenue B. Assets = Liabilities + Equity C. Income = Expense + Tax D. Cash = Profit โ Loss Answer: B Rationale: Fundamental accounting structure.
4. Assets are: A. Money owed B. Resources owned by business C. Business expenses D. Taxes Answer: B Rationale: Valuable resources controlled by business. 5. Liabilities are: A. Income B. Obligations owed C. Assets D. Equity Answer: B Rationale: Debts the business must pay. 6. Equity represents: A. Ownerโs claim B. Company debt C. Expenses D. Revenue Answer: A Rationale: Residual interest in assets. 7. Debit increases: A. Liabilities B. Assets and expenses C. Revenue D. Equity Answer: B Rationale: Basic double-entry rule. 8. Credit increases: A. Assets
C. Print reports D. Send invoices Answer: B Rationale: Organizes financial data by account.
13. Posting means: A. Deleting entries B. Transferring journal to ledger C. Writing invoices D. Paying bills Answer: B Rationale: Moving entries to accounts. 14. Source documents include: A. TV ads B. Receipts and invoices C. Websites D. Emails only Answer: B Rationale: Proof of transactions. 15. Sales journal records: A. Purchases B. Credit sales C. Cash only D. Loans Answer: B Rationale: Tracks sales on credit. 16. Purchase journal records: A. Sales B. Credit purchases C. Cash income D. Payroll
Answer: B Rationale: Records buying on credit.
17. Cash journal records: A. Only credit transactions B. Cash inflows and outflows C. Taxes D. Assets only Answer: B Rationale: Tracks cash movement. 18. Chart of accounts is: A. Bank statement B. List of accounts C. Invoice system D. Payroll sheet Answer: B Rationale: Organizes financial structure. 19. Journal entry must always balance: A. Sometimes B. Always C. Never D. Weekly Answer: B Rationale: Debits = credits. 20. Compound entry is: A. One account only B. More than two accounts C. No accounts D. Only cash Answer: B Rationale: Multiple debit/credit entries.
25. Expense is: A. Income B. Cost incurred C. Asset D. Equity Answer: B Rationale: Outflow of resources. 26. Net income equals: A. Revenue only B. Revenue โ expenses C. Assets โ liabilities D. Cash only Answer: B Rationale: Profit calculation. 27. Gross profit is: A. Revenue โ COGS B. Revenue โ taxes C. Assets โ liabilities D. Cash โ debt Answer: A Rationale: Before operating expenses. 28. Cost of goods sold refers to: A. Salaries B. Direct production cost C. Taxes D. Loans Answer: B Rationale: Cost of producing goods. 29. Retained earnings are: A. Loans
B. Accumulated profits C. Expenses D. Cash only Answer: B Rationale: Reinvested profit.
30. Dividends are: A. Expenses B. Profit distribution C. Loans D. Assets Answer: B Rationale: Paid to owners. **31 โ 40: Payroll & Tax Basics
- Payroll refers to:** A. Marketing B. Employee payments C. Sales D. Auditing Answer: B Rationale: Wage processing. 32. Gross pay is: A. After deductions B. Total earnings before deductions C. Taxes only D. Net income Answer: B Rationale: Full salary amount. 33. Net pay is: A. Before deductions B. After deductions
Answer: B Rationale: Compensation beyond salary.
38. Time sheet records: A. Sales B. Work hours C. Expenses D. Assets Answer: B Rationale: Tracks employee time. 39. Overtime is paid when: A. No work done B. Work exceeds normal hours C. Vacation D. Sick leave Answer: B Rationale: Extra hours compensation. 40. Payroll system ensures: A. Sales increase B. Accurate employee payments C. Inventory tracking D. Marketing Answer: B Rationale: Prevents errors in wages. **41 โ 50: Bank Reconciliation
- Bank reconciliation compares:** A. Profit vs loss B. Bank statement and company records C. Assets vs liabilities D. Sales vs expenses Answer: B Rationale: Ensures both records match.
42. Outstanding cheque is: A. Already cleared B. Issued but not yet cleared by bank C. Cancelled payment D. Deposit received Answer: B Rationale: Not yet processed by bank. 43. Deposit in transit is: A. Lost money B. Recorded by company but not bank C. Loan payment D. Expense Answer: B Rationale: Timing difference in deposits. 44. Bank fees are recorded as: A. Revenue B. Expense C. Asset D. Liability Answer: B Rationale: Cost of banking services. 45. Bank reconciliation helps to detect: A. Marketing errors B. Fraud and errors C. Sales growth D. Inventory levels Answer: B Rationale: Identifies discrepancies.
B. Bank C. Government D. Auditor Answer: B Rationale: External financial record. 51 โ 60: Accounts Receivable & Payable
51. Accounts receivable represents: A. Money owed by company B. Money owed to company C. Expenses D. Assets only Answer: B Rationale: Customer credit sales. 52. Accounts payable represents: A. Money owed to suppliers B. Money owed by customers C. Revenue D. Equity Answer: A Rationale: Business liabilities. 53. Credit sales increase: A. Cash B. Accounts receivable C. Expenses D. Loans Answer: B Rationale: Customer owes money. 54. Bad debt is: A. Good income B. Uncollectible receivable
C. Asset D. Equity Answer: B Rationale: Customer default.
55. Allowance for doubtful accounts is: A. Asset increase B. Estimate of bad debts C. Revenue D. Loan Answer: B Rationale: Expected losses. 56. Credit note reduces: A. Sales return value B. Expenses C. Assets D. Payroll Answer: A Rationale: Refund or adjustment. 57. Debit note increases: A. Amount owed B. Revenue C. Equity D. Cash Answer: A Rationale: Additional charge. 58. Aging schedule is used for: A. Payroll B. Tracking overdue receivables C. Inventory D. Taxes
Answer: B Rationale: Oldest inventory sold first.
63. LIFO means: A. First in first out B. Last in first out C. No inventory D. Random sale Answer: B Rationale: Newest items sold first. 64. Weighted average method calculates: A. Highest cost B. Average cost of inventory C. Sales only D. Cash flow Answer: B Rationale: Smooth cost method. 65. Inventory shrinkage is: A. Profit increase B. Loss of stock C. Sales growth D. Revenue Answer: B Rationale: Theft or damage. 66. Depreciation is: A. Asset appreciation B. Reduction in asset value C. Revenue D. Liability Answer: B Rationale: Wear and tear.
67. Straight-line depreciation is: A. Variable yearly cost B. Equal annual expense C. Random cost D. No depreciation Answer: B Rationale: Simple allocation. 68. Accumulated depreciation is: A. Revenue B. Total depreciation over time C. Expense D. Cash Answer: B Rationale: Total asset reduction. 69. Salvage value is: A. Selling price of goods B. Remaining value after use C. Expense D. Loan value Answer: B Rationale: Residual asset value. 70. Useful life refers to: A. Time asset is productive B. Loan duration C. Sales period D. Tax period Answer: A Rationale: Expected usage time. 71 โ 80: Final Concepts & Ethics
B. Generally Accepted Accounting Principles C. Government Audit Accounting Plan D. General Asset Accounting Program Answer: B Rationale: Standard accounting rules.
76. IFRS is used for: A. Local reporting only B. International reporting standards C. Payroll only D. Tax evasion Answer: B Rationale: Global accounting system. 77. Materiality means: A. All data B. Important financial information C. Small errors D. Cash only Answer: B Rationale: Influences decisions. 78. Consistency requires: A. Changing methods often B. Using same accounting methods C. Ignoring rules D. Random reporting Answer: B Rationale: Ensures comparability. 79. Prudence means: A. Overstate income B. Conservative reporting C. Ignore losses
D. Increase expenses Answer: B Rationale: Avoid over-optimism.
80. Final goal of bookkeeping is: A. Increase expenses B. Provide accurate financial records for decision-making C. Avoid taxes D. Hide transactions Answer: B Rationale: Supports business decisions and compliance.
