Intuit Bookkeeping (Professional Certificate) Exam Updated Questions with Correct Verified, Exams of Accounting

Download Intuit Bookkeeping (Professional Certificate) Exam Updated Questions with Correct Verified and more Exams Accounting in PDF only on Docsity! Intuit Bookkeeping (Professional Certificate) Exam Updated Questions with Correct Verified Answers Rated A+ 2024/2025 Four Key Elements of Bookkeeping Ethics -- correct answer --Honesty, Objectivity, Confidentiality and Professionalism What is DEALER -- correct answer --Dividends + Expenses + Assets = Liabilities + Owner's Equity (beginning) + Revenue What's is the accounting Equation? -- correct answer --Assets = Liabilities + Equity Profit and Loss statement. Shows the company's revenues and expenses during a particular period -- correct answer --The Income Statement A financial statement that reports a company's assets, liabilities, and equity at a specific point in time -- correct answer --The Balance Sheet Reports the changes in company equity, from the opening balance to the end of the period balance. -- correct answer --The Statement of Equity Reports the sources and uses of cash by a business -- correct answer --The Statement of Cash Flow Accounting Cycle -- correct 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 customers pays at the time of sale you must enter it as a -- correct answer --Sales Receipt If customers does not pay at the time of sale you must enter it as a -- correct answer –Invoice Once and customer has paid an invoice it goes to -- correct answer --Receive payment Receive payment and sales receipt are followed by -- correct answer --Bank deposit Step 4 of The Accounting Cycle: Preparing adjusted entries includes -- correct answer --Deferrals, Accruals, Missing Transactions, and Tax Adjustments Removing transactions that belong to a different period -- correct answer – Deferral Opposite of deferral. Concern future payments or expenses -- correct answer --Accruals A signed document containing a written promise to pay a stated sum to a specified person or bearer at a specified ate or on-demand -- correct answer --Promissory Note Notes Receivable -- correct answer --A current or non-current asset Notes Payable -- correct answer --A current or non-current liability Interest Equation -- correct answer --Principle x Interest (mulitply by 30/365 to find day) Receivables, loans, or other debits that have virtually no chance of being paid -- correct answer --Accounts Uncollectible An expense that a business incurs once the repayment of credit previously extended to a customer is estimated to be uncollectible -- correct answer -- Bad Debt A bad debt is charged to expense as soon as it is apparent that an invoice will not be paid. This is easier for business owners. -- correct answer -- Direct Write-Off Method An estimate of the future amount of bad debt is charged to a reserve account as soon as a sale is made. This is more accurate but complex -- correct answer --Allowance Method A contra-asset account that has a natural credit balance. Balances decrease with debits and increase with credits -- correct answer --Accumulated Depreciation Account An expense account on the income statement showing the cost of merchandise to the business -- correct answer --Cost of Goods Sold (COGS) An inventory system that continuously update the inventory account -- correct answer –Perpetual An inventory system that updates the inventory account only at specified intervals -- correct answer –Periodic Inventory Cost Flows -- correct answer --FIFO, LIFO, and Average Cost First-In, First-Out (FIFO) -- correct answer --Method to assign cost to inventory that assumes items are sold in the order acquired; earliest items purchased are the first sold. Last in, First out (LIFO) -- correct answer --Method to assign cost to inventory that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold. Average Cost -- correct answer --All items in the inventory are priced at their average cost Closing Inventory -- correct answer --Closing Inventory=Cost of Goods Available- COGS COGS equation -- correct answer --BI(Beginning Inventory) + COGP (Cost of Goods Purchased) - EI (Ending Inventory) = COGS Fixing Journals Entries -- correct answer --Reverse journal entry or reproduce financial statements Details the error and corrections you made to the income statement and balance sheet -- correct answer –Disclosure PP&E (Plants, Property, and Equipment), Trademarks, and long-term investments -- correct answer --Non-Current Assets The same amount of depreciation expense is recorded each accounting period, during an asset's servicing life -- correct answer --Straight-Line Depreciation The asset is used more earlier in its life so you would depreciate more in year 2 than year 4 -- correct answer --Accelerated Depreciation Table that shows the depreciation amount over the span of he asset's life -- correct answer --Depreciation Schedule A kind of lease in which transfer of ownership of the asset is not intended -- correct answer --Operating Lease A kind of lease in which transfer of ownership of the asset is intended at the end of the lease -- correct answer --Capital Lease A company's liabilities that will come due within 1 year -- correct answer -- Current Liabilities External Reports -- correct answer --reports or other output produced for use by people outside the organization Amoritization -- correct answer --the reduction of a loan balance through payments made over a period of time Loan Amortization Schedule -- correct answer --a schedule of the breakdown of each payment between interest and principal as well as the remaining balance after each payment A loan used to finance a company's daily operations -- correct answer -- Working Capital Loan the borrower has pledged some asset as collateral. -- correct answer -- Secured Loan Net assets formula -- correct answer --Assets – Liabilities The original records that prove that a specific transaction took place -- correct answer --Source Documents Comparing account listed on source documents report to the total that is listed on the balance sheet -- correct answer --Report Reconciliation Method Reviewing all existing transactions or source documents to confirm they have actually occurred -- correct answer --Transactional Reconcillations Percent Change Formula -- correct answer --Percent Change =(Recent value year−Older value year)/Older value year ×100 horizontal analysis (trend analysis) -- correct answer --a technique for evaluating a series of financial statement data over a period of time vertical analysis -- correct answer --reporting an amount on a financial statement as a percentage of another item on the same financial statement Net Income Equation -- correct answer --Revenues – Expenses A measure of a company's profitability. Shows the percentage of revenue that exceeds COGS -- correct answer --Gross Profit Margin Gross profit margin formula -- correct answer --(Sales Revenue - Cost of Goods Sold) / Sales Revenue Measures how much profit a company makes on a dollar after paying for employees and overhead -- correct answer --Operating Margin Operating Profit Margin -- correct answer --operating earnings/sales revenue Used to calculate the percentage of profit a company produces from it total revenue -- correct answer --Net Profit Margin Net Profit Margin Formula -- correct answer --Net profit/sales revenue Analyzes short term financial risk -- correct answer --Current Ratio Current Ratio Formula -- correct answer --Current Ratio = Current Assets / Current Liabilities Compares total debt to total equity -- correct answer --Debt to Equity Ratio Debt to Equity Ratio Formula -- correct answer --Total Debt / Shareholder's Equity Accounts Payable Turnover -- correct answer --Net Credit Purchases/Average Accounts Payable Accounts Receivable Turnover Ratio -- correct answer --net credit sales/average net accounts receivable Cash Flow Coverage Ratio -- correct answer --Cash Flow Operations/ Total Debt Current Liability Coverage Ratio -- correct answer --Net Cash from Operating Activities/ Average Current Liabilities Cash Flow Margin Ratio -- correct answer --cash flow from operations/net sales Key performance indicators (KPIs) -- correct answer --Quantifiable measures of performance used to gauge progress toward strategic objectives or agreed standards of performance. 8 Step Payroll Process -- correct answer --1. Choose payroll system 2. Create Payroll Policy 3. Gather Employee Info 4. Setup Direct Deposit 5. Establish Time Tracking System Maria Garcia owns a software consulting firm. At the beginning of 2019, her firm had assets of $800,000 and liabilities of $185,000. Assuming that assets decreased by $52,000 and liabilities increased by $24,000 during 2020, use the accounting equation to calculate equity at the end of 2020. -- correct answer --- $539,000 The accounting equation can be defined as: -- correct answer --- Assets = Liability + Equity What the company owns or controls and expects to gain value from is defined as: -- correct answer --- An Asset What the company owes to others is defined as: -- correct answer --- L iabilities The owner's stake in the company is defined as: -- correct answer --- Equity A way of bookkeeping that tracks which accounts increase and which decrease for a given transaction is known as: -- correct answer --- Double- entry Accounting Which of the following best defines a credit as it's used in double-entry accounting? -- correct answer --- A decrease in assets/expenses and an increase in liabilities/owner's equity and revenue. Which of the following best defines a debit as it's used in double-entry accounting? -- correct answer --- An increase in assets/expenses and a decrease in liabilities/owner's equity and revenue. You purchased inventory from your vendor and paid cash. The accounts affected are the inventory account and the cash account. In your journal entry, which account would you debit? -- correct answer --- Inventory account An owner invests $1000 in the company. This transaction impacted the checking account and the owner's equity account. In your journal entry, which account do you credit? -- correct answer --- Owner's equity account A sales manager purchases office supplies with the company credit card. This transaction impacts the accounts payable and the office supplies accounts. In your journal entry, which account do you credit? -- correct answer --- Accounts payable The company pays off the credit card bill. This transaction impacts the accounts payable and the cash accounts. In your journal entry, which account do you credit? -- correct answer --- Cash account Debits are always represented on what side of a T-chart? -- correct answer -- - The left. Short-term Investments would be an example of what kind of account? -- correct answer --- An asset account. Accounts payable would be an example of what kind of account? -- correct answer --- A liability account. Accounts receivable would be an example of what kind of account? -- correct answer --- An asset account. True or False: Your client was paid in cash for a service that they provided. They've asked you to leave it off their financial records. Since you are employed by the client, you should do what they ask. -- correct answer --- F alse A schedule that contains all accounts needed to prepare financial statements is known as: -- correct answer --- The General Ledger Reorganizing journal entries and grouping them by account is known as: -- correct answer --- Posting to the ledger A listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger is known as a: -- correct answer --- Chart of Accounts To find the balance of the account types that increase with a debit (asset and expense accounts), bookkeepers will: -- correct answer --- Subtract total credits from total debits (Debits - Credits) The accounting cycle starts with the: -- correct answer --- Analysis of business transactions After analysis, the business transaction is recorded in the journal in: -- correct answer --- Chronological order A form or statement that lists the titles and balances of all ledger accounts at a given date is known as: -- correct answer --- Trial balance Which of the following financial statements provides you with the owner's change in capital over time? -- correct answer --- The Statement of Equity Which of the following financial statements shows the balances of a company's assets, equity, and liability? -- correct answer --- The Balance Sheet Which of the following financial statements provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investments? -- correct answer --- The Statement of Cash Flow A seasonal business like Lou's Landscaping can have decreased cash during off-season months. Which financial statement would show the cash inflows and outflows for a particular month? -- correct answer --- Cash Flow Statement Which of these accounts would have a balance of $0 at the beginning of each new accounting period? -- correct answer --- Revenue A business owner performs a service and is paid when the job is performed. The owner would then enter this transaction into accounting software as: -- correct answer --- A Sales Receipt A business owner performs a service but is not paid when the job is performed. Using their accounting software, the owner would enter the transaction as: -- correct answer --- An Invoice True or False: The ending cash balance on the Statement of Cash Flow should not equal the cash balance reported on the Balance Sheet. -- correct answer --- False A customer paid in advance for a service. They need to cancel the service. If the business owner wishes to apply that money towards the customer's next service, the owner would enter that transaction into their accounting software as: -- correct answer --- A Credit Memo True or False: In order to complete a Statement of Equity, you will need the net profit from the Income Statement. -- correct answer --- True True or False: Business owners should use the General Ledger to make business decisions. -- correct answer --- False A Balance Sheet has four parts: a heading, assets, liabilities, and ______. -- correct answer --- equity True or False: Financial reports should be produced before any adjustments have been made. -- correct answer --- False An owner has deposited several payments they've received from customers into the business's bank account. The owner would then enter this transaction in their accounting software as: -- correct answer --- A Bank Deposit After the Unadjusted Trial Balance is created, the process of going back and updating information is known as: -- correct answer --- Making adjustments An owner brought in a piece of equipment for servicing and paid for the repair with a check. The owner would then enter the transaction into their accounting software as: -- correct answer --- A Vendor Check The document that shows all of the account balances after adjustments have been made is known as: -- correct answer --- The Adjusted Trial Balance Becky provided a service to a customer, and they have yet to pay. Which type of journal entry would need to be made? -- correct answer --- An Accrual True or False: The depreciation of a vehicle is not something that can be entered as an adjustment. -- correct answer --- False Which accounting assumption allows bookkeepers to break a company's financial life into smaller chunks of time? -- correct answer --- The Periodicity Assumption Caren Cosmos is the world's most popular soft rock folk singer. She sold t- shirts online last year and made $7,000. The money from these sales went directly into her personal banking account which she used for her personal needs. Which key accounting assumption did Caren ignore? -- correct answer --- Entity Assumption An accounting method in which revenues are reported when they are earned and expenses are reported when they are incurred is called: -- correct answer --- Accrual Accounting