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WorksheetsINTUIT Certified Bookkeeping Professional
Total questions: 47
Worksheet time: 47mins
You are the bookkeeper for a new partnership that operates a car wash. The business has two equal partners, Mr Parker and Ms Patel. Each partner contributed $100,000 to start the business. The business also took out a Note Payable from the bank for $100,000. Read each statement below and identify which statements are true. More than one answer may be selected.
Cash should be debited for $300,000.
Notes Payable should be credited for$100,000.
Contribution-Parker & Contribution-Patel should each be credited $100,000.
Equity is the partners' paid in capital plus the value of the Note Payable.
You attempt to reconcile a company's bank accounts. There is a difference of $81.00 between the bank statements ending balance and the book balance. You cannot locate an $81.00 transaction. You need to complete the reconciliation. What should you do first?
Because the difference is a multiple of 9, look for transcription errors.
Create a Journal Entry against Retained Earnings to force the bank balance to match and generate a difference of zero during the reconciliation process.
Leave the reconciliation process for this period and hope that it will work for the next period
Restart the reconciliation process from the beginning.
Select the accounts that appear on an Income Statement. More than one answer may be selected.
Accounts Payable
Cash
Cost of Goods Sold
Rent Expense
Select the accounts that appear on a Balance Sheet. More than one answer may be selected.
Accounts Payable
Cash
Cost of Goods Sold
Rent Expense
You are a bookkeeper for a wholesale company that uses the FIFO inventory valuation method. The company makes the widget purchases shown in the chart. In June, the company sells 400 widgets at $200 per unit.
$100 Per Unit
$110 Per Unit
$113.33 Per Unit
$120 Per Unit
Which Accounting Equation is correct?
Assets+Equity=Liabilities
Assets+Liabilities =Equity
Assets=Equity-Liabilities
Assets =Liabilities+Equity
Read each statement about the advantages of software-based double-entry bookkeeping systems. Select only the statements that are TRUE! More than one answer may be selected.
The software will prevent all fraud.
The software should prevent arithmetic errors.
The software should allow transactions to be saved only if the debit and credit entries are equal.
Which TWO accounts should be reconciled monthly? More than one answer may be selected.
Sales Revenue
Income Tax Expense
Credit Cards Payable
Petty Cash
Which of the following are characteristics of the Cash Basis of Accounting? More than one answer may be selected.
Record expenses when paid
Record expenses when incurred.
Record revenue when earned.
Record revenue when received.
Which of the following are characteristics of the Accrual Basis of Accounting? More than one answer may be selected.
Record expenses when paid
Record expenses when incurred.
Record revenue when earned.
Record revenue when received.
Which of the following financial elements belongs on an Income Statement?
Assets
Capital
Expenses
Liabilities
Which of the following financial elements belongs on a Balance Sheet? More than one answer may be selected.
Assets
Capital
Expenses
Liabilities
Which of the following statements pertaining to inventory are TRUE?
Inventory is classified as a liability.
Purchasing inventory on account increases assets and increases liabilities.
Selling $100 of inventory to a customer on account for $150 increases assets and decreases equity.
What are TWO common uses of budget variance reports? More than one answer may be selected.
To estimate the effects of new borrowings on profitability.
To provide financial information to owner's for planning or evaluation purposes.
To provide financial information to vendors for credit analysis.
To estimate expenditures for a future accounting period.
You receive a check from a customer for an open invoice. After recording this transaction, which TWO statements about the accounting equation are correct? More than one answer may be selected.
Total liabilities will decrease.
There will be no change in total equity.
Total equity will increase.
Total assets will increase.
There will be no change in total assets.
Enter Debit or Credit to complete the following statement. Increases in equity accounts are recorded as a (a) .
Enter Debit or Credit to complete the following statement. Revenue is recorded as a (a) .
Enter increase or decrease to answer the following question. Income represents an (a) in retained earnings.
Which TWO documents are usual source documents in the bank reconciliation process. More than one answer may be selected.
Bank Statement
Deposit Receipts
Balance Sheet
Income Statement
You need to reconcile a bank account. Look at the steps in the image & determine if they are listed correctly in accordance to the reconciliation process. Select TRUE or FALSE.
True
False
Identify the definition for the following term:
NSF
The ledger balance as of a certain date.
A bank charge against the account balance when a check bounces.
A deposit transaction recorded on the books, but not yet reported on the bank statement.
A check or other payment issued that has not yet cleared and been reported on the bank statement.
Identify the definition for the following term:
Book Balance
The ledger balance as of a certain date.
A bank charge against the account balance when a check bounces.
A deposit transaction recorded on the books, but not yet reported on the bank statement.
A check or other payment issued that has not yet cleared and been reported on the bank statement.
Identify the definition for the following term:
Outstanding
The ledger balance as of a certain date.
A bank charge against the account balance when a check bounces.
A deposit transaction recorded on the books, but not yet reported on the bank statement.
A check or other payment issued that has not yet cleared and been reported on the bank statement.
Your company is in the business of reselling papers and pens. The office manager regularly purchases papers and pens from a vendor to stock the office supply cabinet for employee's. How should you categorize these purchases?
Office Supplies
Cost of Goods Sold
Merchandise Inventory
Fixed Assets
You review a comparative income statement that displays five years of data. What information can you gather from this statement?
Trends in cash on hand over time.
Trends in current ratio over time.
Trends in inventory asset turnover over time.
Trends in income and expenses over time.
You are a bookkeeper for a store that sells school uniforms. You need to record the following transactions in the books:
1. In january, the store purchased 10 uniforms for $500.
2. In January, the store sold 10 uniforms to a customer for $1,000, payable in 30 days.
3. In February, the customer paid the invoice of $1,000 in full.
Determine which of the statements below are TRUE.
The Cost of Goods Sold is $1,000.
In January, you should debit Accounts Receivable for $1,000.
Gross sales are $500.
Read each statement about payroll accounts. Select ONLY the statements that are TRUE. More than one answer may be selected.
The two primary records for payroll are the Payroll Register and the Employee Earnings Record.
The Payroll Register records the payroll information for all employees for each pay period.
The Employee Earnings Record is prepared first and provides data for the payroll register.
For each quarter, you must prepare new Employee Earnings Records for each individual.
Which asset depreciation method records more depreciation expense in the early years of the asset's life?
Market Value Depreciation
Straight-line Depreciation
Book Value Depreciation
Double-declining balance
Your client is opening a hair salon. He forms a C corporation. he invests $5,000 of his own savings and receives a $10,000 loan from his parents. How should you record the $10,000 loan.
Retained Earnings
Due to Shareholder
Notes Payable
Capital
What information is provided by a Budget vs. Actual Income Statement?
The profitability of the business based on customer payments received and vendor payments cleared, compared to the profitability of the business based on payables.
Outstanding vendor bills that the company has budgeted for, but not yet paid.
The allocation of funds to upcoming expenses.
A comparison of the actual profitability of the business to estimated income and expenses.
Which statement most accurately summarizes the adjusting process?
Analysis and updating of accounts at the end of the accounting period, before financial statements are prepared.
Verification of journal entries to bring accounts up to date at the end of the accounting period.
Evaluation of reported assets and liabilities on the Balance Sheet at the end of the accounting period.
Evaluation of reported revenues and expenses on the Income Statement during the accounting period.
Which equity account records the money that investors initially contribute to a corporation?
Owner Contributions
Partner Contributions
Common Stock
Retained Earnings
Form W-4 is completed by the employee.
True
False
Calculating withholding amounts starts with Net Pay.
True
False
Federal income tax withholding on paychecks is determined by the allowance claimed by the employee.
True
False
You are a bookkeeper for a startup company that uses the accrual basis of accounting. In the first quarter of operations the following transactions occur.
1. The owner invests $10,000 cash and $5,000 of office equipment into the new business.
2. The business pays a $400 equipment deposit and $500 service charge for its first month of high-speed commercial internet service.
3. The business pays a retainer of $2,000 to an attorney for legal counsel.
4. The business receives $8,000 as payment in full at the time of its first sale.
For each statement about the transactions in the first quarter, select ONLY the statements that are TRUE. Multiple answers may be selected.
The business should record Revenue of $10,000 with a debit to Cash.
The business should record an Expense of $500 for Utilities-Internet.
The business should record a Legal Expense of $2,000.
The business should record Revenue of $8,000.
A company employee uses the company credit card to pay for changing the oil in a company vehicle. When you record the transaction, which account should you Debit?
Vehicle Asset
Cash
Vehicle Expense
Credit Card Payable
You are reconciling a checking account. Several checks that were written over the past three weeks have not cleared the bank as of the closing period date. What should you do?
Void the uncleared checks and reenter them when they clear the bank.
Take no action so that the checks correctly impact the account balance.
Move the checks to a liability account named "Uncleared Checks in Transit".
Void the uncleared checks and reissue them to the vendor.
What is the purpose of a Balance Sheet?
To determine the difference between the banks and the current profitability from cash received.
To determine the year over year growth in sales over time.
To determine the profitability of the business during a period of time
To determine the financial health of an organization at a point in time.
On April 7th, you make a $1,500 sale to a customer on account. The T-Accounts in the image provided represents the activity in the Accounts Receivable and Sales Revenue Accounts for the month of April.
What is the Ending Balance of the Sales Revenue Account at the end of April?
$1,500 Debit
$3,500 Credit
$6,500 Credit
On April 7th, you make a $1,500 sale to a customer on account. The T-Accounts in the image provided represents the activity in the Accounts Receivable and Sales Revenue Accounts for the month of April.
What entry should appear in the Sales Revenue T-Account for April 7th?
$1,500 Debit
$1,500 Credit
Your client has 3 outstanding invoices receivable for $300, $500, and $1,200. You write off 1% of the receivables as uncollectible. What is the effect on Accounts Receivable?
Debit $20
Credit $20
No Effect
Review the Balance Sheet shown in the image provided. You write a check for $10,000 to a vendor for costs related to the annual company party. The bill was previously recorded in Accounts Payable. Which TWO statements about the effect on the Balance Sheet are TRUE? (Select TWO.)
Total Stockholders Equity decreases to $361,000.
Total Assets does not change.
Accounts Payable increases to $34,000.
Cash decreases to $48,000
Which THREE statements are valid reasons for making adjusting journal entries? (Choose THREE)
To record expiration for prepaid insurance.
To purchase supplies.
To record depreciation.
To ensure Accounts Receivable matches Accounts Payable.
To recognize unpaid salaries for the current pay period.
In May, a client asks a law firm whether it can prepare legal contracts. The law firm starts working on the contract for the client on June 15th, and delivered the contract on July 1st. The client pays the bill in August. Under the Accrual method of accounting, when does the law firm recognize the contract revenue?
May
June
July
August
For each statement about depreciation select ONLY the statements that are TRUE. (More than one answer may be selected.)
All fixed assets depreciate over the same useful life.
The accumulated depreciation account appears on the Income Statement.
If a fixed asset with no salvage value is held for its estimated useful life, the entire cost would be expensed.
A company may use one asset depreciation for bookkeeping purposes and a different method for tax purposes.
For each statement about liabilities select ONLY the statements that are TRUE. (More than one answer may be selected.)
A business creates a liability when it purchases equipment using its own cash.
A liability is any future financial obligation of the business to an outside entity.
The owners of a business have the sole claim to the business assets if the business has no liabilities.
