Bookkeeping test practice

Preparing for a bookkeeping skills test or interview? Practice the entries a bookkeeper records every month, in a journal in your browser, with every line checked instantly.

A bookkeeping test checks one thing above all: can you turn what happened in a business into correct journal entries? Every employer and every course words its questions differently, so there is no single test to memorise. The good news is that the underlying skills are few and they connect. If you can decide which accounts change, which way, and by how much, you can handle most questions about recording transactions, adjusting the books and closing them.

This page walks through the core topics in the order a bookkeeper meets them during a month, explains what each one asks of you, and links to a full guide and hands-on exercises for each. In every exercise you choose accounts from a chart of accounts, enter amounts in the Debit or Credit column, and get line-by-line feedback the moment you check. The entry must balance, and New numbers gives you the same kind of transaction with a different company and different amounts.

Start with the rule everything rests on

Every entry has at least one debit and one credit, and the debits equal the credits. Assets and expenses increase with a debit. Liabilities, equity and revenue increase with a credit. Each account decreases on the opposite side. Owner's drawing behaves like a debit account because it reduces equity.

Before writing any entry, ask three questions:

1. Which accounts are affected?
2. Does each one go up or down?
3. So is each one debited or credited, and for how much?

Skipping the second question is the quickest way to a wrong entry. Reversed debits and credits, a missing line that leaves the entry out of balance, and an owner's withdrawal recorded as a business expense are the classic early mistakes. Our debits-and-credits lesson is built around exactly those.

Guide and exercises: journal entry practice problems.

Recording everyday transactions

Sales and purchases

Most transactions in a small business are sales and purchases, often on account. When a customer will pay later, you debit Accounts Receivable, not Cash. When you buy merchandise to resell, you debit Inventory, not an expense, because it doesn't become an expense until it's sold. When it is sold, you record two things in one compound entry: the revenue and the cost. The second half, Cost of Goods Sold debited and Inventory credited, is the line that is easy to forget.

Guide and exercises: sales and purchase journal entries.

Payroll entries

Payroll comes in three entries. Recording the payroll: Wages Expense is debited for the full gross pay, Cash is credited for what employees actually receive, and the difference is credited to a withholdings payable account. Recording the employer's own payroll taxes: a payroll tax expense is debited and Payroll Taxes Payable credited. Paying the liabilities later: the payable accounts are debited and Cash credited, with no new expense, because the expense was recorded already.

The exercises use example amounts for practice, not real tax rates, and nothing here tells you how to calculate anyone's actual taxes. The point is the structure of the entries.

Guide and exercises: payroll journal entries.

Adjusting entries at the end of the period

Adjusting entries can feel harder at first, because there is often no new cash and no new document. You are correcting the books so that revenue is recorded when it is earned and expenses when they are incurred. Each adjustment involves one balance sheet account and one income statement account, and Cash is almost never part of it.

The overview is in adjusting entries practice, which uses prepaid expenses as its worked example. The four types to practice:

• Prepaid expenses. Paying for insurance or rent in advance creates an asset. At the end of each period, move only the months already used into expense. The common slip is expensing the months still to come, or forgetting to count every month since the policy started.
• Unearned revenue. Cash received before you provide the service is a liability, not revenue. As you deliver, reduce Unearned Revenue and recognize revenue for the months earned. Cash doesn't move in the adjustment. Guide: unearned revenue adjusting entry.
• Accrued expenses. Wages, interest or bills incurred but not yet paid. Debit the expense and credit a payable, never Cash. For interest on a note, accrue only for the months that have passed. Guide: accrued expenses adjusting entry.
• Depreciation. Spread cost minus salvage value over the useful life, debit Depreciation Expense and credit Accumulated Depreciation, so the asset's original cost stays on the books. If the books close monthly, record one twelfth of the annual amount. Guide: depreciation journal entry.

The depreciation lesson also covers selling equipment: remove the asset's cost and its accumulated depreciation, record the cash received, and the difference between the price and the book value is the gain or loss.

The trial balance

After posting, you list every account's balance in a trial balance. Each balance goes on one side only: the debit column if debits exceed credits, otherwise the credit column. Assets and expenses normally have debit balances; liabilities, equity and revenue normally have credit balances. If the totals don't agree, something was posted wrongly.

Two mistakes to watch for: listing an account's total debits and total credits instead of its net balance, and putting a balance on the wrong side because the normal balance wasn't checked. It's also worth being able to explain why a trial balance that balances can still be wrong: an entry posted to the wrong account, or never recorded at all, keeps both columns equal.

Guide and exercises: trial balance practice. If the test is in a spreadsheet, see also trial balance in Excel.

From the adjusted trial balance to the statements

Once the adjustments are posted, an adjusted trial balance lists every balance again, now including the new accounts the adjustments created, such as Wages Payable and Depreciation Expense. The statements come from it in a fixed order: the income statement gives net income; the statement of owner's equity adds net income and investments to beginning capital and subtracts drawings; the balance sheet reports that ending capital. Tests like to check that you keep Owner's Drawing off the income statement, subtract Accumulated Depreciation from equipment, and use ending capital, not the trial balance figure, on the balance sheet.

Guides and exercises: adjusted trial balance, income statement practice, statement of owner's equity and classified balance sheet.

Closing the books

Closing entries reset the temporary accounts to zero at the end of the year so the next year starts fresh. The order matters:

1. Close the revenue accounts: debit each revenue (they have credit balances) and credit Income Summary.
2. Close the expense accounts: credit each expense and debit Income Summary.
3. Close Income Summary to Owner's Capital. Its balance is the net income or loss.
4. Close Owner's Drawing directly to Owner's Capital.

The trap is treating Owner's Drawing like an expense and running it through Income Summary. It isn't an expense, so it goes straight to capital.

Guide and exercises: closing entries practice and post-closing trial balance.

Bank reconciliation adjustments

A bank reconciliation often turns up items the bank knows about and the books don't yet: service fees, customers' checks returned for insufficient funds (NSF), and interest earned. Each needs a journal entry on the book side. A fee is an expense that reduces Cash. An NSF check puts the amount back into Accounts Receivable, because the customer still owes it; it is not an expense. Interest earned increases Cash and is credited to Interest Revenue. The harder exercise records all three in one compound entry.

Deposits in transit and outstanding checks need no entry: the books already have them, and the bank will catch up.

Guide and exercises: bank reconciliation journal entries. The spreadsheet side is in bank reconciliation in Excel.

Put it together: a full month and two timed tests

The month-end close practice set follows one company through one month: record a transaction, prepare the trial balance, adjust, prepare the adjusted trial balance and income statement, then close. Each step uses the previous step's numbers, as on the job.

When the topics feel familiar one at a time, try them against the clock. There are no hints or feedback until the end, and every question has new numbers each time:

• Bookkeeping test: eight tasks in 30 minutes, from a sale with its cost and a payroll entry to an adjusted trial balance, an income statement and a bank reconciliation entry.
• AP/AR clerk test: eight accounts payable and receivable tasks in 30 minutes, covering early-payment discounts, returns and allowances, subsidiary ledgers, receivables aging and the allowance for doubtful accounts, petty cash, and matching a bank statement to the books.

Pass either test with 70% or more for a certificate of completion with a link an employer can verify. Both tests include exercises from the full course, so they open with a premium notice if you aren't subscribed. The free Bookkeeping basics test earns a certificate too.

How to practice for a test or interview

• Say the reason out loud. In an interview you may be asked why, not only what. "Accounts Receivable goes up, so it's debited" is the kind of answer that shows you understand the entry rather than remember it.
• Work in month order. Record transactions, adjust, prepare the trial balance, close. Seeing how each step feeds the next makes each one easier.
• Repeat with new numbers. Getting an entry right once proves you followed along. Getting it right with three different companies proves you can do it on your own.
• Check that every entry balances. It takes a second and catches a missing line before it reaches the trial balance.
• Keep a list of your own mistakes. When the feedback marks a line wrong, write down the rule it reminds you of, such as "an NSF check goes back to Accounts Receivable". Read the list before your test. It will be short, and it will be about you.

If the role also involves spreadsheets, our accounting Excel test practice page covers reconciliations, schedules and lookups in a spreadsheet.

About these exercises

Every answer is checked by code against rules, so the right answer is known for certain: the accounts, the sides and the amounts. The first exercise of every lesson is free with no sign-up. You can browse every lesson on the lessons page, and premium plans, which unlock the harder exercises in each lesson, are on the pricing page. The exercises are written from scratch and are not copied from any textbook or employer test.