AI for Bookkeepers: Transaction Categorization Quiz

Answers and explanations appear as you take the quiz.

1. A transfer from business checking to the company's own savings account is suggested as Income. Why is that wrong?
   • Transfers must always be coded as expenses
   • It would overstate revenue using money the business already had
   • Savings accounts cannot appear in a chart of accounts
   • Bank feeds cannot import transfers
2. What is the first technical step before the system classifies a raw bank description?
   • Filing the tax return
   • Rounding the amount to the nearest dollar
   • Deleting transactions under $10
   • Normalizing the text to recover a stable merchant identity
3. Why do many categorization products weight a client's own corrections heavily?
   • The same vendor maps to different accounts in different businesses
   • Global models are not allowed in accounting software
   • A bookkeeper's corrections are never wrong
   • Banks require it for bank-feed access
4. How should a monthly loan payment usually be recorded?
   • Entirely to Interest Expense
   • Entirely to Revenue
   • Split into principal, against the loan liability, and interest expense
   • As an owner's draw
5. What feedback-loop risk does the guide warn about?
   • Corrections make the model forget all bank rules
   • Accepting wrong suggestions in bulk teaches the model the error
   • Confidence scores rise until nothing is ever reviewed
   • Bank rules overwrite the chart of accounts
6. How does the guide contrast explicit bank rules with machine-learning models?
   • Rules learn automatically from corrections
   • Machine-learning models never produce confidence scores
   • Rules only work for income transactions
   • Rules are predictable but break when descriptions change
7. Which transactions does the guide recommend prioritizing for review?
   • Low-confidence items, large amounts, first-time vendors and balance sheet items
   • Only transactions under $50
   • Only recurring subscriptions
   • Only items auto-coded with high confidence
8. Why is 'auto-categorized' not the same as correct books?
   • Categorization changes the bank balance
   • Auto-categorization deletes receipts
   • It proposes a classification but doesn't prove the transaction appears once, is in the right period or matches a receipt
   • Auto-categorized items cannot be edited afterward