# QBO Skills question bank Questions with answers and explanations, from the Questiva Learning skills tests. Version 2, authored 2026-08-23. Take it interactively: https://www.questivalearning.com/qbcu-certification-prep#skills ## Accounting foundations & the QBO interface (chapter 1 of QuickBooks® Online Step-by-Step) ### Q1. Which of these decreases the owner's equity? - **✓ a) A net loss for the year.** - b) Paying off a bank loan's principal. - c) Buying a truck with cash. - d) Collecting payments on open invoices. > Income and expenses reach equity through Net Income. When expenses are more than revenue, the loss lowers the owner's equity. (Chapter 1 · Account Types and Financial Reports) ### Q2. A cash basis Profit and Loss counts an invoice as income: - a) On the invoice date. - **✓ b) When the customer pays it.** - c) Never. Only sales receipts count on cash basis. - d) When the deposit is reconciled. > On cash basis, income isn't recognized until the customer pays. QBO can run either basis from the same invoice. (Chapter 1 · Accounting Basis: Cash or Accrual?) ### Q3. When an inventory item is sold on an invoice, QBO: - a) Records the income. The cost is recorded when you pay the vendor's bill. - b) Debits Inventory Asset and credits Cost of Goods Sold. - c) Credits Inventory Asset for the sale price. - **✓ d) Records the income and moves its cost to Cost of Goods Sold.** > The sale price credits income. QBO also moves the item's original cost out of Inventory Asset and into Cost of Goods Sold. (Chapter 1 · Products and Services) ### Q4. To remove a check you just printed: - **✓ a) Void it.** - b) Delete it. - c) Change the amount to a penny. - d) Leave it, and enter a deposit to offset it. > Void a printed check so you keep a record of it and the check numbers stay in order. It's fine to delete a check you never printed. (Chapter 1 · Voiding a Transaction) ### Q5. Entering transactions straight into the Checking register: - a) Is the only way to enter a handwritten check. - b) Doesn't work, because registers are read-only. - c) Is faster than using forms and just as complete. - **✓ d) Can be done, but you should use forms instead.** > You can enter new transactions from a register, but it isn't a good idea because of the limited information available there. Use forms instead. (Chapter 1 · Registers) ### Q6. In QuickBooks® Online, two companies that file separate tax returns need: - a) One file, with Locations turned on. - **✓ b) Two subscriptions.** - c) One subscription. Set the second company up as a sub-customer. - d) A second Chart of Accounts in the same file. > Each company in QuickBooks® Online is a separate subscription. Create both with the same email address so one login reaches them. (Chapter 1 · Creating New Company Files) ### Q7. A bank loan doesn't show on the Profit and Loss because: - a) The report is set to cash basis instead of accrual. - **✓ b) Liabilities go on the Balance Sheet.** - c) Its Detail Type is wrong. - d) No payments have been made on it yet. > Asset, liability and equity accounts are on the Balance Sheet. The Profit and Loss shows income and expenses, and a loan isn't income. (Chapter 1 · Account Types and Financial Reports) ### Q8. QBO is acting up. How can you tell whether the problem is with your computer or with Intuit's website? - a) Restart the computer and try again. - **✓ b) Try it in an Incognito window.** - c) Sign out of QBO and sign back in. - d) Reinstall QuickBooks® Online. > An Incognito window doesn't store cookies, a cache or your browsing history. If the problem happens there too, it's with QBO, and if it works, something on your computer is interfering. (Chapter 1 · Incognito Windows) ### Q9. Intuit releases new QuickBooks® Online features: - a) Once a year, in a new version you install. - b) When you accept the update from the Settings gear. - **✓ c) In waves, to a few companies at a time.** - d) To every company on the same day. > New features go to a few companies at a time, so two files may not show the same options. Your screens won't always match the book either. (Chapter 1 · QuickBooks® Online Updates and New Features) ## Company setup, Chart of Accounts & lists (chapter 2 of QuickBooks® Online Step-by-Step) ### Q1. A shop opened in March and keeps its books on a July to June year. First Month of Fiscal Year should be: - a) Any month. The setting only labels reports. - **✓ b) July.** - c) January, for every business. - d) The month the business opened. > It's the first month of your reporting period, and it sets the default dates for the Profit and Loss and Balance Sheet. It isn't the month the business opened. (Chapter 2 · Advanced Settings) ### Q2. Which account types should you use for a new company Visa card and a five-year equipment loan? - **✓ a) Credit Card and Long Term Liabilities.** - b) Bank and Other Current Liabilities. - c) Credit Card for the Visa, and Fixed Assets for the loan. - d) Other Current Liabilities for both. > A credit card gets the Credit Card type, and a loan you'll repay over several years is a Long Term Liability. The equipment itself is the Fixed Asset. (Chapter 2 · Account Types) ### Q3. What does an account's Detail Type control? - a) The order accounts appear in on the Profit and Loss. - b) Which users can post to the account. - c) Whether the account shows on the Balance Sheet or the Profit and Loss. - **✓ d) How the account maps to lines on the tax return.** > When your accountant prepares taxes in software like TurboTax or ProConnect Tax, the Detail Type maps each account to the right line on the return. The Account Type is what decides which report it's on. (Chapter 2 · Adding Accounts) ### Q4. When the Utilities header line has its own amount on the Profit and Loss, you should: - a) Collapse the report. - **✓ b) Recode that amount to a sub-account and lock Utilities.** - c) Turn on account numbers. - d) Change each sub-account's Account Type to match Utilities. > An amount on the header line means someone coded a transaction straight to it. Locking the header keeps anyone from using it by accident. (Chapter 2 · Adding Sub-accounts) ### Q5. To merge two accounts in the Chart of Accounts: - a) Delete the one you don't need. - b) Make one inactive and re-enter its transactions in the other. - c) Move one account's balance with a journal entry, then make it inactive. - **✓ d) Edit one so it matches the other exactly.** > Give the account you're dropping the same name, type, detail type and parent as the one you keep. QBO offers to merge them, and a merge can't be undone. (Chapter 2 · Merging Accounts) ### Q6. Separate income accounts for Fountains, Plants and Sprinklers are too much detail. Track those sales with: - **✓ a) Products and Services.** - b) One Sales account, with the detail in each memo. - c) An account number on each one. - d) Sub-accounts under one Sales account. > Products and Services keep the detail and give you sales reports by item. Job Materials and Labor can stay as income accounts. (Chapter 2 · Removing Accounts from the Chart of Accounts) ### Q7. To move a QuickBooks® Desktop file into QBO when its reports are accurate, its lists are current and it isn't too large: - **✓ a) Create the QBO subscription, then import the file.** - b) Start from scratch. Imported history can't be corrected. - c) Import the file, then choose a subscription. - d) Run both systems for a year. > Importing works well when the reports are accurate, the lists are current and the file isn't overly large. Create the QBO subscription first, then import. (Chapter 2 · Converting a QuickBooks® Desktop File) ### Q8. To split bill lines between residential and commercial work, and tag each transaction to a branch office: - a) Track Locations only. - b) Use Classes, with a second class on each row for the branch. - c) Leave both off and use sub-accounts. - **✓ d) Use Classes for the work and Locations for the branch.** > Classes can be assigned one to each row, so bill lines can be split. Only one location can be assigned per transaction, which suits a branch office. (Chapter 2 · Advanced Settings) ## Customizing QBO: terms, sales tax, classes, users (chapter 3 of QuickBooks® Online Step-by-Step) ### Q1. On an invoice to a taxable customer, sales tax is charged on: - **✓ a) The taxable items only.** - b) Every line, since the customer is taxable. - c) The services only. - d) Nothing, until you check the Tax box on each line. > Only taxable customers are charged sales tax, and only on taxable items. QuickBooks® Online multiplies the total of the taxable lines by the rate. (Chapter 3 · Applying Sales Tax on Forms) ### Q2. Setting up a new Inventory item with today's date and today's quantity: - **✓ a) Posts to Opening Balance Equity and blocks older entries.** - b) Is correct, and you can still enter the older bills afterward. - c) Sets the Reorder Point to the same number. - d) Saves it as a Non-inventory item. > Use a 0 quantity and a date long before your first transaction. Today's date and quantity create an unnecessary Opening Balance Equity entry and block earlier transactions for the item. (Chapter 3 · Inventory Products) ### Q3. To get a Profit and Loss with a column for each revenue stream, set up: - a) Separate income and expense accounts for each stream. - b) Sub-customers for each stream under every customer. - **✓ c) Classes.** - d) Nothing. The report can already split columns by revenue stream. > Classes separate income and expenses by revenue stream, and a Profit and Loss by Class gives each one a column. Add an Overhead class for costs that belong to the whole business. (Chapter 3 · Activating Class Tracking) ### Q4. Which user role can create invoices and receive payments, but can't pay bills or do banking? - a) Standard All Access. - b) Standard Limited Customers and Vendors. - c) View Company Reports. - **✓ d) Accounts Receivable Manager.** > An Accounts Receivable Manager works with A/R transactions only. Standard Limited Customers and Vendors can also pay bills. (Chapter 3 · Setting Up Users in the Company File) ### Q5. To print each order's PO number on its invoice and report sales by rep, set up: - a) Nothing. Type them in the Message on Invoice box. - b) A class for each rep, and the PO number in the customer's name. - c) A separate customer for each PO number. - **✓ d) Custom Fields.** > Custom Fields add your own fields to sales forms. Turn on Print on Form to show them on the invoice, and use them as report columns or filters. (Chapter 3 · Implementing Custom Fields) ### Q6. In a new company file, when do you set up sales tax? - a) Any time. Turning it on updates your items and customers. - **✓ b) Before you add Products and Services or Customers.** - c) After the customers, so their addresses set the rates. - d) When the first return is due, with a journal entry for the tax. > Set up your Sales Tax Agencies first, because sales tax is calculated from what you sold, to whom and where. (Chapter 3 · Setting Up Sales Tax) ### Q7. To see your profit on a subcontracted service in item profitability reports, set it up as: - a) Two items, one for invoices and one for the subcontractor's bills. - b) A Service item, with the bills coded to Cost of Goods Sold. - **✓ c) A two-sided Service item.** - d) A Subcontractors class, then a Profit and Loss by Class. > Check "I purchase this product/service from a vendor" on the Service item. The same item then goes on the invoice and the bill, so item profitability reports show the profit. (Chapter 3 · Subcontracted Services) ### Q8. The Audit Log can show who made each change only if: - a) The Primary Admin made the change. - **✓ b) Everyone has their own login.** - c) The shared login has the Company Admin role. - d) The login uses a complex password. > Give every user a separate username and password. Then the Audit Log shows who made what changes. (Chapter 3 · Setting Up Users in the Company File) ## Customer sales: invoices, sales receipts, payments & deposits (chapter 4 of QuickBooks® Online Step-by-Step) ### Q1. When a customer pays by credit card at the time of sale, enter: - a) An Invoice, then Receive Payment. - **✓ b) A Sales Receipt.** - c) A Bank Deposit to Checking. - d) An Estimate, then turn it into an Invoice. > Paying at the time of sale makes them a cash customer, even with a credit card, so use a Sales Receipt. (Chapter 4 · Cash vs. Credit Customers) ### Q2. When you save an invoice, which accounts go up? - a) Checking and Income. - b) Undeposited Funds and Income. - **✓ c) Accounts Receivable and Income.** - d) None. That happens when the customer pays. > An Invoice increases (debits) Accounts Receivable and increases (credits) Income. No money has come in yet. (Chapter 4 · Creating Invoices) ### Q3. In the Checking register, a deposit with Services in the Account column means: - a) It came through Payments to Deposit correctly. - b) Nothing's wrong. Deposits always show the income account. - c) Several sales were combined into one deposit. - **✓ d) The income has been counted twice.** > Someone added the deposit from the Bank Transactions feed and typed in an income account, which duplicates the income. Delete it and make a Bank Deposit that gathers the existing payments. (Chapter 4 · Viewing Deposits in the Register) ### Q4. A customer pays a newer invoice before an older one. In Receive Payment, check off: - a) The older invoice first, then the newer one. - **✓ b) The newer invoice only.** - c) Both, with the payment split evenly. - d) Neither, so it's held as a credit. > Check off the invoice the customer is actually paying. Paying oldest to newest out of habit is a common error. (Chapter 4 · Handling Partial Payments) ### Q5. When you save an Estimate, the Profit and Loss and Balance Sheet: - a) Show more income and Accounts Receivable. - **✓ b) Don't change.** - c) Show the income now, and A/R once it's invoiced. - d) Show Accounts Receivable as a pending balance. > Estimates are non-posting, so they don't show up on either report until you turn them into an Invoice. (Chapter 4 · What Are Estimates?) ### Q6. A customer's head office pays for two locations with one check. To see sales for each, set up: - a) One customer, with the location in each invoice's memo. - b) Two separate customers. - **✓ c) Sub-customers, with Bill Parent Customer on.** - d) Two customers, with a custom field for the head office. > Make each location a sub-customer and turn on Bill Parent Customer. You can report on each one, and the parent can pay for them in one payment. (Chapter 4 · Sub-customers) ### Q7. In a new company file, bring in a customer's old unpaid invoices by entering: - **✓ a) Each invoice, with its original date.** - b) The total in the Opening Balance field. - c) One Sales Receipt for the total. - d) A journal entry debiting Accounts Receivable. > Always leave the customer's Opening Balance field blank. Enter the open invoices with their original dates. (Chapter 4 · Setting Up Customers) ### Q8. The right way to stop charging sales tax to a tax-exempt customer is to: - a) Uncheck the Tax box on their sales. - **✓ b) Uncheck This Customer Is Taxable on their record.** - c) Charge the tax, then give it back with a credit memo. - d) Change the taxable items to non-taxable. > Uncheck This Customer Is Taxable and enter their exemption details. Unchecking the Tax box on a line isn't the fix, because the Sales Tax Liability report goes by the item's tax status, not by whether you collected the tax. (Chapter 4 · Setting Up Customers) ### Q9. A refund on a premium you coded to Insurance is deposited with the day's customer checks. Enter it: - a) In Add Funds to This Deposit, coded to Other Income. - b) As a customer payment. - c) As a separate deposit. - **✓ d) In Add Funds to This Deposit, coded to Insurance.** > Code a refund to the same account as the original expense. That reduces Insurance on your reports. (Chapter 4 · Adding Additional Funds to the Deposit) ## Vendor expenses: bills, checks, cards, billable costs & 1099s (chapter 5 of QuickBooks® Online Step-by-Step) ### Q1. A vendor's invoice arrives, and you won't pay it until next month. You enter it as: - a) An Expense. - b) A Check dated next month. - c) A Purchase Order. - **✓ d) A Bill.** > Vendors send invoices, but in QuickBooks® Online you enter them as Bills. The Bill holds what you owe in Accounts Payable until you pay it in Pay Bills. (Chapter 5 · Entering Bills) ### Q2. If you write a Check instead of paying a vendor's open bill: - a) The bill is marked paid. - **✓ b) The bill stays open, and accrual reports show the expense twice.** - c) Nothing posts until you match the check in the Bank Transactions feed. - d) QuickBooks® applies the check to the bill on its own. > The check posts as a second expense. Click Add in the drawer beside the check to turn it into a bill payment. (Chapter 5 · Applying a Check to an Unpaid Bill) ### Q3. Charges on the company credit card are entered as: - a) A Bill to the store. - b) A Transfer from Checking to the credit card account. - **✓ c) An Expense, with the card as the Payment Account.** - d) A Check from Checking. > Record each card charge as an Expense with the credit card as the Payment Account. It raises the card balance and the expense together. (Chapter 5 · Entering Expenses) ### Q4. You paid the company Visa through the bank's website. To record the payment: - a) Enter an Expense from Checking to Credit Card Expense. - **✓ b) Use Pay Down Credit Card.** - c) Re-enter each charge from the statement on one Expense. - d) Make a Journal Entry to Interest Expense. > The charges were expensed when you entered them. Paying the card only moves money from Checking to the Visa, and Pay Down Credit Card records just that. (Chapter 5 · Paying the Credit Card Balance) ### Q5. To pass a purchase on to a customer's next invoice, on the expense you: - **✓ a) Pick the customer and check Billable.** - b) Code it to Cost of Goods Sold. - c) Pick the customer but leave Billable unchecked. - d) Put the customer's name in the Payee field. > The Customer column tracks the cost by job, and the Billable checkmark passes it on to the customer's next invoice, with or without markup. (Chapter 5 · Tracking Job Costs) ### Q6. If you enter a vendor's unpaid bills in the Opening Balance field and then enter them again as Bills: - a) QuickBooks® matches the bills to the opening balance. - b) The bills stay hidden in Pay Bills until the opening balance is paid. - c) QuickBooks® won't let you save the bills. - **✓ d) Accounts Payable shows the debt twice.** > The Opening Balance field creates its own Bill, coded to Miscellaneous Expense. Leave it blank and enter each unpaid bill instead. (Chapter 5 · Adding New Vendors) ### Q7. To make a partial payment on a bill: - **✓ a) Enter the amount in the Payment column of Pay Bills.** - b) Edit the bill to the amount you're paying. - c) Write a check coded to Accounts Payable and delete the bill. - d) Enter a Vendor Credit for the rest, then pay the bill in full. > Pay Bills accepts a partial payment. QuickBooks® Online keeps tracking the rest in Accounts Payable, and the bill shows its balance due next time you open Pay Bills. (Chapter 5 · Paying Bills) ### Q8. A 0.00 total for a vendor on the A/P Aging Summary means: - a) The bills are dated in a closed period. - b) The bills aren't due yet. - c) The bills were Due on Receipt and aged off the report. - **✓ d) A payment wasn't applied to the bill.** > A zero total means the vendor has bills and payments or credits on file that were never applied to each other. Apply the payment to the bill to clear them. (Chapter 5 · The A/P Aging Summary Report) ### Q9. Which report lists checks written straight to a vendor, without a bill? - a) Vendor Balance Detail. - b) Accounts Payable Aging Detail. - **✓ c) Transaction List by Vendor.** - d) Bills and Applied Payments. > Checks written straight to a vendor never go through Accounts Payable, so the A/P reports leave them out. Transaction List by Vendor shows them all. (Chapter 5 · Transaction List by Vendor) ### Q10. How do you record an ATM withdrawal for petty cash and the purchases paid from it? - **✓ a) A Transfer, then an Expense from Petty Cash for each purchase.** - b) Code the ATM withdrawal to an expense account. - c) A Transfer, then a Bill to each store. - d) One Expense from Checking, split across the categories on the receipts. > Cash taken out of the bank is a Transfer, not an expense. Each purchase is then an Expense paid from Petty Cash, so the account matches the cash in the box. (Chapter 5 · Handling Petty Cash) ## Managing A/R & A/P: credits, refunds, bounced checks, bad debt (chapter 6 of QuickBooks® Online Step-by-Step) ### Q1. When a customer returns items from last month's unpaid invoice, you should: - **✓ a) Create a credit memo and apply it to the invoice.** - b) Edit last month's invoice to take off the returned items. - c) Issue a Refund Receipt. - d) Delete the invoice and enter a new one for what they kept. > The customer hasn't paid, so there's nothing to refund. A credit memo lowers what they owe without changing last month's invoice or the reports you ran from it. (Chapter 6 · Recording and Applying Credit Memos) ### Q2. A customer returned a paid item, and you're mailing them a check. In QBO you enter: - a) A Credit Memo. - b) A Check made out to the customer. - **✓ c) A Refund Receipt.** - d) An Expense. > Money going back to a customer goes on a Refund Receipt, with Check as the Payment Method. A Check or Expense won't show in the customer's transaction list. (Chapter 6 · Creating Customer Refunds) ### Q3. You do weekly work for a customer but only invoice them at the end of the month. Each week, you enter the work as: - a) A Sales Receipt. - b) An Invoice for that week. - **✓ c) A Delayed Charge.** - d) A Delayed Credit. > A Delayed Charge records the work without billing it yet. At month end, the charges show up in the invoice's Suggested Transactions drawer. (Chapter 6 · Delayed Charges and Delayed Credits) ### Q4. Which Statement Type opens with what the customer owed on the Start Date? - a) Open Item. - b) Transaction Statement. - c) Invoice List. - **✓ d) Balance Forward.** > Balance Forward shows the balance as of the Start Date, then every transaction through the End Date. Open Item only lists unpaid invoices. (Chapter 6 · Generating Customer Statements) ### Q5. On the Bounced Check service item, the Income Account should be: - a) Bank Charges. - **✓ b) The Checking account.** - c) The income account from the original sale. - d) Accounts Receivable. > It seems backwards, but using Checking means the new invoice deducts the bounced amount from the checking register, so it matches the bank statement. (Chapter 6 · Handling Bounced Checks) ### Q6. How should an accrual-basis company write off last year's uncollectible invoice? - **✓ a) Use a credit memo with a Bad Debts item.** - b) Void the invoice. - c) Discount the invoice to zero. - d) Delete the invoice and leave a note for the accountant. > Last year's reports already counted that income, so voiding or discounting the invoice would change a past period. The credit memo puts the bad debt expense in this year. (Chapter 6 · Writing Off Bad Debts) ### Q7. How do you record an early payment discount on a vendor's bill? - **✓ a) With a Vendor Credit.** - b) Pay the discounted amount and leave the rest of the bill open. - c) Set the bill's Terms to 2% 10 Net 30. - d) With a Bank Deposit from the vendor. > QuickBooks® Online doesn't have discount terms built in. Enter the discount as a Vendor Credit to Purchase Discounts and apply it when you pay the bill. (Chapter 6 · Creating Vendor Credits) ### Q8. When a vendor refunds an office supply purchase by check, record it with: - a) A Vendor Credit against their next bill. - b) Receive Payment. - c) A Credit Card Credit. - **✓ d) A Bank Deposit.** > A refund check from a vendor goes on a Bank Deposit, coded to the same expense account as the original purchase. (Chapter 6 · Creating Vendor Refunds) ### Q9. A sales tax payment entered as a Check should be: - **✓ a) Deleted and redone in the Sales Tax App.** - b) Recategorized from Sales Tax Payable to a Sales Tax Expense account. - c) Excluded in the bank feed. - d) Replaced with a Journal Entry. > Pay sales tax in the Sales Tax App. A Check or Expense won't show in the app or on the Sales Tax Liability reports. (Chapter 6 · Paying Sales Tax) ### Q10. Which is true about automatic Late Fees? - a) They're added to an overdue invoice the next time you send it. - b) They can only be a flat amount. - **✓ c) They only apply to new invoices.** - d) You can't turn them off for one customer. > Turning on late fees only affects new invoices. For ones that were already overdue, add a Late Fees line to each invoice or create a separate invoice for the fees. (Chapter 6 · Adding Late Fees) ## Bank feeds, rules, receipts & reconciliation (chapter 7 of QuickBooks® Online Step-by-Step) ### Q1. When an import brings in the same bank transactions twice, the extra copies should be: - **✓ a) Excluded.** - b) Matched to the same transactions again. - c) Posted to Uncategorized Expense. - d) Posted, then voided after you reconcile. > Exclude a feed line that's already in your books but won't match, such as a second copy from a double import. You can undo it from the Excluded tab. (Chapter 7 · Excluding Transactions) ### Q2. To record a Checking to Savings transfer that QuickBooks® didn't offer to Pair: - a) Categorize each line as a Transfer. - **✓ b) Create it from the Savings side, then Match the Checking side.** - c) Code one side to Owner Contributions and the other to Owner Draws. - d) Exclude both lines. > Create the transfer from the money-in side, then Match the other side so it isn't entered twice. (Chapter 7 · Entering Transfers) ### Q3. Which of these suits a bank rule with Auto-post turned on? - a) Amazon purchases of all kinds. - b) Card deposits for sales you've already entered. - **✓ c) A monthly propane charge.** - d) Checks to different vendors. > Auto-post fits a routine transaction with no job costing that you don't need to review each month, like Craig's propane from Chin's Gas and Oil. (Chapter 7 · Creating Rules) ### Q4. The Difference isn't zero, but the Payments total agrees with the statement. What do you check first? - a) The Reconciliation Discrepancy report. - **✓ b) Your ending balance and date, then the deposits.** - c) Nothing. Click Finish Now. - d) Untick recent deposits one at a time until the Difference is zero. > Rule out a typo in the ending balance or date first. If those are right, look in the deposits, since the payments already agree. (Chapter 7 · Part 3: If the Difference Still Is Not Zero) ### Q5. When you reconcile, checks more than a month old that haven't cleared should be: - a) Checked off. - b) Deleted. - **✓ c) Left unchecked. Call the payees.** - d) Voided and reissued with today's date. > Uncleared checks stay unchecked as outstanding. When one is over a month old, call the payee to make sure it wasn't lost. (Chapter 7 · Part 4: Analyzing the Remaining Transactions) ### Q6. To remove a duplicate expense from a closed accounting period in accrual books: - a) Void it. - **✓ b) Reverse it with a Bank Deposit dated this period.** - c) Delete it. - d) Move its date into the current period, then void it. > In an accrual-based company, never change a transaction in a closed period. Reverse it with a Bank Deposit dated the first day of the current period, and reconcile the two together. (Chapter 7 · Correcting Transactions in Closed Accounting Periods) ### Q7. To bill a customer for only part of one bank charge: - a) Post it all as Billable, then lower the invoice. - **✓ b) Split it and mark only that line Billable.** - c) Post it to one category and enter a second expense for the rest. - d) Exclude it and enter two expenses in the register. > Split divides one bank transaction across categories and customers, and Billable is set line by line. (Chapter 7 · Splitting a Transaction) ### Q8. To record a vendor refund from the Bank Transactions feed: - **✓ a) Enter the vendor and the original category.** - b) Enter the vendor and code it to Other Income. - c) Match it to the original charge. - d) Exclude it. > Use the vendor's name and the same category as the original expense, so the refund reverses the charge. (Chapter 7 · Entering Refunds) ### Q9. You recorded a customer's payment, but it isn't in the Checking register. The feed shows its deposit as Uncategorized Income. You should: - **✓ a) Find out why it won't match.** - b) Post it as suggested. - c) Post it, then delete the payment. - d) Exclude it. > Don't add or exclude it. Find out why it won't match, since the payment may still be waiting in Undeposited Funds (Payments to Deposit) for a Bank Deposit. (Chapter 7 · Uncategorized Transactions) ### Q10. To post several of the owner's personal charges from the feed at once: - a) Select them and Exclude them. - b) Post them to Uncategorized Expense, then fix them with a journal entry. - **✓ c) Select them and use Edit to add the owner and Owner Draws.** - d) Use Find Other Matches to combine them. > Batch Edit puts the same From/To and category on many rows at once. The money did leave the business, so don't Exclude it. (Chapter 7 · Batch Actions) ## Reports & analysis (chapter 8 of QuickBooks® Online Step-by-Step) ### Q1. Which report explains why profit and the bank balance don't line up? - a) Trial Balance. - b) General Ledger. - **✓ c) Statement of Cash Flows.** - d) Profit and Loss, Cash basis. > It starts from net income and shows what moved cash differently, like unpaid invoices, inventory, loan payments and equipment purchases, to arrive at the change in cash. (Chapter 8 · Statement of Cash Flows) ### Q2. A balance left in Opening Balance Equity after setup should be: - a) Left alone, as the owner's original investment. - b) Written off to Reconciliation Discrepancies. - c) Hidden by making the account inactive. - **✓ d) Moved to Retained Earnings.** > Opening Balance Equity is a temporary account used during setup. Afterward, move its balance to Retained Earnings so it equals zero. (Chapter 8 · Analyzing the Balance Sheet) ### Q3. Opened in July, a report saved in June with the Report Period set to Last Month shows: - a) May. - **✓ b) June.** - c) Nothing, until you enter the dates again. - d) Everything since the day it was saved. > Saving keeps a report's format, dates and filtering, not its data. A relative range like Last Month is worked out again each time you open it. (Chapter 8 · Saving and Viewing Reports) ### Q4. Which report shows the customer payments that make up each deposit? - a) Invoices and Received Payments. - **✓ b) Deposit Detail.** - c) Sales by Customer Detail. - d) Collections Report. > Deposit Detail lists the sales transactions in each deposit from Undeposited Funds, and its Cleared column shows whether it's reconciled. (Chapter 8 · Deposit Detail Report) ### Q5. To drop the Inventory Asset and Cost of Goods Sold entries from a report of products sold: - a) Switch the report from Accrual to the Cash basis. - b) Delete those rows. - **✓ c) Filter on Distribution Account, Not Equals.** - d) Uncheck Distribution Account under Columns. > Selling inventory also moves its cost from Inventory Asset to Cost of Goods Sold behind the scenes. A Distribution Account filter set to Not Equals leaves those entries out. (Chapter 8 · Grouping and Filtering) ### Q6. To list uncashed checks, filter the Checking register for: - a) Reconcile Status Cleared. - **✓ b) Transaction Type Check and Reconcile Status No Status.** - c) Transaction Type Check. Then compare it to the bank statement. - d) Reconciled transactions dated This Month. > A check with No Status hasn't matched anything in the Bank Transactions feed, so it hasn't cleared the bank. (Chapter 8 · Filtering the Register) ### Q7. Which report shows how much profit each customer brings in? - **✓ a) Income by Customer Summary.** - b) Sales by Customer Summary. - c) Transaction List by Customer. - d) Accounts Receivable Aging Detail. > Income by Customer Summary subtracts each customer's expenses from their income to show profit. Sales by Customer Summary shows only income. (Chapter 8 · Income by Customer Summary Report) ## Advanced workflows: recurring, journal entries, contractors, loans (chapter 10 of QuickBooks® Online Step-by-Step) ### Q1. Which recurring type prompts you each month for a cell phone bill whose amount changes? - a) Scheduled, with last month's amount as a placeholder. - b) Unscheduled. - c) Scheduled, with Automatically Send Emails turned on. - **✓ d) Reminder.** > Reminder transactions go on the Reminders List when they're due, so you can change the amount before you save. (Chapter 10 · Creating Recurring Transactions) ### Q2. If you don't use QuickBooks® Payments, a scheduled recurring sales receipt paid by MasterCard: - a) Charges the card on schedule. - b) Can't be saved as a recurring template. - **✓ c) Records the sale but never charges the card.** - d) Sends the customer an invoice to pay online instead. > Only QuickBooks® Payments runs the card for you. Without it, set up the same charge in your merchant services portal or the money never comes in. (Chapter 10 · Memorizing a Transaction) ### Q3. A supplier takes some money off what you owe for a late delivery. Record it with: - a) A journal entry debiting Accounts Payable. - b) A journal entry crediting Accounts Payable. - **✓ c) A Vendor Credit.** - d) A Bill with a negative amount. > Don't use a journal entry when a QuickBooks® Online form does the job. For a vendor's credit, that form is the Vendor Credit. (Chapter 10 · Using Journal Entries) ### Q4. When the bank pays the dealer directly, the journal entry for a trailer loan debits: - a) Checking. - b) Trailer Loan. - c) An equipment expense account. - **✓ d) The Trailer fixed asset.** > The bank paid the dealer, so the money never went through checking. Debit the Trailer fixed asset and credit Trailer Loan. (Chapter 10 · Entering the Bank Loan) ### Q5. A monthly loan payment from checking is entered as: - **✓ a) An Expense split into principal and interest.** - b) A Transfer from checking to the loan account. - c) An Expense to Interest Paid. - d) A Bill to the bank, coded to Loan Expense and paid through Pay Bills. > Each payment is part principal and part interest, so split the Expense between the loan account and Interest Paid. (Chapter 10 · Making Loan Payments) ### Q6. To find out what happened to an invoice that's gone from the file, open: - a) The bank reconciliation report. - b) Transaction List by Customer. - c) The Accounts Receivable register. - **✓ d) The Audit Log.** > The Audit Log records every addition, deletion and edit with the date, time and user. Filter it by User, Date Changed or Event. (Chapter 10 · The Audit Log) ### Q7. How do you record a card purchase from the Receipts App once, with the receipt attached? - **✓ a) Create the Expense from the receipt, then match the charge in the bank feed.** - b) Delete the receipt and add the charge from the bank feed. - c) Create the Expense from the receipt, and also add the charge from the bank feed. - d) Enter it as a Bill to the store. > The Receipts App turns the receipt into an Expense with the image attached. When the charge shows up in the Bank Transactions feed, it matches that Expense. (Chapter 10 · The Receipts App) ### Q8. To put logged trips on a client's invoice or an employee's paycheck: - a) Turn on billable expenses, and logged trips show up as unbilled charges. - **✓ b) Add the mileage to the invoice or paycheck by hand.** - c) Mark the trip Billable in the Add Trip window. - d) Log the trip as Personal so it becomes reimbursable. > The Mileage App can't put mileage on paychecks, invoices or bills. Pass-through travel costs are entered manually. (Chapter 10 · Tracking Vehicle Mileage) ### Q9. How do you pay a contractor from the Contractors App without QuickBooks® Payroll or a Contractors Payments plan? - **✓ a) Click Write Check, or use its drop-down for an Expense or a Bill.** - b) Open Contractors under Payroll instead. It pays by direct deposit for free. - c) Click Pay Contractors to send a direct deposit. - d) You can't. They have to be paid from the Vendors App. > Write Check and its drop-down work without either plan. Bulk direct deposit through Pay Contractors needs QuickBooks® Payroll or the Contractors Payments plan. (Chapter 10 · Paying Contractors) ### Q10. To move one month of Prepaid Insurance into Insurance Expense: - a) Recategorize the original payment to Insurance Expense. - b) Enter an Expense from checking for one month's share. - c) Use a Transfer. - **✓ d) Post a journal entry.** > Transfers can't move money between Balance Sheet and Profit and Loss accounts. Each month, debit Insurance Expense and credit Prepaid Insurance. (Chapter 10 · Using Journal Entries)