QuickBooks Practice Test 100 Questions with Verified Answers,100% CORRECT

QuickBooks Practice Test 100 Questions with Verified Answers Which of the following reports answers the question "What transactions make up the current balance I owe each Vendor?" - CORRECT ANSWER Vendor Balance Detail - for each vendor, QB lists the transactions that contribute or make up what you owe During the Advanced/Detailed Setup, you can turn on and off which features in the EasyStep Interview? - CORRECT ANSWER All of the above: Sales taxes; Inventory; Progress Invoicing During the Advanced/Detailed Setup, you can set up a password for which of the following users during the EasyStep Interview? - CORRECT ANSWER Administrator When setting up a new company through the Advanced/Detailed Setup, some company information is optional and some is absolutely required. Which of the following pieces of information does QuickBooks require you to enter during the EasyStep Interview? - CORRECT ANSWER Company name How do you set up multiple businesses in QuickBooks (assuming each business files a separate tax return)? - CORRECT ANSWER Use the Advanced/Detailed Setup to go through the EasyStep interview for each company to create a separate company file During the Advanced/Detailed Setup, how do you setup a new account that is not on the default list of accounts during the EasyStep Interview? - CORRECT ANSWER You can't add accounts that are not on the QuickBooks default list. Finish the interview and add the accounts directly to the Chart of Accounts You've been hired by a company that started in 1911. They've never used QuickBooks. During the Advanced/Detailed Setup, what "Start Date" should you use in the EasyStep Interview? - CORRECT ANSWER The date you want to begin tracking the company's finances in QuickBooks How do you restore a company file from a backup copy? - CORRECT ANSWER Choose File > Open or Restore Company. Select Restore a backup copy and click Next. Choose Local or Online Backup and click Next. Select the file to restore and click Open. Choose where to restore the file to and click Save Which of the following is NOT a backup option in QuickBooks? - CORRECT ANSWER All of the above are QuickBooks backup options: Manually back up the file; Automatically back up the data file when closing QuickBooks; Schedule an unattended backup Why would you restore a data file from the backup file? - CORRECT ANSWER All of the above: You wish to review the company data as it stood at an earlier date; The company data file on your hard drive is damaged and cannot be used; Your computer crashed. You reload QuickBooks, and now you are ready to open the company file How do you switch to Multi-User Mode? - CORRECT ANSWER Choose File > Switch to Multi-user Mode from the menu If you choose to remove transactions as of a specific date from the "Condense Data" window, what does QuickBooks do? - CORRECT ANSWER Removes all transactions while leaving lists, preferences, and service subscriptions intact What happens when you press F2 in QuickBooks? - CORRECT ANSWER QuickBooks opens the Product Information window which includes version and company file information When would you enter a journal entry? - CORRECT ANSWER All of the above: To correct errors (if you have a strong accounting background); For year-end adjustments; To enter depreciation If the computer that houses your QuickBooks data crashes, what should you do? - CORRECT ANSWER Restore a back up copy of your company file When you start a company or are hired as a bookkeeper, it is important to know which edition of QuickBooks you are using. What are the major QuickBooks editions? - CORRECT ANSWER QuickBooks Online, QuickBooks Pro, QuickBooks Premier, QuickBooks Enterprise Solutions When entering a journal entry, what happens if the debits don't equal the credits? - CORRECT ANSWER QuickBooks will not allow you to record the transaction What do the diamonds mean on certain lists (for example, the diamonds to the left of each Customer:Job)? - CORRECT ANSWER You can click on the diamond and move the list entry to a different location on the list If you moved a list entry up or down, what happens when you add a new entry to the list? - CORRECT ANSWER QuickBooks adds new list entries to the top of the list, regardless of alphabetic order What is the maximum number of names that can be included on the Names lists in QuickBooks Pro or Premier? - CORRECT ANSWER 14,500 What keyboard shortcut allows you to see a total for all four names lists? - CORRECT ANSWER F2 How do you combine or merge two list entries? - CORRECT ANSWER Rename the unwanted list entry to match the name of the list entry you want to merge into Can you delete a list entry (for example, an item)? - CORRECT ANSWER Both A and B are correct: Yes, if the list entry is not used in any transactions or is not part of another list entry (for example, a group item); No, if the list entry is used in any transactions or is part of another list entry (for example, a group item) Suppose you own a company that repairs bicycles. What item type should you use for "bicycle repair"? - CORRECT ANSWER Service Which of the following is NOT an Item Type? - CORRECT ANSWER Income Which of the following statements is true concerning items? - CORRECT ANSWER All of the above: You can use one item to represent different services or goods; Items allow you to track your sales in more detail without cluttering your Chart of Accounts or Profit & Loss; To create an invoice, you must use an item What are other benefits of using items? - CORRECT ANSWER All of the above: You can track the actual quantity of goods or services you sell; They can save you time by automatically entering a description and price on forms; They allow you to track a lot of detail without cluttering your Chart of Accounts What item type should you use for inventory that you assemble from other items and then sell? - CORRECT ANSWER Inventory Assembly You've just been hired by a bakery that sells delicious cup cakes. When they buy ingredients (flour, eggs, milk, and sugar), they use the Expense tab and assign the costs to a Cost of Goods Sold account. You need to set up an item for cakes. What item type should you use? - CORRECT ANSWER Non-inventory Part What account (on the Chart of Accounts) is affected when you sell an item? - CORRECT ANSWER The account you selected when you set up the item If you associate a service item with two accounts, how does QuickBooks know which account to use on a transaction? - CORRECT ANSWER When the item is on a sales form, QuickBooks uses the account under "Sales Information" in the item setup. When it's on a purchase form, it uses the account under "Purchase Information." What transaction should you enter if a customer returns a damaged product or, in the case of a service, complains so much you decide to offer a refund? - CORRECT ANSWER Credit memo When would you create an estimate in QuickBooks? - CORRECT ANSWER When a customer requests a bid, quote, or proposal When you invoice for time and costs, where does QuickBooks get the billable time or costs? - CORRECT ANSWER From billable time entered on timesheets and/or billable costs entered on checks and bills When should you create an invoice in QuickBooks? - CORRECT ANSWER When a customer purchases goods or services but does not pay you at the time of the sale When should you use a Sales Receipt in QuickBooks? - CORRECT ANSWER To record a customer payment at the time of sale What is the purpose of Progress Invoicing? - CORRECT ANSWER To invoice from an estimate in increments When you create a statement and select "All open transactions as of statement date," what does QuickBooks show on the statement? - CORRECT ANSWER Open transactions as of the statement date What do you need to record in QuickBooks when a customer's check bounces (the customer had non-sufficient funds, NSF)? - CORRECT ANSWER All of the above: There is less money in the checking account; The customer owes you for the amount of the check (and optionally a bounced check fee); The NSF fee the bank charged you You received 5 customer payments in the mail. At the bank you deposit the 5 checks as one deposit. When you record the 5 separate payments in QuickBooks, how do you show that the 5 checks were actually 1 deposit? - CORRECT ANSWER When you use the Receive Payments window, QuickBooks doesn't deposit the money in your checking account. After you record the 5 payments, click Record Deposits and select the 5 checks What options do you have after you create a credit memo in QuickBooks? - CORRECT ANSWER All of the above: Retain as an available credit; Give a refund; Apply to an invoice Suppose you have a subcontractor who receives a 1099 from your company. Which list should you add them to? - CORRECT ANSWER Vendor List When should you NEVER delete a check? - CORRECT ANSWER You printed a check, and the check number has been used What methods for purchasing can be recorded using the Write Checks window? - CORRECT ANSWER All of the above: Debit card purchase; Petty cash purchase; ATM withdrawal How do you track accounts payable in QuickBooks? - CORRECT ANSWER Enter a bill, and then use the Pay Bills window What transaction/form do you begin with to enter a vendor credit? - CORRECT ANSWER Enter bill What happens to the inventory asset account when you enter a purchase order for inventory? - CORRECT ANSWER No accounts are affected Which form should you use to enter petty cash expenditures? - CORRECT ANSWER Write Checks or use check register When reconciling your bank account in QuickBooks, what must the beginning balance match? - CORRECT ANSWER It should always match the opening balance on the paper bank statement What is a reason to use the Items tab when entering a bill? - CORRECT ANSWER To assign a cost to a job or purchase inventory How do you set up QuickBooks to automatically use discounts and credits? - CORRECT ANSWER Choose Edit > Preferences > Bills > Company Preferences, and then select to automatically use discounts or credits When printing paychecks, what is the preferred check style to give an employee a paystub? - CORRECT ANSWER Voucher When setting up a new employee, what is important about the Payroll Info tab? - CORRECT ANSWER Whatever you enter/see in this window affects each paycheck, unless you change the information on the paycheck itself Why must you set deposit frequencies for the taxes or deductions your company has to pay (Payroll Liabilities)? - CORRECT ANSWER So that Payroll Liabilities show up in the Pay Scheduled Liabilities list in the Payroll Center What are the first two steps to set up payroll in QuickBooks? - CORRECT ANSWER Sign up for a payroll service; and 2) complete the Payroll Setup Interview When you set up a new Payroll Item using the EZ setup wizard, which is not a choice? - CORRECT ANSWER City/Local Taxes How do you use Write Checks to pay Payroll Liabilities so your Payroll reports are accurate? - CORRECT ANSWER You can't Which of the following Payroll Services are available with QuickBooks? - CORRECT ANSWER All of the above: Basic; Enhanced; Assisted How do you track sick or vacation time in QuickBooks? - CORRECT ANSWER All of the above: When you set up an employee, define how QuickBooks should accrue time; Set up a sick or vacation wage item; Pay an employee with a sick or vacation wage item How does entering time for a job affect job cost reports? - CORRECT ANSWER None of the above When would you use the Expenses tab on a payroll liability check? - CORRECT ANSWER To enter late fees/penalties or interest What report should you use to help you complete the state unemployment tax form? - CORRECT ANSWER Employee State Taxes Detail What form must you give to an employee? - CORRECT ANSWER W-2 Which of the following is a way to access a report in QuickBooks? - CORRECT ANSWER All of the above: From the Reports menu; From the Report Center; By clicking Reports at the bottom of lists When you send a QuickBooks report to Excel, which feature allows you to have a drop-down list for each column to allow filtering? - CORRECT ANSWER Auto Filter How do you create a memorized group of reports? - CORRECT ANSWER Open the Memorized Report List and then click Memorized Report > New Group. What is the purpose of subaccounts? - CORRECT ANSWER Track finances in more detail by grouping accounts in a logical fashion and showing a subtotal for those accounts What is the easiest way to organize your memorized reports? - CORRECT ANSWER Create a report group How do you create a memorized group of reports? - CORRECT ANSWER Open the Memorized Report List and then click Memorized Report > New Group How do you display or print a batch/group of reports quickly? - CORRECT ANSWER Choose Reports > Process Multiple Reports What options (tabs) do you have to change a report when you click Customize Report? - CORRECT ANSWER All of the above: Display; Filters; Header/Footer and Fonts & Numbers What happens if you click the Collapse on a report? - CORRECT ANSWER QuickBooks hides Subaccounts and only shows Parent accounts What happens if you double-click a diamond on a report column? - CORRECT ANSWER None of the above: If you click the diamond on the right you can drag and make it bigger, left click and it hides the column completely You have customized and then memorized a report. What does QuickBooks save when memorizing a report? - CORRECT ANSWER Report header, filters, and columns but no the actual transactions - each time you run the report, QB updates information automatically based on new, edited, and deleted transactions - you can memorize a report you want to see each month with updated information If you set up and track Sales Tax in QuickBooks, which category of reports contains Sales Tax reports? - CORRECT ANSWER Vendors and Payables What can you do in the Reports & Graphs Preferences (Edit > Preferences)? - CORRECT ANSWER All of the above; change the summary basis (accrual or cash) for all reports; change format options like font color and size; set which date to use for aging reports What happens when you QuickZoom on a number in a report? - CORRECT ANSWER Quickbooks shows more detail about the number on the report How do you move columns on a report? - CORRECT ANSWER Move your cursor over the column heading, and when it becomes a hand, click and drag the column to the desired position What is the one way that QuickBooks uses the Account Type? - CORRECT ANSWER To identify where the account appears on the financial statements - the first set of accounts appear on the balance sheet, then the next types of account appear on the Profit & Loss Statement What does the term "Double-entry accounting" mean? - CORRECT ANSWER There are always at least two accounts involved in every financial transaction - DEBITS MUST EQUAL CREDITS! What is the purpose of the Chart of Accounts? - CORRECT ANSWER It is how you categorize financial transactions - chart of account is the way to lavel or categorize all money/value that comes into the business You suspect that someone has changed a transaction. What report should you run? - CORRECT ANSWER Audit Trail Report - audit trail shows transactions that have been added, edited, and deleted - also shows the original transaction and who changed it with the exact date and time How can you stop yourself and others from deleting, editing, or adding transactions in a closed period? - CORRECT ANSWER Set a closing date When you run Financial Statements in QuickBooks, what bookkeeping basis can you use to view the report? - CORRECT ANSWER All of the above; cash basis, accrual basis, you can switch the bookkeeping basis if you want What are the 2 main Financial Statements you can run from the "Company and Financial" category of reports? - CORRECT ANSWER Balance Sheet, Profit and Loss - also known as the income statement What are the main sections of the Profit & Loss? - CORRECT ANSWER Income, Cost of Goods Sold, and Expenses You successfully reconciled the checking account last month. This month, when you begin to reconcile the same account, you notice that the beginning balance calculated by QuickBooks is different from the beginning balance according to the bank. How can this happen? - CORRECT ANSWER Someone changed or deleted a cleared transaction - QB calculates this balance each time you reconcile by adding all the payments and deposits that have been cleared What is equity? - CORRECT ANSWER Assets minus liabilities Suppose your address information appears on the upper left of your invoice and you want to move it to the lower right. How would you do this? - CORRECT ANSWER Use the layout designer - allows you to move logos and other elements on a form. The changes you make appear on the printed copy of the form You need to enter the same transaction each month (for example, an insurance payment). How can you automate this process in QuickBooks? - CORRECT ANSWER While the transaction is on the screen, choose Edit > Memorize check (or the name of the transaction): You can memorize most transactions except transactions that require the user to provide more input like paying bills or running payroll How do you set up multiple users in QuickBooks Pro or Premier? - CORRECT ANSWER Choose Company > Set Up Users and Passwords > Set Up Users You've customized an invoice and are ready to use it. But when you open the invoice, QuickBooks displays the default Intuit Invoice. How do you change it? - CORRECT ANSWER On the invoice, click the Template drop-down arrow and select your customized invoice Suppose you have to track a specific piece of information about your customers that QuickBooks does NOT track. What is the best way to do this? - CORRECT ANSWER Edit a customer and click the "Additional Info" tab. Click the Define Fields to create a Custom Field to track anything you want You don't like how a form (for example, an invoice) looks when you print it. How can you change it? - CORRECT ANSWER Click Customize at the top of the form - you can customize most forms you send to customers You notice that when you print an invoice, the information in a field is cut off (that is, it doesn't fit). How can you fix this? - CORRECT ANSWER Use the Layout Designer to make the field wider Which of these functions can only be performed by the Administrator? - CORRECT ANSWER Add new users and change their access privileges Suppose you customized an invoice in QuickBooks. You really like how it looks and want your estimates to look similar. How do you do this? - CORRECT ANSWER Choose Lists > Templates. Select the form you want to duplicate. Then click the Templates button and select Duplicate. Then select the type of template you want to create with the same look, in this case, estimate How do you customize QuickBooks by changing the color scheme and adding or removing icons from the Home page? - CORRECT ANSWER Choose Edit > Preferences > Desktop View You notice that multiple accounts should actually be subaccounts. How can you quickly make these accounts subaccounts of another account? - CORRECT ANSWER Click on the diamond to the left of the account, drag it below the appropriate parent account, and release the mouse button. Then click on the diamond again, drag it to the right, and release the mouse button How do you edit a collections letter? - CORRECT ANSWER Choose Company > Prepare Letters with Envelopes > Customize Letter Templates