QuickBooks Online Certification Exam - Accounting Review
QuickBooks Online Certification Exam
Comprehensive Review Examination - 2026/2027
65 Questions | Detailed Rationales | A+ Graded
1. When setting up a new QuickBooks Online company, which action is performed first during the initial company
setup workflow?
A. Connect bank feeds and import historical transactions
B. **Choose your business entity type and industry** [CORRECT]
C. Create products and services list items
D. Set up sales tax rates and agencies
Correct Answer: B
Rationale: Correct because QuickBooks Online requires the business entity type and industry selection before
customizing the Chart of Accounts and other settings. This matches the initial setup wizard sequence.
2. Which account type classification is used for Accounts Receivable in the QuickBooks Online Chart of Accounts?
A. Revenue
B. **Other Current Asset** [CORRECT]
C. Current Liability
D. Equity
Correct Answer: B
Rationale: Correct because Accounts Receivable represents money owed to the business that is expected to be
collected within one year, classifying it as an Other Current Asset in QuickBooks Online.
3. During bank reconciliation, the beginning balance in QuickBooks Online does not match the bank statement
beginning balance. What is the most likely cause?
A. A new sales receipt was recorded after the last reconciliation
B. **A previously reconciled transaction was deleted or modified** [CORRECT]
C. The bank charged a monthly service fee not yet recorded
D. A customer payment was deposited after the statement date
Correct Answer: B
Rationale: Correct because altering or deleting a previously reconciled transaction changes the opening balance for
the next reconciliation period. Priority is identifying reconciliation integrity issues first.
4. A customer returns goods that were previously sold on credit. Which QuickBooks Online transaction should be
created to record this return?
A. Credit Memo
B. Refund Receipt
C. **Credit Memo linked to the original invoice** [CORRECT]
D. Journal Entry debiting Sales
, QuickBooks Online Certification Exam - Accounting Review
Correct Answer: C
Rationale: Correct because a Credit Memo linked to the original invoice properly reduces the customer's
outstanding balance and maintains the audit trail between the sale and the return.
5. In QuickBooks Online Payroll, where do you configure the company's pay schedule and pay frequency for
employees?
A. Employee Center > Employee Details
B. **Payroll Settings > Pay Schedules** [CORRECT]
C. Accounts and Settings > Payroll
D. Tax Compliance > Payroll Tax Setup
Correct Answer: B
Rationale: Correct because Pay Schedules within Payroll Settings is where pay frequency (weekly, bi-weekly,
semi-monthly, monthly) is defined and assigned to employees. This matches the payroll configuration workflow.
6. Which inventory valuation method does QuickBooks Online Plus use for tracking inventory costs?
A. LIFO (Last In, First Out)
B. Specific Identification
C. **FIFO (First In, First Out)** [CORRECT]
D. Weighted Average Cost
Correct Answer: C
Rationale: Correct because QuickBooks Online Plus uses the FIFO method for inventory valuation. This matches
the platform's default cost flow assumption for inventory items.
7. When recording a journal entry in QuickBooks Online, what happens if the total debits do not equal the total
credits?
A. The entry is saved with a warning notification
B. **QuickBooks Online prevents saving the entry until balanced** [CORRECT]
C. The system automatically creates a balancing entry to Suspense
D. The entry posts but is flagged for review during reconciliation
Correct Answer: B
Rationale: Correct because QuickBooks Online enforces double-entry accounting by requiring debits to equal
credits before allowing a journal entry to be saved.
8. How does QuickBooks Online handle sales tax when a customer is located in a different state than the business?
A. Sales tax is not charged for out-of-state customers
B. The home state tax rate is always applied
C. **The tax rate is determined by the customer's shipping address** [CORRECT]
D. The business must create a custom tax rate for each out-of-state customer
Correct Answer: C
Rationale: Correct because QuickBooks Online uses the customer's shipping address to determine the applicable
sales tax rate based on economic nexus rules and automated tax calculations.
QuickBooks Online Certification Exam
Comprehensive Review Examination - 2026/2027
65 Questions | Detailed Rationales | A+ Graded
1. When setting up a new QuickBooks Online company, which action is performed first during the initial company
setup workflow?
A. Connect bank feeds and import historical transactions
B. **Choose your business entity type and industry** [CORRECT]
C. Create products and services list items
D. Set up sales tax rates and agencies
Correct Answer: B
Rationale: Correct because QuickBooks Online requires the business entity type and industry selection before
customizing the Chart of Accounts and other settings. This matches the initial setup wizard sequence.
2. Which account type classification is used for Accounts Receivable in the QuickBooks Online Chart of Accounts?
A. Revenue
B. **Other Current Asset** [CORRECT]
C. Current Liability
D. Equity
Correct Answer: B
Rationale: Correct because Accounts Receivable represents money owed to the business that is expected to be
collected within one year, classifying it as an Other Current Asset in QuickBooks Online.
3. During bank reconciliation, the beginning balance in QuickBooks Online does not match the bank statement
beginning balance. What is the most likely cause?
A. A new sales receipt was recorded after the last reconciliation
B. **A previously reconciled transaction was deleted or modified** [CORRECT]
C. The bank charged a monthly service fee not yet recorded
D. A customer payment was deposited after the statement date
Correct Answer: B
Rationale: Correct because altering or deleting a previously reconciled transaction changes the opening balance for
the next reconciliation period. Priority is identifying reconciliation integrity issues first.
4. A customer returns goods that were previously sold on credit. Which QuickBooks Online transaction should be
created to record this return?
A. Credit Memo
B. Refund Receipt
C. **Credit Memo linked to the original invoice** [CORRECT]
D. Journal Entry debiting Sales
, QuickBooks Online Certification Exam - Accounting Review
Correct Answer: C
Rationale: Correct because a Credit Memo linked to the original invoice properly reduces the customer's
outstanding balance and maintains the audit trail between the sale and the return.
5. In QuickBooks Online Payroll, where do you configure the company's pay schedule and pay frequency for
employees?
A. Employee Center > Employee Details
B. **Payroll Settings > Pay Schedules** [CORRECT]
C. Accounts and Settings > Payroll
D. Tax Compliance > Payroll Tax Setup
Correct Answer: B
Rationale: Correct because Pay Schedules within Payroll Settings is where pay frequency (weekly, bi-weekly,
semi-monthly, monthly) is defined and assigned to employees. This matches the payroll configuration workflow.
6. Which inventory valuation method does QuickBooks Online Plus use for tracking inventory costs?
A. LIFO (Last In, First Out)
B. Specific Identification
C. **FIFO (First In, First Out)** [CORRECT]
D. Weighted Average Cost
Correct Answer: C
Rationale: Correct because QuickBooks Online Plus uses the FIFO method for inventory valuation. This matches
the platform's default cost flow assumption for inventory items.
7. When recording a journal entry in QuickBooks Online, what happens if the total debits do not equal the total
credits?
A. The entry is saved with a warning notification
B. **QuickBooks Online prevents saving the entry until balanced** [CORRECT]
C. The system automatically creates a balancing entry to Suspense
D. The entry posts but is flagged for review during reconciliation
Correct Answer: B
Rationale: Correct because QuickBooks Online enforces double-entry accounting by requiring debits to equal
credits before allowing a journal entry to be saved.
8. How does QuickBooks Online handle sales tax when a customer is located in a different state than the business?
A. Sales tax is not charged for out-of-state customers
B. The home state tax rate is always applied
C. **The tax rate is determined by the customer's shipping address** [CORRECT]
D. The business must create a custom tax rate for each out-of-state customer
Correct Answer: C
Rationale: Correct because QuickBooks Online uses the customer's shipping address to determine the applicable
sales tax rate based on economic nexus rules and automated tax calculations.
