QuickBooks Practice Test 84 Questions with Verified Answers,100% CORRECT

QuickBooks Practice Test 84 Questions with Verified Answers During the advanced/detailed setup, you can turn on and off which features in the EasyStep Interview - CORRECT ANSWER Sales Tax, Inventory, & Progress Invoicing. To turn off AFTER the easy step interview, choose edit -- preferences. 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 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. Also, you cant add any balances to the accounts (an opening trial balance). However, you can add bank account balances. 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? - CORRECT ANSWER The date you want to begin tracking the company's finances in QuickBooks. You should use the date for which you have accurate starting balances. If the date is in the past, you will have to enter transactions that have occurred up to that point. How do you restore a company file from a backup copy? - CORRECT ANSWER File -- Open or Restore Company -- Restore a Backup Copy -- Next -- Local or Online Backup -- Next -- Select the file to restore -- Open -- choose where to restore the file to -- Save What is a backup option in QuickBooks? - CORRECT ANSWER 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 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 reloaded QuickBooks, and now you are ready to open the company file. How do you switch to Multi-User Mode? - CORRECT ANSWER File -- Switch to Multi-User Mode 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 list, 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. 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. There are some cases where you can't merge or combine entries. You can't merge entries of different "type" Can you delete a list entry (for example, an item)? - CORRECT ANSWER 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 is NOT an Item Type? - CORRECT ANSWER Income What is true concerning items? - CORRECT ANSWER 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 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 form other items and then sell? - CORRECT ANSWER Inventory assembly You've just been hired by a bakery that sells cupcakes. When they buy ingredients, 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. The account you choose (usually an income account for sales items) determines how items affect financial statements. 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 "Sale Information" in the item setup. When it's on a purchase form, it uses the account under "Purchase Information." You can set up an item to affect different accounts by selecting "this service is performed by a sub-contractor or partner" 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 On the Home Page, click Refunds and Credits. This decreases the amount owed by the customer and reverses the sale. 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 you enter an expense, item, or time and also assign that line to a Customer: Job. you can uncheck. You can uncheck this if you don't want to invoice for the cost 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 Progress Invoicing is turned on (preferences) and you create an invoice for a customer with an Estimate, QuickBooks provides 3 choices: 1) Invoice for the entire estimate, 2) invoice for a percentage of the entire estimate, 3) Invoice for selected items/percentages of each item 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 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 check 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 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 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 Open the Enter Bills window and select Credit in the top left part of the form. This turns the Bill into a Vendor Credit, which reduces the amount you owe a vendor. 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 Make sure the bank account that you set up is a Petty Cash Account. 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 reason to use the Items tab when entering a bill? - CORRECT ANSWER To assign a cost to a job or purchase inventory. To have accurate job cost reports in the "Jobs, Time, and Mileage" category, QB requires item information on any job-related expense. You must enter inventory items when you purchase them so QB can keep track of the quantity on hand. 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. Use this preference to automatically take early pay discounts and/or to automatically apply a specific vendor's credit to pay that vendor's bill. This preference ensures you don't forget to take the discounts and credits you have. When printing paychecks, what is the preferred check style to give an employee a paystub? - CORRECT ANSWER Voucher. This style prints one check per page. The check on top, and the voucher contains information regarding earnings, taxes, and payroll. 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 info on the paycheck itself. You enter wages and QB calculates the amount per paycheck for you. You also enter any deductions that you want QB to take from each paycheck Why must you set deposit frequencies for the taxes or deduction 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. QB uses this information to list the due date, status, amount, and other important information so you remember to pay your payroll liabilities on time. What are the first two steps to set up payroll in QB - CORRECT ANSWER 1) sign up for a payroll service 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 There is no choice for city or local taxes. Select custom setup -- other tax How do you use Write Checks to pay Payroll Liabilities so your Payroll reports are accurate? - CORRECT ANSWER You can't. What Payroll Services are available with QuickBooks? - CORRECT ANSWER Basic, Enhanced, Assisted. How do you track sick or vacation time in QB? - CORRECT ANSWER When you set up an employee, define how Qb 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 From the Reports menu; From the Reports 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 To do this, open a report and click Export. Then click the Advanced tab. Below "turn on the following features for this report," select Auto Filtering 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 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 Display Filters Header/Footer and Fonts & Numbers What happens if you click Collapse on a report? - CORRECT ANSWER QB hides subaccounts and only show Parent accounts What happens if you double-click a diamond on a report column? - CORRECT ANSWER None of the above. If you click on a diamond to the right of a column, you can drag it to the right to make it bigger, or to the left to make it smaller. If you drag it to the left past the column to the left, QB hides the column completely. You have customized and then memorized a report. What does QB save when memorizing a report? - CORRECT ANSWER Report header, filters, and columns but not the actual transactions. Each time you run the report, QB automatically updates the info based on new, edited, and deleted transactions. You can memorize a report you want to see each month with updated info. If you set up and track Sales Tax in QB, which category of reports contains Sales Tax reports? - CORRECT ANSWER Vendors and Payables Although the taxes are based on sales, you owe the money, so it is a payable. From this category you can run the Sales Tax Liability Report. What can you do in the Reports & Graphs Preferences (Edit -- Preferences)? - CORRECT ANSWER Change the summary basis (accrual or cash) for all reports; Change Format option like font color and size; Set which date to use for aging reports 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 to (or make up) what you owe. What happens when you QuickZoom on a number in a report? - CORRECT ANSWER QB shows more detail about the number on the report. On a summary report, QuickZoom displays a list of transactions that makes up that number. On a report that lists transactions, QuickZoom opens the actual transactions. 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 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 accounts 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, so for every transaction, there is a source and a use. What is the purpose of the Chart of Accounts? - CORRECT ANSWER It is how you categorize financial transactions. The Chart of Accounts is a way to label or categorize all the money/value that comes into a business, all the money/value that goes out, and all the money that is transferred between different categories. You suspect that someone has changed a transaction. What report should you run? - CORRECT ANSWER Audit Trail Report. The audit trail shows you transactions that have been added, edited, and deleted. It also shows you the original transaction and who changed the transaction, as well as 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 You must set a closing date, especially for the end of the year, once you've sent your accounting records to the accountant for tax preparation. When you run Financial Statements in QB, what bookkeeping basis can you use to view the report? - CORRECT ANSWER 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 & Loss Profit & Loss is also known as the Income Statement What are the main sections of the Profit & Loss? - CORRECT ANSWER Income, COGS, and Expenses. First you see money coming in, then the direct cost to earn that money (COGS), and then the expenses (overhead) to run the business. The difference between Income and