Chapters 1 - 5 Midterm Exam

In QuickBooks Online, when can the Products and Services List be updated? Before entering transactions and while entering transactions. Before entering transactions and after entering transactions. Only after entering transactions. None of the choices are correct.

Before entering transactions and while entering transactions.

When entering customers and sales transactions, which two QuickBooks Online Lists will be used? Banking List, Invoices List. Customers List, Sales List. Credit List, Products and Services List. Customers List, Products and Services List.

Customers List, Products and Services List.

A company should never use separate checking accounts for business transactions and for the owner's personal transaction. True or False

False

QuickBooks Online is updated only once a year when a new version is issued. True False

False

Which tax return is used by a Partnership? Form 1065 Form 1120 Form 1120S Schedule C attached to Form 1040

Form 1065

Equity accounts are: Increased with debits and decreased with credits. Increased with credits and decreased with debits. Increased and decreased with debits. Increased and decreased with credits.

Increased with credits and decreased with debits.

Assets are: Increased and decreased with debits. Increased with debits and decreased with credits. Increased with credits and decreased with debits. Increased and decreased with credits.

Increased with debits and decreased with credits.

Expense accounts are: Increased with debits and decreased with credits. Increased and decreased with debits. Increased and decreased with credits. Increased with credits and decreased with debits.

Increased with debits and decreased with credits.

Which onscreen form is usually used to record a sales transaction that the customer will pay later? Check Register Purchase Order Invoice Expense

Invoice

Which account should be used to make a rent payment for a company's office building? Tax related checking account Payroll related checking account Owner's personal checking account Operations related checking account

Operations related checking account

Which account should be used to make a mortgage payment for the home of a company's owner? Operations related checking account Owner's personal checking account Payroll related checking account Tax related checking account

Owner's personal checking account

When we connect our bank accounts and credit card accounts with QBO, we can download expenses automatically from the bank or credit card company into QBO. True or False

True

Paying a bill is considered a(n) __________blank type transaction. Customers and Sales Banking Employees and Payroll Vendors and Expenses

Vendors and Expenses

Which onscreen form is used to enter an adjusting entry? Journal Banking Expense Sales

Journal

Of the QBO Products and Services types, which of the following is considered Inventory? A collection of products and services that a company sells together. A service the company provides. A product a company sells but does not track the quantity. A product a company sells and tracks the quantity.

A product a company sells and tracks the quantity.

When matching bank or credit card downloaded transactions to a transaction already recorded in QuickBooks Online, what are the possible actions that appear in the Action column? Add, Change, or View. Add, Match, or View. Add, Delete, or Match. Change, Delete, or Match.

Add, Match, or View.

The Balance Sheet summarizes what a company owns and what it owes. What account types are on the Balance Sheet? Assets, Liabilities, Revenues, and Owners' Equity. Assets, Liabilities, Revenues, and Expenses. Assets, Expenses, Liabilities, and Owners' Equity. Assets, Liabilities, and Owners' Equity.

Assets, Liabilities, and Owners' Equity.

Timing differences on a bank reconciliation include all of the following except: Deposits in Transit. Outstanding Checks. Bank Errors. Interest Earned on the Account.

Bank Errors.

Recording a check is considered a(n) __________ Employee and Payroll Banking Customers and Sales Workers

Banking

When using QBO, from which one of the following screens could you add a new account? All of these options are correct. Reports Account and Settings Chart of accounts

Chart of accounts

Small enterprises that have a strictly cash-based operation sometimes just use the __________ Reports Check Register Purchase Order form Invoice form

Check Register

In QuickBooks Online, if the Deposit to: Checking account is selected on the Sales Receipt, then funds are recorded directly in the: Company owner's checking account. Sales Expense account. Payments to Deposit account. Checking account.

Checking account.

Which onscreen form is used to record a vendor transaction when a payment is made at the time of purchase? Sales Receipt Invoice Purchase Order Expense

Expense

Which transaction should not be recorded using the Expense or Check onscreen form? Paychecks to employees for wages and salaries Legal bills Rent expense Office supplies purchased

Paychecks to employees for wages and salaries

In QuickBooks Online, if the Deposit to: Payments to Deposit account is selected on the Receive Payments form, then funds are recorded in the: Checking Account. Petty Funds account. Payments to Deposit account. Company owner's checking account.

Payments to Deposit account.

In QuickBooks Online, if the Deposit to: Payments to Deposit account is selected on the Sales Receipt, then funds are recorded in the: Payments to Deposit account. Rent Expense account. Petty Funds account. Checking account.

Payments to Deposit account.

The __________blank summarizes the income a company has earned and the expenses incurred to earn the income. Profit and Loss Statement Trial Balance Balance Sheet Statement of Cash Flows

Profit and Loss Statement

The __________blank is used to record a customers and sales transaction when a customer pays its account with cash, check, credit card, or online payment. Invoice form Expense form Receive Payment form Credit Memo form

Receive Payment form

The recurring transaction type that generates an alert when we should use a recurring transaction to enter a new transaction is: Banking Scheduled Reminder Unscheduled

Reminder

Which of the following would not be an appropriate subaccount for an Insurance Expense Account? Rent Expense. Auto Insurance Expense. Liability Insurance Expense. Renter Insurance Expense.

Rent Expense.

Customer sales should only be recorded using __________ Bank Deposit Check Register Sales Receipts or Invoices Invoices or Purchase Orders

Sales Receipts or Invoices

To view the Products and Services List, select: Expenses from the Navigation Bar > Products and services tab. Expenses from the Navigation Bar > Contractors tab. Sales from the Navigation Bar > Products and services tab. Sales from the Navigation Bar > Customers tab.

Sales from the Navigation Bar > Products and services tab.

To view the Company Settings in QuickBooks Online, select: a. Accounts and Settings from the Gear icon. b. Chart of Accounts from the Navigation Bar. c. Accounting from the Navigation Bar. d. My Accountant from the Navigation Bar.

a. Accounts and Settings from the Gear icon.

How can an estimate of the uncollectible accounts expense be estimated in advance of the write-off using the Allowance method? a. As a percentage of credit sales or as a percentage of accounts receivable. b. Cash sales plus a percentage of credit sales. c. As a percentage of cash sales or a percentage of credit sales. d. As a percentage of newer receivables with little or no consideration of older receivable balances.

a. As a percentage of credit sales or as a percentage of accounts receivable.

Which QBO Navigation Bar selection provides information about vendor transactions? a. Expenses b. Workers c. Taxes d. Reports

a. Expenses

Which of the following is true regarding inactive accounts in QBO? a. If you need to restore an inactive account, QBO will permit you to do so. b. Inactive accounts are completely deleted from QBO and no longer appear in reports. c. QBO automatically inactivates an account if it is not used for over 1 year d. To inactivate an account, select Banking on the Navigation bar.

a. If you need to restore an inactive account, QBO will permit you to do so.

Which of the following statements is true regarding QuickBooks Online? a. QuickBooks Online is cloud-based and uses a web browser to access. b. QuickBooks Online can only be accessed by using installed software on a computer desktop or laptop. c. QuickBooks Online only updates upon the user request. d. QuickBooks Online is updated annually to ensure the content screens are familiar to users.

a. QuickBooks Online is cloud-based and uses a web browser to access.

The QuickBooks Online (+) New icon lists various transactions that can be created. It is commonly used for all of the following transaction types except: a. Customers. b. Employees. c. Vendors. d. Reports.

d. Reports.

View the selection for tax form that a QBO company is using by selecting: a. Gear icon > Company > Chart of Accounts. b. Gear icon > Account and Settings > Company. c. (+) New icon > Settings > Company. d. Tax Center on the Navigation Bar > Tax Form.

b. Gear icon > Account and Settings > Company.

Which of the following is an advantage of importing a QBO Chart of Accounts instead of entering it manually? a. When importing a Chart of Accounts csv file, there can be glitches that prevent the data from being imported cleanly and subsequently require extra time to clean up the imported data before it can be used. b. Importing a Chart of Accounts using a csv file can save a significant amount of time by eliminating the need to re-key each account into QBO. c. Importing a Chart of Accounts using a csv file can introduce errors into the new system because there are already errors in the csv file. d. None of these are advantages of importing a QBO Chart of Accounts instead of manually entering it.

b. Importing a Chart of Accounts using a csv file can save a significant amount of time by eliminating the need to re-key each account into QBO.

When using Invoices to record customer transactions, if we select Deposit to: Checking account, which of the following sequences is correct? a. Invoice > Receive Payment > Payments to Deposit account > Checking account. b. Invoice > Receive Payment > Checking account. c. Sales Receipt > Checking account. d. Sales Receipt > Payments to Deposit account > Checking account.

b. Invoice > Receive Payment > Checking account.

In the QuickBooks Online Check Register the check mark (✔) column indicates which of the following? a. The check mark identifies the matched balance of the Checking account. b. The check mark indicates whether the bank transaction is C (cleared), R (reconciled), or blank (uncleared, unreconciled). c. The check mark identifies money coming into the Checking account. d. The check mark identifies money coming out of the Checking account.

b. The check mark indicates whether the bank transaction is C (cleared), R (reconciled), or blank (uncleared, unreconciled).

Why is it important to align QuickBooks Online with a company's legal entity and tax information? a. None of the choices are correct. b. The type of legal entity a business uses impacts the equity accounts needed and the tax form filed by the business. c. Because the amount of taxes charged to customers depends on a company's legal entity. d. A company can use more than one legal entity at a time.

b. The type of legal entity a business uses impacts the equity accounts needed and the tax form filed by the business.

The QBO SatNav, which assists with navigating QuickBooks Online, contains which of the following main processes? a. QBO Settings b. QBO Transactions c. All of the choices are correct. d. QBO Reports

c. All of the choices are correct.

What are Accounts Receivable? a. Amounts a customer will pay us at the time we provide a service or product to them. b. Amounts we must return to our customer if they pay us within a specified period of time. c. Amounts a customer owes our business from a credit sale where the customer promises to pay later. d. Amounts a customer has already paid us and the receivable represents discounts we will pay our customers at a later date.

c. Amounts a customer owes our business from a credit sale where the customer promises to pay later.

QuickBooks Online refers to the QuickBooks system accessed through a web browser with data stored __________blank. a. on a compact disc (CD). b. on a flash drive. c. in the cloud. d. on your account's computer hard drive.

c. in the cloud.

For tax purposes, a Limited Liability Company (LLC) may elect to be treated as all of the following except: a. Sole Proprietorship filing a Schedule C attached to an owner's Form 1040. b. Partnership filing a Form 1065. c. S Corporation filing a Form 1120S. d. C Corporation filing a form 1120.

d. C Corporation filing a form 1120.

All of the following are true regarding Owners' Equity except: a. Owners' Equity accounts are decreased by net losses and dividends. b. Owners' Equity accounts are increased by owners' investments in the business and net profits retained in the business rather than paid out in dividends. c. Owners' Equity is calculated as Assets = Liabilities + Owners' Equity. d. Owners' Equity accounts represent the net worth of a business, and are only increased by an investment in the business.

d. Owners' Equity accounts represent the net worth of a business and are only increased by an investment in the business.

What are the steps to complete so that QBO displays account numbers in the chart of accounts? a. Select My Accountant from the Navigation Bar > select Chart of Accounts tab > select Accounts > select Display account numbers. b. Select Accounting from the Navigation Bar > select Chart of Accounts tab > select Accounts > select Account Numbers > select Enable account numbers > select Show account numbers. c. Select the (+) New icon > select Chart of Accounts > select Accounts > select Account Numbers > select Display account numbers. d. Select the Gear icon > select Account and Settings > select Advanced > select Edit Pencil > select Enable account numbers > select Show account numbers.

d. Select the Gear icon > select Account and Settings > select Advanced > select Edit Pencil > select Enable account numbers > select Show account numbers.

Usually account numbers are: a. Used to cross reference fields on tax forms. b. Only used if subaccounts are created. c. generated and have no real purpose. d. Used as a coding system to identify the account type.

d. Used as a coding system to identify the account type.