QBO Ch 7 Test

What account is debited when a purchase order is created?

Accounts Receivable

Karl's inventory records don't match his actual inventory on hand. What should he do?

Create an inventory adjustment.

The sales tax in Clara's area has changed. What should she do?

Edit the existing tax rate to reflect the change.

What method of inventory valuation does QuickBooks Online use?

FIFO

How do you determine profit on the sale of an inventory product?

Find the difference between the item's original cost and its sales price.

Mason wants to return a lawn ornament he purchased from you with cash. What do you do?

Give Mason his money back and create a refund receipt.

What happens to Cost of Goods Sold in the profit and loss report when you sell a product?

It increases.

Jaslene received a bill from her supplier that included more than the actual products purchased. What might the charges be for and what should she do?

It is likely for delivery or shipping charges. She should add the charge to the purchase transaction in QuickBooks.

Angel is going to use QuickBooks for his new business. He tells you his business doesn't use purchase orders. What do you tell him?

No worries; just make your purchase directly on the expense, check, or bill form.

Match each inventory term to its best description. - Non-inventory product - Inventory valuation - Inventory item - Inventory adjustment

Non-inventory product -> An item specially ordered for a customer Inventory valuation -> Helps determine a product's purchase price Inventory item -> A product stocked, tracked, and sold to customers Inventory adjustment -> May be needed for broken or spoiled products

Match the options with when they are used. - Pay Bills - Vendor Credit - Credit Memo - Refund Receipt

Pay Bills -> To apply a credit to a payment Vendor Credit -> A shipment arrived damaged Credit Memo -> A customer was overbilled Refund Receipt -> A customer returned a product for money back

Match each inventory report to what it shows. - Physical Inventory Worksheet - Inventory Valuation Detail - Sales by Product/Service Detail - Inventory Valuation Summary

Physical Inventory Worksheet -> Compares inventory on hand to inventory recorded in QuickBooks Inventory Valuation Detail -> Shows the specifics for transactions that affect inventory value Sales by Product/Service Detail -> Shows the list that contains inventory reports Inventory Valuation Summary -> Shows the value of inventory and average cost per product

What report do you run to verify that goods were not received without applying the receipt of inventory to a purchase order?

Purchases by Vendor Detail

What is NOT an option when receiving inventory against a purchase order?

Receive the inventory as an expense.

What account is collected sales tax held in?

Sales Tax Payable Liability

What is NOT a situation for which you would record a vendor credit?

The customer changed their mind.

What determines how much the Cost of Goods Sold account increases when you sell an item?

The difference between what you paid for the item and what you will sell it for

What happens when you make inventory tracking for a product inactive?

The product's inventory is no longer tracked, but previous transactions are not affected.

Which of these should be set up as a non-inventory item?

Thread used by a seamstress

Issue a _____ if a customer has been overbilled.

credit memo

How you set up sales tax in QuickBooks depends entirely on:

the states in which you conduct business