Computerized accounting exam 1
QBO Help and Support Is accessed through the
? icon.
When in the QBO Chart of Accounts window, adding new accounts is completed by Selecting Accounting, then New, then enter a Category Type and a Detail Type.
A Sub-account is optional, therefore, Uncheck sub-account if not needed.
To enter account numbers into QBO Select
Accounting in the Navigation Bar and use the Edit Pencil.
Accounts Receivables are
Amounts owed from customers.
Account names are rather simple to update. Find the account in the COA and click on the drop down arrow next to Run Report.
An Edit selection will be shown; enter in the new name and save.
The difference between the Chart of Accounts and Recurring Transactions is The
Chart of Accounts is a list of accounts the company uses and Recurring Transactions are transactions saved for future reuse.
QBO Settings are comprised of Company Settings and QBO Chart of Accounts
Company Settings are accessed by Selecting the Gear icon, then select Account and Settings, then select Company.
Double entry accounting is used in conjunction with a journal to record what is exchanged in a transaction
Each journal entry must balance.
QBO Reports provides information to a variety of decision makers and is the output of the accounting system. The Reports includes but are not limited to the following:
Financial statements, Tax Returns, and Management reports.
The QBO Create (+) icon lists various transactions that can be created.
It is commonly used for the following types of transactions Customer, Vendors and Employees.
Net Income =
Revenues - Expenses
Profit and Loss Statement includes
Revenues and Expenses.
The balance sheet summarizes what a company owns and what it owes.
The account types on the balance sheet are Assets, Liabilities, and Owners' Equity (or Stockholders' Equity).
Understanding what type of legal entity a business uses important when initially setting up an accounting system because a company's type of legal entity impacts the equity accounts and the tax form a business files.
The tax form a business files greatly impacts the type of financial information an accounting system must track.
Liabilities are amounts
a company owes to others.
QBO is cloud
based and uses a web browser to access information vs. installed software
Equity accounts are generally Increased with
credits and decreased with debits.
In QBO, account numbers are used to uniquely identify accounts and help
identify an account type.
Many entrepreneurs use an LLC due to its tax advantages and the
limited liability aspect to owners.
Sub Accounts are Subcategories of an account that aid in decision making. To add Sub-accounts by selecting New from the COA window,
then enter the Category Type, select Detail Type and enter a name. Check Sub-account box to confirm the account is a Sub-account.
The primary objective of accounting is to provide information for decision making and QBO is used
to capture, track, sort, summarize, and communicate financial information.
QBO is able to display account numbers in the Chart of Accounts by Once in the Chart of Accounts use the Gear icon,
select Account and Settings > Advanced > Check Enable account numbers > Check Show account numbers > Save.
Balance sheet accounts are considered permanent accounts and these accounts have balances
that are carried forward from year to year.
The main financial statements of a business include the
Balance Sheet, Profit & Loss Statement, and the Statement of Cash Flows.
QBO groups transactions into these different types,
Banking and Credit Card, Customers and Sales, Vendors and Expenses, Employees and Payroll, and Other.
QBO automatically creates a Chart of Accounts when a new company is set up. QBO Chart of Accounts is customized by a user to fit its company's needs.
QBO Chart of Accounts is aligned with a company's tax return since QBO is used to organize financial information for tax preparation.
Revenues are Increased with
credits and decreased with debits.
Assets are generally Increased with
debits and decreased with credits.
Expense accounts Increased with
debits and decreased with credits.
