QB - CH7 - Managing Inventory

What is NOT an option when receiving inventory against a purchase order? --Receive the inventory and pay by check --Create a bill to be paid later --Receive the inventory as an expense --Add the inventory to an estimate

Add the inventory to an estimate

Karl's inventory records don't match his actual inventory on hand. What should he do? --Create an inventory adjustment --Return the extra inventory and create a vendor credit --Designate the products as non-inventory until he straightens out his records --Submit the Physical Inventory Worksheet

Create an inventory adjustment

Match each item to its description. Credit Memo Refund Receipt Vendor Credit Inventory Qty Adjustment Purchase Order --This is a document sent to a vendor to order inventory products --Recorded for an expense or product/service and applied to an unpaid bill --This form applies to open invoices and reduces the amount a customer owes --Use this to match your actual product counts with the counts in QuickBooks --Use this form when returning money to a customer for a returned product

Credit Memo - This form applies to open invoices and reduces the amount a customer owes Refund Receipt - Use this form when returning money to a customer for a returned product Vendor Credit - Recorded for an expense or product/service and applied to an unpaid bill Inventory Qty Adjustment - Use this to match your actual product counts with the counts in QuickBooks Purchase Order - This is a document sent to a vendor to order inventory products

What method of inventory valuation does QuickBooks Online use? --Specific identification method --LIFO --FIFO --Average cost

FIFO

Mason wants to return a lawn ornament he purchased from you with case. What do you do? --Issue a credit memo so Mason's next purchase is discounted by the amount of the lawn ornamnet --Politely explain that all cash sales are final --Give Mason his money back and create a refund reciept --Create a vendor credit associated with Mason's account record

Give Mason his money back and create a refund reciept

Which 'behind the scenes' image shows what happens when you receive inventory? --Checking 100 on Debit, Inventory 100 on Credit --Inventory 100 on Debit, Checking 100 on Credit --Accounts Receivable 100 on Debit, Cost of Goods Sold 100 on Credit --Cost of Goods Sold 100 on Debit, Checking 100 on Credit

Inventory 100 on Debit, Checking 100 on Credit

What happens to Cost of Good Sold in the profit and loss report when you sell a product? --It is closed out --Nothing happens --The valuation automatically adjusts --It increases

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 --This can happen with the FIFO inventory method. It just means the items she ordered have different costs, based on when the supplier purchased them on their end --She should only pay for what she ordered --It could be an error. She should contact the supplier to discuss and request a new bill

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

What account is debited when a purchase order is created? --Accounts Receivable --Cost of Goods Sold --No account is debited --Accounts Payable

No account is debited

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? --While you don't have to use purchase orders in your business, not using them translates to more work for you in QuickBooks --No worries; just make your purchases directly on the expense, check, or bill form --You have to use purchase orders with QuickBooks --If you don't use purchase orders, you can't track your inventory

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

What report do you run to verify that goods were not received without applying the receipt of inventory to a purchase order? --Purchases by Product/Service Detail --Purchases by Vendor Detail --Open Purchase Order List --Expense by Vendor Summary

Open Purchase Order List

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

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 the average cost per product

What account is collected sales tax held in? --Collected Tax Expense --Sales Tax Expense --Tax Income --Sales Tax Payable Liability

Sales Tax Payable Liability

The sales tax in Clara's area has changed. What should she do? --Edit the existing tax rate to reflect the change --Close the current Sales Tax Payable Liability account --Calculate the difference and send any funds due to the appropriate authority --Set up a new sales tax rate

Set up a new sales tax rate

What determines how much Cost of Goods Sold account increases when you sell an item? --Sales tax --The difference between what you paid for the item and what you will sell it for --Whether it's an inventory or non-inventory item --The amount you paid for the item when purchased

The amount you paid for the item when purchased

What is NOT a situation for which you would record a vendor credit? --You ordered the wrong item --An item was damaged in shipment --Too many items were shipped --The customer changed their mind

The customer changed their mind

What happens when you make inventory tracking for a product inactive? --The product can no longer be sold --You won't be able to purchase more of that product --Inventory tracking for that product is disabled --The product's inventory is no longer tracked, but previous transactions are not affected

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 --An hour of consulting work --A shipment of baseball caps --Tax to be charged for a certain jurisdiction

Thread used by a seamstress

Issue a _____ if a customer has been overbilled. --credit memo --vendor credit --purchase order --refund receipt

credit memo

How you set up sales tax in QuickBooks depends entirely on: --how many tax exemptions you have --your industry --the states in which you conduct business --your company's name

the states in which you conduct business