QuickBooks Practice Test 100 Questions

What are the main sections of the Profit & Loss? a. Income, Expenses, and Liabilities b. Income, Cost of Goods Sold, and Expenses c. Income, Assets, and Owner's Equity d. Assets, Liabilities, and Equity

Income, Cost of Goods Sold, and Expenses

What item type should you use for inventory that you assemble from other items and then sell? a. Group b. Inventory Part c. Inventory Assembly d. Non-inventory Part

Inventory Assembly

What can you do in the Reports & Graphs Preferences (Edit > Preferences)? a. Change the summary basis (Accrual or Cash) for all reports b. Change Format options like font color and size c. Set which date to use for aging reports d. All of the above

All of the above

What methods for purchasing can be recorded using the Write Checks window? a. Debit card purchase b. Petty cash purchase c. ATM withdrawal d. All of the above

All of the above

What options (tabs) do you have to change a report when you click Customize Report? a. Display b. Filters c. Header/Footer and Fonts & Numbers d. All of the above

All of the above

When would you enter a journal entry? a. To correct errors (if you have a strong accounting background) b. For year-end adjustments c. To enter depreciation d. All of the above

All of the above

Which of the following is a way to access a report in QuickBooks? a. From the Reports menu b. From the Report Center c. By clicking Reports at the bottom of lists d. All of the above

All of the above

Which of the following statements is true concerning items? a. You can use one item to represent different services or goods. b. Items allow you to track your sales in more detail without cluttering your Chart of Accounts or Profit & Loss. c. To create an invoice, you must use an item. d. All of the above.

All of the above

Why would you restore a data file from the backup file? a. You wish to review the company data as it stood at an earlier date. b. The company data file on your hard drive is damaged and cannot be used. c. Your computer crashed. You reloaded QuickBooks, and now you are ready to open the company file. d. All of the above.

All of the above

What options do you have after you create a credit memo in QuickBooks? a. Retain as an available credit b. Give a refund c. Apply to an invoice d. All of the above

All of the above A credit memo is used when a customer returns goods or you want to credit them for services you've provided. It "reverses" a sale.

Which of the following is NOT a backup option in QuickBooks? a. Manually back up the file. b. Automatically back up the data file when closing QuickBooks. c. Schedule an unattended backup d. All of the above are QuickBooks backup options.

All of the above are QuickBooks backup options.

When you run Financial Statements in QuickBooks, what bookkeeping basis can you use to view the report? a. Cash Basis. b. Accrual Basis. c. You can switch the bookkeeping basis if you want. d. All of the above.

All of the above.

What is equity? a. What you own in the business b. Assets minus (-) liabilities. c. What you owe to others in the business d. Assets plus (+) liabilities

Assets minus (-) liabilities.

You suspect that someone has changed a transaction. What report should you run? a. Audit Trail Report b. User Entry Report c. Modified Transactions Report d. Changed Transactions Report

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.

What are other benefits of using items? a. You can track the actual quantity of goods or services you sell . b. They can save you time by automatically entering a description and price on forms. c. They allow you to track a lot of detail without cluttering your Chart of Accounts. d. All of the above.

All of the above

What are the 2 main Financial Statements you can run from the "Company and Financial" category of reports? a. Balance Sheet, Profit and Loss b. Balance Sheet, Statement of Operations c. Profit and Loss, Statement of Operations d. Statement of Operations, Statement of Financial Position

Balance Sheet, Profit and Loss

Can you delete a list entry (for example, an item)? a. Yes, if the list entry is not used in any transactions or is not part of another list entry (for example, a group item). b. No, if the list entry is used in any transactions or is part of another list entry (for example, a group item). c. Both A and B are correct. d. No, you can never delete a list entry.

Both A and B are correct.

How do you customize QuickBooks by changing the color scheme and adding or removing icons from the Home page? a. You cannot change the color scheme of QuickBooks. b. Click Change the look of QuickBooks on the Home page. c. Right-click on an icon on the Home page to remove it or replace it. Right-click on the Home page in a blank space to change the color scheme. d. Choose Edit > Preferences > Desktop View.

Choose Edit > Preferences > Desktop View.

Suppose you customized an invoice in QuickBooks. You really like how it looks and want your estimates to look similar. How do you do this? a. You cannot duplicate the look and feel of one form to another in QuickBooks. b. Choose Lists > Templates. Select the form you want to duplicate. Then click the Templates button and select Duplicate. Then select the type of template you want to create with the same look, in this case, estimate. c. Choose Customers > Create Estimate > Duplicate form. You then select the type of template you want to duplicate, in this case, estimate. d. Open the customized invoice and click the Duplicate button. You then select the type of template you want to duplicate, in this case, estimate.

Choose Lists > Templates. Select the form you want to duplicate. Then click the Templates button and select Duplicate. Then select the type of template you want to create with the same look, in this case, estimate.

How do you display or print a batch/group of reports quickly? a. The only way is to create a memorized group of reports. b. Choose Reports > Process Multiple Reports. c. You can't do this in QuickBooks. d. On the Home Page, click Batch Reports.

Choose Reports > Process Multiple Reports.

Suppose you have a subcontractor who receives a 1099 from your company. Which list should you add them to? a. Employee List b. Vendor List c. Other Names List d. Class List

Class List

You don't like how a form (for example, an invoice) looks when you print it. How can you change it? a. Export the form to Word and edit it there. b. Save it as a PDF and use PDF editing software. c. Export the form to Excel and edit it there. d. Click Customize at the top of the form.

Click Customize at the top of the form.

You notice that multiple accounts should actually be subaccounts. How can you quickly make these accounts subaccounts of another account? a. Click on the diamond to the left of the account, drag it below the appropriate parent account, and release the mouse button. Then click on the diamond again, drag it to the right, and release the mouse button. b. Click on an account to select it. Then click the Lists menu and select Chart of Accounts > Make subaccount. c. You must click Subaccount of when you set up the new account. If you fail to mark the account as a subaccount during setup, you cannot make it a subaccount at a later time. d. To make a subaccount, right-click on the account and choose Make subaccount.

Click on the diamond to the left of the account, drag it below the appropriate parent account, and release the mouse button. Then click on the diamond again, drag it to the right, and release the mouse button.

What is the easiest way to organize your memorized reports? a. Track your memorized reports in Excel. b. Create a report group. c. Delete reports from your Memorized Report List quarterly to keep the list manageable. d. You are only allowed to create 5 memorized reports, so there is no need to organize your reports.

Create a report group.

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? a. Debit Memo b. Credit Memo c. Customer Return d. Check or Bill

Credit Memo On the Home Page, click Refunds and Credits. This decreases the amount owed by the customer and reverses the sale.

Suppose you have to track a specific piece of information about your customers that QuickBooks does NOT track. What is the best way to do this? a. Export the customer list to Excel, add the information there, and re-import the list. b. Use the Notes feature for each customer. c. Edit a customer and click the "Additional Info" tab. Click Define Fields to create a Custom Field to track anything you want. d. You can't create new fields or rename fields in QuickBooks.

Edit a customer and click the "Additional Info" tab. Click Define Fields to create a Custom Field to track anything you want.

What transaction/form do you begin with to enter a vendor credit? a. Vendor Credit b. Enter Bill c. Pay Bills window d. Receive Vendor Credit

Enter Bill

How do you track accounts payable in QuickBooks? a. Enter a bill, and then use the Write Checks window. b. Write a check, and then mark it as "pending" until you pay it. c. Enter a bill, and then use the Pay Bills window. d. You can't track accounts payable.

Enter a bill, and then use the Pay Bills window

How do you combine or merge two list entries? a. Rename the unwanted list entry to match the name of the list entry you want to merge into. b. Open the list entry you want to get rid of and click Merge. c. From the bottom of the list, click the Activities menu and select Combine Entries. d. You cannot combine or merge two list entries.

From the bottom of the list, click the Activities menu and select Combine Entries.

Which of the following is NOT an Item Type? a. Inventory Part b. Service c. Non-inventory Part d. Income

Income is an Account type.

What is the purpose of the Chart of Accounts? a. It allows accountants to view accounting records remotely. b. It is how you categorize financial transactions. c. To see a graphical chart of income and expenses. d. To categorize items.

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.

When reconciling your bank account in QuickBooks, what must the beginning balance match? a. The beginning balance should always equal the net amount of all uncleared bank transactions. b. It should always match the opening balance on the paper bank statement. c. It should always match the original account opening balance when the account was created. d. The beginning balance should always be zero.

It should always match the opening balance on the paper bank statement

How do you move columns on a report? a. Click Customize Report, and in the Display tab under Columns, click the diamond to the left of the column and drag it to the desired position. b. You can't do this in QuickBooks. You have to export the report to Excel first. c. Click the diamond to the right of the column and drag it to the desired position. d. Move your cursor over the column heading, and when it becomes a hand, click and drag the column to the desired position.

Move your cursor over the column heading, and when it becomes a hand, click and drag the column to the desired position.

What happens to the inventory asset account when you enter a purchase order for inventory? a. The inventory asset account increases. b. The inventory asset account decreases. c. The inventory asset account is not affected. Cost of Goods Sold increases. d. No accounts are affected.

No accounts are affected

You've customized an invoice and are ready to use it. But when you open the invoice, QuickBooks displays the default Intuit Invoice. How do you change it? a. Choose Lists > Templates and delete the default invoice from the list of templates. b. On the invoice, click the Template drop-down arrow and select your customized invoice. c. Choose Edit > Preferences and select the Sales and Customers Preferences. Under the Company Tab, click "Set default invoice to use." d. Choose Lists > Templates and double-click your customized Invoice. Select "Use as default" in the top left of the window. You can also do this step when you customize the invoice.

On the invoice, click the Template drop-down arrow and select your customized invoice.

When you create a statement and select "All open transactions as of statement date," what does QuickBooks show on the statement? a. Open transactions as of the statement date b. All transactions during the specified date range c. Invoice item details for invoices d. Customer payments that haven't been deposited

Open transactions as of the statement date

What happens when you QuickZoom on a number in a report? a. QuickBooks shows more detail about the number on the report. b. QuickBooks shows you the Journal Entry it makes "behind the scenes" for that number. c. QuickBooks displays who entered and modified the transaction. d. QuickBooks magnifies the number so it is easier to read.

QuickBooks 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 transaction.

When entering a journal entry, what happens if the debits don't equal the credits? a. QuickBooks sends the difference to an adjustment account. b. QuickBooks will not allow you to record the transaction. c. QuickBooks asks you what to do with the "unequal" amount. d. Nothing. QuickBooks records the transaction as is.

QuickBooks will not allow you to record the transaction.

You have customized and then memorized a report. What does QuickBooks save when memorizing a report? a. Report header, filters, and transactions b. Transactions only c. Report header, filters, and columns but not the actual transactions d. Everything. A memorized report is like a photographic snapshot of a report.

Report header, filters, and columns but not the actual transactions This means each time you run the report, QuickBooks automatically updates the information based on new, edited, and deleted transactions. You can memorize a report you want to see each month with updated information.

Suppose you own a company that repairs bicycles. What item type should you use for "bicycle repair"? a. Inventory Part b. Non-inventory Part c. Other Charge d. Service

Service

How can you stop yourself and others from deleting, editing, or adding transactions in a closed period? a. Start a new company file each period (fiscal year) b. Change the fiscal year in the Company Information window c. Set a closing date d. Edit the user's profile and enter a date in the "Restrict entry after this date" field

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.

You successfully reconciled the checking account last month. This month, when you begin to reconcile the same account, you notice that the beginning balance calculated by QuickBooks is different from the beginning balance according to the bank. How can this happen? a. It can't happen. b. Someone changed the beginning balance amount. c. Someone changed or deleted a cleared transaction. d. The bank transposed some numbers on a check or deposit.

Someone changed or deleted a cleared transaction. QuickBooks calculates this balance each time you reconcile by adding all the payments and deposits that have been cleared. If someone changes or deletes one of those cleared transactions, the beginning balance in QuickBooks will be different.

What account (on the Chart of Accounts) is affected when you sell an item? a. The account you selected when you set up the item. b. Other Income account. c. A default sales account set up by QuickBooks. d. Accounts are not affected by items.

The account you selected when you set up the item.

What does the term "Double-entry accounting" mean? a. That the Income and Expense accounts are always part of every transaction. b. There are always at least two accounts involved in every financial transaction. c. That the Cost of Goods Sold account and the Liabilities account are always part of a transaction. d. The Equity and Asset accounts are always involved in a transaction.

There are always at least two accounts involved in every financial transaction.

What is one way that QuickBooks uses the Account Type? a. To track revenue and expense by office or business segment b. For financial ratios in the Analysis module c. To change the color of different sections on the financial statements d. To identify where the account appears on the financial statements

To identify where the account appears on the financial statements The first set of accounts appear on the Balance Sheet (Assets, Liabilities and Equity). Then the next types of accounts appear on the Profit & Loss Statement (Income, Cost of Goods Sold, and Expenses).

When should you use a Sales Receipt in QuickBooks? a. To give a customer a receipt for payment of an invoice b. To record a customer prepayment or deposit c. To record a customer payment at the time of sale d. To enter a customer early-payment discount

To record a customer payment at the time of sale

What is the purpose of subaccounts? a. Track departments or locations efficiently b. Track finances in more detail by grouping accounts in a logical fashion and showing a subtotal for those accounts c. To show different Account Types together in one section of a report d. None of the above

Track finances in more detail by grouping accounts in a logical fashion and showing a subtotal for those accounts You can have a "parent" account (for example, Insurance) with subaccounts below it (for example, Car Insurance). You can even have a subaccount of a subaccount (up to 5 levels). When you run a report, click "Collapse" to hide subaccounts and only display "parent" accounts.

Suppose your address information appears on the upper left of your invoice and you want to move it to the lower right. How would you do this? a. Use the QuickBooks Print Engine Editor b. Use the Layout Designer c. Open the Financial Statement Designer d. Use the Custom Form Designer

Use the Layout Designer The Layout Designer allows you to move logos and other elements on a form. The changes you make appear on the printed copy of the form.

You notice that when you print an invoice, the information in a field is cut off (that is, it doesn't fit). How can you fix this? a. Use the Layout Designer to make the field wider. b. Use a different Invoice template. c. This can't happen in QuickBooks, as field sizes are automatically adjusted to fit whatever you type. d. Send the invoice to Word and use that form instead.

Use the Layout Designer to make the field wider.

Which of the following reports answers the question "What transactions make up the current balance I owe each Vendor?" a. A/P Aging Summary b. Accounts Payable graph c. Vendor Balance Detail d. Expenses by Vendor Detail

Vendor Balance Detail For each Vendor, QuickBooks lists the transactions that contribute to (or make up) what you owe.

If you set up and track Sales Tax in QuickBooks, which category of reports contains Sales Tax reports? a. Sales Reports b. Vendors and Payables c. Sales Tax d. Tax Liability

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.

When printing paychecks, what is the preferred check style to give an employee a paystub? a. Standard b. Wallet c. Payroll d. Voucher

Voucher This style prints one check per page. The check on top, and the voucher contains information regarding earnings, taxes, and payroll.

What form must you give to an employee? a. 1099 b. 1096 c. W-2 d. 1040

W-2

When should you create an invoice in QuickBooks? a. When a customer purchases goods or services and pays you in cash at the time of the sale b. When a customer purchases goods or services and pays you by check or credit card at the time of the sale c. When a customer purchases goods or services, but you don't want to record the sale as final d. When a customer purchases goods or services but does not pay you at the time of the sale

When a customer purchases goods or services but does not pay you at the time of the sale

If you associate a service item with two accounts, how does QuickBooks know which account to use on a transaction? a. When the item is on a sales form, QuickBooks uses the account under "Sales Information" in the item setup. When it's on a purchase form, it uses the account under "Purchase Information." b. When you enter the item on a transaction, QuickBooks asks which account to use. c. You cannot associate two accounts to an item. d. Items do not affect accounts.

When the item is on a sales form, QuickBooks uses the account under "Sales 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 (based on whether it's a sale or purchase) by selecting "This service is performed by a sub-contractor or partner."

You need to enter the same transaction each month (for example, an insurance payment). How can you automate this process in QuickBooks? a. While the transaction is on the screen, choose Edit > Memorize check (or the name of the transaction). b. Choose File > Automate Transactions and use the wizard to set up the automated checks or other transactions. c. From Preferences, choose General and click Set Up Automated Transactions. d. While the transaction is on the screen, click the Recur button.

While the transaction is on the screen, choose Edit > Memorize check (or the name of the transaction)

When should you NEVER delete a check? a. You recorded a check but have not printed it yet. b. You printed a check on blank paper but now realize you don't want to record the check. c. You accidentally recorded the same check (with the same check number) twice. d. You printed a check, and the check number has been used.

You printed a check, and the check number has been used

You've just been hired by a bakery that sells delicious cup cakes. When they buy ingredients (flour, eggs, milk, and sugar), 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? a. Group b. Inventory Part c. Inventory Assembly d. Non-inventory Part

d