QuickBooks Online 2018 Practice Test: Accounting Fundamentals and Transactions, Exams of Accounting

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QuickBooks Online 2018 Practice Test Table of Contents QuickBooks Online 2018 Practice Test ......................................................................................................... 3 QuickBooks Online 2018 Practice Test Answer Sheet ................................................................................ 12

4. In QBO, account numbers are: A) used to uniquely identify specific accounts but do not assist in identifying an account type i.e. asset, liability, revenue, expense, and equity. B) used to only identify an account type and the account name identifies the specific account. C) used to uniquely identify accounts and help identify an account type. D) a combination of being randomly assigned and assigned alphabetically buy the user of QBO.
5. Which of the following is incorrect regarding the type of tax form related to legal form of organization? A) Sole Proprietorship – Form 1040 Schedule S B) C Corporation – Form 1 120 C) Partnership – Form 1065 D) Sole Partnership – Form 1140 Schedule C
6. What is the primary objective of accounting and how does QBO assist in achieving this objective? A) The primary objective of accounting provides detailed information to users to prepare the tax return. QBO assists by feeding information directly into the specific areas of the return. B) The primary objective of accounting is to provide information to the IRS to ensure the company is organized as the appropriate legal entity. QBO assists in ensuring the correct tax form is used. C) 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. D) The primary objective of accounting is to provide information to users outside of the company (investors, bankers, IRS, etc.) and QBO assists in tracking information to communicate to external users.

7. Which of the following is false regarding updating QBO Lists? A) There are two basic ways to update QBO Lists: Before entering transactions and While entering transactions. B) QBO does not encourage updating While entering a transaction since it can lead to disorganization. C) If updating QBO Lists Before entering a transaction, use the Navigation Bar and select Accounting to update the Chart of Accounts. D) If updating While entering a transaction, then use the screen where you enter the transaction to update as well.
8. QBO groups transactions into the following different types? A) Banking and Credit Card, Customers and Sales, Vendors and Expenses, and Employees and Payroll. B) Banking and Credit Card, Customers and Sales, Payables, Employees and Payroll, and Other. C) Banking and Credit Card, Customers and Sales, Vendors and Expenses, Employees and Payroll, and Other. D) Banking and Savings, Customers and Sales, Vendors and Expenses, Employees and Payroll, and Other.
9. Revenues are: A) Increased with debits and decreased with credits. B) Increased and decreased with credits. C) Increased and decreased with debits. D) Increased with credits and decreased with debits.
10. What determines whether a company can pay its bills on time? A) Adequate cash flow B) High employee morale C) Ability to reduce expenses easily D) Talent of its sales force

14. All of the following are true regarding the Products and Services List except: A) It collects information about the products and services sold to customers. B) New products must be entered twice to confirm the initial information is correct. C) It is a time-saving feature. D) QBO uses four types of products and services: Inventory, Non-inventory, Service, and Bundle.
15. Which of the following is NOT true regarding the Allowance method? A) The uncollectible accounts expense is estimated in advance of the write-off. B) The estimate can be calculated as a percentage of sales or as a percentage of accounts receivable. C) The method should be used if uncollectible accounts have a material effect on a company's financial statements. D) This method is used for tax purposes.
16. When is the Bill onscreen form used to record a vendor transaction in QBO? A) It is used to record services for which a company has been billed for and agreed to pay later. B) It is used to record expenses a company pays for at the time it receives the product or service. C) It is used when a vendor gives a refund or reduction in a bill for what is owed to the vendor. D) It is used to record a credit or a reduction in the charges owed to the vendor.
17. In QBO, what is the difference between a Bill form and an Expense form? A) A Bill form records a services the company has received and has an obligation to pay the vendor later. An Expense form selects the bills a company wants to pay. B) A Bill form records when the vendor gives the company a refund or reduction in its bill. An Expense tracks the products ordered from the vendor. C) A Bill form records expenses paid for at the time the product or service is received via paying cash, check or credit card. An Expense form records services the company has received and has an obligation to pay the vendor later.

D) A Bill form records a service the company has received and has an obligation to pay the vendor later. An Expense form records expenses paid for at the time the product or service is received via paying cash, check or credit card.

18. How does an account payable arise with a vendor? A) When our business makes a cash purchase, it promises to pay the same amount again for future purchases. B) When our customers purchase amounts from us, they promise to pay us in the future. C) When we return purchases to our vendor, they promise to pay us for the amounts returned. D) When our business purchases on credit, it promises to pay that amount in the future.
19. Place the following QBO Customer transactions in the proper order:

1. Receive payment to record collection of the customer's payment.
2. Invoice to record the resale of product to customer and the customer's promise to pay later.
3. Bank deposit to record the customer's payment in the bank account. A) 2, 1, and 3. B) 1, 2, and 3. C) 3, 2, and 1. D) 3, 1, and 2.

20. What are the four types of products and services QBO uses? A) Inventory, Non-scheduled, Service, and Bundle. B) Inventory, Non-inventory, Service, and Bundle. C) Inventory, Non-inventory, Vendor, and Bundle. D) Inventory, Non-inventory, Service, and Customers.

D) It provides the opportunity for employees to receive their tax forms on their device to automatically upload to the IRS.

25. Which selection below is FALSE regarding Adjustments? A) Adjustments bring accounts up to date and show the correct account balances on financial reports. B) Adjusting entries are dated the first day of the accounting period. C) Adjustments are typically made at the end of the accounting period to up date accounts before year-end reports are prepared. D) Adjustments are also called Adjusting Entries since we enter Adjustments by making entries into a Journal.
26. In QBO, Recurring transactions can be classified as: 1. Scheduled 2. Unscheduled
27. Reminder. Which of the following statements is NOT true regarding these three classifications? A) Scheduled transactions are a great option to use for Recurring adjusting entry transactions since adjustments generally are for a constant amount each time. B) Scheduled transactions mean QBO automatically enters the transaction on the date the user specifies. C) Unscheduled transactions appear in the Recurring Transactions list but QBO will not automatically enter the transaction. D) Reminder transactions mean QBO will alert us with a reminder when we should use a recurring transaction to enter in an adjustment.
28. What is the difference between a correcting entry and an adjusting entry? A) Correcting entries are updates required to bring accounts to the correct balances as of a certain date. Adjusting entries fix mistakes in the accounting system. B) Correcting entries require one journal entry to fix and adjusting entries require two entries to fix. C) Correcting entries fix mistakes in the accounting system. Adjusting entries are not mistakes but updates required to bring accounts to the correct balances as of a certain date. D) Correcting entries and adjusting entries are the same type of entry just labelled differently.

28. What is NOT true regarding QBO reports? A) QBO offers a limited number of reports to ensure its users are not overwhelmed with information they do not need. B) Most QBO reports are accessed from the Navigation Bar. C) QBO offers numerous reports to meet the needs of a wide array of users. D) From the Navigation Bar, Dashboard can be selected which summarizes key financial information.
29. The financial statements must be prepared in a specific order. What is that order and why do financial statements need to be prepared in that order? A) Profit and Loss, Balance Sheet and Statement of Cash Flows. This order is required since the net income obtained from the Profit and Loss statement is used to increase owners' equity on the Balance Sheet. The Balance Sheet's updated accounts are needed to prepare the Statement of Cash Flows. B) Balance Sheet, Profit and Loss and Statement of Cash Flows. This order is required since the total assets obtained from the Balance Sheet is used to increase revenue on the Profit and Loss. Net income is needed to prepare the Statement of Cash Flows. C) Statement of Cash Flows, Profit and Loss, and Balance Sheet. This order is required since the cash obtained from the Statement of Cash Flows is used to increase revenue and the Profit and Loss statement. Updated accounts from the Profit and Loss statement are needed to prepare the Statement of Cash Flows. D) Profit and Loss, Balance Sheet and Statement of Cash Flows. This order is required since the net income obtained from the Profit and Loss statement is used to increase assets on the Balance Sheet and the Balance Sheet's updated accounts are needed to prepare the Statement of Cash Flows.
30. What is NOT true regarding Tax forms? A) The objective of the tax form is to provide information to federal and state tax authorities. B) When preparing tax returns, a company uses the same rules as those used to prepare financial statements. C) When preparing tax returns, a company uses different rules from those used to prepare financial statements. D) Tax forms include: Federal and State income tax returns, Federal Payroll Forms and Federal Form 1099.