From our QuickBooks Training Class in South Florida, we offer a certificate of completion to our students, not to be confused with Intuit’s official QuickBooks Certified ProAdvisor and QuickBooks Certified User which are separate membership programs and examination programs that are sponsored by Intuit Inc. More info about other QuickBooks Certifications here.
1. What are the differences between ITEMS and ACCOUNTS?
- Items: products and services that you sell. They are used on transactions such as invoices and purchase orders. All items must point to an account.
- Accounts: categories in which financial transactions are organized into reports, such as profit & loss and balance sheet. Some accounts carry balances such as accounts receivable and accounts payable; some accounts report information over a period of time, such as income and expenses.
2. What are the two primary Reports in QuickBooks (financial statements)?
- Profit & loss (or income statement) and the balance sheet
3. What is the difference between accrual and cash basis?
- Accrual represents financial transactions and activities as they occur, such as rent expenses that always exists every month and are recorded whether they are paid or not. Only in Accrual basis, you will have accounts payable, accounts receivable, prepaid expense asset and customer deposit liabilities when there is a difference the time the transaction happens and the time that the actual payment is made.
- Cash basis will only report income and expenses as they are paid.
4. What is the difference between Entering a Bill (and Bill Payment) and writing a check?
- Entering a bill is to incur an expense the moment it exists and it’s paid in the future (Accounts Payable). Write Check is to record an expense at the same time it is being paid, no time difference between date of the expense and date of payment. You must use the Pay Bills feature in QuickBooks to mark the Bill (Accounts Payable) paid, using the write check feature would potentially duplicate the expense and overstate your liabilities
5. What is the Undeposited Funds Account?
- The temporary account that QuickBooks uses when a payment is received from a client but not deposited in the bank (QuickBooks bank register) yet.
6. What are the steps to take to accept a customer’s payment and record it in the bank?
- Two Steps: Click of “receive payments” and select client and invoice to apply payment to… this will increase your “undeposited funds” account. Then click on Record Deposit after it is taken to the bank and record all payments that are being deposited together in a single transaction to match the bank.
7. What do you look for when “analyzing” financial reports?
- Consistency: Such as expenses that are expected to repeat every month and Income matching the business activities.
- Common Sense: do the numbers make sense or are the numbers expected. Generally, there should be no negative numbers unless there is a refund you are aware of.
- Trends and Relationships: such as sales going down or expenses going up. Also the percentage of direct costs vs. revenue, etc…
8. What is a Sub-Account? And why would you use it?
- A sub account is an account that belongs to a main or a parent account and is used to create additional categories (or details) within a main category, for example, Lodging and Airfare are sub-accounts of Travel expense.
9. What does the collapse and expand button do on standard reports?
- It shows or hides sub accounts.
10. What is the difference between “Profit and Loss Report” and the “Balance Sheet Report”?
- P&L shows activities: income and expenses to arrive to Net Income (Profit) for a specific time period.
- Balance Sheet shows values: Assets and Liabilities to arrive to Equity (Net Worth) as of an specific date.
- The Net income from the Profit & Loss pass through the equity section in the balance sheet
11. How do you get QuickBooks financial reports to excel? And why would you do that?
- Open any report, click on “Excel” button and then create new worksheet. You must have Excel installed in your computer.
- You would export to excel to be able to manipulate the numbers, search for data, statistical analysis, creating graphs.
12. When reconciling a bank account, where does the value of the “Beginning Balance” come from? Where does the “Ending Balance” come from?
- Beginning balance comes from bank statement and it is also last month’s reconciled balance. The ending balance comes from bank statement, and equals the total amount of cleared transactions.
13. What is the purpose of reconciling the bank account? What are you supposed to do with the transactions that did not reconcile?
- By reconciling you make sure that all transactions that went through the bank are also present in your accounting system. Cash transactions that did not flow through the bank cannot be reconciled using bank statements. Items not reconciled are either pending for the following month or, if they are a mistake or duplicated, they must be deleted.
14. What is the difference between Cost of Goods Sold and Operating Expenses?
- Cost of goods sold are directly attributed to a sale, they only exist because the sale exists, such as the cost of inventory sold, sub-contractor expense. A total sale minus cogs is used to calculate gross margin or gross profit.
- Operating expenses usually are not directly correlated to a sale and are fixed, such as rent and utilities.
15. How do you program QuickBooks to repeat a recurring transaction?
- Memorize Reports: (CRT+M) Automate Transaction Entry will create automatically the transaction in the future
16. How is the MEMO text box in bills, invoices, checks, etc. useful for report filtering and transaction research?
- You can “tag” a transaction with a code, you can search notes within transactions.
17. What are Classes in QuickBooks and how would you use them?
- They are used to create departments or cost centers to measure profits and less for each class.
18. What challenges and/or issues can come across when using classes.. Specially on a balance sheet by Class?
- Unclassified transactions. Balance sheet by class can have issues with unclassified or unbalanced transactions.
19. What Report or Function allows you to view transactions that were changed, modified, or deleted after bank reconciliation has been done?
- Reconciliation discrepancy report in the reports, banking menu.
20. How would you “fix” a customer deposit that was entered as income straight into the register, but then you realized that the invoice belonging to that deposit to still shows an open balance?
- Change the deposit to use the account “accounts receivable” OR delete deposit and use the “receive payment/Record Deposit” workflow.
21. What financial reports should you prepare at the end of the year in order to prepare for tax preparation or other types of financial reporting?
- Profit & Loss, balance sheet A/R Aging, A/P Aging, Inventory Valuation Summary, sales by rep, Profit by job, etc..
22. What is the difference between a Custom Summary Report and a Custom Transaction Detail Report?
- Summary: Contains totals for a customer or vendor / totals for a particular account
- Detail: Line by line, transaction by transaction, Itemized transaction.
23. In your own words, what does it mean to be an “Advanced QuickBooks User”?
- Create custom reports, be proactive to potential users understanding difference between different versions of QuickBooks, knowing how to describe reports, search and find information and confidence to work with multiple QuickBooks files.
24. What tools are available to “figure out” QuickBooks issues… in other words where can you go for answers for questions on how to do certain things in QuickBooks?
- QB Help menu, user guide, search intuit support website, videos in YouTube, tutorials on the web, email trusty accountant, Hector’s Bog, and “google” the question at hand.
25. What does it mean when you have negative Inventory? What can you to do troubleshoot inventory issues?
- Selling inventory you don’t have. Troubleshoot inventory by pulling a “quick report” on the particular item & looking at all the times the inventory came in or out to find discrepancy.
26. What is the purpose of using a Sales Order, instead of an Invoice?
- Sales order record a sale approved by client but not affect inventory or accounting, Invoice is to finalize sales once the product/service has been delivered. A Sales Order can create a “backorder” which lets you sell what you do not have, but commits that inventory to that cistomer when it arrives instead of showing as “available for sale”
27. You are setting up a QuickBooks file from scratch for a company that has been open for many years, how do you handle opening balances of assets and liabilities? How should you enter A/R or A/P opening balances?
- Enter a journal entry for all balance sheet items using last year’s tax return or financial statement prepared by accountant. Also the opening balances could be created when new accounts are created in the Chart of Accounts
- For Inventory Items, they must be entered with beginning balances as they are created in QuickBooks using the item list.
- A/R & A/P must be entered by creating customers or vendors with an opening balance.
28. What are the most important QuickBooks tips for a beginner and to speed up the work?
- Check the date: wrong dates give you the wrong reports, always.
- Use Tab instead of Enter: Enter tends to do the opposite of what you want.
- Home Page: use the home page when lost to find what you are looking for.
- Respect Accounting: accounting rules such as revenue recognition and expenses matching allow for better understanding the reports.
- Shortcuts: speed up data entry process, especially with dates. Always reconcile accounts and get rid of unreconciled (often duplicate) transactions
29. Why is QuickBooks used in such a different way by tax preparers versus a QuickBooks user doing bookkeeping / managing a business?
- Tax preparers and people that input data once per year just enter deposits and expenses and do not deal with Accounts Payable or Accounts Receivable which means they are working on “cash basis”. Where QuickBooks users doing bookkeeping typically enter day-to-day transactions and deal with open invoices (A/R) and open bills (A/P) which means they are working on “accrual basis”
30. What are the most important accounting topics to learn and have in mind in order to understand the work being performed in QuickBooks?
Accounting Principles: Consistency such as seeing the same expenses monthly on the reports, Direct/Variable Costs go into COGS and Indirect/Fixed Costs go into expenses, Revenue Recognition such as having a consistent policy on Invoice dates driven by delivery date or service completion date, Expense Matching such as making sure that expenses follow the income even if they are not paid by creating the Bills on the correct dates, Comparability such as being able to compare this month with last year’s same month.
31. What are the main differences between QuickBooks Pro and Premier?
- Things that Premier does, but Pro doesn’t: can do Sales Orders (Backorders), can create P.O.’s straight from Estimates or Sales Order, Create Change Orders, Industry Specific Reports (Wholesale & Manufacturer, Retail, Non-Profit, Professional Services, Contractor), Inventory Center
32. What does QuickBooks Enterprise have that the other versions do not?
- Enterprise can have from 5 to 30 users, individual user access per area, can handle unlimited amount of items vs. 14500 max with Pro/Premier, more powerful inventory features, works much faster in a network multi-user environment.
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