QuickBooks Level 1 Class Questions

All students that want to skip Level 1 QuickBooks Training Class, must use these exam questions as a guide to see if they are ready to go straight into Level 2.

 

In the Desktop Version of QuickBooks, when Setting up a New Company File with the Step-by-Step Guide, it is important to keep in mind:

1. Once completed QuickBooks will create a company file on the cloud that only people with the correct username and password will be able to access
2. The Interview Questions can always be retrieved later in the future to change the settings
3. The Interview Questions can never again be retrieved for the same company file, but the preferences can be changed in the Edit, Preferences menu and Company, Company Information menu
4. Neither the Interview questions nor the preferences can be changed once the company file is set
5. None of the above

 

Estimates and Purchase orders are known as:

1. Posting Transactions – affect accounting results
2. Non-Posting Transactions – Do not affect accounting results
3. Pending Transactions – affecting accounts receivable and accounts Payable only
4. Non-Deductible Transactions – these are not deductible from taxes based on special IRS rules
5. Non of the above

 

If you click on the Home icon, the following will happen:

1. QuickBooks will send a signal to your GPS with directions back to your house
2. It will take you to the homepage of your favorite website, such as google.com
3. It will close the company file and take you to the initial Open Company File menu
4. It will show the Home Screen with all the workflow icons and keep the other windows open in the background
5. Non of the Above

 

The Chart of Accounts

1. It is an illustration of how all the accounts affect each other in the accounting
2. Is a Chart of all the values and trends of each of your bank accounts
3. Is a list of all “accounting” accounts such as income, expenses, assets, liabilities, and equity.  Where you can create new ones and edit existing ones
4. It is the place where all the bank accounts are reconciled
5. None of the Above

 

What is a Sub-Account and what is it used for?

1. Its an account of less value as non-subaccounts and it shows which accounts have the most value
2. Its used for savings accounts and non-subaccounts are used for checking accounts
3. It is an account within another account (or belonging to a parent account) used to represent higher level of detail of a parent account.  Sub Accounts can be collapsed or expanded in reports.
4. It is a non-posting account used to input all non-posting transactions
5. None of the Above

 

What are some of the different types of items?

1. Income and Expense items
2. Itemized deduction and Standard Deduction
3. Items for sale and items non-for-sale
4. Inventory, Non-Inventory, Service, and Other charges
5. Depreciable, Non-Depreciable, Taxable, and Non Taxable

 

Where or How are items used?

1. They are used to reconcile bank accounts
2. They are used to count how many transactions are in the system
3. They are used in transactions such as invoices or bills to track type of product or service being sold or purchased.
4. They are used only to track inventory items being sold.
5. They are not used in QuickBooks at all unless you turn on the items functionality

 

What is the relationship between an account and item?

1. You can either enable accounts or items to be used in QuickBooks
2. Items are products and services used to track purchases and sales.  They point/post to the assigned account when used in transactions
3. There is only one account per item
4. Accounts do not have any relationship with items
5. Non of the Above

 

What accounts does an Inventory item post to?

1. It just posts to the sale account when sold
2. It just posts to the Inventory account when purchased and posting the sales account when sold
3. It posts the inventory account when purchased, them posts to the sales and cost of goods sold account when sold
4. It posts to the Inventory Account Report
5. None of the Above

 

What would happen if you try to delete an item that was sold a couple of years ago, but has not been used in a while?

1. It will save a record of the past usage but delete it it from the database so you cannot edit it.
2. It will not let you delete it, instead you can make it inactive so it does not show as an option to use it.
3. It cannot be deleted, edited or inactivated.
4. You can delete it, but your past financial statements will be affecte
5. None of the Above

 

What does Accounts Receivable mean?

1. It’s a bank account that only received deposits
2. These are accounts used to receive inventory
3. It means these are values customers owe us, typically from open invoices
4. These are the total amount of money owed to our vendors from open bills
5. Non of the above

 

What does Accounts Payable mean?

1. It’s a bank account that is only used to make payments
2. These are accounts used to pay for inventory that has not been received
3. It means these are values customers owe us, typically from open bills
4. These are the total amount of money owed to our vendors from open bills
5. Non of the above

 

How do Enter Bills / Pay Bills feature differ from “write check” feature?

1. Enter bills for expenses recognized today and use the Pay bills option to pay in the future.  Write check is only used to create expenses that are immediately paid.  Uses Accounts Payable
2. Enter bills for expenses recognized only on the day they get paid using the Pay bills option.  Write check recognizes the expenses when the check clears the bank
3. Enter bills is to allow you to create all your accounts receivable from your customer and write check is to pay all your vendor bills
4. Enter Bills are assets that are converted to liability with the Pay bills function.  Write checks records expenses paid by check only
5. They all serve the same function and affect the accounting the same

 

How does Accrual Basis of Accounting differ from cash basis:

1. Accrual basis is used when customer pay you with credit cards and checks.  Cash basis is only when they pay in cash
2. Cash basis pays the least amount of taxes when you receive all the payments in cash because they are not reported as income
3. Accrual basis helps you recognize Income when is earned, using an Invoice and Accounts Receivable, regardless of when it is paid.  Cash basis recognizes the income when the invoice is paid
4. Accrual is only for large companies that accrue liabilities, all small businesses should be using cash basis
5. They do not differ from the IRS’s perspective.

 

What is the best function to enter inventory being purchased

1. Use the Inventory Adjustment window to load new inventory
2. Create a Purchase Order and then Receive it with or without a bill
3. Create an Inventory Purchase Request using the Inventory Module
4. Go to item list and create a new inventory item with a different name each time it is bought
5. QuickBooks does not handle Inventory purchases

 

What is Undeposited funds?

1. These are checks that bounced and the bank did not accept after it was deposited
2. These are all the open invoices that have not been paid by your clients
3. These are all the payments received but were not marked as deposited in QuickBooks
4. These are the funds you have deposited in the bank, but the bank as not cleared yet as available for use
5. These are all you outstanding checks writen that your vendors have not deposited

 

Which report shows the value of the businesses assets and liabilities?

1. The Tax Return
2. The Business Evaluation Report
3. The Cashflow Analysis
4. The Balance Sheet
5. The Profitability Report

 

Which Reports in QuickBooks shows the activities of the company such as sales and expenses?

1. The Tax Return
2. The Sales and Expenses Report
3. The Cashflow Analysis
4. The Balance Report
5. The Profit and Loss Report

 

What does Bank Reconciliation mean?

1. It means to reconcile with the banker after getting into a fight for bank errors
2. It means to verify that all the accounting and account classification is correct
3. It checks which transactions have cleared or not to verify that the amounts in the QuickBooks register match the bank
4. It matches the QuickBooks register balance with the available balance in the Bank’s Website
5. It automatically downloads the bank transactions so you do not have enter any data manually

 

What are the most used reports in QuickBooks/Accounting to understand the financial health of the business?

1. The Accounting Accuracy Reports
2. The Daily Bank Reconciliation Report
3. The Profit & Loss (or Income Statement) and Balance Sheet
4. The Cashflow Projection Report
5. The Owner’s Distribution Report

 

We recommend only people with basic quickbooks knowledge that can get 16/20 correct or more (80%) to go straight into Level 2 QuickBooks Training class.