ANSWER KEY

Lesson 1: Getting started

Review questions

List the three main ways you enter data in QuickBooks.

Forms, lists, registers

List three ways to access features in QuickBooks.

Menu bar, Icon Bar, Centres, Home page, Navigation bar

What bookkeeping method does QuickBooks use to create most reports?

Accrual, but you can see any report (except transaction reports) on a cash basis
by changing the reporting preference.

Which of the following would you not include in the chart of accounts?
a

Chequing account

Vendor record

Depreciation expense

Accounts payable

Which of the following is an asset?

a

Accounts Payable

Accounts Receivable

c
d

Company delivery van

Both a and b

Both b and c

Chequing, savings, and petty cash should be set up as which of the following account
types in QuickBooks?
a
Expense
b

Other current asset

Bank

Equity

Which of the following best describes a balance sheet?

a

A summary of a companys finances over the past year

A financial snapshot of a company at a specific point in time

c
d

A summary of a companys revenue and expenses for a fiscal year

None of the above

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Lesson 2: Setting up QuickBooks

Review questions
1

During the EasyStep Interview, QuickBooks creates income and expense accounts based
on your companys industry.

When setting up a company file in QuickBooks, what does the Start Date signify?

The date the business was created

The first date of the companys fiscal year

c
d

The date the company purchased QuickBooks

The date from which you will be entering transactions in QuickBooks

When setting up a company file in QuickBooks at the beginning of a fiscal period, you
would normally select which of the following as the start date?
a
b

The first day of the current fiscal period

The last day of the previous fiscal period

True or false: Once you have set up the chart of accounts, you cannot add, delete, or
modify accounts.
a

True

False

Before working in QuickBooks, you need to enter an opening balance for each account.

True or false: Choosing a company organization associates a tax form with your business
in the QuickBooks file.

True

False

In QuickBooks, linking income and expense accounts with tax lines does which of the
following?
a

Helps keep your company profitable

b
c

Helps in preparing income taxes

Helps keep track of sales taxes you owe

Both B and C

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Lesson 3: Working with lists

Review questions
1

How many custom fields can you set up for items?

a
4
b
c

5
7

20

Which of the following forms and windows could potentially be populated with
information from the Vendor list?
Purchase orders
a
b
Bills
c

Write Cheques

All of the above

Which of the following activities cannot be accessed from the Customers & Jobs list in
the Customer Centre?
Create statements
a
b
Assess finance charges
c

Enter credit card charges

Receive payments

On which tab of the Edit Customer window would you enter a customers payment terms
(for example, Net 30 Days)?
a
Address Info
b
Additional Info
c

Payment Info

Job Info

A customer has three warehouses and you are installing an overhead door at each
location. The best way to track this in QuickBooks would be to:
Set up each location as a separate customer
a
b
Set up a separate job for each location under the customer
c

Enter all work as one order under the customer

Use a custom field to track each location

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6

Products you sell would appear on which of the following lists?

a
b

Vendor list
Employee list

Chart of Accounts

Item list

A subcontractor would appear on which of the following lists?

a
Vendor list
b

Employee list

Customers & Jobs list

Item list

Name at least three lists on which you can merge items.

a

Chart of Accounts, Items__

Customers & Jobs, Vendor

Employee, Other Names_

True or false: You can delete list items that are used in transactions.
a

True

False

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Lesson 4: Working with bank accounts

Review questions
1

What does the ending balance in a QuickBooks bank account register represent?
a
Only transactions that have been printed
b

All transactions entered in the register, including cheques that havent yet been
printed

What preference allows you to have QuickBooks prefill the amount from the previous
transaction with a payee?
a
b

Automatically prefill last amount for this payee

Automatically prefill last amount for this name

Automatically recall last transaction for this name

Automatically recall previous transaction for this payee

What preference allows you to have QuickBooks prefill the expense account from
previous transactions with a vendor?
a

Automatically prefill last account for this vendor

Prefill accounts for vendor based on past transactions

c
d

Automatically recall last transaction for this vendor

Prefill accounts for this payee based on the last transaction

True or false: All income and expense accounts have a register associated with them in
QuickBooks.
a

True

False

Reconciling is the process of making sure that your chequing account record matches the
banks record.

How can you determine whether or not a cheque has been cleared in QuickBooks?
a

A checkmark displays in the bank account register

b
c

The word Cleared is stamped on the cheque in QuickBooks

All of the above

None of the above

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7

True or false: If you are tracking bills with Accounts Payable and have already entered a
bill, you should pay the bill by writing a cheque from the Write Cheques window.
a
b

True
False

Which of the following might affect a bank account reconciliation?

a

Interest

b
c

Depreciation
Service charges

Both a and c

All of the above

When would you not want to use the Write Cheques window when paying bills?
a
When paying sales tax
b

When paying payroll taxes

When using a handwritten cheque

d
e

When paying bills you track with Accounts Payable

None of the above

Both a and b

a, b, and d

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Lesson 5: Using other accounts in QuickBooks

Review questions
1

Accumulated amortization is typically set up as what type of account in QuickBooks?

a
A subaccount of a fixed asset account
b

A subaccount of a current asset account

A subaccount of a liability account

An expense account

Equity type accounts would be used to track which of the following?

a

Capital investments

Draws

c
d

Retained Earnings
All of the above

Which of the following would likely be considered a long-term liability?

a

Vehicle loan

b
c

Accounts payable
Rent

Credit card account

Retained Earnings is defined as which of the following?

a

The amount of money that a business retains for paying its employees

b
c

The earnings from non-essential business services

The amount of interest saved from paying off a loan early

The accumulation of a companys net income or loss from its start date

Which of the following would not decrease the value of a companys equity?
a
b

The company paying corporate dividends

The company incurring a net loss for the fiscal year

An owner drawing money out of the company

The company taking a loan out to purchase a new asset

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Lesson 6: Entering sales information

Review questions
1

When receiving payment at the time of sale, you create a Sales Receipt in QuickBooks.

When customers are returning items, you record the return on a credit memo.

In QuickBooks, you can record payments made using which of the following?

Cash

Cheque

c
d

Credit card
All of the above

Which item type should you use when recording a partial payment from a customer on an
invoice?
a
b

Subtotal
Payment

Service

Non-inventory Part

True or false: QuickBooks lets you save sales forms as PDF files.
a
b

True
False

If you regularly invoice a customer for similar items or services, you can memorize the
invoice to save time.

From which list (or lists) does QuickBooks get the information for A, B, and C in the
graphic below?
a

Customers & Jobs List

Customers & Jobs list (if associated terms with the customer); Terms list

Item list

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List the item types used in the line item area of the invoice above.
Inventory Part, Subtotal, Discount, and Service.

On which of the following can you not use price levels?

a

Invoices

b
c

Sales receipts
Credit memos

Purchase orders

10 QuickBooks: Pro allows you to assign price levels to which of the following?
a
b

Specific customers
Individual line items on sales forms

Both a and b

None of the above

11 If a wood door costs $120.00 and you set the rounding option to 1.00 minus .11, what
price would appear on an invoice for the wood door?
a

$120.11

$120.89

c
d

$119.89
$119.11

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12 True or false: Price levels affect Discount items.
a
b

True
False (Price levels only affect Service, Inventory, Non-Inventory Part, and
Inventory Assembly items)

13 Which of the two methods described in this lesson for providing customers with
information about overdue invoices allows you to assess finance charges?

10

Invoice letters

Reminder statements

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Lesson 7: Receiving payments and making deposits

Review questions
1

A company has set up three different jobs for a single customer. The customer writes one
cheque to make a partial payment on open balances for all three jobs. In QuickBooks,
that payment...
a

Must be applied to the first invoice for the first job for the customer

Must be applied to the most recent invoice for the customer

Can be applied to any combination of invoices and jobs for the customer

Cannot be applied to any invoices or jobs for the customer until full payment is
received

QuickBooks supports which of the following types of payment scenarios?

a

Down payments for products or services

b
c

Overpayments from customers

Partial payments from customers

All of the above

True or false: You can enter a customer payment directly in the customer register.
a
b

11

True
False You must enter payments in the Receive Payments window

The Undeposited Funds account acts like a cash drawer and is used to hold funds until
you deposit them into a bank account.

True or false: QuickBooks allows you to print deposit slips that you can take to the bank.
a

True

False

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Lesson 8: Entering and paying bills

Review questions
1

You use the accounts payable account to track money that you owe to vendors.

List the two steps involved in using the accounts payable features in QuickBooks:
a

Enter bills

Pay bills

When you make a payment (from the Chequing account) in the Pay Bills window, you
can see the transactions in the chequing and accounts payable registers.

True or false: When tracking accounts payable in QuickBooks, the Enter Bills window is
the only place you can enter bills and vendor credits.

True

False You can also enter bills and vendor credits directly in the accounts
payable register, which may allow for faster data entry.

Which of the following tasks can you perform in the Pay Bills window?
a
Enter a partial payment on an outstanding bill
b

Make a payment using a credit card

Pay all outstanding bills

All of the above

You paid a vendor $1,000.00 through the Pay Bills window (using the Chequing
account). QuickBooks automatically creates a journal entry that:
a

Deletes the bill.

Shows $1,000.00 as a Credit in Accounts Payable and shows $1,000 as a Debit

in the Chequing account.
Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit
in the Chequing account.
Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit
in the Accounts Receivable.

c
d

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Lesson 9: Analyzing financial data

Review questions
1

QuickZoom is the tool that allows you to drill down on summary reports and graphs in
QuickBooks.

When can you generate a QuickReport?

Only when viewing an active customer or account

Only when viewing a list, register, or form

c
d

Only at the end of the current fiscal period

Only when viewing balance sheet accounts

In which report category would you find the a list of open invoices?
a

Company & Financial

b
c

Sales
Customers & Receivables

List

Report filters let you set custom criteria for the transactions you want to include in a
report.

Once youve customized a preset report to meet your needs, how can you save your
settings so you dont have to customize the report each time you run it?

Choose Save Settings from the Report menu

Choose Save Setting from the File menu

c
d

Click Memorize on the button bar

Click Modify, and then choose Memorize

True or false: Once youve exported report data to Excel, you can send modified data
back to QuickBooks.
a

True

False

13

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Lesson 10: Setting up inventory

Review questions
1

True or false: The Purchase Orders account does not affect the balance sheet or income
statement.
a

True

False

You placed an order with a vendor for inventory parts. The items have arrived, but you
have not received the bill yet. Which option should you choose from the Vendors menu?
Enter bills
a
b

Receive items and enter bill

Receive items

Enter bills for items received

True or false: You must have inventory items on hand before you can enter a sale for
them.
a

True

False

You complete a physical inventory and discover that you have five more of a particular
item than show in QuickBooks. How do you update the inventory records in
QuickBooks?
a

Complete the physical inventory worksheet

b
c

Enter an item receipt

Adjust the quantity using the Adjust Quantity/Value on Hand window

None of the above

Which of the following provide you with a list of all purchase orders created in a file?
a

QuickReport on the Purchase Orders account

b
c

Purchase Orders list report

Open Purchase Orders

All of the above

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Lesson 11: Tracking and paying sales tax

Review questions
1

Which of the following statements is false?

a
You can set up both taxable and non-taxable items
b

You can associate different sales tax rates with different customers

QuickBooks automatically sets up your sales tax rates based on the province you
enter in the Company Information window.
None of the above

d
2

Which of the following can you use to determine your sales tax liability?
a

Sales Tax Payable account register

File Sales Tax window

c
d

Tax Agency report

All of the above

To correctly affect sales tax liability, you should make payments to tax collecting
agencies from which QuickBooks window?
a

Write |Cheques

b
c

Pay Sales Tax

Either a or b

None of the above

In what part of the program do you assign sales tax codes and items to customers?
a
b

In the Sales Tax Code list

On the Customer tab of the New or Edit Item window

On the Additional Info tab of each customers record in the Edit Customer
window
None of the above

15

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Lesson 12: Doing payroll with QuickBooks

Review questions
1

What is required in order for QuickBooks to calculate payroll?

Tax Tables

Which two accounts are typically linked to payroll items?

a

Payroll Liabilities

Payroll Expenses

Which of the following are QuickBooks payroll item types?

a
Compensation
b

Paid Time Off

Retirement Benefits

All of the above

What report would you run to determine how much you owe in payroll taxes?
Payroll Liability Balances

What QuickBooks feature would you use to make setting up payroll easier when a
number of employees have the same hourly wage, payroll schedule, and base deductions?
a
b

Tax tables
Employee defaults

Payroll items

Assisted payroll

True or false: Payroll schedules are required to run payroll in QuickBooks.

a
True
b

16

False You can still run payroll using Special Payroll in the Payroll Centre.

Payroll schedules help you do which of the following?

a

Group employees with the same pay frequency

b
c

Write bonus cheques

Prepare termination cheques

Pay payroll tax liabilities

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Lesson 13: Estimating and progress invoicing

Review questions
1

QuickBooks tracks estimates using what kind of account?

a
Posting
b

True or false: QuickBooks allows you to create multiple estimates for a single customer.
a

True

False

Which of the following is not an option when creating an invoice from an estimate?
a

Create an invoice for the entire estimate

Create an invoice for a percentage of the entire estimate

c
d

Create an invoice for selected items or different percentages of each item

None of the above

You prepared an estimate for a customer and were subsequently awarded the contract.
How would you change the job status from Pending to Awarded?
a

17

Non-posting

Create the invoice from the accepted estimatethis changes the status
automatically
Use the Job Status drop-down list in the customers record

Use the Job Status drop-down list in the Create Estimates window

None of the above

What QuickBooks feature would you use to charge customers as you complete various
phases of a job?
a

Progress invoicing

Phased invoicing

c
d

Partial invoicing
None of the above

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Lesson 14: Tracking time

Review questions
1

18

List three ways to enter time in QuickBooks.

a
Weekly timesheet
b

Time/Enter Single Activity window

The Timer application available with QuickBooks: Pro and higher editions

For which of the following can the time tracking features in QuickBooks not be used?
a
b

Notifying you that more staffing is required for a given project

Tracking the cost of an employees gross pay by job

Providing hours worked on an employees pay cheque

Invoicing customers based on time spent on a job

Which report would you use to determine how many hours were spent on each activity
and whether or not the customer had been billed for the time?
a

Time by item

Time by name

c
d

Time by job summary

Time by job detail

When paying owners or partners, you should use an equity account to track the payment.

Which of the following is a step involved in the process for invoicing a customer for time
worked?
a

Select the customers name in the Create Invoices window

Click Add Time/Costs

In the Choose Billable Time and Costs window, click to select the items you
want to transfer to the invoice

All of the above

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Lesson 15: Customizing forms and writing QuickBooks

Letters
Review questions
1

List three forms that can be customized in QuickBooks:

a
Invoice
b

Sales receipt

Credit memo

d
e

Statement
Purchase order

Estimate

Sales order (available in Premier and higher editions only)

True or false: The column order on QuickBooks forms is fixed and cannot be changed.
a
True
b

You use the Layout Designer window to move and resize fields on forms.

You can add fields from which of the following lists to QuickBooks Letters?

19

False

a
b

Customers & Jobs

Employee

Vendor

All of the above

True or false: You can convert an existing Microsoft Word document into a QuickBooks
Letter to which you can add QuickBooks data.
a

True

False

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