Accounting Basics for QuickBooks® Proficiency Test (D)

Accounting Basics for QuickBooks® Proficiency Test

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Accounting Basics for QuickBooks® Proficiency Test

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1. What does the term "Double entry accounting" mean?

a. That the Income and Expense accounts are always part of every transactionb. There are always at least two accounts involved in every financial transactionc. That the Cost of Goods Sold account and the Liabilities account are always part of a transactiond. The Equity and Asset accounts are always involved in a transaction
2. Literally, "Debit" means what?

a. The Expense account of a transactionb. The Equity account of a transactionc. The left side of a transactiond. The right side of a transaction
3. Which certain types of accounts increase when you debit them?

a. Liabilities, equity, and incomeb. Chequing, expenses, and incomec. Assets, cost of goods sold, and expensesd. Income, assets, and liabilities
4. Which statement is a financial “picture” of your company?

a. The General Ledgerb. The Revenue & Income Summaryc. The Chart of Accountsd. The Balance Sheet
5. Which of the following is one of the six accounting principles?

a. The Even/Odd principleb. The T square principlec. The Matching principled. The Square principle
6. What question does the Revenue principle answer?

a. What is revenue?b. How do you measure revenue?c. When do you record revenue?d. All of the above
7. What are the three factors to determine whether or not accounting information is Reliable?

a. Valid, Verifiable, and Positiveb. Valid, Verifiable, and Neutralc. Valid, Verifiable, and Negatived. Valid, Reliable, and Assumable
8. Why is it important to choose the correct account type when setting up the chart of accounts?

a. If the type is incorrect, then financial statements will be wrongb. The account type determines how QuickBooks uses the accountc. The account type determines which financial statement the account appears ond. All of the above
9. The Balance Sheet is like which of the following?

a. A statement from the beginning of the fiscal yearb. A financial movie showing how your business is doing over a period of timec. A snapshot or picture of how your business looks at a certain timed. None of the above
10. In what two ways does QuickBooks use Account Type?

a. To determine which financial statement the account appears on, and which principle the account fallsb. To determine which financial statement the account appears on, and howc. To determine how QuickBooks uses the account, and which principle the account followsd. Any of the above
11. When you double-click on a balance sheet account in the Chart of Accounts, what does QuickBooks display?

a. The Account Registerb. The Edit Account windowc. The Add New Account windowd. The Make Inactive window
12. When receiving payments in QuickBooks, you must specify which of the following?

a. Which Labor account the payment will decreaseb. What account the payment comes fromc. Where the payment goes (Undeposited Funds, Chequing, etc)d. What company is in the “Pay to the order of” field
13. What is the QuickBooks term for an invoice you've received from a vendor?

a. Purchase Orderb. Invoicec. Billd. Debit
14. Why might you use a journal entry?

a. To enter transactions that you cannot enter with a built-in formb. To correct errorsc. For year-end adjustmentsd. All of the above
15. If your accounting records are incorrect, where in QuickBooks can you look to help solve the problem?

a. Reports: Customers & Receivables: Open Invoicesb. Reports: Inventory: Inventory Valuation Summaryc. Reports: Vendors & Payables: Unpaid Bills Detaild. Any of the above
16. What is one tool or method outside of QuickBooks that can help support your financial data IN QuickBooks?

a. A statement from your accountantb. Documents from vendors and customers, like bills and cleared chequesc. A documented phone call from your bankerd. Handwritten records from conversations with vendors
17. What is one way to verify the Accounts Payable balance on the Balance Sheet?

a. Click Inventory: Inventory Valuation Summary to review the value of all inventoryb. Click Reports: Vendors & Payables: Unpaid Bills Detail to review to whom you owe moneyc. Click Reports: Company & Financial: Profit and Loss Standard to review the Profit and Lossd. Click Reports: Vendors & Payables: Summary Report
18. What is "Expert Analysis"?

a. It is a tool QuickBooks offers to help you understand and use many of the ratios accountants useb. It is a tool bankers use to analyze your financial datac. It is a tool QuickBooks uses to analyze financial datad. It is a tool accountants use while analyzing your financial data
19. Why is it not always meaningful to compare trends?

a. Variable costs might increase in numbers from year to year, but decrease as percentage of incomeb. Sometimes there is a large increase in salesc. You may have a large increase in costs from one year to the nextd. Income may be lower from one year to the next
20. When analyzing trends in variable expenses, how should you display expenses to get accurate trend data?

a. As Percent of Expenseb. As Percent of Incomec. As Percent of Rowd. As Percent of Column
21. When scheduling an unattended backup, why would you choose a time frame like 1AM?

a. QuickBooks must be closed for the backup to workb. The computer must be turned offc. The QuickBooks company file must be open, but you cannot do any work in the file at the time of thed. The QuickBooks company file must be closed, but the computer must be turned on
22. Which of the following is NOT a suggested weekly accounting task?

a. Back up data file to hard driveb. Pay billsc. Print chequesd. Review unpaid bills
23. What two Customer reports should you run every month?

a. The Open Invoices report and the Item Price Listb. The Open Invoices report and the Collections Reportc. The Collections Report and the Item Price Listd. The Sales by Customer Summary report and the Open Invoices report
24. How often should you back up your QuickBooks data file?

a. Once a weekb. Once a dayc. Once a monthd. Only when you set the closing date
25. What should you remember to do before creating an accountant's copy of your data file?

a. Remove all users except the Administratorb. Set a closing datec. Have all employees get out of the data filed. Set up the chart of accounts
26. What report do you start with to create the Entry Journal?

a. Balance Sheet Standardb. Journal reportc. Make General Journal Entry windowd. Custom Transaction Detail Report
27. When an accountant is working within an accountant's copy of a company file, what does QuickBooks display in the title bar?

a. "Accountant's Copyb. "Accountant's Copy Existsc. "Your Company Filed. The title bar is the same, whether or not an accountant's copy exists
28. What is the Accountants Review?

a. A form your accountant fills out to enter and edit notes on your financesb. An agreement with your accountant formalizing each party’s responsibilitiesc. A feature that allows the accountant to review and make adjustments to your financial numbersd. All of the above
29. Which menu would you access to create a new company budget?

a. The Edit menub. The File menuc. The Company menud. The List menu
30. What menu would you access to turn on Classes?

a. Edit: Duplicateb. Edit: Copyc. Edit: Classesd. Edit: Preferences
31. What does a budget offer in QuickBooks that a forecast does NOT offer?

a. More options for class reportsb. They offer the same optionsc. More reporting optionsd. Fewer reporting options
32. What does it mean if you report transactions on an accrual basis?

a. You report all income that has been earned and all expenses that have been incurred, regardless if the money has been received or paidb. You only report income if the money has been receivedc. You only report expenses if they have been paidd. Both b. and c.
33. By default, Net Income for the prior year flows into which account in the next year?

a. Retained Earningsb. Assetsc. Liabilitiesd. Accounts Receivable
34. Which of the following is NOT a step for the improved closing entry?

a. Change the name of the Retained Earnings accountb. Create a new Retained Earnings accountc. Delete the Retained Earnings accountd. Transfer each year's income or loss into the new Retained Earnings account
35. When executing the Improved Closing Entry, what account type should you choose for the new Retained Earnings account?

a. Retained Earningsb. Fixed Assetc. Equityd. Other Current Liability
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