When a customer returns items from last month's unpaid invoice, you should:

Create a credit memo and apply it to the invoice.

Edit last month's invoice to take off the returned items.

Delete the invoice and enter a new one for what they kept.

A customer returned a paid item, and you're mailing them a check. In QBO you enter:

A Check made out to the customer.

On the Bounced Check service item, the Income Account should be:

The income account from the original sale.

How should an accrual-basis company write off last year's uncollectible invoice?

Use a credit memo with a Bad Debts item.

Delete the invoice and leave a note for the accountant.

How do you record an early payment discount on a vendor's bill?

Pay the discounted amount and leave the rest of the bill open.

Set the bill's Terms to 2% 10 Net 30.

With a Bank Deposit from the vendor.

When a vendor refunds an office supply purchase by check, record it with:

A Vendor Credit against their next bill.

A sales tax payment entered as a Check should be:

Deleted and redone in the Sales Tax App.

Recategorized from Sales Tax Payable to a Sales Tax Expense account.

Which is true about automatic Late Fees?

They only apply to new invoices.

They're added to an overdue invoice the next time you send it.

They can only be a flat amount.

You can't turn them off for one customer.

QBO Skills practice questions

Managing A/R & A/P: credits, refunds, bounced checks, bad debt

10 practice questions on managing A/R & A/P: credits, refunds, bounced checks, bad debt, each with the answer and why it is right. From Questiva Learning' QuickBooks® Online skills test. The topic is covered in Chapter 6 of QuickBooks® Online Step-by-Step.

Take the skills assessments

When a customer returns items from last month's unpaid invoice, you should:
1. Create a credit memo and apply it to the invoice.
2. Edit last month's invoice to take off the returned items.
3. Issue a Refund Receipt.
4. Delete the invoice and enter a new one for what they kept.
Answer: A) Create a credit memo and apply it to the invoice.. The customer hasn't paid, so there's nothing to refund. A credit memo lowers what they owe without changing last month's invoice or the reports you ran from it. (Chapter 6 · Recording and Applying Credit Memos)
A customer returned a paid item, and you're mailing them a check. In QBO you enter:
1. A Credit Memo.
2. A Check made out to the customer.
3. A Refund Receipt.
4. An Expense.
Answer: C) A Refund Receipt.. Money going back to a customer goes on a Refund Receipt, with Check as the Payment Method. A Check or Expense won't show in the customer's transaction list. (Chapter 6 · Creating Customer Refunds)
You do weekly work for a customer but only invoice them at the end of the month. Each week, you enter the work as:
1. A Sales Receipt.
2. An Invoice for that week.
3. A Delayed Charge.
4. A Delayed Credit.
Answer: C) A Delayed Charge.. A Delayed Charge records the work without billing it yet. At month end, the charges show up in the invoice's Suggested Transactions drawer. (Chapter 6 · Delayed Charges and Delayed Credits)
Which Statement Type opens with what the customer owed on the Start Date?
1. Open Item.
2. Transaction Statement.
3. Invoice List.
4. Balance Forward.
Answer: D) Balance Forward.. Balance Forward shows the balance as of the Start Date, then every transaction through the End Date. Open Item only lists unpaid invoices. (Chapter 6 · Generating Customer Statements)
On the Bounced Check service item, the Income Account should be:
1. Bank Charges.
2. The Checking account.
3. The income account from the original sale.
4. Accounts Receivable.
Answer: B) The Checking account.. It seems backwards, but using Checking means the new invoice deducts the bounced amount from the checking register, so it matches the bank statement. (Chapter 6 · Handling Bounced Checks)
How should an accrual-basis company write off last year's uncollectible invoice?
1. Use a credit memo with a Bad Debts item.
2. Void the invoice.
3. Discount the invoice to zero.
4. Delete the invoice and leave a note for the accountant.
Answer: A) Use a credit memo with a Bad Debts item.. Last year's reports already counted that income, so voiding or discounting the invoice would change a past period. The credit memo puts the bad debt expense in this year. (Chapter 6 · Writing Off Bad Debts)
How do you record an early payment discount on a vendor's bill?
1. With a Vendor Credit.
2. Pay the discounted amount and leave the rest of the bill open.
3. Set the bill's Terms to 2% 10 Net 30.
4. With a Bank Deposit from the vendor.
Answer: A) With a Vendor Credit.. QuickBooks® Online doesn't have discount terms built in. Enter the discount as a Vendor Credit to Purchase Discounts and apply it when you pay the bill. (Chapter 6 · Creating Vendor Credits)
When a vendor refunds an office supply purchase by check, record it with:
1. A Vendor Credit against their next bill.
2. Receive Payment.
3. A Credit Card Credit.
4. A Bank Deposit.
Answer: D) A Bank Deposit.. A refund check from a vendor goes on a Bank Deposit, coded to the same expense account as the original purchase. (Chapter 6 · Creating Vendor Refunds)
A sales tax payment entered as a Check should be:
1. Deleted and redone in the Sales Tax App.
2. Recategorized from Sales Tax Payable to a Sales Tax Expense account.
3. Excluded in the bank feed.
4. Replaced with a Journal Entry.
Answer: A) Deleted and redone in the Sales Tax App.. Pay sales tax in the Sales Tax App. A Check or Expense won't show in the app or on the Sales Tax Liability reports. (Chapter 6 · Paying Sales Tax)
Which is true about automatic Late Fees?
1. They're added to an overdue invoice the next time you send it.
2. They can only be a flat amount.
3. They only apply to new invoices.
4. You can't turn them off for one customer.
Answer: C) They only apply to new invoices.. Turning on late fees only affects new invoices. For ones that were already overdue, add a Late Fees line to each invoice or create a separate invoice for the fees. (Chapter 6 · Adding Late Fees)