QBO Skills practice questions

Customizing QBO: terms, sales tax, classes, users

8 practice questions on customizing QBO: terms, sales tax, classes, users, each with the answer and why it is right. From Questiva Learning' QuickBooks® Online skills test. The topic is covered in Chapter 3 of QuickBooks® Online Step-by-Step.

1. On an invoice to a taxable customer, sales tax is charged on:

   1. The taxable items only.
   2. Every line, since the customer is taxable.
   3. The services only.
   4. Nothing, until you check the Tax box on each line.

   Answer: A) The taxable items only.. Only taxable customers are charged sales tax, and only on taxable items. QuickBooks® Online multiplies the total of the taxable lines by the rate. (Chapter 3 · Applying Sales Tax on Forms)

2. Setting up a new Inventory item with today's date and today's quantity:

   1. Posts to Opening Balance Equity and blocks older entries.
   2. Is correct, and you can still enter the older bills afterward.
   3. Sets the Reorder Point to the same number.
   4. Saves it as a Non-inventory item.

   Answer: A) Posts to Opening Balance Equity and blocks older entries.. Use a 0 quantity and a date long before your first transaction. Today's date and quantity create an unnecessary Opening Balance Equity entry and block earlier transactions for the item. (Chapter 3 · Inventory Products)

3. To get a Profit and Loss with a column for each revenue stream, set up:

   1. Separate income and expense accounts for each stream.
   2. Sub-customers for each stream under every customer.
   3. Classes.
   4. Nothing. The report can already split columns by revenue stream.

   Answer: C) Classes.. Classes separate income and expenses by revenue stream, and a Profit and Loss by Class gives each one a column. Add an Overhead class for costs that belong to the whole business. (Chapter 3 · Activating Class Tracking)

4. Which user role can create invoices and receive payments, but can't pay bills or do banking?

   1. Standard All Access.
   2. Standard Limited Customers and Vendors.
   3. View Company Reports.
   4. Accounts Receivable Manager.

   Answer: D) Accounts Receivable Manager.. An Accounts Receivable Manager works with A/R transactions only. Standard Limited Customers and Vendors can also pay bills. (Chapter 3 · Setting Up Users in the Company File)

5. To print each order's PO number on its invoice and report sales by rep, set up:

   1. Nothing. Type them in the Message on Invoice box.
   2. A class for each rep, and the PO number in the customer's name.
   3. A separate customer for each PO number.
   4. Custom Fields.

   Answer: D) Custom Fields.. Custom Fields add your own fields to sales forms. Turn on Print on Form to show them on the invoice, and use them as report columns or filters. (Chapter 3 · Implementing Custom Fields)

6. In a new company file, when do you set up sales tax?

   1. Any time. Turning it on updates your items and customers.
   2. Before you add Products and Services or Customers.
   3. After the customers, so their addresses set the rates.
   4. When the first return is due, with a journal entry for the tax.

   Answer: B) Before you add Products and Services or Customers.. Set up your Sales Tax Agencies first, because sales tax is calculated from what you sold, to whom and where. (Chapter 3 · Setting Up Sales Tax)

7. To see your profit on a subcontracted service in item profitability reports, set it up as:

   1. Two items, one for invoices and one for the subcontractor's bills.
   2. A Service item, with the bills coded to Cost of Goods Sold.
   3. A two-sided Service item.
   4. A Subcontractors class, then a Profit and Loss by Class.

   Answer: C) A two-sided Service item.. Check "I purchase this product/service from a vendor" on the Service item. The same item then goes on the invoice and the bill, so item profitability reports show the profit. (Chapter 3 · Subcontracted Services)

8. The Audit Log can show who made each change only if:

   1. The Primary Admin made the change.
   2. Everyone has their own login.
   3. The shared login has the Company Admin role.
   4. The login uses a complex password.

   Answer: B) Everyone has their own login.. Give every user a separate username and password. Then the Audit Log shows who made what changes. (Chapter 3 · Setting Up Users in the Company File)