QBO Skills practice questions

Customer sales: invoices, sales receipts, payments & deposits

30 practice questions on customer sales: invoices, sales receipts, payments & deposits, each with the answer and why it is right. From Questiva Consultants' QuickBooks Online skills test. The topic is covered in Chapter 4 of QuickBooks Online Step-by-Step.

1. A landscaping client has the lawn done on March 3 and pays the crew with a Visa card before they leave. Which form records this sale, and why?

   1. An Invoice followed by a Receive Payment, because paying by card makes it a credit sale.
   2. A Sales Receipt, because the customer paid at the time of the sale, whatever the method.
   3. A Bank Deposit to Checking coded to the income account, because the money is already in hand.
   4. An Estimate converted to an Invoice, so the service date and the card payment are captured.

   Answer: B) A Sales Receipt, because the customer paid at the time of the sale, whatever the method.. "Cash" and "credit" customers describe the bookkeeping workflow, not the payment method. A customer who pays at the time of sale — even by card — is a cash customer and gets a Sales Receipt, which records the items sold and the money received on one form. An Invoice is for customers who pay later; a deposit coded to income skips the sale. (Chapter 4 · Cash vs. Credit Customers)

2. On March 3 you save a $1,200 Invoice to a customer for work completed that day, terms Net 30. On March 3, what has changed in the books?

   1. Checking and Income each increase by $1,200, dated March 3.
   2. Undeposited Funds (Payments to deposit) and Income each increase by $1,200.
   3. Accounts Receivable and Income each increase by $1,200, dated March 3.
   4. Nothing changes until the customer's payment is received in April.

   Answer: C) Accounts Receivable and Income each increase by $1,200, dated March 3.. An Invoice debits Accounts Receivable and credits Income the day it is saved — the sale is earned even though no money has moved. Cash and Undeposited Funds are untouched until a Receive Payment is recorded. Waiting for the payment to record income is cash-basis thinking that leaves the receivable off the books. (Chapter 4 · Creating Invoices)

3. The March 10 bank statement shows one deposit of $2,062.52. In QuickBooks the Checking register shows two separate deposits that day, $1,500.00 from Cool Cars and $562.52 from Freeman Sporting Goods, each with Accounts Receivable in the Account column. What happened, and what will it cause?

   1. The payments were received with Deposit To set to Checking, so two deposits exist where the bank has one, and the feed and reconciliation will not match.
   2. The two invoices were entered twice and paid twice, so income and receivables are overstated and one set of transactions must be deleted from the register.
   3. This is the intended result, since the book recommends that every customer payment be deposited on its own rather than grouped with others for the same day.
   4. The deposits were added from the bank feed with an income account typed in by hand, so income is doubled and both deposits must be deleted and re-entered.

   Answer: A) The payments were received with Deposit To set to Checking, so two deposits exist where the bank has one, and the feed and reconciliation will not match.. Accounts Receivable in a deposit's Account column means a Receive Payment was deposited straight to the bank instead of to Undeposited Funds (Payments to deposit). Two separate deposits cannot match the bank's single $2,062.52 line. Use Undeposited Funds and one Bank Deposit that groups both payments. Income is not doubled here — A/R was correctly reduced. (Chapter 4 · Undeposited Funds and Payments to Deposit)

4. In the Checking register an $850.00 deposit dated March 12 shows "Services" in the Account column. The invoice payments that made up that deposit had already been recorded through Receive Payment that morning. What does this tell you, and what is the fix?

   1. The payments were never actually recorded, so create a Sales Receipt for $850.00 to replace them and leave the deposit exactly as it is in the register.
   2. This is correct; the deposit is the transaction that posts the income for those invoices, and the earlier Receive Payments only reduced the customer's receivable balances.
   3. The deposit should be edited so its Account column reads Accounts Receivable, which links it to the invoices paid that morning and removes the extra income.
   4. Someone added the bank-feed deposit by hand with an income account instead of matching it, so income is doubled; delete it and build a Bank Deposit from the payments.

   Answer: D) Someone added the bank-feed deposit by hand with an income account instead of matching it, so income is doubled; delete it and build a Bank Deposit from the payments.. An income account on a deposit line means the deposit itself recorded a sale on top of the invoice payments already waiting in Undeposited Funds (Payments to deposit). The register check: Sales or Services in the Account column is the duplicate-income pattern. Delete it and build a Bank Deposit from those payments; recoding it to A/R leaves a payment with no invoice. (Chapter 4 · Viewing Deposits in the Register)

5. On March 15 you received two customer checks ($400 and $250), $100 in cash, and three Visa payments ($90, $120 and $60), all saved to Undeposited Funds (Payments to deposit). The bank will show the checks and cash as one deposit and the card batch as another. How many Bank Deposits should you create?

   1. One deposit of $1,020.00 containing all six payments, since they were all received on the same day.
   2. Six deposits, one for each payment, so that every customer's payment can be traced on its own.
   3. Two deposits: $750.00 for the checks and cash, and $270.00 for the Visa batch.
   4. Two deposits: $650.00 for the two checks, and $370.00 for the cash together with the cards.

   Answer: C) Two deposits: $750.00 for the checks and cash, and $270.00 for the Visa batch.. Deposits are grouped by payment type so each QuickBooks deposit equals a line on the bank statement: checks and cash go to the bank together, and the card processor credits its batch separately. One lump deposit or six individual ones will never match the statement, and cash belongs with the checks, not the cards. (Chapter 4 · Making Bank Deposits)

6. Red Rock Diner has two open invoices: #1023 for $300.00 dated February 1 and #1031 for $450.00 dated March 1. Their check for $450.00 arrives with "Inv 1031" written on the memo line. In Receive Payment, what should you do?

   1. Check off #1023 first because it is the oldest, then apply the remaining $150.00 to #1031.
   2. Check off #1031 only, so the $450.00 closes it and #1023 stays open.
   3. Record two separate payments of $225.00 and apply one to each invoice.
   4. Leave both invoices unchecked so the $450.00 is held as a customer credit.

   Answer: B) Check off #1031 only, so the $450.00 closes it and #1023 stays open.. Apply the payment to the invoice the customer is actually paying. A common error is paying invoices oldest-first even when the customer's remittance names a newer one — it leaves the wrong invoice open and confuses the next statement. One check is one payment; splitting it in two creates transactions that never happened. (Chapter 4 · Handling Partial Payments)

7. A customer pays invoices #1040 ($200.00) and #1041 ($350.00) with a single check for $550.00. Which recording is correct?

   1. One Receive Payment for $550.00 with both invoices checked off.
   2. Two Receive Payments, $200.00 and $350.00, each applied to its own invoice.
   3. One Sales Receipt for $550.00 dated the day the check arrived.
   4. One Bank Deposit for $550.00 coded to Accounts Receivable.

   Answer: A) One Receive Payment for $550.00 with both invoices checked off.. Each real-life action gets one QuickBooks transaction: one check, one payment, with every invoice it covers checked off. Splitting it into two payments is a common mistake that makes the deposit harder to match. A Sales Receipt would record a second sale, and a deposit coded to A/R leaves both invoices open. (Chapter 4 · Handling Payments Against Multiple Invoices)

8. A customer with one open invoice for $500.00 sends a check for $600.00. You enter a Receive Payment for $600.00 and check off the invoice. What does QuickBooks do with the extra $100.00, and what should happen next?

   1. It refuses to save the payment until the amount received equals the open balance of the invoice.
   2. It posts the extra $100.00 to income as an additional sale recorded against the same customer.
   3. It leaves the $100.00 in Undeposited Funds as a separate, unapplied sales receipt for the customer.
   4. It holds $100.00 as a credit on the customer, for you to refund or apply to their next invoice.

   Answer: D) It holds $100.00 as a credit on the customer, for you to refund or apply to their next invoice.. When a payment is not fully allocated, QuickBooks keeps the remainder as a credit for that customer. The bookkeeper's decision is what to do with it — send a refund, apply it to the next invoice, or send a statement showing it. Overpayments are never income, and the full $600.00 still deposits as one amount to match the bank. (Chapter 4 · What if the Payment Doesn't Match the Invoice?)

9. On March 3 you save a $6,000.00 Estimate for a patio job. What is the effect on the Profit and Loss and the Balance Sheet?

   1. Income and Accounts Receivable each increase by $6,000.00 on the date of the estimate.
   2. None. An Estimate is non-posting; nothing reaches the ledger until it becomes an Invoice.
   3. Income increases by $6,000.00 on March 3, but Accounts Receivable does not change until it is invoiced.
   4. Accounts Receivable increases by $6,000.00 as a pending receivable, with no effect on income.

   Answer: B) None. An Estimate is non-posting; nothing reaches the ledger until it becomes an Invoice.. Estimates record a bid and track a project, but they are non-posting forms: no entry is made, so neither financial statement moves. The accounting starts when the estimate is converted to an Invoice (or invoiced progressively). Treating a bid as income or a receivable overstates both. (Chapter 4 · What Are Estimates?)

10. Blake Leary is already a customer. Your company now also buys from Blake, and QuickBooks will not let you create a vendor with the display name "Blake Leary". How should the vendor record be set up?

    1. Delete the customer record and keep a single vendor record that is used for both the sales to Blake and the purchases from Blake.
    2. Record purchases from Blake as negative-amount invoices on the existing customer record instead of entering bills to a vendor.
    3. Put Blake on the Employee list as well, so that purchases from Blake can be recorded as expense reimbursements to an employee.
    4. Create the vendor as "Blake Leary-v", a slightly different display name, with the same contact details as the customer.

    Answer: D) Create the vendor as "Blake Leary-v", a slightly different display name, with the same contact details as the customer.. A Display Name must be unique across the Customer, Vendor and Employee lists. When someone is both a customer and a vendor you keep two records with slightly different names — a suffix, a middle initial or "Inc." — and the same contact information. Negative invoices and employee records misfile the purchases. (Chapter 4 · Setting Up Customers)

11. Freeman Sporting Goods has two store locations you invoice separately, but its head office pays for both stores with one check each month. How should the customer records be set up so one payment can close invoices from both stores?

    1. One customer record for the company, with the store name typed into the memo of every invoice.
    2. Two unrelated customer records, one per store, each receiving its own payment every month.
    3. Each store as a sub-customer of Freeman Sporting Goods with Bill Parent Customer turned on.
    4. Each store as its own customer, with a custom field naming the head office that pays the bills.

    Answer: C) Each store as a sub-customer of Freeman Sporting Goods with Bill Parent Customer turned on.. Sub-customers group a customer's jobs or locations and keep income and expenses reportable by location. Turning on Bill Parent Customer tells QuickBooks the parent pays the bills, so one payment can be applied across both stores' invoices. Memos and custom fields give no way to apply a single payment across two customer records. (Chapter 4 · Sub-customers)

12. You are setting up a new QuickBooks company on April 1. One customer currently owes two invoices from the old system: $700.00 dated March 5 and $300.00 dated March 20. How should that balance be brought in?

    1. Leave the Opening Balance field blank and enter the two invoices with their original dates.
    2. Enter $1,000.00 in the customer's Opening Balance field when the record is created on April 1.
    3. Create one Sales Receipt for $1,000.00 dated April 1 so the money shows as received.
    4. Post a journal entry dated April 1 debiting Accounts Receivable for $1,000.00 for the customer.

    Answer: A) Leave the Opening Balance field blank and enter the two invoices with their original dates.. The book's rule is to always leave Opening Balance blank. Entering the open invoices with their original dates keeps the aging, due dates and detail correct, so the customer's next payment can be applied to real invoices. A lump balance or a journal entry leaves nothing to apply a payment against; a sales receipt records money you have not received. (Chapter 4 · Setting Up Customers)

13. Soil is set up as a taxable product. A tax-exempt nonprofit buys two bags, and a coworker simply unchecks the Tax box on that line of the sales receipt. Why is this a problem, and what should have been done?

    1. It is not a problem; unchecking the Tax box on the line is the intended way to handle a sale to a tax-exempt organization, and the report will reflect it.
    2. The Sales Tax Liability report follows the item's status, not the box, so it will overstate what is owed; mark the customer tax-exempt instead.
    3. Sales tax must always be charged on a taxable item at the time of sale, and the nonprofit should then be refunded the tax afterwards by check or credit memo.
    4. The Soil item should be deleted and re-created as a non-taxable service so that it never attracts sales tax on any future sale to any customer.

    Answer: B) The Sales Tax Liability report follows the item's status, not the box, so it will overstate what is owed; mark the customer tax-exempt instead.. The chapter is explicit: do not toggle the Tax checkmark, because the Sales Tax Liability report calculates from the item's status, not from whether tax was collected. An exempt buyer is handled on the customer record (uncheck This Customer Is Taxable, enter the exemption details); a genuinely different item status calls for a duplicated item, not a deleted one. (Chapter 4 · Entering Sales Receipts)

14. An invoice dated March 1 with terms Net 30 is still unpaid on April 5. On the Accounts Receivable Aging Summary run that day, which column holds it, and why?

    1. Current, because aging is measured from the invoice date and 35 days is within the first period.
    2. 31–60, because the report counts the days since the invoice date, which is 35 on April 5.
    3. It does not appear on the report until it is a full 30 days past the due date.
    4. 1–30, because aging counts the days past the due date that the terms set.

    Answer: D) 1–30, because aging counts the days past the due date that the terms set.. The terms set the due date — 30 days out, the end of March — and the aging columns count days past that due date, so on April 5 the invoice is a few days overdue and sits in 1–30. Current holds invoices not yet due. Counting from the invoice date is the usual misreading and ages every invoice a month early. (Chapter 4 · The Accounts Receivable Aging Summary)

15. The Accounts Receivable Aging Summary shows $0.00 for Amy's Bird Sanctuary, yet her customer page lists an open invoice for $240.00 and an unapplied credit memo for $240.00. What should you do?

    1. Open Receive Payment for Amy and apply the credit memo to the invoice so both close.
    2. Nothing; a zero balance means she owes nothing, so the invoice and credit memo are fine as they are.
    3. Delete the credit memo so the open invoice shows on the aging report again with its $240.00 balance.
    4. Enter a journal entry to clear the $240.00 out of Accounts Receivable and close the invoice.

    Answer: A) Open Receive Payment for Amy and apply the credit memo to the invoice so both close.. A zero on the aging report with activity behind it means an open invoice and an equal credit are sitting unapplied. The fix is a Receive Payment that applies the credit memo as the payment, which closes both and keeps the invoice history intact. Deleting the credit or journalling A/R destroys the record of what happened. (Chapter 4 · The Accounts Receivable Aging Summary)

16. A $200.00 sale paid through Square arrives in the bank as $194.20 after Square's fee. You have already recorded a $200.00 Sales Receipt to Undeposited Funds (Payments to deposit). How do you record the deposit so it matches the bank?

    1. Edit the Sales Receipt down to $194.20 so that the recorded sale equals the amount the bank actually received.
    2. Deposit the full $200.00 and post a separate $5.80 expense dated the same day to Cost of Goods Sold for the processor.
    3. In the Bank Deposit, check the $200.00 receipt and add a −$5.80 line to Square, account Merchant Service Fees.
    4. Deposit $194.20 against the receipt and leave the remaining $5.80 sitting in Undeposited Funds until month end.

    Answer: C) In the Bank Deposit, check the $200.00 receipt and add a −$5.80 line to Square, account Merchant Service Fees.. The sale was $200.00 and stays $200.00; the processor's fee is a company expense deducted inside the deposit using the Add Funds grid with a negative amount, so the deposit equals the bank's $194.20. Reducing the sale understates income; leaving $5.80 in Undeposited Funds leaves a phantom balance; merchant fees are an expense, not cost of goods sold. (Chapter 4 · PayPal and Square)

17. One of the soil bags ripped, so Craig wants to take $5.00 off a customer's sales receipt. The form shows the line items, the message and the sales tax, but no Discount box anywhere. What is going on?

    1. Discounts belong to Invoices only; a Sales Receipt cannot carry one, so the sale has to be re-entered as an invoice.
    2. The Discount slider in Account and Settings > Sales > Sales Form Content is off, so the field is hidden on every sales form.
    3. The Discount box appears only after a form has been recorded once, so save the receipt and reopen it to take the $5.00 off.
    4. Discounts are available only to companies using QuickBooks Payments, since the discount changes the amount the card is charged.

    Answer: B) The Discount slider in Account and Settings > Sales > Sales Form Content is off, so the field is hidden on every sales form.. Discount is a company-level sales setting. With the slider off no sales form shows the field; turn it on in Account and Settings > Sales > Sales Form Content and the Discount Percent / Discount Value box appears below the line items on receipts and invoices alike. Recording the form first changes nothing, and merchant services have no bearing on it. (Chapter 4 · Configuring the Sales Settings)

18. Today you invoice a client for a photo session booked three weeks out and for retouching scheduled the day after the session. The owner wants each line to show the day that work will actually be done, without changing when the sale is recorded. What makes that possible?

    1. Turn on Service Date so every line carries its own date, and leave the Invoice Date on the day the invoice is written.
    2. Date the invoice the day of the session so the form matches the work, and name the retouching date in the line description.
    3. Write a separate invoice for each service, each one dated the day that service will be performed, and send them together.
    4. Put the future dates in the Due Date field, which is where the A/R Aging and Collections reports read work dates from.

    Answer: A) Turn on Service Date so every line carries its own date, and leave the Invoice Date on the day the invoice is written.. Service Date, turned on in Account and Settings > Sales or from an invoice's Manage > Customization, adds a date to each line separate from the form's own date — built for this multi-phase case. A transaction's date stays the date of the sale, so moving it or splitting the invoice misdates revenue, and the Due Date comes from Terms. (Chapter 4 · Configuring the Sales Settings)

19. A studio turns on Accept Tips and answers Who's Receiving These Tips? with My Team. At month end the owner has collected $340.00 in tips but cannot find them anywhere on the Profit and Loss. Where are they, and why?

    1. In an Undistributed Tips liability account, because tips collected for the staff are money the company owes them, not its own revenue.
    2. In a Tips Income account that reports below the operating section, so they land under other income instead of ordinary sales.
    3. Rolled into the service line they were collected on, so they are already inside ordinary service income and cannot be split back out.
    4. Nowhere. With My Team chosen the tip only prints on the customer's receipt for the staff member and is never posted to the books.

    Answer: A) In an Undistributed Tips liability account, because tips collected for the staff are money the company owes them, not its own revenue.. Answering My Team makes QuickBooks create an Undistributed Tips liability the first time tips are taken: the business is holding that money for its team, so it is a payable rather than revenue. Answering Just Me instead creates a Tips Income account, the owner's own income. Nothing goes unrecorded, and a tip is never folded into the service line. (Chapter 4 · Configuring the Sales Settings)

20. A sales receipt holds $75.00 of gardening service, which is not taxable, and $20.00 of soil, which is taxable at 8%. Craig switches Discount Percent to Discount Value, enters 5, and the sales tax falls from $1.60 to $1.52. Why did the tax move?

    1. The discount is split across the lines in proportion to their amounts, so part of the $5.00 lands on the soil and shrinks the taxable sale.
    2. A discount value always comes off the taxable lines first, so the whole $5.00 was subtracted from the soil before the tax was figured.
    3. Sales tax is charged on the money actually collected, so trimming $5.00 off what the customer paid trimmed the tax along with it.
    4. The discount posts to Discounts Given, which reduces income, and sales tax on a receipt is calculated from the net income of the sale.

    Answer: A) The discount is split across the lines in proportion to their amounts, so part of the $5.00 lands on the soil and shrinks the taxable sale.. A discount value is spread proportionally over the line items, so about a fifth of the $5.00 falls on the $20.00 of soil and the taxable amount — not the rate — goes down. QuickBooks does not take it off the taxable lines first, sales tax follows each item's taxable status rather than what you collected, and it is never figured from net income. (Chapter 4 · Entering Sales Receipts)

21. Craig is invoicing 4 hours of Gardening at $25.00, one Pest Control at $35.00 and $10.00 of Soil, and wants to give this customer 15% off the services but nothing off the materials. How should the invoice be built?

    1. Enter all three lines, then set the Discount to 15 percent, which QuickBooks takes off the service lines and leaves the materials alone.
    2. Enter the two service lines at cut rates of $21.25 and $29.75 so the discount disappears into service revenue, then add the Soil at $10.00.
    3. Enter all three lines, put a Subtotal on the last row, switch the Discount to $ and type 145*.15 so the subtotal drives the amount.
    4. Enter the two service lines, add a Subtotal beneath them, then the Soil line, switch the Discount to $ and type 135*.15 for $20.25.

    Answer: D) Enter the two service lines, add a Subtotal beneath them, then the Soil line, switch the Discount to $ and type 135*.15 for $20.25.. A Subtotal sums the lines above it, so one placed after the two services gives the $135.00 the discount is figured from; in $ mode, typing 135*.15 fills in −20.25. A percent Discount works on the whole invoice, materials included, and a subtotal on the last row sweeps the soil in. Cutting the rates hides the discount from your reports. (Chapter 4 · Adding Subtotals to an Invoice)

22. You added Mariette Martinez on the fly from a sales receipt and typed her street address into the address box on the form. A month later you start an invoice for her and the address boxes come up empty. What happened?

    1. Sales receipts and invoices keep separate address books, so an address typed on a receipt only comes back on later receipts.
    2. The address was cleared when Shipping was switched on in the Sales settings, which replaced the billing fields on the forms.
    3. An address typed onto a sales form belongs to that one transaction; it is never written back to the customer's record.
    4. The address is on the record but stays hidden on new forms until Ship To is switched on under the Manage pane's Customization.

    Answer: C) An address typed onto a sales form belongs to that one transaction; it is never written back to the customer's record.. QuickBooks fills a form's address boxes from the customer record, and typing over them changes that transaction and nothing else. Use Edit Customer to make an address stick for future sales. Every form type reads the same customer record, turning Shipping on adds fields rather than erasing them, and Customization decides which fields appear, not what the record holds. (Chapter 4 · Entering Sales Receipts)

23. Two customer records exist for the same landscaping client, each carrying its own invoices and payments, and the owner wants one record holding the whole history. What is the right way to combine them?

    1. Re-enter the duplicate's invoices and payments under the record you are keeping, then delete the originals so nothing is counted twice.
    2. Open the record you are discarding, choose Edit ▸ Merge Contacts, pick the record you are keeping in the Into box and click Merge Contacts, which cannot be undone.
    3. Make the duplicate inactive, which hides it from the list and moves its invoices and payments onto the record you are keeping.
    4. Leave both records active and post a journal entry moving the duplicate's Accounts Receivable balance onto the record you are keeping.

    Answer: B) Open the record you are discarding, choose Edit ▸ Merge Contacts, pick the record you are keeping in the Into box and click Merge Contacts, which cannot be undone.. You merge from the record you are discarding: Edit ▸ Merge Contacts, choose the record you are keeping in the Into box, and QuickBooks combines every transaction from both, permanently. Inactivating only hides a record and leaves its transactions on it, re-keying loses the originals, and a journal entry moves a balance without moving the invoices behind it. (Chapter 4 · Merging Customers)

24. It is the first of the month and you need to chase every past-due invoice: see them together in one list and email the whole group in one go. Where do you do that, and how?

    1. The Invoices App under Sales & Get Paid — click the orange Overdue bar on the Money Bar, then use Batch Actions to email them.
    2. The Accounts Receivable Aging Summary — drill into the 1–30 and 31–60 columns, then use Batch Actions at the top of the report.
    3. The Audit Log — filter it to invoices whose due date has passed, then send the reminder emails from the log's Action column.
    4. Each customer's record in turn — open the Transaction List tab, pick out the open invoices, and send each from its Action column.

    Answer: A) The Invoices App under Sales & Get Paid — click the orange Overdue bar on the Money Bar, then use Batch Actions to email them.. The Invoices App lists every sales transaction with its status: the Money Bar's orange bar filters the list to overdue invoices, and Batch Actions prints or emails a whole group at once. The aging report totals what is owed but sends nothing, the Audit Log records who changed what, and working customer by customer is what this list exists to save you. (Chapter 4 · Using the Invoices App)

25. Two customer checks totalling $750.00 are sitting in Undeposited Funds (Payments to deposit) from invoice payments recorded yesterday. You select both in a Bank Deposit and record it. What does the deposit post?

    1. Checking increases by $750.00 and Income increases by $750.00, which is when these two sales finally reach the Profit and Loss.
    2. Nothing posts until the deposit is matched in the bank feed; until then it shows on the register as a pending line only.
    3. Undeposited Funds decreases by $750.00 and Checking increases by $750.00; the income posted when the sales were recorded.
    4. Checking increases by $750.00 and Accounts Receivable decreases by $750.00, which is what closes the invoices the checks paid.

    Answer: C) Undeposited Funds decreases by $750.00 and Checking increases by $750.00; the income posted when the sales were recorded.. A deposit only moves money that is already on the books: it credits Undeposited Funds and debits the bank account. Income posted on the invoice or sales receipt, and Accounts Receivable was cleared by the Receive Payment, so posting either again would double it. A recorded deposit hits the ledger straight away, matched in the feed or not. (Chapter 4 · Making Bank Deposits)

26. Craig's cash and checks for the day total $2,204.52, but he keeps $300.00 of the cash in an office box for small purchases and walks $1,904.52 into the bank. How should the Bank Deposit be recorded?

    1. Check off receipts totalling $1,904.52 and leave $300.00 of the customer payments in Undeposited Funds until the office cash is spent.
    2. Check off the whole $2,204.52, then enter $300.00 in Cash Back Goes To against a Petty Cash bank account, leaving a $1,904.52 deposit.
    3. Check off the whole $2,204.52 and add a $300.00 office supplies line in Add Funds to This Deposit so the deposit nets down to $1,904.52.
    4. Record the deposit at the full $2,204.52 and write a $300.00 check payable to Petty Cash on the same date to move that cash back out.

    Answer: B) Check off the whole $2,204.52, then enter $300.00 in Cash Back Goes To against a Petty Cash bank account, leaving a $1,904.52 deposit.. The deposit must equal the money that reached the bank. Check off everything collected, then hold the $300.00 back with Cash Back Goes To pointed at a Petty Cash account, leaving a $1,904.52 deposit. Leaving receipts behind creates a phantom Undeposited Funds balance, an expense line records a purchase that never happened, and a full deposit shows money the bank never saw. (Chapter 4 · Holding Cash Back from Deposits)

27. Along with the day's customer checks, Craig deposits a $142.00 refund check from Brosnahan Insurance Agency for a policy he had already paid and coded to Insurance. How should the refund go on the Bank Deposit?

    1. On an Add Funds to This Deposit line coded to Other Income, since the money is coming into the business rather than going out.
    2. As a $142.00 customer payment from Brosnahan Insurance Agency, so the refund appears with the rest of the day's money coming in.
    3. Kept off the deposit and entered separately as a $142.00 credit memo to the insurance vendor, dated the day the check arrived.
    4. On an Add Funds to This Deposit line, Received From Brosnahan Insurance Agency, Account Insurance — where the premium was expensed.

    Answer: D) On an Add Funds to This Deposit line, Received From Brosnahan Insurance Agency, Account Insurance — where the premium was expensed.. A deposit can carry money that did not come from a sale. Code a refund to the account the original expense used, so the credit reduces that expense on your reports. Other Income leaves Insurance overstated, the insurer is not a customer with an invoice, and holding the check out breaks the match to the bank's deposit. (Chapter 4 · Adding Additional Funds to the Deposit)

28. Your card processor closes its batch at 6:00 p.m. The bank shows one card deposit of $980.00 covering two Visa sales rung up after 6:00 p.m. on March 18 and three rung up the morning of March 19. How should the Bank Deposit be built?

    1. Two deposits, one for each sale date, because a deposit should never combine payments that were recorded on different days.
    2. One deposit, dated the day the bank credited the money, holding all five payments so its total equals the $980.00 line.
    3. One deposit dated March 18 for the two late sales, leaving the March 19 sales in Undeposited Funds for the next batch.
    4. Five deposits, one per card payment, so each sale can be traced back to the customer whose card was charged for it.

    Answer: B) One deposit, dated the day the bank credited the money, holding all five payments so its total equals the $980.00 line.. Deposits are grouped to match what the processor actually paid out. A batch that closes mid-evening pushes late charges into the next payout, so a deposit built strictly by sale date can never equal the bank's $980.00 line. Splitting the batch up, or leaving part of it behind, leaves the reconciliation with lines that have nothing to match. (Chapter 4 · Depositing Credit Card Payments)

29. A studio that has been subtracting Square's fee inside every Bank Deposit signs up for QuickBooks Payments instead. Its bookkeeper asks whether each deposit still needs a negative fee line. What should you tell her?

    1. Yes. Every merchant service nets its fee out of the payout, so a negative line is always needed for a deposit to match the bank.
    2. Yes, but only on the first deposit of each month, when the processor bills that whole month of fees against a single payout.
    3. No. QuickBooks Payments charges its fees in a separate expense transaction, so deposits are built the way cash and checks are.
    4. No. QuickBooks Payments posts the fees to Cost of Goods Sold by itself, so the fees never have to be recorded by hand at all.

    Answer: C) No. QuickBooks Payments charges its fees in a separate expense transaction, so deposits are built the way cash and checks are.. Square and PayPal take their cut out of each payment, which is why the fee has to be subtracted inside the deposit. QuickBooks Payments bills its fees as a separate expense transaction, so the payout equals the batch and the deposit is entered like a deposit of checks. Merchant fees are an operating expense of the business, never cost of goods sold. (Chapter 4 · QuickBooks Payments)

30. Looking at one slow-paying customer's open invoice, a bookkeeper opens Manage > Scheduling and switches on a reminder three days before the due date, meaning it for that customer alone. What has she actually done?

    1. Set a reminder on this invoice only, since options opened from inside a transaction apply to the transaction you have open.
    2. Set a reminder for this customer only, because the reminder schedule is stored on the customer record she opened it from.
    3. Turned the invoice into a Recurring Invoice that will generate and email a fresh copy every three days until it is paid off.
    4. Turned reminders on for every invoice in the company, because the reminder schedule is a company-wide automation setting.

    Answer: D) Turned reminders on for every invoice in the company, because the reminder schedule is a company-wide automation setting.. Reminders live in an invoice's Scheduling section, but the chapter warns that this automation applies to all invoices, not just the one you are looking at. Nothing here attaches to a single customer, and it does not create a Recurring Invoice — that is a separate tool that generates new invoices on a schedule. (Chapter 4 · Managing and Customizing Invoices)