The fundamental accounting equation that governs all accounting is:

Net income = Revenue - expenses.

Which of the following statements is true?

Debits are bad because they reduce income.

Equity is increased by a net loss.

Total debits equal total credits in every transaction.

Assets are increased with a credit entry.

Under accrual accounting:

A sale is not recorded until the customer pays the invoice.

Income and expenses are recognized when transactions occur.

An expense is not recorded until you write the check.

You must maintain two separate accounting systems.

QuickBooks Online is:

A double-entry accounting system.

Introducing QuickBooks Online

Preview · ~42 min read · from QuickBooks Online Step-by-Step

After reading this chapter, you will be able to identify the different QuickBooks Online subscription versions, understand basic accounting principles like the accounting equation and double-entry accounting, and navigate the QBO interface to enter transactions and access information about your business. The chapter covers how QuickBooks Online functions as a cloud-based subscription accessed through a web browser, how it integrates with third-party apps to streamline workflows, and how the software handles the behind-the-scenes double-entry accounting so you can focus on running your business rather than managing debits and credits manually.

In this chapter

The QuickBooks Online Ecosystem
Accounting 101
Using a Browser to Access QBO
Working with QuickBooks Online Files
QuickBooks Online's Interface
The Left Navigation Bar
The Money Bar
Dynamic Save Buttons
The Settings Gear
Lists
Entering Transactions in QuickBooks Online
Editing Transactions
QuickBooks Online Help
Do It Yourself

Get the full textbook →

Chapter review: Accounting fundamentals & the QBO interface

5 practice questions. The answers are in the book.

The fundamental accounting equation that governs all accounting is:
- Net income = Revenue - expenses.
- Assets + Liabilities = Equity.
- Assets = Liabilities + Equity.
- Assets = Liabilities - Equity.
Which of the following statements is true?
- Debits are bad because they reduce income.
- Equity is increased by a net loss.
- Total debits equal total credits in every transaction.
- Assets are increased with a credit entry.
Under accrual accounting:
- A sale is not recorded until the customer pays the invoice.
- Income and expenses are recognized when transactions occur.
- An expense is not recorded until you write the check.
- You must maintain two separate accounting systems.
QuickBooks Online is:
- A job costing system.
- A payroll system.
- A double-entry accounting system.
- All of the above.
Which is not a method of accessing the data entry screens?
- Create button
- Home
- Keyboard shortcuts
- The Settings gear