Vendor Expenses

Preview · ~43 min read · from QuickBooks Online Step-by-Step

# Vendor Expenses Summary After reading this chapter, you will be able to track company expenses through multiple payment methods, set up vendor records with appropriate payment terms and default expense categories, and analyze vendor activity using accounts payable reports. The chapter covers configuring expense settings to enable job costing and billable expense tracking, creating and managing vendor records including 1099 tracking options, and processing vendor payments through the Bill and Pay Bills workflows, Check window, and Expense transactions for credit card payments.

In this chapter

• Configuring the Expenses Settings
• Tracking Company Expenses
• Setting up Vendors
• Merging Vendors
• Tracking Job Costs
• Vendor Invoices
• Entering Bills
• Bills with Products and Job Costing
• Attaching Documents
• Paying Bills
• Using Credit Cards
• Paying the Credit Card Balance
• Writing Checks
• Applying a Check to an Unpaid Bill
• Handling Petty Cash
• Running Accounts Payable Reports
• Vendor Balance Detail
• Do It Yourself
• Do It Yourself: Vendor Expenses

Chapter review: Vendor expenses & accounts payable workflow

15 practice questions. The answers are in the book.

1. You may record payments to your vendors by:

   • Paying by credit card using an Expense.
   • Using Check to write and print a check.
   • Using a Bill to record Accounts Payable and then using Pay Bills to pay open bills with either a check or credit card.
   • All of the above.

2. To display the Vendors list:

   • Click Vendors on the Home Dashboard.
   • Click the Create button and then on Vendors.
   • Type Vendor into the Search.
   • Hover over Expenses & Bills under All Apps in the Left Navigation Bar and then click on Vendors.

3. You can add a vendor:

   • Only at the beginning of the fiscal year.
   • Only if you will purchase over $600 from that particular vendor and a Form 1099 will be issued.
   • Only at the beginning of the month.
   • At any time by selecting New Vendor in the Vendors list.

4. Which statement is true?

   • QuickBooks Online records each Bill Payment in a bank account register (or credit card account register) and the Accounts Payable register.
   • Pay Bills increases the balance in both the Checking account and the Accounts Payable account.
   • QuickBooks Online has built-in Discount Terms.
   • You cannot make partial payments on a bill.

5. When you print checks, which of these is NOT true?

   • You can print checks one at a time.
   • You have to print checks in batches.
   • You can enter handwritten checks.
   • Online Bill Pay can send checks for you.

6. If you pay a Bill by check, all of the following occur, except:

   • QuickBooks Online increments the check number.
   • The bill is marked Paid.
   • The Checking account balance decreases.
   • The Accounts Payable account increases.

7. If you want to track the expenses for each customer or project:

   • Enter each expense in the job-cost section.
   • Use the pay liabilities function.
   • Link each expense with the customer, sub-customer, or project to which it applies.
   • Create a separate expense account for each job.

8. To make a credit card payment, the best practice is to:

   • Itemize the expenses when you enter the credit card payment in the Checking account.
   • Choose Pay Liability from the Create button.
   • Use Pay Down Credit Card on the Create button.
   • None of the above.

9. If you create an expense instead of paying off a bill, which of these is NOT true:

   • You can open the Expense and use the drawer to turn it into a bill payment.
   • It doesn’t matter, since the expense only shows in Cash-based reports.
   • The expense is doubled in Accrual-based accounting.
   • The expense will match in the Bank Transactions feed.

10. Which Account type should you use to track Petty Cash:

    • Credit Card.
    • Equity.
    • Bank.
    • Other Current Asset.

11. The Vendor Balance Detail Report:

    • Shows the detail of each bill, vendor credit, and bill payment to each vendor.
    • Shows the detail of each payment created using the Check window.
    • Can be created by selecting Vendor Balance Detail report from the Vendors list.
    • None of the above.

12. What is the accounting behind the scenes for the Pay Bills window when payments are made from the Checking account?

    • Increase (debit) Accounts Payable, Decrease (credit) the Checking account.
    • Decrease (debit) Accounts Payable, Decrease (credit) the Checking account.
    • Decrease (debit) Accounts Payable, Increase (credit) the Checking account.
    • Decrease (credit) Accounts Payable, Decrease (debit) the Checking account.

13. It is best not to use which field in the new vendor setup window:

    • Opening Balance.
    • Vendor Name.
    • Address.
    • Terms.

14. In the Pay Bills window, you can sort the bills by:

    • Due Date.
    • Payee.
    • Open Balance.
    • All of the above.

15. Which statement is true regarding bill payments:

    • Bill Payments increase the balance in the Accounts Payable account.
    • When you pay bills by issuing a check using the Pay Bills window, QuickBooks Online records each Bill Payment in the Checking account register and in the Accounts Payable account register.
    • If you select more than one bill for the same vendor, QuickBooks Online creates a separate bill payment for each bill.
    • There is no way to send money to pay bills inside QuickBooks Online.