QuickBooks Certified User Exam 56 Questions with Verified Answers
What information is required before setting up a QuickBooks file? - CORRECT ANSWER 1.
... [Show More] Company name
2. Industry
3. Company type
4. Company contact information
6. Tax ID
How do you start a new company data file in QuickBooks (Express Start and Advanced Setup)? - CORRECT ANSWER File>New Company
Three options:
1. Express Start
2. Advanced Setup
3. Other Options (convert from other files)
How do you keep the lists and preferences from an old file while removing old transactions? - CORRECT ANSWER File>Utilities>Condense Data
Select: All Transactions
How do you customize the home page? - CORRECT ANSWER Edit>Preferences
Select: Desktop View
Select either: My Preferences tab OR
Company Preferences tab
How do you set up lists (customers, vendors, items, etc)? Include which names and items should appear on which lists. - CORRECT ANSWER This is the last step after you've created your new company file. You may add data here or add it later.
The Customer List should include only names of people that pay you for products and services.
The Vendor List should only include names of people that you pay for products and services.
The Employee List should only include names of people you pay to work for your company exclusively.
The Items List should include things products and services that your company offers.
How do you navigate or move around QuickBooks (use home page, menus, icon bar, etc)? - CORRECT ANSWER On the home page there are workflows that are set up in different categories. The categories are:
1. Vendors (Purchase Orders, Enter Bills, Receive Bills)
2. Customers (Create Invoices, Statements, Receive Payments, etc)
3. Employees (Pay Employees, Pay Liabilities, etc)
4. Company (Chart of Accounts, Inventory Activities, Items and Services, etc)
5. Banking (Reconciliation, enter credit card charges, record deposits, write checks, etc)
There is also an icon bar with shortcuts and a toolbar at the top of the page.
How do you back up and restore a data file? - CORRECT ANSWER There are four ways to back up a company file:
1. Backup online
2. Manual backup
3. Automatic backup
4. Scheduled backup
To backup company files: File>Back Up Company>Create Local Backup
To restore company files: File>Open or File>Restore Company
How do you determine the release number, and how do you update QuickBooks? - CORRECT ANSWER To find the release number, hit the F2 key and look at the box labeled, Versions Used on File. The release number will be after the letter, R.
There are four ways to update QuickBooks:
1. When you download a new annual version and click the update option
2. Turning on the Automatic Update feature in the Update QuickBooks window
3. Manual checking and downloading updates
4. Downloading the latest maintenance release from the website and installing manually
To check and download updates manually, you may click: Help>Update QuickBooks
How do you use QuickBooks in single-user and multi-user mode? - CORRECT ANSWER To use multi-user mode, you must install a licensed copy of QuickBooks on each networked computer. The company file should be located on a shared server that can be accessed by all users.
To switch to multi-user mode, click File>Switch to Multi-user Mode
Single-users have more permissions such as deleting entries on lists, import/export data, etc.
What versions and editions of QuickBooks are available for a specific year (desktop version), and how do you know which version you are using? - CORRECT ANSWER To figure out what version you are using, hit the F2 key in QuickBooks.
There is a new version that comes out annually. There are 5 general editions available:
1. QuickBooks Online
2. QuickBooks for Mac
3. QuickBooks Pro
4. QuickBooks Premier
5. QuickBooks Enterprise Solutions
6. Other industry-specific editions
How do you password protect QuickBooks? - CORRECT ANSWER To set up a password, you must assign an administrator first. To do this, click Company>Set Up Users and Passwords>Set Up Users. Then select Admin and Edit User to set up a password and challenge question.
How do you use preferences? - CORRECT ANSWER Edit>Preferences
Examples of preferences include using enter vs tab for moving through a form, disabling QuickBooks optional service reminders, removing "ding" when saving transactions, etc.
How do you add new entries to a list? - CORRECT ANSWER Enter a list and click "New Customers and Jobs" or press ctrl+n. You may also add new entries by using QuickAdd or Set Up buttons that automatically pop up while filling out a form (check, bill, etc).
How do you delete entries from a list? - CORRECT ANSWER Right click on any entry or account to delete, or press ctrl+d. You may also use the entry options buttons at the bottom of the page (such as in the Chart of Accounts and Items List).
How do you edit entries in a list? - CORRECT ANSWER On most lists, you can double click to open an edit window for the entry. You may also right click and select edit, use the entry options buttons at the bottom of the page, or press ctrl+e.
How do you merge entries in a list? - CORRECT ANSWER Rename one of the entries as the same name as the entry you want to merge it with.
Who should be listed in the Customer Center? - CORRECT ANSWER Only people that pay our company for a product or service.
How do you navigate and use the Customer Center? - CORRECT ANSWER You can look at all customers individually, edit their information, add new customers, add new transactions, print reports, and access income tracking among other things.
How do you complete the workflow (from the sale to making the deposit) for invoicing and sales receipts? - CORRECT ANSWER For invoicing, the workflow is Create Invoices, Receive Payments, and Record Deposits. When using receipts, the workflow is Create Sales Receipts and Record Deposits. You may also create a statement charge for a customer or simply bypass steps by making a deposit.
How does QuickBooks use the Undeposited Funds, Accounts Receivable, and checking accounts in the invoicing cycle? - CORRECT ANSWER If you have received a payment but haven't deposited it yet, it reflects in QuickBooks as Undeposited Funds.
How and why would you record a customer credit? - CORRECT ANSWER To record a customer credit, you must first use job lists, and either invoices, sales receipts, or statements. Select the Refunds and Credits icon on the home page and fill in the information. You may then either refund the money via check or add a credit to an invoice or statement.
How and why would you create a statement? - CORRECT ANSWER There are two reasons to send statements:
1. To remind customers of overdue balances
2. To list statement charges that a customer owes
There are two types of customer statements:
1. Open Transactions (without history)
2. Activity based (over a period of time)
Select the Statements icon from the home page and enter the correct information. You may create and send batch statements.
How do you handle bounced checks (also called NSF checks)? - CORRECT ANSWER Within the Customer List, click the Transaction tab in the company's profile. Double click on the payment that bounced. Click Record Bounced Check icon at the top of the payment window. Record the fee the bank charged you for the bounced check, and enter the fee that you will charge the customer for the bounced check. The invoice will now be marked as unpaid, and there will be an added line-item for the bounced check fee. QuickBooks automatically creates a journal entry to record the transaction as well.
Who should be listed in the Vendor Center? - CORRECT ANSWER Only people or businesses that we purchase products or services from.
How do you navigate and use the Vendor Center? - CORRECT ANSWER You can look at all vendors individually, edit their information, add new vendors, add new transactions, print reports, and access bill tracking among other things.
What are the different workflows for making purchases? Include how to enter and pay bills, write checks, use a credit card, and use a debit card. - CORRECT ANSWER There are two methods:
1. Tracking accounts payable (enter bills, pay bills)
2. Open drawer method (write checks)
To pay bills, you select the Enter Bills icon, enter the information, and then when you're ready to pay the bills, you select the Pay Bills icon from the home screen and print from your computer. To use a credit card, you select the Enter Credit Card Charges icon on the home screen and enter the information as if it were a bill. To enter a debit card transaction, use the Write Checks icon on the home screen, and don't print the check.
How do you record transactions in the purchase workflows? - CORRECT ANSWER You may either enter the bill within the Receive Inventory window (if your bill was shipped with the inventory), or you may use the Enter Bills Against Inventory window if the bill was mailed later.
How and why would you record a vendor credit? - CORRECT ANSWER Enter a credit memo if you receive a refund from the vendor. In the Enter Bills window, enter a credit memo by hitting the Credit option at the top of the screen (instead of Bill).
How do you complete the inventory workflow from purchase order to payment? - CORRECT ANSWER There are four steps:
1. Prepare purchase order for inventory
2. Receive the shipment of inventory
3. Enter Bill Against Inventory (different icon than simply Enter Bill)
4. Pay the bill
How do you set up, collect, and pay sales tax? - CORRECT ANSWER Setting up sales tax takes five steps:
1. Set sales tax preferences
2. Set up sales tax items and groups
3. Set up sales tax codes
4. Assign sales tax codes to sales tax items
5. Assign sales tax code and items to customers
To collect sales tax, simply enter it in the invoice (next to the line item). To pay sales tax, click the Manage Sales Tax icon on the home page, and click the Pay Sales Tax button.
How do you do a bank reconciliation? - CORRECT ANSWER Once you receive a bank statement, click the Reconciliation button to begin. You must do a separate reconciliation for each bank account that the company has. You may also do this for other types of accounts like credit cards.
What are the differences between the payroll services available from QuickBooks? - CORRECT ANSWER There are three versions of payroll available to desktop QuickBooks users:
1. Basic Payroll (do taxes completely on your own)
2. Enhanced Payroll (QuickBooks helps you with your taxes)
3. Assisted Payroll (QuickBooks does all of your taxes for you)
How do you set up payroll using the Payroll Setup Wizard (including employees, federal and state taxes, and basic payroll deductions)? - CORRECT ANSWER To start the Payroll Setup Interview, select Employees>Payroll Setup. To add an employee after the setup interview is completed, use the Employees tab on the home page, and hit the button to add a new employee. While doing this, use the Payroll Info tab to set deductions, taxes, and sick/vacation time as well as the payroll schedule.
How do you set up an employee's earnings and sick or vacation time? - CORRECT ANSWER Open the Employee Center on the home page, select an employee, and edit their profile. Under the Payroll Info here, you may set their payroll schedule, earnings, and sick/vacation rates.
How do you track sick or vacation time (accruing hours and using banked hours)? - CORRECT ANSWER Within the Employee Center, click an employee, hit edit, and open the Payroll Info tab. Select the Sick/Vacation Hours button to see or change any sick/vacation hours used or given.
How and why would you set up payroll schedules? - CORRECT ANSWER Set up payroll schedules in the setup interview to group employees on the same schedule to keep you up to date with paychecks, and lets QuickBooks automatically fill in some information.
How do you run payroll? - CORRECT ANSWER Select the Pay Employees icon on the home page.
How and why would you pay payroll liabilities? - CORRECT ANSWER Pay liabilities on the second tab in the Pay Employees window. Payroll liabilities apply if you have federal taxes or company match policies with your employees.
How do you prepare payroll forms (941 and W2) in QuickBooks? - CORRECT ANSWER 941 tax forms need to be filed every quarter. First click the Process Payroll Forms icon from the home page. (This is the same thing as opening the Payroll Center and selecting the File Forms tab). Hit the Create Forms button to start. QuickBooks Enhanced Payroll enters most information for you automatically. Before you finish, make sure to review the forms.
How do you track time and use it for payroll or for invoicing customers? - CORRECT ANSWER First turn on time tracking by choosing Edit>Preferences, then select the Time and Expense icon and click the Company Preferences Tab. When you're ready to track time, click the Enter Time icon on the home page. Make sure you select a job name if you want to invoice billable time to a customer.
There are three methods for time tracking:
1. Use Single Activity window (including a stop watch and detailed notes)
2. Weekly time sheet
3. Enter time when you pay employees
How and why would you use the Report Center? - CORRECT ANSWER Use the Report Center to find and understand reports that QuickBooks provides. To access the Report Center, click Reports>Report Center.
How do you customize reports (including report modifications, collapsing subaccounts, etc)? - CORRECT ANSWER In each report window there is a button on the top left corner that's named Customize Report. In this window, there are four tabs:
1. Display
2. Filters
3. Headers/Footers
4. Fonts & Numbers
In the display tab, you may add or delete any columns you want, such as balance, credit limit, or notes.
How and why would you process multiple reports (report groups)? - CORRECT ANSWER To make it easier to find a memorized report, create a report group and print a report batch. Open Memorized Reports List from Reports>Memorized>Memorized Reports List, then click the option button at the bottom of the window to add a new group. Use diamonds to move the reports into that group (in outline format).
When you're ready to process multiple reports, choose Reports>Multiple Reports and select which group you would like to print.
How and why would you send reports to Excel? - CORRECT ANSWER Send reports to Excel if QuickBooks can't do the function that you want (such as rename column or row headings and totaling different columns).
To export a report to Excel, open a report, click the Excel button, and then click Create New Worksheet.
How do you update and refresh Excel reports from QuickBooks? - CORRECT ANSWER You may either update within QuickBooks through the Excel button or update within Excel itself. To update it within Excel, click the QuickBooks tab and select Update Report. Changes made in Excel cannot be imported into QuickBooks.
How do you memorize reports? - CORRECT ANSWER Open any report and hit the Memorize key, or ctrl+z.
What are basic financial statements and what do they mean? - CORRECT ANSWER There are two basic financial statements:
1. Balance sheet (finances at one moment in time)
2. Profit and Loss (finances over a period of time)
These financial statements summarize the chart of accounts.
What is the difference between cash and accrual reports? - CORRECT ANSWER Cash reports show exactly how much money is in your accounts at any given moment, and accrual reports show how much would be in your account if you paid all your bills and received all customer payments.
How and why would you set a closing date? - CORRECT ANSWER A closing date essentially locks part of your QuickBooks file so that you can't make any more changes to that section. The closing date is set with a password, and may not be unlocked without the password. To set the closing date select Company>Set Closing Date.
How do you enter a Journal Entry? - CORRECT ANSWER Company>Make General Journal Entries
How and why would you memorize transactions (Automate Transaction Entry)? - CORRECT ANSWER Memorize transactions that are the same transactions that you enter over and over again to save time in the future. QuickBooks can't memorize transactions that require multiple decisions such as paying bills or running payroll. To memorize a transaction, fill out the check (or invoice, etc that you're working on), then hit Edit>Memorize Check (Memorize Invoice, etc...) before you hit Save and Close.
What level of access can be granted or denied to multiple users? - CORRECT ANSWER There are three access levels:
1. Access to all areas of QuickBooks
2. Access to selected areas of QuickBooks
3. Access as an accountant (limits sensitive customer data
If you give access to selected areas, you will go through the setup and select which areas of QuickBooks the user will have access to specifically.
How and why would you create custom fields? - CORRECT ANSWER You can add anything to many forms - such as an alternative phone number for your company. In the Create Invoices window (or whatever else you are customizing), select the Formatting tab at the top. To change a field, select the Customize Data Layout button. To change the background or add a logo, choose the Customize Design button.
How does QuickBooks use items to perform the necessary accounting entries? - CORRECT ANSWER Items make it easier to fill out forms of all kinds (invoices, payments, etc) and track profits, inventory, etc. Items also work behind the scenes when flowing into your financial statements. Item setup includes assigning the item to an account that shows up on your statements.
What are the different types of product items and when do you use each type? - CORRECT ANSWER 1. Service items (service that your company provides for customers)
2. Inventory parts (items you buy, sell, and track how many you have on hand)
3. Non-inventory parts (products you buy, sell, but don't track how many you have on hand, something you buy but don't sell, or something you sell but don't buy)
4. Inventory assembly (items that you buy, assemble, and then sell)
What are the different types of financial items (that may show up on an invoice or statement) and when do you use each type? - CORRECT ANSWER 1. Other charge (for line items like shipping and handling)
2. Subtotal (doesn't point to any account on the chart of accounts)
3. Group items (a group of up to 20 items that you can discount all at the same time)
4. Discount item (allows you to give a discount)
5. Payment item (allows you to show a payment)
6. Sales tax items
7 . Sales tax groups [Show Less]