Deck 2: QBO Chart of Accounts

Question 1

Which of the following statements is not true regarding QBO subaccounts?

A)QBO automatically sets up Subaccounts commonly used by companies.
B)QBO permits the use of Subaccounts which are useful in tracking additional detail.
C)Subaccounts are essentially subcategories of an account.
D)Subaccounts are added by selecting New from the Chart of Accounts window and selecting the Category Type,i.e.Expenses,then selecting Detail Type and entering in the Name.

Answer 1

QBO automatically sets up Subaccounts commonly used by companies.

Question 2

Liabilities:

A)Are amounts a company owes to others.
B)Represent obligations that must be satisfied with cash.
C)Are recorded in the Profit & Loss Statement.
D)Are usually recorded in the equity section of the balance sheet if it is long term.

Answer 2

A

Question 3

QBO is able to display account numbers in the Chart of Accounts by:

A)Once in the Chart of Accounts use the Edit Pencil in the Chart of Accounts,then select Enable account numbers,and then Show account numbers.
B)It is not possible to show account numbers in the Chart of Accounts; only account names can be shown.
C)Select Accounting then Chart of Accounts and all account numbers are shown automatically once the Chart of Accounts is opened.
D)Account numbers can only be shown once complete set up of the company is finished.

Answer 3

A

Question 4

When in the QBO Chart of Accounts window,adding new accounts is completed by:

A)Selecting Accounting,then New,then enter a Category Type and a Detail Type.A Sub-account is needed for all new accounts,therefore,Check the Sub-account and enter in the appropriate name.
B)Selecting the Gear icon,then hit the plus in the Accounting window,then New,then enter a Category Type and a Detail Type.A Sub-account is optional,therefore,Uncheck sub-account if not needed and enter if it is needed.
C)Selecting Accounting,then New,then enter a Category Type and a Detail Type.A Sub-account is optional,therefore,Uncheck sub-account if not needed.
D)Selecting Gear icon,then hit the plus in the Accounting window,then New,then enter a Category Type and a Detail Type.A Sub-account is required for all new accounts,therefore,enter the title if it is needed.

Question 5

Which is not true regarding deleting accounts in the QBO COA?

A)Only accounts not being used can be deleted.
B)If an account has not been used in 1 year or longer,even if it has a balance,it can be deleted.
C)If an account has been used to record a transaction and has a balance,it can't be deleted.
D)If an account has Sub-accounts associated with it,it can't be deleted.

Question 6

An account name can be changed in QBO by completing the following:

A)Account names are rather simple to update.Find the account in the COA and click directly on the name of the account.A window will open allowing you to change the name.
B)Account names are rather simple to update.Find the account in the COA and click on the drop down arrow next to Run Report.An Edit selection will be shown; enter in the new name and save.
C)Account names are not easy to update since QBO encourages maintaining consistency in its reporting.Find the account in the COA and click directly on the name of the account.
D)QBO encourages consistency in its COA,therefore,it is challenging to change account names.Find the Gear icon,next hit the + sign,then enter a password and find the COA window.Once there click on the account name and change the name accordingly.

Question 7

Which of the following is incorrect regarding the type of tax form related to legal form of organization? Select all that apply:

A)Sole Proprietorship - Form 1040 Schedule S
B)C Corporation - Form 1120
C)Partnership - Form 1065
D)Sole Partnership - Form 1140 Schedule C

Question 8

To enter account numbers into QBO:

A)Select Accounting in the Navigation Bar and use the Edit Pencil.
B)There is no need to enter account numbers into QBO; QBO assigns account numbers automatically.
C)Use the Gear icon and select Advanced.
D)Account numbers can only be entered when the register is displayed.Select View register then the Edit Pencil.

Question 9

The main financial statements of a business include:

A)Balance Sheet,Profit & Loss Statement,and the Statement of Cash Flows
B)Tax Return,Balance Sheet,Profit & Loss Statement,and the Statement of Cash Flows
C)Balance Sheet,Profit & Loss Statement,and Notes to the Financial Statements
D)Tax Return,Statement of Cash Flows,and Balance sheet

Question 10

Profit and Loss Statement includes the following account types:

A)Assets,Revenues,Expenses and Liabilities.
B)Assets,Revenues,and Owners' Equity.
C)Expenses,Liabilities,and Owners' Equity.
D)Revenues and Expenses.

Question 11

Select the statement that is not true regarding Assets.

A)Asset accounts include but are not limited to: cash,accounts receivable,inventory,and fixed assets.
B)Assets provide a future benefit to the company.
C)Assets are amounts a company owes to others.
D)Assets are resources a company owns.

Question 12

Which of the following is correct regarding QBO COA?

A)By customizing the QBO COA to align with the business tax return,countless hours are saved in preparation time,and tax returns are more accurate.
B)QBO does not encourage editing of its COA since too many errors can be made by changing what was initially set up when the company was organized.
C)QBO does allow editing of the accounts in the COA,however,it only allows authorized users to make changes.QBO codes accounts for tax return preparation tracking.
D)QBO is not able to assist in tax return preparation and only requests legal entity status for COA account purposes.Changes to the COA are encouraged and should happen often.

Question 13

What are QBO Sub-accounts and how are these accounts added to the Chart of Accounts (COA)?

A)Subcategories of an account that aid in decision making.Add Sub-accounts by selecting New from the COA window,then enter the Category Type,select Detail Type and enter a name.
B)Subcategories of an account used to determine the appropriate tax form.Add Sub-accounts by selecting New from the COA window,then enter the Category Type,select Detail Type and enter a name.
C)Subcategories of an account that aid in decision making.Add Sub-accounts by selecting New from the COA window,next hit the + sign in the upper right corner,then enter the Category Type,select Detail Type and enter a name.
D)Subcategories of an account that aid in decision making.Add Sub-accounts by selecting New from the COA window,then enter the Category Type,select Detail Type and enter a name.Check Sub-account box to confirm the account is a Sub-account.

Question 14

The balance sheet summarizes what a company owns and what it owes.What account types are on the balance statement?

A)Assets,Expenses,Liabilities,and Owners' Equity (or Stockholders' Equity).
B)Assets,Liabilities,Revenues,and Owners' Equity (or Stockholders' Equity).
C)Assets,Liabilities,Revenues and Expenses.
D)Assets,Liabilities,and Owners' Equity (or Stockholders' Equity).

Question 15

All of the following are true regarding QBO except:

A)A company's Chart of Accounts can be customized in QBO to track information needed to complete the tax return.
B)A QBO goal is to see that the Chart of Accounts feeds into the tax return lines.
C)QBO focuses most on providing detailed reports for its users and is not overly concerned about tax return preparation.
D)It is important to know which tax form a company uses to best tailor the Chart of Accounts to feed into the tax return.

Question 16

Which of the following is correct?

A)Balance sheet accounts are considered permanent accounts and these accounts have balances that are closed each year.
B)Balance sheet accounts are considered permanent accounts and these accounts have balances that are carried forward from year to year.
C)Balance sheet accounts are considered temporary accounts and these accounts have balances that are carried forward from year to year.
D)Profit and Loss accounts are considered permanent accounts and these accounts have balances that are closed each year.

Question 17

All of the following are true regarding Owners' Equity except:

A)Owners' Equity accounts represent the net worth of a business,and are only increased by an investment in the business.
B)Owners' Equity accounts are decreased by net losses and dividends (for corporations).
C)Owners' Equity accounts are increased by owners' investments in the business and net profits retained in the business rather than paid out in dividends.
D)Owners' Equity is calculated by Assets = Liabilities + Owners' Equity.

Question 18

What is the primary objective of accounting and how does QBO assist in achieving this objective?

A)The primary objective of accounting provides detailed information to users to prepare the tax return.QBO assists by feeding information directly into the specific areas of the return.
B)The primary objective of accounting is to provide information to the IRS to ensure the company is organized as the appropriate legal entity.QBO assists in ensuring the correct tax form is used.
C)The primary objective of accounting is to provide information for decision making and QBO is used to capture,track,sort,summarize,and communicate financial information.
D)The primary objective of accounting is to provide information to users outside of the company (investors,bankers,IRS,etc.)and QBO assists in tracking information to communicate to external users.

Question 19

In QBO,account numbers are:

A)used to uniquely identify specific accounts but do not assist in identifying an account type i.e.asset,liability,revenue,expense,and equity.
B)used to only identify an account type and the account name identifies the specific account.
C)used to uniquely identify accounts and help identify an account type.
D)a combination of being randomly assigned and assigned alphabetically buy the user of QBO.

Question 20

Net income is calculated by:

A)Net Income = Assets + Revenues
B)Net Income = Revenues + Owners' Equity
C)Net Income = Revenues - Expenses
D)Net Income = Assets - Liabilities