Deck 7: Inventory

Question 1

How is a Purchase Order different from a Bill?

A)Purchase Order - records a fulfilled order of purchased products from a vendor. Bill - mailed by the vendor once the order has been approved by a company.
B)Purchase Order - record of an order to purchase products from a vendor. Bill - received when a purchase order has been fulfilled and received by a company.
C)Purchase Order - preliminary pricing of items ordered. Bill - received when a purchase order has been fulfilled and received by a company.
D)Purchase Order - record of an order to purchase products from a vendor. Bill - record collection of the customer's payment.

Answer 1

B

Question 2

In QBO,what List is NOT used for inventory transactions?

A)Vendors List
B)Customers List
C)Products and Services List
D)Accounts List

Answer 2

D

Question 3

What is not TRUE regarding the QBO Products and Services List?

A)It is used for products and services sold to customers that were not purchased from vendors.
B)It is used for products that are both purchased and sold.
C)A company only has to enter one set of product information used for both purchasing and sales.
D)It collects information about products purchased from vendors and sold to customers.

Answer 3

A

Question 4

If Undeposited Funds was selected during Receive Payment,then which of the following is true?

A)A company does not need to create a bank deposit since the funds are already available to pay bills.
B)A company must create a bank deposit to transfer the funds from the Undeposited Funds account to the appropriate bank account.
C)Undeposited Funds are used with Bundles and the company must separate out the different payments prior to creating a bank deposit.
D)Use the Gear Icon and select Bank Deposit under Other to record the transfer.

Question 5

A customer may pay using the following methods in QBO?

A)Online Credit Card,Online Bank Transfer,or Customer Check
B)Credit Card (online,phone,in person,or mail),Online (credit card or bank transfer),or Customer Check
C)Credit Card (online or phone),Online Bank Transfer,or Customer Check
D)Check or Online Credit Card

Question 6

What is the process in QBO used to record a bill received that will be paid later?

A)Select the Create Icon (+),then select Bill and Vendor from the Vendor List drop-down menu (many items will auto-fill when vendor is selected).After a vendor is selected,open purchase orders appear and select Add to add the purchase order to the bill.
B)Select the Gear Icon,then select Bill and Vendor from the Vendor List drop-down menu (many items will auto-fill when vendor is selected).After a vendor is selected,open purchase orders appear and select Add to add the purchase order to the bill.
C)Select the Create Icon (+),then select Vendor from the Vendor List drop-down menu (many items will auto-fill when vendor is selected)then select Bill.After a Bill is selected,open purchase orders appear and select Add to add the purchase order to the bill.
D)Select the Gear Icon,then select Vendor from the Vendor List drop-down menu (many items will auto-fill when vendor is selected)then select Bill.After a Bill is selected,open purchase orders appear and select Add to add the purchase order to the bill.

Question 7

What is NOT true regarding an invoice in QBO?

A)Invoices are only used to recognize sales to customers for products versus services.
B)An invoice is used to record sales when the customer will pay later.
C)An invoice contains detailed information about the products and services to a customer.
D)To create an invoice,use the Create (+)icon and select Invoice.Then select Customer and select vendor or Add New Customer.

Question 8

What is NOT true regarding the Products and Services List?

A)It can be updated either Before entering transactions or While entering transactions.
B)It collects information about the products or services purchased from vendors.
C)It links the product item to the accounts in the Chart of Accounts,therefore,when the item is selected in the QBO form,then the linked accounts are automatically updated as well.
D)It collects information about the products purchased from vendors and sold to customers.

Question 9

Why does an internal control system use a 3-way match?

A)Comparing what was ordered with what was received,and what was billed ensures a company does not pay more than what was ordered or received.
B)Comparing what was received with what was budgeted,and ensuring a company does not overspend on inventory items.
C)Comparing what a company physically has with what was ordered,and ensuring inventory is maintained at quality level.
D)Comparing what was ordered with what was received,and what was physically sold or remains on hand.

Question 10

Inventory is:

A)Items used to make a product including supplies,and items held for resale.
B)An expense when purchased and recognized as an asset when sold.
C)A product a business purchases,holds as an asset,and then resells to its customers.
D)A service we sell to our customers such as legal services.

Question 11

In QBO,what is a Bundle?

A)A collection of products or services that are sold together as a bundle.Products can be purchased separately and sold to customers as a Bundle.
B)A combination of Service and Non-inventory items Bundled together and sold to customers.
C)It is a combination of services offered to different customers.
D)It is a combination of Lists (Vendors,Customers,and Products and Services)used to efficiently input information into QBO.

Question 12

In QBO,when customers pay bills via Credit Card the following is true:

A)QBO is fairly flexible,however,it would prefer a company have customers pay with a credit card online or over the phone vs.through the mail.
B)QBO requires credit cards to be processed with a company's bank and then payments can be automatically downloaded to a company's account.
C)QBO accepts only MasterCard,Visa and American Express.
D)Using QBO's Merchant Account Service you can obtain online authorization and then download payments directly into QBO which updates accounts.

Question 13

What best describes internal controls?

A)A set of processes used to detect errors and irregularities.
B)Procedures used to detect errors and irregularities in asset accounts.
C)A set of processes and procedures to safeguard assets and detect errors.
D)A set of processes and procedures used to detect fraud and find errors in accounting data.

Question 14

Place the following QBO Customer transactions in the proper order: 1.Receive payment to record collection of the customer's payment.
2)Invoice to record the resale of product to customer and the customer's promise to pay later.
3)Bank deposit to record the customer's payment in the bank account.

A)2,1,and 3.
B)1,2,and 3.
C)3,2,and 1.
D)3,1,and 2.

Question 15

Why is a good system of internal controls necessary over inventory?

A)Inventory is an asset that a company must have available to sell.
B)Inventory is large and hard for a company to manage with proper controls.
C)Inventory is one of the main targets of fraud and theft.
D)Inventory is tied to liabilities and must be managed before too much debt is incurred.

Question 16

In QBO,what is NOT true regarding inventory?

A)To maintain consistency QBO uses the same inventory item when recording sales and purchases.
B)QBO can track both the cost and the sale price for inventory items.
C)QBO automatically updates inventory records by reducing the quantity on hand for all sales.
D)QBO must track the quantity of Non-inventory items such as supplies as well as inventory items.

Question 17

An effective method of internal control is periodically comparing/reconciling actual assets with accounting records.How is this most easily accomplished?

A)Physically count inventory and compare the value of the inventory with the market to ensure inventory is not devaluing.
B)Compare a physical count of inventory to purchase orders maintained in accounting files.
C)Compare what is recorded in the accounting records with the purchase orders maintained in the accounting files.
D)Physically count inventory on hand and compare it with what is recorded in the accounting records.

Question 18

What are the four types of products and services QBO uses?

A)Inventory,Non-scheduled,Service,and Bundle.
B)Inventory,Non-inventory,Service,and Bundle.
C)Inventory,Non-inventory,Vendor,and Bundle.
D)Inventory,Non-inventory,Service,and Customers.

Question 19

What is NOT true regarding the meaning of a 3-way match?

A)It compares the inventory's physical count with accounting records and the value of the inventory.
B)It is a principle of internal control.
C)It cross checks amounts across three documents.
D)It compares what was ordered,received and billed.

Question 20

What are the Vendor transactions related to inventory purchases that QBO records (listed in the proper order)?

A)Placing product orders,paying bills,and receiving products.
B)Placing product orders,receiving products,and paying bills.
C)Placing product orders,reconciling account detail to a physical count,and paying bills.
D)Placing project orders,invoicing products,and receiving customer payments.