True or False

Question 1

Partnership is the most common type of business

Answer 1

False. Most are Sole Proprietorship

Question 2

The Chart of Accounts tracks the items and services that you sell.

Answer 2

False. It is the collection of accounts to track the flow of money in, out, and through your business

Question 3

You can use the Open or Restore Co. Feature in QB to open a new company file or to restore a backup file

Answer 3

True. This will open a new co. file or restore a backup file

Question 4

Your business receives income from your customers in exchange for products and services you provide

Answer 4

True. Income is what you receive from customers in exchange for product or services you provide

Question 5

A portable file is a compressed version of your existing Co. file

Answer 5

True. Contain info of your existing file in a compressed version

Question 6

You use the function key F3 to perform a search in QB

Answer 6

True. You can do a quick and easy search by pressing the F3

Question 7

You can use the export and import features to transfer historical transactions to another file

Answer 7

False. You can use the export and import features to transfer many components, but not historical transactions.

Question 8

Your’d use the Schedule Backup window to designate when and how often you’d like to back up your file.

Answer 8

True. This window allows you to set when and how often you’d like QB to back up your Co. File.

Question 9

QBM si the file extension assigned to your regular QB co. file

Answer 9

False. QBM is the three-digit file extension for a portable file

Question 10

A complete verification of your file ensures that data isn’t corrupted each time you back up in QB.

Answer 10

True. Verifying your file checks for corrupt data when you back up

Question 11

Changes made to the My Preferences tab apply to all users of the file.

Answer 11

False. Changes made to the My Preferences tab will only affect the user who is currently logged on

Question 12

QB balances your debits and credits during the condense data process.

Answer 12

False. The condense data process replaces transactions with the summary entries

Question 13

A strong internal control system prevents errors in recording and reporting.

Answer 13

True. This is best to prevent errors.

Question 14

Implementing a policy of separation of duties makes a company vulnerable to theft.

Answer 14

False. Separation of duties prevents employees from having access to a company asset, which reduces a company’s vulnerability to theft.

Question 15

When you create a new company file in QB the program will automatically log you in as a manager.

Answer 15

False. QB will automatically log you in as an administrator.

Question 16

The ability to transfer funds between accounts is considered a sensitive accounting activity.

Answer 16

True. The authorization to transfer funds between accounts is found under the ‘Sensitive Accounting Activities” window when you set up a new user.

Question 17

Double-Entry Bookkeeping means you must make at least two journal entries each month to record transactions.

Answer 17

False. You make as many Journal entries necessary and can make none if there are none. Double-entry bookkeeping means that when recording a journal entry, debits always equal credits.

Question 18

If a company has liabilities of $137,000 and assets of $398,000 its equity is $261,000

Answer 18

True.

Question 19

Every Journal entry includes a debit and a credit that do not necessarily need to equal each other.

Answer 19

False. Debit and credits must always equal each other.

Question 20

The accounting equation is expressed as income minus expense.

Answer 20

False. That is the net income equation.

Question 21

The balance sheet is a report that lists what a business owns, owes, and the net value of the business to owners.

Answer 21

True. This is an important list of what a business owns, owes, and the net value

Question 22

The net accounting equation is expressed as assets = Liabilities + Equity

Answer 22

True.

Question 23

You use the Write Checks window to create checks to pay vendors and others.

Answer 23

True. Allows you to write and print checks to pay bills.

Question 24

The accounts receivable subsidiary ledger contains all transactions posted from the journal.

Answer 24

False. The accounts receivable subsidiary ledger provides a detail of customer accounts alphabetically. It is the general ledger that contains all transactions posted from the journal.

Question 25

The ledger lists transactions chronologically.

Answer 25

False. The ledger lists transactions chronologically only within each account. Primarily, the ledger lists transactions by accounts.

Question 26

You use the Enter Bills function to record invoices you receive from vendors.

Answer 26

True. This will ensure that your accounts payable account is credited.

Question 27

It is common practice to create a general journal entry in an accounts receivable or accounts payable controlling account.

Answer 27

False. Usually, there shouldn’t be GL entries posted to these accounts. If you find any, you’ll need to reverse them or the totals on your subsidiary ledgers may not match their respective controlling accounts.

Question 28

The general journal entry is not generated automatically by QB.

Answer 28

True. You can create a general journal entry yourself to periodically adjust your account balances.

Question 29

The fixed Asset account type is the best used to track long term assets in your business, like equipment and buildings.

Answer 29

True.

Question 30

An appropriate account number for a truck account is 195000.

Answer 30

True. A truck is a fixed asset, which falls under the asset account type. Asset accounts starts with the numeral 1

Question 31

You can use the keyboard shortcut ALT+A to quickly access the Chart of Accounts in QB.

Answer 31

False. You use Ctrl+A to access the Chart of Accounts

Question 32

A bank account is best used to track the balance of checking, savings, CDs, money markets, and the like

Answer 32

True.

Question 33

The best account type to track the amount of money you owe your vendors is Accounts Receivable

Answer 33

False. You use Accounts Payable account type to track the money that your business owes vendors

Question 34

You can organize generic accounts by adding sub accounts.

Answer 34

True. Breaking down generic accounts into sub accounts keep your income and expenses organized.

Question 35

If you don’t enter information in all the fields when you set up a new customer, you can always use the Edit function to fill in the fields later

Answer 35

True

Question 36

If you close QB while entering a new customer and open it again, you will lose the record permanently.

Answer 36

True. A better option to undo errors is to use Ctrl+Z

Question 37

You can use the Chart of Accounts to keep track of important tasks.

Answer 37

False. This is best served by the To Do List

Question 38

You can use the Payment Settings tab in the New Customer window to enter a credit limit for the customer.

Answer 38

True. The Payment Settings tab is where you can enter an account number, credit card info, and credit limit for your customer.

Question 39

You can delete a customer or vendor at any time.

Answer 39

False. You can only delete a customer or vendor if the record has no transactions.