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QuickBooks Online Certification Test Study Guide
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Can you delete or make inactive something on a list if it has a balance (e.g. Customer, Vendor, or Stock Product, or Account)?
Yes, QuickBooks will automatically create a transaction to make the balance zero.
While setting up a QuickBooks Online account, you accidentally entered the wrong company address. How would you fix this error?
Change it in Account and Settings window, which you can access by clicking the Gear icon and select Account and Settings.
If you use QuickBooks Online Plus, how do you charge a customer for expenses you incurred on a project?
When entering the expense, enter the customer name and select the Billable checkbox.
Your boss asks you to remove an account from the Chart of Accounts (you don't use it anymore). How would you do this?
Open the Chart of Accounts. Click the drop down list to the right of the account you want to remove. Select "Delete".
Which transaction does not affect the customer's balance?
Estimate
Which transaction CANNOT be made recurring?
Deposit
What do you use Terms for in QuickBooks?
To determine when a customer's invoice is due.
Select the statement that's NOT true about using the QuickBooks app on a mobile device.
You can do everything (all QuickBooks functionality) on the app that can do in your regular QuickBooks (using a browser).
Your Accountant is upset that changes are being made to last year's numbers. How can you stop this from happening?
In the Advanced section of the company settings, set a Closing Date.
Which of the following statements is TRUE regarding products and services?
When you purchase or sell a product, the value of the purchase or sale flows to the account (and therefore the financial statement) you selected when you set up the product or service.
Which is NOT a good reason to enter a General Journal Entry?
To avoid using the built-in forms (e.g. checks and invoices)
Put the 2 steps for entering a vendor credit and using it when you pay the bill in the correct order.
1. Click the Global Create Button, Plus sign, and select Vendor Credit.
2. Click the Global Create Butto, Plus sign and select Pay Bills.
When should you use the Items Details area (bottom of the screenshot below) on a bill, check or expense?
To track sales tax
When you want to send someone a bill for items
When you purchase stock
The Accounts Payable Aging report can help you stay on top of your business because it lists which of the following?
You can view what you owe and when it's due.
What information does QuickBooks NOT ask/need when you create a new QuickBooks Online account for a company?
The owner's name
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Verified questions
ACCOUNTING
Melissa Ostwerk, the new controller of TurboDrives Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even through the subject did not sound exciting at first, she found that there were some important ideas presented that should get a hearing at her company. After returning from the seminar, she arranged a meeting with the production manager, Jan Kingsman, and the assistant production manager, Lonny Chan. Melissa: I ran across an idea that I wanted to check out with both of you. It's about the way we compute predetermined overhead rates. Jan: We're all ears. Melissa: we compute the predetermined overhead rate by dividing the estimated total factory overhead for the coming year, which is all a fixed cost, by the estimated total units produced for the coming year. Lonny: We've been doing that as long as I've been with the company. Jan: And it has been done that way at every other company I've worked at, expect at most placed they divide by direct labor-hours. Melissa: We use units because it is simpler and we basically make one product with minor variations. But, there's another way to do it. Instead of basing the overhead rate on the estimated total units produced for the coming year, we could base it on the total units produced at capacity. Lonny: Oh, the Marketing Department will love that. It will drop the costs on all of our products. They'll go wild over there cutting prices. Melissa: That is a worry, but i wanted to talk to both of you first before going over to Marketing. Jan: Arent you always going to have a lot of underapplied overhead? Melissa: That's correct, but let me show you how we would handle it. Here's an example based on our budged for next year. $$ \begin{matrix} \text{Budgeted (estimated) production} & \text{80.000 units}\\ \text{Budgeted sales} & \text{80.000 units}\\ \text{Capacity} & \text{100.000 units}\\ \text{Selling price} & \text{\$ 70 per unit}\\ \text{Variable manufacturing cost} & \text{\$ 18 per unit}\\ \text{Total manufacturing overhead cost (all fixed)} & \text{\$ 2.000.000}\\ \text{Selling and administrative expenses (all fixed)} & \text{\$ 1.950.000}\\ \text{Beginning inventories} & \text{\$ 0}\\ \end{matrix} $$ Traditional approach to computing the predetermined overhead rate: $$ \begin{array}{l}{\text { Predetermined }} \\ {\text { overhead rate }}\end{array}=\frac{\text { Estimated total manufacturing overhead cost }}{\text { Estimated total amount of the allocation base }} =\frac{\$ 2,000,000}{80,000 \text { units }}=\$ 25 \text { per unit } $$ $$ \begin{matrix} \text{Budgeted Income Statement}\\ \text{Revenue (80.000 units }{ \times } \text{\$ 70 per unit} & \text{ } & \text{\$ 5.600.000}\\ \text{Cost of goods sold} & \text{ } & \text{ }\\ \text{Variable manufacturing (80.000 units }{ \times } \text{\$ 18 per unit)} & \text{\$ 1.440.00} & \text{ }\\ \text{Manufacturing overhead applied (80,000 units }{ \times } \text { per unit} & \text{2.000.000} & \text{3.440.000}\\ \text{Gross margin} & \text{ } & \text{2.160.000}\\ \text{Selling and administrative expenses} & \text{ } & \text{1.950.000}\\ \text{Net operating income} & \text{ } & \text{\$ 210.000}\\ \end{matrix} $$ New approach to computing the predetermined overhead rate using capacity in the denominator: $$ \begin{array}{l}{\text { Predetermined }} \\ {\text { overhead rate }}\end{array}=\frac{\text { Estimated total manufacturing overhead cost at capacity }}{\text { Estimated total amount of the allocation base at capacity }}=\frac{\$ 2,000,000}{100,000 \text { units }}=\$ 20 \text { per unit } $$ $$ \begin{matrix} \text{Budgeted Income Statement}\\ \text{Revenue (80,000 units }{ \times } \text{\$ 70 per unit} & \text{ } & \text{\$ 5.600.000}\\ \text{Cost of goods sold:}\\ \text{Variable manufacturing (80,000 units }{ \times } \text{\$ 18 per unit} & \text{\$ 1.440.000}\\ \text{Manufacturing overhead applied (80,000 units }{ \times } \text{\$ 20 per unit} & \text{1.600.000} & \text{3.040.000}\\ \text{Gross margin} & \text{ } & \text{2.560.000}\\ \text{Cost of unused capacity [(100.000 units-80.000 units) }{ \times } \text{ \$ 20 per unit]} & \text{ } & \text{1.950.000}\\ \text{Net operating income} & \text{ } & \text{\$ 210.000}\\ \end{matrix} $$ Jan: Whoa!! I don't think I like the looks of that "Cost of unused capacity." If that thing shows up on the income statement, someone from headquarters is likely to come down here looking for some people to lay off. Lonny: I'm worried about something else, too. What happens when sales are not up to expectations? Can we pull the "hat trick"? Melissa: I'm sorry, I don't understand. Jan: Lonny's talking about something that happens fairly regularly. When sales are down and profits look like they are going to be lower than the president told the owners they were going to be, the president comes down here and asks us to deliver some more profits. Lonny: And we pull them out of our hat. Jan: Yeah, we just increase production until we get the profits we want. Melissa: I still don't understand. You mean you increase sales? Jan: Nope, we increase production. We're the production managers, not the sales managers. Melisa: I get it. Because you have produced more, the sales force has more units it can sell. Jan: Nope, the marketing people don't do a thing. We just build inventories and that does the trick. In all of the forthcoming questions, assume that the predetermined overhead rate under the traditional method is $25 per unit, and under the new method it is$20 per unit. Also, assume that under the traditional method any underapplied or overapplied overhead is taken directly to the income statement as an adjustment to Cost of Goods Sold. 1. Suppose actual production is 80.000 units. Compute the net operating incomes that would be realized under the traditional and new methods if actual sales are 75,000 units and everything else tums out as expected. 2. How many units would have to be produced under each of the methods in order to realize the budgeted net operating income of $210,000 if actual sales are 75,000 units and everything else turns out as expected? 3. What effect does the new method based on capacity have on the volatility of net operating income? 4. Will the "hat trick" be easier or harder to perform if the new method based on capacity is used? 5. Do you think the "hat trick" is ethical?
ACCOUNTING
Lyle Co. has only one product line. For that line, the reorder point is 500 units, the lead time for production is three weeks, and the sales volume is estimated at 50 units per week. Lyle has established which of the following amounts as its safety stock? a. 150 b. 350 c. 500 d. 650
ACCOUNTING
On April 30 of the current year, Naples Electric Repair has the following general ledger accounts and balances. The business uses a monthly fiscal period. A work sheet is given in the Working Papers. $$ \begin{matrix} \text{Account Titles} & \text{Account Balances}\\ \text{} & \text{Debit} & \text{Credit}\\ \text{Cash} & \text{\$ 5,658.00} & \text{}\\ \text{Petty Cash} & \text{300.00} & \text{}\\ \text{Accounts Receivable-Barbara Bye} & \text{3,022.00} & \text{}\\ \text{Supplies} & \text{1,710.00} & \text{}\\ \text{Prepaid Insurance} & \text{2,200.00} & \text{}\\ \text{Accounts Payable- Seaside Supplies} & \text{} & \text{\$ 1,000.00}\\ \text{Kaelynn Guerero, Capital} & \text{} & \text{9,004.00}\\ \text{Kaelynn Guerero, Drawing} & \text{880.00} & \text{}\\ \text{Income Summary} & \text{} & \text{}\\ \text{Sales} & \text{} & \text{6,800.00}\\ \text{Advertising Expense} & \text{900.00} & \text{}\\ \text{Cash Short and Over} & \text{4.00} & \text{}\\ \text{Insurance Expense} & \text{} & \text{}\\ \text{Miscellaneous Expense} & \text{380.00} & \text{}\\ \text{Rent Expense} & \text{750.00} & \text{}\\ \text{Supplies Expense} & \text{} & \text{}\\ \text{Utilities Expense} & \text{1,000. 00}\\ \end{matrix} $$ Rule a single line across the Income Statement and Balance Sheet columns. Total each column. Calculate and record the net income or net loss. Label the amount in the Account Title column.
ACCOUNTING
Sleep Late, a large hotel chain, has been using activity-based costing to determine the cost of a night’s stay at their hotels. One of the activities, “Inspection,” occurs after a customer has checked out of a hotel room. Sleep Late inspects every 10th room and has been using “number of rooms inspected” as the cost driver for inspection costs. A significant component of inspection costs is the cost of the supplies used in each inspection. Mary Adams, the chief inspector, is wondering whether inspection labor-hours might be a better cost driver for inspection costs. Mary gathers information for weekly inspection costs, rooms inspected, and inspection labor-hour as follows: $$ \begin{matrix} \text{Week} & \text{Rooms Inspected} & \text{Inspection Labor-Hours} & \text{Inspection Costs}\\ \text{1} & \text{254} & \text{66} & \text{\$ 1.740}\\ \text{2} & \text{322} & \text{110} & \text{2.500}\\ \text{3} & \text{335} & \text{82} & \text{2.250}\\ \text{4} & \text{431} & \text{123} & \text{2.800}\\ \text{5} & \text{198} & \text{48} & \text{1.400}\\ \text{6} & \text{239} & \text{62} & \text{1.690}\\ \text{7} & \text{252} & \text{108} & \text{1.720}\\ \text{8} & \text{325} & \text{127} & \text{2.200}\\ \end{matrix} $$ Mary runs regressions on each of the possible cost drivers and estimates there cost functions: Inspection Costs=$193.19+($6.26 $\times$ Number of rooms inspected), Inspection costs=$944.66+($12.04$\times$Inspection labor-hours)
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