Quick Books Quiz

Which of the following is an example of a current liability in accounting?

• Long-term debt

• Accounts receivable

• Prepaid expenses

• Accounts payable

Answer explanation

Accounts payable is an example of a current liability as it represents money owed by a company to its suppliers for goods or services that have already been received but not yet paid for.

Which of the following financial statements provides information on a company's profitability?

• Income statement

• Balance sheet

• Cash flow statement

• Statement of retained earnings

Answer explanation

The income statement provides information on a company's profitability by showing its revenues, expenses, and net income over a specific period of time.

Which of the following accounts is debited in a journal entry to record a sale on credit?

• Sales revenue

• Accounts receivable

• Cash

• Inventory

Answer explanation

When a sale is made on credit, the accounts receivable account is debited to reflect the increase in the amount of money owed to the company by its customers

Which of the following accounting principles requires that financial statements be prepared using the same accounting methods and procedures from one period to the next?

• Matching principle

• Revenue recognition

• Consistency principle

• Materiality principlee

Answer explanation

The consistency principle requires that financial statements be prepared using the same accounting methods and procedures from one period to the next to ensure comparability and consistency.

What is the purpose of the Payroll Setup Wizard in QuickBooks?

• To create payroll items for employee compensation. b.

• To set up employee information and payroll tax information.

• To create employee paychecks.

• To print W-2 forms for employees

Answer explanation

The Payroll Setup Wizard in QuickBooks is used to set up employee information and payroll tax information. It guides users through the process of entering employee data and setting up tax items, such as federal and state tax rates

How do you record employee hours in QuickBooks?

• Use the Timesheet feature to enter employee hours worked.

• Manually enter employee hours in the Employee Center.

• Use the Payroll Center to enter employee hours worked

• None of the above

Answer explanation

The Timesheet feature in QuickBooks is used to record employee hours worked. You can enter hours by day or by week, and assign them to specific customers, jobs, or service item

Which of the following is an example of a contra account in accounting? a.Accounts receivable b. xc.

• Accounts receivable

• Accumulated depreciation

• Inventory

• Prepaid expenses

Answer explanation

Accumulated depreciation. Accumulated depreciation is an example of a contra account as it offsets the balance of a fixed asset account by showing the cumulative amount of depreciation recorded for that asset over its useful life

Which of the following is a necessary step when setting up QuickBooks?

• Choosing a bank account to connect to QuickBooks

• Creating a new company file

• Generating invoices

• Creating a customer list

Answer explanation

Creating a new company file. This is a necessary first step when setting up QuickBooks as it will create a file where all of your financial data will be stored.

Which of the following lists is NOT a necessary list to set up in QuickBooks?

• Chart of Accounts

• Vendor List

• Employee List

• Customer List

Answer explanation

While it is important to set up employee information in QuickBooks, it is not a necessary list to set up during the initial setup process.

What is the Fiddle-Faddle Accounting Method?

• A legitimate accounting method recognized by the IRS

• A fraudulent accounting method

• A method used to estimate financial data

• A method used to delay recording expenses

Answer explanation

A fraudulent accounting method. The Fiddle-Faddle Accounting Method is not a legitimate accounting method recognized by the IRS or any other regulatory agency. It is a fraudulent accounting method used to manipulate financial data in order to deceive investors or creditors. This method involves falsifying financial statements by either inflating revenues or hiding expenses.