QuickBooks Online: Loans

A liability account in which a borrower records a written promise to repay a lender

• Credit Payable
• Loan Receivable
• Liability

• Note Payable

Answer explanation

Which account type in QuickBooks Online is used to track loans?

• Bank

• Expense

• Liability

• Income

Answer explanation

Loans are considered liabilities because they represent an obligation to repay a borrowed amount.

When recording a loan payment in QuickBooks Online, which account is typically debited?

• Accounts Receivable

• Accounts Payable

• Loan Interest Expense

• Loan Payable

Answer explanation

• When recording a loan payment, you typically debit the Accounts Payable account because it represents the amount owed to the lender.

Which QuickBooks Online feature allows you to set up a loan and track its details?

• Chart of Accounts

• Bank Reconciliation

• Loan Manager

• Memorized Transactions

Answer explanation

• QuickBooks Online has a feature called Loan Manager that allows you to set up and track the details of a loan, such as the loan amount, interest rate, and payment schedule.

4. How do you record the initial loan amount in QuickBooks Online?

• 4. Create an expense transaction

• 4. Create a journal entry

• 4. Create a liability account

• 4. Create an income transaction

Answer explanation

• To record the initial loan amount, you create a liability account in QuickBooks Online. This account represents the loan amount that needs to be repaid.

5. What is the purpose of the "Interest Expense" account in QuickBooks Online?

• 5. To track interest income

• 5. To track interest paid on loans

• 5. To track interest earned on investments

• 5. To track interest paid to vendors

Answer explanation

• The "Interest Expense" account in QuickBooks Online is used to track the interest paid on loans. It helps you keep track of the costs associated with borrowing money.

6. Which report in QuickBooks Online provides a summary of loan balances and payments?

• 6. Profit and Loss Statement

• 6. Balance Sheet

• 6. Statement of Cash Flows

• 6. Sales by Customer Detail Report

Answer explanation

• The Balance Sheet in QuickBooks Online provides a summary of loan balances and payments. It shows the outstanding loan amounts and any payments made towards the loans.

7. How do you record a loan payment that includes both principal and interest in QuickBooks Online?

• 7. Create separate transactions for principal and interest

• 7. Use the Write Checks feature

• 7. Use the Pay Bills feature

• 7. Use the Loan Manager feature

Answer explanation

• To record a loan payment that includes both principal and interest, you create separate transactions for each. This allows you to accurately track the principal repayment and the interest expense.

8. What is the purpose of the "Other Current Liabilities" account in QuickBooks Online?

• 8. To track short-term loans

• 8. To track long-term loans

• 8. To track payroll liabilities

• 8. To track customer deposits

Answer explanation

• The "Other Current Liabilities" account in QuickBooks Online is used to track short-term loans. It represents the loans that are expected to be repaid within a year.

10. How do you record a loan payment made from a bank account in QuickBooks Online?

• 10. Create a journal entry

• 10. Use the Write Checks feature

• 10. Use the Pay Bills feature

• 10. Use the Loan Manager feature

Answer explanation

• When recording a loan payment made from a bank account, you can use the Write Checks feature in QuickBooks Online. This allows you to specify the bank account from which the payment is made.