Certified QuickBooks ProAdvisor — Questions and Answers

Question 1: Which QuickBooks Online plan is the first to include the 'Budgeting' feature for creating and comparing budgets to actuals?

Simple Start
Advanced
Plus (Correct answer)
Essentials

Correct answer: Plus

The Budgeting feature, which allows creating annual budgets and running Budget vs. Actuals reports, is first available in the Plus plan.

Question 2: Which feature allows you to undo a bank reconciliation?

Transaction History
Reconcile Tool (Accountant only) (Correct answer)
Bank Register
Audit Trail

Correct answer: Reconcile Tool (Accountant only)

While not readily available to all users, QuickBooks Online provides a specific 'Undo Reconciliation' feature within the Reconcile tool, primarily accessible to accountants or users with special permissions. This function is crucial for correcting errors made during a bank reconciliation. It ensures the accuracy of financial statements by allowing a complete reversal of a previously completed reconciliation.

Question 3: A client accidentally applied a vendor credit to the wrong bill. How do you fix this in QBO?

Void the original bill and create a new one
Open the bill payment and uncheck the credit, then re-apply to the correct bill (Correct answer)
Delete the vendor credit and re-enter it
Use a journal entry to transfer the credit

Correct answer: Open the bill payment and uncheck the credit, then re-apply to the correct bill

Open the bill payment where the credit was applied, uncheck it from the wrong bill, save, then apply it to the correct bill.

Question 4: In QBO, which report shows a full list of all accounts along with their current balances?

General Ledger
Balance Sheet
Profit and Loss
Trial Balance (Correct answer)

Correct answer: Trial Balance

The Trial Balance report in QBO lists every account with its debit or credit balance, useful for verifying that the books are in balance.

Question 5: What is the difference between a Delayed Charge and an Invoice in QBO?

A Delayed Charge is a non-posting placeholder that can be added to a future invoice; an Invoice is posted and affects A/R (Correct answer)
There is no functional difference between the two
A Delayed Charge is sent to the customer immediately; an Invoice is held for later
A Delayed Charge reduces inventory immediately; an Invoice does not

Correct answer: A Delayed Charge is a non-posting placeholder that can be added to a future invoice; an Invoice is posted and affects A/R

A Delayed Charge does not post to the general ledger or create an A/R balance; it serves as a reminder to bill the customer and can be pulled onto a future invoice.

Question 6: What does the 'Warn me when a transaction isn't assigned a class' setting do in QBO?

Deletes transactions that do not have a class assignment
Displays a warning but still allows saving without a class (Correct answer)
Automatically assigns a default class to unclassified transactions
Prevents saving a transaction without a class

Correct answer: Displays a warning but still allows saving without a class

This setting displays a warning message alerting the user but does not block the transaction from being saved without a class.

Question 7: A bill was entered in QBO with the wrong vendor. What is the correct way to fix this?

Open the bill and change the Vendor field directly (Correct answer)
Delete the bill and re-enter it
Void the bill and create a new one
Use a journal entry to reclassify the payable

Correct answer: Open the bill and change the Vendor field directly

In QBO you can open an existing bill and change the Vendor field directly, then save, without needing to delete or void it.

Question 8: When using the 'Pay Bills' screen in QBO, what does checking the 'Auto' checkbox next to a bill do?

Marks the bill for automatic recurring payment
Splits the payment across multiple bank accounts
Schedules the payment via bank auto-pay
Applies available vendor credits automatically (Correct answer)

Correct answer: Applies available vendor credits automatically

The Auto checkbox on the Pay Bills screen automatically applies any available vendor credits to reduce the amount owed on that bill.

Question 9: In QBO, what is the effect of enabling 'Show account numbers' in the Chart of Accounts settings?

A unique number is generated for each transaction
Account numbers appear on financial reports and transaction forms (Correct answer)
Account numbers replace account names throughout QBO
Accounts are automatically renumbered based on account type

Correct answer: Account numbers appear on financial reports and transaction forms

Enabling account numbers in QBO displays them alongside account names on financial statements and transaction entry forms.

Question 10: A ProAdvisor sets up a QBO account and later discovers the client's legal business name was entered incorrectly. What is the risk of correcting it?

Tax filings will automatically amend
All bank feeds will be permanently deleted
The QBO subscription must be cancelled and restarted
Previously issued documents (invoices, statements) reflected the wrong name, so correction is low-risk for future documents only (Correct answer)

Correct answer: Previously issued documents (invoices, statements) reflected the wrong name, so correction is low-risk for future documents only

Changing the company name in QBO updates future documents only — past documents already issued to customers retain the old name.

Question 11: When creating an invoice for a service that will be performed in the future, what is the correct transaction to use in QuickBooks Online to record a customer's initial deposit?

Use a Sales Receipt for the deposit amount.
Create a liability account called 'Customer Deposits' and record the deposit using a Journal Entry.
Create an invoice for the full amount and record a partial payment against it. (Correct answer)
Create an Estimate and convert it to an invoice once the service is complete.

Correct answer: Create an invoice for the full amount and record a partial payment against it.

The standard workflow is to create an invoice for the full amount of the agreed-upon service. Then, use the 'Receive Payment' function to record the partial payment (deposit) against that specific invoice. This correctly tracks the outstanding balance in Accounts Receivable.

Question 12: In QBO, you receive a customer check but are not ready to make a bank deposit yet. Which account should the payment be deposited to?

Accounts Receivable
Checking account directly
Other Current Assets — Prepaid
Undeposited Funds (Correct answer)

Correct answer: Undeposited Funds

Depositing to Undeposited Funds holds the payment until you are ready to batch it with other receipts into a single bank deposit.

Question 13: A vendor bill has been paid but the check bounced. What is the recommended QBO workflow to handle this?

Void the check and re-open the original bill by reversing the payment (Correct answer)
Enter a journal entry to debit Accounts Payable
Create a vendor credit for the payment amount
Delete the bill payment and re-enter the bill

Correct answer: Void the check and re-open the original bill by reversing the payment

Voiding the check in QBO automatically reopens the original bill so it shows as unpaid and you can reprocess the payment.

Question 14: A client's Chart of Accounts has grown unwieldy with over 300 accounts. As a ProAdvisor, what is your first recommended step?

Archive the company file and start a new one
Merge all similar accounts without reviewing history
Run a Transaction Detail by Account report to identify accounts with no recent activity (Correct answer)
Export and delete all unused accounts immediately

Correct answer: Run a Transaction Detail by Account report to identify accounts with no recent activity

Running a Transaction Detail by Account report helps identify dormant accounts safely before taking any action to clean up the chart of accounts.

Question 15: A vendor credit in QBO was created but never applied to a bill. Where will it appear on the Balance Sheet?

As a debit balance in Accounts Payable (reducing the liability) (Correct answer)
As Other Current Liabilities until applied
As a negative balance in Accounts Receivable
It will not appear until applied to a bill

Correct answer: As a debit balance in Accounts Payable (reducing the liability)

An unapplied vendor credit reduces the Accounts Payable balance on the Balance Sheet, shown as a debit within the AP account.

Question 16: A client used their company debit card to purchase office supplies at a store and wants to record the transaction immediately. Which transaction type in QuickBooks Online is most appropriate for this scenario?

Journal Entry
Check
Bill
Expense (Correct answer)

Correct answer: Expense

An 'Expense' is the correct transaction for a purchase that is paid for immediately, such as with a debit card, cash, or credit card. A 'Bill' is used to record an expense that will be paid later, creating an entry in Accounts Payable. A 'Check' is for payments made with a physical or digital check. While a Journal Entry could be used, it is not the standard workflow for a simple expense and is more prone to error.

Question 17: When a user selects 'Pay Bills' in QuickBooks Online to pay an outstanding vendor bill, what is the primary DEBIT in the resulting journal entry?

Undeposited Funds
The Bank Account
An Expense Account
Accounts Payable (Correct answer)

Correct answer: Accounts Payable

The initial entry of a 'Bill' creates a credit to Accounts Payable (a liability) and a debit to an expense account. When the bill is paid using the 'Pay Bills' function, the transaction relieves the liability. Therefore, the journal entry for the payment is a DEBIT to Accounts Payable (decreasing the amount owed) and a credit to the asset account used for payment (e.g., Checking Account).

Question 18: Which of the following best describes the 'Open Item' statement type in QBO?

Displays only credits and adjustments
Shows the total balance owed with no transaction detail
Shows only payments received during the statement period
Lists each unpaid invoice and credit individually without a prior balance forward (Correct answer)

Correct answer: Lists each unpaid invoice and credit individually without a prior balance forward

An Open Item statement lists every individual outstanding invoice and credit so the customer can see exactly which transactions make up their balance.

Question 19: A client received a single bill from a contractor for work done on three separate projects. To ensure accurate job costing, how should this bill be entered in QuickBooks Online?

Pay the full amount and later create journal entries to allocate the costs.
Enter one bill and use the 'Memo' field to describe the cost breakdown per project.
Use the 'Item details' or 'Category details' section to add multiple lines, assigning each line's cost to the appropriate Customer/Project. (Correct answer)
Create three separate bills, one for each project, and estimate the amounts.

Correct answer: Use the 'Item details' or 'Category details' section to add multiple lines, assigning each line's cost to the appropriate Customer/Project.

On a Bill, Expense, or Check transaction form, the 'Item details' or 'Category details' grid allows the user to add multiple lines. Each line can be assigned to a different Customer/Project. This is the correct method for allocating costs from a single vendor transaction to multiple projects, ensuring precise profitability tracking for each one.

Question 20: Which QBO feature allows a ProAdvisor to give a client's accountant view-only access to reports without granting full transaction access?

Time Tracking Only role
Accountant user invitation
Reports Only role (Correct answer)
Standard User role

Correct answer: Reports Only role

The 'Reports Only' user role grants access to view and export reports without the ability to enter or edit transactions.

Question 21: Which of the following is TRUE about sub-accounts in QBO's Chart of Accounts?

Sub-accounts are only available in QBO Advanced
Sub-accounts must have the same account type as their parent (Correct answer)
Sub-accounts can have a different account type from their parent
Sub-accounts cannot hold transactions directly

Correct answer: Sub-accounts must have the same account type as their parent

Sub-accounts in QBO must share the same account type as their parent account to maintain proper financial statement classification.

Question 22: What happens to Undeposited Funds when you create a Bank Deposit in QBO?

It is deleted automatically
The balance decreases as funds move to the selected bank account (Correct answer)
The balance increases
It transfers to Accounts Receivable

Correct answer: The balance decreases as funds move to the selected bank account

Creating a Bank Deposit clears the Undeposited Funds account and moves the selected payments to the chosen bank account.

Question 23: Which QBO transaction records the return of goods to a vendor and reduces the amount you owe them?

Bill Payment
Refund Receipt
Vendor Credit (Correct answer)
Credit Memo

Correct answer: Vendor Credit

A Vendor Credit in QBO records that a vendor owes you money or has reduced your outstanding balance, typically due to returned goods.

Question 24: If a company has multiple retail store locations, which QBO feature is most appropriate for tracking each store's financial performance separately?

Location tracking (Correct answer)
Class tracking
Customer sub-types
Projects

Correct answer: Location tracking

Location tracking is designed to monitor financial performance by physical or divisional location, making it ideal for multi-location businesses.

Question 25: Which dashboard section provides a quick overview of income, expenses, and profit?

Reports
Projects
Banking
Business Overview (Correct answer)

Correct answer: Business Overview

The 'Business Overview' section on the QuickBooks Online dashboard is specifically designed to provide a quick, high-level summary of your company's financial performance. It presents visual charts and graphs that illustrate key metrics like income, expenses, and overall profit. This allows users to easily grasp their financial health and identify trends at a glance.

Question 26: Which QBOA tool allows ProAdvisors to see a consolidated view of all clients' key financial metrics at a glance?

Client Hub (Client Overview) (Correct answer)
Accountant Reports center
Work tab project board
Books Review checklist

Correct answer: Client Hub (Client Overview)

The Client Hub in QBOA provides a consolidated dashboard showing key financial metrics for all connected client companies.

Question 27: What is the purpose of a Purchase Order (PO) in QBO?

To formally request goods or services from a vendor before receiving a bill (Correct answer)
To record payment to a vendor immediately
To reverse an incorrectly posted vendor bill
To split a large bill into installment payments

Correct answer: To formally request goods or services from a vendor before receiving a bill

A Purchase Order is a non-posting document sent to a vendor to request goods or services; it converts to a bill when the vendor fulfills the order.

Question 28: In QBO, which transaction type should be used when a customer returns merchandise and you need to issue them a refund check?

Vendor Credit
Journal Entry to debit A/R
Delayed Credit
Credit Memo followed by a Refund Receipt (Correct answer)

Correct answer: Credit Memo followed by a Refund Receipt

A Credit Memo records the returned goods and reduces the customer balance, and a Refund Receipt (or refund from the credit memo) issues the actual cash refund.

Question 29: A new QBO company defaults to cash-basis accounting. Where does a ProAdvisor change this to accrual-basis?

Chart of Accounts > Settings
Banking > Bank Feeds Settings
Reports > Report Settings
Account and Settings > Advanced > Accounting method (Correct answer)

Correct answer: Account and Settings > Advanced > Accounting method

The default accounting method (cash or accrual) is set under Account and Settings > Advanced in QuickBooks Online.

Question 30: In QBO, which setting must be enabled to allow customers to pay invoices online via ACH or credit card directly from the invoice email?

Enable Recurring Transactions in Account and Settings
Accounts Receivable Aging preferences
Account and Settings > Advanced > Automation > Auto-send invoices
QuickBooks Payments (merchant account) linked to the QBO company (Correct answer)

Correct answer: QuickBooks Payments (merchant account) linked to the QBO company

Online invoice payments require an active QuickBooks Payments merchant account connected to the QBO company, which adds a Pay Now button to emailed invoices.

Question 31: A QBO user wants to apply an existing customer credit to a new invoice. What is the correct way to do this?

Edit the credit memo and change its date to match the invoice
Create a journal entry debiting A/R and crediting the credit memo
Issue a refund check and then re-invoice the customer
Open Receive Payment, select the invoice, and check the available credit to apply it (Correct answer)

Correct answer: Open Receive Payment, select the invoice, and check the available credit to apply it

In the Receive Payment screen, QBO displays outstanding credits for the customer which can be checked to offset the selected invoice.

Question 32: A client accidentally created a duplicate invoice and already emailed it to the customer. What is the safest action in QBO?

Void the duplicate invoice to keep an audit trail (Correct answer)
Edit the original invoice to zero out amounts
Apply a credit memo to both invoices
Delete both invoices and start over

Correct answer: Void the duplicate invoice to keep an audit trail

Voiding preserves the transaction record and audit trail while zeroing out the amounts, which is safer than deletion for transactions already sent.

Question 33: In QBO, which column on the Accounts Receivable Aging report represents invoices not yet past their due date?

Current (Correct answer)
91+
61-90
31-60

Correct answer: Current

The 'Current' column on the A/R Aging report shows invoices that are outstanding but not yet past their due date.

Question 34: What form should be used to record a vendor bill in QuickBooks?

Bill (Correct answer)
Check
Sales Receipt
Expense

Correct answer: Bill

The 'Bill' form in QuickBooks is specifically designed to record expenses from vendors that your business intends to pay later. Entering a bill increases your Accounts Payable, accurately reflecting that your company owes money to a vendor for goods or services received. This sets up the liability before payment is made.

Question 35: Which user permission level in QBO allows a bookkeeper to enter and pay bills but prevents them from viewing payroll data?

Company Admin
Standard User with All access
Reports Only
Standard User with limited access (no payroll) (Correct answer)

Correct answer: Standard User with limited access (no payroll)

A Standard User role with customized access can grant bills and expense permissions while specifically excluding payroll visibility.

Question 36: To encourage timely payments, a company wants to automatically send reminders for overdue invoices. Where in QuickBooks Online can this feature be configured?

From the 'Reports' center by customizing the A/R Aging report.
Through the 'Recurring Transactions' menu.
In the Customer's profile under the 'Payment and billing' tab.
In 'Account and Settings' under the 'Sales' tab. (Correct answer)

Correct answer: In 'Account and Settings' under the 'Sales' tab.

Automatic invoice reminders are a company-wide setting. They can be enabled and customized by navigating to the Gear icon > Account and Settings > Sales tab. Here, you can set up multiple reminder emails to be sent based on how many days an invoice is overdue.

Question 37: In QBO, what does the 'Location' tracking field allow you to do that 'Class' tracking cannot?

Filter reports by geographic region on a map
Assign transactions to a physical business location or profit center (Correct answer)
Allocate costs across multiple projects simultaneously
Track expenses by department

Correct answer: Assign transactions to a physical business location or profit center

Location tracking in QBO is designed to segment financials by physical store, office, or profit center, complementing Class which is used for departments or product lines.

Question 38: A business provides services and collects payment immediately at the time of service. Which QuickBooks Online transaction form is most appropriate for this scenario?

Delayed Charge
Estimate
Invoice
Sales Receipt (Correct answer)

Correct answer: Sales Receipt

A Sales Receipt is the correct form to use when payment is collected at the same time the service is provided or the product is sold. It records the sale and the payment in a single transaction and does not affect Accounts Receivable, unlike an invoice which is used when payment will be received later.

Question 39: What is the purpose of the 'Trace' feature when reviewing a number on a QBO financial report?

It exports the report to Excel
It highlights the number in the report
It drills down to show the individual transactions making up that total (Correct answer)
It flags the amount for auditor review

Correct answer: It drills down to show the individual transactions making up that total

Clicking (tracing) any amount on a QBO report drills down to the underlying transactions that compose that total.

Question 40: A company records a prepaid insurance payment covering 12 months. In QBO, how should this be initially recorded?

Debit Prepaid Insurance (asset) for the full amount (Correct answer)
Record as Accounts Payable with a 12-month note
Debit Insurance Expense for the full amount
Split the bill across 12 future-dated expense transactions

Correct answer: Debit Prepaid Insurance (asset) for the full amount

Prepaid expenses are recorded as assets (Prepaid Insurance) initially, then expensed monthly via journal entry as the coverage is consumed.

Question 41: A client has 600 customers in QBO. They want to send a customized email to a specific segment. Which QBO list feature supports this?

Sub-customers grouped under a parent
Customer types used to filter the list (Correct answer)
Tags applied to customers
Classes assigned to customers

Correct answer: Customer types used to filter the list

Customer Types in QBO allow you to categorize and filter customers, making it easier to target specific segments for communications or reporting.

Question 42: A vendor offers a 2/10 net 30 discount. In QBO, where do you set this up so early-payment discounts are captured automatically?

Chart of accounts discount account
Bill form's Discount field each time
Vendor profile under Payment terms (Correct answer)
Accounts Payable settings

Correct answer: Vendor profile under Payment terms

Setting the vendor's payment terms (e.g., 2% 10 Net 30) in the vendor profile allows QBO to remind you of the discount window when paying bills.

Question 43: When inviting an accountant user to a QBO company, how many accountant seats are available without consuming billable user slots?

2 (Correct answer)
Unlimited
5
1

Correct answer: 2

QuickBooks Online allows up to 2 accountant users (firm seats) per company file that do not count toward the billable user limit.

Question 44: A company wants to give a returning customer a 10% discount on their next invoice. Where in QBO can a default discount be set at the customer level?

Company Settings > Sales > Discounts
Products and Services list
The customer's profile under the Payment and billing tab (Correct answer)
Chart of Accounts

Correct answer: The customer's profile under the Payment and billing tab

A default discount percentage for a specific customer can be stored in the customer record under the Payment and billing tab and will pre-populate on invoices.

Question 45: What is the purpose of the 'Transaction Detail by Account' report in QBO?

Displays a summary total for each account without individual transactions
Shows only journal entries posted by the accountant
Lists every transaction affecting each account with full detail (Correct answer)
Reconciles each account to the bank statement automatically

Correct answer: Lists every transaction affecting each account with full detail

The Transaction Detail by Account report shows every individual transaction recorded under each account, similar to a detailed general ledger.

Question 46: What does the 'As of Date' field control in the Inventory Valuation Summary report?

The fiscal year end date
The point-in-time snapshot for inventory quantities and values (Correct answer)
The date range for sales
The date range for purchases

Correct answer: The point-in-time snapshot for inventory quantities and values

The As of Date sets the specific date for which inventory quantities and values are displayed.

Question 47: A ProAdvisor wants to track billable hours spent on a client's work and add them to an invoice. Which QBO feature supports this workflow?

Recurring journal entries
Time tracking with billable status (Correct answer)
Class tracking by customer
Expense receipts with markup

Correct answer: Time tracking with billable status

QBO time entries can be marked as billable to a specific customer, then added directly to that customer's invoice.

Question 48: Which QBO feature allows you to automatically email an invoice to a customer on a recurring schedule without manual intervention?

Delayed Charge
Progress Invoicing
Batch Invoicing
Recurring Transactions (Scheduled) (Correct answer)

Correct answer: Recurring Transactions (Scheduled)

Setting a Recurring Transaction to 'Scheduled' type causes QBO to automatically create and send the invoice to the customer on the defined schedule.

Question 49: A client reports their Trial Balance doesn't balance (debits ≠ credits). What is the most likely cause in QBO?

Payroll tax deposits are not yet recorded
Unpaid invoices are counted twice
Cash-basis reporting distorts the trial balance
QBO rarely produces an unbalanced trial balance; suspect a corrupted data file or import error (Correct answer)

Correct answer: QBO rarely produces an unbalanced trial balance; suspect a corrupted data file or import error

QBO enforces double-entry accounting, so an unbalanced trial balance almost always indicates a data import error or file corruption rather than a normal entry mistake.

Question 50: When you need to write off damaged inventory in QBO, which adjustment type reduces the quantity on hand?

Journal Entry only
Both Quantity and Value simultaneously
Quantity Adjustment (Correct answer)
Value Adjustment

Correct answer: Quantity Adjustment

A Quantity Adjustment is used to reduce on-hand stock counts for damaged or lost goods.

Question 51: What is the purpose of the 'Accountant View' toggle available to accountant users in QuickBooks Online?

It provides access to accountant-specific tools like reclassify transactions and write-off invoices (Correct answer)
It hides sensitive payroll data from the business owner
It switches the chart of accounts to a tax-basis layout
It enables multi-currency for the accountant only

Correct answer: It provides access to accountant-specific tools like reclassify transactions and write-off invoices

Accountant View gives ProAdvisors access to tools like Reclassify Transactions, Write Off Invoices, and the Prep for Taxes feature not visible in Business View.

Question 52: Which QBO feature lets a company bill a customer for time and expenses that were tracked against their name before creating an invoice?

Batch Invoicing
Progress Invoicing
Billable Expenses (Add to Invoice) (Correct answer)
Delayed Charges

Correct answer: Billable Expenses (Add to Invoice)

Marking time entries and expenses as Billable links them to the customer and lets you add them directly to the next invoice with one click.

Certified QuickBooks ProAdvisor

The Certified QuickBooks ProAdvisor certification validates an individual's expertise in using and supporting QuickBooks Online for small businesses.

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