QBO - Certified QuickBooks ProAdvisor QuickBooks Online Setup Questions and Answers 1 — Questions and Answers
Question 1: A new client who runs a small service-based business has never used accounting software before. When setting up their QuickBooks Online company file for the first time, which of the following is a critical first step in the 'Account and Settings' area?
- Connecting their bank and credit card accounts to the banking feed.
- Importing a complete list of all customers, vendors, products, and services.
- Setting the company's fiscal year start month and accounting method. (Correct answer)
- Customizing the look and feel of their sales forms and invoices.
Correct answer: Setting the company's fiscal year start month and accounting method.
Before entering transactions, it is crucial to establish the company's accounting foundation. This includes setting the fiscal year, which impacts financial reporting periods, and choosing the accounting method (cash vs. accrual), which determines how income and expenses are recognized. While other steps are important, they follow this fundamental setup.
Question 2: When importing data into a new QuickBooks Online company, which list can be imported as a CSV or Excel file?
- Bank Transactions
- Invoices and Bills
- Chart of Accounts (Correct answer)
- Payroll history
Correct answer: Chart of Accounts
QuickBooks Online allows users to import several types of lists to speed up the setup process. This includes the Chart of Accounts, Customers, Vendors, and Products and Services from a CSV or Excel file. Bank transactions are typically brought in through a direct bank feed connection, while historical transactions like invoices and bills generally need to be entered manually or with a third-party app.
Question 3: A client wants to give their office manager the ability to manage customers, vendors, and enter daily transactions, but does not want them to see sensitive financial reports or company bank balances. Which user role would be most appropriate to assign in QuickBooks Online?
- Company Administrator
- Standard user with all access rights
- Accountant
- Standard user with limited access (e.g., only Customers & Sales) (Correct answer)
Correct answer: Standard user with limited access (e.g., only Customers & Sales)
The 'Standard user' role can be customized to grant specific permissions. For this scenario, you can give the user access to areas like 'Customers & Sales' and 'Vendors & Purchases' while restricting access to banking and reporting, thereby protecting sensitive financial data. The Company Administrator and Accountant roles have much higher levels of access.
Question 4: Which of the following settings is configured directly from the 'Sales' tab within the 'Account and Settings' section of QuickBooks Online?
- Setting up sales tax rates and agencies.
- Connecting a credit card payment processor.
- Customizing the default email message sent with invoices. (Correct answer)
- Choosing the company's legal name for tax forms.
Correct answer: Customizing the default email message sent with invoices.
The 'Sales' tab in 'Account and Settings' allows you to customize sales form content, set invoice payment terms, and define the default email messages that accompany sales forms like invoices and estimates. Sales tax is set up in the 'Taxes' center, payment processors are managed under 'Payments', and the legal name is in the 'Company' tab.
Question 5: Your client has been in business for several years and is migrating to QuickBooks Online. They have provided you with their trial balance from their previous accounting system as of December 31st of the last fiscal year. What is the most common method for entering these opening balances into QBO?
- Importing the trial balance using the 'Import Data' tool.
- Creating a single, comprehensive journal entry dated as of the start of the new fiscal year. (Correct answer)
- Manually entering each asset, liability, and equity account's balance in the Chart of Accounts setup screen.
- Connecting the bank feeds and letting the downloaded transactions establish the balances.
Correct answer: Creating a single, comprehensive journal entry dated as of the start of the new fiscal year.
The standard and most efficient method for establishing opening balances from a prior system is to create a journal entry. This entry, dated on the 'start date' (e.g., January 1st), will debit all asset accounts and credit all liability and equity accounts, ensuring the balance sheet is correct from day one.
Question 6: To correctly set up QuickBooks Online to track sales tax, what is the first step a user must take?
- Create a 'Sales Tax Payable' liability account in the Chart of Accounts.
- Add sales tax rates to each individual product and service item.
- Go to the Taxes center and run the 'Set up sales tax' wizard. (Correct answer)
- Enter the state sales tax agency as a vendor in the Vendor Center.
Correct answer: Go to the Taxes center and run the 'Set up sales tax' wizard.
QuickBooks Online has a dedicated sales tax module. The proper procedure is to first navigate to the 'Taxes' center from the left-hand navigation bar and follow the guided setup wizard. This process automatically creates the necessary accounts (like Sales Tax Payable) and allows you to add your tax agencies and rates in one streamlined workflow.
QBO - Certified QuickBooks ProAdvisor QuickBooks Online Setup Questions and Answers 1
A new client who runs a small service-based business has never used accounting software before.
When setting up their QuickBooks Online company file for the first time, which of the following is a critical first step in the 'Account and Settings' area?