Certified QuickBooks ProAdvisor — Questions and Answers

Question 1: A vendor sends a bill with net-30 terms. Which QBO feature automatically calculates the due date when you enter the bill?

Recurring transactions
Payment Schedule
Accounts Payable aging report
Terms field on the bill form (Correct answer)

Correct answer: Terms field on the bill form

The Terms field on the bill form uses the vendor's payment terms to automatically calculate the due date from the bill date.

Question 2: Which QBO report lists all open invoices grouped by how many days past due they are?

Unbilled Charges
Sales by Customer Detail
Customer Balance Summary
Accounts Receivable Aging Detail (Correct answer)

Correct answer: Accounts Receivable Aging Detail

The Accounts Receivable Aging Detail report groups unpaid invoices by aging buckets such as Current, 1-30 days, 31-60 days, and beyond.

Question 3: Which QBO transaction records the return of goods to a vendor and reduces the amount you owe them?

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

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 4: Which QBO feature allows you to save a customized report with specific filters and date ranges for future use?

Memorize Report
Save Customization (Correct answer)
Bookmark Report
Report Snapshot

Correct answer: Save Customization

The 'Save Customization' button in QBO saves your report settings and adds it to the Custom Reports tab for easy reuse.

Question 5: A vendor offers a 2/10 net 30 discount. In QBO, where do you set this up so early-payment discounts are captured automatically?

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

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 6: Which of the following represents the standard accounts payable workflow in QuickBooks Online for an invoice received from a vendor that will be paid at a later date?

Create Purchase Order -> Create Expense
Create Expense -> Match to Bank Feed
Enter Bill -> Pay Bill (Correct answer)
Write Check -> Print Check

Correct answer: Enter Bill -> Pay Bill

The standard and correct workflow for managing accounts payable is to first enter the vendor's invoice as a 'Bill'. This records the expense in the proper period and creates a liability in the Accounts Payable account. Later, when the payment is made, the 'Pay Bills' function is used to create the payment transaction (like a check or electronic payment), which reduces the Accounts Payable balance and the bank account balance.

Question 7: 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
Delete the bill payment and re-enter the bill
Create a vendor credit for the payment amount

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 8: A client asks what the difference is between a Balance Sheet and a Profit and Loss. What is the most accurate explanation?

Both reports show the same data but formatted differently
A Balance Sheet shows cash flow; a P&L shows accrual revenue only
A Balance Sheet shows a snapshot of assets, liabilities, and equity at a point in time; a P&L shows income and expenses over a period (Correct answer)
A Balance Sheet is used for tax filing; a P&L is used for bank loans only

Correct answer: A Balance Sheet shows a snapshot of assets, liabilities, and equity at a point in time; a P&L shows income and expenses over a period

The Balance Sheet is a point-in-time snapshot of what a company owns and owes, while the Profit and Loss covers revenues and expenses over a specified date range.

Question 9: In QBO, the 'Vendor Balance Summary' report differs from the 'Unpaid Bills' report in that it:

Includes paid bills from the current period
Shows only bills due within 30 days
Shows the net balance per vendor including credits, not individual open bills (Correct answer)
Displays bills by expense account category

Correct answer: Shows the net balance per vendor including credits, not individual open bills

Vendor Balance Summary shows a single net balance per vendor (bills minus credits), while Unpaid Bills lists each individual open bill.

Question 10: A client wants to view a summary of their company's financial position, including what it owns (assets) and what it owes (liabilities) at a specific point in time. Which standard report in QuickBooks Online should they run?

Profit and Loss
Statement of Cash Flows
A/R Aging Summary
Balance Sheet (Correct answer)

Correct answer: Balance Sheet

The Balance Sheet is the correct report. It provides a snapshot of a company's financial health by summarizing its assets, liabilities, and owner's equity on a specific date. The Profit and Loss statement shows performance over a period, the Statement of Cash Flows tracks cash movement, and the A/R Aging report details unpaid customer invoices.

Question 11: When setting up a recurring bill in QBO, which recurrence type creates a bill automatically without any user review?

Reminder
Scheduled (Correct answer)
Unscheduled
Memorized

Correct answer: Scheduled

A Scheduled recurring transaction in QBO creates and posts the bill automatically on the specified interval without requiring user action.

Question 12: Which of the following sequences represents the correct and most common accounts receivable workflow in QuickBooks Online for an accrual-basis business?

Sales Receipt > Bank Deposit
Invoice > Receive Payment > Bank Deposit (Correct answer)
Receive Payment > Invoice > Bank Deposit
Estimate > Sales Receipt > Bank Deposit

Correct answer: Invoice > Receive Payment > Bank Deposit

For an accrual-basis business that extends credit to customers, the standard workflow begins with creating an Invoice to record the sale and the account receivable. When the customer pays, a Receive Payment transaction is recorded to close the invoice. Finally, the payment (often held in Undeposited Funds) is included in a Bank Deposit.

Question 13: What is the purpose of the 'Categorized' tab in QBO's Banking center?

Shows transactions waiting for review and categorization
Displays transactions that have been excluded
Lists all connected bank accounts
Shows transactions that have already been added or matched to the register (Correct answer)

Correct answer: Shows transactions that have already been added or matched to the register

The Categorized tab shows transactions that have already been accepted into the QBO register.

Question 14: A QuickBooks Online company file was set up with the wrong industry type. What is the impact of changing the industry in Account and Settings?

It has no effect after the initial setup is complete
It changes the tax form assigned to the company
It updates the default report templates and suggested accounts (Correct answer)
It rebuilds the chart of accounts to match the new industry

Correct answer: It updates the default report templates and suggested accounts

Changing the industry type updates suggested account names and default report layouts, but it does not alter existing accounts already created.

Question 15: Which of the following is TRUE about sub-accounts in QBO's Chart of Accounts?

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

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 16: Which of the following statements is true regarding the function of Purchase Orders (POs) within QuickBooks Online?

POs must be converted into an 'Expense' transaction, not a 'Bill'.
The Purchase Order feature is enabled by default in all QBO subscriptions.
A PO is a non-posting transaction and does not impact the general ledger. (Correct answer)
Creating a PO immediately increases the Accounts Payable balance.

Correct answer: A PO is a non-posting transaction and does not impact the general ledger.

Purchase Orders are non-posting transactions. This means they are used to formalize an order with a vendor but do not affect any financial accounts (like Accounts Payable or Expenses) or appear on financial statements. The financial impact occurs only when the PO is converted into a Bill (when an invoice is received) or an Expense (if paid for immediately upon receipt).

Question 17: In the QBO Chart of Accounts, which account type automatically increases with a credit entry?

Cost of Goods Sold
Equity (Correct answer)
Asset
Expense

Correct answer: Equity

Equity accounts follow the credit-normal balance rule, meaning credits increase equity and debits decrease it.

Question 18: A customer pays only part of an outstanding invoice in QBO. What is the correct way to record this partial payment?

Receive payment and enter the partial amount, leaving the remaining balance open (Correct answer)
Apply a discount to reduce the invoice to the paid amount
Create a credit memo for the unpaid portion
Delete the original invoice and create a new one for the remaining balance

Correct answer: Receive payment and enter the partial amount, leaving the remaining balance open

In QBO you use Receive Payment, enter the partial amount received, and the remaining open balance stays on the invoice automatically.

Question 19: After enabling billable expenses, how does a reimbursable expense flow to the customer's invoice in QBO?

It creates a billable line item in the customer's estimate
It auto-generates a draft invoice immediately
You must manually re-enter it on the invoice
It appears in the Add to Invoice drawer when creating the customer's invoice (Correct answer)

Correct answer: It appears in the Add to Invoice drawer when creating the customer's invoice

Billable expenses appear in the Add to Invoice panel on the right side when creating or editing that customer's invoice.

Question 20: A new QBO company defaults to cash-basis accounting. Where does a ProAdvisor change this to accrual-basis?

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

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 21: In QBO, when you email an invoice directly from the Invoice form, what happens automatically?

A copy is posted to the customer portal only, not emailed
The invoice is marked as paid
The invoice status changes to 'Sent' and the email is logged in the activity (Correct answer)
The invoice is converted to a Sales Receipt

Correct answer: The invoice status changes to 'Sent' and the email is logged in the activity

When you email an invoice from QBO, the status updates to Sent and QBO logs the email activity in the invoice's transaction history.

Question 22: What is the impact of changing a product from 'non-taxable' to 'taxable' in QBO?

It automatically notifies the tax agency of the change
It applies sales tax to that product on all future transactions only (Correct answer)
It retroactively adds tax to all past invoices
It deletes the product's sales history

Correct answer: It applies sales tax to that product on all future transactions only

Changing a product's taxability only affects future transactions; QBO does not modify historical invoices.

Question 23: In QBO, what happens to inventory quantity on hand when you save a Sales Receipt?

Inventory quantity decreases immediately upon saving (Correct answer)
Inventory quantity increases because a sale was made
Inventory is only updated when the receipt is printed
Inventory is not affected until the item is shipped

Correct answer: Inventory quantity decreases immediately upon saving

Saving a Sales Receipt in QBO immediately reduces the inventory quantity on hand for any inventory items sold.

Question 24: In QBO, what does setting a customer's 'Payment Terms' to Net 30 mean?

The customer receives a 30-day credit limit
The customer must pay a 30% deposit upfront
Invoices older than 30 days are automatically written off
Payment is due 30 days after the invoice date (Correct answer)

Correct answer: Payment is due 30 days after the invoice date

Net 30 terms mean the full invoice balance is due within 30 days of the invoice date.

Question 25: How often should bank reconciliations be performed?

Monthly (Correct answer)
Once per quarter
Weekly
Only at year-end

Correct answer: Monthly

Bank reconciliations should ideally be performed monthly, shortly after receiving your bank statement. Regular monthly reconciliation helps to quickly identify and correct errors, detect fraudulent activity, and ensure the accuracy of your financial records. This consistent practice is crucial for maintaining reliable financial data.

Question 26: A QBO client uses the Products and Services list. When would you use a 'Non-inventory' item type instead of an 'Inventory' item type on an invoice?

When the item always requires a purchase order first
When the item is purchased but never resold
When the item has a variable price that changes with every sale
When the item is sold but QBO should not track quantity on hand for it (Correct answer)

Correct answer: When the item is sold but QBO should not track quantity on hand for it

Non-inventory items are used for products you sell but do not need to track stock levels for, such as drop-shipped goods or one-off supplies.

Question 27: A customer pays an outstanding invoice with a check. Which QBO transaction type should you use to record this payment?

Receive Payment (Correct answer)
Sales Receipt
Journal Entry
Bank Deposit

Correct answer: Receive Payment

Receive Payment is used to apply a customer payment to an existing open invoice in QBO.

Question 28: In QuickBooks Online Advanced, what is the purpose of the 'Custom Fields' feature during setup?

To create custom chart of accounts categories
To build custom payroll deduction types
To capture business-specific data on sales and purchase forms beyond standard fields (Correct answer)
To add extra tax rates to invoices

Correct answer: To capture business-specific data on sales and purchase forms beyond standard fields

Custom Fields in QBO Advanced let businesses add unique data fields (like purchase order numbers or project codes) to sales and purchase transaction forms.

Question 29: Which QuickBooks Online plan is the first to include the 'Budgeting' feature for creating and comparing budgets to actuals?

Plus (Correct answer)
Simple Start
Essentials
Advanced

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

A Delayed Charge reduces inventory immediately; an Invoice does not
A Delayed Charge is sent to the customer immediately; an Invoice is held for later
There is no functional difference between the two
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)

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 31: A business wants every new invoice to default to a 'Due on Receipt' payment term. Where is this configured in QBO?

Account and Settings > Sales > Invoice and delivery preferences (Correct answer)
On each customer's profile individually
Chart of Accounts > Accounts Receivable settings
Reports > Custom Reports

Correct answer: Account and Settings > Sales > Invoice and delivery preferences

The default payment term for all new invoices is set under Account and Settings > Sales > Invoice and delivery preferences.

Question 32: What is the purpose of the 'Accountant View' toggle available to accountant users in QuickBooks Online?

It switches the chart of accounts to a tax-basis layout
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 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 33: Which QBO feature allows you to automatically import and categorize credit card transactions from your bank?

Recurring Transactions
Bank Feeds (Connect Bank) (Correct answer)
Batch Transactions
Expense Rules

Correct answer: Bank Feeds (Connect Bank)

Bank Feeds (Connect Bank) pulls in credit card and bank transactions automatically for review and categorization in QBO.

Question 34: A client needs to track project profitability including labor costs. Which QBO feature should you enable?

Tags
Projects with Time Tracking (Correct answer)
Classes
Custom Reports

Correct answer: Projects with Time Tracking

The Projects feature combined with Time Tracking allows QBO to allocate labor costs, expenses, and revenue to individual projects for profitability reporting.

Question 35: What happens to the opening balance equity account when a ProAdvisor enters beginning balances during initial company setup?

It remains permanently on the balance sheet as a reference
It receives offsetting entries to keep the balance sheet in balance (Correct answer)
It is automatically closed to retained earnings at year end
It is used only for bank reconciliation adjustments

Correct answer: It receives offsetting entries to keep the balance sheet in balance

Opening Balance Equity receives offsetting credit or debit entries whenever beginning balances are entered so the balance sheet remains balanced.

Question 36: A customer overpaid an invoice. Which of the following is the best practice in QuickBooks Online to handle this overpayment and give the customer credit for future purchases?

Create a Credit Memo for the overpayment amount, which can then be applied to a future invoice. (Correct answer)
Delete the original payment and re-enter it for the correct invoice amount.
Leave the unapplied amount as a customer credit directly from the Receive Payment screen without creating a separate transaction.
Record the overpayment as a tip in the Receive Payment screen.

Correct answer: Create a Credit Memo for the overpayment amount, which can then be applied to a future invoice.

When a customer overpays, the best practice is to create a Credit Memo. This formalizes the credit on the customer's account. Later, when a new invoice is created for that customer, QuickBooks will prompt you to apply the available credit from the Credit Memo, maintaining a clear and accurate accounts receivable history.

Question 37: A QBO user converts an Estimate to an Invoice but the customer only wants to be billed for work completed so far. Which feature supports this?

Delayed Charges
Recurring Invoices
Batch Invoicing
Progress Invoicing (Correct answer)

Correct answer: Progress Invoicing

Progress Invoicing lets you bill a percentage or specific line items from an Estimate across multiple invoices as work is completed.

Question 38: Which QBO feature allows you to automatically email an invoice to a customer on a recurring schedule without manual intervention?

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

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 39: When categorizing a downloaded bank transaction in QBO, selecting 'Add' does what?

Creates a new transaction in QBO based on the bank data (Correct answer)
Transfers the transaction to another account
Matches it to an existing transaction already in QBO
Excludes it from the register

Correct answer: Creates a new transaction in QBO based on the bank data

Clicking 'Add' on a bank feed transaction creates a brand-new QBO transaction using the downloaded bank data.

Question 40: To encourage timely payments, a company wants to automatically send reminders for overdue invoices. Where in QuickBooks Online can this feature be configured?

In the Customer's profile under the 'Payment and billing' tab.
Through the 'Recurring Transactions' menu.
From the 'Reports' center by customizing the A/R Aging report.
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 41: What is 'Contractor Payments' within QBO Payroll used for?

Processing reimbursements for contractor expenses
Paying and tracking 1099 independent contractors and generating 1099-NEC forms (Correct answer)
Tracking hours worked by temporary agency staff
Paying vendor bills through the payroll module

Correct answer: Paying and tracking 1099 independent contractors and generating 1099-NEC forms

The Contractor Payments feature in QBO Payroll manages payments to 1099 contractors and automates 1099-NEC form preparation at year-end.

Question 42: Which user role in QBO has permission to manage subscriptions and billing but cannot enter transactions?

Billing Manager (or the Master Admin for billing only) (Correct answer)
Standard User
Reports Only
Company Admin

Correct answer: Billing Manager (or the Master Admin for billing only)

The Master Admin or a Billing Manager role can manage subscription and billing information without necessarily having transaction access.

Question 43: In QBO, what happens to the Accounts Payable balance when you record a vendor credit?

It moves to a deferred liability account
It remains unchanged until applied to a bill
It increases because you owe more
It decreases because the vendor owes you a reduction (Correct answer)

Correct answer: It decreases because the vendor owes you a reduction

A vendor credit reduces Accounts Payable (debits AP) because it represents an amount the vendor owes you as a reduction against future bills.

Question 44: Which income account does QBO assign by default to a new inventory product?

Sales of Product Income (Correct answer)
Unearned Revenue
Other Income
Service Revenue

Correct answer: Sales of Product Income

QBO pre-selects 'Sales of Product Income' as the default income account for new inventory items.

Question 45: Which QBO report shows all outstanding customer balances grouped by how long they have been overdue?

Sales by Customer Summary
Open Invoices report
Customer Contact List
Accounts Receivable Aging Summary (Correct answer)

Correct answer: Accounts Receivable Aging Summary

The Accounts Receivable Aging Summary groups customer balances into buckets (Current, 1-30, 31-60, etc.) to show overdue amounts.

Question 46: A client's bank feed shows a transaction downloaded twice due to a sync error. What is the correct way to handle this in QBO?

Archive one and approve the other
Delete both and re-enter manually
Exclude the duplicate transaction (Correct answer)
Match both to the same register entry

Correct answer: Exclude the duplicate transaction

In QBO, duplicate downloaded transactions should be excluded so they do not post to the books.

Question 47: A client wants to pay multiple vendors at once via online bill pay in QBO. Which feature supports this workflow?

Vendor Center bulk payment export
Batch Actions on the Bill list
QBO Bill Pay powered by Melio (Correct answer)
Pay Bills screen with multiple bills selected

Correct answer: QBO Bill Pay powered by Melio

QBO Bill Pay (powered by Melio) allows users to pay multiple vendors via ACH or check from within QBO in a single workflow.

Question 48: When you void a check in QBO, what happens to the transaction amount?

It is deleted entirely
It is moved to a suspense account
The amount is set to zero and the transaction remains for audit trail (Correct answer)
It is reversed with a new offsetting entry

Correct answer: The amount is set to zero and the transaction remains for audit trail

Voiding a check sets the amount to $0 while keeping the transaction in the register to preserve the audit trail.

Question 49: In QBO, what does the 'Location' tracking field allow you to do that 'Class' tracking cannot?

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

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

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

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 51: A client's QuickBooks Online is set to 'Cash Basis' accounting. What does this mean for how income is reported?

Income is split evenly across the fiscal year
Income is recorded when payment is actually received (Correct answer)
Income is recorded when an invoice is created
Income is recorded based on contract signing date

Correct answer: Income is recorded when payment is actually received

Under cash basis accounting, income is recognized only when cash is received, not when the invoice is issued.

Question 52: Which of the following is a list type in QuickBooks Online?

Chart of Accounts (Correct answer)
Reports
Invoices
Bank Rules

Correct answer: Chart of Accounts

In QuickBooks Online, the Chart of Accounts is a primary example of a 'list' type. Lists are fundamental databases that store key information used across the software, such as customer lists, vendor lists, and product/service lists. These lists organize essential data that populates transactions and reports, forming the backbone of your company's data.

Certified QuickBooks ProAdvisor

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

Questions

90 min

Time Limit

80%

To Pass

Checking for saved progress...

Exam Rules

You can skip questions and return to them later
Flag questions for review before submitting
No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
Timer auto-submits when time runs out
Your progress is auto-saved every 30 seconds