Certified QuickBooks ProAdvisor — Questions and Answers

Question 1: What is the purpose of the 'Notes' section within a QBOA client profile?

To record free-form information about the client relationship (Correct answer)
To display the client's last login timestamp
To store QBO transactions flagged for review
To log all email correspondence automatically

Correct answer: To record free-form information about the client relationship

The Notes section in a QBOA client profile lets ProAdvisors save freeform text about the client for internal reference.

Question 2: A client accidentally created a duplicate invoice and already emailed it to the customer. What is the safest action in QBO?

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

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 3: In QBO Payroll, what triggers the Additional Medicare Tax (0.9%) withholding for an employee?

Medicare wages exceed $200,000 for the calendar year from that employer (Correct answer)
Medicare wages exceed $100,000 for the calendar year
The employee's total household income exceeds $250,000
The employer's total payroll exceeds $500,000 annually

Correct answer: Medicare wages exceed $200,000 for the calendar year from that employer

Employers must withhold an additional 0.9% Medicare tax once an individual employee's wages from that employer exceed $200,000 in a calendar year.

Question 4: A business provides services and collects payment immediately at the time of service. Which QuickBooks Online transaction form is most appropriate for this scenario?

Invoice
Delayed Charge
Estimate
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 5: After enabling billable expenses, how does a reimbursable expense flow to the customer's invoice in QBO?

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

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

Unscheduled
Memorized
Reminder
Scheduled (Correct answer)

Correct answer: Scheduled

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

Question 7: During company setup, a ProAdvisor needs to set the default payment terms for all new customers. Where is this configured?

Customers > New Customer > Terms
Gear > Lists > Payment Terms
Gear > Account and Settings > Sales > Invoice and delivery (Correct answer)
Gear > Account and Settings > Payments

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

Default payment terms for customers are set under Gear > Account and Settings > Sales in the Invoice and delivery section.

Question 8: 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?

Products and Services list
The customer's profile under the Payment and billing tab (Correct answer)
Company Settings > Sales > Discounts
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 9: When you use the 'Work' tab in QuickBooks Online Accountant, what is a 'project'?

A set of bank rules applied to a client file
A container grouping related tasks for a client engagement (Correct answer)
A recurring invoice template
A folder of uploaded client documents

Correct answer: A container grouping related tasks for a client engagement

In QBOA Work, a project is a container that groups related tasks and subtasks under a single client engagement.

Question 10: In QBO, if you use the 'Expense' form instead of a 'Bill' to record a vendor purchase, what is the main accounting difference?

Bill is for goods only; Expense is for services only
Expense reduces the bank/credit card balance immediately; Bill creates an Accounts Payable liability (Correct answer)
There is no difference — both affect the same accounts
Expense hits Accounts Payable; Bill hits the bank directly

Correct answer: Expense reduces the bank/credit card balance immediately; Bill creates an Accounts Payable liability

An Expense immediately credits the payment account (bank/CC), while a Bill credits Accounts Payable creating a liability until a payment is made.

Question 11: In QBO, which of the following is true about deleting versus voiding a bill payment check?

Voiding is only available for checks over 90 days old
Deleting creates an automatic reversal journal entry
Both remove the transaction from all reports permanently
Voiding keeps the transaction in audit logs with a $0 amount; deleting removes it entirely (Correct answer)

Correct answer: Voiding keeps the transaction in audit logs with a $0 amount; deleting removes it entirely

Voiding a check in QBO zeroes the amount and marks it void in the audit trail; deleting removes the transaction record entirely with no trace.

Question 12: In QBO, what happens to the Accounts Payable balance when you record a vendor credit?

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

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 13: When setting up a new QuickBooks Online company, which step allows you to import existing customer and vendor lists from a spreadsheet?

Use the Gear icon > Import Data (Correct answer)
Use the Plus (+) icon > Import
Go to Accounting > Chart of Accounts > Import
Go to Sales > Customers > Import

Correct answer: Use the Gear icon > Import Data

The Gear icon (Settings) > Import Data allows you to import customers, vendors, accounts, and products/services from CSV files.

Question 14: In QBO, the 'Vendor Balance Summary' report differs from the 'Unpaid Bills' report in that it:

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

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 15: In QBO, what does the 'Balance Forward' statement type show customers?

All transactions in a date range plus the running balance
A detailed list of every open invoice line item
Only the outstanding balance owed without transaction detail (Correct answer)
Only credits applied during the period

Correct answer: Only the outstanding balance owed without transaction detail

Balance Forward statements show only the total amount owed without itemizing individual transactions, unlike the Open Item statement.

Question 16: Which QBO setting must be enabled before you can assign expenses to specific customers for potential reimbursement?

Billable Expenses (Correct answer)
Projects
Class Tracking
Multicurrency

Correct answer: Billable Expenses

The Billable Expenses setting (under Account and Settings > Expenses) must be enabled to mark expenses as billable to a customer.

Question 17: 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
Accounts Payable settings
Vendor profile under Payment terms (Correct answer)

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 18: In QBO, where do you configure the default income account for a specific product or service?

Customer profile settings
Chart of Accounts > Edit
Products & Services list > Edit item (Correct answer)
Sales settings in Account and Settings

Correct answer: Products & Services list > Edit item

Each product or service in the Products & Services list has an income account field that determines where revenue is recorded when the item is sold.

Question 19: Which of the following best describes the 'Open Item' statement type in QBO?

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

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 20: During reconciliation you notice the difference is exactly $25 — the same amount as a check written this period. What likely caused this?

The check amount was transposed in QBO
The check was not cleared on the bank statement (Correct answer)
The check was entered twice in QBO
The bank charged an extra fee

Correct answer: The check was not cleared on the bank statement

An unreconciled check with the exact difference amount usually means it has not yet cleared the bank.

Question 21: A QBO user wants to apply an existing customer credit to a new invoice. What is the correct way to do this?

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

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 22: In QBO Payroll, which action correctly handles a returned direct deposit due to an incorrect bank account number?

Void the original paycheck and reissue as a paper check
Contact Intuit support to redirect the funds automatically
Delete the paycheck and re-enter it from scratch
Reverse the direct deposit and reprocess with the correct account (Correct answer)

Correct answer: Reverse the direct deposit and reprocess with the correct account

The reverse direct deposit workflow in QBO pulls back the failed transaction so you can reprocess payroll with the corrected bank details.

Question 23: Which QBO Payroll feature allows a ProAdvisor to set up and send W-2 forms electronically to employees at year-end?

W-2 Wizard under Payroll Settings
Tax Filings under Reports
Year-End Forms under the Payroll Tax center
Employee Self-Service portal via Workforce (Correct answer)

Correct answer: Employee Self-Service portal via Workforce

QuickBooks Workforce (the employee self-service portal) allows employees to view and download their W-2 forms electronically when enabled.

Question 24: In QuickBooks Online, what is the function of the 'Excluded' tab in the Banking center?

It displays voided bank transactions
It shows transactions with errors that need correction
It holds transactions the user has chosen not to add to the books (Correct answer)
It stores transactions that have been matched and reconciled

Correct answer: It holds transactions the user has chosen not to add to the books

The Excluded tab stores bank feed transactions that the user has manually excluded and does not want to import into QuickBooks.

Question 25: 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
Bill
Expense (Correct answer)
Check

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 26: 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 27: A reconciliation is off by a small amount that cannot be found. A ProAdvisor decides to force the reconciliation to zero. Which account is typically used for this adjustment?

Reconciliation Discrepancies (Correct answer)
Uncategorized Expenses
Opening Balance Equity
Retained Earnings

Correct answer: Reconciliation Discrepancies

QBO posts forced reconciliation adjustments to the Reconciliation Discrepancies account.

Question 28: Which QBO feature allows you to automatically import and categorize credit card transactions from your bank?

Recurring Transactions
Batch Transactions
Bank Feeds (Connect Bank) (Correct answer)
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 29: What does QBO do if you create an invoice for an inventory item when quantity on hand is zero?

An automatic Purchase Order is generated
The quantity goes negative, allowing the transaction to proceed (Correct answer)
QBO blocks the transaction
The item is removed from the invoice

Correct answer: The quantity goes negative, allowing the transaction to proceed

QBO allows inventory quantity to go negative, enabling you to invoice items you have not yet physically received.

Question 30: If a company has multiple retail store locations, which QBO feature is most appropriate for tracking each store's financial performance separately?

Customer sub-types
Class tracking
Location tracking (Correct answer)
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 31: A business owner has generated a Profit & Loss report and wants to save the current customization settings—including a comparison to the previous year and a filter for a specific location—to run again each month. What is the most efficient way to do this in QuickBooks Online?

Use the 'Save Customization' feature. (Correct answer)
Take a screenshot of the customization settings for future reference.
Export the report to Excel and create a template.
Manually re-apply the filters and settings each time the report is run.

Correct answer: Use the 'Save Customization' feature.

The 'Save Customization' feature allows a user to name a modified report and save its specific settings, such as filters, columns, and comparison periods. This saved report can then be easily accessed and re-run from the 'Custom reports' tab, which is far more efficient than the other options.

Question 32: 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
QuickBooks Payments (merchant account) linked to the QBO company (Correct answer)
Account and Settings > Advanced > Automation > Auto-send invoices
Accounts Receivable Aging preferences

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 33: A company buys $500 of office supplies with a company credit card. Which QBO form should be used?

Expense (with credit card as payment account) (Correct answer)
Check
Bill
Purchase Order

Correct answer: Expense (with credit card as payment account)

An Expense transaction with the credit card selected as the payment account correctly records a credit card purchase in QBO.

Question 34: When setting up a new QuickBooks Online company, which step must be completed before you can connect a bank account?

Complete the company profile including legal business name and address (Correct answer)
Set up payroll
Create at least one invoice
Import a chart of accounts from Excel

Correct answer: Complete the company profile including legal business name and address

QuickBooks Online requires the company profile (legal name, address, industry) to be completed before bank connections can be established.

Question 35: In QBO, what happens to inventory quantity on hand when you save a Sales Receipt?

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

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 36: 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 37: Which QBO feature allows you to review every addition, deletion, or edit made to transactions, including changes made during bank reconciliation?

Reconciliation Report
Chart of Accounts History
Bank Register
Audit Log (Correct answer)

Correct answer: Audit Log

The Audit Log in QBO tracks every change to transactions, including who made the change and when.

Question 38: When you undo a reconciliation in QBO, what is the immediate effect?

The reconciled (R) status is removed from all transactions in that reconciliation (Correct answer)
All transactions in that period are permanently deleted
The bank account is disconnected from the feed
The Chart of Accounts balance is reset to zero

Correct answer: The reconciled (R) status is removed from all transactions in that reconciliation

Undoing a reconciliation removes the R status from all previously cleared transactions, making them available to reconcile again.

Question 39: Which dashboard section provides a quick overview of income, expenses, and profit?

Business Overview (Correct answer)
Reports
Banking
Projects

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

Recurring Transactions (Scheduled) (Correct answer)
Delayed Charge
Batch Invoicing
Progress 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 41: Which of the following sequences represents the correct and most common accounts receivable workflow in QuickBooks Online for an accrual-basis business?

Invoice > Receive Payment > Bank Deposit (Correct answer)
Estimate > Sales Receipt > Bank Deposit
Receive Payment > Invoice > Bank Deposit
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 42: How can you view a Profit and Loss report for a single specific Location in QBO?

Open a Profit and Loss report and use the report filter to select the specific Location (Correct answer)
Select P&L by Location from the report center and choose the desired location
Build a custom report from scratch using the advanced report builder
Export to Excel and manually filter the data by location column

Correct answer: Open a Profit and Loss report and use the report filter to select the specific Location

You can open any Profit and Loss report and use the filter options to select a specific Location, narrowing the results to that location only.

Question 43: Which report in QBO shows all outstanding bills grouped by how many days they are past due?

Accounts Payable Aging Summary (Correct answer)
Transaction List by Vendor
Unpaid Bills
Vendor Balance Detail

Correct answer: Accounts Payable Aging Summary

The Accounts Payable Aging Summary groups outstanding bills into aging buckets (Current, 1-30, 31-60, etc.) to show overdue amounts.

Question 44: Which QBO feature allows you to save a customized report with specific filters and date ranges for future use?

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

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

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

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 46: Which section of Account and Settings in QBO controls whether purchase orders are available in the company?

Payments settings
Expenses settings (Correct answer)
Sales settings
Advanced settings

Correct answer: Expenses settings

Purchase orders are enabled under the Expenses section of Account and Settings in QuickBooks Online.

Question 47: A customer pays only part of an outstanding invoice in QBO. What is the correct way to record this partial payment?

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

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 48: What is the correct sequence to record a sale when a customer pays at the time of service in QBO?

Delayed Charge → Invoice
Invoice → Receive Payment → Bank Deposit
Estimate → Invoice → Receive Payment
Sales Receipt (single step) (Correct answer)

Correct answer: Sales Receipt (single step)

A Sales Receipt combines the sale and payment into one transaction, making it the correct single-step form when payment is collected immediately.

Question 49: A vendor sends a bill with net-30 terms. Which QBO feature automatically calculates the due date when you enter the bill?

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

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 50: When configuring sales tax in QuickBooks Online, which setup step automatically calculates the correct tax rate for each transaction?

Importing tax tables from the IRS website
Manually entering tax rates on each invoice
Using the Automated Sales Tax feature linked to the customer's billing address (Correct answer)
Applying a single flat rate to all sales

Correct answer: Using the Automated Sales Tax feature linked to the customer's billing address

QBO's Automated Sales Tax feature uses the customer's billing address to apply the correct jurisdiction rate automatically.

Question 51: A bank statement ending balance is $10,000. QBO's register shows $9,800. What is the most common next step?

Close the books immediately
Identify uncleared or missing transactions totaling $200 (Correct answer)
Delete all transactions from the period
Adjust the bank statement to match QBO

Correct answer: Identify uncleared or missing transactions totaling $200

A $200 difference means you need to find uncleared transactions or missing entries that account for the gap.

Question 52: A business wants every new invoice to default to a 'Due on Receipt' payment term. Where is this configured in QBO?

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

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.

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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