Certified QuickBooks ProAdvisor — Questions and Answers

Question 1: What is the purpose of the 'Undeposited Funds' account in QBO?

To temporarily hold payments received before they are deposited into a bank account (Correct answer)
To hold overpayments from customers
To track checks that have bounced
To record petty cash transactions

Correct answer: To temporarily hold payments received before they are deposited into a bank account

Undeposited Funds acts as a holding account for received payments until they are grouped and recorded as a bank deposit.

Question 2: A client has several customers who paid with checks and cash throughout the day. To efficiently record these payments and ensure the bank deposit matches, what is the recommended final step in the QuickBooks Online sales workflow?

Hold the checks and cash until the end of the week and then create separate deposit slips for each payment.
Individually record each payment using the 'Receive Payment' screen and deposit them directly to the bank account.
Use the 'Bank Deposit' feature to group the payments received from Undeposited Funds into a single deposit transaction. (Correct answer)
Create a single Sales Receipt for the total amount and deposit it to Undeposited Funds.

Correct answer: Use the 'Bank Deposit' feature to group the payments received from Undeposited Funds into a single deposit transaction.

The correct workflow is to first receive payments against invoices (or create sales receipts) and direct these funds to the 'Undeposited Funds' account. Then, when the physical deposit is made at the bank, use the 'Bank Deposit' screen to select all the individual payments that constitute that single deposit. This ensures that the deposit amount in QuickBooks matches the actual bank deposit, simplifying bank reconciliation.

Question 3: When setting up a recurring bill in QBO, which recurrence type creates a bill automatically without any user review?

Scheduled (Correct answer)
Unscheduled
Memorized
Reminder

Correct answer: Scheduled

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

Question 4: What does the 'Voided/Deleted Transactions' report in the Audit Log help an accountant identify?

Unauthorized changes or deletions made to transactions (Correct answer)
Duplicate vendor payments
Sales tax adjustments
Transactions posted to inactive accounts

Correct answer: Unauthorized changes or deletions made to transactions

The Voided/Deleted Transactions report surfaces any transaction that was removed or voided, including who made the change and when, supporting fraud detection.

Question 5: A ProAdvisor is setting up classes in QBO for a nonprofit client to track programs. Under which setting must 'Track classes' first be enabled?

Account and Settings > Sales > Products and Services
Account and Settings > Advanced > Categories (Correct answer)
Reports > Management Reports
Account and Settings > Expenses > Bills and expenses

Correct answer: Account and Settings > Advanced > Categories

Class tracking must be enabled under Account and Settings > Advanced > Categories before classes can be assigned to transactions.

Question 6: A client wants to bill customers for actual time spent on projects. Which two features must be turned on in QBO settings to enable this workflow?

Budgeting and Classes
Inventory tracking and Purchase Orders
Projects and Multicurrency
Time tracking and Billable expenses/hours (Correct answer)

Correct answer: Time tracking and Billable expenses/hours

Enabling Time Tracking and marking time as Billable allows employees to log hours that can then be added directly to customer invoices.

Question 7: A QBO company uses classes to track sales by department. Where do you assign a class when creating an invoice?

On each line item or in the header of the invoice form (Correct answer)
Only through a journal entry after the invoice is saved
In the customer profile under Payment and billing
In Company Settings before saving the invoice

Correct answer: On each line item or in the header of the invoice form

When class tracking is enabled, a Class column appears on each line item of the invoice (or in the header if set to one class per transaction).

Question 8: Which QBO feature allows you to automatically email an invoice to a customer on a recurring schedule without manual intervention?

Batch Invoicing
Progress Invoicing
Delayed Charge
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 9: In QuickBooks Online, what is the effect of marking an account as 'inactive'?

The account no longer appears in transaction dropdowns but historical data is preserved (Correct answer)
The account is permanently removed from the chart of accounts
The account balance is zeroed out automatically
All transactions in that account are deleted

Correct answer: The account no longer appears in transaction dropdowns but historical data is preserved

Making an account inactive hides it from dropdowns and forms while retaining all historical transactions and balances for reporting purposes.

Question 10: A client wants to pay multiple vendors at once via online bill pay in QBO. Which feature supports this workflow?

QBO Bill Pay powered by Melio (Correct answer)
Vendor Center bulk payment export
Batch Actions on the Bill list
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 11: In QBO, which transaction type should be used when a customer returns merchandise and you need to issue them a refund check?

Journal Entry to debit A/R
Delayed Credit
Vendor 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 12: When viewing a Profit & Loss report, what is the primary difference between selecting the 'Accrual' basis versus the 'Cash' basis?

Cash basis shows income when invoices are created and expenses when bills are entered.
Cash basis reports are always more accurate for tax purposes.
Accrual basis only includes transactions that have cleared the bank.
Accrual basis shows income when it is earned and expenses when they are incurred, regardless of when money changes hands. (Correct answer)

Correct answer: Accrual basis shows income when it is earned and expenses when they are incurred, regardless of when money changes hands.

Accrual basis accounting recognizes revenue when the sale is made (earned) and expenses when they are incurred, not when payment is sent or received. Cash basis accounting, conversely, recognizes revenue and expenses only when cash is actually exchanged.

Question 13: What is the purpose of a Purchase Order (PO) in QBO?

To record payment to a vendor immediately
To reverse an incorrectly posted vendor bill
To formally request goods or services from a vendor before receiving a bill (Correct answer)
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 14: What is the correct sequence to record a sale when a customer pays at the time of service in QBO?

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

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 15: When a Desktop file with inventory is converted to QuickBooks Online, why might inventory values change?

QBO uses standard costing only
QBO uses LIFO costing
QBO uses FIFO costing while Desktop uses average cost (Correct answer)
QBO doesn't track quantity on hand

Correct answer: QBO uses FIFO costing while Desktop uses average cost

QBO recalculates inventory under FIFO, so values can differ from Desktop's average cost.

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

Projects
Class Tracking
Billable Expenses (Correct answer)
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: What is the purpose of the 'Undeposited Funds' account in QBO's sales workflow?

It records revenue that has been invoiced but not yet collected
It holds funds that have been deposited but not yet reconciled
It temporarily holds payments received before they are grouped into a bank deposit (Correct answer)
It tracks credit card refunds awaiting processing

Correct answer: It temporarily holds payments received before they are grouped into a bank deposit

Undeposited Funds acts as a holding account for received payments until you combine them into a single bank deposit matching your actual bank statement.

Question 18: 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)
Create at least one invoice
Import a chart of accounts from Excel
Set up payroll

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 19: During initial QBO setup, what does the 'closing date' setting in Account and Settings protect?

It prevents all users from logging in after business hours
It locks the payroll module after each pay run
It automatically closes open invoices at month-end
It restricts editing or deleting transactions before a specified date without a password (Correct answer)

Correct answer: It restricts editing or deleting transactions before a specified date without a password

The closing date requires a password to edit transactions dated on or before that date, protecting reconciled historical data.

Question 20: What does 'item-based' expense entry on a bill in QBO allow that account-based entry does not?

Tracking inventory received and updating stock quantities (Correct answer)
Attaching receipts to the bill
Setting payment terms on the bill
Assigning the expense to a class

Correct answer: Tracking inventory received and updating stock quantities

Item-based bill lines update inventory quantities in QBO, while account-based lines only affect the general ledger expense account.

Question 21: What does the 'Record Tax Payment' function in QBO's Sales Tax Center accomplish?

Imports tax data from the IRS
Calculates the tax rate for the next period
Records remittance to the tax agency and clears the sales tax liability (Correct answer)
Generates an automatic tax refund request

Correct answer: Records remittance to the tax agency and clears the sales tax liability

Recording a tax payment creates a transaction that reduces the sales tax liability and marks the amount as paid to the agency.

Question 22: Which action should you take in QBO when a customer overpays an invoice and you need to apply the credit to a future invoice?

Delete the original invoice and re-enter it for the correct amount
Create a Credit Memo and apply it to the next invoice (Correct answer)
Issue a refund check immediately
Record a journal entry to miscellaneous income

Correct answer: Create a Credit Memo and apply it to the next invoice

A Credit Memo records the overpayment as a customer credit that can be applied to reduce the balance on any future invoice.

Question 23: A client runs a marketing agency and frequently uses freelance graphic designers. To ensure proper tracking for 1099-NEC forms at year-end, what is the correct way to set up these individuals in QuickBooks Online?

Create a journal entry for each payment made to the designers.
Add them in the 'Vendors' list and collect a Form W-9. (Correct answer)
Set them up under the 'Projects' feature without adding them as a vendor.
Add them as employees but mark them as "statutory" and exempt from withholdings.

Correct answer: Add them in the 'Vendors' list and collect a Form W-9.

Independent contractors must be set up as Vendors in QuickBooks Online. It is crucial to collect a Form W-9 from them to get their Taxpayer Identification Number (TIN) and other necessary details. Within the vendor's profile, the user must check the box to 'Track payments for 1099' to enable QBO to properly report the payments at year-end.

Question 24: Which vendor profile setting must be turned on so a contractor's payments appear in QuickBooks Online's 1099 reports?

Apply sales tax to purchases
Enable vendor payment terms
Track payments for 1099 (Correct answer)
Vendor is tax exempt

Correct answer: Track payments for 1099

Only vendors marked to track payments for 1099 are included in the 1099 preparation flow.

Question 25: In QBO, what does setting a customer's 'Payment Terms' to Net 30 mean?

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

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

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

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

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

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

As Other Current Liabilities until applied
As a negative balance in Accounts Receivable
As a debit balance in Accounts Payable (reducing the liability) (Correct answer)
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 29: 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
Schedules the payment via bank auto-pay
Applies available vendor credits automatically (Correct answer)
Splits the payment across multiple bank accounts

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 30: A company wants to require manager approval before any vendor bill over $1,000 is paid. QBO's native workflow supports this through:

Purchase Order mandatory linkage
QBO Advanced's Workflow Automation feature (Correct answer)
Custom transaction approval rules in settings
Restricting bill payment permissions to managers only

Correct answer: QBO Advanced's Workflow Automation feature

QBO Advanced includes Workflow Automation that can route transactions above specified thresholds for approval before payment.

Question 31: 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?

Leave the unapplied amount as a customer credit directly from the Receive Payment screen without creating a separate transaction.
Delete the original payment and re-enter it for the correct invoice amount.
Create a Credit Memo for the overpayment amount, which can then be applied to a future invoice. (Correct answer)
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 32: A foreign-currency invoice is paid and the exchange rate on the payment date differs from the rate on the invoice date. Which account records the resulting difference?

Opening Balance Equity
Retained Earnings
Undeposited Funds
Realized Gain or Loss (Correct answer)

Correct answer: Realized Gain or Loss

When a foreign-currency transaction is settled at a different rate than it was recorded at, QuickBooks posts the difference to the Realized Gain or Loss account. Unrealized gain or loss applies to open balances revalued at a reporting date.

Question 33: A client's QuickBooks Online is set to 'Cash Basis' accounting. What does this mean for how income is reported?

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

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 34: Which statement about the Primary admin role in QuickBooks Online is accurate?

A company can have up to three Primary admins
The Primary admin cannot view the Audit Log
The Primary admin role is automatically assigned to the accountant user
There is only one Primary admin per company, and the role can be transferred (Correct answer)

Correct answer: There is only one Primary admin per company, and the role can be transferred

Each company has exactly one Primary admin, who can transfer that role to another admin.

Question 35: In QBO, what does the 'Balance Forward' statement type show customers?

Only credits applied during the period
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)

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 36: An auditor asks for a list of all changes made by a specific employee last month. What is the fastest way to produce it?

Export the Chart of Accounts
Filter the Audit Log by that user and a custom date range (Correct answer)
Run the Journal report
Review the employee's timesheets

Correct answer: Filter the Audit Log by that user and a custom date range

The Audit Log can be filtered by user, date range, and event type to isolate one person's activity.

Question 37: In a single-amount-column bank CSV import into QuickBooks Online, how are money-out transactions usually shown?

With the letter D before the amount
As negative amounts (Correct answer)
In a separate memo column
In brackets in the Description column

Correct answer: As negative amounts

With one amount column, deposits are positive and withdrawals are negative; the mapping step can flip the signs if the bank uses the opposite convention.

Question 38: Which federal deposit schedule requires payroll taxes to be deposited the next business day after payroll?

Next-day deposit rule (Correct answer)
Semi-weekly depositor schedule
Annual depositor schedule
Monthly depositor schedule

Correct answer: Next-day deposit rule

The next-day deposit rule applies when a single payroll accumulates $100,000 or more in tax liability on any day.

Question 39: A QBO customer is exempt from sales tax. Where do you mark this so invoices are automatically created without tax?

By deleting the sales tax item from Products and Services
In the customer's profile under the Tax info tab (Correct answer)
On each individual invoice line item
In Account and Settings > Taxes

Correct answer: In the customer's profile under the Tax info tab

Setting the customer as tax-exempt in their Tax info tab ensures all future invoices for that customer are created without sales tax automatically.

Question 40: Which QBO tool lets you see all sales activity for a single customer on one screen, including invoices, payments, and credits?

A/R Aging Detail report
Transaction Detail by Account report
Profit & Loss by Customer report
Customer page (customer ledger) (Correct answer)

Correct answer: Customer page (customer ledger)

Opening a customer's record in QBO displays their full transaction history — invoices, payments, credits, and the running balance — all on one page.

Question 41: A client wants to track mileage as a business expense in QBO. Which feature should you direct them to use?

Class tracking for vehicle costs
Journal Entry with a mileage account
Expense form with a custom mileage field
Mileage tracking under the + New menu (Correct answer)

Correct answer: Mileage tracking under the + New menu

QBO has a built-in Mileage tracking feature accessible from the + New menu that calculates reimbursable mileage at the IRS rate.

Question 42: Which QBOA tool allows ProAdvisors to see a consolidated view of all clients' key financial metrics at a glance?

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

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 43: 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)
Sales Receipt > Bank Deposit
Estimate > Sales Receipt > Bank Deposit
Receive Payment > Invoice > 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 44: 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 rebuilds the chart of accounts to match the new industry
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)

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 45: 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
Vendor profile under Payment terms (Correct answer)
Bill form's Discount field each time
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 46: How do you mark a customer as sales tax-exempt in QBO?

Use a journal entry to reverse tax charges each month
Apply a 0% rate manually to every invoice
Set their tax status to Exempt in their customer profile (Correct answer)
Delete their shipping address

Correct answer: Set their tax status to Exempt in their customer profile

Setting the Tax info field to Exempt in the customer's profile prevents QBO from calculating sales tax on that customer's transactions.

Question 47: 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?

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

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

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

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 49: A client running a cash-basis business wants to see income only when payment is received. Which report setting ensures this?

Modified cash basis
Cash (Correct answer)
Accrual
Hybrid

Correct answer: Cash

Setting the report to Cash basis shows income and expenses only when money actually changes hands, not when invoices are issued.

Question 50: A business enables 'One class per row' and 'Warn me when a transaction isn't assigned a class.' An employee saves an invoice leaving two line items without a class. What occurs?

The unclassified lines are automatically assigned the most recently used class
A warning message appears but the invoice is saved with those lines unclassified (Correct answer)
The invoice is rejected and cannot be saved until all lines have a class
The invoice saves silently with no warning displayed

Correct answer: A warning message appears but the invoice is saved with those lines unclassified

The warn setting is advisory only; it alerts the user but does not prevent saving, so the invoice is saved with the unclassified lines remaining unassigned.

Question 51: A user successfully ran and submitted payroll for the week. The next day, they realize they forgot to include a $100 bonus for one employee. The direct deposit has already been processed and sent. Which of the following is the most appropriate action to take within QuickBooks Online Payroll to pay the employee the missing amount?

Manually write a check to the employee and record it as a regular expense, bypassing the payroll module.
Adjust the employee's next regular paycheck to include the $100 bonus from the previous period.
Run an "Unscheduled" or "Off-cycle" payroll for only the one employee and the bonus amount. (Correct answer)
Delete the entire payroll run and create a new one with the correct amounts.

Correct answer: Run an "Unscheduled" or "Off-cycle" payroll for only the one employee and the bonus amount.

Once a payroll with direct deposit has been processed, it cannot be deleted or edited. The proper method to pay an additional amount for the same pay period is to run an off-cycle or unscheduled payroll. This ensures the bonus is taxed correctly for the period it was earned and that all payroll reports remain accurate. While adding it to the next check is a possible workaround, it is not the most accurate method for tax and reporting purposes.

Question 52: A customer's invoice is paid via ACH bank transfer. In QBO, which Payment Method should be selected when recording the Receive Payment?

Cash
Check
Credit Card
ACH or e-check (Correct answer)

Correct answer: ACH or e-check

ACH or e-check is the appropriate payment method for direct bank transfers, keeping the deposit records accurate and audit-ready.

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

These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

quickbooks.intuit.com — Eligibility, passing score, retake policy, renewal, test delivery · verified Oct 2026