QBO Class and Location Tracking 1 — Questions and Answers
Question 1: What is the primary purpose of Class tracking in QuickBooks Online?
- To track transactions by the physical location of the business
- To categorize transactions by department, product line, or business segment (Correct answer)
- To assign expenses to specific customers
- To organize vendors by type
Correct answer: To categorize transactions by department, product line, or business segment
Class tracking allows you to categorize transactions by business segment, department, or product line for more detailed internal reporting.
Question 2: Where in QuickBooks Online do you enable Class tracking?
- Chart of Accounts settings
- Account and Settings under the Advanced tab (Correct answer)
- Sales settings under Customization
- Payroll Settings
Correct answer: Account and Settings under the Advanced tab
Class tracking is enabled in Account and Settings under the Advanced tab, in the Categories section.
Question 3: What does the 'Warn me when a transaction isn't assigned a class' setting do in QBO?
- Prevents saving a transaction without a class
- Automatically assigns a default class to unclassified transactions
- Displays a warning but still allows saving without a class (Correct answer)
- Deletes transactions that do not have a class assignment
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 4: What is the key difference between Class and Location tracking in QuickBooks Online?
- Classes track employees; Locations track customers
- Classes segment business activities such as departments; Locations identify physical or divisional business locations (Correct answer)
- Classes are used for income only; Locations are used for expenses only
- Classes track time entries; Locations track inventory movement
Correct answer: Classes segment business activities such as departments; Locations identify physical or divisional business locations
Class tracking segments business activities like departments or product lines, while Location tracking identifies the physical or divisional location where transactions occur.
Question 5: How many classes can be assigned to a single transaction line item in QuickBooks Online?
- Up to three classes per line
- As many as needed
- Only one class per line (Correct answer)
- Up to five classes per line
Correct answer: Only one class per line
QBO allows only one class to be assigned per transaction line item, providing single-dimension segmentation.
Question 6: Which QuickBooks Online report shows income and expenses broken down by Class?
- Balance Sheet by Class
- Profit and Loss by Class (Correct answer)
- Transaction Detail by Account
- Expenses by Vendor Summary
Correct answer: Profit and Loss by Class
The Profit and Loss by Class report displays income and expenses segmented by each class assigned to transactions.
Question 7: When setting up class tracking, what option allows you to assign one class to the entire transaction rather than individual lines?
- Global class assignment
- Header-level class override
- One class per row
- One class per transaction (Correct answer)
Correct answer: One class per transaction
In Account and Settings, selecting 'One to each entire transaction' assigns a single class to the whole transaction rather than per line.
QBO Class and Location Tracking 1
What is the primary purpose of Class tracking in QuickBooks Online?