QBO Financial Reporting 2 — Questions and Answers
Question 1: A client wants to see how much revenue was earned but not yet collected. Which report best shows this?
- Accounts Receivable Aging Summary (Correct answer)
- Profit and Loss by Month
- Balance Sheet
- Sales by Customer Summary
Correct answer: Accounts Receivable Aging Summary
The Accounts Receivable Aging Summary shows outstanding invoices grouped by how long they have been unpaid, revealing uncollected revenue.
Question 2: When running a Profit and Loss report in QBO, what does the 'Compare another period' option allow you to do?
- Show two date ranges side by side for trend analysis (Correct answer)
- Combine two companies into one report
- Export data to a comparison spreadsheet automatically
- Display budget vs. actual figures only
Correct answer: Show two date ranges side by side for trend analysis
The 'Compare another period' option displays two date ranges side by side so users can analyze performance trends over time.
Question 3: Which financial statement in QBO shows the net change in cash during a specific period?
- Balance Sheet
- Profit and Loss
- Statement of Cash Flows (Correct answer)
- Trial Balance
Correct answer: Statement of Cash Flows
The Statement of Cash Flows categorizes cash inflows and outflows into operating, investing, and financing activities to show net cash change.
Question 4: A business owner notices their net income is positive but cash is decreasing. Which report would best explain why?
- Profit and Loss Detail
- Statement of Cash Flows (Correct answer)
- Balance Sheet Comparison
- Accounts Payable Aging
Correct answer: Statement of Cash Flows
The Statement of Cash Flows reconciles net income to actual cash movement, revealing non-cash items and working capital changes causing the discrepancy.
Question 5: In QBO, what is the purpose of the 'Collapse' button on a Profit and Loss report?
- Hides zero-balance accounts
- Groups sub-accounts under their parent accounts to summarize data (Correct answer)
- Removes comparative period columns
- Filters out accounts below a threshold amount
Correct answer: Groups sub-accounts under their parent accounts to summarize data
The Collapse button hides individual sub-accounts and rolls their totals into parent account lines for a cleaner, higher-level view.
Question 6: Which QBO report would you run to verify that total debits equal total credits in the general ledger?
- Audit Log
- Journal Report
- Trial Balance (Correct answer)
- Account List
Correct answer: Trial Balance
The Trial Balance lists all accounts with their debit or credit balances and confirms they are in balance as required by double-entry accounting.
Question 7: A client needs a report showing every transaction posted to their bank account during Q1. Which report is most appropriate?
- Balance Sheet
- General Ledger (Correct answer)
- Cash Flow Statement
- Reconciliation Report
Correct answer: General Ledger
The General Ledger report shows every transaction recorded to a specific account, making it ideal for reviewing all bank account activity in a period.
QBO Financial Reporting 2
A client wants to see how much revenue was earned but not yet collected.
Which report best shows this?