QBO Managing Lists & Chart of Accounts 3 — Questions and Answers
Question 1: In QBO, which account type would you use to record a long-term loan payable over five years?
- Other Current Liability
- Accounts Payable
- Long-Term Liability (Correct answer)
- Expense
Correct answer: Long-Term Liability
Loans payable beyond one year are classified as Long-Term Liabilities in QBO.
Question 2: A client needs to track inventory costs. Which Product/Service type in QBO supports inventory tracking with COGS?
- Service
- Non-inventory
- Inventory (Correct answer)
- Bundle
Correct answer: Inventory
The Inventory product type in QBO tracks quantity on hand and automatically records Cost of Goods Sold when items are sold.
Question 3: How do you prevent users from adding new accounts to the Chart of Accounts in QBO Advanced?
- Lock the Chart of Accounts in Company Settings
- Remove the user's ability to manage accounts under Roles (Correct answer)
- Set all accounts to inactive
- There is no way to restrict this in QBO
Correct answer: Remove the user's ability to manage accounts under Roles
In QBO Advanced, custom roles can restrict specific users from creating or managing chart of accounts entries.
Question 4: What happens when you change the account type of an existing account in QBO?
- All transactions are deleted from the account
- The account balance resets to zero
- QBO warns that the change may affect reports and tax mapping (Correct answer)
- The account is automatically merged with another account
Correct answer: QBO warns that the change may affect reports and tax mapping
QBO displays a warning that changing the account type can affect how transactions appear on financial reports and tax forms.
Question 5: Which QBO list stores payment terms such as 'Net 30' or '2/10 Net 30'?
- Chart of Accounts
- Products & Services
- Terms list (Correct answer)
- Payment methods list
Correct answer: Terms list
The Terms list in QBO stores payment terms that can be applied to customer invoices and vendor bills.
Question 6: A customer's name appears twice in the Customer List due to a data entry error. What is the correct way to fix this in QBO?
- Delete one customer record
- Edit one name to match the other to trigger an automatic merge (Correct answer)
- Export, fix in Excel, and re-import
- Use the batch actions menu to combine records
Correct answer: Edit one name to match the other to trigger an automatic merge
To merge duplicate customers in QBO, edit one customer's name to exactly match the other and QBO will prompt you to merge them.
Question 7: In QBO, where do you configure the default income account for a specific product or service?
- Chart of Accounts > Edit
- Products & Services list > Edit item (Correct answer)
- Sales settings in Account and Settings
- Customer profile 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.
QBO Managing Lists & Chart of Accounts 3
In QBO, which account type would you use to record a long-term loan payable over five years?