QBO Recording Transactions 3 — Questions and Answers
Question 1: What is the purpose of a Journal Entry in QBO?
- To import bank transactions automatically
- To manually debit and credit accounts for transactions not covered by standard forms (Correct answer)
- To reconcile the bank account
- To create a recurring invoice
Correct answer: To manually debit and credit accounts for transactions not covered by standard forms
Journal Entries allow accountants to manually adjust account balances using debits and credits for non-standard transactions.
Question 2: A company buys $500 of office supplies with a company credit card. Which QBO form should be used?
- Bill
- Check
- Expense (with credit card as payment account) (Correct answer)
- 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 3: In QBO, what does the 'Memo' field on a transaction primarily serve?
- It determines the tax category
- It provides a descriptive note for internal reference (Correct answer)
- It automatically creates a report
- It links the transaction to a customer
Correct answer: It provides a descriptive note for internal reference
The Memo field is a free-text note that helps identify the purpose of a transaction but does not affect accounting calculations.
Question 4: When you void a check in QBO, what happens to the transaction amount?
- It is deleted entirely
- The amount is set to zero and the transaction remains for audit trail (Correct answer)
- It is reversed with a new offsetting entry
- It is moved to a suspense account
Correct answer: The amount is set to zero and the transaction remains for audit trail
Voiding a check sets the amount to $0 while keeping the transaction in the register to preserve the audit trail.
Question 5: Which QBO report would you use to see every transaction posted to a specific account over a date range?
- Balance Sheet
- Transaction List by Date
- Account QuickReport / Transaction Detail by Account (Correct answer)
- Profit and Loss
Correct answer: Account QuickReport / Transaction Detail by Account
The Account QuickReport or Transaction Detail by Account report lists all transactions posted to a selected account within a chosen period.
Question 6: You accidentally posted an expense to the wrong account. What is the recommended way to fix this in QBO?
- Delete the transaction and re-enter it
- Edit the transaction directly and change the account (Correct answer)
- Create a reversing Journal Entry
- Enter a credit memo
Correct answer: Edit the transaction directly and change the account
You can simply open the transaction, change the account to the correct one, and save — QBO updates the general ledger automatically.
Question 7: What does a negative balance in Accounts Payable typically indicate in QBO?
- You owe more money to vendors than usual
- You have overpaid a vendor or applied a vendor credit in excess of what is owed (Correct answer)
- The bank account is overdrawn
- A data entry error that cannot be fixed
Correct answer: You have overpaid a vendor or applied a vendor credit in excess of what is owed
A negative AP balance usually means vendor payments or credits exceed outstanding bills, indicating an overpayment or unapplied vendor credit.
QBO Recording Transactions 3
What is the purpose of a Journal Entry in QBO?