Xero Reporting and Financial Analysis Flashcards

Which Xero feature allows you to schedule a report to be emailed to stakeholders automatically each month?

Answer: Report subscriptions

Report subscriptions in Xero let you set up automatic delivery of a saved report to specified email addresses on a recurring schedule.

A Xero user wants to export the Profit and Loss report data for further analysis in a spreadsheet. What export option does Xero offer?

Answer: PDF and Excel (XLSX) export

Xero reports can be exported as PDF for presentation or as Excel (XLSX) for further analysis in a spreadsheet application.

In Xero financial reporting, what does a negative figure in the 'Other Income' section of the Profit and Loss typically indicate?

Answer: Income has been coded in reverse (debit to income account)

A negative balance in an income account on the P&L usually means a transaction was debited to that account, reversing the income, such as a credit note or miscoding.

Which Xero report is best for verifying that opening balances entered during a migration match the previous accounting system's closing balances?

Answer: Trial Balance as at the conversion date

Running a Trial Balance as at the Xero conversion date confirms that all opening balance entries net to zero and agree with the previous system.

When a Xero Profit and Loss is run on a 'cash basis', which transactions are excluded?

Answer: Unpaid (outstanding) invoices and bills

On a cash basis P&L, only transactions where cash has moved are included; unpaid invoices and bills are excluded until payment is received or made.

A Xero adviser wants to assess whether a client's current assets can cover current liabilities. Which ratio is derived from Balance Sheet data?

Answer: Current ratio (current assets ÷ current liabilities)

The current ratio is calculated by dividing total current assets by total current liabilities, both of which are found on the Xero Balance Sheet.

In Xero, which report would you run to identify any accounts that have been used in the current period but have zero balances, potentially indicating miscoding?

Answer: Trial Balance showing all accounts including zero-balance

Running the Trial Balance with the option to show all accounts (including zeros) surfaces accounts with offsetting entries that net to zero, revealing potential miscoding.