Flashcards in True or False Deck (39):
Partnership is the most common type of business
False. Most are Sole Proprietorship
The Chart of Accounts tracks the items and services that you sell.
False. It is the collection of accounts to track the flow of money in, out, and through your business
You can use the Open or Restore Co. Feature in QB to open a new company file or to restore a backup file
True. This will open a new co. file or restore a backup file
Your business receives income from your customers in exchange for products and services you provide
True. Income is what you receive from customers in exchange for product or services you provide
A portable file is a compressed version of your existing Co. file
True. Contain info of your existing file in a compressed version
You use the function key F3 to perform a search in QB
True. You can do a quick and easy search by pressing the F3
You can use the export and import features to transfer historical transactions to another file
False. You can use the export and import features to transfer many components, but not historical transactions.
Your'd use the Schedule Backup window to designate when and how often you'd like to back up your file.
True. This window allows you to set when and how often you'd like QB to back up your Co. File.
QBM si the file extension assigned to your regular QB co. file
False. QBM is the three-digit file extension for a portable file
A complete verification of your file ensures that data isn't corrupted each time you back up in QB.
True. Verifying your file checks for corrupt data when you back up
Changes made to the My Preferences tab apply to all users of the file.
False. Changes made to the My Preferences tab will only affect the user who is currently logged on
QB balances your debits and credits during the condense data process.
False. The condense data process replaces transactions with the summary entries
A strong internal control system prevents errors in recording and reporting.
True. This is best to prevent errors.
Implementing a policy of separation of duties makes a company vulnerable to theft.
False. Separation of duties prevents employees from having access to a company asset, which reduces a company's vulnerability to theft.
When you create a new company file in QB the program will automatically log you in as a manager.
False. QB will automatically log you in as an administrator.
The ability to transfer funds between accounts is considered a sensitive accounting activity.
True. The authorization to transfer funds between accounts is found under the 'Sensitive Accounting Activities" window when you set up a new user.
Double-Entry Bookkeeping means you must make at least two journal entries each month to record transactions.
False. You make as many Journal entries necessary and can make none if there are none. Double-entry bookkeeping means that when recording a journal entry, debits always equal credits.
If a company has liabilities of $137,000 and assets of $398,000 its equity is $261,000
Every Journal entry includes a debit and a credit that do not necessarily need to equal each other.
False. Debit and credits must always equal each other.
The accounting equation is expressed as income minus expense.
False. That is the net income equation.
The balance sheet is a report that lists what a business owns, owes, and the net value of the business to owners.
True. This is an important list of what a business owns, owes, and the net value
The net accounting equation is expressed as assets = Liabilities + Equity
You use the Write Checks window to create checks to pay vendors and others.
True. Allows you to write and print checks to pay bills.
The accounts receivable subsidiary ledger contains all transactions posted from the journal.
False. The accounts receivable subsidiary ledger provides a detail of customer accounts alphabetically. It is the general ledger that contains all transactions posted from the journal.
The ledger lists transactions chronologically.
False. The ledger lists transactions chronologically only within each account. Primarily, the ledger lists transactions by accounts.
You use the Enter Bills function to record invoices you receive from vendors.
True. This will ensure that your accounts payable account is credited.
It is common practice to create a general journal entry in an accounts receivable or accounts payable controlling account.
False. Usually, there shouldn't be GL entries posted to these accounts. If you find any, you'll need to reverse them or the totals on your subsidiary ledgers may not match their respective controlling accounts.
The general journal entry is not generated automatically by QB.
True. You can create a general journal entry yourself to periodically adjust your account balances.
The fixed Asset account type is the best used to track long term assets in your business, like equipment and buildings.
An appropriate account number for a truck account is 195000.
True. A truck is a fixed asset, which falls under the asset account type. Asset accounts starts with the numeral 1
You can use the keyboard shortcut ALT+A to quickly access the Chart of Accounts in QB.
False. You use Ctrl+A to access the Chart of Accounts
A bank account is best used to track the balance of checking, savings, CDs, money markets, and the like
The best account type to track the amount of money you owe your vendors is Accounts Receivable
False. You use Accounts Payable account type to track the money that your business owes vendors
You can organize generic accounts by adding sub accounts.
True. Breaking down generic accounts into sub accounts keep your income and expenses organized.
If you don't enter information in all the fields when you set up a new customer, you can always use the Edit function to fill in the fields later
If you close QB while entering a new customer and open it again, you will lose the record permanently.
True. A better option to undo errors is to use Ctrl+Z
You can use the Chart of Accounts to keep track of important tasks.
False. This is best served by the To Do List
You can use the Payment Settings tab in the New Customer window to enter a credit limit for the customer.
True. The Payment Settings tab is where you can enter an account number, credit card info, and credit limit for your customer.