Inventory Test Bank Answers Ch7

Computer Accounting with QuickBooks 2019, 19e (Kay)

Chapter 7 Inventory

1) How does QuickBooks categorize items?

A) Non-inventory items

B) Inventory items

C) Service items

D) All the choices are correct

Difficulty: 1 Easy

Learning Objective: 07-05 Items & Services List

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

2) Which of the following activities and QuickBooks window used to record it is incorrect?

A) Sell goods and bill customers; Invoice

B) Record inventory information; Inventory List

C) Record vendor information; Vendors List

D) Order goods; Purchase Order

Difficulty: 2 Medium

Learning Objective: 07-04 Vendor Navigation

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

3) Which one of the following activities is not shown in the Vendors section of the Home page?

A) Write Checks

B) Pay Sales Taxes

C) Pay Bills

D) Purchase Orders

Difficulty: 1 Easy

Learning Objective: 07-04 Vendor Navigation

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

4) Which one of the following is usually classified as an inventory item?

A) Goods purchased for resale to customers

B) Items purchased and the quantity on hand does not need to be tracked

C) Items purchased and used by the company such as office supplies

D) Items purchased for a specific customer job

Difficulty: 2 Medium

Learning Objective: 07-05 Items & Services List

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

5) Which of the following reports is typically used when counting inventory on hand?

A) Inventory Valuation Summary

B) Inventory Valuation Detail

C) Inventory Stock Status by Item

D) Physical Inventory Worksheet

Difficulty: 1 Easy

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

6) The Inventory Stock Status by Item report is used when:

A) Vendors offer a purchase discount on inventory items

B) A list is needed of the quantity of inventory on hand and on order

C) The computers go down

D) Inventory items are physically placed in the warehouse

Difficulty: 2 Medium

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

7) Vendor reports can be accessed in QuickBooks in all of the following ways except:

A) Reports Center

B) Vendors Center

C) Reports Menu

D) All the choices are correct

Difficulty: 1 Easy

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

8) What QuickBooks activity comes next in this series of business activities:

Purchase Order > Receive Items > Enter Bills > ______

A) Receive Payments

B) Pay Bills

C) Deposit

D) Vendors List

Difficulty: 1 Easy

Learning Objective: 07-04 Vendor Navigation; 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

9) What QuickBooks activity comes next in this series of business activities:

Invoice > Receive Payments > ______

A) Make Deposit

B) Receive Payments

C) Pay Bills

D) Vendors List

Difficulty: 1 Easy

Learning Objective: 07-04 Vendor Navigation

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

10) If you received inventory without a bill, once the bill has arrived you could do all of the following, except:

A) Enter the bill against the inventory already recorded

B) Enter the inventory and then enter the bill separately

C) Enter the bill and wait for the inventory to arrive

D) Enter the inventory and bill at the same time

Difficulty: 2 Medium

Learning Objective: 07-08 Receive Inventory; 07-09 Enter Bills Against Inventory

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

11) The Purchase Orders window is used to record which one of the following transactions?

A) A customer order to purchase goods

B) An order to purchase goods from a vendor

C) Services received but not yet paid

D) Cash purchases of supplies

Difficulty: 1 Easy

Learning Objective: 07-07 Create Purchase Orders

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

12) Which order of tasks is used when purchasing inventory? 

A) Enter Bills > Pay Bills

B) Enter Invoice > Write Check

C) Purchase Order > Receive Items > Receive Bill > Pay Bills

D) Purchase Requisition > Receive Inventory > Pay Bills

Difficulty: 1 Easy

Learning Objective: 07-04 Vendor Navigation

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

13) Sales taxes are:

A) Charged on sales to other retailers

B) Charged on retail sales to customers

C) Paid by the retailer on sales to vendors

D) Paid by the vendor

Difficulty: 2 Medium

Learning Objective: 07-11 Pay Sales Tax; 07-05 Items & Services List

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

14) The Open Purchase Orders Report gives information about:

A) Purchase Orders for items ordered but not yet received

B) All Purchase Orders

C) Purchase Orders from domestic companies only

D) Purchase Orders from foreign companies only

Difficulty: 2 Medium

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

15) A non-inventory item is:

A) Goods purchased for resale to customers

B) An item purchased for a specific customer job

C) A service purchased from a vendor

D) A service sold to a vendor

Difficulty: 2 Medium

Learning Objective: 07-05 Items & Services List

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

16) Which window is used to pay sales taxes?

A) Create Invoice

B) Write Checks

C) Manage Sales Tax

D) Enter Bills

Difficulty: 1 Easy

Learning Objective: 07-11 Pay Sales Tax

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

17) Which report provides information on items ordered but not received?

A) Accounts Payable Aging Detail

B) Accounts Payable Aging Summary

C) Open Purchase Orders Report

D) Physical Inventory Worksheet

Difficulty: 2 Medium

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

18) Which one of the following is not a vendor transaction? 

A) Receive inventory

B) Receive payments

C) Order inventory

D) Receive bills

Difficulty: 1 Easy

Learning Objective: 07-03 Vendor and Customer Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

19) Recording a purchase of inventory using QuickBooks involves all the following steps except:

A) Create purchase order to order items from vendor

B) Receive item and record as inventory

C) Create invoice order to bill customers for purchases

D) Receive bill and record obligation to pay vendor later

Difficulty: 2 Medium

Learning Objective: 07-04 Vendor Navigation

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

20) The Physical Inventory Worksheet is used when:

A) inventory items are physically placed in the warehouse

B) the computer system goes down

C) taking a physical count of inventory on hand

D) All the choices are correct

Difficulty: 2 Medium

Learning Objective: 07-12 Vendor Reports

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

21) Briefly describe how sales tax payments flow from customers to government entities.

Difficulty: 3 Hard

Learning Objective: 07-11 Pay Sales Tax

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual

22) Describe the three types of items:  Inventory items, Non-inventory items, and Services. Provide examples of each.

Non-inventory items are purchases for a specific job, for example a custom countertop; items purchased and used by the company instead of reselling to customers, for example, copy paper, pens, and coffee; and items purchased and resold to customers, but the quantity does not need to be tracked, for example, Rock Castle might include roofing nails in this category.

Service items can be services that are purchased or sold. For example, service items include: services you buy from vendors, such as cleaning services and services you sell to customers, such as installation labor.

Difficulty: 3 Hard

Learning Objective: 07-05 Items & Services List

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual

23) Briefly describe a 3-way match and how it can be used to improve internal control.

1. What was ordered?

2. What was received?

3. What was billed?

Basically, we want to compare what we ordered with what we received, and what we were billed. These three amounts should agree so that we are not paying for more than what we ordered or received.

Difficulty: 3 Hard

Learning Objective: 07-14 Accounting Essentials: Inventory and Internal Control

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual