QuickBooks Merchandise Company Complete Test Bank Chapter 13

Computer Accounting with QuickBooks 2019, 19e (Kay)

Chapter 13 QuickBooks Merchandise Company

1) Retail customers:

A) Pay no sales tax

B) Pay sales tax

C) Pay a manufacturing tax

D) Pay sales tax on labor only

Difficulty: 1 Easy

Learning Objective: 13-06 Customer, Vendor, and Item Lists

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

2) After creating a new QuickBooks data file for an existing company and entering all the existing balances, use an opening adjusting entry to move the balance in the ________ account to the Capital Stock account.

A) Uncategorized Expenses

B) Uncategorized Income

C) Opening Balance Equity

D) None of the choices are correct

Difficulty: 2 Medium

Learning Objective: 13-08 QuickBooks Opening Adjustments

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

3) Identify which of the following opening adjusting entries should be used when setting up in QuickBooks an existing company with opening balances:

A) Debit: Capital Stock, Credit: Opening Balance Equity

B) Debit: Opening Balance Equity, Credit: Capital Stock

C) Debit: Accounts Receivable, Credit: Capital Stock

D) Debit: Accounts Payable, Credit: Opening Balance Equity

Difficulty: 3 Hard

Learning Objective: 13-08 QuickBooks Opening Adjustments

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

4) A consulting firm is an example of a ________ company.

A) Service

B) Retail Shop

C) Manufacturing

D) Merchandise

Difficulty: 1 Easy

Learning Objective: 13-02 New QuickBooks Merchandising Company

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

5) An accounting firm is an example of a ________ company.

A) Service

B) Retail Shop

C) Manufacturing

D) Product-based business

Difficulty: 1 Easy

Learning Objective: 13-02 New QuickBooks Merchandising Company

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

6) When you place an order for items from a vendor, which one of the following QuickBooks forms would you use?

A) Create Invoice

B) Receive Inventory

C) Purchase Order

D) None of the choices are correct

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

7) When using QuickBooks, sales tax is:

A) Calculated manually for each item sold

B) Calculated for all items that are listed on an invoice

C) Calculated automatically by QuickBooks for items flagged as taxable

D) All the choices are correct

Difficulty: 2 Medium

Learning Objective: 13-06 Customer, Vendor, and Item Lists; 13-10 Customers and Sales Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

8) The Sales Tax Rate appears on which of the QuickBooks lists?

A) Customers List

B) Vendors List

C) Item List

D) Account List

Difficulty: 2 Medium

Learning Objective: 13-06 Customer, Vendor, and Item Lists

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

9) Inventory items received should be compared against:

A) Sales order

B) Purchase order

C) Supplies inventory

D) Sales receipt

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

10) When recording the sale of a product, which account is increased?

A) Inventory

B) Accounts Receivable

C) Notes Payable

D) None of the choices are correct

Difficulty: 3 Hard

Learning Objective: 13-10 Customers and Sales Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

11) The purchasing cycle includes all of the following transactions except:

A) Create a purchase order to order inventory

B) Receive inventory items and record in the inventory account

C) Enter hours in the time sheet for stocking inventory

D) Enter bill in QuickBooks when bill is received

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

12) To view account numbers in the Chart of Accounts, select:

A) Edit > Preferences > General > Company Preferences

B) Edit > Preferences > Desktop View > Company Preferences

C) Edit > Preferences > General > My Preferences

D) Edit > Preferences > Accounting > Company Preferences

Difficulty: 2 Medium

Learning Objective: 13-07 Customize Chart of Accounts

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

13) To add an existing opening balance to a new account, select:

A) New Account > Opening Balance

B) Account Options > Enter Opening Balance

C) Account > Opening Balance

D) Edit Account > Enter Opening Balance

Difficulty: 2 Medium

Learning Objective: 13-07 Customize Chart of Accounts

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

14) The cost of the inventory items sold is tracked in what account:

A) Items Sold

B) Materials Cost

C) Cost of Goods Sold

D) Inventory Sold

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

15) If the supplies on hand at the end of January totaled $500 and the Supplies on Hand account before adjustment is $900, what should be the adjustment at month-end?

A) Increase supplies on hand by $900; reduce supplies expense by $900

B) Reduce supplies on hand by $400; increase supplies expense by $400

C) Reduce supplies on hand by $500; increase supplies expense by $500

D) Increase supplies on hand by $400; reduce supplies expense by $400

Difficulty: 3 Hard

Learning Objective: 13-11 Adjusting Entries

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

16) A furniture store is an example of a ________ company.

A) Service

B) Merchandise

C) Manufacturing

D) None of the choices are correct

Difficulty: 1 Easy

Learning Objective: 13-02 New QuickBooks Merchandising Company

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

17) When creating a new QuickBooks data file for an existing company, QuickBooks automatically offsets accounts receivable balances with an entry to the:

A) Uncategorized Expenses account

B) Uncategorized Income account

C) Opening Balance Equity account

D) Capital Stock account

Difficulty: 3 Hard

Learning Objective: 13-08 QuickBooks Opening Adjustments

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

18) When creating a new QuickBooks data file for an existing company, QuickBooks automatically offsets accounts payable balances with an entry to the:

A) Uncategorized Expenses account

B) Uncategorized Income account

C) Opening Balance Equity account

D) Capital Stock account

Difficulty: 3 Hard

Learning Objective: 13-08 QuickBooks Opening Adjustments

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

19) The purchasing cycle for a merchandising company consists of:

A) Create Purchase Order > Receive Payment > Make Deposits

B) Create Purchase Order > Receive Inventory > Enter Bill > Pay Bill

C) Create Invoice > Receive Payment > Record Deposits

D) Create Invoice > Receive Inventory > Pay Bill > Record Deposits

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

20) The sales cycle for a merchandising company consists of:

A) Create Purchase Order > Receive Inventory > Enter Bill > Pay Bill

B) Create Purchase Order > Receive Payment > Make Deposits

C) Create Invoice > Receive Payment > Make Deposits

D) Create Invoice > Receive Inventory > Pay Bill > Make Deposits

Difficulty: 2 Medium

Learning Objective: 13-10 Customers and Sales Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: automatic

21) Briefly explain how the supplies on hand account is adjusted at the end of the period.

Difficulty: 2 Medium

Learning Objective: 13-11 Adjusting Entries

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual

22) Name 2 (two) differences between accounting for a service company and a retail shop.

• A merchandising company tracks inventory and cost of goods sold, while a service company tracks services and hours per project.
• The accounts in the Chart of Accounts can vary for a service company versus a merchandising company. For example, a retail shop uses the Inventory account while typically a service company does not.
• A merchandising company must collect and account for sales taxes payable. Typically, a service company does not collect sales taxes on services.

Difficulty: 2 Medium

Learning Objective: 13-06 Customer, Vendor, and Item Lists; 13-08 QuickBooks Opening Adjustments; 13-02 New QuickBooks Merchandising Company; 13-09 Vendor and Expense Transactions; 13-10 Customers and Sales Transactions; 13-07 Customize Chart of Accounts; 13-11 Adjusting Entries; 13-01 QuickBooks SatNav; 13-03 Create New Company; 13-04 Add Bank Account; 13-05 Customize QuickBooks Preference; 13-12 Financial Reports; 13-13 Back Up QuickBooks Files

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual

23) Briefly describe the main differences in using QuickBooks for a service company versus a merchandise company.

• A merchandise company Vendor section of the QuickBooks Home Page includes a Purchase Orders icon and a service company Vendor section does not.
• A merchandise company Vendor section of the QuickBooks Home Page includes a Receive Inventory icon and a service company Vendor section does not.
• A merchandise company Vendor section of the QuickBooks Home Page includes an Enter Bills Against Inventory icon and a service company Vendor section does not.
• A merchandise company Vendor section of the QuickBooks Home Page includes a Manage Sales Tax icon and a service company Vendor section does not.
• Both the service company and merchandise company Vendor section includes Enter Bills and Pay Bills icons.

Difficulty: 2 Medium

Learning Objective: 13-09 Vendor and Expense Transactions

Accessibility: Keyboard Navigation; Screen Reader Compatible

Gradable: manual