SOLUTIONS MANUAL FOR Computer Accounting with QuickBooks Online A Cloud-Based Approach, 2e Carol Yac

SOLUTION'S MANUAL FOR Computer Accounting with QuickBooks Online A Cloud-Based Approach, 2e Carol Yacht, Susan Crosson.

Chapter 1, Analysis Questions 1. Define the chart of accounts and its categories. How do accounting textbooks define the chart of accounts?

ANSWER: The Chart of Accounts is a complete list of a business’s accounts and their balances. QBO includes the Account name, Type (for financial statement classification), the Detail Type (account subcategory), and Balance. The chart of accounts includes two categories of accounts: •

Balance Sheet accounts: In QBO, these types of accounts reflect what you own and what you owe, like Bank, Credit Card, Assets, Liabilities, Accounts Receivable, Accounts Payable and Equity.

•

Income and expense accounts: These are categories for tracking how money flows in and out of your company.

In accounting textbooks, the term Chart of Accounts is defined as a list of all the accounts used in the General Ledger. Accounts are used to classify transaction information for reporting purposes.

2. What do you select to add account numbers to the Chart of Accounts?

ANSWER: Adding account numbers is a two-step process. a. Go to > Account and Settings > Advanced > in the Chart of accounts area, click on the pencil icon to Enable account numbers and Show account numbers > Save > Done.

b. After saving, then selecting <Done> on the Advanced Settings page, click > Chart of Accounts > View Register > Edit > type the account number in the Number field.

3. What numbering system is used for the Chart of Accounts? Complete the following chart.

Numbers

Type

1000s

Assets

2000s

Liabilities

3000s

Equity

4000s

Income

5000s

Cost of Sales

6000s

Expenses

Chapter 2 Answer to Analysis Question What is cloudware?

ANSWER: Cloudware refers to software that is built, installed, delivered and accessed entirely from a remote web server, also called the “cloud.” Cloudware is a software delivery method that provides software over the internet.

Answer to Analysis Question, Chapter 3 How do you edit a transaction? List two options.

ANSWER: 1. With the Audit Log shown, drill down to the transaction that needs editing. The original entry is shown. Make the needed corrections, then save. When you view the Audit Log again, the edited transaction is shown.

2. Go to Recent Transactions by selecting the magnifying-glass icon. To edit the transaction, link to it. Make the needed changes, then save.

ANSWER TO ANALYSIS QUESTION, Chapter 4 The Analysis question is included online at www.mhhe.com/qbo2e > select Student Edition > Chapter 4 > Analysis Questions. Student can download the Word file, then email their answers to the instructor.

1. What are vendors?

ANSWER Vendors are the businesses that offer QB Cloud credit to buy merchandise and/or assets, or credit for expenses incurred.

2. What is Accounts Payable and how do you verify its balance?

ANSWER Accounts Payable is the amount of money the business owes. The Accounts Payable balance and the total of the amount owed to vendors should be the same.

3. Why is the balance in Merchandise Inventory different than the balance in Accounts Payable? Include account balances as of November 12 (completed in Exercise 4-2) in your answer. Explain.

ANSWER: Merchandise Inventory includes products sold for Cash and purchases made on account.

The balance in Accounts Payable is different because it represents merchandise purchases made on account only. The Merchandise Inventory account includes both purchases made on account and inventory sold for cash.

For example, after completing Exercise 4-2, purchases made on account as of November 12, 20XX are $17,920.

The Merchandise Inventory account balance is $12,920. The $5,000 difference ($17,920 12,920) represents the cost for computers sold for cash on 11/9, 11/10, and 11/12: $500 cost X 10 computers sold equals $5,000. (Hint: The October 1 - November 12, 20XX Transaction Report shows the total for 115 Merchandise Inventory as $12,920.00. Cash Sales are shown with a minus balance.)

ANSWER TO ANALYSIS QUESTION, CHAPTER 5 1. What is the account distribution for the 11/15/20XX sale on account of 5 data storage products to eBiz for a total of $150, Invoice 1007?

Account 105 Accounts Receivable/eBiz 501 Cost of Goods Sold 115 Merchandise Inventory 401 Sales

Debit 150.00 75.00

Credit

75.00 150.00

2. What is the account distribution for selling one web server for cash, $400, Sales Receipt 1013 on 11/30/20XX? Account 101 Checking 501 Cost of Goods Sold 401 Sales 115 Merchandise Inventory

Debit 400.00 200.00

Credit

400.00 200.00

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 6 1. Is there a difference between the December 1-31 Profit and Loss and the October 1 to December 31 Profit and Loss? Explain and provide an example.

Yes. Because the P&L includes income accounts, cost of goods sold, and expenses – the temporary accounts – the P&L for a month will be different than the P&L for the entire fourth quarter. For example, the net income for October 1 through December 31 is $14,643.52. An accumulation of all the P&L accounts. The net income for the month of December is $5,133.93 reflecting one month of income, cost of goods sold, and expense account balances.

2. Is there a difference between the December 1-31 Balance Sheet and the October 1 to December 31 Balance Sheet? Explain.

No. The balance sheet shows the permanent accounts, Assets, Liabilities and Equity. The balance sheet for one month and the balance sheet for the entire quarter is the same.

3. Is there a difference between the December 1-31 Statement of Cash Flows and the October 1 to December 31 Statement of Cash Flows? Explain.

Yes. The statement of cash flows includes the net income amount, either for a month or the fourth quarter. The net income for the fourth quarter is $14,643.52. The net income for the month of December is $5,133.93. Therefore a statement of cash flows for one month will differ from one for three months.

The cash at the end of the period is the same but not the amounts for Operating Activities, Investing Activities and Financing Activities.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 7 Explain the difference between the adjusted trial balance and the postclosing trial balance.

ANSWER: After the adjusting entries are recorded on December 31, the adjusted trial balance shows all the general ledger accounts with balances. The adjusted trial balance includes permanent and temporary account balances. Once the adjusting entries are journalized and posted, the adjusted trial balance updates the account balances for Prepaid Insurance and Prepaid Rent, and shows account balances for Accumulated Depreciation, Insurance expense, Rent or Lease expense, and Depreciation expense.

After the fiscal year is closed, and the Net Income amount is transferred to Retained Earnings, a postclosing trial balance is printed on January 1 of the next year. Only permanent accounts appear on the postclosing trial balance. All temporary accounts (income, cost of goods sold, and expenses) have been closed and zeroed out.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 8 1.

How do you determine when to use Sales Receipts or Sales Invoices?

ANSWER: Depending on when you receive the payments there are two ways to deal with sales transactions: a.

For sales to a customer on account, deferred payment, create invoices and receive payments against them.

b.

For an immediate cash or credit card payment, use sales receipts.

2. How do you record a Sales Invoice?

ANSWER: Choose Create (+) > Invoice (in Customers list) to create the invoice.

3. How do you record a Sales Receipt?

ANSWER: Choose Create (+) > Sales Receipt (in Customers list) to create the sales receipt.

ANSWER TO ANALYSIS QUESTION, CHAPTER 9 How do you determine when to select the Check window and when to select Make payment on the Vendors page?

ANSWER: a. Use the Check # window to verify the Transaction Register’s check numbers, amounts for each expense, and balance after each check is recorded. b. On the Vendors page, link to an Open bill to pay for what is owed to a vendor for purchases made on account. Once the appropriate Bill is selected, click Make Payment.

ANALYSIS QUESTIONS, CHAPTER 10 1. Why does the March 31, 20XY Balance Sheet show both Retailed Earnings and Net Income?

ANSWER: The Retained Earnings balance reflects last year’s Net Income. When the Balance Sheet was printed for January 1 of the next year, the Net Income amount on the December 31 Profit and Loss statement was transferred to Retained Earnings.

The Net Income amount on the March 31 Balance Sheet is the same as the amount shown on the Profit and Loss Statement – Sales minus Expenses and Cost of Goods Sold.

2. What section of the Balance Sheet are the Retained Earnings and Net Income amounts shown?

ANSWER: The Equity section of the balance sheet lists Account 318 Retained Earnings and the Net Income amount.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 11 1. What is a Management Report? Briefly Explain.

ANSWER: Management reports include professional, ready-to-use templates that contain reports and other customizable content, consolidated into a single document. They can be printed, emailed, or exported.

2. What does the QB Labs selection show?

ANSWER: QuickBooks Labs is like a high-tech playground for QuickBooks experts. It’s a place where you can be the first to try experimental plug-ins. Like any good laboratory, QuickBooks Labs is always moving forward. Sometimes experiments break or disappear. And sometimes they evolve into real features. Because the plug-ins are experimental, they are not supported by QB technical support.

ANSWER TO ANALYSIS QUESTION, CHAPTER 12 How can you check and learn about updates?

ANSWER: Go to the QuickBooks Blog at http://quickbooks.intuit.com/blog/ > link to What’s New in QBO.

Going to the Net Answers, Chapter 1 Go online to Move to QuickBooks Online > click Compare. The URL is http://quickbooks.intuit.com/move-to-quickbooks-online/.

Answer the following questions: 1. In terms of device access, compare QuickBooks Online (QBO) to QuickBooks Desktop (QBD).

With QBO, you can work from a PC, Mac, smartphones, or tablets at any time. QuickBooks Desktop does not offer any device access.

2. Explain support options.

QBO includes support at no additional cost. Support for desktop versions of QB is $89 for 90 days (as of this writing).

3. Explain file access and cloud-based apps.

QuickBooks Online includes instant file access for accountants and you can connect to 300+ cloud-based apps. QuickBooks desktop does not include these features.

Answers Going to the Net, Chapter 2 Go online to QuickBooks Products > link to Try it Free.

1. What Online products are available for independent contractors and small business?

Self-Employed (independent contractors) Simple Start (small business) Essentials (small business) Plus (small business) – included with textbook.

2. List each products’ features.

Independent contractors: Self-Employed, Track miles, track income, organize expenses, maximize tax deductions, and send invoices.

Small Business: Simple Start: Same features as self-employed, plus send estimates and track sales tax.

Essentials: Same features as self-employed and simple start with the addition of manage bills and multiple users. Get all simple start features, manage and pay bills, multiple people can use it Plus: get all essentials features, plus track time, track inventory, prepare and print 1099.

(Most popular)

Answers Going to the Net, Chapter 3 To learn about exporting to Excel, use the QuickBooks community.

Go online to the QuickBooks Learn & Support. The website is https://community.intuit.com/quickbooks-online.

In the Ask a question field, type Unable to Export to Excel. Link to Why am I unable to export to Excel in Internet Explorer. The website is https://community.intuit.com/articles/1145936-whyam-i-unable-to-export-to-excel-in-internet-explorer.

Answers Going to the Net, Chapter 4 Go to QuickBooks Learn & Support and do a search for Inventory.

1.

2.

3.

Go online to https://community.intuit.com/.

Type a Search word; for example, type Inventory.

Link to articles of interest.

Answers will vary.

Answers Going to the Net, Chapter 5 Go to the QuickBooks blog at http://quickbooks.intuit.com/blog/. What are the QuickBooks Blog selections and links on its Home page? Make a selection, then read an article of interest.

Describe each section of the Home page.

As of this writing the selections are: News, Thought Leadership, What’s New in QBO, Innovation, Accountant Advice, and Customer Profiles.

The blog’s Home page incudes a Featured article and additional articles. Students make a selection and read an article of interest.

Scroll down to see the New to QuickBooks? section. As of this writing, these selections are shown.

Additional links are shown at the bottom of the website. As of this writing, these links are shown.

Answers to Going to the Net, Chapter 6 Go to the Reconcile process and overview website. Read the article. (The website is https://community.intuit.com/articles/1145755-reconcile-process-and-overview.)

1. What accounts can be reconciled?

ANSWER: Only cash-flow accounts can be reconciled. When you reconcile an account, you’ll only find accounts listed on your balance sheet as choices to reconcile.

2. What amounts should match on both the bank statement and reconcile window? What if amounts do not match; what should you do?

ANSWER: Your bank statement should have a total figure for the amount of cleared deposits and credits which should match the amount listed for the total checked amount in deposits and credits. If it doesn’t match, compare the transactions on the statement to the ones in the reconcile window to locate the incorrect or missing transaction.

Answers to Going to the Net, Chapter 7 1. Go to the QuickBooks Learn Support website. The website address is https://community.intuit.com.

2. Type the Search word, Customize your Profit and Loss Report Report.

3. Link to Customize your Profit and Loss Report. The website is https://community.intuit.com/articles/1525069-customize-your-profit-and-loss-report.

Select See only some accounts not all of them. a. What is the P&L default?

ANSWER: By default, all income and expense accounts are included on the Profit and Loss report. b. Describe the steps to see some accounts but not all of them.

ANSWER: To filter the P&L by a specific account, do this: 1. With your P&L open, click Customize.

2. Click Filter.

3. Select the Distribution Account checkbox in the drop-down menu, select the account or accounts you'd like to filter by.

Answers to Going to the Net, Chapter 8 1.

2.

Go to the QuickBooks Online support website at https://community.intuit.com/quickbooks-online. In the search field, type Take quick action on vendor transactions > Search > link to Take quick action on vendor transactions. (The URL is https://community.intuit.com/articles/1431244-take-quickaction-on-vendor-transactions.

How do you take quick action on vendor transactions?

ANSWER: Use the list on the Vendors page to take quick action on a transaction. For example, you can make a payment on a bill to a vendor, without having to find the bill transaction first. Just look for relevant actions – Create bill, Create expense, or Make payment across from the vendor name.

3.

Go back to the QuickBooks Online support website. (Hint: Click on the back arrow twice.) In the Ask a question field, type How do I turn on Billable Expenses > Search.

The URL https://community.intuit.com/articles/1145654-how-do-i-turn-on-billableexpenses.

How do you use the Use Billable Expenses preferences? How does this affect tracking expenses and items by customer?

ANSWER: The Use Billable Expenses preference puts a Billable check box on purchases (expenses) you make (record), such as when you use Enter Bill, Write Check, Expense. Checking Billable lets you specify that an expense should automatically flow to a customer's next invoice.

To turn on the Use Billable Expenses preference: 1.

2.

3.

4.

5.

Choose the Gear icon > Account and Settings.

Choose Expenses from the menu on the left.

In the Bills and expenses section, check on the Edit icon.

Place a check in the box to Make expenses and items billable.

Click Save.

Turning on Use billable expenses activates additional features which makes entering billable expenses simpler. Track expenses and items by customer will add a field on transactions to list the customer's name.

Answers for Going to the Net, Chapter 9 Go to the QuickBooks Online support website at https://community.intuit.com/quickbooks-online. In the Ask a question field, type More cool things you can do with QuickBooks online > Search > link to More cool things you can do with QuickBooks Online. The URL is https://community.intuit.com/articles/1431059-more-cool-things-you-can-do-with-quickbooks-online.

1. List 4 cool things you can do with QuickBooks.

ANSWER:

1) Connect your bank accounts.

2) Get the QuickBooks iPhone or Android app.

3) Get the QuickBooks payroll app.

4) Get the QuickBooks Mac or Windows app.

2. What does the Resource Center include?

ANSWER: Visit the Resource Center where you can: • •

Watch video tutorials to learn how to do common tasks like creating and customizing your Invoices, adding users, and customizing reports.

Go to the QBO Blog to get the scoop on the latest product updates, tips, and tricks each month.

Note: As of this writing, The Resources list at the bottom of the page includes a link to the Blog.

Answers to Going to the Net, Chapter 10 1. Go to the QuickBooks Blog. To explore what is included on the Blog, click each selection.

As of this writing, the selections are News, Thought Leadership, What’s New in QBO, Innovation, Accountant Advice, Customer Profiles, Search.

2. Write a brief summary of what is included within each Blog selection ANSWER: News: Includes recent articles. As of this writing, the News page shows that there are 2.2 million global QBO customers and counting.

Thought Leadership: Articles about QBO customers.

What’s New in QBO: The latest updates and features are shown.

Innovation: Articles about innovative use of QBO. Accountant Advice: advice from accounting professionals.

Customer profiles: Various profiles of customers who are using QBO. There is also a search field.

Answers to Going to the Net, Chapter 11 1. Go to the QuickBooks Learn & Support website at https://community.intuit.com/. In the Ask a question field, type Accounting Methods > Search > link to Accounting methods.

2. Describe accounting methods, cash basis and accrual basis.

ANSWER: Accounting methods Cash basis and accrual basis are accounting methods that determine how and when you track income and expenses. The IRS wants you to use the same method each year when you report income.

Cash basis With cash basis, you count income when you receive the money, instead of when you bill a customer. Expenses are reported when you pay bills.

Accrual basis With accrual basis, you count income as soon as you bill a customer (instead of when you receive the money) and expenses are reported when you receive a bill.

Accrual basis can better reflect how your business is doing, in that it counts income on the date you actually delivered products or services, not the date you were paid for them.

Answers to Going to the Net, Chapter 12 Go to this Firm of the Future website. The URL is https://www.firmofthefuture.com/content/3-apps-toincrease-productivity-for-bookkeepers-everywhere/. Read the article 3 Apps to Increase Productivity for Bookkeepers Everywhere.

1. What are the apps listed in this article? Write a brief explanation of each apps.

ANSWER: Receipt Bank includes multi-expensing capability and a dashboard. You can also scan handwritten receipt, a must-have for your client base.

Asana: This app allows teams to track the progress of deadlines and workloads from the beginning all the way through to completion in one location. Asana also turns Google emails into actions, customizes dashboards for specific needs, and organizes inboxes by receiving only necessary messages.

Google Suite: This app provides integrated business email, calendar, online storage and easy file sharing.

2. In the article, what are the final thoughts?

ANSWER Perhaps, you have an app you have found to be a game changer for you and your clients.

Whichever ones you use, the result should be efficient and productive service for your clients.

Answers Problem Solving, Chapter 1 1. Display Craig’s Design and Landscaping Services Chart of Accounts.

Display the test drive’s chart of accounts: https://qbo.intuit.com/redir/testdrive > Gear > Chart of Accounts.

2. How do the View register accounts differ from the Run report accounts? Include information about financial statements in your answer.

The View register accounts show their Chart of Accounts balances. The View register accounts are also called permanent accounts and appear on the Balance Sheet. The Run report accounts do not show balances and are called temporary accounts. Temporary accounts appear on QBO’s Profit & Loss Statement (also called the Income Statement). The Run report accounts are closed at the end of the year.

3. When through, sign out.

Chapter 2, Answer Problem Solving On the Chart of Accounts, why are the category and detail type selectrions important? To explain the category and detail types, use 3 accounts – one asset, one liability and one expense account. Identify Category Type, Detail Type, Name, Number and financial statement.

The Category Type and Detail Type columns are important because they classify accounts for the financial statements. Student choices for accounts may vary.

Asset example:

Category Type Bank

Detail Type Checking: tracks all your checking activity, including debit card transactions.

Name Checking

Number 101

Financial Statement Balance Sheet

Number 201

Financial Statement Balance Sheet

Number 607

Financial Statement Profit and Loss

Liability account:

Category Type Accounts Payable

Detail Type Accounts Payable (A/P)

Name Accounts Payable (A/P)

Expense account: Category Type Expenses

Detail Type Office/General Administrative

Name Depreciation Expense

Chapter 3 Answers, Problem Solving 1. What is the date of the beginning balance?

October 1, 20XX

2. Describe the beginning balance transaction type and the account distribution.

The beginning balance is a Journal Entry. The account distribution is: Debit Credit 101 Checking 50,000.00 135 Computer Equipment 10,000.00 301 Common Stock 60,000.00

3. What are the steps for accessing the report that shows the beginning balance?

The Account List, Chart of Accounts, or the Journal report shows the beginning balance. For the Account List, go to Reports > type Account List in the search field. Or, go to Gear > Chart of Accounts.

For the Journal report, go to Reports > type Journal in the search field > type 10/01/20XX as the date > Run Report.

Exercise 4-3, Problem Solving

1.

What report lists the debits and credits for each transaction? Show the total on November 12.

ANSWER: The Journal lists the debits and credits for each transaction. The total of October 1 thru November 12 journal transactions is $115,350.41.

2.

Identify the report that shows money you earned (income) and money you spent (expenses). Explain how to display this report and the final balance.

ANSWER: The Profit and Loss shows income and expenses. Go to Reports > Recommended > Profit and Loss > Run > 10/1/2017 to 11/12/2017 > Run Report. The Net Income is $8,569.59.

3.

Identify the report that shows assets, liabilities, and equity. Show the steps for displaying that report, and the final balance(s).

ANSWER: The Balance Sheet lists what you own (assets), what your debts are (liabilities), and what you’ve invested in your company (equity). Go to Reports > Recommended > Balance Sheet > Run > 10/1/2017 to 11/12/2017 > Run Report. Total assets and Total liabilities and equal are $91,489.59.

Exercise 5-3: Problem Solving List three, or more, ways to show account balances for an asset and expense account. Include the QBO steps for each method. Specify the account and balance in your answer. What is the difference between View Register accounts and Run report accounts?

Asset account: Account 101 Checking, Balance $61,469.59 1. Gear > Chart of Accounts (or Accounting button). The QuickBooks Balance is shown for Account 101 Checking.

2. Gear > Chart of Accounts > View register for 101 Checking. Instead of View register, doubleclick 101 Checking.

3. Reports > Trial Balance > from 10/1/XX to 11/30/XX. 4. Reports > Balance Sheet (or Statement of Cash Flows) from 10/1/XX to 11/30/XX. 5. In the Bank accounts area, the Dashboard shows 101 Checking In QuickBooks balance, $61,469.59.

Expense: Account 603 Bank Charges, Balance, $40.00 1.

2.

3.

4.

Reports > Profit and Loss > from 10/1/XX to 11/30/XX. Reports > Transaction Detail by Account > from 10/1/XX to 11/30/XX. Gear > Chart of Accounts (or Accounting button) >go to Account 603 > Run report.

On the Dashboard’s Expense graph, select This year. Scroll over the graph to Everything else. To go to the Transaction Report, click on Everything else. The Total for 603 Bank Charges is shown.

On the Account List or Chart of Accounts, the View register link is for balance sheet accounts (bank, current and fixed assets, liability, equity). The Run report link is for retained earnings, income, cost of goods sold, and expense accounts. Registers display transactions in a traditional ledger format.

Answers to Exercise 6-3: Problem Solving 1. On the Profit and Loss report, describe how to compare October, November and December.

Show calculations for determining percent of income for an expense account. The financial statements displayed on textbook pages 299 and 300 are used for the answer. a. Display the Profit and Loss By Month report > Customize > from 10/1/XX to 12/30/XX > Run report. b. Click <Customize> > select Rows/Columns > % of Income. c. On the Profit and Loss by Month report, an expense account is divided by total income to determine the % of income. For example: 601 Advertising for October: 125/6,000 = 2.08%.

2. Describe how the Balance Sheet can be customized. Show an example and two calculations – one for an asset and one for a liability. a. Display the 10/1/20XX to 12/30/XX balance sheet > Customize > Rows/Columns > % of Column > Run report. b. Each row is divided by $82,783.52 (the total assets and total liability and equity amount). For example, Account 115 Merchandise Inventory $9,870/$82,783.52 = 11.92%.

Answers to Exercise 7-3: Problem Solving 1. Explain why the amounts are different when the Trial Balance on page 318 is compared to the Adjusted Trial Balance on page 324.

On page 318, the December 31 trial balance was displayed before adjustments were entered in the journal. On page 318 amounts were filtered so that non-zero amounts are not shown. The adjusted trial balance shows all debit and credit balances, including those with zero balances 2. What are the differences on the Profit and Loss after adjustments to the P&L saved in Exercise 6-2?

Account 607 Depreciation Expense 611 Insurance 623 Rent or Lease Adjusting Entries Total

P&L after Adjustments 800.00 (Dr.) 750.00 (Dr.) 6,000.00 (Dr. 7,550.00

Net Income before adjusting entries Minus adjusting entries total Net Income after adjustments

P&L before Adjustments 0.00 0.00 0.00

$14,643.52 -7,550.00 $7,093.52

On the P&L statement, the total amount of journalized and posted adjusting entries equals the difference between the Net Income before adjustments and Net Income after adjustments.

Answers to Exercise 8-3: Problem Solving Describe the difference between a Bill and Invoice. Include an example, which QBO module is being used, and the account distribution for a Bill and an Invoice.

ANSWER: The accounts payable module includes vendor bills. QB Cloud purchases items on account from vendors. Bills are money that QB Cloud owes to the companies they buy items from.

The account distribution for a vendor bill is:

The accounts receivable module includes customer invoices for items sold. Customers owe money to QB Cloud for items bought on account.

The account distribution for a customer invoice is:

Exercise 9-3: Problem Solving 1. What is a module?

ANSWER: A module is a software design that emphasizes separating the functions of a program into independent, interchangeable components, so that each contains everything necessary to execute one aspect of the desired function. For example, QBO organizes transactions and reports by modules or components within the accounting system.

2. Organize the following source documents according to the QBO modules used. Define each module.

ANSWER: •

Bills and vendor payments: Accounts Payable module Accounts payable is the amount of money the business owes to vendors. Accounts payable organizes and monitors both purchases on account and vendor payments. The accounts payable module is used when QB Cloud makes purchases on account and receives payments from vendors.

•

Invoices and customer payments: Accounts Receivable module Accounts receivable are what customers owe your business. The accounts receivable module organizes both sales on account and customer payments. When QB Cloud sells items on account and receives payments from customers, the accounts receivable module is used.

Exercise 10-3: Problem Solving 1. What are the similarities and differences between the Transaction Detail by Account and the General Ledger?

ANSWER: The Transaction Detail by Account report lists subtotals by each account on your chart of accounts. It is like the General ledger without opening balances.

The General Ledger shows each account in your chart of account. The GL shows all the transactions that occurred in that account over a period of time. It includes the beginning balance and total for each account.

2. What does the Profit and Loss by Month report (textbook page 505) show a Net Loss for March 20XY? Show the calculation.

ANSWER: In March, expenses exceeded total income and total cost of goods sold resulting in a loss of $2,108.01.

Total Income: $12,860.00 Total Cost of Goods Sold: -6,430.00 Total Expenses -8,538.01 Net Loss -2,108.01

ANSWERS EXERCISE 11-3: PROBLEM SOLVING Compare the differences in percent of net income on the October – November Profit and Loss (textbook page 535). Explain why.

ANSWER In October, the percent of income is 73.96% because Total Expenses divided by Total income is $1,562.44/$6,000 = 26.04%.

In November, the percent of income is 42.55% because Total Expenses divided by Total Income is $887.97/$11,920 = 7.45%.

When November expenses are compared to October expenses, November expenses were much less -- $887.97 in November; $1,562.44 in October. Total income is also slightly different when October is compared to November -- $6,000 for October; $11,920 for November. The big difference in Total Income and Expenses is the reason why the percentage of income is significantly different.

EXERCISE 12-3, PROBLEM SOLVING Go to The QuickBooks Blog at http://quickbooks.intuit.com/blog/ > link to Innovation. Read an article about Innovation. Click Read more when you see an article of interest. For example, the author chose Get a New, Special Report on AI (Artificial Intelligence) and Machine Learning at http://quickbooks.intuit.com/blog/innovation/get-a-new-special-report-on-artificialintelligence-and-machine-learning/. The complete report could be downloaded.

Your students’ innovation page will differ. You may want to collect a brief essay about what Innovation article the students read.

CHAPTER 1 QUICKBOOKS ONLINE TEST-DRIVE INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

Start the sample company, Craig’s Design and Landscaping Services.

Tour QuickBooks Online (QBO).

Explore the User Interface.

Export the Chart of Accounts to Excel.

View recent transactions and reports.

Create an invoice, sales receipt, bill, and write check.

Complete Check Your Progress.

Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 1-1, 1-2, and 1-3.

SYSTEM REQUIREMENTS To use QuickBooks Online (QBO), you need to sign in with a web browser. You can access QBO from any PC or Mac with an Internet connection.

Internet connection required (high-speed connection recommended) Supported Browsers • • • •

Google Chrome (updates automatically), Mozilla Firefox (updates automatically), Internet Explorer 10 or later, Safari 6.1 or later Also accessible via Chrome on Android and Safari on iOS QuickBooks Online mobile app works with the iPhone, iPad and Android phones and tablets, Surface tablet Not all features are available on mobile devices

1 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Other For exporting reports to Excel, Microsoft Excel 2003 or later. Adobe for saving PDF files. The free Adobe Reader is available at https://get.adobe.com/reader/.

QBO Tips ❖ Start an Internet browser. Type https://qbo.intuit.com/redir/testdrive in your browser’s address line. ❖ Each time your students start the sample company, Craig’s Design and Landscaping, security verification needs to be typed. The verification changes with each log in, and the sample company starts again. ❖ Each time the sample company is started, a new session begins. Data is not saved. ❖ In Chapter 1, students complete Check Your Progress assignments and compare their results with the answers shown. In subsequent chapters, students provide Check Your Progress answers. ❖ Before students start Exercise 1-1, the authors suggest they sign out of QBO. Then, students log into a new session of QBO before starting Exercise 1-1. Students complete Exercise 1-1’s transactions and continue with Exercise 1-2. Students should not log out until Exercises 1-1, 1-2, and 1-3 are completed. ❖ To compare your students Excel spreadsheets to the Excel reports at www.mhhe.com/qbo2e > Instructor Edition > Excel Reports, use Microsoft Office’s Spreadsheet Compare. This information is included in the textbook’s Appendix A, Troubleshooting.

Office Professional 2016: “Compare two versions of a workbook by using Spreadsheet Compare” at https://support.office.com/en-US/article/Compare-two-versions-of-aworkbook-by-using-Spreadsheet-Compare-0E1627FD-CE14-4C33-9AB1-8EA82C6A5A7E. “What can you do with Spreadsheet Inquire in Excel 2016 for Windows,” at https://support.office.com/en-US/article/what-you-can-do-with-spreadsheet-inquire-inexcel-2016-for-windows-5444eb12-14a2-4d82-b527-45b9884f98cf.

For Office Professional 2013, go to https://technet.microsoft.com/enus/library/dn205148.aspx.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 1 resources. Students go online to www.mhhe.com/qbo2e > Student Edition > Chapter 1. The following links are included: 1. Narrated PowerPoints. Students listen to PowerPoints for each chapter. The Instructor 2 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2.

3.

4.

5.

PowerPoints include answers to the Going to the Net exercise and analysis questions.

Online Quizzes: The Online Quizzes include 10 multiple-choice questions, and 10 True or False questions. The quizzes are graded and can be emailed to the instructor.

Analysis Question: Students answer the analysis question, then email it to their instructor.

The Analysis question is a Word file.

Going to the Net: Go online to compare QuickBooks Desktop to QuickBooks Online.

There are two videos for Chapter 1: • •

QuickBooks Online for iPad Navigate in QuickBooks

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. In the textbook, the Glossary is Appendix B. 7. Problem Solving: This is Exercise 1-3 in the textbook.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, End of Chapter Solutions (files saved as PDFs), answers to Problem Solving (third exercise in each chapter), answers to Check Your Progress, answers to the Certification Multiple Choice questions, answers to the Going to the Net exercise, and answers to the analysis questions. The Instructor Edition also includes an Instructor’s Manual, Instructor PowerPoints, suggested Syllabi and a Test Bank. Choose a chapter to populate additional resources.

ANSWERS GOING TO THE NET Answers to Going to the Net are included on the OLC’s Instructor Edition Link. They are also shown below.

Go online to Move to QuickBooks Online > click Compare. Answer the following questions. (The URL is https://quickbooks.intuit.com/move-to-quickbooks-online/.)

Answer the following questions: 1. In terms of device access, compare QuickBooks Online (QBO) to QuickBooks Desktop (QBD).

With QBO, you can work from a PC, Mac, smartphones, or tablets at any time. QuickBooks Desktop does not offer any device access.

3 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2. Explain support options.

QBO includes support at no additional cost. Support for desktop versions of QB is $89 for 90 days (as of this writing).

3. Explain instant file access and cloud-based apps.

QuickBooks Online includes instant file access for accountants and you can connect to 300+ cloud-based apps. QuickBooks desktop does not include these features.

ANSWERS ANALYSIS QUESTIONS The Analysis question is included online at www.mhhe.com/qbo2e > Student Edition > Analysis Questions. Students can download the Word file, then email their answers to the instructor.

1. Define the chart of accounts and its categories. How do accounting textbooks define the chart of accounts?

ANSWER: The Chart of Accounts is a complete list of a business’s accounts and their balances. QBO includes the Account name, Type (for financial statement classification), the Detail Type (account subcategory), and Balance.

The chart of accounts includes two categories of accounts:

4 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

•

Balance Sheet accounts: In QBO, these types of accounts reflect what you own and what you owe, like Bank, Credit Card, Assets, Liabilities, Accounts Receivable, Accounts Payable and Equity.

•

Income and expense accounts: These are categories for tracking how money flows in and out of your company.

In accounting textbooks, the term Chart of Accounts is defined as a list of all the accounts used in the General Ledger. Accounts are used to classify transaction information for reporting purposes.

2. What do you select to add account numbers to the Chart of Accounts?

ANSWER: Adding account numbers is a two-step process. a. Go to > Account and Settings (or Company Settings) > Advanced > in the Chart of accounts area, click on the pencil icon to Enable account numbers and Show account numbers > Save > Done.

b. After saving, then selecting <Done> on the Advanced Settings page, click > Chart of Accounts > View Register > Edit > type the account number in the Number field.

3. What numbering system is used for the Chart of Accounts? Complete the following chart.

Numbers 1000s 2000s 3000s 4000s 5000s 6000s

Type Assets Liabilities Equity Income Cost of Sales Expenses

5 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 1 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. The following Internet browsers can be used with QB Online: a. b. c. d. e.

Internet Explorer.

Firefox.

Google Chrome.

Safari.

All of the above.

2. To start QuickBooks Online, you need to: a. Insert a software DVD into the drive. b. Go to your hard drive to install software. c. Insert a USB flash drive. d. Start your Internet browser. e. None of the above.

3. When you start QBO, you need to: a. b. c. d. e.

Type a security verification.

Select the back button.

Select Start to access the software.

Install the desktop software.

All of the above.

4. The central place for getting an overview of the company is called the: a. b. c. d. e.

Taskbar.

Tabs.

Dashboard.

Vendors page.

All of the above.

5. From the plus (+) sign, you can: a. b. c. d. e.

Create an invoice.

Create a sales receipt.

Enter a bill.

Write a check.

All of the above.

6 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

6. Use this icon to search transactions. a. Gear. b. Magnifying-glass. c. Question mark. d. Plus sign. e. None of the above.

7. To navigate the QBO interface, select: a. b. c. d. e.

Customers.

Vendors.

Employees.

Reports.

All of the above.

8. A list of all the accounts used in the General Ledger is called a: a. b. c. d. e.

Balance Sheet.

Journal.

Chart of Accounts.

Trial Balance.

Profit and Loss Statement.

9. What Navigation bar selection do you use for the Balance Sheet? a. b. c. d. e.

Customers.

Vendors.

Banking.

Create menu.

Reports.

10. In which of the following areas, is the Chart of Accounts located? a. b. c. d. e.

Settings.

Customers.

Vendors.

Banking.

Apps.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 1 > True or False Quiz. Students can email the questions and answers to their instructor.

7 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

1.

The QuickBooks Online (QBO) sample company is Bellflower Landscaping.

False, Craig’s Design and Landscaping Services.

2.

QBO can be used on Windows and Mac OS X operating systems.

True.

3.

Since QBO is web-delivered, it is best to use DSL or a cable modem for access.

True.

4.

Each time you log into the fictional company, the same security word is used.

False. A unique security verification is used.

8 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

5.

A chart of accounts is a list of all the accounts used by a company showing identifying numbers assigned to each account.

True

6.

The user interface is the link between a user and the software.

True.

7.

In the company snapshot, the general ledger is shown.

False, income and expense graphs are shown.

8.

One of the ways to add an invoice, click on the gear icon.

False, click on the plus sign.

9.

Each time you start QBO’s sample company, a new session (or instance) of the company starts.

True

10.

The Journal report shows every transaction during a period of time and includes debits and credits.

True

Exercise 1-1 Students complete 12 transactions. They should continue with Exercises 1-2 and 1-3 before signing out.

Exercise 1-2 In Exercise 1-2, students export the Journal, Transaction Detail by Account, and Trial Balance to Excel.

9 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Journal Report: The Excel report shows the 12 transactions recorded in Exercise 1-1. Go online to www.mhhe.com/qbo2e > Instructor Edition > Excel Reports. The Journal shows the date that students entered the transactions. The default date is This Month-to-date.

Transaction Detail by Account: The Excel report lists transactions subtotaled by each account on the chart of accounts. It is like the General Ledger without opening balances.

Trial Balance: The Excel report shows the Trial Balance after students record the 12 transactions in Exercise 1-1. The OLC’s Instructor Edition link includes the Excel Reports saved.

Display the trial balance for the dates you used for the Exercise 1-1 transactions.

Exercise 1-2 includes the following Check Your Figures amounts: Check Your Figures: Checking Accounts Receivable Accounts Payable Design Income Advertising

1,439.58 6,965.72 2,895.61 3,225.00 324.86

Exercise 1-3: Problem Solving Students can access Exercise 1-3 online at www.mhhe.com/qbo2e > Student Edition > Chapter 1 > Problem Solving. The Problem Solving exercise is a Word file that could be turned in to the instructor. The questions and answers follow: 1. Display Craig’s Design and Landscaping Services Chart of Accounts.

Display the test drive’s chart of accounts: https://qbo.intuit.com/redir/testdrive > Gear > Chart of Accounts.

2. How do the View register accounts differ from the Run report accounts? Include information about financial statements in your answer.

The View register accounts show their Chart of Accounts balances. The View register accounts are also called permanent accounts and appear on the Balance Sheet. The Run report accounts do not show balances and are called temporary accounts. Temporary accounts appear on QBO’s Profit & Loss (also called the Income Statement). The Run report accounts are closed at the end of the year.

3. When through, sign out.

10 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

The Instructor Edition also includes the answers at www.mhhe.com/qbo2e > Instructor Edition > Answers Problem Solving.

FILES SAVED IN CHAPTER 1 In Chapter 1, these files are exported to Excel. Instructors may want students to add their names to file names shown below.

Chapter/Exercise Excel and PDF 1 Chapter 1_CofA_sample company_Student Name.xlsx Chapter 1_CofA_sample company_Student Name.pdf 1-2 Exercise 1-2_Journal.xlsx Exercise 1-2_Journal.pdf Exercise 1-2_Transaction Detail by Account.xlsx Exercise 1-2_Transaction Detail by Acocunt.pdf Exercise 1-2_Trial Balance.xlsx Exercise 1-2_Trial Balance.pdf

11 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Page No. 22 22-23 48 48 49 49 49 49

CHAPTER 2 NEW COMPANY SET UP AND CHART OF ACCOUNTS INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

Start QuickBooks Online with your User ID and Password.

Set up the company, QB Cloud_Student Name (your first and last name).

Watch Explore the Power of QuickBooks videos.

Complete account and settings.

Create a Chart of Accounts.

Save Chart of Accounts as PDF file.

Export the Chart of Accounts to Excel.

Invite accountant and learn about user roles and access rights.

View the Audit Log. Complete Check Your Progress assignments within the chapter.

Use the Online Learning Center, www.mhhe.com/qbo2e for additional resources.

Complete Exercises 2-1, 2-2, and 2-3.

QBO Tips ❖ Instructors can obtain unlimited access to QB Online (no time limit) at http://www.intuiteducationprogram.com/ > Educator Registration. For more information, refer to www.mhhe.com/qbo > Instructor Edition > Educator Registration. Additional information is also included in the Online Learning Center’s Instructor’s Manual. For the Instructor Edition’s username and password, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. ❖ Using the License and Product numbers included with the textbook, student have access to QB Online (Plus version) for 12 months. ❖ Students should write down their User ID and Password. Each time QBO is started, the User ID and Password is needed. ❖ Students should use Invite Accountant or email the instructor their User ID and Password. If the student’s User ID and Password is used, the instructor should set up a time with their student to receive the emailed 6-digit Confirmation code. (Refer to textbook pages 82-84.)

To see the work completed by students, log into their company, then view the Audit Log. Select > Audit Log. Or access various areas of student work.

OR, ❖ For more information about viewing student work, Company Administrator, and access rights within QBO, refer to pages 82-84. ❖ Tracking inventory is part of Chapter 4. Two settings are important for that to work correctly. This is shown in Chapter 2 on textbook page 64, step 4.

13 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

On textbook page 65, step 6, the Bills and expenses setting is shown.

❖ If you are familiar with QuickBooks Desktop software, Account and Settings in QuickBooks Online is similar to Preferences in QB Desktop. ❖ To compare your students Excel spreadsheets to the Excel reports at www.mhhe.com/qbo2e > Instructor Edition > Excel Reports, use Microsoft Office’s Spreadsheet Compare. This information is included in the textbook’s Appendix A, Troubleshooting.

Office Professional 2016: “Compare two versions of a workbook by using Spreadsheet Compare” at https://support.office.com/en-US/article/Compare-two-versions-of-aworkbook-by-using-Spreadsheet-Compare-0E1627FD-CE14-4C33-9AB1-8EA82C6A5A7E. “What can you do with Spreadsheet Inquire in Excel 2016 for Windows,” at https://support.office.com/en-US/article/what-you-can-do-with-spreadsheet-inquire-inexcel-2016-for-windows-5444eb12-14a2-4d82-b527-45b9884f98cf.

For Office Professional 2013, go to https://technet.microsoft.com/enus/library/dn205148.aspx.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 2 resources. Students go online to www.mhhe.com/qbo2e > Student Edition > Chapter 2. The following links are included: 1. Narrated PowerPoints. Students listen to narrated PowerPoints for each chapter. The Instructor PowerPoints include answers to the Going to the Net exercise and analysis questions.

2. Online Quizzes: The Online Quizzes include 10 multiple-choice questions, and 10 True or 14 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

False questions. Student answers can be emailed to their instructor. The answers to the Multiple Choice and True or False questions are included in the IMK. 3. Analysis question: The analysis question is a Word file. Student answers can be emailed to the instructor.

4. Going to the Net: Students go online to QuickBooks Products > link to Try it free. Then answer questions about QB Online products.

5. Video: Watch Stay Organized with QuickBooks. The URL is https://www.youtube.com/watch?v=oU6BGWHg5As#t=36. This video is also identified in Chapter 2 in the Explore the Power of QuickBooks sections.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The glossary is included on the OLC and the in the textbook as Appendix B. 7. Problem Solving: This is the textbook’s Exercise 2-3. In the second edition, the third end-ofchapter exercise is new.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your McGraw-Hill Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html.

The Instructor Edition includes the files exported to Excel, End of Chapter Solutions (files saved as PDFs), answers to Problem Solving (third exercise in each chapter), answers to Check Your Progress, answers to the Certification Multiple Choice questions, answers to the Going to the Net exercise, answers to Problem Solving, and answers to the analysis questions. The Instructor Edition also includes Educator Registration (unlimited access to QBO Accountant), Training Modules (included with QBO Accountant Educator registration), Instructor’s Manual, Instructor PowerPoints, suggested Syllabi and a Test Bank. Choose a chapter to populate additional resources.

ANSWER TO GOING TO THE NET Answers to Going to the Net are included on the OLC’s Instructor Edition Link. They are also shown below.

Go online to QuickBooks Products > link to Try it Free.

1. What Online products are available for independent contractors and small business?

Independent contractor: Self-Employed. Small business: Simple start, Essentials, Plus (most popular). Plus is included with the textbook.

15 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2. List each products’ features.

Independent Contractors: Self-Employed: Track miles, track income, organize expenses, maximize tax deductions, and send invoices.

Small Business: Simple Start: Same features as self-employed, plus send estimates and track sales tax.

Essentials: Same features as self-employed and simple start with the addition of manage bills and multiple users. get all simple start features, manage and pay bills, multiple people can use it.

Plus: get all essentials features, plus track time, track inventory, prepare and print 1099.

(Most popular.)

ANSWER TO ANALYSIS QUESTION The Analysis question is included online at www.mhhe.com/qbo2e > Student Edition > link to Analysis Questions. Student can download the Word file, then email their answers to the instructor.

What is cloudware?

ANSWER: Cloudware refers to software that is built, installed, delivered and accessed entirely from a remote Web server, also called the “cloud.” Cloudware is a software delivery method that provides software over the Internet.

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e; Student Edition, select Chapter 2, link to Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. This term refers to software that is Internet delivered.

A. Desktop.

B. Dashboard.

C. Account and settings.

D. Cloudware 16 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

E. All of the above.

2. Another name for the Chart of Accounts is: A. Account and settings.

B. Account list.

C. Balance sheet.

D. Profit and loss.

E. None of the above.

3. From the default page you can: A. See the dashboard.

B. Profit and loss.

C. Expenses.

D. Bank accounts.

E. All of the above.

4. The Navigation bar includes these selections: A. Dashboard.

B. Banking.

C. Reports.

D. Employees.

E. All of the above.

5. To create a transaction, select the: A. Search icon.

B. Question mark.

C. Plus sign.

D. Minus sign.

E. All of the above.

6. To configure QBO to work the way you want, go to: A. Export files to Excel.

B. Print as Adobe PDF file.

C. Set up a chart of accounts.

D. Account and settings.

E. None of the above.

7. The column on the chart of accounts that classifies accounts for financial statements is: A. Account number.

17 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

B. Type.

C. Account name.

D. Description E. All of the above.

8. QBO exports reports to this file type: A. Excel.

B. Transaction list.

C. Accounts.

D. Customers.

E. All of the above.

9. The search icon takes you to: A. Help menu.

B. Creating transactions.

C. Activities.

D. Dashboard.

E. Recent transactions.

10. The gear icon can be used for: A. Account and settings.

B. Manage users.

C. Import data.

D. All lists.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e, Student Edition, Chapter 2, True or False Quiz. Students can email the questions and answers to their instructor.

1. The company set up in Chapter 2 is QB Cloud with your first and last name.

True 2. Cloudware refers to software accessed entirely from a Web server.

True 3. A password can be set up with 4 characters or less.

False. A password can be set up with 8 characters or more.

18 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

4. Each time you start QBO, you must type a Password. User IDs can be saved by your browser.

True 5. To see the work you have completed, display the Audit Log. True.

6. The Navigation bar is on the left side of the QBO window.

True 7. The Navigation bar’s Accounting selection includes the Chart of Accounts.

True.

8. To explore the power of QuickBooks, do an Internet search.

False (To explore the power of QuickBooks, watch the videos included in Chapter 2.)

9. When the plus sign is selected, you can create new transactions, invoices, sales receipts, bills, and more.

True 10. Preferences, also called settings, can be set as you work.

True CHECK YOUR PROGRESS Within Chapter 2, students complete the Check Your Progress assignment.

1. The Account No. for Checking is 101.

2. The Category Type for Checking is Bank.

3. The Account No. for Accounts Payable is 201.

4. The Category Type for Accounts Payable is Accounts Payable (A/P).

5. The Account Number for Common Stock is 301.

19 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

6. The Category Type for Common Stock is Equity.

EXERCISE 2-1 Students add, edit an account description, and assign account numbers to the Chart of Accounts.

20 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

EXERCISE 2-2 Students save the Chart of Accounts as an Adobe PDF file and export it to Excel. The suggested files names are Exercise 2-2_Chart of Accounts.pdf and Exercise 2-2_Chart of Accounts.xls.

EXERCISE 2-3, PROBLEM SOLVING On the Chart of Accounts, why are the category and detail type selections important? To explain the category and detail types, use 3 accounts – one asset, one liability and one expense account. Identify Category Type, Detail Type, Name, Number and financial statement.

The Category Type and Detail Type columns are important because they classify accounts for the financial statements. Student choices for accounts may vary.

Asset example:

Category Type Bank

Detail Type Checking: tracks all your checking activity, including debit card transactions.

Name Checking

Number 101

Financial Statement Balance Sheet

Number 201

Financial Statement Balance Sheet

Number 607

Financial Statement Profit and Loss

Liability account: Category Type Accounts Payable

Detail Type Accounts Payable (A/P)

Name Accounts Payable (A/P)

Expense account: Category Type Detail Type Name Expenses Office/General Depreciation Administrative Expense FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 2

The Chart below shows the PDF and Excel files saved in Chapter 2 and Exercise 2-2.

Chapter/Exercise PDF & Excel 2 Chapter 2_Chart of Accounts.pdf Chapter 2_Chart of Accounts.xlsx 2-2 Exercise 2-2_Chart of Accounts.pdf Exercise 2-2_Chart of Accounts.xlsx 21 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Page No. 81 82 90 90

For the Excel and PDF files saved within the chapter and in the exercises, go to www.mhhe.com/qbo > Instructor Edition > Excel Reports or End of Chapter Solutions (for the PDF files). The textbook files names and Instructor Edition files names are the same.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

22 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 3 BEGINNING BALANCES AND OCTOBER TRANSACTION REGISTER INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Start QuickBooks Online and sign in QB Cloud_Student Name (your first and last name).

Enter the owner’s investment in the business.

Use a transaction register to write checks.

Record cash sales and complete a transfer of funds.

Display the Bank Register, Journal, Trial Balance, Balance Sheet, Income Statement, and Audit Log. Save PDF files and export reports to Excel.

Complete Check Your Progress.

Watch QBO video.

Go to the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 3-1, 3-2 and 3-3.

QBO Tips ❖ Each time QBO is started, the User ID and Password is needed. ❖ There are three ways for instructors to see student work: (textbook pages 82-84) a. Students set up their instructor as the Accountant (Invite Accountant feature). b. Students email the instructor their User ID and Password, and set up a time to receive the emailed Confirmation Code. c. Students set up their instructor as the Company Administrator. ❖ When QBO updates, accounts may be added to the Chart of Accounts (also called the Account List) and some may not have account numbers.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 3 resources. Students go online to www.mhhe.com/qbo2e > Student Edition > Chapter 3. The following links are included: 1. Narrated PowerPoints. Students listen to narrated PowerPoints for each chapter. The Instructor PowerPoints include answers to the Going to the Net exercise and analysis questions.

2. Online Quizzes: The Online Quizzes include 10 multiple-choice questions, and 10 True or False questions. Student answers can be emailed to their instructor. The answers to the Multiple Choice and True or False questions are included in the IMK. 3. Analysis question: The analysis question is a Word file. Student answers can be emailed to the instructor.

4. Going to the Net: Students use the QuickBooks Community to learn about exporting to 25 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

Excel. a. Go online to the QuickBooks Learn & Support. The URL is https://community.intuit.com/quickbooks-online. b. In the Ask a question field, type Unable to Export to Excel. Link to Why am I unable to export to Excel in Internet Explorer. The website is https://community.intuit.com/articles/1145936-why-am-i-unable-to-export-to-excel-ininternet-explorer.

5. Video: Students watch the Watch the Navigating QuickBooks on YouTube. The website is https://www.youtube.com/watch?v=48QBRQdyRmU. 6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. In the textbook, the Glossary is Appendix B. 7. Problem Solving: This is the textbook’s Exercise 3-3. In the second edition, the third end-ofchapter exercise is new.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your McGraw-Hill Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html.

The Instructor Edition includes the files exported to Excel, End of Chapter Solutions (files saved as PDFs), answers to Problem Solving (third exercise in each chapter), answers to Check Your Progress, answers to the Certification Multiple Choice questions, answers to the Going to the Net exercise, answers to Problem Solving, and answers to the analysis questions. The Instructor Edition also includes Educator Registration (unlimited access to QBO Accountant), Training Modules (included with QBO Accountant Educator registration), Instructor’s Manual, Instructor PowerPoints, suggested Syllabi and a Test Bank. Choose a chapter to populate additional resources.

ANSWER TO ANALYSIS QUESTION The Analysis question is included online at www.mhhe.com/qbo2e > Student Edition > Analysis Questions. Students can download the Word file, then email their answers to the instructor.

How do you edit a transaction? List two options.

ANSWER: 1. With the Audit Log shown, drill down to the transaction that needs editing. Click . The original entry is shown. Make the needed corrections, then save. When you view the Audit Log again, the edited transaction is shown.

2. Go to Recent Transactions by selecting the magnifying-glass icon. To edit the transaction, link to it. Make the needed changes, then save.

MULTIPLE-CHOICE QUESTIONS 26 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 3 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. Written evidence of business transactions.

A. Desktop.

B. Dashboard.

C. Source document D. Cloudware.

E. None of the above.

2. To record the owner’s investment, what selection is made?

A. Income.

B. Expenses.

C. Gear > Account and Settings.

D. + > Journal Entry.

E. All of the above.

3. A journal entry is a transaction in which: A. There are at least two parts - a debit and credit.

B. Debit and credit distribution lines.

C. Each line has an account from the chart of accounts.

D. The total of the debits and credits equal.

E. All of the above.

4. Checks, payments, bills, bank deposits, and transfers are entered on: A. The general journal.

B. Specialized screens.

C. Activities.

D. Dashboard.

E. None of the above.

5. The October transaction register shows QB Cloud’s: A. Transactions completed for October.

B. General journal.

C. Dashboard.

D. Checking account activity.

E. All of the above.

27 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

6. You can transfer funds between most balance sheet accounts except: A. Accounts Payable and Accounts Receivable accounts.

B. Account 101 Checking and Account 205 Loan Payable.

C. Cash and sales.

D. Customer and vendor accounts.

E. None of the above.

7. Which QBO feature is used to view the company’s financial information?

A. Account listing.

B. Reports.

C. Chart of accounts.

D. Registers.

E. All of the above.

8. This report lists what you own, your debts, and what you’ve invested.

A. Audit log.

B. Balance Sheet.

C. Profit & Loss.

D. General journal.

E. All of the above.

9. This report shows the debit and credit balance of each account.

A. Audit log.

B. Balance Sheet.

C. Profit & Loss.

D. Trial Balance.

E. None of the above.

10. This report shows money you earned and money you spent.

A. Trial Balance.

B. Journal.

C. Profit & Loss.

D. Balance Sheet.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e, Student Edition, Chapter 3, True or False Quiz. Students can email the questions and answers to their instructor.

28 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

1. In Chapter 3, the owner invests cash and computer equipment in the business.

True 2. The company, QB Cloud_Student Name, was started in December of the current year.

False. QB Cloud’s first month of operations is October of the current year.

3. In Chapter 3, the transaction register is used as a source document for recording transactions.

True.

4. The transaction register shows each customer’s account activity.

False. The transaction register shows QB Cloud’s checking account activity.

5. The account for recording a check to the U.S. Post office is Freight In. False. The account for recording U.S. Post Office checks is Account 627 Shipping and delivery.

6. The Sales Receipt window is used for recording cash sales.

True 7. The account distribution for expenses is a credit to Account 101 Checking and a debit to Account 401 Sales.

False. The expenses account distribution is a debit to the appropriate expense account and a credit to Account 101 Checking.

8. The account distribution for cash sales is a debit to Account No. 101 Checking and a credit to Account No. 401 Sales.

True 9. The account distribution for the transfer of funds for the loan payable is a debit to Account No. 101 Checking and a credit to Account 205 Loan Payable.

True 10. On the Dashboard, Income and Expenses are shown graphically.

29 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

True CHECK YOUR PROGRESS Within Chapter 3, students complete the Check Your Progress assignment. These account balances reflect October 1-17, 20XX transactions.

1. Account 101 Checking

47,976.29 (dr.)

Account 205 Loan Payable

5,000.00 (cr.)

Account 401 Sales

2,500.00 (cr.)

Account 621 Office Supplies

106.52 (dr.)

Account 633 Telephone Expense

76.19 (dr.)

Account 635 Utilities

79.00 (dr.)

2. What is the 10/17/XX Net income?

1,976.29

3. What are the total Liabilities and Equity?

66,976.29

4. What report(s) show the Net Income?

Profit & Loss, Balance Sheet

5. What report(s) show all work completed?

Audit Log, Recent Transactions

30 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

EXERCISE 3-1 Students use the transaction register to complete October 18 through October 30 checks and cash sales. On the transaction register, checks are shown as payments and cash sales are shown as deposits. Use Sales Receipts to record cash sales.

EXERCISE 3-2 Student save reports as PDF files and export reports to Excel.

EXERCISE 3-3: PROBEM SOLVING 1. What is the date of the beginning balance?

October 1, 20XX 2. Describe the beginning balance transaction type and the account distribution.

The beginning balance is a Journal Entry. The account distribution is: Debit Credit 101 Checking 50,000.00 135 Computer Equipment 10,000.00 301 Common Stock 60,000.00 3. What are the steps for accessing the report that shows the beginning balance?

The Account List, Chart of Accounts, or the Journal report shows the beginning balance. For the Account List, go to Reports > type Account List in the search field. Or, go to Gear > Chart of Accounts.

For the Journal report, go to Reports > type Journal in the search field > type 10/01/20XX as the date > Run Report.

31 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 3 The chart shows the PDF and Excel files saved in Chapter 3 and Exercise 3-2.

Chapter/ Exercise 3

3-2

PDF & Excel Chapter 3_Oct 1 to Oct 17_Journal Chapter 3_Oct 1 to Oct 17_Trial Balance Chapter 3_Oct 1 to Oct 17_Profit and Loss Chapter 3_Oct 1 to Oct 17_Balance Sheet Exercise 3-2_October Journal Exercise 3-2_October Trial Balance Exercise 3-2_October Profit and Loss Exercise 3-2_October Balance Sheet

Page 122 123 125 127 134 134 134 134

The Instructor Edition link at www.mhhe.com/qbo2e includes the PDF files and Excel files saved in Chapter 3. To access the Instructor Edition, contact your . Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html for the Online Learning Center’s Instructor Edition username and password.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

32 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

CHAPTER 4 VENDORS AND INVENTORY INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

Start QuickBooks Online and sign in to QB Cloud_Student Name (your first and last name).

To check data, display the Expense and Sales transactions and the October 30 Trial Balance.

Complete bank reconciliation with the October bank statement.

Enter new vendors.

Enter inventory products and services.

Record vendor transactions.

Print reports and financial statements.

Filter the audit log.

Save PDF files and export reports to Excel.

Complete Check Your Progress.

Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 4-1, 4-2 and 4-3.

QBO Tips ❖ To make sure students are starting in the correct place in the data, complete the Check Your Data section at the beginning of Chapter 4. Students verify Expense and Sales transactions and the October 30 trial balance. ❖ The Vendor Contact List includes Vendors that are paid immediately with a check, or paid later for purchases on account.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 4 resources. Students go online to, link to Student Edition > www.mhhe.com/qbo2e > Chapter 4. The following links are included: 1. Narrated PowerPoints. Students listen to narrated PowerPoints for each chapter. The Instructor PowerPoints include answers to the Going to the Net exercise and analysis questions.

2. Online Quizzes: The Online Quizzes include 10 multiple-choice questions, and 10 True or False questions. Student answers can be emailed to their instructor. The answers to the Multiple Choice and True or False questions are included in the IMK. 3. Analysis question: The analysis question is a Word file. Student answers can be emailed to the instructor.

4. Going to the Net: Go to QuickBooks Learn & Support and do a search for Inventory.

35 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

a. Go online to https://community.intuit.com/. b. Type a Search word; for example, type Inventory. c. Link to articles of interest.

5. Videos: a. b.

Watch an Inventory video at http://quickbooks.intuit.com/tutorials/lessons/inventory/.

Watch the Create and Expense Reports in QuickBooks video. The website is https://www.youtube.com/watch?v=NmUyBRE8sxc.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. In the textbook, the Glossary is Appendix B. 7. Problem solving link includes Exercise 4-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

36 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

ANSWER TO ANALYSIS QUESTION The Analysis question is included online at www.mhhe.com/qbo2e > Student Edition > Chapter 4 > Analysis Questions. Students can download the Word file, then email their answers to the instructor.

1. What are vendors?

ANSWER Vendors are the businesses that offer QB Cloud credit to buy merchandise and/or assets, or credit for expenses incurred.

2. What is Accounts Payable and how do you verify its balance?

ANSWER Accounts Payable is the amount of money the business owes. The Accounts Payable balance and the total of the amount owed to vendors should be the same.

3. Why is the balance in Merchandise Inventory different than the balance in Accounts Payable? Include account balances as of November 12 (completed in Exercise 4-2) in your answer. Explain.

ANSWER: Merchandise Inventory includes products sold for Cash and purchases made on account.

The balance in Accounts Payable is different because it represents merchandise purchases made on account only. The Merchandise Inventory account includes both purchases made on account and inventory sold for cash.

Purchases made on account as of November 12, 20XX are $17,920.

The Merchandise Inventory account balance is $12,920. The $5,000 difference ($17,920 12,920) represents the cost for computers sold for cash on 11/9, 11/10, and 11/12: $500 cost X 10 computers sold equals $5,000. (Hint: The October 1 - November 12, 20XX Transaction Report shows the total for 115 Merchandise Inventory as $12,920.00. Cash Sales are shown with a minus balance.)

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 4 > link to Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

37 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

1. Merchandise purchased from vendors needs to be paid within: A. 10 days.

B. 20 days.

C. 30 days.

D. End of the month.

E. None of the above.

2. QB Cloud receives a bank statement every: A. Quarter.

B. Month.

C. Week.

D.D ay.

E. None of the above.

3. The process of bringing the balance of the bank statement and the balance of the checking account into agreement is called?

A. The trial balance.

B. The balance sheet.

C. Bank reconciliation.

D. Checking account register.

E. All of the above.

4. The default for reports is: A. Cash basis.

B. Accrual basis.

C. Account reconciliation.

D. Transaction register.

E. None of the above.

5. Purchases on account from vendors are known as: A. Vendor contact list.

B. Transaction details by account.

C. Sales receipts.

D. Accounts payable transactions.

E. None of the above.

6. When reconciled, Account 101 Checking shows the same balance as: A. Account 201 Accounts Payable.

B. Account 115 Merchandise Inventory.

C. Cash and sales.

D. Bank statement.

E. None of the above.

38 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

7. This feature shows information about suppliers who offer credit to QB Cloud: A. Products and Services.

B. Vendors Page.

C. Reports.

D. Registers.

E. All of the above.

8. Checks that are issued by QB Cloud are shown on this report: A. Register, Account 101 Checking.

B. Balance Sheet, Account 201 Accounts Payable.

C. Sales Receipts.

D. AP Aging Summary.

E. All of the above.

9. To view all the vendors added in Chapters 3 and 4, display this report: A. Transaction Detail by Account.

B. Trial Balance.

C. Profit and Loss.

D. Vendor Contact List.

E. None of the above.

10. A product that is purchased from vendors for sale to customers is called: A. Supplies.

B. Transaction.

C. Inventory.

D. Balance of Account 201 Accounts Payable.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 4 > True or False Quiz. Students can email the questions and answers to their instructor.

1. The Vendors page is where the company keeps track of the suppliers you work with.

True 2. QBO’s accounts payable system shows vendor activity.

True.

3. In Chapter 4, to make sure you are starting in the correct place in the data, display the November 12 trial balance.

39 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

False. To make sure you are starting in the correct place in the data, display the Expense and Sales transactions and the October 30 trial balance.

4. The transaction register shows the company’s checking account.

True.

5. The trial balance shows which checks, ATMs, and deposits cleared the bank.

False. The bank statement shows which checks, ATMs, and deposits cleared the bank.

6. Since QB Cloud buys on credit from various vendors, the business wants to keep track of the amount owed and the due dates of bills.

True.

7. Recording the purchase of an inventory item increased Account 115 Merchandise Inventory on the Balance Sheet by the cost of the item and increases the Quantity on Hand for that item.

True.

8. Recording the sale of an inventory item increases the Inventory Asset account by the original cost of the item.

False. Recording the sale of an inventory item decreases the Inventory Asset account by the original cost and decreases the Quantity on hand for that item.

9. Information about a purchase is recorded by selecting the Create icon (+), then Sales Receipts.

False. Information about a purchase is recorded by selecting the Create icon (+), then Bill.

10. The account distribution for a bill is a debit to Account 115 Merchandise Inventory and a credit to Account 201 Accounts Payable/Vendor.

True CHECK YOUR PROGRESS Within Chapter 4, students complete the Check Your Progress assignment. These account balances are as of 11/3/20XX. 1. Account 101 Checking Account 115 Merchandise Inventory

$49,977.19 (dr.) $2,420.00 (dr.)

40 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

Account 201 Accounts Payable Account 601 Advertising Account 603 Bank Charges Account 629 Stationery & Printing 2.

3.

4.

5.

6.

7.

What is the 11/3 Net Income?

What is the 11/3 total Liabilities and Equity?

What is the quantity and asset value of data storage?

What is the quantity and asset value of network products: What is the quantity and asset value of web servers?

What is the quantity and asset value of webinars?

$2,420.00 (cr.) $250.00 (dr.) $20.00 (dr.) $553.18 (dr.) $3,977.19 $71,397.19 20, $300 10, $250 8, $1,600 6, $270

EXERCISE 4-1 Students add vendors and products, complete transaction register entries, vendor transactions, and cash sales.

EXERCISE 4-2 Student save reports as PDF files and export reports to Excel.

EXERCISE 4-3 1.

What report lists the debits and credits for each transaction? Show the total on November 12.

ANSWER: The Journal lists the debits and credits for each transaction. The total of October 1 thru November 12 journal transactions is $115,350.41.

2.

3.

Identify the report that shows money you earned (income) and money you spent (expenses). Explain how to display this report and the final balance.

ANSWER: The Profit and Loss shows income and expenses. Go to Reports > Recommended > Profit and Loss > Run > 10/1/2017 to 11/12/2017 > Run Report. The Net Income is $8,569.59.

Identify the report that shows assets, liabilities, and equity. Show the steps for displaying that report, and the final balance(s).

ANSWER: The Balance Sheet lists what you own (assets), what your debts are (liabilities), and what you’ve invested in your company (equity). Go to Reports > Recommended > Balance Sheet > Run > 10/1/2017 to 11/12/2017 > Run Report. Total assets and Total liabilities and equal are $91,489.59.

41 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 4 The chart below shows the PDF and Excel files saved in Chapter 4 and Exercise 4-2.

Chapter/ Exercise PDF & Excel 4 Chapter 4_October 31_Trial Balance Chapter 4_Vendor Contact List Chapter 4_Product Service List Chapter 4_Journal Chapter 4_Transaction Detail by Account Chapter 4_Trial Balance Chapter 4_Inventory Valuation Summary Chapter 4_Vendor Balance Summary Chapter 4_AP Aging Summary Chapter 4_Profit and Loss Chapter 4_Balance Sheet Chapter 4_Statement of Cash Flows 4-2 Exercise 4-2_Vendor Contact List Exercise 4-2_Product Service List Exercise 4-2_Journal Exercise 4-2_Transaction Detail by Account Exercise 4-2_Trial Balance

42 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

Page 148 156 166 171 172 173 174 175 176 179 181 183 192 192 192 192 192

Chapter/ Exercise PDF & Excel 4-2 Exercise 4-2_Inventory Valuation Summary Exercise 4-2_Vendor Balance Summary Exercise 4-2_AP Aging Summary Exercise 4-2_Profit and Loss Exercise 4-2_Balance Sheet Exercise 4-2_Statement of Cash Flows

Page 192 192 192 192 192 192

The Instructor Edition link at www.mhhe.com/qbo2e includes the PDF files and Excel files saved in Chapter 4.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

43 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

CHAPTER 5 CUSTOMERS AND SALES INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Start QuickBooks Online and sign in to QB Cloud_Student Name.

To check data, display Expense and Sales transactions and the November 12 Trial Balance.

Enter customer settings.

Enter new customers and record customer sales and cash sales.

Complete an advanced search.

Display financial statements.

Display the audit log.

Export reports to Excel and Adobe PDF. Complete Check Your Progress.

Go to the Online Learning at www.mhhe.com/qbo2e for additional resources.

Complete Exercises 5-1, 5-2 and 5-3.

QBO Tips ❖ To make sure students are starting in the correct place in the data, display Expense and Sales Transactions and the November 12, 20XX Trial Balance. ❖ The Customer Contact List shows customers that QB Cloud sells products to on account, meaning credit transactions or accounts receivable transactions. ❖ Accounts receivable are what customers owe your business.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 5 resources. Students go online to www.mhhe.com/qbo2e > Student Edition > Chapter 5. The following links are included: 1. Narrated PowerPoints. Students listen to narrated PowerPoints for each chapter. The Instructor PowerPoints include answers to the Going to the Net exercise and analysis question.

2. Online Quizzes: The Online Quizzes include 10 multiple-choice questions, and 10 True or False questions. Student answers can be emailed to their instructor. The answers to the Multiple Choice and True or False questions are included in the IMK. 3. Analysis question: The analysis question is a Word file. Student answers can be emailed to the instructor.

4. Going to the Net: a. Go to the QuickBooks blog at http://quickbooks.intuit.com/blog/. b. What are the QuickBooks Blog selections and links on its Home page? Make a selection, then read an article of interest. Describe each section of the Home page.

45 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

ANSWER: As of this writing the choices are: News, Thought Leadership, What’s New in QBO, Innovation, Accountant Advice, and Customer Profiles.

The blog’s Home page incudes a Featured article and additional articles. Students make a selection and read an article of interest.

Scroll down to see the New to QuickBooks? section. As of this writing, these selections are shown.

Additional links are shown at the bottom of the website. As of this writing, these links are shown.

46 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

5. Videos: a. Watch the Create an Invoice video. The URL is https://www.youtube.com/watch?v=k3-j0mmqoZA. b. Go to RadioFreeQB www.youtube.com/RadioFreeQB. Watch a QBO video of interest.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. In the textbook, the Glossary is Appendix B. 7. Problem Solving link includes Exercise 5-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel and PDF, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTION The Analysis question is included online at www.mhhe.com/qbo2e > Student Edition > Chapter 5 > Analysis Questions. Student can download the Word file, then email their answers to the instructor.

1. What is the account distribution for the 11/15/20XX sale on account of 5 data storage products to eBiz for a total of $150, Invoice 1007?

Account

Debit

Credit

47 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

105 Accounts Receivable/eBiz 501 Cost of Goods Sold 115 Merchandise Inventory 401 Sales

150.00 75.00 75.00 150.00

2. What is the account distribution for selling one web server for cash, $400, Sales Receipt 1013 on 11/30/20XX? Account 101 Checking 501 Cost of Goods Sold 401 Sales 115 Merchandise Inventory

Debit

Credit 400.00 200.00 400.00 200.00

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 5 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. Before adding customers, Check QBO’s: A. Vendors.

B. Inventory.

C. Account and Settings.

D. Products and services list.

E. All. 2. The Customers page includes the: A. Adding a new customer.

B. Customer list.

C. Create invoice.

D.E xport to Excel.

E. All. 3. When cash sales are recorded, use: A. Invoice.

B. Bill.

C. Customer payment.

D. Sales Receipt.

E. None.

4. What customers owe your business is known as: A. Accounts payable.

48 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

B. Invoices.

C. Accounts receivable.

D. Account register.

E. All. 5. The following transaction affects the customer’s balance: A. Credit memo.

B. A/P transaction.

C. Bill.

D. Register.

E. None.

6. To see customer transactions and account balances, display the: A. A/P Register.

B. Trial Balance.

C. A/R Register D. Sales Receipts.

E. None.

49 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

7. Products and services are associated with this type of account: A. Expenses.

B. Income.

C. Settings.

D. Liabilities.

E. None.

8. In this type of report, each transaction’s debit and credit is shown: A. A/R Aging Summary.

B. Journal.

C. A/R Register.

D. Trial Balance.

E. None.

9. The inventory valuation summary shows: A. Quantity.

B. Asset value.

C. Average cost D. Account 115 Merchandise Inventory account balance.

E. All. 10.T he Audit Log displays events occurred in: A. Daylight savings time.

B. Mountain Standard Time.

C. Eastern Standard Time.

D. Your local time.

E. None.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 5 > True or False Quiz. Students can email the questions and answers to their instructor.

1. The focus of Chapter 5 is customers and sales.

True 2. Starting data is displayed for 11/1/20XX. False. Starting data is displayed for 10/1/20XX to 11/12/20XX. 3. A sales receipt is used for customer sales on account.

False. An invoice is used for customer sales on account.

50 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

4. Credit transactions from customers are accounts payable transactions.

False. Credit transactions from customers are accounts receivable transactions.

5. Credit memos apply returns to the customer’s balance.

True.

6. Registers can be used to look at transactions and account balances.

True.

7. The November bank statement shows checking account activity through 10/30/20XX. False. The November bank statement shows checking account activity through 11/30/20XX. 8. On invoices and other sales transactions, you choose products and services.

True.

9. The Journal is an example of a specialized screen.

False. Specialized screens include invoices, receive payments, credit memos, sales receipts, checks, bills, transfers, bank deposits.

10. The account distribution for an invoice includes debits to Account 105 Accounts Receivable/customer and Account 501 Cost of Goods Sold; and credits to Account 401 Sales, and Account 115 Merchandise Inventory.

True CHECK YOUR PROGRESS, CHAPTER 5 1. What is the account balance from 10/1/20XX to 11/30/20XX in these accounts? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking Account 105 Accounts Receivable

$61,469.59 (dr.) $0.00 (dr.)

Account 115 Merchandise Inventory

$11,960.00 (dr.)

Account 401 Sales

$17,920.00 (cr.)

51 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Account 501 Cost of Goods Sold Account 603 Bank Charges

$5,960.00 (dr.) $40.00 (dr.)

2. What is Net Income?

$9,509.59

3. What are the total Liabilities and Equity?

$92,429.59

4. What is the quantity, asset value, and average cost of computers?

16, $8,000, $500 5. What is the quantity, asset value, and average cost of data storage?

31, $465, $15 6. What is the quantity, asset value, and average cost of network products?

16, $400, $25

7. What is the quantity, asset value, and average cost of web servers?

13, $2,600, $200 8. What is the quantity, asset value, and average cost of webinars?

11, $495, $45 EXERCISE 5-1 Students add two customers and complete transaction register entries, vendor payments, customer transactions, and cash sales.

EXERCISE 5-2 Students export reports to Excel and save as PDF files.

Exercise 5-3: Problem Solving List three, or more, ways to show account balances for an asset and expense account. Include the QBO steps for each method. Specify the account and balance in your answer. What is the difference between View Register accounts and Run report accounts?

52 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Asset account: Account 101 Checking, Balance $61,469.59 1. Gear > Chart of Accounts (or Accounting button). The QuickBooks Balance is shown for Account 101 Checking.

2. Gear > Chart of Accounts > View register for 101 Checking. Instead of View register, doubleclick 101 Checking.

3. Reports > Trial Balance > from 10/1/XX to 11/30/XX. 4. Reports > Balance Sheet (or Statement of Cash Flows) from 10/1/XX to 11/30/XX. 5. In the Bank accounts area, the Dashboard shows 101 Checking In QuickBooks balance, $61,469.59.

Expense: Account 603 Bank Charges, Balance, $40.00 1.

2.

3.

4.

Reports > Profit and Loss > from 10/1/XX to 11/30/XX. Reports > Transaction Detail by Account > from 10/1/XX to 11/30/XX. Gear > Chart of Accounts (or Accounting button) >go to Account 603 > Run report.

On the Dashboard’s Expense graph, select This year. Scroll over the graph to Everything else. To go to the Transaction Report, click on Everything else. The Total for 603 Bank Charges is shown.

On the Account List or Chart of Accounts, the View register link is for balance sheet accounts (bank, current and fixed assets, liability, equity). The Run report link is for retained earnings, income, cost of goods sold, and expense accounts. Registers display transactions in a traditional ledger format.

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 5 The chart below shows the PDF and Excel files saved in Chapter 5 and Exercise 5-2.

Chapter/ Exercise 5

5-2 5-2

PDF & Excel Chapter 5_Customer Contact List Chapter 5_Products and Services List Chapter 5_Journal Chapter 5_Transaction Detail by Account Chapter 5_Trial Balance Chapter 5_Inventory Valuation Summary Chapter 5_Vendor Balance Summary Chapter 5_AP Aging Summary Chapter 5_Profit and Loss Chapter 5_Balance Sheet Chapter 5_Statement of Cash Flows Exercise 5-2_Vendor Balance Summary Exercise 5-2_AP Aging Summary Exercise 5-2_Customer Contact List 53 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Page 207 225 229 231 232 234 235 236 237 239 240 248 248 248

Exercise 5-2_Journal Exercise 5-2_Transaction Detail by Account Exercise 5-2_Trial Balance Exercise 5-2_Inventory Valuation Summary Exercise 5-2_Customer Balance Summary Exercise 5-2_AR Aging Summary Exercise 5-2_Profit and Loss Exercise 5-2_Balance Sheet Exercise 5-2_Statement of Cash Flows

248 248 248 248 248 248 248 248 248

The Instructor Edition link at www.mhhe.com/qbo2e includes the PDF files and Excel files saved in Chapter 5.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

54 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 6 DECEMBER SOURCE DOCUMENTS INSTRUCTOR’S MANUAL AND KEY (IMK) OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

Start QuickBooks Online and sign in to QB Cloud_Student Name (your first and last name).

To check data, display expense and sales transactions and the December 1 Trial Balance.

Analyze source documents.

Record vendor, customer, cash, and credit card transactions.

Complete Check Your Progress.

Export reports to Excel and save as PDF files.

Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 6-1, 6-2 and 6-3.

The purpose of Chapter 6 is to review what students have learned in previous chapters. After analyzing each source document, students record the appropriate transactions. All transactions occurred during December of the current year.

The source documents trigger transaction analysis for: • • • • • •

Accounts payable and vendors.

Inventory.

Accounts receivable and customers.

Cash and credit card sales.

Account reconciliation.

Reporting.

QBO Tips ❖ The source documents analyzed include: o o o o o

Vendor bills for purchasing inventory.

Memos include customer payments, vendor payments and remittances.

Transaction register for issuing checks for expenses and recording ATM withdrawals.

Sales invoices for credit customers.

Sales receipts for cash and credit card sales.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 6 resources. Go online to www.mhhe.com/qbo2e > Student Edition > select Chapter 6.

57 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis question: Students answer the analysis question, then email their instructor.

4. Going to the Net (answers to GTN questions are shown below) a. Go to the Reconcile process and overview website. The URL https://community.intuit.com/articles/1145755-reconcile-process-and-overview b. Read the article, then answer these questions.

1) What accounts can be reconciled?

ANSWER: Only cash-flow accounts can be reconciled. When you go to reconcile an account, you’ll only find accounts listed on your balance sheet as choices to reconcile.

2) What amounts should match on both the bank statement and reconcile window?

What if amounts do not match; what should you do?

ANSWER: Your bank statement should have a total figure for the amount of cleared deposits and credits which should match the amount listed for the total checked amount in deposits and credits. If it doesn’t match, compare the transactions on the statement to the ones in the reconcile window to locate the incorrect or missing transaction.

5. Video: Watch Reports Made Easy at https://www.youtube.com/watch?v=GLFEAXbNIyQ. 6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 7-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 6

58 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

1. Is there a difference between the December 1-31 Profit and Loss and the October 1 to December 31 Profit and Loss? Explain and provide an example.

Yes. Because the P&L includes income accounts, cost of goods sold, and expenses – the temporary accounts – the P&L for a month will be different than the P&L for the entire fourth quarter. For example, the net income for October 1 through December 31 is $14,643.52. An accumulation of all the P&L accounts. The net income for the month of December is $5,133.93 reflecting one month of income, cost of goods sold, and expense account balances.

2. Is there a difference between the December 1-31 Balance Sheet and the October 1 to December 31 Balance Sheet? Explain.

No. The balance sheet shows the permanent accounts, Assets, Liabilities and Equity. The balance sheet for one month and the balance sheet for the entire quarter is the same.

3. Is there a difference between the December 1-31 Statement of Cash Flows and the October 1 to December 31 Statement of Cash Flows? Explain.

Yes. The statement of cash flows includes the net income amount, either for a month or the fourth quarter. The net income for the fourth quarter is $14,643.52. The net income for the month of December is $5,133.93. Therefore a statement of cash flows for one month will differ from one for three months.

The cash at the end of the period is the same but not the amounts for Operating Activities, Investing Activities and Financing Activities.

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 6 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. When issuing checks or ATMs for expenses, refer to the: A. Vendor pages.

B. Accounts Receivable register.

C. Transaction register.

D. Products and services list.

E. All of the above.

2. To show the amount charged for earlier disbursements, select <Yes> to this window prompt: 59 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

A. Vendor list.

B. Customer sort.

C. Saved window.

D. Auto Recall Dialog.

E. All of the above.

60 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

3. Vendor purchases are tracked by the following: A. Purchase order.

B. Net 30 terms.

C. Customer payments.

D. Bill number.

E. None of the above.

4. When customers pay what they owe, the check is payable to: A. Accounts receivable.

B. Craig’s Design and Landscaping Services.

C. QB Cloud_Student Name.

D. Account 101 Checking.

E. All of the above.

5. The terms of vendor payments are: A. Net 30 B. End of month.

C. Net 60.

D. Vendor payments do not have terms.

E. All of the above.

6. The Sales Receipts window is used for the following: A. Vendor payments.

B. Purchases made on account.

C. Sales invoices on account.

D. Cash and credit card sales.

E. None of the above.

7. The trial balance account totals for the fourth quarter are the same as: A. Transaction detail by account.

B. Balance sheet.

C. Profit and loss.

D. Statement of cash flows.

E. None of the above.

8. The Customer balance summary total agrees with this account balance: A. Account 101 Checking.

B. Account 115 Merchandise Inventory.

61 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

C. Account 105 Accounts Receivable D. Account 201 Accounts Payable.

E. None of the above.

9. The vendor balance summary total agrees with this account balance: A. Account 105 Accounts Receivable.

B. Account 115 Merchandise Inventory.

C. Account 501 Cost of Goods Sold.

D. Account 201 Accounts payable.

E. All of the above.

10. The inventory valuation summary shows: A. The asset value.

B. The average cost C. The same balance as Account 115 Merchandise Inventory.

D. The quantity of each item in inventory.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 6. True or False Quiz. Students can email the questions and answers to their instructor.

62 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

1. In Chapter 6, documents trigger transaction analysis.

True 2. A remittance is the action of sending money in payment of a bill.

True.

3. To make sure you are starting in the correct place, display the 11/2/20XX to 11/30/20XX trial balance.

False. Display the 10/1/20XX to 12/1/20XX trial balance.

4. In Chapter 6, all transactions occurred during November.

False. All transaction occurred during December.

5. When customer payments are received, use the Sales Receipts window.

False. Use the Receive Payment window for customer payments.

6. Credit card receipts are entered on the Sales Receipts page or window.

True.

7. Bills show a purchase amount as well as a remittance amount.

True.

8. Vendor payments are made on the Bill or invoice window.

False. Vendor payments are made on the Bill Payment window.

9. Sales on account are recorded on the Purchase Invoice window or page.

False. Sales on account are recorded on the Invoice window or page.

10. The inventory valuation summary shows all purchases made on account.

False. The inventory valuation summary shows the quantity, asset value, and average cost of inventory.

CHECK YOUR PROGRESS, CHAPTER 6

63 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

1. What are the account balances in these accounts from 10/1/20XX to 12/30/20XX? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking

$53,513.52 (dr.)

Account 105 Accounts Receivable

400.00 (dr.)

Account 115 Merchandise Inventory

9,870.00 (dr.)

Account 201 Accounts Payable

3,120.00 (cr.)

Account 401 Sales

31,140.00 (cr.)

Account 501 Cost of Goods Sold

12,570.00 (dr.)

2. What Total is shown on the 12/30 Trial Balance?

$99,260.00

3. What is Net Income?

$14,663.52

4. What are the total Liabilities and Equity?

$82,783.52

5. What is the quantity, asset value, and average cost of computers?

11, $5,500, $500 6. What is the quantity, asset value, and average cost of data storage?

51, $765, $15 7. What is the quantity, asset value, and average cost of network products?

16, $400, $25 8. What is the quantity, asset value, and average cost of web servers?

14, $2,800, $200 9. What is the quantity, asset value, and average cost of webinars?

9, $405, $45 10.W hat is the cash increase at the end of the period? $53,513.52 64 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

EXERCISE 6-1 Using the December 31 bank statement, students reconcile Account 101 Checking.

EXERCISE 6-2 Students save reports as PDF files and export reports to Excel.

EXERCISE 6-3: Problem Solving. The financial statements displayed on textbook pages 299 and 300 are used for the answer.

1. On the Profit and Loss report, describe how to compare October, November and December.

Show calculations for determining percent of income for an expense account. a. Display the Profit and Loss By Month report > Customize > from 10/1/XX to 12/30/XX > Run report. b. Click <Customize> > select Rows/Columns > % of Income. c. On the Profit and Loss by Month report, an expense account is divided by total income to determine the % of income. For example: 601 Advertising for October: 125/$6,000 = 2.08%.

2. Describe how the Balance Sheet can be customized. Show an example and two calculations – one for an asset and one for a liability. a. Display the 10/1/20XX to 12/30/XX balance sheet > Customize > Rows/Columns > % of Column > Run report. b. Each row is divided by $82,783.52 (the total assets and total liability and equity amount). For example, Account 115 Merchandise Inventory $9,870/$82,783.52 = 11.92%.

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 6 The chart below shows the PDF and Excel files saved in Chapter 6 and Exercise 6-2.

Chapter/ Exercise 6

PDF & Excel Chapter 6_Journal Chapter 6_Trial Balance Chapter 6_Customer Balance Summary Chapter 6_AR Aging Summary Chapter 6_Inventory Valuation Summary Chapter 6_Vendor Balance Summary 65 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

Page 292 293 294 294 294 295

6-1 6-2

6-2

Chapter 6_AP Aging Summary Chapter 6_Profit and Loss Chapter 6_Profit and Loss by Month Chapter 6_Balance Sheet Chapter 6_Custom Balance Sheet Chapter 6_Statement of Cash Flows Exercise 6-1_Reconciliation Report.pdf (no Excel file) Exercise 6-2_Journal Exercise 6-2_Transaction Detail by Account Exercise 6-2_General Ledger Exercise 6-2_Trial Balance Exercise 6-2_Profit and Loss Exercise 6-2_Profit and Loss by Month Exercise 6-2_Balance Sheet Exercise 6-1_Custom Balance Sheet Exercise 6-2_Statement of Cash Flows

295 296 299 301 302 303 310 310 310 310 310 310 310 310 310 311

The Instructor Edition link at www.mhhe.com/qbo2e includes the PDF files and Excel files saved in Chapter 6.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

66 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach .

CHAPTER 7 ANALYSIS AND REPORTS— END OF FOURTH QUARTER AND YEAR OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

Start QuickBooks Online and sign in to QB Cloud_Student Name.

To check data, display the December 31 Trial Balance.

Record end-of-quarter adjusting entries.

Display the adjusted trial balance and financial statements.

Complete the closing process and display the postclosing trial balance.

Export reports to Excel and save as PDF files.

Complete Check Your Progress.

Go to the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 7-1, 7-2 and 7-3.

In Chapter 7, your students continue recording financial information for QB Cloud_Student Name. They complete transactions for the end of the fourth quarter and the end of the year. At the end of December, which is also the end of the fourth quarter, they will prepare adjusting entries, print financial statements, and close the fiscal year.

QBO Tips ❖ Use the Journal Entry window to enter end-of-fourth-quarter adjusting entries. ❖ Select

> Journal Entry (in the Other list) for the Journal Entry window.

❖ The end-of-quarter adjusting entries include: o Adjust three months prepaid rent: $2,000 X 3 = $6,000. o Adjust three months prepaid insurance: $3,000 X 3/12 = $750. o Use straight-line depreciation for computer equipment: $10,000 - $400 (salvage value) ÷ 3 years X 3/12 = $800.

69 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 7 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 7.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to their instructor.

3. Analysis question: Students answer the analysis question, then email them to their instructor, 4. Going to the Net a. Go to the QuickBooks Learn & Support website. The website is https://community.intuit.com/quickbooks-online. b. Type the Search word, Customize your Profit and Loss Report. c. Link to Customize your Profit and Loss Report. The website is https://community.intuit.com/articles/1525069-customize-your-profit-and-loss-report.

Select See only some accounts not all of them. Answer these questions.

ANSWER: 1) What is the P&L default?

ANSWER: By default, all income and expense accounts are included on the Profit and Loss report.

2) Describe the steps to see some accounts but not all of them.

ANSWER: To filter the P&L by a specific account, do this: 1. With your P&L open, click Customize.

2. Click Filter.

3. Select the Distribution Account checkbox and in the drop-down menu, select the account or accounts you'd like to filter by.

5. Videos: a. Create Sales Reports video (http://quickbooks.intuit.com/tutorials/lessons/incomerelated-reports/).

70 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

b. Go to Prof. Susan Crosson’s Financial Accounting videos at http://www.bus.emory.edu/scrosso/FA%20Videos.htm. To review financial accounting principles and procedures, link to a video.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 7-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTION, CHAPTER 7 Explain the difference between the adjusted trial balance and the postclosing trial balance.

ANSWER: After the adjusting entries are recorded on December 31, the adjusted trial balance shows all the general ledger accounts with balances. The adjusted trial balance includes permanent and temporary account balances. Once the adjusting entries are journalized and posted, the adjusted trial balance updates the account balances for Prepaid Insurance and Prepaid Rent, and shows account balance for Accumulated Depreciation, Insurance expense, Rent or Lease expense, and Depreciation expense.

After the fiscal year is closed, and the Net Income amount is transferred to Retained Earnings, a postclosing trial balance is printed on January 1 of the next year. Only permanent accounts appear on the postclosing trial balance. All temporary accounts (income, cost of goods sold, and expenses) have been closed and zeroed out.

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 7 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. The purpose of an adjusting entry is: A. Revenue was earned but not recorded.

B. Expenses incurred but not recorded.

C. To show the prepaid expense for one month.

D. Customer paid in advance of receiving goods or services.

71 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

E. All the above.

2. Adjusting entries are made on the: A. 15th of every month.

B. First day of the new year, meaning January 1.

C. Last day of the month, quarter, or year.

D. Adjusting entries are rarely recorded for a company.

E. All of the above.

3. On January 1 of the new year, this account shows Net Income: A. Sales.

B. Cost of Goods Sold.

C. Common Stock.

D. Retained Earnings.

E. None of the above.

4. On January 1, the Profit & Loss statement shows the following account balances: A. The same as on December 31 of the previous year.

B. Zero.

C. The same as the Balance Sheet accounts.

D. The same as the Statement of Cash Flows accounts.

E. None of the above.

5. The Exercise 6-2 December trial balance shows account balances before: A. Recording expenses.

B. Adjustments.

C. Additional Common Stock investment.

D. Before bills are paid.

E. None of the above.

6. Record adjusting entries on the: A. Customer payments window.

B. Vendor payments window.

C. Check window.

D. Journal Entry window.

E. None of the above.

7. When depreciating Computer Equipment, this method was used:

72 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

A. Double-declining balance.

B. Computer Equipment is not depreciated.

C. Straight-Line.

D. Average.

E. None of the above.

8. This report lists each account on the chart of accounts with a minus sign in front of credit balances.

A. December 31 Journal.

B. Adjusted Trial Balance.

C. EOY Profit and Loss statement.

D. Transaction Detail by Account.

E. All of the above.

9. After adjustments are journalized and posted, the report(s) updated is/are: A. Trial Balance.

B. Profit and Loss.

C. Balance Sheet.

D. Statement of Cash Flows.

E. All of the above.

10.I n Chapter 7, when the Balance Sheet date is changed to January 1: A. The Balance Sheet has zero account balances.

B. Net Income is shown as Retained Earnings.

C. Depreciation expense has an $800.00 balance.

D. The Balance Sheet is the same on December 31 and January 1.

E. None of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 7 > True or False Quiz. Students can email the questions and answers to their instructor.

1. In Chapter 7, end-of-fourth quarter closing entries are recorded on the Journal Entry window.

False. (In Chapter 7, end-of-fourth quarter adjusting entries are recorded on the Journal Entry window.)

2. After completing closing entries, you print the Adjusted Trial Balance, Profit & Loss statement and other financial statements.

73 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

False. After completing adjusting entries, you print the Adjusted Trial Balance, Profit & Loss statement and other financial statements.

3. The fiscal year is a period that a company uses for accounting purposes and preparing financial statements.

True.

4. For tax purposes, the fiscal year and calendar year are the same because that is the Internal Revenue Service default.

False. For tax purposes, companies can choose to be calendar-year taxpayers or fiscal-year taxpayers. The default IRS system is based on the calendar year.

5. Adjusting entries are recorded to correct an account balance.

True.

6. An example of an adjusting entry is an expense that has been prepaid but it has not been recorded for its appropriate monthly amount.

True.

7. A typical reason for an adjusting entry is that it involves deleting an asset, a liability, or an expense account balance.

False. A typical reason for an adjusting entry is that it involves updating one Profit and Loss statement account and one Balance Sheet account.

8. Accumulated depreciation has a credit balance.

True.

9. The purpose of financial statements is to show revenues earned and expenses incurred during the accounting period.

True.

10. The amount shown in Retained Earnings is last year’s Net Income.

True.

ANSWERS TO CHECK YOUR PROGRESS, CHAPTER 7 74 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

1. What is the account balance on 1/1/20XX (next year) in these accounts? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking

53,493.52 (dr.)

Account 105 Accounts Receivable

400.00 (dr.)

Account 115 Merchandise Inventory

9,870.00 (dr.)

Account 123 Prepaid Rent Account 125 Prepaid Insurance Account 137 Accumulated Depreciation

0.00 (dr.)

2,250.00 (dr.)

800.00 (cr.)

Account 603 Bank Charges Account 318 Retained Earnings

0.00 (dr.)

7,093.52 (cr)

2. What are total current assets?

66,013.52

3. What are total liabilities and equity?

75,213.52

4. What is the amount owed by customers?

400.00

5. List the customer(s) and due dates that payments are owed to QB Cloud_Student Name.

Springfield Unified School District, $400.00. The due date is 1/23/20XY. 6. What is the amount owed by QB Cloud_Student Name to vendors? $3,120.00 7. List the vendor name, amounts due, and due date Ample Store $480, 1/5/20XY and 1/9/20XY Any Time Deployment, $250, 1/16/20XY CloudZ Channel, $800, 1/2/20XY Computers 2 You, $1,500, 1/16/20XY Conf/Call, $90, 1/5/20XY The total is $3,120 owed to vendors which agrees with #6.

75 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

EXERCISE 7-1 Match the Report Description with the Report Name. Students write the appropriate letter next to the Report Name column. Students can complete Exercise 7-1 online at www.mhhe.com/qbo2e > Student Edition > Select Exercise 7-1. The Answers to Exercise 7-1 are on the Instructor Edition.

Letter a.

Report Description Summarizes key information, for example, quantity on hand, value, and average cost of each item.

Write Letter a., b., etc. f.

Report Name Expenses by Vendor Summary

76 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

b. c.

d.

e. f. g.

h.

i. j. k.

l. m.

n.

o.

Groups purchases by the items in the Product/Service List.

Allows you to see all activity and transactions related to each customer.

Breaks down every transaction into debits and credits and displays them chronologically.

Lists individual sales, including dates, types, amounts and totals.

This report shows total expenses for each vendor.

Lists all transactions so you can view the company’s activities with a specific vendor.

This report shows which customers generated the most revenue.

Summarizes debit and credit balances for each account.

Provides detailed information about each check issued.

Shows money earned and money spent so you can see if you have a profit or loss. Also called the income statement.

Transactions modified within the last 4 days.

Provides the name, type, and balance for each account listing in your chart of accounts.

Provides detailed information about amounts received, including date, client or vendor, and amount.

Lists the permanent accounts: assets, liabilities, and equity.

h. n.

Sales by Customer summary Deposit Detail

g.

Transaction List by Vendor

j.

Check Detail

i.

Trial Balance

e.

Sales by Customer Detail

m.

Account Listing

d.

Journal

b.

Purchases by Product/Service Detail Balance Sheet

o.

c. a.

Transaction List by Customer Inventory Valuation Summary

l.

Recent Transactions

k.

Profit and Loss

EXERCISE 7-2 Students save reports as PDF files and export reports to Excel.

Exercise 7-3 Answers to Exercise 7-3: Problem Solving 1. Explain why the amounts are different when the Trial Balance on page 318 is compared to 77 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

the Adjusted Trial Balance on page 324.

On page 318, the December 31 trial balance was displayed before adjustments were entered in the journal. On page 318 amounts were filtered so that non-zero amounts are not shown. The adjusted trial balance shows all debit and credit balances, including those with zero balances 2. What are the differences on the Profit and Loss after adjustments to the P&L saved in Exercise 6-2?

Account 607 Depreciation Expense 611 Insurance 623 Rent or Lease Adjusting Entries Total

P&L after Adjustments 800.00 (Dr.) 750.00 (Dr.) 6,000.00 (Dr. 7,550.00

Net Income before adjusting entries Minus adjusting entries total Net Income after adjustments

P&L before Adjustments 0.00 0.00 0.00

$14,643.52 -7,550.00 $7,093.52

On the P&L statement, the total amount of journalized and posted adjusting entries equals the difference between the Net Income before adjustments and Net Income after adjustments.

78 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 7 The chart below shows the PDF and Excel files saved in Chapter 7 and Exercise 7-2.

Chapter/ Exercise 7

7-2

PDF & Excel Chapter 7_December 31 Journal Chapter 7_December 31 Transaction Detail by Account Chapter 7_Adjusted Trial Balance Chapter 7_EOY Profit and Loss Chapter 7_EOY Balance Sheet Chapter 7_EOY Statement of Cash Flows Chapter 7_January 1 Balance Sheet Chapter 7_Postclosing Trial Balance Chapter 7_Reconcilation Report.xlsx (no PDF) Exercise 7-2_AR Aging Summary Exercise 7-2_Customer Balance Detail Exercise 7-2_Invoice List Exercise 7-2_AP Aging Summary Exercise 7-2_Vendor Balance Detail Exercise 7-2_Unpaid Bills

Page 321 322 324 327 331 332 334 336 340 345 345 346 346 346 346

The Instructor Edition link at www.mhhe.com/qbo2e includes the PDF files and Excel files saved in Chapter 7.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page. Or, select Gear > Manage Users > Invite Accountant.

2. Use the students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code.

Each sign-in is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

79 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 8 JANUARY SOURCE DOCUMENTS OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

Start QuickBooks Online and sign in to QB Cloud_Student Name (your first and last name.)

To check data, display the January 1 Postclosing Trial Balance.

Analyze source documents.

Record vendor, customer, cash, and credit card transactions.

Export reports to Excel and save as PDF files.

Complete Check Your Progress.

Go to the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 8-1, 8-2 and 8-3.

Using source documents, students complete January business transactions for QB Cloud_Student Name. QB Cloud sells computers, data storage, network products, web servers, and webinars.

The source documents shown prompt transaction analysis for issuing checks for expenses, accounts payable (vendors), inventory, accounts receivable (customers), and cash and credit card sales. Students also use the January 31 bank statement to reconcile Account 101 Checking.

QBO Tips ❖ Using source documents, students record transaction. o Memo shown for Vendor payments: Vendors > select appropriate vendor > open bill > Make payment. o Transaction register: Create (+) > Check (within the vendor list) > make appropriate selection > within Account details, select expense. o Credit card receipts: Create (+) > Sales Receipt (within the Customers list) > select appropriate type of credit card > complete items. o Customer payments: Customers > select appropriate customer, open invoice > Receive payment. o Bill: Create (+) > Bill (within the Vendors list) > select appropriate vendor.

81 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

o Sales Invoice: Create (+) > Invoice (within Customers list) > select appropriate customer. o Sales Receipts for cash sales: Create (+) > Sales Receipt > select cash sales. o Bank statement for checking account reconciliation.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 8 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 8.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis questions: Students answer the analysis questions, then email them to the instructor.

4. Going to the Net a. Go to the QuickBooks Online support website at https://community.intuit.com/quickbooks-online. In the Ask a question field, type Take quick action on vendor transactions > Search > link to Take quick action on vendor transactions. (The URL is https://community.intuit.com/articles/1431244-take-quickaction-on-vendor-transactions. b. How do you take quick action on vendor transactions?

ANSWER: Use the list on the Vendors page to take quick action on a transaction. For example, you can make a payment on a bill to a vendor, without having to find the bill transaction first. Just look for relevant actions – Create bill, Create expense, or Make payment across from the vendor name. c. Go back to the QuickBooks Online support website. (Hint: Click on the back arrow twice.) In the search field, type How do I turn on Billable Expenses. The URL https://community.intuit.com/articles/1145654-how-do-i-turn-on-billable-expenses.

82 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

How do you use the Use Billable Expenses preferences? How does this affect tracking expenses and items by customer?

ANSWER: The Use Billable Expenses preference puts a Billable check box on purchases (expenses) you make (record), such as when you use Enter Bill, Write Check, Expense. Checking Billable lets you specify that an expense should automatically flow to a customer's next invoice.

To turn on the Use Billable Expenses preference: 1.

2.

3.

4.

5.

Choose the Gear icon > Account and Settings.

Choose Expenses from the menu on the left In the Bills and expenses section, check on the Edit icon.

Place a check in the box to Make expenses and items billable.

Click Save.

Turning on Use billable expenses activates additional features which makes entering billable expenses simpler. Track expenses and items by customer will add a field on transactions to list the customer's name.

5. Videos: a. Watch the Reconcile your accounts. The URL is https://quickbooks.intuit.com/tutorials/lessons/reconcile-accounts/. b. Go to Susan Crosson’s Financial Accounting videos. The URL is http://www.bus.emory.edu/scrosso/FA%20Videos.htm. To review financial accounting principles and procedures, watch videos.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 8-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 8 1.

How do you determine when to use Sales Receipts or Sales Invoices?

ANSWER: 83 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Depending on when you receive the payments, there are two ways to deal with sales transactions: a.

For sales to a customer on account, or deferred payment, create invoices and receive payments against them.

b.

For an immediate cash or credit card payment, use sales receipts.

2. How do you record a Sales Invoice?

ANSWER: Choose Create (+) > Invoice (in Customers list) to create the invoice.

3. How do you record a Sales Receipt?

ANSWER: Choose Create (+) > Sales Receipt (in Customers list) to create the sales receipt.

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 8 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. To make sure you are starting in the correct place in the data, display the: A. January journal.

B. Adjusted Trial Balance.

C. January 1 Trial Balance.

D. December 1-31 Balance Sheet.

E. None of the above 2. In Chapter 8, all transactions occur in the month of: A. November.

B. December.

C. January.

D.O ctober.

E. None of the above.

3. If you recorded fourth-quarter transactions in 2017, January transactions are recorded for: 84 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

A. 2015.

B. 2016 C. 2017.

D. 2018.

E. None of the above.

4. Use the transaction register to record QB Cloud’s: A. Expenses.

B. Bills to vendors.

C. Sales invoices.

D. Sales receipts.

E. None of the above.

5. Make this selection to record credit card receipts: A. Bills (in vendor list).

B. Sales receipt (in customers list).

C. Reports (from the Navigation bar).

D. Company settings (from Gear icon).

E. None of the above.

6. Customer payments are recorded on the: A. Sales Invoice window.

B. Bill Payment window.

C. Register window.

D. Receive Payment window.

E. None of the above.

7. To purchase inventory, record the transaction from this source document: A. Sales Receipt.

B. Vendor Payment.

C. Memo.

D. Bill.

E. All of the above.

8. To show sales on account to customers, analyze this source document: A. Bill.

B. Memo.

C. Sales Receipt.

85 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

D. Sales Invoice.

E. All of the above.

9. Cash sales are recorded on this window: A. Bill Payment.

B. Accounts Receivable register.

C. Sales Receipt.

D. Sales Invoice.

E. None of the above.

10. In Chapter 8, the A/R Aging Summary total agrees with the: A. Accounts payable balance.

B. Accounts receivable balance.

C. Merchandise inventory balance.

D. Common stock balance.

E. None of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Chapter 8 > True or False Quiz. Students can email the questions and answers to their instructor.

1. The postclosing trial balance and January 1 trial balance show the same account balances.

True.

2. In Chapter 8, a memo, followed by remittances, shows which vendor payments need to be made.

True.

3. Refer to the Sales Invoice source document for the products sold and credit cards used.

False. Refer to the Sales Receipts source document for the products sold and credit cards used.

4. When a Bill is received, the customer shown is QB Cloud.

True.

5. In Chapter 8, use the same year as the one used in Chapter 7.

False. In Chapter 8, use the year following the one used in Chapter 7.

86 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

6. On the Receive payment window, use the Reference No. field for the check number.

True.

7. Credit card sales are deposited to Account 105 Accounts Receivable.

False. Credit card sales are deposited to Account 101 Checking.

8. On January 1, Account 318 Retained Earnings has a credit balance.

True.

9. The transaction register shows sales on account.

False. The transaction register shows checks issued for expenses.

10. The bank sends QB Cloud verification of credit card sales.

True.

CHECK YOUR PROGRESS, CHAPTER 8 1. What is the account balance from 1/1/20XY to 1/30/20XY in these accounts? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking

$48,564.54 (dr.)

Account 105 Accounts Receivable

$1,550.00 (dr.)

Account 115 Merchandise Inventory

$11,575.00 (dr.)

Account 201 Accounts Payable

$3,500.00 (cr.)

Net Income

$3,546.02

Total Liabilities and Equity

$79,139.54

2. What is the quantity, asset value, and average cost of computers?

13, $6,500, $500 3. What is the quantity, asset value, and average cost of data storage?

55, $825, $15 87 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

4. What is the quantity, asset value, and average cost of network products?

32, $800, $25 6. What is the quantity, asset value, and average cost of web servers?

15, $3,000, $200 7. What is the quantity, asset value, and average cost of webinars?

10, $450, $45 EXERCISE 8-1 Using the January 31 bank statement shown in the textbook, reconcile Account 101 Checking.

EXERCISE 8-2 Students save reports as PDF files and export reports to Excel.

EXERCISE 8-3: Problem Solving Describe the difference between a Bill and Invoice. Include an example, which QBO module is being used, and the account distribution for a Bill and an Invoice.

ANSWER: The accounts payable module includes vendor bills. QB Cloud purchases items on account from vendors. Bills are money that QB Cloud owes to the companies they buy items from.

The account distribution for a vendor bill is:

The accounts receivable module includes customer invoices for items sold. Customers owe money to QB Cloud for items bought on account.

The account distribution for a customer invoice is:

88 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

FILES EXPORTED TO EXCEL AND SAVED AS PDFS IN CHAPTER 8 The chart below shows the Excel files and PDF files saved in Chapter 8 and Exercise 8-2.

Chapter/ Exercise 8

8 8-1 8-2

Excel & PDF

Page

Chapter 8_Journal Chapter 8_Trial Balance Chapter 8_AR Aging Summary Chapter 8_Inventory Valuation Summary Chapter 8_AP Aging Summary Chapter 8_Profit and Loss Chapter 8_Balance Sheet Chapter 8_Statement of Cash Flows Exercise 8-1_Reconciliation Report.pdf Exercise 8-2_Journal Exercise 8-2_Transaction Detail by Account Exercise 8-2_General Ledger Exercise 8-2_Customer Balance Summary Exercise 8-2_Vendor Balance Summary Exercise 8-2_Trial Balance Exercise 8-2_Profit and Loss Exercise 8-2_Balance Sheet Exercise 8-2_Statement of Cash Flows

388 389 390 391 391 392 394 395 400 400 400 400 400 400 400 400 400 400

The Instructor Edition link at www.mhhe.com/qbo2e includes the Excel and PDF files saved in Chapter 8.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page. Or, select Gear > Manage Users > Invite Accountant.

89 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2. Use the students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each sign-in is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

90 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 9 JANUARY SOURCE DOCUMENTS OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

Start QuickBooks Online and sign in to QB Cloud_Student Name.

To check data, display the January 31 Trial Balance.

Analyze source documents.

Record vendor, customer, cash, and credit card transactions.

Export reports to Excel and save as PDF files.

Complete Check Your Progress.

Go to the Online Learning Center at www.mhhe.com/qbo2e for additional resources.

Complete Exercises 9-1, 9-2 and 9-3

The purpose of Chapter 9 is to review what students have learned in the previous chapters.

Students analyze source documents, then record transactions. The documents shown trigger transaction analysis for accounts payable (vendors), inventory, accounts receivable (customers), cash and credit card sales. Using the February 28 bank statement, students reconcile Account 101 Checking.

QBO Tips ❖ Source documents include: ➢ ➢ ➢ ➢ ➢

Vendor bills for purchasing inventory.

Memos include customer payments, vendor payments and remittances.

Transaction register for issuing checks for expenses and recording ATM withdrawals.

Sales invoices for credit customers.

Sales receipts for cash and credit card sales.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 9 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 9.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis question: Answer the analysis question, then email to the instructor.

4. Going to the Net: a. Go to the QuickBooks Online support website at https://community.intuit.com/quickbooks-online. In the Ask a question field, type More 93 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

cool things you can do with QuickBooks online > Search > link to More cool things you can do with QuickBooks Online. The URL is https://community.intuit.com/articles/1431059-more-cool-things-you-can-do-withquickbooks-online. b. List 4 cool things you can do with QuickBooks.

ANSWER: 1) Connect your bank accounts.

2) Get the QuickBooks iPhone or Android app.

3) Get the QuickBooks payroll app.

4) Get the QuickBooks Mac or Windows app. c. What does the Resource Center include?

ANSWER: Visit the Resource Center where you can: • •

Watch video tutorials to learn how to do common tasks like creating and customizing your Invoices, adding users, and customizing reports.

Go to the QBO Blog to get the scoop on the latest product updates, tips, and tricks each month. (Note: As of this writing, The Resources list at the bottom of the page includes a link to the Blog.)

94 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

5. Videos: a. Go to Prof. Susan Crosson’s Financial Accounting videos at http://www.bus.emory.edu/scrosso/FA%20Videos.htm. To review financial accounting principles and procedures, link to a video. b. QuickBooks tutorials. The website is http://quickbooks.intuit.com/tutorials/allquickbooks-tutorials/. Students watch videos of interest.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 9-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 9 How do you determine when to select the Check window and when to select Make payment on the Vendors page?

ANSWER: a. Use the Check # window to verify the Transaction Register’s check numbers, amounts for each expense, and balance after each check is recorded. b. On the Vendors page, link to an Open bill to pay for what is owed to a vendor for purchases made on account. Once the appropriate Bill is selected, click Make Payment.

95 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 9 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. To make sure you are starting in the correct place in the data, display the: A. January 1-31 Trial Balance.

B. Adjusted Trial Balance.

C. February Trial Balance.

D. December 1-31 Balance Sheet.

E. None of the above.

2. In Chapter 9, all transactions occur in the month of: A. November.

B. October.

C. December.

D.J anuary.

E. None of the above.

3. Credit card receipts are entered on this window: A. Invoice.

B. Make vendor payment.

C. Bill.

D. Sales Receipt.

E. None of the above.

4. Use this report to display the accounts receivable balance: A. A/P Aging Summary.

B. Inventory Valuation Summary.

C. Account 101 Checking Register.

D. A/R Aging Summary.

E. None of the above.

5. The Dashboard displays the same Checking account balance (as of a specific date) as the: A. A/P Aging Summary.

B. Transaction Register.

C. Inventory Valuation Summary.

D. A/R Aging Summary.

96 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

E. None of the above.

6. Purchases of inventory from vendors are payable: A. At the end of the month.

B. Within 15 days.

C. Within 45 days.

D. Within 30 days.

E. None of the above.

7. Payments from customers are due within: A. 30 days.

B. 15 days.

C. 45 days.

D. 60 days.

E. None of the above.

8. Use this window to record vendor payments: A. Receive Payment #.

B. Transaction report.

C. Accounts Payable register.

D. Bill Payment #.

E. All of the above.

9. Asset values and average costs are shown on this report: A. A/R Aging Summary.

B. Inventory Valuation Summary.

C. Trial Balance.

D. Journal.

E. None of the above.

10.N et income is shown on the following reports: A. Profit and Loss and Balance Sheet.

B. Profit and Loss and Inventory Valuation Summary.

C. Balance Sheet and A/P Aging Summary.

D. A/P Aging Summary and A/R Aging Summary.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 9 > True or False Quiz. Students can email the questions and answers to their 97 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

instructor.

1. Use the transaction register for entering ATMs and checks for expenses.

True.

2. Memos include vendor payments, remittances, and customer payments.

True.

3. Use sales invoices for purchasing inventory.

False. Use vendor bills for purchasing inventory.

4. Cash sales are shown on sales receipts.

True.

5. In Chapter 9, the credit card company sends verification of credit card receipts.

False. In Chapter 9, the bank sends verification of credit card receipts.

6. Each credit card receipt is from the same credit card company.

False. Credit card receipts are from different credit card companies.

7. Deposit customer payments into Account 101 Checking.

True.

8. When a check is issued, Account 201 Accounts Payable is credited.

False. When a check is issued, Account 101 Checking is credited.

9. Vendor bills are due within 60 days.

False. Vendor bills are due within 30 days.

10. To verify the accounts receivable balance, display one of the inventory reports.

False. To verify the accounts receivable balance, display the A/R Aging Summary or Customer Balance Summary.

CHECK YOUR PROGRESS, CHAPTER 9

98 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

1. What is the account balance from 1/1/20XY to 2/27/20XY in these accounts? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking

$48,102.94 (dr.)

Account 135 Computer Equipment

$10,000.00 (dr.)

Account 137 Accumulated Depreciation

$800.00 (cr.)

Account 401 Sales

$17,790.00 (cr.)

Account 501 Cost of Goods Sold

$8,895.00 (dr.)

2. What is the Net Income? $6,994.42 3. What are the total Liabilities and Equity? $78,222.94 4. What is the quantity, asset value, and average cost of computers?

12, $6,000, $500

5. What is the quantity, asset value, and average cost of data storage?

56, $840.00, $15

6. What is the quantity, asset value, and average cost of network products.

18, $450, $25 7. What is the quantity, asset value, and average cost of web servers?

16, $3,200, $200 8. What is the quantity, asset value, and average cost of webinars?

14, $630, $45 EXERCISE 9-1 99 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Using the February 28 bank statement shown in the textbook, reconcile Account 101 Checking.

EXERCISE 9-2 Students save reports as PDF files and export reports to Excel.

EXERCISE 9-3 1. What is a module?

ANSWER: A module is a software design that emphasizes separating the functions of a program into independent, interchangeable components, so that each contains everything necessary to execute one aspect of the desired function. For example, QBO organizes transactions and reports by modules or components within the accounting system.

2. Organize the following source documents according to the QBO modules used. Define each module.

ANSWER: •

Bills and vendor payments: Accounts Payable module

Accounts payable is the amount of money the business owes to vendors. Accounts payable organizes and monitors both purchases on account and vendor payments. The accounts payable module is used when QB Cloud makes purchases on account and receives payments from vendors.

•

Invoices and customer payments: Accounts Receivable module

Accounts receivable are what customers owe your business. The accounts receivable module organizes both sales on account and customer payments. When QB Cloud sells items on account and receives payments from customers, the accounts receivable module is used.

FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 9 The chart below shows the PDF and Excel files saved in Chapter 9 and Exercise 9-2.

Chapter/ Exercise

PDF & Excel Chapter 9_Journal 100 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

Page 438

9

9-1 9-2

Chapter 9_Trial Balance Chapter 9_AR Aging Summary Chapter 9_Inventory Valuation Summary Chapter 9_AP Aging Summary Chapter 9_Profit and Loss Chapter 9_Balance Sheet Chapter 9_Statement of Cash Flows Exercise 9-1_Reconciliation Report.pdf Exercise 9-2_Journal Exercise 9-2_Transaction Detail by Account Exercise 9-2_General Ledger Exercise 9-2_Customer Balance Summary Exercise 9-2_Vendor Balance Summary Exercise 9-2_Statement of Cash Flows

439 440 440 440 441 443 443 448 448 448 448 448 448 448

The Instructor Edition link at www.mhhe.com/qbo2e includes the Excel and PDF files saved in Chapter 9.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

101 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 10 MARCH SOURCE DOCUMENT AND END OF FIRST QUARTER OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Start QuickBooks Online and sign in to QB Cloud_Student Name.

To check data, display the February 28 Trial Balance.

Analyze source documents.

Record vendor, customer, cash, and credit card transactions.

Record end-of-quarter adjusting entries.

Display the adjusted trial balance and financial statements.

Save PDF files and export reports to Excel.

Complete Check Your Progress.

Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 10-1, 10-2 and 10-3.

In Chapter 10, your students complete business processes for QB Cloud_Student Name. QB Cloud sells computers, data storage, network products, web servers, webinars, and purchases inventory on account from vendors. In order to record transactions, students analyze source documents. To reconcile Account 101 Checking, students use Exercise 10-1’s March 31 bank statement At the end of the first quarter, adjusting entries and financial statements are completed.

QBO Tips • • •

It is the policy of QB Cloud to record adjusting entries at the end of the quarter. The accounting records are complete through March 31, 20XY. The end-of-quarter adjusting entries are journalized and posted before Accounnt 101 Checking is reconciled in Exerciser 10-1. Refer to the comment on textbook page 398.

Student could refer to Chapter 7’s end-of-quarter adjusting entries to review the accounts and the amounts debited and credit.

105 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 10 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 10.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis question: Answer the analysis question, then email to the instructor.

4. Going to the Net a. Go to the QuickBooks Blog. The website is http://quickbooks.intuit.com/blog/. To explore what is included on the Blog, click each selection. As of this writing, the selections are News, Thought Leadership, What’s New in QBO, Innovation, Accountant Advice, Customer Profiles, Search.

b. Write a brief summary of what is included within each Blog selection ANSWER: News: Includes recent articles. As of this writing, the News page shows that there are 2.2 million global QBO customers and counting.

Thought Leadership: Articles about QBO customers.

What’s New in QBO: The latest updates and features are shown.

Innovation: Articles about innovative use of QBO. Accountant Advice: advice from accounting professionals.

Customer profiles: Various profiles of customers who are using QBO. There is also a search field.

5. Videos: a. Go to Prof. Susan Crosson’s Financial Accounting videos at http://www.bus.emory.edu/scrosso/FA%20Videos.htm. To review financial accounting principles and procedures, link to a video.

106 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

b. Watch QuickBooks Tutorials. The website is http://quickbooks.intuit.com/tutorials/allquickbooks-tutorials/. Students watch videos of interest.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 10-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 10 1. Why does the March 31, 20XY Balance Sheet show both Retailed Earnings and Net Income?

ANSWER: The Retained Earnings balance reflects last year’s Net Income. When the Balance Sheet was printed for January 1 of the next year, the Net Income amount on the December 31 Profit and Loss statement was transferred to Retained Earnings.

The Net Income amount on the March 31 Balance Sheet is the same as the amount shown on the Profit and Loss Statement – Sales minus Expenses and Cost of Goods Sold.

2. What section of the Balance Sheet are the Retained Earnings and Net Income amounts shown?

ANSWER: The Equity section of the balance sheet lists Account 318 Retained Earnings and the Net Income amount.

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 10 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. The date for the end of the first quarter is: A. December 31.

107 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

B. January 31.

C. February 28.

D. March 31.

E. None of the above.

2. The source document for ordering inventory is: A. Memo.

B. Sales Receipt.

C. Transaction Register.

D. Bill.

E. None of the above.

3. The source document that shows sales to customers on account is a: A. Transaction Register.

B. Sales Invoice.

C. Sales Receipt.

D. Bill.

E. None of the above.

4. To make sure you are starting Chapter 10 in the correct place in the data, display this report: A. January 1 through March 31 A/P Aging Summary.

B. Inventory Valuation Summary.

C. Account 101 Checking Register.

D. January 1 through February 28 Trial Balance.

E. None of the above.

5. In Chapter 10, all transactions occurred in: A. February.

B. March.

C. April.

D. May. E. None of the above.

6. This type of transaction includes a field for selecting the credit card used.

A. Sales Invoices.

B. Memo.

C. Bill.

D. Sales Receipt.

E. All of the above.

7. When a vendor is paid, the following document is shown: 108 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

A. Sales Invoice.

B. Sales Receipt.

C. Remittance.

D. Check.

E. None of the above.

109 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

8. The following report is printed before the end-of-the quarter transactions are journalized and posted: A. Profit and Loss.

B. Balance Sheet.

C. Adjusted Trial Balance.

D. Unadjusted Trial Balance E. All of the above.

9. After recording the adjusting entry for rent paid on January 1, Account 125 Prepaid Rent has this balance.

A. $6,000.00.

B. $0.00.

C. $1,500.00.

D. $53,493.52.

E. None of the above.

10. To adjust depreciation, debit and credit the following accounts: A. Debit Accumulated Depreciation, Credit Depreciation Expense.

B. Debit Computer Equipment, Credit Accumulated Depreciation.

C. Debit Depreciation Expense, Credit Accumulated Depreciation.

D. Debit Depreciation Expense, Credit Computer Equipment.

E. None of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 10 > True or False Quiz. Students can email the questions and answers to their instructor.

1. The first quarter is October, November, and December.

False. The first quarter is January, February and March.

110 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2. The March 1 Trial Balance shows the same account balances as the February 28 trial balance.

True.

3. The bank sends verification of credit card receipts.

True.

4. To check the amount of inventory available, print the Inventory Valuation Summary report.

True.

5. The A/P Aging Summary shows the same balance Account 105 Accounts Receivable.

False. The A/P Aging Summary shows the same balance as Account 201 Accounts Payable.

The A/R Summary shows the same balance as Account 105 Accounts Receivable.

6. The Inventory Valuation Summary shows the same balance as Account 115 Merchandise Inventory.

True.

7. In Chapter 10, the trial balance does not show a balance for Account 318 Retained Earnings.

False. The balance in Account 318 Retained Earnings is shown on the Chapter 10 trial balances.

8. Net Income is determined by subtracting total Expenses from the Gross Profit amount.

True.

9. In Chapter 10, QB Cloud received all customer payments due.

False. In Chapter 10, customers paid some but not all amounts due for sales on account)

111 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

10. The account type for Account 101 Checking is Bank.

True.

CHECK YOUR PROGRESS, CHAPTER 10 1. What is the account balance from 1/1/20XY to 3/31/20XY in these accounts? Indicate whether these accounts have debit (dr.) or credit (cr.) balances.

Account 101 Checking

$55,239.93 (dr.)

Account 115 Merchandise Inventory

$10,030.00 (dr.)

Account 123 Prepaid Rent Account 401 Sales

$0.00 (dr.) $30,650.00 (cr.)

Net Income

$4,866.41

Total Assets

$77,299.93

2. What accounts are debited and credited for the prepaid rent adjustment? Indicate the account type.

Debit, Account 623 Rent or Lease (Expenses). Credit, Account 123 Prepaid Rent (Other current asset).

3. What is the amount of the adjusting entry for prepaid rent? $6,000.00

112 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

4. What accounts are debited and credited for the prepaid insurance adjustment? Indicate the account type.

Debit, Account 611 Insurance (Expenses). Credit, Account 125 Prepaid Insurance (Other current asset).

5. What is the amount of the adjustment entry for prepaid insurance? $750.00 6. What accounts are debited and credited for the depreciation adjustment? Indicate the account type.

Debit, Account 607 Account Depreciation Expense (Expenses). Credit, Account 137 Accumulated Depreciation (Fixed Assets).

7. What is the amount of the adjustment for depreciation? $800.00 EXERCISE 10-1 Using the March 31 bank statement shown in the textbook, reconcile Account 101 Checking.

EXERCISE 10-2 Students save reports as PDF files and export reports to Excel.

EXERCISE 10-3: PROBLEM SOLVING 1. What are the similarities and differences between the Transaction Detail by Account and the General Ledger?

113 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

ANSWER: The Transaction Detail by Account report lists subtotals by each account on your chart of accounts. It is like the General ledger without opening balances.

The General Ledger shows each account in your chart of account. The GL shows all the transactions that occurred in that account over a period of time. It includes the beginning balance and total for each account.

2. Why does the Profit and Loss by Month report (textbook page 505) show a Net Loss for March 20XY? Show the calculation.

ANSWER: In March, expenses exceeded total income and total cost of goods sold resulting in a loss of $2,108.01.

Total Income: $12,860.00 Total Cost of Goods Sold: -6,430.00 Total Expenses -8,538.01 Net Loss -2,108.01 FILES SAVED AND EXPORTED TO EXCEL IN CHAPTER 10 Chapter/ Exercise 10

Chapter/Exercise 10 10-1 10-2

Excel & PDF Chapter 10_Unadjusted Trial Balance Chapter 10_Journal Chapter 10_March 31 Journal Chapter 10_Adjusted Trial Balance Chapter 10_AR Aging Summary Chapter 10_Inventory Valuation Summary Chapter 10_AP Aging Summary Chapter 10_Profit and Loss Chapter 10_Profit and Loss by Month Excel & PDF Chapter 10_Balance Sheet Chapter 10_Statement of Cash Flows Exercise 10-1_Reconciliation Report.pdf Exercise 10-2_Journal Exercise 10-2_Trial Balance Exercise 10-2_Transaction Detail by Account Exercise 10-2_General Ledger

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Page 491 499 500 501 502 502 503 504 505 Page 507 507 512 512 512 512 512

Exercise 10-2_Customer Balance Summary Exercise 10-2_Vendor Balance Summary Exercise 10-2_Profit and Loss Exercise 10-2_Balance Sheet Exercise 10-2_Statement of Cash Flows

512 513 513 513 513

The Instructor Edition link at www.mhhe.com/qbo2e includes the Excel and PDF files saved in Chapter 10.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each sign-in is authenticated using the computer’s IP address.

3. To add your students’ companies as Clients from within QuickBooks Online Accountant go to www.mhhe.com/qbo2e > Instructor Edition > Student List. The QB Online Accountant version is obtained from the Intuit Education Program and is for educators only.

115 - Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 11 CERTIFICATION, QUICKBOOKS LABS AND REPORT CUSTOMIZATION OBJECTIVES 1. Learn about QuickBooks Online User Certification and the textbook chapters that coordinate with the certification test.

2. Prepare management reports.

3. Complete report customization.

4. Use QuickBooks Labs.

5. Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

6. Complete Exercises 11-1 and 11-2.

Chapter 11 focuses on four areas: • • • •

QuickBooks Online Certification includes objectives, what students should know, and grade percentage.

Report Customization includes settings to help build the report you want to see.

Management Reports: There are three ready-to-use management reports – company overview, sales performance, and expenses performance.

QuickBooks Labs shows some plug-ins that can be used.

QBO Tips • • • •

The company that manages QBO Certification is Certiport, www.certiport.com.

Chapter 11 includes a chart showing which chapters cover Certification topics, textbook pages 518-522. A detailed summary is includes on textbook pages 523-526.

Once a report is customized, it is included in the My Custom Reports tab on the Reports page.

QuickBooks Labs plug-ins are included on the Settings menu (Gear > QuickBooks Labs). Plugins change over time.

117 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 11 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 11.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis question: Answer the analysis question, then email to the instructor.

4. Going to the Net a. Go to the QuickBooks Learn & Support website at https://community.intuit.com/. In the Ask a question field, type Accounting Methods > Search > link to Accounting methods. b. Describe accounting methods, cash basis and accrual basis.

ANSWER: Accounting methods Cash basis and accrual basis are accounting methods that determine how and when you track income and expenses. The IRS wants you to use the same method each year when you report income.

Cash basis With cash basis, you count income when you receive the money, instead of when you bill a customer. Expenses are reported when you pay bills.

Accrual basis With accrual basis, you count income as soon as you bill a customer (instead of when you receive the money) and expenses are reported when you receive a bill.

Accrual basis can better reflect how your business is doing, in that it counts income on the date you actually delivered products or services, not the date you were paid for it.

118 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

5. Videos: Go to QuickBooks Labs and watch videos of interest. Watch Customize Reports and Email. The website is http://quickbooks.intuit.com/tutorials/lessons/custom-reports/.

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem solving link includes Exercise 11-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTIONS, CHAPTER 11 1. What is a Management Report? Briefly explain.

ANSWER: Management reports include professional, ready-to-use templates that contain reports and other customizable content, consolidated into a single document. They can be printed, emailed, or exported.

2. What does the QuickBooks Labs selection show?

ANSWER: QuickBooks Labs is like a high-tech playground for QuickBooks experts. It’s a place where you can be the first to try experimental plug-ins. Like any good laboratory, QuickBooks Labs is always moving forward. Sometimes experiments break or disappear. And sometimes they evolve into real features. Because the plug-ins are experimental, they are not supported by QB technical support.

119 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 11 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. Students can confirm their QBO knowledge by passing the: A. Test administered the second week of class.

B. Saving reports.

C. Customizing reports.

D. Certification test.

E. None of the above.

2. QuickBooks Online Setup includes: A. Company information.

B. Signing in and signing out.

C. The settings menu.

D.S etting up lists.

E. All the above.

3. The sales workflow includes: A. Entering checks and deposits.

B. Invoicing and customer payments (A/R), sales receipts.

C. Purchases, bills, writing checks, using credit and debit cards.

D. Entering transfers in the General Journal.

E. None of the above.

4. The purchases workflow includes: A. Customizing journal entries.

B. Setting up customers and sales accounts.

C. Recording transaction register checks, deposits, and customizing required reports.

D. Purchases and bills (A/P), writing checks, using credit and debit cards.

E. None of the above.

5. To view the company’s financial information at a glance, go to the: A. General journal.

B. Reports page.

C. Link to Sales Receipt.

D. Display all the dates on the register.

E. None of the above.

120 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

6. When you report income when it is received, the method used is: A. Perpetual inventory.

B. Credit sales.

C. Accrual.

D. Cash.

E. All of the above.

7. When you report income when you bill it, the method used is: A. Perpetual inventory.

B. Cash sales.

C. Accrual.

D. Cash.

E. All of the above.

8. Ready-to-use templates are included in this selection: A. Sign out page.

B. QB Labs.

C. Account and Settings page.

D. Management reports.

E. All of the above.

121 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

9. When customizing a report, the following criteria can be selected: A. Date range.

B. Months.

C. % of Income.

D. % of Expense.

E. All the above.

10. Customized reports can be saved as: A. Customized reports cannot be saved.

B. Word docx or doc files.

C. Excel and PDF files.

D. Comma-separated values files.

E. None of the above.

True or False: The True or False questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 11 > True or False Quiz. Students can email the questions and answers to their instructor.

1. The Certification test covers how to customize reports.

True.

2. The User Interface and navigation is covered on the Certification test.

True.

3. The QB Lab plug-ins change over time.

True.

122 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

4. My Custom Reports includes the reports that you run most frequently.

False. On the Reports page. The My Custom Report selection includes reports that have been customized.

5. Management reports include a list of all available reports.

False. Management reports include professional ready-to-use templates. All reports includes a list of all available reports, categorized by subject.

6. In Chapter 11, using Management Reports includes setting custom dates.

True.

7. To control more of the Management Reports features, click <View>.

False. Click <Edit> to control more features within Management Reports.

8. Gross Profit is determined by adding Total Income and Total Cost of Goods Sold.

False. Gross Profit is determined by subtracting Total Cost of Goods Sold from Total Income.

9. The Management Reports feature allows you to add an additional report.

True.

10. When you customize the Profit and Loss report, only one month can be displayed.

False. Within the Rows/Columns selection, Months can be selected. This results in more than one month being shown on the P&L.

123 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHECK YOUR PROGRESS, CHAPTER 11 1. What is the Net Income on October 31 and November 30?

October 31, $4,437.56; November 30, $5,072.03.

2. What report(s) show Net Income for October and November?

Three reports show net income: Profit and Loss, Balance Sheet, and Statement of Cash Flows.

3. What company manages QuickBooks Online Certification? What is their website address?

The company that manages QBO certification is Certiport, www.certiport.com 4. Where are the QuickBooks plug-ins? List three.

The Settings Menu includes the QuickBooks Labs plug-ins (Gear > QuickBooks Labs). Three plug-ins include Directory View for Vendors, Alternate Navigation and Centers, Customer Ratings. Student answers will vary. The QB Labs plug-ins change.

5. Where are customized reports located?

Once a report is customized, they appear on the Reports page within the My Customized Reports list.

EXERCISE 11-1 The Balance Sheet and Statement of Cash Flows is customized to show both October and November balances.

EXERCISE 11-2 Students save the Balance Sheet and Statement of Cash Flows as PDF and Excel files.

124 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

EXERCISE 11-3: PROBLEM SOLVING Compare the differences in percent of net income on the October – November Profit and Loss (textbook page 535). Explain why.

ANSWER In October, the percent of income is 73.96% because Total Expenses divided by Total income is $1,562.44/$6,000 = 26.04%.

In November, the percent of income is 42.55% because Total Expenses divided by Total Income is $887.97/$11,920 = 7.45%.

When November expenses are compared to October expenses, November expenses were much less -- $887.97 in November; $1,562.44 in October. Total income is also slightly different when October is compared to November -- $6,000 for October; $11,920 for November. The big difference in Total Income and Expenses is the reason why the percentage of income is significantly different.

EXCEL & PDF FILES SAVED IN CHAPTER 11 The chart below shows the Excel and PDF files saved in Chapter 11 and Exercise 11-2.

Chapter/ Exercise 11

11-2

PDF & Excel Chapter 11_Management Report_Sales Performance.pdf Chapter 11_2_Sales Performance.pdf Chapter 11_Oct_Nov_Profit and Loss.xlsx Exercise 11-2_Oct_Nov_Balance Sheet.pdf Exercise 11-2_Oct_Nov_Balance Sheet.xlsx Exercise 11-2_Oct_Nov_Statement of Cash Flows.pdf Exercise 11-2_Oct_Nov_Statement of Cash Flows.xlsx

Page 529 533 536 540 540 540 540

The Instructor Edition link at www.mhhe.com/qbo2e includes the Excel and PDF files saved in Chapter 11.

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

125 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

126 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2e .

CHAPTER 12 APPS, UPDATES, QUICKBOOKS BLOG AND TIPS OBJECTIVES 1.

2.

3.

4.

5.

6.

7.

Start QBO and sign in to QB Cloud_Student Name.

Connect to Apps and search for new ones.

Learn about QuickBooks Online updates.

Use the QuickBooks blog.

Learn about QBO tips.

Use the Online Learning Center, www.mhhe.com/qbo2e, for additional resources.

Complete Exercises 12-1, 12-2 and 12-3.

QBO Tips • • •

Apps are added on a regular basis.

QBO updates automatically.

Use the QB blog to learn about recent updates.

ONLINE LEARNING CENTER (OLC): www.mhhe.com/qbo2e The OLC includes additional Chapter 12 resources. Go online to www.mhhe.com/qbo2e > Student Edition > Chapter 12.

1. Narrated PowerPoints.

2. Online quizzes: 10 True or False and 10 multiple-choice questions. The Online quizzes are graded and can be emailed to the instructor.

3. Analysis question: Answer the analysis question, then email to the instructor.

4. Going to the Net a. Go to the Firm of the Future website. (The URL is https://www.firmofthefuture.com/content/3-apps-to-increase-productivity-forbookkeepers-everywhere/.) Read the article, 3 Apps to Increase Productivity for Bookkeepers Everywhere.

127 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

b. What are the apps listed in this article? Write a brief explanation of each apps.

ANSWER: Receipt Bank includes multi-expensing capability and a dashboard. You can also scan handwritten receipt, a must-have for your client base.

Asana: This app allows teams to track the progress of deadlines and workloads from the beginning all the way through to completion in one location. Asana also turns Google emails into actions, customizes dashboards for specific needs, and organizes inboxes by receiving only necessary messages.

Google Suite: This app provides integrated business email, calendar, online storage and easy file sharing. c. In the article, what are the final thoughts?

ANSWER: Perhaps, you have an app you have found to be a game changer for you and your clients. Whichever ones you use, the result should be efficient and productive service for your clients.

5. Videos: Watch the See Your Business Heath in QuickBooks and QuickBooks tutorials. The URLS are http://quickbooks.intuit.com/tutorials/lessons/see-business-health/ and http://quickbooks.intuit.com/tutorials/all-quickbooks-tutorials/.)

6. Glossary of terms: Words that are italicized and boldfaced are defined in the glossary. The Glossary is also Appendix B. 7. Problem Solving link includes Exercise 12-3.

INSTRUCTOR EDITION: www.mhhe.com/qbo2e To access the password-protected Instructor Edition, contact your Learning Technology Representative at https://shop.mheducation.com/store/paris/user/findltr.html. The Instructor Edition includes the files exported to Excel, answers to the multiple-choice and true or false questions, answers to the Going to the Net exercise, and answers to the analysis questions.

ANSWER TO ANALYSIS QUESTION, CHAPTER 12 How can you check and learn about updates?

ANSWER: Go to the QuickBooks Blog at http://quickbooks.intuit.com/blog/ > link to What’s New in QBO. 128 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

MULTIPLE-CHOICE QUESTIONS The multiple-choice questions are online at www.mhhe.com/qbo2e > Student Edition > Chapter 12 > Multiple Choice Quiz. Students answer the questions online, then email the graded quiz to their instructor.

1. The Navigation bar includes all the following selections except: A. Home.

B. Customers.

C. Vendors.

D. Gear.

E. Apps.

2. To select specific Apps, browse by _____________________: A. Category.

B. Specific app.

C. Company name.

D.T ype search criteria.

E. All the above.

3. The following type of app helps companies manage and analyze client interactions: A. Spreadsheet software.

B. Databases.

C. Enterprise resource planning systems.

D. Customer relationship management.

E. None of the above.

4. Shared data sources of a company can be managed with this type of system: A. Customer relationship management.

B. Spreadsheet software.

C. Point of sale systems.

D. Enterprise resource planning.

E. None of the above.

5. What type of QBO app allows you to accept credit cards and bank transfers?

A. Order Checks.

B. Pay employees.

C. Get easy financing.

D. Accept payments online.

129 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

E. None of the above.

6. Where can you find information about how QBO may have changed?

A. Go to Apps and search for updates and changes.

B. Balance sheet report.

C. P&L. D. What’s new on the QB Blog.

E. None of the above.

7. To see keyboard shortcuts, do this: A. Use Apps.

B. Go to Gear > Recent transactions.

C. Press Ctrl + Alt + ? (or /).

D. Bank register.

E. None of the above.

8. The latest information, including future QBO developments, can be found on the: A. Updated settings page.

B. QB Labs.

C. Apps page.

D. QuickBooks blog.

E. All of the above.

9. Using this feature, you can browse by category, link to what is shown, or search for new ones: A. Home.

B. Apps.

C. Manage Users.

D. Gear > Recurring Transactions.

E. All the above.

10. Updates: A. Are inevitable.

B. Occur regularly.

C. Are tested with specific users.

D. Automatic.

E. All of the above.

True or False: The True or False questions are online at www.mhhe.com/QBO > Student Edition > Chapter 12 > True or False Quiz. Students can email the questions and answers to 130 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

their instructor.

1. Periodically check Apps because new ones are regularly added.

True.

131 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

2. CRM apps cannot be used with QBO. False. CRM apps integrate with QBO so you can easily access customer financial information.

3. Updates include user interface elements, accounting features, and user functions.

True.

4. Innovation is one of the links on the QuickBooks Blog.

True.

5. The QuickBooks blog includes customer profiles.

True.

6. The QB blog may show different links and pages than the ones shown in the textbook.

True.

7. CRM apps include accounts payable links.

False. CRM apps include sales and marketing information, marketing management, customer service, a contact center, and mobile applications.

8. An ERP app includes PayPal and other direct links for payments.

True.

9. Intuit collects feedback from specific companies and users.

True.

132 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

10. The QB Blog shows how many business use QuickBooks Online.

True.

EXERCISE 12-1 In Exercise 12-1, students go to the Apps page and select one of interest. Students also search for Apps.

EXERCISE 12-2 In Exercise 12-2, students go to the QB Blog to learn more about what links and information is included.

EXERCISE 12-3, PROBLEM SOLVING Go to The QuickBooks Blog at http://quickbooks.intuit.com/blog/ > link to Innovation. Read an article about Innovation. Click Read more when you see an article of interest. For example, the author chose Get a New, Special Report on AI (Artificial Intelligence) and Machine Learning at http://quickbooks.intuit.com/blog/innovation/get-a-new-special-report-on-artificialintelligence-and-machine-learning/. The complete report could be downloaded.

Your students’ innovation page will differ. You may want to collect a brief essay about what Innovation article the students read.

133 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

For access to students’ accounts, refer to textbook pages 82-84.

1. Invite Accountant: Get set up right with help from your accountant is included on the Dashboard or Home page.

2. Use

the

students’ User ID, Password and Confirmation Code. If using this step, the instructor should set up a time with their student to receive the emailed 6-digit confirmation code. Each signin is authenticated using the computer’s IP address.

134 – Computer Accounting with QuickBooks Online: A Cloud-Based Approach, 2/e .

Answers: QuickBooks Online Certification Multiple Choice Questions Objective: QBO Setup and Chart of Accounts 1.

You are a click away from seeing your work with: a. Restored backup files. b. Reports exported to Excel. c. Adobe Acrobat reports. d. Cloud access. e. All. Difficulty: Medium Page xvii

2.

Sign into QuickBooks Online with the following Internet browsers: a. Google Chrome or Mozilla Firefox. b. Safari or Internet Explorer. c. Android or iOs. d. All. e. None.

Difficulty: Easy Page xx

3.

QuickBooks Online is an example of: a. Desktop software. b. Software as a service. c. Software installed on the hard drive. d. A service company. e. All. Difficulty: Medium Page 54

4.

When setting up your company account, which of the following cannot be set up? a. Company name. b. The Chart of Accounts. c. User ID and password. d. Company address and zip code. e. All. Difficulty: Hard Page 62-65

5.

When setting up a company: a. Use a Valid email address and unique password. b. Use the same email and password that you already have with Intuit. c. No email or password is needed. d. Skip the Set Up Your Account page. e. None.

Difficulty: Easy Page 55

6.

To see how long your account is active, make these selections: a. Create menu > Recent transactions.

b. Help > Search for account. c. Gear > Account and Settings > Billing & Subscription. d. All. e. None Difficulty: Medium Page 56-57 7.

Setting up your company includes: a. Changing the navigation bar. b. Default accounts. c. Updated settings. d. Moving the dashboard. e. All. Difficulty: Hard Page 77

8.

Pop-ups may show __________________: a. Updated settings. b. Starting balances. c. That the general ledger. d. None. e. All. Difficulty: Hard Page 56

9.

These selections can be made from the Navigation bar, except: a. Company profile. b. Dashboard or Home page. c. Sales and Expenses. d. Accounting and Reports. e. None.

Difficulty: Easy Page 58

10.

Use the magnifying glass icon for: a. Help. b. Settings menu. c. Create. d. Recent transactions. e. All. Difficulty: Medium Page 59

11.

Use the plus sign for: a. Help. b. Settings menu. c. Viewing recent transactions. d. Adding transactions. e. All. Difficulty: Easy Page 57

12.

How do you access the Settings Menu? a. Go to Reports. b. Click Accounting to go to the Chart of Accounts. c. There is no settings menu. d. Use the gear icon. e. None.

Difficulty: Hard Page 60

13.

To configure a QuickBooks Online company the way you want, use this feature: a. Communication with Intuit. b. Type your company email address. c. Manage users. d. Account and Settings. e. All. Difficulty: Hard Page 62

14.

What icon is used to edit? a. Magnifying glass. b. Pencil. c. Plus. d. Minus. e. All. Difficulty: Easy Page 63

15.

To track inventory items, turn this Expense selection on: a. Enable and use account numbers. b. Make expenses and items billable. c. Show items table on expense and purchase forms. d. Accept payments through QuickBooks, emailed invoices and mobile payments. e. All. Difficulty: Medium Page 64

16.

A list of all the accounts used in the General Ledger is called a/an: a. Income Statement. b. Balance Sheet. c. Statement of Cash Flows. d. Chart of Accounts e. None.

Difficulty: Easy Page 68

17.

If a Confirm your account information window appears, you need to establish a/an: a. Address for your company. b. State where your company resides. c. Account list. d. Confirmation Code. e. All. Difficulty: Hard Page 83

18.

When you set up a QuickBooks Online company, a/an __________________ is also set up: a. Default Chart of Accounts. b. Company location. c. Owner’s investment. d. App. e. All. Difficulty: Medium Page 77

19.

To add accounts to the Chart of Accounts page, select the following icon: a. Edit. b. New c. Revise. d. Category Type. e. All. Difficulty: Easy Page 71

20.

Add the following information for each account: a. Category type b. Detail type c. Number d. Description. e. All. Difficulty: Medium Page 73

21.

On the Chart of Accounts, the Category Type identifies the account for the: a. Income Statement. b. Financial Statements. c. Transactions. d. Search criteria. e. None.

Difficulty: Hard Page 76 22.

What is the difference between View register and Run report? a. There is no difference between view register and run report. b. View register are balance sheet accounts; Run report are profit and loss accounts. c. The Category Type identifies view register and run report classifications, along with the detail type. d. The Name and Account number needs to be specified first. e. All. Difficulty: Hard Page 78

23.

The chart of accounts is also called the: a. Balance Sheet. b. Trial Balance. c. Profit and Loss. d. Account List. e. None.

Difficulty: Easy Page 78

24.

When inventory is added, the following accounts are used: a. Merchandise Inventory. b. Sales. c. Cost of Goods Sold. d. All. e. None.

Difficulty: Medium Page 78

25.

To share access rights within QuickBooks Online, use the following: a. Sign in with another user’s ID and Password. b. Invite Accountant. c. Company Administrator. d. All. e. None.

Difficulty: Medium Page 82

26.

In order to sign in to another company account, a/an _____________________ needs to be emailed: a. Confirmation code. b. IP Address. c. Browser information. d. All. e. None.

Difficulty: Hard Page 83

27.

Each account sign in is authenticated via a/an: a. Company administrator. b. User ID. c. Password. d. IP Address. e. All. Difficulty: Hard Page 84

28.

To Invite Accountant, do this: a. Gear > Manage Users b. Gear > Confirmation Code. c. Plus sign > Manage Users. d. Profile > Recent Transactions. e. All. Difficulty: Medium Page 84

29.

The ________________________ contains a list of all the changes that have been made to your company data and by whom. a. Internal controller. b. Chart of Accounts. c. List of Recent Transactions. d. Audit Log. e. All. Difficulty: Medium Page 86

Objective: Beginning Balances and Transaction Register 30.

The transaction register shows: a. Checking account activity. b. The chart of accounts. c. The general ledger. d. All the accounts. e. None.

Difficulty: easy Page 96

31.

Use this selection to see the Account List: a. Home or Dashboard. b. Sales. c. Expenses. d. Reports. e. None.

Difficulty: Easy Page 99

32.

A transaction which shows at least a debit and credit is called a/an: a. Ledger. b. Journal entry.

c. Account balance. d. Special page. e. All. Difficulty: Easy Page 98 33.

All of the following represent specialized screens except: a. Category Type. b. Check. c. Receive payment. d. Bill. e. Transfer.

Difficulty: Hard Page 99

34.

When entering a journal entry, what happens if the debits don’t equal the credits? a. The difference is sent to an adjustment account, then you can save and post. b. QuickBooks will not allow you to save the transaction. c. You are asked what to do with the unequal amount. d. Nothing happens. e. All. Difficulty: Hard Page 99

35.

To record transactions, do this: a. + > select appropriate link. b. Sales > plus sign > Statement. c. Gear > Dashboard > Journal entry. d. Accounting > Sales > Invoice. e. All. Difficulty: Medium Page 102

36.

To add a payee for a check, do this: a. + > Check > Type name > Add Payee > Save Vendor. b. + > Check > type description > choose account > type amount. c. Gear > Check > Journal entry. d. Dashboard > Check > Vendor > Save. e. All. Difficulty: Medium Page 102

37.

Each time a check is issued, the account distribution in the Journal is a: a. Debit to the appropriate expense account and a credit to the checking account. b. Debit to the appropriate liability account and a credit to the appropriate expense account. c. Debit to an asset account and a credit to a liability account. d. Debit to an accounts payable account and a credit to an accounts receivable account. e. None.

Difficulty: Medium Page 104

38.

Sales Receipts are used for: a. Accounts payable transactions. b. Cash sales. c. Accounts receivable transactions. d. Invoices. e. All. Difficulty: Medium Page 108

39.

To enter a sales receipt, do this: a. Gear > + > Sales Receipt. b. + > Sales Receipt (in the Customers list). c. + > Sales Receipt (in the Vendors list). d. Gear > Accounts and Settings. e. None.

Difficulty: Easy Page 108

40.

Cash sales are categorized as: a. Inventory Items. b. Non-inventory items. c. Asset accounts. d. Expense accounts. e. All. Difficulty: Medium Page 108

41.

For Cash Sales, the Product/Service, Sales Information field shows: a. Account 401 Sales. b. Name, Cash Sales. c. I sell this product/service to my customers. d. I bought this product/service from my suppliers/vendors. e. None.

Difficulty: Hard Page 108

42.

The account distribution for cash sales is: a. Debit Sales; Credit Checking. b. Debit Accounts Receivable; Credit Sales. c. Debit Checking; Credit Sales. d. Debit Accounts Payable; Credit Checking. e. None.

Difficulty: Easy Page 114

43.

To transfer funds, do this: a. Gear > Transfer. b. + > Transfer. c. Gear > Profile > Account and Settings. d. Expenses > Transfer. e. None.

Difficulty: Easy Page 115 44.

To show your company’s financial information, use: a. Recent transactions. b. Sales Receipts. c. Customer and vendor reports. d. Reports. e. All. Difficulty: Medium Page 120

45.

To see a range of dates, use this feature: a. Customize reports. b. Edit the Chart of Accounts. c. Edit the company Profile. d. Refer to Account and Settings. e. All. Difficulty: Hard Page 122

46.

To see debit and credit balances for each account, use this report: a. Balance Sheet b. Profit and Loss. c. Statement of Cash Flow. d. Trial Balance. e. All. Difficulty: Easy Page 123

47.

To see the money you earned and the money you spent, display this report: a. Balance Sheet. b. Profit and Loss. c. Statement of Cash Flow. d. Trial Balance. e. All. Difficulty: Easy Page 124

48.

To see what your company owns, what your debits are, and what you have invested, display this report: a. Balance Sheet. b. Profit and Loss. c. The company Trial Balance. d. All. e. None.

Difficulty: Easy Page 125

49.

A way to drill down to an original transaction is to go to: a. Gear > Account and Settings.

b. Magnifying glass icon > Recent Transactions. c. Search > Gear > Account and Settings. d. Company profile. e. All Difficulty: Medium Page 128 Objective: Vendors and Inventory 50.

Your company purchases merchandise from: a. Customers. b. Vendors. c. Accounts on the chart of accounts. d. Income accounts. e. None.

Difficulty: Medium Page 148

51.

The process of bringing the balance of the bank statement and the balance of the checking account into agreement is called: a. Balancing the accounts. b. Sales. c. Vendors, suppliers, or clients. d. Bank reconciliation. e. All. Difficulty: Easy Page 145

52.

To see the checking account register, do this: a. Accounting > Chart of Accounts > double-click checking. b. Dashboard > Gear > Account and Settings. c. + > Single Time Activity. d. Create > Estimate > Statement > Bank Deposit > Purchase Order. e. None.

Difficulty: Easy Page 145

53.

When your checking account is reconciled, this page shows 0.00 as the difference: a. Journal entry. b. Invoice from customers. c. Bank Deposits on the checking register. d. Reconcile – Checking page. e. None.

Difficulty: Hard Page 145

54.

The default for a QuickBooks Online company is: a. Cash basis. b. Accrual basis. c. Batch posting. d. Saving all transactions.

e. None.

Difficulty: Medium Page 117 55.

Counting income or expenses only when you actually receive or pay is called: a. Accrual basis. b. Cash basis. c. Batch posting. d. Savings. e. None.

Difficulty: Medium Page 117

56.

When the company makes purchases on account from vendors, this is known as: a. Accounts payable transactions. b. Accounts receivable transactions. c. Cash basis accounting. d. Batch posting. e. All. Difficulty: Medium Page 148

57.

A product that is purchased from vendors for sale to customers is known as a/an: a. Balance sheet account. b. Inventory item. c. Supplier. d. Vendor. e. All. Difficulty: Medium Page 156

58.

What do you select to add vendors? a. Navigation bar > Expenses > Vendors > New vendor. b. Sales > Products and Services > New supplier. c. Navigation bar > Dashboard > Expenses. d. Navigation bar > Reports. e. None.

Difficulty: Easy Page 152

59.

When an expense is voided, the following report shows the change: a. Trial Balance. b. Balance Sheet. c. General ledger. d. Audit Log. e. All. Difficulty: Medium Page 156

60.

Use ___________________________ to enter inventory item prices or rates: a. Merchandise selection. b. Account and settings. c. Company profile. d. Products and services. e. All. Difficulty: Medium Page 156

61.

QuickBooks Online updates purchases and sales, tracks cost of goods sold, stock levels, sales prices, and vendors. This is called: a. Periodic inventory. b. Products and inventory. c. Perpetual inventory d. Accrual basis. e. All Difficulty: Hard Page 160

62.

What accounts are affected when you purchase inventory on account? a. Debit Merchandise Inventory; Credit Accounts Payable/Vendor. b. Debit Accounts Receivable/customer and Cost of Goods Sold; Credit Sales and Merchandise Inventory. c. Debit Accounts Payable/Vendor; Credit Merchandise Inventory. d. Debit Cash; Credit Accounts Payable/vendor. e. None.

Difficulty: Hard Page 158

Objective: Customers and Sales 63.

___________________________________ are what customers owe your business. a. Accounts payable. b. Accounts receivable. c. Sales. d. Purchases. e. None.

Difficulty: Easy Page 208

64.

What transaction should you enter if a customer returns a damaged product? a. Debit memo. b. Credit memo. c. Invoice or Sales Receipt. d. Check or Bill. e. None.

Difficulty: Easy Page 210

65.

To see your customer transactions and refunds, do this: a. Navigation bar > Accounting > on the Chart of Accounts, double-click Accounts Receivable, A/R Register displays. b. Navigation bar > Accounting > Sales > double-click appropriate Invoice > Invoice number appears > edit as needed > Save. c. Reports > Management Reports > All Reports > Company Snapshot. d. Expenses > Export to Excel > Save as PDF report. e. None.

Difficulty: Hard Page 213

66.

What report shows the balance for each customer? a. A/P aging. b. A/R aging. c. Reports > Account List. d. Reports > Balance Sheet. e. All. Difficulty: Medium Page 213

67.

What report shows the quantity, asset value and average cost? a. A/P aging and customer balance detail. b. A/R aging and vendor balance detail. c. Account List. d. Inventory valuation summary. e. None.

Difficulty: Medium Page 234

68.

What report shows the balance I owe to each vendor? a. A/P aging. b. A/R aging. c. Reports > Account List. d. Reports > Balance Sheet. e. All. Difficulty: Medium Page 235

69.

To record a customer payment, do this: a. Vendors page > Make payment. b. Vendors page > Create bill. c. Customers page > Receive payment. d. None.

Difficulty: Easy Page 214

70.

For sales invoices, use these selections: a. Expenses > Bill. b. + > Invoice (Customers list) c. + > Check (Vendors list) d. Reports > Journal.

e. None Difficulty: Medium Page 208

71.

For vendor payments, use these selections: a. Banking > Journal. b. + > Invoice (Customer list). c. + > Check (Vendors list) d. + > Pay Bills. e. None Difficulty: Medium Page 274

72.

For purchases from vendors on account, use these selections: a. Dashboard > Pay Bills. b. + > Bill. c. Sales > Banking. d. Reports > Account List. e. None.

Difficulty: Medium Page 276

73.

A period that a company or government uses for accounting purchases and preparing financial statements is called: a. Monthly accounting. b. Cash basis. c. Fiscal year. d. Adjusting entries. e. None.

Difficulty: Medium Page 316

74.

The purpose of __________________________________ is so that the Net Income balance is transferred to the equity account Retailed Earnings. a. Adjusting entries. b. Fiscal year. c. Monthly accounting. d. Closing the books. e. All. Difficulty: Hard Page 317

75.

On the Balance Sheet, the previous year’s Net Income amount appears as: a. Checking. b. Accounts Receivable. c. Accounts Payable. d. Retained Earnings. e. None.

Difficulty: Hard Page 317

76.

Accounts that are closed at the end of the year are called: a. Permanent accounts. b. Temporary accounts. c. Accrual basis. d. Cash basis. e. None.

Difficulty: Medium Page 334

77.

Asset, Liability, and Equity accounts shown on the balance sheet are called: a. Permanent accounts. b. Temporary accounts. c. Accrual basis. d. Cash basis. e. None.

Difficulty: Medium Page 335

78.

QuickBooks Online organizes reports by _________________ within the accounting system: a. Accrual basis. b. Cash basis. c. Modules. d. User interface. e. All. Difficulty: Medium Page 336

79.

To customize a report, go to: a. Reports > Profit & Loss > Balance Sheet > Summary Reports. b. Reports > display the report > select Rows/Columns, General, Lists, Numbers, Header/Footer > make preferred selections. c. Navigation Bar > Transaction > Chart of Accounts > go the appropriate register. d. None. e. All. Difficulty: Easy Page 339

80.

This report cannot be exported to Excel: a. Balance Sheet. b. Profit and Loss. c. Statement of Cash Flow. d. Reconcile report. e. All. Difficulty: Medium Page 340

81.

A high-tech playground for QuickBooks experts is called: a. Pro advisor.

b. Certified user. c. QuickBooks Labs. d. Point-of-sale apps. e. All. Difficulty: Easy Page 536

82.

Changes to the user interface, accounting features, and user functions are called: a. Updates. b. Apps. c. QuickBooks Labs d. Certified users. e. All. Difficulty: Medium Page 547

Objective: Basic accounting and User Interface 83. Identify how QuickBooks Online uses Detail Types. a. To track revenue and expense by office or business segment QuickBooks uses Classes. b. For financial ratios in the Analysis module. c. To change the color of different financial statement sections. d. To identify where the account appears on the financial statements. e. All. Difficulty:Hard Page 73 84. The balance sheet shows the: a. Income and Expense accounts. b. Accounting equation. c. Equity and Asset accounts involved in a transaction. d. Cost of Goods Sold account and the Liabilities account that are part of every transaction. e. None.

Difficulty:Medium Page 177 85. What is the purpose of the Chart of Accounts? a. It allows accountants to view accounting records remotely. b. It is how you classify accounts for financial statements. c. To see a graphical chart of income and expenses. d. To categorize items. e. All. Difficulty:Hard Page 17

86.

If transactions have been changed, how do you check? What report should you run? a. Audit Log. b. User Entry Report. c. Modified Transactions Report. d. Balance Sheet. e. None.

Difficulty:Medium Page 86

87.

When you run Financial Statement reports, what accounting basis can you use to view the report? a. Cash Basis. b. Accrual Basis. c. You can switch the accounting basis. d. All. e. None.

Difficulty:Hard Page 117

88.

What are the main financial statements that you can run from Recommended Reports? a. Profit and Loss. b. Balance Sheet. c. A/R Aging Summary d. A/P Aging Summary. e. All. Difficulty:Hard Page 176

89.

What are the main sections of the Profit and Loss? a. Income Expenses and Liabilities. b. Income, Cost of Goods Sold, and Expenses. c. Income, Assets, and Equity. d. Assets, Liabilities, and Equity. e. None.

Difficulty:Easy Page 10

90.

After you reconciled the checking account successfully, you notice that the beginning balance calculated by QuickBooks Online is different from the beginning balance on your bank statement. How can this happen? a. It cannot happen. b. Someone changed the beginning balance amount. c. Someone changed or deleted a cleared transaction.

d. The bank transposed some numbers on a check or deposit. e. None Difficulty:Hard Page 145 91.

What is equity? a. What your company owns. b. Assets minus liabilities. c. What you owe others. d. Assets plus liabilities. e. None.

Difficulty:Easy Page 177

92.

How do you add numbers to your chart of accounts? a. Gear > Account and Settings > Advanced > Edit chart of accounts > Enable and Show account numbers. b. You cannot change the chart of accounts. c. Customize reports. d. Go to the Checking account register > add accounts. e. None.

Difficulty:Easy Page 18

93.

You need to enter the same transaction each month. How can you automate this process? a. While the transaction is on the screen, select Make recurring > Save. b. You cannot automate transactions. c. When you select the same vendor, the account details are the same. Retype the entry > Save. d. All. e. None.

Difficulty:Hard Page 102

94.

When I go to a customer invoice, I notice there is a mistake. What is the best way to fix it? a. Go to the A/R summary report and edit the invoice. b. Go to the A/P summary report and edit the invoice. c. Go to one of the inventory reports, and edit. d. Display the invoice. Make the correct entries > Save. e. None.

Difficulty:Medium Page 128

95.

What is the quickest way to see the history of invoices to a specific customer?

a. Go to the vendor page >display a vendor purchase > Select Audit History Audit. b. Go to Customers page > double-click the customer > select a transaction > More > Audit History. c. Gear > Audit Log. d. None. e. All. Difficulty:Hard Page 156 96.

After allowing account numbers, how can you easily assign account numbers to the chart of accounts? a. Select Accounting > Bank > go to one of the account registers. b. You cannot edit the chart of accounts. c. Go to Accounting > Chart of Accounts > click on the pencil (edit icon) > add numbers to the chart of accounts. d. Go to the Apps icon > select a general ledger app. e. None.

Difficulty:Easy Page 18

97.

What QuickBooks Online report shows cash generated by your business (operating activities), cash spent on your business (investments) and cash in or out from stock and dividends (financing). a. Trial Balance. b. Balance Sheet. c. Profit and Loss. d. Statement of Cash Flows. e. All. Difficulty:Medium Page 177

98.

What QuickBooks Online report lists transactions subtotaled by each account on the chart of accounts? a. Chart of Accounts. b. Balance Sheet. c. Transaction Detail by Account. d. Inventory Valuation Detail. e. All. Difficulty:Medium Page 171

99.

What QuickBooks Online report displays your income and expenses in yearover-year comparisons using pie charts and bar graphs? a. Balance Sheet. b. Profit and Loss.

c. Expenses by Vendor Summary. d. Company Snapshot. e. None.

Difficulty:Easy Page 37

100.

What selection allows you to give your professor access to your account? a. Dashboard. b. Invite Accountant. c. Banking. d. Apps. e. All. Difficulty:Easy Page 83