Online Setup Flashcards

A new client who runs a small service-based business has never used accounting software before. When setting up their QuickBooks Online company file for the first time, which of the following is a critical first step in the 'Account and Settings' area?

Answer: Setting the company's fiscal year start month and accounting method.

Before entering transactions, it is crucial to establish the company's accounting foundation. This includes setting the fiscal year, which impacts financial reporting periods, and choosing the accounting method (cash vs. accrual), which determines how income and expenses are recognized. While other steps are important, they follow this fundamental setup.

When importing data into a new QuickBooks Online company, which list can be imported as a CSV or Excel file?

Answer: Chart of Accounts

QuickBooks Online allows users to import several types of lists to speed up the setup process. This includes the Chart of Accounts, Customers, Vendors, and Products and Services from a CSV or Excel file. Bank transactions are typically brought in through a direct bank feed connection, while historical transactions like invoices and bills generally need to be entered manually or with a third-party app.

A client wants to give their office manager the ability to manage customers, vendors, and enter daily transactions, but does not want them to see sensitive financial reports or company bank balances. Which user role would be most appropriate to assign in QuickBooks Online?

Answer: Standard user with limited access (e.g., only Customers & Sales)

The 'Standard user' role can be customized to grant specific permissions. For this scenario, you can give the user access to areas like 'Customers & Sales' and 'Vendors & Purchases' while restricting access to banking and reporting, thereby protecting sensitive financial data. The Company Administrator and Accountant roles have much higher levels of access.

Which of the following settings is configured directly from the 'Sales' tab within the 'Account and Settings' section of QuickBooks Online?

Answer: Customizing the default email message sent with invoices.

The 'Sales' tab in 'Account and Settings' allows you to customize sales form content, set invoice payment terms, and define the default email messages that accompany sales forms like invoices and estimates. Sales tax is set up in the 'Taxes' center, payment processors are managed under 'Payments', and the legal name is in the 'Company' tab.

Your client has been in business for several years and is migrating to QuickBooks Online. They have provided you with their trial balance from their previous accounting system as of December 31st of the last fiscal year. What is the most common method for entering these opening balances into QBO?

Answer: Creating a single, comprehensive journal entry dated as of the start of the new fiscal year.

The standard and most efficient method for establishing opening balances from a prior system is to create a journal entry. This entry, dated on the 'start date' (e.g., January 1st), will debit all asset accounts and credit all liability and equity accounts, ensuring the balance sheet is correct from day one.

To correctly set up QuickBooks Online to track sales tax, what is the first step a user must take?

Answer: Go to the Taxes center and run the 'Set up sales tax' wizard.

QuickBooks Online has a dedicated sales tax module. The proper procedure is to first navigate to the 'Taxes' center from the left-hand navigation bar and follow the guided setup wizard. This process automatically creates the necessary accounts (like Sales Tax Payable) and allows you to add your tax agencies and rates in one streamlined workflow.