QuickBooks 2015 and 2016 Adjustments and Year-End Procedures
True/False
Indicate whether the statement is true or false.
____1.Sole Proprietorships should rename their Retained Earnings account to Opening Bal Equity.
____2.A fixed asset is a purchase that is valuable for more than 5 years.
____3.All customers should be sent an IRS Form 1099 at the end of the year.
____4.When you void a transaction, you retain all of the information from that transaction.
____5.Your Chart of Accounts should include an account called Journal Entries that is used on the first line of each General Journal Entry so that all General Journal Entry transactions can be quickly referenced in the account register.
____6.You can only memorize General Journal Entries.
____7.You cannot change a transaction in an account that has been reconciled.
____8.It is recommended that you make all of your adjustments in a single General Journal Entry so that it can be easily found.
____9.Owner’s Investments and Owner’s Drawings should be closed at the end of the fiscal year.
____10.The IRS only requires that you include accurate Taxpayer IDs for your 1099 vendors when you submit your 1099 form.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____11.Which of the following should you do at the end of an accounting period?
a. / Reconcile cash, credit card, and loan accounts against the period-end statements. / c. / Enter depreciation entries.b. / Run reports for the period and verify their accuracy. / d. / All of the above.
____12.To calculate depreciation,
a. / record depreciation each month using a General Journal Entry. / c. / contact you accountant or QuickBooks ProAdvisor to use the Fixed Asset Manager in the QuickBooks Accountant Edition.b. / use the Fixed Asset Manager in QuickBooks Accountant. / d. / any of the above.
____13.Which of the following is an example of a fixed asset?
a. / A Building / c. / A Truckb. / A Server / d. / All of the above
____14.QuickBooks automatically creates
a. / IRS Form 1099-MISC / c. / IRS Form 1099-DIVb. / IRS Form 1099-INT / d. / All of the above
____15.In order to have accurate information for the IRS Form 1099, you should supply each vendor with which form before your first payment?
a. / Form W-2 / c. / Form W-9b. / Form 1099-MISC / d. / Form 1099-VEND
____16.Which of the following is true?
a. / General Journal entries can’t be used to recategorize class information. / c. / The total credits must match the total debits in each General Journal Entry.b. / General Journal entries can be used to recategorize information using Items. / d. / All of the above.
____17.In order to use track 1099 vendors, you should
a. / setup the Tax:1099 Company Preferences. / c. / have the vendor fill out a W-2 form.b. / make sure Record1099 Transaction is selected from the bottom of the Purchase Order window. / d. / all of the above.
____18.When might you need to make an adjusting entry?
a. / A transaction needs to be changed from one class to another class. / c. / Prepaid expenses need to be reallocated to the time period when the expenses are used.b. / You need to record depreciation on a fixed asset. / d. / All of the above.
____19.Which of the following accounts could fixed assets have?
a. / A control account, an expense account and an inventory account / c. / A liability account, an expense account, and a Contra accountb. / A control account, a Cost account and an Accumulated Depreciation account / d. / An equity account, a Depreciation expense account and an Accumulated Depreciation account
____20.To make an adjustment to items and their associated accounts, you should use
a. / the Edit Item window. / c. / a General Journal Entry.b. / a Zero-Dollar Check. / d. / the Accumulated Depreciation account.
Completion
Complete each statement.
21.The ______entry transfers net income into Retained Earnings or Owner’s Equity account.
22.The ______is the current book value of a Fixed Asset.
23.QuickBooks uses ______to automatically track all 1099 vendors’ payments and threshold amounts for generating Form 1099s.
24.You can lock a data file to block users from making transactions during a closed period by setting a(n) ______.
25.The ______account tracks the money the owner of a sole proprietorship puts into the company.
26.To delete a memorized transaction, select the transaction in the ______and select Delete Memorized Transaction.
27.The use, or value loss, of a fixed asset is tracked in the fixed asset’s ______account.
28.The ______assists in completing accurate 1099 and 1096 tax forms.
29.To adjust expense accounts with items, create a ______.
30.Use the ______to track detailed information about fixed assets.
QuickBooks 2015 Adjustments and Year-End Procedures
Answer Section
TRUE/FALSE
1.ANS:F
Sole Proprietorships should rename their Retained Earnings account to Owner’s Equity, not Opening Bal Equity. (See Adjustments Chapter - Closing the Year)
PTS:1
2.ANS:F
A purchase is considered a fixed asset if it has value for more than a single year. (See Adjustments Chapter - Tracking Fixed Assets) niib
PTS:1
3.ANS:F
1099s are only used to report vendors who provide business-related services. Customers are not eligible. (See Adjustments Chapter - Processing 1099s) niib
PTS:1
4.ANS:F
Voided transactions only maintain the date, number and details of the transaction. It does not retain amounts. (See Adjustments Chapter - Editing, Voiding and Deleting Transactions - Voiding and Deleting Transactions)
PTS:1
5.ANS:T
By having an account such as Journal Entries, the various general journal entries can be browsed in the Journal Entries account register. (See Adjustments Chapter - Recording Adjustments in General Journal Entries - Creating a General Journal Entry)
PTS:1
6.ANS:F
You can memorize almost all transaction in QuickBooks. (See Adjustments Chapter - Memorizing Journal Entries - Creating Memorized Transactions)
PTS:1
7.ANS:F
Although not recommended, you can change transactions made during reconciled accounts periods. QuickBooks will only prevent you from making this change if the file has been locked by setting a closing date. (See Adjustments Chapter - Editing, Voiding and Deleting Transactions)
PTS:1
8.ANS:F
Each adjustment should be recorded in its own General Journal Entry. These entries will be particularly important in the future if you are audited or need to answer questions about aged books. Having the adjustments recorded in their own windows will make them easier to understand. (See Adjustments Chapter - Recording Adjustments and General Journal Entries)
PTS:1
9.ANS:F
Owner’s Drawings should be closed at the end of the fiscal year, however Owner’s Investments might not be closed so the record of the owner’s investments can grow over time. (See Adjustments Chapter - Closing the Year - Recording Closing Entries for Sole Proprietorships and Partnerships - Closing Sole Proprietorship Drawing Accounts)
PTS:1
10.ANS:F
The IRS may reject your 1099s if you do not include valid Taxpayer IDs and addresses for your 1099 vendors. (See Adjustments Chapter - Processing 1099s - Printing 1099s and 1096 Forms) niib
PTS:1
MULTIPLE CHOICE
11.ANS:D
You should do each of the above items, in addition to other tasks such as conduct a physical inventory and back up the QuickBooks file, at the end of the accounting period. (See Adjustments Chapter - Closing the Year - Closing the Accounting Period)
PTS:1
12.ANS:D
Any of these methods will calculate depreciation. (See Adjustments Chapter - Tracking Fixed Assets - Calculating and Recording Depreciation) niib
PTS:1
13.ANS:D
A fixed asset is a purchase that has value for more than a year. Each of the examples listed above, a building, server, or truck will have value for longer than a year. (See Adjustments Chapter - Tracking Fixed Assets) niib
PTS:1
14.ANS:A
QuickBooks can create IRS Form 1099-MISC but not 1099-INT or 1099-DIV. (See Adjustments Chapter - Processing Form 1099) niib
PTS:1
15.ANS:C
IRS Form W-9 provides you with all the information you will need to fill out IRS Form 1099. Vendors are required to give you this information. (See Adjustments Chapter - Processing 1099s - Editting1099 Information in Vendor Records) niib
PTS:1
16.ANS:C
Each General Journal Entry must balance. (See Adjustments Chapter - General Journal Entries - Creating a General Journal Entry)
PTS:1
17.ANS:A
Once you have set up the Tax:1099 Company Preferences, QuickBooks will automatically record the transactions with 1099 vendors. (See Adjustments Chapter - Processing 1099s - Setting Account Mapping Preferences for 1099s) niib
PTS:1
18.ANS:D
Adjusting entries can be used for any of these types of changes, as well as others such as closing the Owner’s Draw account and correcting a transaction that was allocated to the wrong account. (See Adjustments Chapter - General Journal Entries)
PTS:1
19.ANS:B
Fixed assets have a control (or master) account, a Cost account and an Accumulated Depreciation account. (See Adjustments Chapter - Tracking Fixed Assets) niib
PTS:1
20.ANS:B
Zero-dollar checks are checks where debits are entered as items with positive numbers and credits are entered as items with negative numbers. The balance of the check is $0.00. (See Adjustments Chapter - General Journal Entries - Adjusting Expense Accounts Associated with Items (Zero-Dollar Checks))
PTS:1
COMPLETION
21.ANS:
closing
The closing entry is automatically done for you by QuickBooks at the end of the fiscal year. It transfers net income into Retained Earnings or Owner’s Equity. (See Adjustments Chapter - Closing the Year)
PTS:1
22.ANS:
Net Book Value
The Net Book Value or NBV is the book value of a Fixed Asset at a certain point of time. It is calculated by subtracting the depreciation from the purchase price. (See Adjustments Chapter - Tracking Fixed Assets) niib
PTS:1
23.ANS:
account mapping
Account mapping allows you to select accounts to track as 1099 vendors, both their payments and company wide threshold amount for reporting to the IRS. (See Adjustments Chapter - Processing 1099s - Setting Account Mapping Preferences for 1099s) niib
PTS:1
24.ANS:
closing date
When you set a closing date, you prevent users from making changes to transactions that took place before that date. (See Adjustments Chapter - Setting a Closing Date to “Lock” Transactions)
PTS:1
25.ANS:
Owner’s Investments
The Owner’s Investments account records the owner’s investments into a sole proprietorship. (See Adjustments Chapter - Closing the Year - Recording Closing Entries for Sole Proprietorships and Partnerships)
PTS:1
26.ANS:
Memorized Transaction List
The Memorized Transaction List is a central location where you can access all the memorized transactions. You can edit, reschedule or delete the transactions. (See Adjustments Chapter - Memorized Journal Entries - Deleting, Rescheduling, and Editing Memorized Transactions - Deleting Memorized Transactions)
PTS:1
27.ANS:
Accumulated Depreciation
Accumulated Depreciation tracks the use, or change in value, of a fixed asset. (See Adjustments Chapter - Tracking Fixed Assets) niib
PTS:1
28.ANS:
1099 Wizard
The 1099 Wizard helps users complete a 4-step process of reviewing, mapping accounts, running reports, and printing 1099 and 1096 tax forms. (See Adjustments Chapter - Processing 1099s - The 1099 Wizard) niib
PTS:1
29.ANS:
zero-dollar check
zero dollar check
Zero-dollar checks are used to make adjustments using items, since General Journal Entries do not have item fields. (See Adjustments Chapter - General Journal Entries - Adjusting Expense Accounts Associated with Items (Zero-Dollar Checks))
PTS:1
30.ANS:
Fixed Asset List
By creating Fixed Asset Items in the Fixed Asset List, you can track the cost and depreciation of your company’s fixed assets. (See Adjustments Chapter - Tracking Fixed Assets - Using the Fixed Asset List) niib
PTS:1