Question

The Chart of Accounts lies at the heart of a QuickBooks Online company. Which 5 of the following statements are true about the Chart of Accounts, how to make changes to the Chart of Accounts, and how products and services are linked to the Chart of Accounts?(Select all that apply)
-To add a new account, you open the Chart of Accounts by selecting Accounting from the left navigation, then select New to open the Account window

-The Sales of Product Income account is a default account when inventory is turned on

-Uncategorized Income and Uncategorized Expense are default accounts for online banking activity

-If you add a new account, the category type determines on which financial statement this account will show

-When we set up Products and Services, they are linked to the Chart of Accounts by specifying a sales price/rate

-Delete an account from the Chart of Accounts if it is not relevant to your business

Answer 1

Answer: The correct answers are "To add a new account, you open the Chart of Accounts by selecting Accounting from the left navigation, then select New to open the Account window", "The Sales of Product Income account is a default account when inventory is turned on",  "Uncategorized Income and Uncategorized Expense are default accounts for online banking activity", "If you add a new account, the category type determines on which financial statement this account will show", and "Delete an account from the Chart of Accounts if it is not relevant to your business".

Explanation: To add a new account, you open the Chart of Accounts by selecting Accounting from the left navigation, then select New to open the Account window - It is the correct way to add new accounts.

The Sales of Product Income account is a default account when inventory is turned on - Activating the inventory automatically creates the Sales of Product account that is an Income account.

Uncategorized Income and Uncategorized Expense are default accounts for online banking activity - Income and expenses not classified are by default for online banking.

If you add a new account, the category type determines on which financial statement this account will show - The appearance of accounts in the different financial statements depends on the category that determines the account, for example an income or expense account, will appear in the income statement.

Delete an account from the Chart of Accounts if it is not relevant to your business - It is possible to eliminate accounts that are not useful for the business model used.