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Review Questions

Select the best answer(s) for each of the following:

1. You record the sales price for a Group Item in:

a) The Sales Price field

b) The Rate field

c) The Price Level field

d) None of the above

2. When you sell an inventory item, which account(s) decrease in value?

a) Inventory income account

b) Inventory asset account

c) Cost of goods sold account

d) Expense account

3. If a vendor sends you more than the quantity on your purchase order, you can:

a) Receive the extra shipment into inventory, and then send it back and record a bill credit.

b) Refuse the extra shipment and send it back to the vendor without recording a transaction in QuickBooks.

c) Receive the extra shipment and record an inventory adjustment.

d) Receive the extra shipment and pay for it.

4. Which type of transaction applies only to inventory?

a) Purchase order

b) Item receipt

c) Bill

d) Invoice

5. QuickBooks Pro, Premier, and Accountant can’t:

a) Calculate gross profit on inventory sold.

b) Report the status of inventory items including how many are on hand and how many are on order.

c) Use the LIFO or FIFO method to calculate inventory cost.

d) Track open purchase orders.

Tracking Inventory Exercise 1 Applying Your Knowledge

Restore the sample file, sample_product-based business 2015 (Portable).QBM. (Or, if you are using QuickBooks 2014, restore sample_product-based business 2014 (Portable).QBM.)

1. Create a new Inventory item in the Item List with the data in the following table. [pic]

Figure 8-1 New inventory item

2. Create purchase order 2019-1 dated 03/11/2019 to Zeng Building Supplies for 5 casement windows. Use the New Construction class. Include a memo to identify the purchase order. Print the purchase order on blank paper. [pic] Figure 8-2 Purchase order

3. Create an item receipt dated 03/28/2019 for 5 casement windows from Zeng Building Supplies against PO 2019-1. The packing slip number is 180410. The item receipt total is $1,000. [pic]

Figure 8-3 Item receipt

4. Create an invoice (#2019-101) for Mark Bauman: Home Remodel on 04/10/2019 for 2 casement windows. Use the default sales price and assign the sale to the Remodel class. Add a memo to identify the invoice. [pic] Figure 8-4 Invoice

5. Run and print a Casement Window item QuickReport for 03/01/2019 to 04/30/2019.

[pic]Figure 8-5 Inventory Part item QuickReport

6. Run and print an Inventory Stock Status by Item report for 3/01/2019 to 4/30/2019.

[pic]Figure 8-6 Inventory Stock Status by Item report

7. Run and print an Inventory Valuation Summary as of 04/30/2019.

[pic]Figure 8-7 Inventory Valuation Summary report

Tracking Inventory Exercise 2 (Advanced)

Applying Your Knowledge

Restore the sample file, sample_product-based business 2015 (Portable).QBM. (Or, if you are using QuickBooks 2014, restore sample_product-based business 2014 (Portable).QBM.)

1. Create new Inventory Part items with the data in the following tables.

[pic]Figure 8-3 Data for New Inventory Part item

2. Create purchase order 2019-1 dated 04/12/2019 to Zeng Building Supplies. Use the New Construction class. Include 5 white casement windows and 2 casement windows with unfinished wood. Add a memo to identify the purchase order. Print the purchase order on blank paper.

[pic]Figure 8-9 New inventory item88

For the following transactions, unless specific values are provided, keep all defaults on transactions, such as dates, prices, and sales tax.

[pic]Figure 8-10 New inventory item 3. Create an item receipt dated 4/15/2019 for Zeng Building Supplies against PO 2019-1 for 1 white casement window and 1 casement window with unfinished wood. The packing slip number is 5459.

[pic]

Figure 8-11 Initial item receipt

4. Create an item receipt dated 4/17/2019 for Zeng Building Supplies against PO 2019-1 for the remaining items on the purchase order. The packing slip number is 5472.

[pic]

Figure 8-12 Final item receipt

5. Create an invoice 2019-102 dated 4/21/2019 to Davies,Aaron:Remodel for 2 white casement windows and 2 casement windows with unfinished wood. Use the Remodel class [pic]

Figure 8-13 Invoice

6. Record a bill for item receipt 5459 dated 4/22/2019 from Zeng Building Supplies. Delivery charges of$32.50 were added to the bill. Use the Expenses tab to record delivery charges (using the Freight & Delivery cost of goods sold account). Use the Remodel class. The total bill amount is $324.50. (Hint: Use the Recalculate button to adjust the Amount Due.)

[pic]

Figure 8-14 Bill for first item receipt

7. Record a bill for item receipt 5472 dated 4/22/2019 from Zeng Building Supplies. Use the Remodel class. [pic]

Figure 8-15 Bill for second item

Chapter 8: Tracking Inventory

8. Record an inventory adjustment (#2019-101) dated 4/30/2019 for a white Casement Window item. Create the Inventory Adjustment account (54530). Use the Remodel class. Quantity on hand is 1. Memo is Damaged window.

[pic]Figure 8-16 Inventory adjustment

9. Run and print a Casement Window – White item QuickReport for all dates.

[pic]

Figure 8-17 Inventory Part item QuickReport

10. Run and print an Inventory Stock Status by Item report for 3/01/2019 to 4/30/2019.

[pic]

Figure 8-18 Inventory Stock Status by Item report

11. Run and print an Inventory Valuation Summary as of 04/30/2019.

[pic]

Figure 8-19 Inventory Valuation Summary report

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