QuickBooks Certified User (QBCU) Practice Exam

Which item type tracks quantity and affects both balance sheet and P&L?

Non-Inventory item Service item Inventory item Subtotal item

Correct Answer:

Inventory item

Explanation:

Inventory items are set up to track quantities on hand. That quantity is an asset on the balance sheet, because you own inventory. When you buy inventory, the balance sheet asset increases; when you sell it, the inventory asset decreases and the cost of the goods sold is recorded on the income statement. At the same time, revenue from the sale hits the income statement, so the item type links both the balance sheet and the P&L. Other item types don’t track on-hand quantities or don’t affect both statements: non-inventory items don’t manage quantity, service items affect only the income statement, and subtotal items don’t post to accounts. So the item type that both tracks quantity and impacts both financial statements is the inventory item.

Access more questions from this quiz

Continue to QuickBooks Certified User (QBCU) Practice Exam for more practice questions and the full quiz experience.

Access More Questions