Based on the provided sources, here are at least 30 multiple-choice questions about creating a company

in Peachtree Accounting, followed by the answers and their source citations.

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**Multiple Choice Questions**

1. According to the source, which of the following is one of the minimum pieces of information required
when initially setting up your company in Peachtree?

a) Beginning balances

b) Employee records

c) Chart of Accounts

d) Inventory items

2. What is the primary purpose of the Peachtree Setup Guide?

a) To walk you through creating a new company initially

b) To set up default information, data records, and beginning balances after the initial setup

c) To help you choose your accounting method

d) To define your account aging periods

3. In cash-basis accounting, when do you recognize income and expenses?

a) When an invoice or bill is sent or received

b) Only when cash is received or spent

c) When required by GAAP

d) As soon as inventory is sold

4. According to the source, which accounting method requires you to recognize income as soon as you
invoice the customer, even if cash hasn't been received yet?

a) Cash-basis accounting

b) Accrual accounting

c) Both cash and accrual accounting

d) Neither cash nor accrual accounting

5. The IRS requires businesses selling traditional inventory items (stock items) to use which accounting
method?

a) Cash-basis accounting

b) Accrual accounting

c) Either method, depending on the business size

d) A hybrid method

6. According to the source, if you grant or receive credit from customers or vendors, which accounting
method should you use?

a) Cash-basis accounting

b) Accrual accounting

c) Either method is acceptable

d) This decision is irrelevant to accounting method choice

7. If a publicly traded company is required to follow GAAP, which accounting method must they use for
their financial statements?

a) Cash-basis accounting

b) Accrual accounting

c) A method chosen based on tax benefits

d) Peachtree allows them to choose either

8. What warning does the source give about choosing your accounting method in Peachtree?

a) It can be easily changed later if needed

b) It should only be chosen after consulting with an accountant

c) If you make the wrong choice, there is NO WAY to change it afterwards

d) It impacts only tax reporting, not internal reporting

9. Which type of businesses are mentioned as often liking cash-basis accounting?

a) Businesses with significant inventory

b) Businesses that grant extensive credit

c) Small, service-type businesses like accountants or consultants

d) Publicly traded companies

10. What is cited as a tax benefit of cash-basis accounting for small service companies?

a) Expenses are recognized in the year they are incurred, not paid

b) Income received in December might be reported in January of the following year, resulting in a
short-term benefit

c) It simplifies GAAP compliance

d) It allows for better projection of cash flow

11. According to the source, a potential drawback of choosing not to record customer or vendor invoices
in cash basis accounting is:

a) It violates GAAP

b) It requires more bookkeeping time

c) You lose the benefits of aging and projecting cash flow

d) It prevents the recognition of income

12. One cited benefit of Accrual Accounting is "Better reporting" because:

a) It only recognizes income when cash is received

b) It includes booked sales and purchases (Accounts Receivable and Accounts Payable)

c) It simplifies cash management

d) It allows income from December to be reported in January

13. What is Posting in Peachtree Accounting?

a) The process of creating journal entries

b) The process of updating the General Ledger's chart of accounts to reflect journal entries and
updating reports

c) The process of entering beginning balances

d) The process of choosing an accounting method

14. In which posting method are transactions saved to a temporary holding area for review before being
posted to the General Ledger?

a) Real-time posting

b) SmartPosting

c) Batch posting

d) Automatic posting

15. In Real-time posting, when are transactions posted and saved?

a) Only when the batch is manually posted

b) Automatically by the SmartPosting service

c) When you click the Save button

d) After being reviewed in a temporary holding area

16. What is a cited benefit of using SmartPosting, especially in a network environment?

a) It allows reviewing transactions before posting

b) It simplifies the chart of accounts structure

c) It gives you better performance because you can save transactions without waiting for them to post

d) It is required for Accrual accounting

17. Can you change your posting method after creating a new company in Peachtree?

a) No, like the accounting method, it cannot be changed.

b) Yes, this option can always be changed at any time.

c) Only if you switch from Real-time to Batch posting.

d) Only during the Setup Guide process.

18. When changing from Batch or SmartPosting to Real-time posting, what happens to any unposted
batches?

a) They are deleted.

b) They remain unposted until the change is complete.

c) They are automatically posted before the switch is made.

d) They are converted to Real-time transactions.

19. What is a "really important thing to think about" regarding the starting date for converting to
Peachtree?

a) It should be the current date.

b) It must be a date on which you know all your account balances, customer balances, vendor
balances, and so on.

c) It must always be the first day of a calendar year.

d) It cannot be the end of the previous fiscal year if you want reports comparing years.
20. A special feature of Peachtree mentioned is the ability to have how many years open at once?

a) One

b) Two

c) Three

d) Up to twenty-six

21. Peachtree allows you to have how many periods in your fiscal year?

a) Always 12

b) From one to thirteen

c) Only 12 or 26

d) A variable number determined by the calendar

22. In Account Aging, if you age invoices by invoice date, what do the aging reports show?

a) How overdue each invoice is

b) How old each invoice and each balance is

c) The due date of each invoice

d) Only invoices with credit terms

23. If you age invoices by due date, what do the aging reports show?

a) How old each invoice is

b) The original invoice date

c) How overdue each invoice is

d) The total balance outstanding

24. How do many businesses choose to age accounts payable and accounts receivable according to the
source?

a) Both by invoice date

b) Both by due date

c) Accounts payable by due date and accounts receivable by invoice date

d) Accounts payable by invoice date and accounts receivable by due date

25. Where is the way you age invoices established in Peachtree?

a) In the Create a New Company wizard

b) In Vendor and Customer Defaults

c) In the Chart of Accounts setup

d) In the Accounting Periods settings

26. On the aging reports, the leftmost column shows balances for which type of invoices?

a) The oldest or most overdue invoices

b) Invoices aged by due date

c) The most recent or least overdue invoices

d) Invoices aged by invoice date

27. At a minimum, which ID is requested by the Create a New Company wizard?

a) State Employer ID

b) Employee ID

c) Account ID

d) Aging ID
28. The Business Type selected in the Company Information window defines the kind of business you
run and determines the makeup of which section of your chart of accounts?

a) Assets

b) Liabilities

c) Equity

d) Expenses

29. Can you change the business type after setting it up initially?

a) No, it cannot be changed once selected.

b) Yes, it can be changed at any time.

c) Only within the Setup Guide.

d) Only if you build your own chart of accounts.

30. Your company's Chart of Accounts is defined in the source as:

a) A list of all employees and vendors

b) A complete list of all account names used in the General Ledger

c) A report showing all transactions

d) The method for calculating depreciation

31. When setting up accounts in your chart of accounts, Peachtree recommends numbering accounts in
a way similar to that for other accounts of the same type to help you:

a) Calculate balances automatically

b) Locate accounts more easily

c) Determine the accounting method

d) Set up account aging

32. If you choose to use a sample business type when creating your company, what are you essentially
choosing?

a) Your accounting method

b) Your posting method

c) A general ledger chart of accounts

d) Your fiscal year start date

33. What is a "consolidated company" in Peachtree?

a) A company created by converting data from another application

b) A company that combines the charts of accounts of a number of existing Peachtree companies

c) A company created using a simplified chart of accounts

d) A company with only one accounting period

34. According to the source, once you finish New Company Setup, you won't be able to change:

a) Your accounting method and posting method

b) Your accounting periods and fiscal year start

c) Your chart of accounts structure

d) Your company name and address

35. The Fast Add feature in Peachtree helps you enter which type of records at the same time as you
enter transactions?

a) Vendor records

b) Employee records

c) Customer records

d) Inventory item records

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**Answers**

1. c) Chart of Accounts

2. b) To set up default information, data records, and beginning balances after the initial setup

3. b) Only when cash is received or spent

4. b) Accrual accounting

5. b) Accrual accounting

6. b) Accrual accounting

7. b) Accrual accounting

8. c) If you make the wrong choice, there is NO WAY to change it afterwards

9. c) Small, service-type businesses like accountants or consultants

10. b) Income received in December might be reported in January of the following year, resulting in a
short-term benefit

11. c) You lose the benefits of aging and projecting cash flow

12. b) It includes booked sales and purchases (Accounts Receivable and Accounts Payable)

13. b) The process of updating the General Ledger's chart of accounts to reflect journal entries and
updating reports

14. c) Batch posting

15. c) When you click the Save button

16. c) It gives you better performance because you can save transactions without waiting for them to
post

17. b) Yes, this option can always be changed at any time.

18. c) They are automatically posted before the switch is made.

19. b) It must be a date on which you know all your account balances, customer balances, vendor
balances, and so on.
20. b) Two

21. b) From one to thirteen

22. b) How old each invoice and each balance is

23. c) How overdue each invoice is

24. c) Accounts payable by due date and accounts receivable by invoice date

25. b) In Vendor and Customer Defaults

26. c) The most recent or least overdue invoices

27. a) State Employer ID (Also Company Name, Address, Country, Phone, Fax, Business Type, Federal
Employer ID, State Unemployment ID, Chart of Accounts, Accounting Method, Posting Method,
Accounting Periods, Fiscal Year Start, Company Information to Copy) - State Employer ID is explicitly
listed as a minimum.

28. c) Equity

29. b) Yes, it can be changed at any time.

30. b) A complete list of all account names used in the General Ledger

31. b) Locate accounts more easily

32. c) A general ledger chart of accounts

33. b) A company that combines the charts of accounts of a number of existing Peachtree companies

34. b) Your accounting periods and fiscal year start

35. c) Customer records