Sage Certification Exam Questions
Sample Questions and Answers for Sage Assessment Practice Questions
What is the primary purpose of Sage accounting software?
A) Inventory management
B) Financial record-keeping and reporting
C) Website development
D) Customer relationship management
Answer: B) Financial record-keeping and reporting
Explanation: Sage accounting software is designed to help businesses manage their financial transactions, including invoicing, payroll, and tax compliance. While it may include features related to inventory and CRM, its primary focus is on financial management.
Which type of account is credited when recording a sales transaction in Sage?
A) Accounts Payable
B) Accounts Receivable
C) Sales Revenue
D) Cash
Answer: C) Sales Revenue
Explanation: When a sale is recorded, the revenue account (Sales Revenue) is credited to reflect the income earned. If it is a cash sale, the Cash account is debited, and if it is a credit sale, Accounts Receivable is debited.
What is the role of the General Ledger in Sage?
A) To track only cash transactions
B) To maintain a record of all financial transactions
C) To generate customer invoices
D) To process payroll payments
Answer: B) To maintain a record of all financial transactions
Explanation: The General Ledger is the backbone of accounting in Sage, containing a record of all financial transactions. It helps in preparing financial statements like the balance sheet and income statement.
In Sage, which report provides a summary of all outstanding customer invoices?
A) Income Statement
B) Aged Receivables Report
C) Bank Reconciliation Report
D) Trial Balance
Answer: B) Aged Receivables Report
Explanation: The Aged Receivables Report categorizes outstanding customer invoices based on the number of days overdue, helping businesses track unpaid amounts.
Which Sage feature allows businesses to track stock levels?
A) Payroll Module
B) Bank Reconciliation
C) Inventory Management
D) Fixed Asset Register
Answer: C) Inventory Management
Explanation: The Inventory Management module in Sage helps businesses track stock levels, manage reordering, and monitor product movement.
How can you correct a mistake in a recorded transaction in Sage?
A) Delete the transaction
B) Use the “Undo” button
C) Create a journal entry adjustment
D) Restart the software
Answer: C) Create a journal entry adjustment
Explanation: Sage does not allow direct deletion of financial transactions to maintain audit integrity. Instead, corrections should be made using adjusting journal entries.
What does Sage’s bank reconciliation feature help businesses achieve?
A) Ensure accounts payable are correct
B) Match financial records with bank statements
C) Calculate employee salaries
D) Automate sales tax reporting
Answer: B) Match financial records with bank statements
Explanation: The bank reconciliation feature helps businesses compare transactions recorded in Sage with actual bank statements, ensuring accuracy in financial records.
What type of account is Accounts Payable in Sage?
A) Asset
B) Liability
C) Expense
D) Revenue
Answer: B) Liability
Explanation: Accounts Payable represents amounts owed by the business to suppliers or creditors, making it a liability account.
In Sage Payroll, what is the purpose of statutory deductions?
A) To increase employee salaries
B) To calculate profit margins
C) To comply with government tax laws
D) To adjust supplier payments
Answer: C) To comply with government tax laws
Explanation: Statutory deductions include taxes and contributions that employers must withhold from employee wages, such as income tax and social security.
What is the role of a Trial Balance in Sage?
A) To calculate business profitability
B) To ensure total debits and credits match
C) To list outstanding invoices
D) To generate payroll reports
Answer: B) To ensure total debits and credits match
Explanation: The Trial Balance is a report that checks the accuracy of ledger entries by ensuring total debits equal total credits.
What happens when you void a check in Sage?
A) The payment remains in the system
B) The check is permanently deleted
C) A reversal entry is created
D) The bank balance remains unchanged
Answer: C) A reversal entry is created
Explanation: When a check is voided in Sage, a reversing entry is automatically generated to cancel out the original payment, maintaining an accurate audit trail.
Which financial statement does Sage generate to show company profitability?
A) Balance Sheet
B) Cash Flow Statement
C) Profit and Loss Statement
D) Trial Balance
Answer: C) Profit and Loss Statement
Explanation: The Profit and Loss Statement (Income Statement) summarizes revenues and expenses over a specific period to determine business profitability.
What is the default depreciation method used in Sage for fixed assets?
A) Straight-line method
B) Declining balance method
C) Sum-of-the-years method
D) Double declining balance method
Answer: A) Straight-line method
Explanation: The straight-line method is commonly used in Sage to allocate the cost of fixed assets evenly over their useful life.
In Sage, what is a “Supplier Ledger”?
A) A report listing all customer transactions
B) A record of all transactions with suppliers
C) A summary of all inventory purchases
D) A list of unpaid customer invoices
Answer: B) A record of all transactions with suppliers
Explanation: The Supplier Ledger (Accounts Payable Ledger) maintains a record of all purchases, payments, and balances owed to suppliers.
Which of the following is a key feature of Sage 50?
A) Cloud-based customer management
B) Real-time stock updates
C) Multi-user access for accounting and payroll
D) Website development
Answer: C) Multi-user access for accounting and payroll
Explanation: Sage 50 allows multiple users to access accounting and payroll features simultaneously, making it ideal for businesses that need collaborative accounting.
What is the purpose of “Audit Trail” in Sage?
A) To track deleted transactions
B) To generate financial statements
C) To analyze business performance
D) To forecast cash flow
Answer: A) To track deleted transactions
Explanation: The Audit Trail feature in Sage records all financial activities, including edits and deletions, to ensure accountability and compliance.
Which tax-related feature is available in Sage?
A) Automatic tax calculation and reporting
B) Manual tax filing only
C) Fixed sales tax rates for all businesses
D) No tax-related features
Answer: A) Automatic tax calculation and reporting
Explanation: Sage includes built-in tax calculation and reporting features to help businesses comply with tax regulations.
In Sage Payroll, what does “RTI” stand for?
A) Real-Time Information
B) Required Tax Input
C) Revenue and Tax Integration
D) Refundable Tax Invoice
Answer: A) Real-Time Information
Explanation: RTI (Real-Time Information) is a payroll reporting system that sends employee tax and earnings information to the tax authorities in real-time.
How does Sage handle multi-currency transactions?
A) Converts transactions automatically using exchange rates
B) Rejects all foreign currency transactions
C) Requires manual conversion before entry
D) Only supports domestic currency transactions
Answer: A) Converts transactions automatically using exchange rates
Explanation: Sage supports multi-currency transactions by using real-time exchange rates to convert amounts accurately.
Which Sage feature allows automatic payment of invoices?
A) Bank Feeds
B) Automated Invoice Processing
C) Auto-Billing
D) Direct Deposit
Answer: B) Automated Invoice Processing
Explanation: This feature helps businesses streamline payments by automatically processing supplier and customer invoices.
What is the purpose of Sage’s “Recurring Transactions” feature?
A) To delete duplicate invoices
B) To set up regular transactions automatically
C) To generate one-time reports
D) To reconcile bank statements
Answer: B) To set up regular transactions automatically
Explanation: The Recurring Transactions feature automates repeated transactions, such as rent payments or monthly invoices.
What is the benefit of using Sage’s “Cash Flow Forecasting” tool?
A) Predicts future cash flow trends
B) Eliminates the need for budgeting
C) Automatically approves loans
D) Tracks payroll expenses only
Answer: A) Predicts future cash flow trends
Explanation: The Cash Flow Forecasting tool helps businesses plan finances by predicting cash inflows and outflows.
What does the “Nominal Ledger” track in Sage?
A) Employee salaries
B) Fixed asset values
C) All financial transactions by account category
D) Supplier invoices only
Answer: C) All financial transactions by account category
Explanation: The Nominal Ledger in Sage organizes financial transactions into categories such as income, expenses, assets, and liabilities.
What action should be taken before closing a financial year in Sage?
A) Delete all transactions
B) Reconcile all bank accounts and review reports
C) Change the fiscal year manually
D) Restart the accounting system
Answer: B) Reconcile all bank accounts and review reports
Explanation: Before closing a financial year, businesses should ensure all transactions are recorded, bank accounts are reconciled, and financial reports are reviewed.
What does the Sage “Purchase Order Processing” feature do?
A) Tracks customer invoices
B) Helps businesses manage supplier purchases
C) Deletes supplier transactions
D) Calculates employee salaries
Answer: B) Helps businesses manage supplier purchases
Explanation: The Purchase Order Processing feature allows businesses to create, manage, and track supplier purchase orders.
What type of transactions are recorded under “Accounts Receivable” in Sage?
A) Customer invoices and payments
B) Supplier payments
C) Payroll deductions
D) Bank reconciliations
Answer: A) Customer invoices and payments
Explanation: Accounts Receivable tracks customer invoices and payments received from customers.
In Sage, how do you record an expense paid in cash?
A) Create a journal entry debiting cash
B) Record a supplier payment transaction
C) Use the “Bank Payment” option
D) Adjust the retained earnings account
Answer: C) Use the “Bank Payment” option
Explanation: The “Bank Payment” option allows users to record expenses paid directly from a business bank account.
What is a “Suspense Account” used for in Sage?
A) To hold transactions temporarily before they are classified
B) To track tax payments
C) To manage supplier payments
D) To delete unused accounts
Answer: A) To hold transactions temporarily before they are classified
Explanation: A Suspense Account is used when a transaction’s correct account is unknown and needs classification later.
Which Sage feature helps users import bank transactions?
A) Manual Journal Entry
B) Bank Feeds
C) Cash Flow Statement
D) Trial Balance
Answer: B) Bank Feeds
Explanation: The Bank Feeds feature automatically imports transactions from linked bank accounts, reducing manual data entry.
What is Sage “Cloud Accounting” best known for?
A) Allowing remote access to financial data
B) Limiting access to desktop users only
C) Storing transactions only on local computers
D) Preventing real-time collaboration
Answer: A) Allowing remote access to financial data
Explanation: Sage Cloud Accounting allows businesses to access financial data anytime, anywhere, improving flexibility and collaboration.
Sage Payroll Questions
1. Which of the following payroll taxes can Sage Payroll automatically calculate?
A) Income tax only
B) Social Security, Medicare, and Income Tax
C) Property tax
D) Business license fees
Answer: B) Social Security, Medicare, and Income Tax
Explanation: Sage Payroll automatically calculates federal and state payroll taxes, including Social Security, Medicare, and income tax, to ensure compliance with government regulations.
2. What is the purpose of the “RTI” (Real-Time Information) system in Sage Payroll?
A) To send payroll data to the tax authorities in real-time
B) To generate employee performance reports
C) To track invoices for suppliers
D) To adjust tax brackets for businesses
Answer: A) To send payroll data to the tax authorities in real-time
Explanation: RTI ensures that employee earnings, tax deductions, and national insurance contributions are reported to tax authorities immediately upon processing payroll.
3. How does Sage Payroll handle statutory sick pay (SSP)?
A) It calculates SSP automatically based on employee absence records
B) Employers must manually adjust sick pay
C) Sick pay is deducted from employee salaries
D) Sage Payroll does not support statutory sick pay
Answer: A) It calculates SSP automatically based on employee absence records
Explanation: Sage Payroll uses employee absence records to determine eligibility and automatically calculates statutory sick pay according to government guidelines.
4. Which report in Sage Payroll provides an overview of all wages, deductions, and taxes?
A) Profit and Loss Statement
B) Payroll Summary Report
C) Accounts Payable Ledger
D) Bank Reconciliation Report
Answer: B) Payroll Summary Report
Explanation: The Payroll Summary Report provides a detailed breakdown of wages paid, deductions taken, and taxes withheld for a given payroll period.
5. How does Sage Payroll handle direct deposit payments?
A) Generates paper checks only
B) Transfers salaries directly to employees’ bank accounts
C) Requires manual bank transactions
D) Only supports payments via third-party processors
Answer: B) Transfers salaries directly to employees’ bank accounts
Explanation: Sage Payroll allows businesses to process direct deposit payments, ensuring timely salary transfers without needing paper checks.
Sage 50 Questions
6. What is the primary function of Sage 50?
A) Inventory tracking only
B) Payroll processing only
C) Small business accounting and financial management
D) Website development
Answer: C) Small business accounting and financial management
Explanation: Sage 50 is an accounting software designed for small to medium-sized businesses, offering financial management, payroll, invoicing, and reporting tools.
7. Which feature in Sage 50 allows businesses to track expenses and income?
A) Nominal Ledger
B) Sales Tax Calculator
C) Cash Flow Forecasting
D) Direct Bank Feed
Answer: A) Nominal Ledger
Explanation: The Nominal Ledger (General Ledger) in Sage 50 records all financial transactions, tracking business expenses and income.
8. What happens when you “reconcile a bank account” in Sage 50?
A) The account is permanently closed
B) Bank transactions are matched with Sage records
C) A new account is created
D) All outstanding invoices are deleted
Answer: B) Bank transactions are matched with Sage records
Explanation: Bank reconciliation in Sage 50 ensures that recorded transactions match actual bank statements, identifying discrepancies and preventing financial errors.
9. How can users create recurring transactions in Sage 50?
A) By using the Recurring Entries feature
B) By manually entering transactions every month
C) By adjusting the trial balance
D) By exporting data to Excel
Answer: A) By using the Recurring Entries feature
Explanation: Sage 50 allows users to set up recurring transactions for expenses or invoices that repeat periodically, reducing manual data entry.
10. Which of the following is a key benefit of Sage 50’s inventory management feature?
A) Real-time stock tracking and automatic reorder alerts
B) Manual stock adjustments only
C) Limited to a single warehouse
D) No tracking of inventory costs
Answer: A) Real-time stock tracking and automatic reorder alerts
Explanation: Sage 50’s inventory management system helps businesses track stock levels, reorder products automatically, and manage costs efficiently.
Sage 100 Questions
11. What type of businesses typically use Sage 100?
A) Large corporations only
B) Manufacturing, distribution, and mid-sized businesses
C) Sole proprietors only
D) Non-profit organizations exclusively
Answer: B) Manufacturing, distribution, and mid-sized businesses
Explanation: Sage 100 is a robust ERP (Enterprise Resource Planning) solution for businesses needing advanced accounting, inventory, and manufacturing management tools.
12. What is the purpose of “Bill of Materials” in Sage 100?
A) Tracks employee work schedules
B) Manages raw materials and production costs
C) Calculates supplier invoices
D) Processes payroll transactions
Answer: B) Manages raw materials and production costs
Explanation: The Bill of Materials (BOM) feature in Sage 100 helps manufacturers track raw materials, assembly processes, and costs.
13. How does Sage 100 help with job costing?
A) Tracks project expenses, labor costs, and materials used
B) Creates job postings for hiring
C) Processes job applications
D) Manages tax filings for businesses
Answer: A) Tracks project expenses, labor costs, and materials used
Explanation: Sage 100’s job costing feature allows businesses to allocate costs to specific projects, ensuring accurate budgeting and profitability analysis.
14. Which module in Sage 100 is used for managing supplier payments?
A) Accounts Receivable
B) Accounts Payable
C) General Ledger
D) Fixed Assets
Answer: B) Accounts Payable
Explanation: The Accounts Payable module tracks supplier invoices, processes payments, and helps manage vendor relationships.
15. What security feature does Sage 100 provide to protect financial data?
A) Multi-user access control and audit trails
B) Open-source code for customization
C) Public data sharing
D) Unlimited access for all employees
Answer: A) Multi-user access control and audit trails
Explanation: Sage 100 includes role-based access control, audit trails, and encryption to protect sensitive financial data.
Additional Mixed Questions
16. In Sage, what is the function of a “contra entry”?
A) Records a transfer between two bank accounts
B) Adjusts tax liabilities
C) Deletes old transactions
D) Cancels an employee salary
Answer: A) Records a transfer between two bank accounts
Explanation: A contra entry records transactions where funds move between two accounts, ensuring no net effect on total cash balance.
17. What does Sage’s “Cloud Hosting” feature allow?
A) Secure access to Sage software from anywhere
B) Installation on a single local computer only
C) Offline-only transactions
D) Manual updates every month
Answer: A) Secure access to Sage software from anywhere
Explanation: Cloud hosting enables businesses to access Sage applications from any location, enhancing flexibility and collaboration.
1. What does Sage Payroll’s Auto Enrolment feature help with?
A) Submitting VAT returns
B) Enrolling employees into workplace pension schemes
C) Processing supplier payments
D) Managing employee bonuses
Answer: B) Enrolling employees into workplace pension schemes
Explanation: Sage Payroll’s Auto Enrolment feature automatically enrolls eligible employees into a pension scheme and manages contributions according to legal requirements.
2. Which report in Sage Payroll provides a breakdown of employee net pay?
A) Payslip Summary Report
B) Bank Reconciliation Report
C) Inventory Valuation Report
D) Sales Tax Report
Answer: A) Payslip Summary Report
Explanation: The Payslip Summary Report provides details on employee gross pay, deductions, and net pay for payroll processing.
3. What type of payroll frequency does Sage Payroll support?
A) Weekly
B) Monthly
C) Bi-weekly
D) All of the above
Answer: D) All of the above
Explanation: Sage Payroll allows businesses to process payroll on different schedules, including weekly, bi-weekly, and monthly, depending on company policies.
4. In Sage Payroll, what is the purpose of the “P32 Employer Payment Record”?
A) Tracks employee work hours
B) Summarizes employer tax liabilities and payments
C) Lists outstanding invoices
D) Provides inventory stock levels
Answer: B) Summarizes employer tax liabilities and payments
Explanation: The P32 Employer Payment Record in Sage Payroll helps businesses track their total employer liabilities for tax and National Insurance contributions.
5. What happens when you “rollback” an employee’s pay in Sage Payroll?
A) It deletes the employee’s record
B) It reverses the payroll for that employee only
C) It cancels the entire payroll for all employees
D) It closes the payroll year
Answer: B) It reverses the payroll for that employee only
Explanation: The rollback feature allows users to undo payroll calculations for a single employee without affecting others.
Sage 50 Questions
6. How does Sage 50 handle unpaid customer invoices?
A) By marking them as bad debts
B) By automatically writing them off
C) By tracking them in Accounts Receivable
D) By deleting them from the system
Answer: C) By tracking them in Accounts Receivable
Explanation: Sage 50 records unpaid customer invoices in the Accounts Receivable module, allowing businesses to track outstanding balances.
7. What is the function of “Recurring Invoices” in Sage 50?
A) Generates invoices automatically at set intervals
B) Deletes duplicate invoices
C) Automatically applies discounts
D) Consolidates multiple invoices into one
Answer: A) Generates invoices automatically at set intervals
Explanation: The Recurring Invoices feature helps automate billing for repeat customers, reducing manual work.
8. In Sage 50, what is the purpose of the “Audit Trail Report”?
A) Tracks all user activity and changes made in the system
B) Generates financial statements
C) Deletes duplicate transactions
D) Analyzes payroll trends
Answer: A) Tracks all user activity and changes made in the system
Explanation: The Audit Trail Report helps businesses maintain transparency and accountability by recording all financial activities and user actions.
9. What feature in Sage 50 allows users to link bank transactions directly to their accounts?
A) Direct Bank Feeds
B) General Ledger Entries
C) Invoice Matching
D) Payroll Integration
Answer: A) Direct Bank Feeds
Explanation: The Direct Bank Feeds feature allows users to sync their bank transactions with Sage 50, reducing manual data entry.
10. What is the benefit of using Sage 50’s “Departmental Analysis” feature?
A) Tracks financial performance by department
B) Consolidates financial reports for multiple businesses
C) Automates inventory restocking
D) Merges duplicate transactions
Answer: A) Tracks financial performance by department
Explanation: Departmental Analysis in Sage 50 enables businesses to analyze income and expenses by department for better financial oversight.
Sage 100 Questions
11. What type of accounting method does Sage 100 primarily use?
A) Cash basis accounting
B) Accrual basis accounting
C) Single-entry accounting
D) None of the above
Answer: B) Accrual basis accounting
Explanation: Sage 100 primarily uses the accrual method, recording revenues and expenses when they are earned or incurred rather than when cash is received or paid.
12. Which module in Sage 100 manages customer invoices and payments?
A) General Ledger
B) Accounts Receivable
C) Inventory Management
D) Fixed Assets
Answer: B) Accounts Receivable
Explanation: The Accounts Receivable module tracks customer invoices, payments, and outstanding balances.
13. What is the purpose of the “Fixed Assets” module in Sage 100?
A) Tracks company-owned assets and depreciation
B) Manages supplier invoices
C) Processes employee payroll
D) Generates tax reports
Answer: A) Tracks company-owned assets and depreciation
Explanation: The Fixed Assets module helps businesses track their equipment, property, and other assets while managing depreciation.
14. Which feature in Sage 100 helps businesses manage inventory efficiently?
A) Warehouse Management
B) Stock Valuation Reports
C) Bill of Materials
D) All of the above
Answer: D) All of the above
Explanation: Sage 100 provides multiple inventory management tools, including warehouse tracking, stock valuation, and Bill of Materials.
15. How does Sage 100 handle purchase orders?
A) Allows users to create and track purchase orders
B) Deletes orders after they are fulfilled
C) Sends orders directly to suppliers without tracking
D) Only supports manual purchase entries
Answer: A) Allows users to create and track purchase orders
Explanation: Sage 100 enables businesses to create, monitor, and manage purchase orders to ensure accurate procurement and supplier management.
Additional Mixed Questions
16. What is the main advantage of using Sage Cloud-based solutions?
A) Access data from any device
B) No software updates required
C) Works only on desktop computers
D) Requires no internet connection
Answer: A) Access data from any device
Explanation: Cloud-based Sage solutions allow users to access financial data remotely, improving flexibility and collaboration.
17. How does Sage software handle VAT calculations?
A) Automatically calculates VAT based on predefined tax rates
B) Requires manual calculations
C) Only applies VAT for large businesses
D) Excludes VAT from reports
Answer: A) Automatically calculates VAT based on predefined tax rates
Explanation: Sage software applies the correct VAT rates to transactions, ensuring compliance with tax regulations.
18. What happens if a Sage user enters a duplicate invoice?
A) Sage alerts the user and prevents duplication
B) The duplicate invoice is ignored
C) The original invoice is deleted
D) The system automatically pays the duplicate invoice
Answer: A) Sage alerts the user and prevents duplication
Explanation: Sage has built-in validation to prevent duplicate invoice entries and ensure accurate financial records.
Sage Payroll Questions
1. What does the “RTI (Real-Time Information) submission” feature in Sage Payroll do?
A) Generates financial statements
B) Sends employee payroll data to tax authorities in real time
C) Calculates pension contributions
D) Processes supplier payments
Answer: B) Sends employee payroll data to tax authorities in real time
Explanation: RTI is a UK payroll requirement that ensures payroll data is submitted to HMRC each time employees are paid.
2. What is the purpose of the “Year-End Process” in Sage Payroll?
A) To reset employee records and generate annual payroll reports
B) To process payroll for the next year in advance
C) To delete old payroll records
D) To issue final paychecks for terminated employees
Answer: A) To reset employee records and generate annual payroll reports
Explanation: The Year-End Process ensures compliance by closing the current payroll year and preparing records for the new year.
3. How can an employer correct payroll errors in Sage Payroll after finalizing a pay run?
A) By deleting the entire payroll history
B) By using the “Rollback” function
C) By manually adjusting tax rates
D) By requesting an external audit
Answer: B) By using the “Rollback” function
Explanation: The rollback function allows employers to correct payroll mistakes for individual employees without affecting the entire payroll.
4. Which type of payment method is NOT directly supported by Sage Payroll?
A) Bank Transfer
B) Cryptocurrency
C) Check Payment
D) Direct Deposit
Answer: B) Cryptocurrency
Explanation: Sage Payroll supports traditional payment methods like bank transfers and checks but does not natively process cryptocurrency payments.
5. What is the purpose of the “Statutory Sick Pay” feature in Sage Payroll?
A) Automatically calculates sick pay based on government regulations
B) Manages unpaid leave requests
C) Reduces payroll tax liability
D) Tracks employee work hours
Answer: A) Automatically calculates sick pay based on government regulations
Explanation: Sage Payroll includes statutory sick pay calculations to ensure compliance with employment laws.
Sage 50 Questions
6. In Sage 50, what is the “Bank Reconciliation” feature used for?
A) To match transactions recorded in Sage 50 with actual bank statements
B) To generate invoices for customers
C) To process payroll tax payments
D) To delete duplicate transactions
Answer: A) To match transactions recorded in Sage 50 with actual bank statements
Explanation: The bank reconciliation process ensures that accounting records align with bank statements, preventing discrepancies.
7. What does Sage 50’s “Multi-Currency” feature allow businesses to do?
A) Process transactions in multiple currencies
B) Convert all transactions into a single currency
C) Automatically deduct taxes for foreign purchases
D) Disable transactions in non-local currencies
Answer: A) Process transactions in multiple currencies
Explanation: Sage 50 allows businesses to track and convert transactions in different currencies, useful for international trade.
8. What happens if you void a check in Sage 50?
A) The check is deleted permanently
B) The check is marked as void but remains in records
C) A replacement check is automatically issued
D) The entire payroll history is affected
Answer: B) The check is marked as void but remains in records
Explanation: Voiding a check ensures that records remain accurate while preventing its use.
9. How does Sage 50 handle “Write-Offs” for bad debts?
A) Allows users to mark invoices as uncollectible
B) Deletes outstanding invoices from records
C) Issues automatic refunds to customers
D) Converts unpaid invoices into payroll deductions
Answer: A) Allows users to mark invoices as uncollectible
Explanation: Sage 50 helps businesses manage bad debts by writing off unpaid invoices while keeping financial records accurate.
10. What is the “Recurring Transactions” feature in Sage 50 used for?
A) To schedule automatic entries for repetitive transactions
B) To duplicate transactions randomly
C) To delete outdated transactions
D) To adjust inventory stock levels
Answer: A) To schedule automatic entries for repetitive transactions
Explanation: This feature helps automate recurring expenses or income, reducing manual data entry.
Sage 100 Questions
11. What module in Sage 100 is primarily used for managing vendor payments?
A) Accounts Payable
B) Accounts Receivable
C) General Ledger
D) Fixed Assets
Answer: A) Accounts Payable
Explanation: The Accounts Payable module tracks vendor invoices and payments.
12. In Sage 100, what does the “Inventory Valuation” report show?
A) The current value of stock based on cost and quantity
B) The total sales revenue for a period
C) The number of customers who placed orders
D) The amount of unpaid invoices
Answer: A) The current value of stock based on cost and quantity
Explanation: This report helps businesses track inventory value using methods like FIFO, LIFO, or weighted average.
13. What is the purpose of Sage 100’s “Bill of Materials” (BOM) feature?
A) To track components required for manufacturing products
B) To manage employee payroll
C) To generate tax reports
D) To track customer returns
Answer: A) To track components required for manufacturing products
Explanation: BOM helps manufacturers manage raw materials and assembly processes.
14. How does Sage 100 handle partial purchase order receipts?
A) It allows users to receive partial shipments and update stock levels accordingly
B) It cancels the entire purchase order
C) It processes only full orders
D) It deletes the order if not fully received
Answer: A) It allows users to receive partial shipments and update stock levels accordingly
Explanation: Businesses can receive inventory in stages without affecting financial records.
15. What is a key benefit of using the Sage 100 “Job Cost” module?
A) Tracks labor and material costs for specific projects
B) Automates payroll processing
C) Issues customer invoices
D) Consolidates duplicate transactions
Answer: A) Tracks labor and material costs for specific projects
Explanation: The Job Cost module helps businesses track project expenses and profitability.
Additional Mixed Questions
16. How does Sage software handle duplicate transactions?
A) Flags them for review before processing
B) Automatically deletes one copy
C) Ignores duplicates
D) Charges penalties
Answer: A) Flags them for review before processing
Explanation: Sage ensures transaction accuracy by alerting users to possible duplicates.
17. What is the “1099 Reporting” feature in Sage 50 and Sage 100 used for?
A) Reporting payments made to independent contractors
B) Filing employee payroll taxes
C) Tracking inventory
D) Processing loan applications
Answer: A) Reporting payments made to independent contractors
Explanation: Businesses use 1099 reporting to comply with tax laws when paying freelancers.
18. Which security feature in Sage software helps prevent unauthorized access?
A) Role-Based User Permissions
B) Auto-Logout after 5 minutes
C) Disabling password protection
D) Automatic data deletion
Answer: A) Role-Based User Permissions
Explanation: Role-based permissions allow businesses to control access levels for different users.
Sage Payroll Questions
1. What report in Sage Payroll provides a summary of an employee’s taxable earnings and deductions?
A) Payroll Register Report
B) Bank Reconciliation Report
C) Inventory Valuation Report
D) Profit and Loss Report
Answer: A) Payroll Register Report
Explanation: The Payroll Register Report provides details on employee wages, deductions, and tax amounts processed in a pay period.
2. How does Sage Payroll handle payroll taxes for multiple states?
A) It does not support multiple-state taxation
B) It allows tax calculations based on the employee’s work and residence locations
C) It ignores taxes outside the primary business state
D) It requires manual tax entry for each state
Answer: B) It allows tax calculations based on the employee’s work and residence locations
Explanation: Sage Payroll automatically calculates multi-state taxes based on employee location settings.
3. What is the purpose of the “Pension Auto Enrollment” feature in Sage Payroll?
A) Automatically enrolls eligible employees into a workplace pension scheme
B) Issues employee retirement plans automatically
C) Deducts wages for retirement savings without employee consent
D) Generates tax-free bonuses for employees
Answer: A) Automatically enrolls eligible employees into a workplace pension scheme
Explanation: This feature ensures compliance with pension regulations by enrolling employees who meet the criteria.
4. Which payroll cycle is NOT supported by Sage Payroll?
A) Weekly
B) Bi-weekly
C) Monthly
D) Hourly
Answer: D) Hourly
Explanation: Payroll cycles are typically based on pay periods (weekly, bi-weekly, or monthly), not on an hourly basis.
5. What does the “Payroll Journal” feature in Sage Payroll do?
A) Records payroll transactions for accounting purposes
B) Processes employee tax refunds
C) Issues bonuses for overtime work
D) Automatically deposits employee salaries
Answer: A) Records payroll transactions for accounting purposes
Explanation: The Payroll Journal helps integrate payroll expenses into financial reports.
Sage 50 Questions
6. What does Sage 50’s “Audit Trail” feature do?
A) Tracks and records every financial transaction for security and compliance
B) Deletes old transactions to free up space
C) Automatically corrects errors in accounting records
D) Generates marketing reports
Answer: A) Tracks and records every financial transaction for security and compliance
Explanation: The Audit Trail feature ensures transparency and helps detect fraudulent activities.
7. How does Sage 50 handle “Bank Feed Integration”?
A) Allows automatic syncing of transactions from bank accounts
B) Blocks access to financial institutions
C) Requires manual entry of all transactions
D) Converts bank statements into invoices
Answer: A) Allows automatic syncing of transactions from bank accounts
Explanation: Bank Feed Integration ensures that transactions are imported automatically to reduce manual data entry.
8. What is the purpose of the “Undeposited Funds” account in Sage 50?
A) Temporarily holds received payments before they are deposited into a bank
B) Stores cash transactions permanently
C) Automatically transfers funds to vendor accounts
D) Manages payroll liabilities
Answer: A) Temporarily holds received payments before they are deposited into a bank
Explanation: The Undeposited Funds account helps track payments that are received but not yet deposited.
9. How can users create a “Credit Memo” in Sage 50?
A) By applying a negative amount on an invoice
B) By issuing a refund check
C) By deleting an invoice
D) By changing customer payment terms
Answer: A) By applying a negative amount on an invoice
Explanation: A Credit Memo reduces the amount a customer owes for returned goods or service adjustments.
10. What is the function of Sage 50’s “Recurring Invoices” feature?
A) Automates the creation of invoices for repeat transactions
B) Deletes invoices after processing
C) Sends invoices to random customers
D) Prevents customers from paying early
Answer: A) Automates the creation of invoices for repeat transactions
Explanation: Recurring invoices help businesses streamline billing for customers who require regular services.
Sage 100 Questions
11. How does Sage 100 handle “Sales Order Processing”?
A) Converts sales orders into invoices and manages fulfillment
B) Deletes customer orders automatically
C) Issues refunds instead of processing orders
D) Generates financial statements
Answer: A) Converts sales orders into invoices and manages fulfillment
Explanation: This feature tracks sales orders and ensures timely delivery of goods or services.
12. What is the primary function of Sage 100’s “Fixed Assets” module?
A) Tracks company-owned assets, including depreciation calculations
B) Issues payroll checks
C) Generates tax forms
D) Processes sales transactions
Answer: A) Tracks company-owned assets, including depreciation calculations
Explanation: The Fixed Assets module helps businesses manage long-term assets and their depreciation.
13. How does Sage 100’s “Lot Tracking” feature benefit businesses?
A) Allows tracking of product batches for quality control and recalls
B) Removes old inventory automatically
C) Generates bank transactions
D) Deletes expired products
Answer: A) Allows tracking of product batches for quality control and recalls
Explanation: Lot tracking helps businesses maintain compliance and product quality.
14. What does Sage 100’s “Bill of Materials” (BOM) module track?
A) Components required for manufacturing products
B) Employee payroll details
C) Tax liabilities
D) Customer invoices
Answer: A) Components required for manufacturing products
Explanation: BOM helps businesses manage production planning and inventory requirements.
15. How does Sage 100 handle “Job Costing”?
A) Tracks expenses related to specific projects for budgeting and profitability analysis
B) Processes bank loans
C) Issues tax deductions
D) Automatically generates revenue reports
Answer: A) Tracks expenses related to specific projects for budgeting and profitability analysis
Explanation: The Job Costing feature helps businesses determine the true cost of projects.
Additional Mixed Questions
16. What is Sage software’s “Data Import” feature used for?
A) Allows businesses to upload data from external sources like Excel
B) Deletes previous year’s records
C) Generates automatic financial reports
D) Blocks duplicate entries
Answer: A) Allows businesses to upload data from external sources like Excel
Explanation: Sage’s data import function helps users migrate financial records efficiently.
17. What security measure in Sage software helps prevent unauthorized access?
A) Role-Based Access Control
B) Single Password for All Users
C) Auto-Login Without Authentication
D) Unlimited Access to All Users
Answer: A) Role-Based Access Control
Explanation: Role-based permissions ensure that employees only access data relevant to their role.
18. What is the “Cash Flow Management” tool in Sage software used for?
A) Tracks inflows and outflows of money to ensure financial stability
B) Generates customer invoices
C) Deletes overdue payments
D) Transfers funds automatically between accounts
Answer: A) Tracks inflows and outflows of money to ensure financial stability
Explanation: Cash Flow Management helps businesses maintain a positive financial position.
Case Study 1: Sage Payroll – Multi-State Taxation
Scenario:
ABC Corp operates in California, Texas, and New York. An employee, Sarah, lives in New Jersey but works remotely for the New York office. Sarah’s paycheck is consistently miscalculated, and she is overpaying state taxes.
Question:
As the payroll manager, how should you configure Sage Payroll to ensure Sarah is taxed correctly?
Solution:
Verify Work & Residence Locations:
Set Sarah’s residence tax settings for New Jersey.
Set her work tax settings for New York (since she works remotely but for the NY office).
Multi-State Taxation Compliance:
Sage Payroll will automatically calculate taxes based on the work and residence states.
Ensure that reciprocal agreements (if any) between NJ and NY are applied.
Payroll Adjustments:
Process a corrective payroll entry to refund any excess tax Sarah paid.
Key Takeaway:
Always configure state and local tax settings accurately for remote workers to avoid tax discrepancies.
Case Study 2: Sage 50 – Handling Customer Refunds
Scenario:
A customer, John’s Auto Parts, placed a $5,000 order with your company using Sage 50. Due to a pricing mistake, they overpaid by $500. They request a refund or credit memo for the overpayment.
Question:
What steps should you take in Sage 50 to process either a refund or apply a credit memo?
Solution:
Processing a Refund:
Navigate to Banking > Write Checks in Sage 50.
Select John’s Auto Parts as the payee.
Enter $500 as the refund amount and reference the overpayment invoice.
Save and post the transaction.
Applying a Credit Memo Instead:
Go to Customers & Sales > Credit Memos in Sage 50.
Select the customer account and apply the $500 credit to their next order.
Key Takeaway:
Refunds and credit memos in Sage 50 ensure accurate customer balances while maintaining a correct general ledger.
Case Study 3: Sage 100 – Managing Inventory Shortages
Scenario:
Your company, TechZone Inc., sells computer hardware and manages inventory using Sage 100. A customer orders 50 graphics cards, but the system shows only 30 in stock.
Question:
How should you handle this order efficiently in Sage 100?
Solution:
Check Available Inventory:
Navigate to Inventory Management > Item Inquiry in Sage 100.
Verify if the remaining 20 units are expected soon (backorders).
Partial Shipment Option:
Convert the sales order into a partial shipment to send 30 units now.
Sage 100 will automatically create a backorder for the remaining 20 units.
Alternative Solutions:
If backorders are unavailable, consider a drop shipment (direct shipment from supplier).
Use inter-location transfers if another warehouse has stock.
Key Takeaway:
Sage 100’s inventory management allows flexibility in handling stock shortages without canceling orders.
Case Study 4: Sage Payroll – Bonus Taxation
Scenario:
XYZ Healthcare wants to pay a $2,000 year-end bonus to employees using Sage Payroll. However, some employees are confused about how much tax will be withheld.
Question:
What are the best ways to process bonuses in Sage Payroll, and how is tax calculated?
Solution:
Choose Bonus Taxation Method:
Aggregate Method: Taxes are based on regular tax brackets (lower withholding).
Flat Rate Method: IRS flat rate of 22% federal tax (plus state/local taxes).
Processing in Sage Payroll:
Go to Payroll > Earnings and select Bonus Pay.
Apply either the flat tax rate or aggregate method based on company policy.
Run payroll preview to show employees estimated deductions.
Key Takeaway:
Understanding bonus taxation options ensures proper payroll compliance and employee transparency.
Case Study 5: Sage 50 – Bank Reconciliation Issue
Scenario:
Your company, GreenTech Solutions, reconciles the bank account in Sage 50 every month. In January, the bank statement shows $75,000, but Sage 50 shows $74,200 after reconciliation.
Question:
What steps should you take to identify and resolve this $800 discrepancy?
Solution:
Check for Outstanding Transactions:
Go to Banking > Reconciliation in Sage 50.
Look for any outstanding checks or deposits that haven’t cleared yet.
Verify Manual Entry Errors:
Compare Sage 50 records with the actual bank statement.
Look for duplicate entries or incorrect transaction amounts.
Adjust if Necessary:
If an error is found, edit or void the incorrect transaction.
If a missing entry exists, add it and re-run reconciliation.
Key Takeaway:
Sage 50’s bank reconciliation feature helps businesses track cash flow and resolve discrepancies quickly.
Case Study 6: Sage 100 – Job Costing for a Construction Project
Scenario:
Your construction company, BuildRight Inc., is working on a $500,000 office renovation project. You need to track labor, materials, and subcontractor costs using Sage 100 Job Costing.
Question:
How can Sage 100 help track project profitability and cost control?
Solution:
Set Up Job Costing in Sage 100:
Navigate to Modules > Job Costing > Job Maintenance.
Create a new job record for the office renovation project.
Assign Cost Categories:
Labor costs
Materials (wood, steel, etc.)
Subcontractor payments
Track Costs in Real-Time:
Enter timecards and vendor invoices directly into Sage 100.
Generate Job Profitability Reports to compare estimated vs. actual costs.
Key Takeaway:
Sage 100’s Job Costing Module helps companies maintain budget control and maximize profit margins.