So sorry for the long post, I need to figure out what I'm doing wrong!

Well, the loudest, hardest to please, most complaining whiney woman at my church informed me today that the cake I GAVE her last week was "dry as toast" and she threw it out!!!!! (it was just a cake I baked to practice the upside-down icing technique, I decided to give it away after I baked it and she said she'd take it)...Now, in her defense, I did tell her when she picked it up that the edges could have been dry because after I leveled it, I took a long time reading how to do the upside-down icing...so it was sitting there a while, leveled, before I started icing it. Anyway, I've been baking cakes about 7 months and have never been properly taught about baking, so I do have some questions:

1. I leveled the cake right out of the oven before it was out of the pan. Pretty sure this was mistake #1? Let it cool completely first, right?

2. After icing the cake, it sat out overnight without a cover (My cake dome is at my parent's house)...so the next day, the outer layer of icing was probably hard. Would this contribute?

3. How do you prevent icing colors from bleeding onto each other while also keeping the icing fresh? Several cakes ago, I finished a cake and boxed & taped it up. The next morning the colors bled together. Someone on this forum said to leave the cake out so the icing can breathe (using buttercream) - but if I leave it out, uncovered, the icing gets hard and crusty! What do I do?

Thank you if you made it this far! I really appreciate your help!

1. I leveled the cake right out of the oven before it was out of the pan. Pretty sure this was mistake #1? Let it cool completely first, right?
No that should not have contributed to dryness at all. I have done that w/many cakes.

2. After icing the cake, it sat out overnight without a cover ...so the next day, the outer layer of icing was probably hard. Would this contribute?
NO, once the cake is iced it is sealed and cannot dry out - expecially just overnight.

3. How do you prevent icing colors from bleeding onto each other while also keeping the icing fresh?.......
finished a cake and boxed & taped it up. The next morning the colors bled together. Someone on this forum said to leave the cake out so the icing can breathe (using buttercream) - but if I leave it out, uncovered, the icing gets hard and crusty! What do I do?

If your icing hardens overnight (or less) then you are using the wrong icing recipe &/or the brand of gel colors used. Colors bleed when using freshly colored icing. Make your colors ahead if possible. 99% of my cakes are b'cream and there is no color bleeding. Maybe it's your recipe. It might be too wet.
You mention 'sealing' the boxed up cake.......why was that necessary? Yes, covered/boxed up cakes need to 'breath' - not be airtight.

THANK YOU! I feel 100% better!

In regards to the colors bleeding, I bet my icing is slightly too wet. I live in Mississippi and probably need to add just a little more ps. I'm using Americolor gel for my colors, but I don't mix the colors ahead of time. I didn't know I need to do that. Also, I really don't know why I taped up the box so tightly! It was the 2nd cake I did, my dad's birthday cake, I guess I taped it because that's what I've seen other bakeries do!

Also, should I store my cake in the fridge once finished? If it's not necessary why do bakeries do it?

Again, thank you so much for the tips!!!!

Refrigeration of cakes is for perishable fillings and for stability when transporting. If aren't worried about these things, you don't need to refrigerate.

Too dry, huh? I would have told the lady that you appreciated her feedback, but there was not need to throw away the cake. She should have given it back to you so you could evaluate the dryness.

I do not think anything you did has contributed to dryness (aside from, may be, the recipe not containing much liquid?). I noticed, however, that for me freezing cake layers helps keep them moist. I started the "freezing method" with my banana cakes, and then I just decided to freeze all other ones too. It is especially helpful if you bake late in the day and your cakes need time to "settle" overnight before you decorated. So my steps are: bake-cool-freeze-take out and level bu cutting off the tops - fill and crumb coat - refrigerate - take out and ice - refrigerate - and only then decorate. I found this works the best for me, but then again, NYC is a very humid place and I am right by the ocean, and so much refrigeration may not be necessary elsewhere.

You could also trying using a syrup in between layers (just a combo of sugar and water) to keep them moist, prior to adding the filling.

The addition of meringue powder to your icing can prevent colors from bleeding.

A dry cake has been overbaked. That is about all that will make a cake dry (once it is iced). Even using simple syrup to try to rehydrate a dry cake won't help much.
The OP needs to remember *everyone's* tastes are different. what you like I don't; have you eaten monkey or rattlesnake? LOL I don't! like sweet tea; but love plain, regular iced tea. So what the lady called dry might not have actually been dry. It's really hard to say.
The best thing is to be careful baking and not let it sit out UNcovered more than 10-15 minutes. Cover it w/plastic wrap/bag or icing to hold in the moisture that naturally is in a cake.