Tax Setup and Compliance Flashcards
6 cards from real QBO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Tax Setup and Compliance flashcards as text
Which QBO report shows how much sales tax was collected and is owed to each tax agency for a given period?
Answer: Sales Tax Liability Report
The Sales Tax Liability Report itemizes tax collected by agency and period, showing what is currently owed.
What does the 'Record Tax Payment' function in QBO's Sales Tax Center accomplish?
Answer: Records remittance to the tax agency and clears the sales tax liability
Recording a tax payment creates a transaction that reduces the sales tax liability and marks the amount as paid to the agency.
When should a ProAdvisor set up multiple sales tax rate components for a single location in QBO?
Answer: When separate state, county, and city tax rates each apply to transactions
Many jurisdictions layer state, county, and city taxes, requiring separate components to calculate the correct combined rate.
What does QBO's 'Prepare Return' workflow in the Sales Tax Center produce?
Answer: A calculated summary of tax due for the period to use when filing
The Prepare Return workflow calculates total tax collected and owed, generating a summary you use when submitting the return to the agency.
In QBO, which transaction type records money paid directly back to a customer when they return goods?
Answer: Refund Receipt
A Refund Receipt records a direct payment back to the customer and reduces both revenue and the bank balance.
What does a 'tax overdue' indicator in QBO's Sales Tax Center mean?
Answer: A filing period has passed without a recorded tax payment for that agency
A 'tax overdue' status flags that the filing deadline for that agency's period has passed with no recorded payment.