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
Where do you configure automated sales tax in QuickBooks Online?
Answer: Taxes menu > Sales Tax
Sales tax is configured and managed from the Taxes menu under the Sales Tax section in QBO.
What two pieces of information does QBO's automated sales tax engine use to calculate tax on a transaction?
Answer: Customer's shipping address and the taxability of the product or service
QBO combines the customer's location and the item's taxability status to determine the correct sales tax rate.
What does marking a product or service as 'taxable' tell QBO to do?
Answer: Apply the applicable sales tax rate when that item is sold to taxable customers
Marking a product as taxable instructs QBO to calculate and add sales tax when that item is sold.
Which QBO feature provides a filing workflow to calculate and prepare sales tax returns?
Answer: Sales Tax Center filing workflow
The Sales Tax Center includes a filing workflow that calculates tax owed and guides you through preparing returns.
How do you mark a customer as sales tax-exempt in QBO?
Answer: Set their tax status to Exempt in their customer profile
Setting the Tax info field to Exempt in the customer's profile prevents QBO from calculating sales tax on that customer's transactions.
In QBO's sales tax setup, what does a 'tax agency' represent?
Answer: The government entity to which collected sales tax is remitted
A tax agency in QBO represents the state or local taxing authority that receives your collected sales tax.