Payroll Setup and Management Flashcards
7 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 7 Payroll Setup and Management flashcards as text
A client needs to record a payroll run that was processed outside of QBO (e.g., with a third-party provider). Which feature should be used?
Answer: Manual Paycheck under Payroll
The Manual Paycheck (or 'Record as paid outside QBO') option lets you enter payroll data for tax tracking without cutting a new check.
What is the Social Security wage base limit relevant for when processing payroll in QBO?
Answer: It sets the maximum annual wages subject to the 6.2% Social Security tax
Social Security tax (6.2% employee + 6.2% employer) only applies to wages up to the annual wage base limit, which QBO tracks automatically.
In QBO Payroll, which action correctly handles a returned direct deposit due to an incorrect bank account number?
Answer: Reverse the direct deposit and reprocess with the correct account
The reverse direct deposit workflow in QBO pulls back the failed transaction so you can reprocess payroll with the corrected bank details.
A salaried exempt employee worked only half a month due to starting mid-period. How should their first paycheck be calculated in QBO Payroll?
Answer: Use the prorated salary option or manually enter the correct partial-period amount
QBO Payroll allows editing the salary amount on the paycheck to reflect a prorated amount for a partial first period.
Which QBO Payroll report is most useful for verifying that payroll tax deposits match the amounts reported on Form 941?
Answer: Tax Liability Report
The Tax Liability Report shows employer and employee tax amounts by type and period, making it ideal for reconciling with Form 941.
What is 'Contractor Payments' within QBO Payroll used for?
Answer: Paying and tracking 1099 independent contractors and generating 1099-NEC forms
The Contractor Payments feature in QBO Payroll manages payments to 1099 contractors and automates 1099-NEC form preparation at year-end.
When setting up a company-paid health insurance contribution in QBO Payroll, what account type should it map to in the Chart of Accounts?
Answer: Employee Benefits Expense (an expense account)
Company-paid benefit contributions are recorded as an expense, typically under an Employee Benefits Expense account.