QBO Tax Setup and Compliance

Question 1

Where do you configure automated sales tax in QuickBooks Online?

Accepted Answer

Taxes menu > Sales Tax

Answer

Sales tax is configured and managed from the Taxes menu under the Sales Tax section in QBO.

Question 2

What two pieces of information does QBO's automated sales tax engine use to calculate tax on a transaction?

Accepted Answer

Customer's shipping address and the taxability of the product or service

Answer

QBO combines the customer's location and the item's taxability status to determine the correct sales tax rate.

Question 3

What does marking a product or service as 'taxable' tell QBO to do?

Accepted Answer

Apply the applicable sales tax rate when that item is sold to taxable customers

Answer

Marking a product as taxable instructs QBO to calculate and add sales tax when that item is sold.

Question 4

Which QBO feature provides a filing workflow to calculate and prepare sales tax returns?

Accepted Answer

Sales Tax Center filing workflow

Answer

The Sales Tax Center includes a filing workflow that calculates tax owed and guides you through preparing returns.

Question 5

How do you mark a customer as sales tax-exempt in QBO?

Accepted Answer

Set their tax status to Exempt in their customer profile

Answer

Setting the Tax info field to Exempt in the customer's profile prevents QBO from calculating sales tax on that customer's transactions.

(QBO) Certified QuickBooks ProAdvisor Practice Test