QBO Payroll Setup and Management 2

Question 1

When setting up a new employee in QuickBooks Online Payroll, which section is used to enter federal and state withholding allowances?

Accepted Answer

Withholding

Answer

The Withholding section of the employee profile stores federal and state W-4 information used to calculate tax withholding.

Question 2

A company wants to pay employees a non-taxable car allowance. What is the correct way to set this up in QBO Payroll?

Accepted Answer

Add a non-taxable reimbursement pay type

Answer

A non-taxable reimbursement pay type is used for expenses like car allowances that do not constitute taxable wages.

Question 3

What happens to payroll taxes when a payroll run is voided in QuickBooks Online Payroll?

Accepted Answer

Tax liabilities are reversed in the system

Answer

Voiding a payroll run in QBO reverses the associated tax liabilities and wage amounts in the books.

Question 4

In QuickBooks Online Payroll, which report shows the total wages, taxes, and deductions for each employee for a selected period?

Accepted Answer

Payroll Summary by Employee

Answer

The Payroll Summary by Employee report breaks down earnings, deductions, and taxes per employee for the chosen date range.

Question 5

An employee claims exempt from federal income tax withholding on their W-4. How should this be recorded in QBO Payroll?

Accepted Answer

Enter 'Exempt' in the federal withholding section

Answer

Selecting 'Exempt' in the federal withholding section tells QBO not to withhold federal income tax for that employee.

(QBO) Certified QuickBooks ProAdvisor Practice Test