You sell shredding services. When you perform them in your state, they are not taxable, but you also have an office in a neighboring state that requires you to collect sales tax for your shredding services. Because the services are sometimes taxable, you marked the item(s) taxable in the item setup.

How will QuickBooks Online know when sales tax should be assessed when using shredding services on a sales form?

Which 2 statements are correct regarding adjusting sales tax on a return? (Select all that apply)

• Rounding up should post to an income account

• Penalties should post to a contra-income account

• Interest charged should post to a payable account

• Rounding down should post to an income account

Early payment discount (credit) should post to an income account

Dawn's Technology Co provides computer services to which special sales tax rules apply. The company set up a taxable product/service item for sale and accepted the default Sales Tax category

How will Automated Sales Tax calculate sales tax on invoices for this product?

• It will not calculate sales tax at all

• It will always calculate the sales tax based on the street address of the seller

• It will calculate sales tax based on the normal state rate, not the specialty rate

It will calculate the sales tax based on the shipping address of the customer

Question 5

There are two methodologies for tax only transactions, and a scenario for each. We will call them scenario A and scenario B.

• Scenario A occurs when the business owner forgot to charge sales tax on one or more invoices and is now invoicing the customer to recoup the sales tax.
• Scenario B occurs when the business undergoes a Sales Tax Audit.

The business owner realizes that he'll never be able to recoup the missed sales taxes from all the sales because there were too many sales transactions and perhaps small amounts of sales tax on each one. Therefore, he will have to pay the sales tax himself.

What should be done for each scenario?

• A. Invoice the customer for an item called Sales Tax. B. Write a check to the state for an expense account called Sales Tax expense.

• A. Invoice the customer for an item called Sales Tax. B. Enter a bill from the state for an account called Sales Taxes payable.

• A. Invoice the customer for a bundle, where the bundle is made up of +1 of a taxable item and -1 of the same item but not taxable. B. Create a Sales Receipt using a bundle, where the bundle is made up of +1 of a taxable item and -1 of the same item but not taxable. Override the sales tax to zero.

A. Invoice the customer for a bundle, where the bundle is made up of +1 of a taxable item and -1 of the same item but not taxable. B. Create a Sales Receipt using a bundle, where the bundle is made up of +1 of a taxable item and -1 of the same item but not taxable. Add an additional line for Sales Tax Expense and enter the amount of tax as a negative number.