Tax Rules Flashcards
What tax fields need to match on an invoice, statement, PO’s?
The tax rate of the units/products and the tax rate on the invoice etc. with the exception of a multi tax rate invoice which should be Tax Except on invoices etc. as Xero will pick up tax rate from individual tax codes from each line item
What are the 3 tax codes in Xero
1) Tax Exclusive
2) Tax Inclusive
3) No Tax
If ABC Limited sets up Xero and they decide that the selling price of all of the items they sell will be added to Xero as Tax Exclusive then when an invoice is created the invoice should? what
Also be set to Tax Excluded so Xero applies the correct tax amount. Otherwise xero will add 15% too little.
If ABC limited wanted to change the tax treatment of this invoice from exclusive to Tax Inclusive then they would also need to edit the?
the Unit Price of the item needs to include tax, so the tax is reflected accurately
Ensure the unit tax price is the same as…?
the invoice, purchase order, quote tax rate
There may be instances where the business sells an item that has no tax. Where this is the case the tax setting for the invoice should be set as?
No Tax
If there are a number of items on the invoice and some include tax and some do not then the invoice setting should be set as?
Tax exclusive. Xero will Calculate tax rates from individual line item tax rates on invoices etc
IF line items include tax then invoice is set to?
TAX INCLUSIVE
IF line items exclude tax then invoice is set to
TAX EXCLUDED
IF some line items have no tax and some do then invoice set to?
TAX EXCLUSIVE and individual tax rate on each line are adjusted to show tax with and without ?
IF line items have no tax then invoice set to?
No Tax
When an invoice, bill, or purchase order is created you will need to know?
if the unit price of the Item set up in Xero includes tax or not.
