Final answer:
In QuickBooks Online, if you update an existing sales tax rate due to a change, the new rate will apply to future transactions only. Past transactions will not be affected and will show the sales tax calculated at the prior rate. The total amount charged to customers is the sum of the original price and the calculated sales tax.
Step-by-step explanation:
When the sales tax rate changes, and you edit the existing one in QuickBooks Online, the new rate will apply to all future transactions. However, it's crucial to note that changing the sales tax rate does not retroactively alter the amount of sales tax calculated on past transactions. QuickBooks Online will continue to display the sales tax amount that was calculated based on the rate in effect at the time of each transaction.
To calculate the amount of sales tax, you must use the formula: Amount of sales tax = price × rate of sales tax. If the rate changes, you will apply the new rate to the taxable items or services going forward. When you have calculated the sales tax, you need to add it to the original price of the goods or services to find the total amount that the customer should be charged.
In summary, if a sales tax rate changes, updating the rate in QuickBooks Online is a straightforward process that impacts future transactions, while previous transactions maintain the sales tax amount based on the old rate. Always ensure that you are applying the correct sales tax rate at the time of sale to avoid discrepancies in your accounting records.