Oracle Financials Cloud: Accounts Payable 2017 Implementation Essentials — Question 7

Certain suppliers that your customer regularly deals with are exempt from tax. How would you configure tax for this?

Answer options

• A. Enable the relevant suppliers for Offset Tax and create an Offset Tax to remove the calculated tax line from these suppliers.
• B. Define a Tax Status and Rate for Exempt, define a Party Fiscal Classification of Exempt, assign it to the relevant suppliers, and write a rule to incorporate the exempt Party Fiscal Classification.
• C. Create a new Tax Regime for the Exempt tax and subscribe the exempt suppliers to the tax regime on the Configuration Options tab.
• D. Define a Tax Status and Rate for Exempt, define a Supplier Fiscal Classification of Exempt, assign it to the relevant suppliers, and write a rule to incorporate the exempt Supplier Fiscal Classification.

Correct answer: A

Explanation

The correct answer is A, as enabling Offset Tax specifically removes the tax for those suppliers as intended. Option B incorrectly focuses on Party Fiscal Classification, which is not necessary for supplier-specific exemptions. Option C suggests creating a new Tax Regime, which is an unnecessary step for the given scenario. Option D also incorrectly mentions Supplier Fiscal Classification instead of the correct approach using Offset Tax.