Oracle Exam 1Z0-1055-24 Topic 2 Question 4 Discussion

Actual exam question for Oracle's 1Z0-1055-24 exam

Question #: 4
Topic #: 2

A Payables user creates a manual invoice, and a Withholding Tax Classification Code defaults on the invoice line when the invoice is saved. Where does this Withholding Tax Classification Code default from?

A. From the Site Assignments of the Supplier Site B. From the Party Tax Profile of the Third Party Site C. From the Ship-to Location selected on the invoice

AFrom the Site Assignments of the Supplier Site (Correct Answer)
The Withholding Tax Classification Code can be assigned at the supplier site level in Oracle Financials Cloud.
When a supplier site has a predefined withholding tax classification, this automatically defaults onto the invoice line when an invoice is created for that supplier site.
This setup ensures that consistent withholding tax is applied to transactions related to that supplier.
According to Oracle documentation:
'For supplier sites that use withholding tax, the withholding tax classification that you define at the supplier site assignment level is used to populate the default tax classification on the invoice.'
(Oracle Financials Cloud Payables Guide)

BFrom the Party Tax Profile of the Third Party Site (Incorrect Answer)
The Party Tax Profile contains tax-related settings for a supplier or third-party entity, including tax registration details.
However, it does not directly default the Withholding Tax Classification Code onto invoice lines.
Instead, the Party Tax Profile provides high-level tax configurations that may influence tax calculations but does not assign the default withholding tax classification.

CFrom the Ship-to Location selected on the invoice (Incorrect Answer)
The Ship-to Location on an invoice is used for logistics and sales tax calculations based on where goods are delivered.
It does not impact withholding tax, which is typically linked to the supplier or supplier site.
Therefore, the Withholding Tax Classification Code does not default from the Ship-to Location.
Final Conclusion:
The correct source of the default Withholding Tax Classification Code on an invoice line is the Supplier Site Assignment.
This ensures that withholding tax is consistently applied to transactions involving that supplier, reducing errors in tax calculations.
Reference:
Oracle Financials Cloud Documentation -- Withholding Tax Classifications in Payables
(Oracle Documentation Link)

Show Suggested Answer

Suggested Answer: A

Comprehensive and Detailed In-Depth Explanation: In Oracle Financials Cloud, when a Payables user creates a manual invoice, the Withholding Tax Classification Code can default onto the invoice line from various sources depending on the system configurations. The correct source for defaulting this code is from the Site Assignments of the Supplier Site.

Explanation of Each Option:

by Barney at Mar 05, 2025, 03:07 AM

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Novella

3 months ago

Thanks for the explanation. It's important to understand where these defaults come from to avoid mistakes in tax calculations.

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Whitney

3 months ago

I initially thought it was C, from the Ship-to Location. Good thing we clarified this before the exam.

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Alethea

3 months ago

I agree with Nathan. It makes sense that the withholding tax classification code defaults from the supplier site.

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Ah, the default Withholding Tax Classification Code, the bane of every Payables user's existence! I swear, it's like a game of Russian roulette every time I create a manual invoice.

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Norah

3 months ago

User 2

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Fatima

3 months ago

User 1

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