Commerce Accountancy

Accounting Principles and Practice

1,241 Questions

Accounting principles and practice questions cover core concepts like assets, depreciation, financial statements, and ledger adjustments. These topics are essential for commerce students preparing for academic and competitive exams. Regular practice ensures a strong grasp of standard accounting standards and business operations.

Asset depreciationFinancial statement adjustmentsAccounting standardsSingle entry systemCapital expenditure

Accounting Principles and Practice Questions

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What are the prerequisites for interfacing Payables invoice lines with Assets?

  1. A. The invoice should be transferred to General Ledger.

  2. B. Distribution Account is Asset Clearing or CIP account

  3. C. All the above

  4. D. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

To interface Payables invoice lines with Oracle Assets, two prerequisites exist: the invoice must be transferred to General Ledger (accounting created), and the distribution account must be either an Asset Clearing account or a CIP (Construction in Progress) account. These conditions ensure only asset-related capital costs flow to Assets. Since both A and B are required, 'All the above' is correct.

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__________invoice represent the credit for goods or services

  1. A. Credit Memo

  2. B. Debit memo

  3. C. Expense Report

  4. D. Quickmatch
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A Credit Memo in Oracle Payables represents a credit for goods or services, typically issued when goods are returned to a supplier or when a supplier owes the customer money. It reduces the amount owed to the supplier. Debit Memos increase liability (not credits), Expense Reports reimburse employees, and QuickMatch is an invoice creation method.

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The purpose of unrealized gain/ loss report is to review the unrealized gain and losses on

  1. A. All invoices

  2. B. Foreign Currency Invoices

  3. C. All invoices due to tax effects

  4. D. All invoices due to change in AP set up
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Unrealized gain/loss reports analyze fluctuations in exchange rates for open transactions denominated in foreign currencies. Invoices in the ledger's functional currency do not generate exchange rate gains or losses, rendering other options incorrect.

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Which type of items would prevent period close in payables

  1. A. Paid and accounted invoices

  2. B. Unaccounted invoices

  3. C. Accounted invoices

  4. D. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In Oracle Payables, period closure is blocked by unaccounted invoices or payments because all transactions must be accounted for and transferred to the General Ledger before a period can be locked. Fully accounted transactions do not prevent closure, and 'All of the above' is incorrect because accounted invoices are valid for closing.

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Which statement is true about invoices

  1. A. An invoice can be paid without being validated

  2. B. An invoice can be paid only after the invoice accounting entries are created

  3. C. An invoice needs to be validated before you can create the invoice accounting entries

  4. D. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Oracle Receivables enforces a strict workflow where invoice validation must precede accounting entry creation. You cannot pay an unvalidated invoice, and accounting entries are only created after validation completes successfully. This ensures data integrity before financial impact occurs.

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To create a customer account credit that isn't related to a specific invoice we should create

  1. A. On account Debit Memo

  2. B. On account Invoice

  3. C. On Account Commitment

  4. D. On Account Credit Memo
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An On-Account Credit Memo is the correct mechanism for creating a customer credit that is not tied to a specific invoice. Unlike debit memos or regular invoices which typically relate to specific transactions, an on-account credit memo creates a general credit balance that can be applied later to any invoice.

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XYZ Inc uses manual receipts in its application process. They are reviewing the status of the reciept if it requires remittance. Which status would they look for?

  1. A. Approved

  2. B. Confirmed

  3. C. Remitted

  4. D. Cleared
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In manual receipt processing, the 'Confirmed' status indicates that a receipt has been approved and is ready for remittance to the bank. This status comes after initial entry and validation, confirming the receipt is valid and should be included in the next remittance batch.

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__________ rule is used during autoinvoicing

  1. A. Application Rules

  2. B. Auto Cash Rules

  3. C. Accounting Rule

  4. D. Grouping rule
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Grouping Rules are used during AutoInvoice to determine how multiple invoice lines should be combined into single invoices. These rules specify which attributes (like customer, bill-to site, or salesperson) must match for lines to be grouped together, affecting how many invoices are created from the interface data.

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Your company is establishing policies for correcting invoices entered in error. Which two methods describe valid correction options in Oracle Receivables?

  1. A. Void invoices posted to the General Ledger in error and create replacement invoices for the correct amount.

  2. B. Update invoices not posted to the General Ledger by incompleting, changing, and recompleting them.

  3. C. Adjust invoices posted to the General Ledger in error by increasing or decreasing the original invoice amounts.

  4. D. Both B and C
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Oracle Receivables provides two valid invoice correction methods depending on posting status. For invoices not yet posted to GL, you can incomplete, modify, and recomplete them. For invoices already posted, you must adjust them using credit memos or adjustments rather than voiding and recreating, which would break audit trails.

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Which action do you need to perform in order for Oracle Receivables to enable you to maintain transactions and balances in multiple currencies for the purposes of MRC?

  1. A.Define currency conversion types.

  2. B.Enable the multicurrency option in the Bank setup window.

  3. C.Associate set of books in the system options window.

  4. D.Assign the primary set of books to the reporting set of books.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For Multiple Reporting Currencies (MRC), the system requires assigning the primary set of books to the reporting set of books in the setup configurations. Defining conversion types, bank setups, or system options are secondary configuration details that do not establish the underlying MRC relationship itself.

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ABC Inc needs to restrict the activities that certain responsibilities can perform for cash receipts. What are the options.

  1. A. View , Enter, Update and delete only

  2. B. View, Enter and Delete only

  3. View, Enter, Maintain and update only

  4. View, Enter, Maintain, update and delete only
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In Oracle Receivables responsibility security, cash receipts access can be restricted to four possible activities: View, Enter, Update, and Delete. Option A lists all four valid options. Options B and D omit 'Update' while option C incorrectly replaces 'Delete' with 'Maintain' - these are not the standard activity restrictions available.

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Which statement is not true about accounting rule

  1. A. Accounting rule enable you to defer revenue

  2. B. Accounting Rule enables you to define fixed and variable rule to recognize revenue

  3. C. Accounting rule enable you to define the number of periods and precentage of total revenue that you can record in each accounting period

  4. D. Accounting rule enables you to define the number of periods and amount of invoice that you can bill your customer in each accounting period
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounting rules in Oracle Revenue Recognition define how revenue is distributed across accounting periods, not billing schedules. Options A, B, and C all correctly describe accounting rule functionality: deferring revenue, defining fixed/variable recognition rules, and specifying periods/percentages. Option D incorrectly states accounting rules control billing amounts to customers - that is the purpose of invoicing rules or payment schedules, not revenue recognition rules.

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_________ program generates GL distributions for revenue in each transaction line that uses accounting rule and invoicing rules

  1. A. Revenue Recognition program

  2. B. Create Accounting Program

  3. C. Auto Reconciliation Program

  4. D. AR to GL Reconciliation program
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Revenue Recognition program is the concurrent program that generates GL distributions for revenue when transactions use accounting rules combined with invoicing rules. It creates the appropriate accounting entries to recognize revenue across periods. Options B (Create Accounting), C (Auto Reconciliation), and D (AR to GL Reconciliation) are different Oracle programs for other purposes - general ledger posting, bank reconciliation, and account reconciliation respectively.

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Invoice Print New Invoices Program

  1. A. Print All the transaction that have the print status as 'Print'

  2. B. Print all the transaction that have the print status as ' Do not print'

  3. C. Print all the transaction that have not been printed previously and have a print status of 'Print'.

  4. D. Print all the transaction that have been printed previously and have a print status of 'Print'.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Invoice Print New Invoices Program prints only transactions that have NOT been printed previously AND have a print status set to 'Print'. It specifically targets new, unprinted invoices. Option A is incorrect - it doesn't reprint already-printed transactions. Option B is wrong - it ignores 'Do not print' status. Option D is incorrect - it doesn't reprint already-printed transactions.

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The Approval Limits have not been setup. Which of the invoice creation methods may not work?

  1. A. Refund

  2. B. Debit Memo

  3. C. Adjustment

  4. D. On-Account Credit
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Adjustment transactions in Oracle Receivables require Approval Limits to be set up because they represent balance adjustments that need approval workflow. Refunds (A), Debit Memos (B), and On-Account Credits (D) can be created without approval limits being configured. The question asks which method MAY NOT work without approval limits - Adjustments require this setup to function properly in the approval workflow.