Commerce Accountancy

Accounting Principles and Practices

2,324 Questions

Accounting principles and practices involve the preparation of trial balances, ledgers, and bank reconciliation statements. This area tests your knowledge of fundamental accounting concepts and routine business transactions. It is a core section in commerce exams and various competitive tests.

Ledger accountsTrial balance preparationBank reconciliation statementAccounting conceptsPrimary books of accounts

Accounting Principles and Practices Questions

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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.

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Dunning Letters are

  1. A. Statement of Account Covering Letter

  2. B. Invoice Covering Letter

  3. C. Reminder Letters

  4. D. Receipt Covering Letters
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Dunning letters are collection correspondence letters sent to customers as reminders of overdue balances or invoices. They do not serve as cover letters for statements or invoices, nor are they receipts.

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A clerk from ABC Inc., receives a customer receipt that does not have sufficient information to identify the customer or invoice. Which is the correct method of entering the receipt in Oracle Accounts Receivable?

  1. A. Enter the receipt as an unapplied receipt.

  2. B. Enter the receipt as an unidentified receipt.

  3. C. Enter the receipt as an on-account receipt.

  4. D. Enter the receipt as a miscellaneous receipt.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An unidentified receipt in Oracle Accounts Receivable is used when a payment is received without enough information to match it to a specific customer or invoice. This differs from unapplied receipts (customer known but not applied to specific invoices), on-account receipts (payments applied to customer's account balance), and miscellaneous receipts (non-invoice payments like interest or donations). The unidentified receipt type is specifically designed for this scenario.

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For the transaction related activities such as adjustments and discounts receivables derives the balancing segment value from the __________ account that is associated with the transactions

  1. A. Revenue

  2. B. Receivables

  3. C. Unapplied Cash

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

For adjustments and discounts in Oracle Receivables, the balancing segment value is derived from the Receivables account associated with the transaction. This ensures that accounting entries for these transaction-related activities maintain proper segment balancing. The Revenue account is for recording income, Unapplied Cash handles unapplied receipts, and Unbilled Receivables is for recognized revenue not yet billed - none of these are used for adjustments and discounts.

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Identify a statement that apply to Oracle Collections.

  1. A. It is a Web-based self-service application.

  2. B. It can be used to place an invoice in dispute.

  3. C. It enables customers to see their own Oracle Receivables account information, such as balances.

  4. D. It enables you to create transactions
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Oracle Collections is a module that allows collectors to manage customer accounts, including placing invoices in dispute when customers contest charges. Option A describes the iReceivables self-service application (customer-facing), Option C also describes iReceivables, and Option D is incorrect because Collections is for collecting on existing transactions, not creating new ones. Placing invoices in dispute is a core Collections functionality.

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You want an invoice to be due in four stages. To accomplish this, what should you do when creating the invoice?

  1. A. Assign an invoicing rule with four schedules

  2. B. Create four lines, and assign different payment terms to each line

  3. C. Assign payment terms that have four payment schedules

  4. D. Assign payment terms that have four discount periods defined
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Payment terms with multiple payment schedules allow invoices to be due in stages. By assigning payment terms that have four payment schedules defined, the invoice will automatically split into four due dates. Invoicing rules determine revenue recognition timing over multiple schedules, not payment due dates. Creating multiple lines with different payment terms would fragment the invoice logically rather than creating staged payment terms for a single invoice.

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A miscellaneous receipt is entered by mistake and posted to GL. What is the best method to reverse the miscellaneous receipt

  1. A. Carry out the standard reversal of the miscellaneous receipt

  2. B. Carry out the debit memo reversal of the miscellaneous receipt

  3. C. Create receivable activity adjustment for the reversal of the miscellaneous receipt

  4. D. Create a journal entry in general ledger to reverse the accounting impact created by the posting of the miscellaneous receipt.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Standard reversal is the correct method to reverse a miscellaneous receipt. Debit memo reversals apply to standard invoice-applied receipts when the customer's balance must be reinstated, and GL adjustments or manual adjustments bypass subledger integrity and fail to properly correct the receipt's subledger state.

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Non-invoice related transactions such as investment and interest income are known as _________ in Receivables.

  1. A. Standard Receipts

  2. B. miscellaneous receipts

  3. C. Cash Receipts

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

In Oracle Receivables, non-invoice related receipts, such as interest, investments, or refunds, are classified as miscellaneous receipts. Standard receipts are applied against specific customer invoices, and Cash Receipts or Interest Receipts are not the formal subledger terms for this category.