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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Which statement is true about the "Order to Cash" lifecycle?

  1. A. Posting receipts is part of the Cash Management process.

  2. B. The pricing engine supplies the initial unit price from the item price listed in the Inventory Organization.

  3. C. When you book an order, the information is transferred through AutoInvoice to Receivables for invoicing the customer.

  4. D. During AutoInvoice, when the data is brought into the Interface tables, errors are moved to the Interface Exceptions table to be corrected.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

During the AutoInvoice import process, data that fails validation checks is placed in the Interface Exceptions table, allowing users to correct the errors. Posting receipts belongs to Receivables (not Cash Management), pricing details are retrieved from Oracle Pricing Engine lists, and booked orders must go through the shipping and fulfillment steps before AutoInvoice imports them.

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When you run the Create Accounting program in draft mode, you can _____

  1. A. post entries

  2. B. create entries

  3. C. reserve funds

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

The Create Accounting program in Oracle Subledger Accounting creates draft journal entries that can be reviewed, but does not post or transfer them to the General Ledger, nor does it reserve funds. Standard entry creation is the main capability of draft mode, confirming B is correct.

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Which statement is true about Invoicing Rules and Accounting Rules?

  1. A.If a transaction has an Invoicing Rule, an Accounting Rule is optional.

  2. B.If a transaction has an Invoicing Rule, an Accounting Rule is not allowed.

  3. C.If a transaction has an Invoicing Rule, an Accounting Rule is also required.

  4. D.Invoicing Rules and Accounting Rules have no effect until invoices are paid.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Invoicing rules determine when you bill your customer, while accounting rules determine when you recognize revenue. In Oracle Receivables, if you assign an invoicing rule to a transaction, you must also assign an accounting rule to define the revenue recognition schedule.

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Commitment is nothing but _________

  1. A.Adjustments

  2. B. Debit Memos

  3. C. Gurantee or deposit

  4. D. Credit memo
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In accounts receivable, a commitment represents a guarantee or deposit provided by a customer, often as security for future transactions or credit. This is distinct from adjustments, debit memos, or credit memos which are transactional documents. The commitment serves as a financial assurance until the underlying obligation is fulfilled.

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____program is used to transfer transactions from other systems into Receivables.

  1. A. Create Accounting

  2. B. Autoinvoice Master

  3. C. Revenue Recognition

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

AutoInvoice (or Autoinvoice Master) is the Oracle Receivables program used to import transaction data from external systems like order management or spreadsheets. It's the interface that converts external transaction data into Receivables transactions. Create Accounting is for journal generation, Revenue Recognition is for revenue management, and Receivables Interface is a broader concept.

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___________ book is used to track financial information for your tax reporting authorities.

  1. A. Corporate Book

  2. B. Tax Book

  3. C. Budget Book

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

A Tax Book is specifically designed to track asset financial information according to tax regulations and requirements for tax reporting authorities. Corporate books track financial accounting for financial statements, while budget books are for planning.

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____________report shows the asset that you retired for the book and accounting period range you select

  1. A. Asset retired for a book

  2. B. Asset reinstatement

  3. C. Asset retirements

  4. D. Tax retirement
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Asset Retirements report displays all assets that were retired during a specific book and accounting period range that you select. This helps track retirement activity over time. Asset reinstatement would be about bringing assets back, not retiring them.

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_________is used to determine whether the bank balances in oracle financials matches wih the balance as per the bank statement

  1. A. Cash Forecasting

  2. B. Auto Reconciliation

  3. C. Bank Reconciliation

  4. D. Remittance
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Bank Reconciliation is the process that verifies internal bank balances in Oracle Financials match the actual bank statement balance. This control detects discrepancies, errors, or timing differences between company records and bank records. Cash Forecasting projects future positions, Auto Reconciliation automates matching, and Remittance handles payment transmissions.

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The ________ Report shows transactions that were cleared or reconciled both manually and automatically.

  1. A. Bank Statement Detail

  2. B. Cleared transactions

  3. C. Transaction detail

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

The Cleared Transactions Report displays all transactions that have been cleared through bank statement matching, whether manually entered or auto-reconciled. This report provides visibility into reconciliation activity and audit trail. Bank Statement Detail shows line-level detail, Transaction Detail is generic, and Reconciled Transactions is not the standard report name.

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In payables you submit the ___________program to transfer the payables subledger accounting entries to General Ledger interface

  1. A. Payables transfer to General Ledger

  2. B. General Ledger interface program

  3. C. AP Reconciliation program

  4. D. Payables interface program
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The 'Payables transfer to General Ledger' program moves accounted subledger entries from Payables to GL interface tables for posting. This creates the accounting linkage between Payables transactions and the General Ledger. Other options are generic names or incorrect - AP Reconciliation is different functionality.

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A company wants to review the unreconciled bank statement lines with their status. Which report should be run to get such a information

  1. A. GL Reconciliation Report

  2. B. Cleared Transactions Report

  3. C. Bank Statement Detail Report

  4. D. Auto Reconciliation Execution Report
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Bank Statement Detail Report shows individual statement line items with their reconciliation status, including unreconciled lines. This granular view helps identify remaining reconciliation work. GL Reconciliation is different, Cleared Transactions shows only matched items, and Auto Reconciliation Execution Report shows program run results.

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A user is reconciling transaction balances in the closing process. Why would the user run the Invoice Exceptions Report?

  1. A. to identify transactions that do not appear in the Aging report

  2. B. to identify order lines with workflow stuck

  3. C. to identify transactions that do not appear in the Transaction Register

  4. D. to identify unposted transactions
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Invoice Exceptions Report specifically identifies transactions that are missing from the Aging report, often due to data inconsistencies or timing issues. This helps close process discrepancies. It does not identify workflow-stuck orders, Transaction Register missing items, or unposted transactions.

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_____________report lists payment batches and remittance batches that are available for reconciliation

  1. A. Batches available for reconciliation

  2. B. Transactions available for reconciliation

  3. C. Remittance available for reconciliation

  4. D. Payment Batch available for reconciliation
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Batches Available for Reconciliation report lists both payment batches and remittance batches that are ready for reconciliation. This report groups transactions into batches for easier processing. Option B refers to individual transactions, while options C and D describe only partial aspects of the report's functionality.

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_____________report is used to reconcile the general ledger cash account to a bank statement balance

  1. A. AR Reconciliation

  2. B. AP Reconciliation

  3. C. GL Reconciliation

  4. D. Auto Reconciliation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

GL Reconciliation report is used to reconcile the general ledger cash account to the bank statement balance. This process ensures that the company's internal records match the bank's records. AR (Accounts Receivable) and AP (Accounts Payable) reconciliation focus on those specific modules, while Auto Reconciliation is a process, not a report type.