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Q.What is journal, how many types of journal?
Journals it is used to record the business transaction it contains debit and credit lines always debit must be equal to credit. Types of journals are Suspense Journal or Unbalanced Journal, Recurring Journals and Reversal journals.
1. P2P Process & O2C Process
2. P2P process start with
1. B. O2C processing four high-level processes i.e. Order, Invoices, Recognize the COGS and Cash Receipt.
Sales orderàBook OderàRelease the OrderàConfirm the OrderàClose the OrderàImport InvoiceàPrint the InvoiceàRevenue RecognitionàDefer the Cost of Goods àenter ReceiptàApply the Receipt.
Q.What is Translations & Revaluation and which level its working?
Translation: It is used to translate functional currency balances into foreign currency balances at the account level
Revaluation: It is used identify the unrealized gain or loss .which is occurring on the currency fluctuation.
-Functional Currency is USD
-Foreign Currency is INR.
-Conversion Rate is 2.
-Created invoice for 100 INR, validated and accounted. Not Paid.
As per the above journal lines on 01-Dec-2009, customer is liable to pay 200 USD to the supplier.
-End of the period, conversion rate has been changed to 2.5.
-So customer’s liability will get increased to 250 USD(100*2.5).
-So customer suppose to pay 250 USD instead of 200 USD to the supplier.
-This is the true liability at the end of the period and this need to be reflected in customer’s General Ledger. Loss 50 USD should be populated in Loss account.
-Revaluation adjusts these amounts and keeps gain/loss amounts in Unrealized Gain/Loss accounts defined in Revaluation window.
What is Security Rules and Cross validation Rules?
It is used to restrict the users from entering the segments. It will work at the responsibility level.
It is used to restrict the end users from entering the code combinations. It will work at structure level
Q.What is Dynamic Insertion?
You can dynamically create new account code combinations when entering data by enabling dynamic insertion in the Key Flexfield Segments window. The alternative method for this is, you can require all accounts to be define manually in the Accounts Combinations window.
Points to Remember:
-Dynamic instertion can be enabled or disabled at any time.
-You can define cross validation rules to prevent incorrect account combinations from being created by dynamic insertion.
-If you are defining an Accounting Flexfield for Oracle Projects, you must define your segment with the Allow Dynamic Inserts option set to Yes.
Q.Difference between Standard Accrual and Standard Cash?
In case of Standard Accrual, Invoice and Payment Accounting will be there.
Reason: Transaction happens in two phases.
1)Order goods and receive goods(Create PO, Create Receipt, Create Invoice and account it)
2)Pay the amount for received goods within due time set by the supplier( Pay the invoice and account it)
Since you are not paying the amount immediately, you need to keep track of the amount needs to pay to the supplier after phase one. You maintain this amount in LiabilityA/C(Cr). After second phase, you debit your LiabilityA/C and credit your CachA/C which shows your cash flow from your organization to the supplier.
In case of Standard Cash, only payment accounting will be there.
Reason: While purchasing an item you pay amount immediately to the supplier. So you don’t have any debt to the supplier to record. so there is nothing to record in LiabiltyA/C.
Q.Explain Flexfield Qualifiers in GL?
Need to assign qualifiers to individual accounting key flexfield segments to identify or represent the purpose in COA.
Natural Account Each Accounting Flexfield structure must contain only one natural account segment. When setting up the values, you will indicate the type of account as Asset, Liability, Owner’s Equity, Revenue, or Expense.
Balancing Account Each structure must contain only one balancing segment. Oracle General Ledger ensures that all journals balance for each balancing segment.
Cost Center This segment is required for Oracle Assets. The cost center segment is used in many Oracle Assets reports and by Oracle Workflow to generate account numbers. In addition, Oracle Projects and Oracle Purchasing also utilize the cost center segment.
Intercompany General Ledger automatically uses the intercompany segment in the account code combination to track intercompany transactions within a single ledger. This segment has the same value set and the same values as the balancing segment.
Q.Primary Ledger Vs Secondary Ledger Vs Reporting Currency
Primary Ledger Vs Secondary Ledger
Use secondary ledgers for supplementary purposes, such as consolidation, statutory reporting, or adjustments for one or more legal entities within the same accounting setup.
For example, use a primary ledger for corporate accounting purposes that use the corporate chart of accounts and subledger accounting method, and
use a secondary ledger for statutory reporting purposes that use the statutory chart of accounts and subledger accounting method.
This allows you to maintain both a corporate and statutory representation of the same legal entity’s transactions in parallel.
Reporting Currency Vs Secondary Ledger
Reporting Currencies are not the same as secondary ledgers. Looking at the 4 C’s that define a ledger, we have a chart of accounts, calendar, accounting method, and currency. If you only need multiple currencies to support your reporting requirements, use reporting currencies. If you need to account for your data using different calendars, charts of accounts, accounting methods in addition to currency, use a secondary ledger.
Q.What is Adjusting Period?
Typically, the last day of the fiscal year is used as an adjusting period to perform adjusting and closing journal entries. Once you begin using your accounting calendar, you cannot change its structure to remove or add an adjusting period. Choosing whether to include an adjusting period or not in your calendar is a very important decision. You can have an unlimited number of adjusting periods.
Q.How many types of Purchase Orders (PO’s)?
Standard Purchase Order: It’s a legal document to buy the goods or services by supplier it will be created when we know the goods or services, price, quotation, delivery schedule and accounting distribution and also is one time purchase order
Blanket PO: Blanket PO is created when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you do not know the detail of your delivery schedules.
Planned PO: Planned PO is a long–term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.
Contract PO: Contract PO is created when you agree with your suppliers on specific terms and conditions without indicating the goods and services that you will be purchasing.
Q.What is 2 way, 3 way and 4 way matching?
Making payments to the suppliers in 3 ways. what ever you have ordered for the PO we will make the payment for the suppliers in 2-way(we will compare two documents PO and Invoice).
eg:Suppose we Had given PO for 100 items ,for that we will receive invoice for 100 items. so that we will make payment for that 100 items. 2) In 3-Way we will compare 3 documents PO+reciept+Invoice Eg:Suppose we have ordered 100 items in PO. But we had received only 80 items ,But we had received invoice for 100 items. so, we will make payment for only 80 items 3) IN 4-Way we will compare 4 documents PO+Receipt+Invoice+Inspection Eg:Suppose we have 100 items in PO. Suppers send us 80 items We will do inspection on those items what ever we have received, If 10 items got damaged. finally, we are going to make payment to the 70 items only.
Q.What is Payment Terms and How to define Payment Terms?
Payables uses payment terms to automatically calculate due dates, discount dates, and discount amounts for each invoice you enter. Payment terms will default from the supplier site. If you need to change the payment terms and the terms you want to use are not on the list of values, you can define additional terms in the Payment Terms window.
Q.What is SWEEP Program? Explain Process Of Sweep Program?
This particular program is run in order to transfer un-accounted invioce to next opened period during period end closing of Accounts Payable. In fact you can’t close Payable Period if you have Un-Accounted Invoice in Payables. In order to negotiate (Transfer) these invoice to next open period this program is run. So that the Payable period can be closed.
Q.Difference between AP Invoice and AR Invoices?
AP Invoice: it is nothing but what amount going out towards receiving Raw material from the vendor or supplier. (Expenses)
AR Invoice: it is nothing but what amount coming in buy selling the product to customer or parties (Revenues)
Q.What is Pre Payment in AP?
Prepayment is Advance Payment made to supplier by Organization or Employee. Later it will apply against the feature debit
These are two types
1. Permanent Prepayment
2. Temporary Prepayment.
Q.What is Key flex filed how many types in GL, AP, AR, & FA?
Key Flex field: is used to capture mandatory information of the organizations
In GL 3 types 1. Accounting flex field (mandatory) 2. Reporting attribute (optional) 3. Gl ledger flex field (optional)
IN AP No flex fields
IN AR Two types 1. Sales Tax Location flexfield (mandatory) 2. Territory Flexfield
In FA Three Flex field i.e. Category (mandatory), Asset key (mandatory), Locations flex field.
Q.What is Debit Memo and Credit Memo in AP?
Its negative amount identified by Customer and sent to Supplier. Ex: Purchase Returns.
Its negative amount identified by Supplier and sent to the Customer. Ex: TDS Payables
In Payable we are receiving the material from supplier. so we have to pay the amount to the supplier. in case supplier has send the goods more than what we order at the point of we have to return the goods reduce the accounting balance.We send a memo to the supplier is called as debit memo or supplier send a memo is called as credit memo. Both of the reducing our liability. Ex: In Payables Debit Memo and Credit Memo functionality is same It decreases the supplier balance (i.e. decreases the liability) Eg Supplier has send you invoice X with an amount of $100 but Later we found there is mismatch in quantity (more quantity billed)so we will inform to customer. Then customer has sent you the credit memo but if customer says send me the debit memo then you will generate debit memo from your end. Both are same as functionality.
Q.What is Debit Memo and Credit Memo in AR?
In AR Debit memo is Positive Amount for example we are selling the product to the customer.
Either we may forget to add a freight charges or some other thing. So at that time we are prepare or Rise the Debit memo it is increased the Org balance.
(Customer is Under Charged at that time Org prepare Debit memo)
In AR Credit memo is Negative Amount if you billed more than your customer then Org need to raise Credit memo to give the credit to your Customer, so it is decreasing the Org balance.
Q.How many types of AP Invoices?
AP INVOICES: 11 invoice are there
1) Regular invoice (9) 2) Special invoice(2)
1) Regular Invoice
1. Standard invoice 2. Credit memo 3. Debit memo 4. Prepaid invoice 5. Expense report
6. Quick invoice 7. Mixed invoice 8. PO default 9. Withholding Tax invoice
2) Special Invoice
1. Recurring invoice 2. Interest invoice
Q.How Many types of AR Invoices?
AR TRANSACTIONS (Invoice) 7
2. Credit memo
3. Debit memo
7. Bills Receivables.
Q.Explain Approval Hierarchies in PO.
Approval hierarchies let you automatically route documents for approval. There are two kinds of approval hierarchies in Purchasing: position hierarchy and employee/supervisor relationships.
If an employee/supervisor relationship is used, the approval routing structures are defined as you enter employees using the Enter Person window. In this case, positions are not required to be setup.
If you choose to use position hierarchies, you must set up positions. Even though the position hierarchies require more initial effort to set up, they are easy to maintain and allow you to define approval routing structures that remain stable regardless of how frequently individual employees leave your organization or relocate within it.
Q.Difference between Standard and mixed Invoices?
Standard Invoices: Standard Invoice are invoices from a supplier representing an amount due for goods or services purchased. Standard invoices can be either matched to a purchase order or not matched. Standard invoices must be positive amounts.
Mixed Invoices: Mixed Invoices can be matched to both purchase orders and invoices. Mixed invoices can have either positive or negative amounts.
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