Financial Management and Reporting Flashcards
7 cards from real ERP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Reporting flashcards as text
In ERP systems, which financial control prevents a single employee from both approving a purchase order and authorizing payment to the same vendor?
Answer: Segregation of duties
Segregation of duties is an internal control that divides key tasks across different employees to reduce fraud and error risk.
A 'soft close' in ERP financial management differs from a 'hard close' because it:
Answer: Allows certain transactions to still be posted after the initial close
A soft close provisionally closes a period while allowing specific users or transaction types to continue posting, unlike a hard close which is permanent.
In ERP budgetary control, 'budget availability check' is triggered at which point in the procurement process?
Answer: When a purchase order or requisition is created
Budget availability checks in ERP occur at commitment creation (purchase requisition or purchase order) to prevent overspending before a liability is incurred.
Which financial KPI in ERP measures the proportion of revenues that remain after deducting cost of goods sold?
Answer: Gross margin
Gross margin equals (Revenue - COGS) / Revenue and is the first profitability measure on the income statement after direct production costs.
An ERP 'payment run' that is scheduled to execute on a Friday before a holiday weekend should be reviewed for which risk?
Answer: Value dating errors causing payments to clear before due dates
Value dating issues can cause bank debits to occur on the wrong date around holidays, potentially paying vendors too early or generating bank charges.
In ERP accounts receivable, a 'dunning process' is used to:
Answer: Systematically remind customers of overdue invoices
The dunning process in ERP generates escalating reminder letters or notices to customers with overdue balances to prompt payment.
When an ERP system performs 'allocations' in management accounting, it is primarily doing which of the following?
Answer: Distributing overhead or service costs across business units or cost objects
Allocations distribute shared or indirect costs from a sender cost center to receiver cost centers or objects based on defined allocation keys.