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
Which ERP financial concept describes the recognition of revenue before cash is received, consistent with accrual accounting?
Answer: Accrued revenue
Accrued revenue is recognized in the period it is earned regardless of when cash is collected, following the accrual basis of accounting.
In ERP fixed asset management, the 'net book value' of an asset is calculated as:
Answer: Original acquisition cost minus accumulated depreciation
Net book value equals the original acquisition cost minus all accumulated depreciation posted to date on the asset.
A CFO notices that the ERP is posting a large 'suspense account' balance at month-end. What is the most likely cause?
Answer: Transactions that could not be fully coded or matched to a valid account
Suspense accounts capture transactions that cannot be fully processed due to missing or invalid account assignments, requiring review and reclassification.
In ERP treasury management, 'cash pooling' is used primarily to:
Answer: Consolidate idle cash from multiple entities to optimize interest and reduce borrowing costs
Cash pooling aggregates cash positions across multiple accounts or legal entities so surplus funds offset deficits, reducing net borrowing and maximizing interest income.
Which ERP report provides a real-time view of all outstanding vendor invoices and their due dates to help manage cash outflows?
Answer: Payment forecast report
A payment forecast report projects future cash outflows by due date, helping treasury teams plan liquidity for upcoming vendor payments.
When applying the 'matching principle' in ERP financial reporting, expenses should be recognized:
Answer: In the same period as the revenue they help generate
The matching principle requires expenses to be recorded in the same accounting period as the revenues they contribute to generating.
In an ERP environment, 'parallel accounting' allows an organization to maintain multiple ledgers primarily to:
Answer: Report under multiple accounting standards such as GAAP and IFRS concurrently
Parallel accounting in ERP enables companies to maintain separate ledgers with different valuation rules to satisfy multiple reporting standards simultaneously.