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 financial management, which process automatically creates a journal entry to reverse an accrual posted in the prior period?
Answer: Automatic reversal
Automatic reversal in ERP creates an offsetting entry at the start of the new period so the accrual effect does not double-count when the actual invoice arrives.
A company implements ERP with a 'cost center hierarchy.' What is the primary benefit of this hierarchy in financial reporting?
Answer: It enables rollup reporting from individual cost centers to management levels
A cost center hierarchy allows financial data to be aggregated and reported at various organizational levels, from individual teams up to business units and the enterprise.
Which ERP financial control automatically places a vendor's invoices on payment hold when the vendor's bank account information has been recently changed?
Answer: Vendor master change audit hold
A vendor master change audit hold prevents payment fraud by blocking payments until a change to sensitive vendor data, such as bank details, is verified and approved.
In ERP project accounting, a 'billing milestone' is used to:
Answer: Trigger customer invoicing at predefined project completion points
Billing milestones define specific deliverables or dates when a customer invoice is generated, linking project progress to revenue recognition and cash collection.
When an ERP system generates a 'credit memo' in accounts receivable, it typically results in:
Answer: A reduction of the customer's open receivable balance
A credit memo reduces the amount a customer owes, either offsetting a future invoice or being refunded, resulting in a decrease to the accounts receivable balance.
In ERP financial planning, 'top-down budgeting' means that:
Answer: Senior management sets overall targets that are then distributed to lower levels
Top-down budgeting starts with high-level targets set by senior leadership, which are then broken down and allocated to departments and cost centers.
Which ERP audit trail feature is most important for demonstrating SOX (Sarbanes-Oxley) compliance in financial reporting?
Answer: Immutable change log recording who posted, changed, or deleted financial transactions
SOX compliance requires a complete and tamper-proof audit trail showing all changes to financial records, including who made changes and when.