General Ledger & AP/AR Setup Flashcards

What is a 'chart of accounts segment' used for in ERP GL configuration?

Answer: Breaking the account string into dimensions such as company, department, and natural account

Segments partition the account string so transactions can be classified by multiple dimensions like entity, cost center, and natural account.

In AP, 'early payment discount' (e.g., 2/10 Net 30) means the buyer receives a 2% discount if:

Answer: Payment is made within 10 days of the invoice date

The term '2/10 Net 30' grants a 2% discount when payment is made within the first 10 days.

Which of the following best describes an 'intercompany elimination' in a consolidated GL?

Answer: Canceling out transactions between entities within the same corporate group

Intercompany eliminations prevent double-counting revenue and expenses when consolidating subsidiary financials.

In AR, a 'credit memo' is issued to a customer primarily to:

Answer: Reduce the amount the customer owes due to returns or adjustments

A credit memo reduces the customer's balance, typically after a return, pricing error, or allowance.

What ERP feature prevents a GL journal entry from posting if debits do not equal credits?

Answer: Balance validation or posting control

ERP systems enforce double-entry integrity by blocking out-of-balance journal entries from posting.

Which AP configuration determines the maximum dollar variance allowed between a PO and an invoice before the system flags it for review?

Answer: Invoice tolerance threshold

Invoice tolerance thresholds define acceptable price or quantity differences before triggering an exception hold.

In GL setup, 'fiscal period locking' is performed to:

Answer: Stop any further posting to a closed accounting period

Period locking ensures that finalized financial statements cannot be altered by new or backdated entries.