Oracle Receivables

Oracle EBS Receivables Essentials – Question Bank

Oracle E-Business Suite 12 Financial Management Certified Implementation Specialist: Oracle Receivables – Sample Questions

These questions are similar to the ones asked in the actual Test.

How should I know? I know, because although I got my Receivables Certification five years back, I have re-certified with the latest version of the Certification test.

Before you start here are some Key features of the Receivables Essentials Certification Exam;

– The exam is Computer based and you have 150 minutes to answer 80 Questions.

– The Questions are (mostly) multiple choice type and there is NO penalty for an incorrect answer.

– Some of the Questions may have more than one correct answers. You must get ALL the options correct for you to be awarded points.

– The Official Pass percentage is 60% (But this can vary). You will be told the exact passing percentage before your begin your test.

Here are a few sample questions for you;

A Quick Quiz

Q1. If your organization needs to apply receipts to transactions in different currencies, you need to set up Receivables for cross currency receipts.

Which of the following options represent the activities that need to be done to set up Receivables for cross currency receipts?

a. Define a cross currency rounding account/ Define a credit account/ Set the Journals

b. Define a credit account/ Define a suspense account/ Set the Journals

c. Define a cross currency rounding account/ Define a suspense account/ Set the Journals

d. Define a cross currency rounding account/ Define a suspense account/Define a credit account

 

Answer; c

Explanation;

To set up cross-currency receipts:

Define a cross currency rounding account – Receivables uses this account to record any rounding error amounts created during a cross currency receipt application for currencies that have a fixed rate relationship.

Define a suspense account – General Ledger uses this account to balance the posting of multi-currency journal entries that result from applying cross-currency receipts.

Set the Journals: Display Inverse Rate profile option – Set this profile option to determine how General Ledger displays conversion rates in the Exchange Rate window.

cross-curuncy-recepie

 

 

Q2. Receipts may be created in which of the following ways?

a. Manual Receipts, Semi-automatic Receipts, Automatic Receipts

b. Semi-automatic Receipts, QuickCash Receipts, Automatic Receipts

c. Manual Receipts, QuickCash Receipts, Automatic Receipts

d. Manual Receipts, QuickCash Receipts, Semi-automatic Receipts

 

Answer; c

Explanation;

Manual Receipts: Standard and Miscellaneous receipts can be manually applied to transactions or customer accounts. The Manual Receipt entry method provides more control over the application of individual receipts to specific items.

QuickCash Receipts: Standard and AutoLockbox receipts can be applied using QuickCash receipts. Use this method when you need to enter and apply receipts quickly, because it only requires a minimal amount of information for each receipt and application. Also, QuickCash provides an extra level of control for entering high volume receipts, because it does not immediately affect your customer’s account balance. QuickCash permits using AutoCash rules, placing receipts on-account, and entering them as unidentified or unapplied.

Automatic Receipts: Credit Cards and Direct Debits can use Automatic Receipts to automatically generate receipts for customers with whom you have predefined agreements. These agreements let you collect payments on time by transferring funds from the customer’s bank account to yours on the receipt maturity date. Prepayments require Oracle Order Management.

recipts

 

 

Q3. In the bill presentment template, the primary bill page has three content areas. Which of the following is NOT a valid content area?

a. Footer

b. Header

c. Schedule

d. Lines & Tax

 

Answer: c

Explanation;

Bill Presentment Architecture retrieves, formats, and presents billing data online and in printed bills, according to templates that you define.

You can design new templates, use the default templates provided with BPA, upload external templates, or modify templates to suit your company or customer business needs.

When you create or customize templates, you design the layout and contents of a primary bill page and, if needed, a details page. The primary bill page has three content areas:

Header: This area includes information typically seen at the top of an invoice, such as the company logo, invoice number, date, customer name, bill-to address, ship-to address, and terms.

Lines and Tax: This area contains the billing items, and optionally the tax lines, for all transactions included in the bill. This section typically includes the item number, item description, quantities, and cost amounts.

Footer: This area includes information typically available at the bottom of an invoice, such as the total for the bill, aging, additional notes to the customer, and other messages.

You can create a details page for a template if your supplementary data source has a registered details page view. The details page contains supporting billing information from your supplementary data source such as Oracle Service Contracts.

Note: After creating your billing template, you can preview and print it using actual customer data.

 

 

Q4.When you set up the matching criteria for an attribute in a rule, you can select the condition for which a template is used to display or print bills.

Which of the following conditions are NOT available?

a. Greater than

b. Contains

c. First character is

d. Less than or equal to

 

Answer; c

Explanation;

The matching conditions available are:

  • Equals
  • Greater than
  • Greater than or equal to
  • Less than
  • Less than or equal to
  • Starts with
  • Contains

 

Q5. You define Receivables activities according to activity type. An activity type determines whether the activity uses a distribution set or GL account, where Receivables derives the tax rate code, and in which windows an activity appears in the list of values.

Which of the following activity types are NOT provided?

a. Adjustments

b. Letter of Credit

c. Chargebacks

d. Late Charges

 

Answer; b

Explanation;

Receivables provides these activity types:

types

Adjustment: You use activities of this type in the Adjustments window. You must create at least one activity of this type.

Bank Error: You use activities of this type in the Receipts window when entering Miscellaneous transactions. You can use this type of activity to help reconcile bank statements using Oracle Cash Management.

Claim Investigation: You use activities of this type in the Receipts Applications and QuickCash windows when placing receipt overpayments, short payments, and invalid Lockbox transactions into claim investigation. The receivable activity that you use determines the accounting for these claim investigation applications. This activity type is for use only with Oracle Trade Management.

Credit Card Chargeback: Use activities of this type in the Receipts Applications window when recording credit card chargebacks. This activity includes information about the General Ledger clearing account used to clear the chargebacks. Receivables credits the clearing account when you apply a credit card chargeback, and then debits the account after generating the negative miscellaneous receipt.

Credit Card Refund: You use activities of this type in the Receipts Applications window when processing refunds to customer credit card accounts. This activity includes information about the General Ledger clearing account used to clear credit card refunds. You must create at least one activity of this type to process credit card refunds.

Earned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received within the discount period (determined by the transaction payment terms).

Late Charges: You use activities of this type in the System Options window when you define a late charge policy. You must define a late charge activity if you record late charges as adjustments against overdue transactions. If you assess penalties in addition to late charges, then define a separate activity for penalties.

Miscellaneous Cash: You use activities of this type in the Receipts window when entering Miscellaneous transactions. You must create at least one activity of this type.

Payment Netting: You use activities of this type in the Applications window and in the QuickCash Multiple Application window when applying a receipt against other open receipts. You can define multiple receivables activities of this type, but only one Payment Netting activity can be active at any given time.

Prepayments: Receivables uses activities of this type in the Applications window when creating prepayment receipts. You can define multiple receivables activities of this type, but only one prepayment activity can be active at any given time.

Refund: Use activities of this type in the Applications window to process automated non-credit card refunds.

Unearned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received after the discount period (determined by the transaction payment terms).

Other Types of Receivables Activities include: Endorsements, Receipt Write-Off, and Short-Term Debt.

Q6. You want to adjust an invoice by decreasing the line amount by $120. If the Adjustment Receivables Activity is set with a Tax Rate Code Source of  ‘None’, Receivables does not calculate tax. The only accounting is specific to the adjustment.

The above statement is:

a. True

b. False

 

Answer: a

Explanation;

invoice

This example above shows how Receivables derives the GL accounts on an Adjustment Receivables Activity.

You want to adjust an invoice by decreasing the line amount by $120. If the Adjustment Receivables Activity is set with a Tax Rate Code Source of:

  • None:Receivables does not calculate tax. The only accounting is specific to the adjustment.
  • Invoice: Receivables uses the tax rate code on the original invoice to distribute the tax amount.

 

Q7. While defining a receipt class, which of the following need to be defined?

a. Creation method, Remittance method, Clearance method, Receipt method

b. Creation method, Matching method, Clearance method, Receipt method

c. Creation method, Remittance method, Matching method, Receipt method

d. Creation method, Remittance method, Clearance method, Matching method

 

Answer; a

Explanation;

reciept-classes

Receipt classes determine how Oracle Receivables processes receipts. Specify for each receipt class:

Creation Method – How to create receipts

Manual: Standard, quick, and lockbox receipts

Automatic: Automatic and credit card receipts. Oracle Payments processes funds capture.

Remittance Method – How to derive the remittance account for automatic receipts

No Remittance: Receipts that are not remitted.

Standard: Regular remittance.

Factoring: Short term debt.

Clearance Method – How to reconcile receipts before posting to GL

Direct: Clear at time of receipt entry.

By Automatic Clearing: Clear using the Automatic Clearing program.

By Matching: Clear receipts manually in Oracle Cash Management.

Receipt Method – How to account for receipt entry and receipt application

A receipt method is tied to a receipt class and takes on the attributes of that receipt class, including creation method, remittance, and clearing.

One or more receipt methods are associated with each receipt class.

A receipt method includes a funds capture method, to identify the way customers remit payment to you.

Each receipt method can be associated with one or more remittance bank accounts. Each bank account determines the GL accounts to use when you enter or apply a receipt.

 

 

Q8. Discount Basis is the basis used when calculating discounts on invoices.  Receivables use this value as the default Discount Basis in the Payment Terms window.

With reference to the above, which of the following statements are FALSE?

  1. Discount Basis of ‘Invoice Amount ‘calculates the discount amount based on total invoice amount including tax and freight
  2. Discount Basis of ‘Lines, Freight Items and Tax’ calculates the discount amount based on the amount of line items, freight, and tax of your invoices, but not freight and charges at the invoice header level.
  3. It is not possible to allow Un-earned discounts. These are discounts a customer takes after the discount period passes.
  4. Discount Basis of ‘Lines and Tax, not Freight Items and Tax’ calculates the discount amount based on the amount of line items, freight, and tax of your invoices, but not freight and charges at the invoice header level.

 

Answer; c

Explanation;

The following elements can be used as basis for discounts;

Invoice Amount: To calculate the discount amount based on the sum of the tax, freight charges, and line amounts of your invoices.

Lines Only: To calculate the discount amount based on only the line amounts of your invoices.

Lines, Freight Items and Tax: To calculate the discount amount based on the amount of line items, freight, and tax of your invoices, but not freight and charges at the invoice header level.

Lines and Tax, not Freight Items and Tax: Choose this option to calculate the discount amount based on the line items and their tax amounts, but not the freight items and their tax lines, of your invoices.

AutoCash Rule Set (optional): Used when entering a receipt for a customer whose profile class has not been assigned an AutoCash Rule Set. The AutoCash Rule set and the Discount Grace Days specified in a customer’s credit profile determine the sequence of AutoCash Rules that Receivables uses when Post QuickCash is run to automatically apply receipts to this customer’s open debit items.

Allow Unearned Discounts: Enable this option to allow unearned discounts. Unearned discounts are discounts a customer takes after the discount period passes. You define discount periods when defining your payment terms.

Discount on Partial Payment: Enable this option to allow discounts to be taken for partial payments. If this option is enabled, you can still choose not to allow discounts on partial payments at the transaction level when defining Payment Terms.

Require Billing Location: Enable this option to require that a bill-to location be associated with a cash receipt. If this option is enabled, the Post QuickCash program does not create receipts that do not have billing locations. If you enable this option, you should also enable the Require Billing Location option when defining your Lockboxes; otherwise, Receivables displays an error when you submit AutoLockbox.

Invoices per Commit: Enter the number of invoices you want the Automatic Receipt program to process before saving.

Receipts per Commit: Enter the number of receipts you want the Automatic Receipt program to process before saving.

More Questions? Have a look at:

Receivables Essentials – Question Bank