Friday, 13 December 2019

Top 20 Oracle Financials Interview questions


Ques: 1. What is the implication of dynamic insert?

Ans: In Oracle EBS Applications, Dynamic Insertion is a feature which controls whether the user can enter new account code combinations from any form/window. If this feature is disabled, then the user cannot input new account code combinations from any window/form.
Oracle applications use a specific form known as Combination form, for directly entering the new code combinations. Users can enter new account code combinations only through this form if Dynamic Insertion is disabled.


Ques: 2. What are the different statuses of an accounting period?
Ans: The different status of an accounting period in oracle GL are:
  • Never Opened - Cannot enter or post journals. 
  • Future Enterable - Enter journal but cannot post. The number of future enterable periods is a fixed number defined in the set of books window. The number of future enterable period can be changed at any time. 
  • Open - Enter and port journals to any open period. An unlimited number of periods can be open but doing so may slow the posting process and can confuse users entering journals. 
  • Closed - Cannot post journals in a closed period. Must reopen closed periods before posting journals. Should manually close periods after finishing month/quarter/year-end processing. 
  • Permanently Closed - Permanently closed periods cannot be reopened. This status is required to Archive and Purge data.

Ques: 3. How many types of conversion rates are there in oracle GL?

Ans: There are five basic types of conversion rate types predefined in Oracle GL:
  • Spot: An exchange rate based on the rate for a specific date. It applies to the immediate delivery of a currency. 
  • Corporate: An exchange rate that standardize rates for your company. This rate is generally a standard market rate determined by senior financial management for use throughout the organization. 
  • User: An exchange rate that you enter during foreign currency journal entry. 
  • Emu Fixed: An exchange rate that is used by countries joining the EU during the transition period to the Euro currency. 
  • User Defined: A rate type defined by your company to meet specific needs.

Ques: 4. What is the implication of the ‘future period” field in the set of book definition form?

Ans: The value mentioned in the Future Period field represents the number of future enterable periods that users can use to input journal entries (provided those future periods are opened). However, consideration must be given to minimize the number of future enterable periods to prevent users from accidentally entering journal entries in an incorrect period.


Ques: 5. What action is required at set of book definition level / what is a suspense account and its purpose?

Ans: If you choose to allow posting of out-of-balance/unbalanced journal entries, GL automatically posts the difference to Suspense Account. However, the Suspense Account check box should be checked and an Account # to be provided for this feature to work during the creation of set of books.
If you have multiple companies or balancing entities within a set of books, GL automatically creates a suspense account for each balancing entity.


Ques: 6. What is the purpose of stat journal?

Ans: You can associate statistical amounts with monetary amounts by using statistical units of measure. This enables you to enter both monetary and statistical amounts in a single journal entry line.


Ques: 7. What are the target and offset accounts in allocation formula?

Ans: These are the lines that are the actual journal entry:

Target (T): Enter an account in the Target line to specify the destination for your allocation. The parent value used in the target must be the same parent value used in the B and C lines of the formula.

Offset (O): Enter an account in the Offset line to specify the account to use for offsetting debit or credit from your allocation. The Offset account is usually the same account as formula line A to reduce the cost pool by the allocated amount.


Ques: 8. How the Primary Ledger is different from Secondary Ledger?

Ans: Use secondary ledgers for supplementary purposes, such as consolidation, statutory reporting, or adjustments for one or more legal entities within the same accounting setup.
For example, use a primary ledger for corporate accounting purposes that use the corporate chart of accounts and subledger accounting method, and use a secondary ledger for statutory reporting purposes that use the statutory chart of accounts and subledger accounting method. This allows you to maintain both a corporate and statutory representation of the same legal entity’s transactions in parallel.


Ques: 9. What is an adjusting period and its implications?

Ans: Typically, the last day of the fiscal year is used to perform adjusting and closing journals entries. This period is referred to as Adjusting Period. Choosing whether to include an adjusting period or not in a calendar is a very important decision. There can be unlimited number of adjusting periods. Once the accounting calendar is used, changes to its structure to remove or add an adjusting period cannot be done.


Ques: 10. How is the effective date related to the period?

Ans: Effective Date and Period are related to each other in Journals scenarios when we are trying to import journal import by effective dates. A new profile option, GL Journal Import, Separate Journals by Accounting Date, allows us to choose how journal import will group journal lines.
  • Yes: Journal import will place journal lines with different accounting dates into separate journals.
  • No: Journal import will group all journal lines with different accounting dates that fall into the same accounting period into the same journal, unless average balance processing is enabled.

Ques: 11. What do you understand by consolidation workbench?

Ans: The consolidation workbench provides a central point of control for consolidating an unlimited number of subsidiaries to your parent. This window provides feedback on the state of the consolidation process, keeping you informed about each subsidiary’s consolidation status. The workbench also monitors subsidiary account balances for any changes that occur after the subsidiary data has been transferred to your parent SOBs.
  • Consolidation Sets: You can even create consolidation sets which launch multiple consolidations in a single step for overall streamlining of the consolidation process. 
  • Consolidation Hierarchies: You can create consolidation hierarchies, or multi-level hierarchies, and view your consolidations hierarchies using a graphical Consolidation Hierarchy Viewer. 
  • State Controller: From the consolidation workbench, you can access the State Controller, which is a color coded navigation tool to guide through the consolidation process.


Ques: 12. What is Translations & Revaluation and which level its working?

Ans: Translation: It is used to translate functional currency balances into foreign currency balances at the account level.
 
Revaluation: It is used identify the unrealized gain or loss .which is occurring on the currency fluctuation.


Ques: 13. What is adjusting period?

Ans: Typically, the last day of the fiscal year is used as an adjusting period to perform adjusting and closing journal entries. Once you begin using your accounting calendar, you cannot change its structure to remove or add an adjusting period. Choosing whether to include an adjusting period or not in your calendar is a very important decision. You can have an unlimited number of adjusting periods.


Ques: 14. What is 2-way, 3-way and 4-way matching?

Ans: Making payments to the suppliers in 3 ways. whatever you have ordered for the PO we will make the payment for the suppliers

1). in 2-way matching, we will compare two documents PO and Invoice.
for example: Suppose we had given PO for 10 items, for that we will receive invoice for 10 items. so that we will make payment for that 10 items.  

2) In 3-Way matching, we will compare 3 documents PO + receipt + Invoice.
For example: Suppose we have ordered 10 items in PO. But we had received only 8 items ,But we had received invoice for 10 items. so, we will make payment for only 8 items.

3) IN 4-Way matching, we will compare 4 documents PO + Receipt + Invoice + Inspection.
For example: Suppose we have 10 items in PO. Supplier sends us 8 items. We will do inspection on those items whatever we have received, If 2 items got damaged. finally, we are going to make payment to the 6 items only.


Ques: 15. What is SWEEP Program? Explain Process Of Sweep Program?

Ans: This particular program is run in order to transfer un-accounted invoice to next opened period during period end closing of Accounts Payable. In fact you can’t close Payable Period if you have Un-Accounted Invoice in Payables. In order to negotiate (Transfer) these invoice to next open period this program is run. So that the Payable period can be closed.


Ques: 16. What is Debit Memo and Credit Memo in AP?

Ans:
Debit Memo: Its negative amount identified by Customer and sent to Supplier. For Example: Purchase Returns.

Credit memo: Its negative amount identified by Supplier and sent to the Customer. Ex:  TDS Payables

In Payable we are receiving the material from supplier. so we have to pay the amount to the supplier. in case supplier has send the goods more than what we order at the point of we must return the goods reduce the accounting balance. We send a memo to the supplier is called as debit memo or supplier send a memo is called as credit memo. Both reducing our liability. Ex: In Payables Debit Memo and Credit Memo functionality is same It decreases the supplier balance (i.e. decreases the liability) Eg Supplier has send you invoice X with an amount of $100 but Later we found there is mismatch in quantity (more quantity billed) so we will inform to customer. Then customer has sent you the credit memo but if customer says send me the debit memo then you will generate debit memo from your end. Both are same as functionality. 


Ques: 17. Difference between Standard and mixed Invoices?

Ans:

Standard Invoice: Standard Invoice are invoices from a supplier representing an amount due for goods or services purchased. Standard invoices can be either matched to a purchase order or not matched. Standard invoices must be positive amounts.

Mixed Invoices: Mixed Invoices can be matched to both purchase orders and invoices. Mixed invoices can have either positive or negative amounts.


Ques: 18. What is Security Rules and Cross validation Rules?

Ans: It is used to restrict the users from entering the segments. It will work at the responsibility level. It is used to restrict the end users from entering the code combinations. It will work at structure level.


Ques: 19. Define FSG (Financial Statement Generator) ?

Ans: This is a kind of tool that is highly powerful as well as flexible and helps in building reports that are customized without depending on programming. This tool is only available with GL.


Ques: 20. How Many types of AR Invoices?

Ans: There are 7 types of invoices in AR Transactions:
  • Invoice 
  • Credit memo 
  • Debit memo 
  • Deposit 
  • Guaranty 
  • Chargeback 
  • Bills Receivables. 

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