AP Interview

1.Explain about Accounts Payable. Ans)The Accounts Payable application component records and manages accounting data for all vendors. It is also an integral part of the purchasing system: Deliveries and invoices are managed according to vendors. The system automatically triggers postings in response to the operative transactions. In the same way, the system supplies the Cash Management application component with figures from invoices in order to optimize liquidity planning. 2.What is the meaning of invoice? Ans)An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so rather than quantity, price and discount the invoicing amount is based on quantity, price, discount and duration. Generally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months etc being billed. 3) Can you give a sample Process Flow for Procure to Pay Cycle?

Ans) Process flow for Procure to pay will go through two departments (Commercial & Finance) Procure - Commercial Department The following steps invovle to prcure any item 1. Received Requsition from concern Department

2. Request for Quotation from Suppliers at least three 3. Finalize the best Quotation by keeping in mind about our companies standard 4. Check the Budget for the same 5. Negociate with supplier for more economic pricing and finalize the payment terms 6. Process the PO and forward to the supplier to supply the goods and services Pay Cycle - Finance Department The following steps need to be fulfil 1. Invoice should be match with PO 2. Invoice should has all the supporting documents such as PO copy,Delivery note duly signed by reciever (our staff who authorized to received goods / store keeper) 3. If the invoice is for services then it should be forwarded to the concern department head or project manager for his confirmation of work done and his approval 4. Even if it not the services invoice, it should forwarded to the concern person's approval who request the PO for the same 5. Finance can reject the invoice if it is not budgeted and ask for the reasons. 6. After receiving all the confirmation and approvals from the concern department heads the invoice will be update in to the accounting system first in order to avoid any duplication of Invoice and PO (it shown on accounting package if the invoice is duplicate if not, altelast it tells you if the PO already used or cancel) 7. Finance approved the invoice and process the payment base on payment terms with the supplier.

4)What are the journals entries in Procure to Pay Cycle. Ans)

Description

A) Po creation

DR

No Entry

CR

No Entry

B) While Receiving the goods Accurval

Material Receiving

Ap

C) While Inspection

No Entry

No Entry

D) While Trans ford the good to Inventory Receiving

Inv Org Material Purchase price Varience

Material

F) While Po Is Matching to Invoices

Ap Accurval

Liability

G) While Making the Payment Clearing

Liability

Cash

H) Ofter Reconciliation

Cash Clearing

Cash

I) Final Entry

Inv Org Material

Cash

5)What is the difference between EFT & Wire? Ans)EFT and WIRE are the most popular form of electronic payment method. EFT stands for electronic fund transfer and it is one of the fastest mode of electronic payment after WIRE. EFT is a batch oriented mechanism for transfering funds from one bank to another because of which clearing & settlement takes around 2 to 4 days. On the other hand, WIRE is a RTGS i.e. real time gross settlement system of making the fund transfer on real time and gross basis. Clearing and settlement happens on the same day. WIRE is more expensive and faster than EFT. 6) What is meant by Distribution Sets:

Ans)You can use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order. For example, you can create for an advertising supplier a Distribution Set that allocates advertising expense on an invoice to four advertising departments. You can assign a default Distribution Set to a supplier site so

Payables will use it for every invoice you enter for that supplier site. If you do not assign a default Distribution Set to a supplier site, you can always assign a Distribution Set to an invoice when you enter it. Use Full Distribution Sets to create distributions with set percentage amounts, or use Skeleton Distribution Sets to create distributions with no set distribution amounts. For example, a Full Distribution Set for a rent invoice assigns 70% of the invoice amount to the Sales facility expense account and 30% to the Administration facility expense account. A Skeleton Distribution Set for the same invoice would create one distribution for the Sales facility expense account and one distribution for the Administration facility expense account, leaving the amounts zero. You could then enter amounts during invoice entry depending on variables such as that month's headcount for each group. 7)What is the meaning of GRN? Ans) GOODS RECEIPT NOTE MEANS IT PROVES THAT MATERIAL IS DELIVERED AT STORES DEPARTMENT. GRN IS THE BASE DOCUMENT AND IMPORTANT DOCUMENTS FOR PROOF OF RECEIPT OF MATERIAL AT WARE HOUSE.THIS CAN BE PREPARED BY STORES DEPARTMENT AND APPROVED BY PLANT HEAD. GRN CONTAINS ORDERED QTY,RECEIVED QTY AND ACCEPTED QTY. BILL WILL BE PASSED BASED THE GRN NOTE. ONCE THE GRN IS PREPARED AUTOMATICALLY INVENTORY WILL BE UPDATED AND ACCORDINGLY PAYMENT WILL BE RELEASED TO THE VENDOR. GRN contains the following details. 1.Ordered quantity . 2.Received Quantity.

3.Defective quantity in received quantity . 4.Quality standards details. 8) How does the payment mechanism work? Ans) The open items of an account can only be cleared once you post an identical offsetting amount to the account. In other words, the balance of the items assigned to each other must equal zero.During clearing, the system enters a clearing document number and the clearing date in these items. In this way, invoices in a vendor account are indicated as paid, and items in a bank clearing account are indicated as cleared. You generally use the payment program to clear invoices. Manual clearing of open items is therefore not usually necessary. However, you will sometimes have to clear items manually if, for example, you receive a refund from your vendor or you have set up a direct debit procedure. 9) Difference between interface tables and base tables? Ans) The difference between the interface and base tables is as below Interface table: is the table where the data gets validated before data get posted to the base tables. There are many interfaces which are seeded with Oracle. You can consider as the entry point of the data, and the interface checks the sanity of data. Base tables: As told earlier once the data is validated will get updated in the base tables, and is considered as the data which is in the base table is accurate and used in many ways. (Reporting..etc..)

The base tables in AP are as follows: 1) ap_invoices_all 2) ap_invoice_payments_all 3) ap_invoice_distibutions_All 4) ap_payment_schdules 5) ap_payment_dustributions_all 6) ap_checks_all 7) ap_accounting_events_all  8) ap_bank_accounts_all 9) ap_bank_accounts_uses_all   

10) What is the process of creating an Invoices and transferring it to GL? Ans)  1. create batch 2. create invoice 3. create distribution 4. validate the invoice 5. actions ­à approve 6. if individual create accounting click ok 7. If batch go to batch create accounting. 8. Create accounting hits Payable Accounting(Transfer) ??Program which will create accounting. 9. Run Transfer to GL Concurrent Program 10. Journal Import 11. Post journals 12. Hits balances. 11) How do u Transfer from AP to GL?  Ans)“Payables transfer to GL program” is used to transfer from AP to GL.

12) How many types of invoices are there in AP. Ans) 

1. Standarad invoice  2. Debit Memo 3. Credit Memo 4. Mixed Invoice 5. Retain age Invoice 6. Transportation invoice 7. Prepayment invoice 8. Expenses Report Invoice 9. Payment Request Invoice 10. Po default 13) How many types of purchase order types/agreements are there?   A) Standard Purchase Order: You generally create standard purchase orders for one­time  purchase of various items. You create standard purchase orders when you know the details of the goods or services you require, estimated costs, quantities, delivery schedules, and accounting  distributions. If you use encumbrance accounting, the purchase order may be encumbered since  the required information is known B) Planned PO : A planned purchase order is a long­term agreement committing to buy it items or services from a single source. You must specify tentative delivery schedules and all  details for goods or services that you want to buy, including charge account, quantities and  estimated cost. EX: Buying goods for Christmas from a specific dealer. C) Contract PO : You create contract purchase agreement with your supplier to agree on  specific terms and conditions without indicating the goods and services that you will be  purchasing i.e. for $ amount you must supply this much quantity. You can later issue standard  PO referencing your contracts and you can encumber these purchase orders if you use  encumbrance accounting. D) Blanket PO : You create blanket purchase agreements when you know the detail of goods or  services you plan to buy from a specific supplier in a period , but you do not yet know the detail  of your delivery schedules. You can use blanket purchase agreements to specify negotiated  prices for your items before actually purchasing them. A Blanket Purchase Agreement is a sort of contract between the you and ur supplier about the  price at which you will purchase the items from the supplier in future. Here you enter the price of the item not the quantity of the items. When you create the release you enter the quantity of the  items. The price is not updatable in the release. The quantity * price makes the Released  Amount. Now suppose your contract with your supplier is such that you can only purchase the  items worth a fixed amount against the contract.

14.Payment

Method:

A funds disbursement payment method is a medium by which the first party payer, or deploying company, makes a payment to a third party payee, such as a supplier. You can use a payment method to pay one or more suppliers. Oracle Payments supports several payment methods for funds disbursement, including the following:    

Check Electronic wire Clearing Check: You can pay with a manual payment, a Quick payment, or in a payment batch. Electornic: Electronic An electronic funds transfer to the bank of a supplier.You create electronic payments either through the e- Commerce Gateway, or by delivering a payment batch file to your bank. For both methods, Payables creates a file during payment batch creation. If you are using the e-Commerce Gateway to create the file of payments, an EDI translator is required to create the EDI Formatted file prior to delivering it to your bank.For electronic funds transfers, the file is formatted and delivered to your ap.out directory for delivery to your bank. Wire:

Wire Funds transfer initiated be contacting the bank and requesting wire payment to the bank of a suplier.A payment method where you pay invoices outside of Payables by notifying your bank that you want to debit your account and credit your supplier’s account with appropriate funds. You provide your bank with your supplier’s bank information, and your bank sends you confirmation of your transaction. Your supplier’s bank sends your supplier confirmation of the payment. You then record the transaction manually. Clearing: Clearing Payment for invoices transferred from another entity within the company without creating a payment document.Payment method you use to account for intercompany expenses when you do not actually disburse funds through banks. You do not generate a payment document with the Clearing payment method. When you enter the invoice, you enter Clearing for the payment method.You can record a Clearing payment using a Manual type payment only.

15.What id recurring invoices? What are AP setup steps? Ans) some times suppliers would not be sending any invoices. but still the payment have to made to home: rent, lease rentals. in this situation we have to create invoice every period wise. For that purpose we have to create one recurring invoice template. Template means with one master copy creating the multiple invoices is called template. Here we are creating the one invoice master copy is formally known as recurring invoice or recurring invoice template.

SET UP: 1)we have to create one special calendar 2)we have to create one full distribution set

3)we have to enter payment terms in the recurring invoice window 4)enter the template no, first invoice amount, special invoice amounts What are Types of Prepayment? Pre-payment invoice are used when there is advance payment made to Suppliers against purchases or Employees for Travel expenses (Impress amount). Pre payments are two types: 1.Temporary pre-payment 2.Permanent pre-payment. Temporary pre payments are adjusted against the future purchase invoice. Whereas we cannot adjust Permanent pre payments against future purchases. This payment we can receive when the contract cancelled with the supplier. We can convert Permanent pre-payment into Temporary prepayment. After conversion we can use that to adjust against future invoices. Permanent - which is used for long term deposit. Ex:-Fixed deposit, Term deposit Temporary-which is used for short term advance. Ex:-Advance to supplier What is payment Request in Oracle Payables? Payment request is the invoice. If we Refund the money to the Customer In Oracle receivables. The Payment request invoice is automatically generates. The accounting entry is as follows

Item Expense --- Dr Liability – Cr What is the use of permanent prepayment and Accounting entry? Sometimes suppliers request for advance payment or Deposit to deliver the good or services, so for this type of scenario Oracle provides Prepayment. Accounting entries for Prepayment is While Creating Prepayment Invoice: Prepayment --- Dr----It will pick from supplier Liability – Cr----It will pick from supplier While Making Payment to Prepayment: Liability – Dr Cash – Cr While applying Prepayment on Standard Invoice: Liability --- Dr Prepayment – Cr Difference between invoice and invoice batch and what setup required? It’s either, or relation. We have to activate profile option batch% as yes. It will disable the new button at find screen at invoice. Explain the P2P process flow

Procure to pay (p2p) is a process of requesting, purchasing, receiving, paying for and accounting for goods and services. Procure to Pay Lifecycle is one of the important business Process in Oracle Applications. It’s the flow that gets the goods required to do business. It involves the transactional flow of data that is sent to a supplier as well as the data that surrounds the fulfillment of the actual order and payment for the product or service. Create a requisition>> create RFQ>> create a quotation from quote analysis>> generate a PO>>receipt of material>> create Invoice in payables>> transfer to GL Can we automatically ‘Close’ the Purchase order without receiving the full quantity? The Receipt Close Tolerance lets you specify a quantity percentage within which Purchasing closes a partially received shipment. For example, if your Receipt Close Tolerance is 5% and you receive 96% of an expected shipment, Purchasing automatically closes this shipment for receiving. When does a Purchase Order line get the Status ‘Closed for Receiving’? Goods have been received on the system against this line but an invoice has not been matched to the order. Can we match an Invoice against a line even when it is ‘Closed for Invoicing’? The Close for invoicing status does not prevent you from matching an invoice to a purchase order or to a receipt. What is Invoice Validation Process? Before you can pay or create accounting entries for any invoice, the Invoice Validation process must validate the invoice. Invoice Validation checks the matching, tax, period status, exchange rate, and distribution information for invoices you enter and automatically applies holds to exception invoices. If an invoice has a hold, you can release the hold by correcting the exception that caused Invoice Validation to apply the hold by updating the invoice or the purchase order, or changing the invoice tolerances.

What are the types of invoices? Standard, Debit memo, Credit memo, Interest, Prepayment, Retainge, Withholding invoice, Expense Report and Payment Request What is Prepayment and Process?

A prepayment is a type of invoice you enter to make an advance payment. We can adjust prepayment against standard invoice in future.

Can we change invoice if we made the payment? Yes, we can change if its not accounted and if the amount exceeding the previous amount otherwise can’t change. What are the criteria for entering a standard invoice? Supplier, Supplier site, payment term, payment method, distribution account What are the modules interfaced through AP module? Purchasing,GL. What is the work of payment manager? We can make payment supplier category wise and for multiple supplier payment in a one struck. Can we sweep invoice which is in hold position? No, We have hold and release that then we can close the period. What do you mean of retention in AP?what is the accounting entry for retainage releage? It means holding some part of payment for a contract suppler. Retain value will be release at the end of the contract. We can make through Retainage invoice. When Invoice matched with PO accounting entry would be: Accrual ------ Dr Liability ---- Cr Retainage ---Cr----It will pick from financial options While making payment to the invoice matched with PO: Liability ---- Dr Cash --------Cr When Retainage Release Invoice Matched with PO accounting entry would be: Retainage --------Dr Liability ----------- Cr While making Payment to Retainage Release: Liability ---Dr Cash -------Cr What are the encumbrance options for AP? How are they used? PO encumbrance and requisition encumbrance available in Financial options.

Encumbrance used to reserve the funds at the time of raising PR or PO. What are the different types of supplier site? Purchasing,Pay,Primary pay,RFQ only,Procurement card How can we default supplier site at invoice level? Enable primar pay check box in supplier site for that particular site. What is the use of Withholding invoice and which scenario?and accounting entry? At the time of doing withholding tax ,this invoice used to generate. When Withholding tax applied on standard Invoice: Item Expense --- Dr Liability --- Cr Withholding --- Cr-----It will pick from WHT codes Auto Generated WHT Entry: Item Expense – Dr Liability --- Cr What is the entry for AP invoice? Expenses Ac Dr 100 To Supplier Ac Cr 100 What is recurring invoice? What is the scenario we are using this? Repeatedly incurring invoice for expenses that occurs regularly. Example: Rent for every month and lease payment What are the methods of accounting? Accrual and Cash method What is special calendar & why its required? Use the Special Calendar window to define periods that Payables uses for automatic withholding tax, recurring invoices, payment terms, and for the Key Indicators Report. For example, if you monitor staff productivity weekly, use this window to define weekly periods for the Key Indicators calendar type. What is the use of Offset Account method Three types i.e. None,Balance,Account If we selecting None then Supplier account will be same for all OU ,If we selesting Balanceing then supplier account will seggregate for OU wise , if we select Account then its segregare All Code combination as based on real distribution account we have entered for OU wise. How many types of payment method.

There are 5 types of Payment methods i.e. Bills payable,Check,Electronic,Outsourced Check,Wire What is pay group? It is to group invoices in to supplier category for payments. What is prepayment settlement date in payable option? Number of days you want Payables to add to the system date to calculate a default settlement date for a prepayment. Payables prevents you from applying the prepayment to an invoice until on or after the settlement date. What is GL date basis in payable option? The date you want Payables to use as the default accounting date for invoices during invoice entry. Invoice Date-Invoice date you enter during invoice entry. System Date-Current date for your Payables system. The date you enter the invoice. Goods Received/Invoice Date-Date that you enter in the Date Goods Received field. If no value is entered, then the invoice date is used. Goods Received/System Date-Date that you enter in the Date Goods Received field. If no value is entered, then the system date is used. What is difference between debit memo and credit memo? Debit Memo: A negative change in invoiced amount identified by customer and sent to supplier. Ex.Purchase return Credit Memo: A negative change in invoiced amount identified by supplier and sent to customer.Ex:TDS payable. Both credit memo and debit memos will decrease the supplier balance What is meant by with-holding tax invoice? After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority. What are the mandatory setups in AP? Financial option,Payable option,System setup option,Create payment term,Create payment administrator,Creation of supplier,Open payable period,Open GL period,Open Inventory period,Open Purchase period, Can we make foreign currency invoice and payment? Yes,but in payable option we have to enable use multiple currency and in bank, enable multi currency payments Purpose of Payable invoice open interface?

It can use the Payables Open Interface Import program to create Payables invoices from invoice data in the Payables Open Interface Tables example: AGIS Transactions are coming to payables through Payables Open Interface Tables Payable open interface import? (Expense Report Import)? Use Payables Open Interface Import to import invoices from the Payables Open Interface Tables. What is Multi Currency payments? Multi currency is possible but we have to set up at the time of Bank Creation. Can we implement MRC at Payables? Yes, but we have to enable multiple currency option at payable options What does the Unaccounted Transaction Sweep Report do? It will sweep the transaction to next period. What reports should I run before closing the period? Period close exception report, Unposted transaction What is the program to transfer data from AP to GL? Transfer Journal Entries to GL (Parameter-Ledger ,End date) What is meant by void payments? When you void a payment, Payables automatically reverses the accounting and payment records so your general ledger will have the correct information, and so the status of the paid invoices is reset to Unpaid. Payables also reverses any realized gains or losses on foreign currency invoices recorded as paid by the payment What are the types of journal categories available in the AP? Payable What is meant by matching and what are the types of matching’s available? 2 way-Invoice and PO, 3 way-Invoice,PO and Receipt and 4 way-Invoice,PO,Receipt and Inspection What is a Hold and Release? Types of hold? Hold means restriction in invoice for further processing.User can define any kind of holds to hold the invoice for further processing. Type:-Manual and System hold How to approve ‘n’ no. of invoices? You can be Approved n number of invoices using the Request "Invoice Validation"

What is Zero-Payment in AP? Create zero-amount payments to pay basic invoices with offsetting credit or debit memos, or to record cancelled invoices as paid so they are no longer included on the Invoice Aging Report. Before you make a zero-amount payment, you must enable the Allow zero payments in bank accounts How to transfer funds between your internal banks? From cash management we can directly transfer the funds between the bank accounts Can I find out which invoices are matched to a PO? yes ERS Invoice means? Evaluated Receipt settlement Which makes auto invoice in payable. What is meant by RTS transactions? Return to supplier which has to assign at the time of creating supplier. What are the steps to define a Bank? 1. User management-Role-Security wizard through Sys Admin 2.Bank branch 3. Bank Account 4.Bank Document assignment How to assign Cash clearing Account ? While doing bank creation, we have to give cash clearing account. 7.How the terms date will be calculated for recurring invoices? When Payables creates recurring invoices, the invoice date is the first date of the period in which the recurring invoice is created. The Terms Date depends on the Terms Date Basis setting at the supplier site, but is calculated differently than for regular invoices: If the Terms Date Basis is set to System Date, then the Terms Date is the same date that the recurring invoice was created. If the Terms Date Basis is set to anything else, then the Terms Date is the invoice date, which is the first day of the period in which the recurring invoice is created.

8.What is the default invoice date for recurring invoices? Every month first date will be the default date for recurring invoice. 9.How to define foreign currency recurring Invoice Template ? What are the additional considerations?

Optionally change the invoice currency, which is your functional currency unless you have a supplier site default. If you enter a foreign currency, enter exchange rate information when you create invoices based on the template.

10. What are the prerequisites for auto creation of Debit Memo of RTS transactions? Check the check box “Create Debit memo for RTS transactions” under purchasing Tab page in Supplier site. And in purchase module in “Returns Form” Check the Check Box Create debit memo.

Types of Invoices in AP: The different types of invoices available in Payables are: 1. Standard Invoices: Standard invoices are the invoices issued by a supplier to the buyer, representing the amount due for the products or services the supplier has provided to the buyer. Standard invoices can be either matched to a purchase order or not matched. A standard invoice must be positive amount. 2. Mixed Invoices: Mixed invoices are the invoices which can have either positive or negative amounts and can be matched to both purchase orders and invoices. For example, if there is a mixed invoice for $-1000, you can either match it to an invoice with $-1000 or to a purchase order with an amount $1000. 3. Credit Memo: Credit memo is an invoice raised by the supplier to the buyer with negative amount. It reduces the supplier balance and reduces the liability. For example the customer has returned some of the goods that he purchased, the supplier sends a credit memo to the buyer to adjust the balance. 4. Debit Memo: Debit memo is an invoice raised by the customer to supplier with negative amount.

The functionality of Debit Memo is same as Credit Memo. Both are to reduce the liability. The purpose of Debit Memos is to record a credit for a supplier who does not send you a credit memo. Unlike in AR, both Credit memo and Debit memo are with negative signs in Payables. 5. Prepayment: Prepayments are the invoices raised to record advance payments to a supplier or employee. 6. Expense Reports: Expense reports are the invoices that represent amount due to an employee for all his business related expenses. 7. Retainage Release Invoices: Retainage release is the act of releasing, or paying, that portion of a payment that was withheld until a substantial portion or all of the service procurement work is completed. The amounts retained during the life of the contract must be released and paid to the supplier or sub-contractor once all or a substantial portion of the work is completed. Oracle Payables uses the Retainage Release Request to create a type of invoice called Retainage Release. A retainage release invoice has lines, which are copied from the original standard progress invoices, which show an amount left to be released. Retainage release invoices can only be entered manually in the Invoice Workbench window.

8. Withholding Tax: After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority. Payables can automatically create withholding tax invoices, or you can perform this task manually. If you choose to automatically create withholding tax invoices, you must choose whether to do this during Invoice Validation or during payment processing.

9. PO Price Adjustment Invoices: PO Price Adjustment Invoices are used for recording the difference in price between the original invoice and the new purchase order price. For example, If a supplier sends an invoice for a change in unit price for an invoice you have matched to a purchase order, PO Price Adjustment Invoices can be used to adjust the invoiced unit price of previously matched purchase order shipments or distributions without adjusting the quantity billed.

PO price adjustment invoices can be matched to both purchase orders and invoices. 10. Quick invoices: Used for quick, high-volume invoice entry for invoices that do not require extensive validation and defaults. After entry, you import these into the Payables system. Validation and defaulting occur during import When we enter transactions in Purchasing, the accounting entries will get generated with respect to the following accounts. 1. When Creating a receipt: Inventory Receiving A/C DR Accrual Account CR 2. At the time of Receiving transactions: Asset clearing A/c or Inventory valuation a/c DR Inventory Receiving A/c CR 3. When a Payables invoice matched with PO: Accrual A/C DR Liability A/c 4. when asset addition done: Asset A/c DR Asset Clearing A/c CR(Asset item)

(OR) expense a/c DR inventory Valuation A/C(Inventory item) When we enter transactions in Payables, the accounting entries will get generated with respect to the following accounts. 1. Invoice: When we create accounting for an invoice, the accounting will be generated with respect to the following accounts. Item Expense A/C Liability A/C

DR CR

2. Payment: There are two stages in which the accounting may generate, based on the accounting option that we setup in Payables. > Direct Pay-No Clearance: In this stage, there will be no clearance process separately and the cash account will get credited directly. Liability A/C Cash A/C

DR CR

> Pay and Clear: In this stage, the payment and clearance process will have separate accounting entries. At the time of Payment: Liability A/C Cash Clearing A/C

DR CR

At the time of Clearance: Cash Clearing A/C

DR

Cash A/C

CR

When we enter transactions in Receivables, the accounting entries will get generated with respect to the following accounts. 1. Accounting for invoice: Receivables A/C DR Revenue Account Cr 2. Credit memo: Revenue Dr Receivables A/C CR 3. Receipts: Cash A/C DR Receivables A/c CR While your resume gets your foot in the door, it's the in person interview that will make or break you as a candidate for an accounting position. Actively preparing for your interview, including practicing answers to common accounting interview questions, will help you make a great first impression on the hiring manager. Read on to learn more about the five most common accounting interview questions.

1. Why Do You Want to Be an Accountant? This fairly standard interview question is a typical warm-up, since it's an opening that breaks the ice and allows the hiring manager to get to know you better. That doesn't mean, however, that it's a throwaway question. You should answer thoughtfully by giving examples of things that happened in your life that led you to the accounting field. Were you the fifth grade class treasurer? Did you save for months to buy your first car? Whatever the scenario, give the interviewer some background about yourself and your studies.

2. Do You Possess Any Knowledge of Accounting Standards? Even if you've never had a job in the field before, you should be prepared to answer this question with some knowledge of international accounting standards (IAS). While there are so many facets of IAS that it would be possible to be up to speed on all of them, prior to an interview you should do some research on the most recent changes to these standards and be prepared to discuss.

3. How Do You Minimize the Risk for Errors in Your Work? As an accountant, you'll be held to a very high standard of excellence, especially since even the smallest errors can lead to big financial issues. In response to this question, it's important to discuss the importance of checking your work several times and establishing a system of checks and balances. It also helps to give an example of a time that you caught an error through double checking or another method.

4. Describe a Time When You've Helped Reduce Costs This can be a challenging question, especially if you've never held an accounting job before. While some accountants strictly do their jobs, others go above and beyond by making suggestions to management and identifying areas where money can be saved. By describing a scenario from your coursework or an internship, you can show the hiring manager that you're willing to go beyond and be a team player.

5. Where Do You See Yourself in Five Years? A common question in all industries, this question gives you the chance to show off your foresight and ambition. Your answer should be both modest and truthful, highlighting the things that you hope to learn from a position with the organization you're interviewing with while displaying a solid plan for your short term career trajectory.

By preparing for these accounting interview questions, you can increase your chance of getting a job in your chosen field, even if you're a new graduate. It may be helpful to practice with friends or family members before you land your first interview. And for more valuable interview tips, visit LiveCareer’s Interview Tips page.

ACCOUNTS PAYABLE INTERVIEW QUESTIONS IN R12 Posted by Raju ERP

1.Explain about Accounts Payable. Ans)The Accounts Payable application component records and manages accounting data for all vendors. It is also an integral part of the purchasing system: Deliveries and invoices are managed according to vendors. The system automatically triggers postings in response to the operative transactions. In the same way, the system supplies the Cash Management application component with figures from invoices in order to optimize liquidity planning.

2.What is the meaning of invoice? Ans)An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so rather than quantity, price and discount the invoicing amount is based on quantity, price, discount and duration. Generally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months etc being billed.

3) Can you give a sample Process Flow for Procure to Pay Cycle?

Ans) Process flow for Procure to pay will go through two departments (Commercial & Finance) Procure - Commercial Department The following steps invovle to prcure any item 1. Received Requsition from concern Department 2. Request for Quotation from Suppliers at least three 3. Finalize the best Quotation by keeping in mind about our companies standard 4. Check the Budget for the same 5. Negociate with supplier for more economic pricing and finalize the payment terms 6. Process the PO and forward to the supplier to supply the goods and services Pay Cycle - Finance Department The following steps need to be fulfil 1. Invoice should be match with PO 2. Invoice should has all the supporting documents such as PO copy,Delivery note duly signed by reciever (our staff who authorized to received goods / store keeper) 3. If the invoice is for services then it should be forwarded to the concern department head or project manager for his confirmation of work done and his approval

4. Even if it not the services invoice, it should forwarded to the concern person's approval who request the PO for the same 5. Finance can reject the invoice if it is not budgeted and ask for the reasons. 6. After receiving all the confirmation and approvals from the concern department heads the invoice will be update in to the accounting system first in order to avoid any duplication of Invoice and PO (it shown on accounting package if the invoice is duplicate if not, altelast it tells you if the PO already used or cancel) 7. Finance approved the invoice and process the payment base on payment terms with the supplier.

4)What are the journals entries in Procure to Pay Cycle. Ans)

Description DR

CR

A) Po creation No Entry

No Entry

B) While Receiving the goods Ap Accurval

Material Receiving

C) While Inspection Entry

No No Entry

D) While Trans ford the good to Inventory Material Receiving

Inv Org Material Purchase price

Varience

F) While Po Is Matching to Invoices Liability

Ap Accurval

G) While Making the Payment Liability Cash Clearing

H) Ofter Reconciliation Clearing Cash

I) Final Entry Material

Cash

Inv Org Cash

5)What is the difference between EFT & Wire? Ans)EFT and WIRE are the most popular form of electronic payment method. EFT stands for electronic fund transfer and it is one of the fastest mode of electronic payment after WIRE. EFT is a batch oriented mechanism for transfering funds from one bank to another because of which clearing & settlement takes around 2 to 4 days. On the other hand, WIRE is a RTGS i.e. real time gross settlement system of making the fund transfer on real time and gross basis. Clearing and settlement happens on the same day. WIRE is more expensive and faster than EFT.

6) What is meant by Distribution Sets:

Ans)You can use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order. For example, you can create for an advertising supplier a Distribution Set that allocates advertising expense on an invoice to four advertising departments. You can assign a default Distribution Set to a supplier site so Payables will use it for every invoice you enter for that supplier site. If you do not assign a default Distribution Set to a supplier site, you can always assign a Distribution Set to an invoice when you enter it. Use Full Distribution Sets to create distributions with set percentage amounts, or use Skeleton Distribution Sets to create distributions with no set distribution amounts. For example, a Full Distribution Set for a rent invoice assigns 70% of the invoice amount to the Sales facility expense account and 30% to the Administration facility expense account. A Skeleton Distribution Set for the same invoice would create one distribution for the Sales facility expense account and one distribution for the Administration facility expense account, leaving the amounts zero. You could then enter amounts during invoice entry depending on variables such as that month's headcount for each group. 7)What is the meaning of GRN? Ans) GOODS RECEIPT NOTE MEANS IT PROVES THAT MATERIAL IS DELIVERED AT STORES DEPARTMENT. GRN IS THE BASE DOCUMENT AND IMPORTANT DOCUMENTS FOR PROOF OF RECEIPT OF MATERIAL AT WARE HOUSE.THIS CAN BE PREPARED BY STORES DEPARTMENT AND APPROVED BY PLANT HEAD. GRN CONTAINS ORDERED QTY,RECEIVED QTY AND ACCEPTED QTY. BILL WILL BE PASSED BASED THE GRN NOTE. ONCE THE GRN IS PREPARED

AUTOMATICALLY INVENTORY WILL BE UPDATED AND ACCORDINGLY PAYMENT WILL BE RELEASED TO THE VENDOR. GRN contains the following details. 1.Ordered quantity . 2.Received Quantity. 3.Defective quantity in received quantity . 4.Quality standards details. 8) How does the payment mechanism work? Ans) The open items of an account can only be cleared once you post an identical offsetting amount to the account. In other words, the balance of the items assigned to each other must equal zero.During clearing, the system enters a clearing document number and the clearing date in these items. In this way, invoices in a vendor account are indicated as paid, and items in a bank clearing account are indicated as cleared. You generally use the payment program to clear invoices. Manual clearing of open items is therefore not usually necessary. However, you will sometimes have to clear items manually if, for example, you receive a refund from your vendor or you have set up a direct debit procedure.

9) Difference between interface tables and base tables? Ans) The difference between the interface and base tables is as below

Interface table: is the table where the data gets validated before data get posted to the base tables. There are many interfaces which are seeded with Oracle. You can consider as the entry point of the data, and the interface checks the sanity of data. Base tables: As told earlier once the data is validated will get updated in the base tables, and is considered as the data which is in the base table is accurate and used in many ways. (Reporting..etc..)

The base tables in AP are as follows:

1) ap_invoices_all

2) ap_invoice_payments_all

3) ap_invoice_distibutions_All

4) ap_payment_schdules

5) ap_payment_dustributions_all

6) ap_checks_all

7) ap_accounting_events_all 

8) ap_bank_accounts_all

9) ap_bank_accounts_uses_all

  

10) What is the process of creating an Invoices and transferring it to GL? Ans)  1. create batch 2. create invoice 3. create distribution 4. validate the invoice 5. actions ­à approve 6. if individual create accounting click ok 7. If batch go to batch create accounting. 8. Create accounting hits Payable Accounting(Transfer) ??Program which will create accounting. 9. Run Transfer to GL Concurrent Program 10. Journal Import 11. Post journals 12. Hits balances.

11) How do u Transfer from AP to GL?  Ans)“Payables transfer to GL program” is used to transfer from AP to GL.

12) How many types of invoices are there in AP. Ans)  1. Standarad invoice  2. Debit Memo 3. Credit Memo 4. Mixed Invoice 5. Retain age Invoice

6. Transportation invoice 7. Prepayment invoice 8. Expenses Report Invoice 9. Payment Request Invoice 10. Po default

13) How many types of purchase order types/agreements are there?   A) Standard Purchase Order: You generally create standard purchase orders for one­time purchase of  various items. You create standard purchase orders when you know the details of the goods or services  you require, estimated costs, quantities, delivery schedules, and accounting distributions. If you use  encumbrance accounting, the purchase order may be encumbered since the required information is known

B) Planned PO : A planned purchase order is a long­term agreement committing to buy it items or services from a single source. You must specify tentative delivery schedules and all details for  goods or services that you want to buy, including charge account, quantities and estimated cost. EX: Buying goods for Christmas from a specific dealer.

C) Contract PO : You create contract purchase agreement with your supplier to agree on specific terms  and conditions without indicating the goods and services that you will be purchasing i.e. for $ amount you must supply this much quantity. You can later issue standard PO referencing your contracts and you can  encumber these purchase orders if you use encumbrance accounting.

D) Blanket PO : You create blanket purchase agreements when you know the detail of goods or services  you plan to buy from a specific supplier in a period , but you do not yet know the detail of your delivery  schedules. You can use blanket purchase agreements to specify negotiated prices for your items before  actually purchasing them. A Blanket Purchase Agreement is a sort of contract between the you and ur supplier about the price at  which you will purchase the items from the supplier in future. Here you enter the price of the item not the  quantity of the items. When you create the release you enter the quantity of the items. The price is not 

updatable in the release. The quantity * price makes the Released Amount. Now suppose your contract  with your supplier is such that you can only purchase the items worth a fixed amount against the  contract.

14.Payment

Method:

A funds disbursement payment method is a medium by which the first party payer, or deploying company, makes a payment to a third party payee, such as a supplier. You can use a payment method to pay one or more suppliers. Oracle Payments supports several payment methods for funds disbursement, including the following: 

Check



Electronic



wire



Clearing

Check: You can pay with a manual payment, a Quick payment, or in a payment batch.

Electornic: Electronic An electronic funds transfer to the bank of a supplier.You create electronic payments either through the e- Commerce Gateway, or by delivering a payment batch file to your bank. For both methods, Payables creates a file during payment batch

creation. If you are using the e-Commerce Gateway to create the file of payments, an EDI translator is required to create the EDI Formatted file prior to delivering it to your bank.For electronic funds transfers, the file is formatted and delivered to your ap.out directory for delivery to your bank. Wire: Wire Funds transfer initiated be contacting the bank and requesting wire payment to the bank of a suplier.A payment method where you pay invoices outside of Payables by notifying your bank that you want to debit your account and credit your supplier’s account with appropriate funds. You provide your bank with your supplier’s bank information, and your bank sends you confirmation of your transaction. Your supplier’s bank sends your supplier confirmation of the payment. You then record the transaction manually. Clearing: Clearing Payment for invoices transferred from another entity within the company without creating a payment document.Payment method you use to account for intercompany expenses when you do not actually disburse funds through banks. You do not generate a payment document with the Clearing payment method. When you enter the invoice, you enter Clearing for the payment method.You can record a Clearing payment using a Manual type payment only.

15.What id recurring invoices? What are AP setup steps?

Ans) some times suppliers would not be sending any invoices. but still the payment have to made to home: rent, lease rentals. in this situation we have to create invoice every period wise. For that purpose we have to create one recurringinvoice template. Template means with one master copy creating the multiple invoices is called template. Here we are creating the one invoice master copy is formally known as recurring invoice or recurring invoice template.

SET UP: 1)we have to create one special calendar 2)we have to create one full distribution set 3)we have to enter payment terms in the recurring invoice window 4)enter the template no, first invoice amount, special invoice amounts

Top 10 HR Interview Questions & How To Answer Them These are top 10 HR interview questions and will help you in preparing for the interview. when responding to HR interview questions keep your answers brief and to the point. If you are faced with a difficult HR interview question, make sure you stay calm, don’t get defensive, and take a moment to think about your response before you answer the interview question. Remember, the responses below are only suggestions when attending an HR Interview. Try to personalise your response as much as possible. Tell me about yourself. Answer: Identify some of your main attributes and memorise them. Describe your qualifications, career history and range of skills, emphasising those skills relevant to the job on offer. What have your achievements been to date? A. Select an achievement that is work-related and fairly recent. Identify the skills you used in the achievement and quantify the benefit it had to the company. For example, ‘my greatest achievement has been to design and implement a new sales ledger system, bringing it in ahead of time and improving our debtors’ position significantly, saving the company £50,000 a month in interest’.

Are you happy with your career-to-date? A: This HR interview question is really about your self-esteem, confidence and career aspirations. The answer must be ‘yes’, followed by a brief explanation as to what it is about your career so far that’s made you happy. If you have hit a career plateau, or you feel you are moving too slowly, then you must qualify your answer. Constantly talking isn’t necessarily communicating.- Eternal Sunshine of the Spotless Mind (2004) – Joel Barrish (Jim Carrey) What is the most difficult situation you have had to face and how did you tackle it? A: The purpose of this HR interview question is to find out what your definition of difficult is and whether you can show a logical approach to problem-solving. To show yourself in a positive light, select a difficult work situation which was not caused by you and which can be quickly explained in a few sentences. Explain how you defined the problem, what the options were, why you selected the one you did and what the outcome was. Always end on a positive note. What do you like about your present job? A: This is a straightforward HR interview question. All you have to do is make sure that your ‘likes’ correspond to the skills required for the job on offer. Be enthusiastic; describe your job as interesting and diverse but do not overdo it – after all, you are looking to leave. What do you dislike about your present job? A: Be cautious with this answer to this HR interview question. Do not be too specific as you may draw attention to weaknesses that will leave you open to further problems. One approach is to choose a characteristic of your present company, such as its size or slow decision-making processes, etc. Give your answer with the air of someone who takes problems and frustrations in your stride as part of the job. What are your strengths? A: This is one HR interview question that you know you are going to get so there is no excuse for being unprepared. Concentrate on discussing your main strengths. List three or four proficiencies e.g. your ability to learn quickly, determination to succeed, positive attitude, your ability to relate to people and achieve a common goal. You may be asked to give examples of the above so be prepared. What is your greatest weakness? A: Do not say you have none in response to this HR interview question- this will lead to further problems. You have two options – use a professed weakness such as a lack of experience (not ability) on your part in an area that is not vital for the job.

The second option is to describe a personal or professional weakness that could also be considered to be strength and the steps you have taken to combat it. An example would be: “I know my team think I’m too demanding at times – I tend to drive them pretty hard but I’m getting much better at using the carrot and not the stick”. Why do you want to leave your current employer? A: in response to this HR interview question state how you are looking for a new challenge, more responsibility, experience and a change of environment. Do not be negative in your reasons for leaving. It is rarely appropriate to cite salary as your primary motivator. Why have you applied for this particular job? A: Through this HR interview question the employer is looking for evidence that the job suits you, fits in with your general aptitudes, coincides with your long-term goals and involves doing things you enjoy. Make sure you have a good understanding of the role and the organisation and describe the attributes of the organisation that interest you most.