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AccountsPayableInterviewQuestionsInR12OracleTechno&Functional

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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,
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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)CanyougiveasampleProcessFlowforProcuretoPayCycle?
Ans)ProcessflowforProcuretopaywillgothroughtwodepartments
(Commercial&Finance)
ProcureCommercialDepartmentThefollowingstepsinvovleto
prcureanyitem
1.ReceivedRequsitionfromconcernDepartment
2.RequestforQuotationfromSuppliersatleastthree
3.FinalizethebestQuotationbykeepinginmindaboutourcompanies
standard
4.ChecktheBudgetforthesame
5.Negociatewithsupplierformoreeconomicpricingandfinalizethe
paymentterms
6.ProcessthePOandforwardtothesuppliertosupplythegoodsand
services
PayCycleFinanceDepartment
Thefollowingstepsneedtobefulfil
1.InvoiceshouldbematchwithPO
2.InvoiceshouldhasallthesupportingdocumentssuchasPO
copy,Deliverynotedulysignedbyreciever(ourstaffwhoauthorized
toreceivedgoods/storekeeper)
3.Iftheinvoiceisforservicesthenitshouldbeforwardedtothe
concerndepartmentheadorprojectmanagerforhisconfirmationof
workdoneandhisapproval
4.Evenifitnottheservicesinvoice,itshouldforwardedtothe
concernperson'sapprovalwhorequestthePOforthesame
5.Financecanrejecttheinvoiceifitisnotbudgetedandaskforthe
reasons.
6.Afterreceivingalltheconfirmationandapprovalsfromtheconcern
departmentheadstheinvoicewillbeupdateintotheaccounting
systemfirstinordertoavoidanyduplicationofInvoiceandPO(it
shownonaccountingpackageiftheinvoiceisduplicateifnot,altelast
ittellsyouifthePOalreadyusedorcancel)
7.Financeapprovedtheinvoiceandprocessthepaymentbaseon
paymenttermswiththesupplier.

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4)WhatarethejournalsentriesinProcuretoPayCycle.
Ans)
Description
DRCR
A)PocreationNoEntry
NoEntry
B)WhileReceivingthegoodsMaterial
ReceivingApAccurval
C)WhileInspectionNo
EntryNoEntry
D)WhileTransfordthegoodtoInventoryInvOrg
MaterialMaterialReceiving
Purchaseprice
Varience
F)WhilePoIsMatchingtoInvoicesAp
AccurvalLiability

G)WhileMakingthePayment
LiabilityCashClearing

H)OfterReconciliationCash
ClearingCash

I)FinalEntryInvOrg
MaterialCash

5)WhatisthedifferencebetweenEFT&Wire?
Ans)EFTandWIREarethemostpopularformofelectronicpayment
method.EFTstandsforelectronicfundtransferanditisoneofthe
fastestmodeofelectronicpaymentafterWIRE.EFTisabatch
orientedmechanismfortransferingfundsfromonebanktoanother
becauseofwhichclearing&settlementtakesaround2to4days.On
theotherhand,WIREisaRTGSi.e.realtimegrosssettlementsystem
ofmakingthefundtransferonrealtimeandgrossbasis.Clearingand
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settlementhappensonthesameday.WIREismoreexpensiveand
fasterthanEFT.
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
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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
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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..)

ThebasetablesinAPareasfollows:
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)WhatistheprocessofcreatinganInvoicesandtransferringit
toGL?
Ans)
1.createbatch
2.createinvoice
3.createdistribution
4.validatetheinvoice
5.actionsapprove
6.ifindividualcreateaccountingclickok
7.Ifbatchgotobatchcreateaccounting.
8.CreateaccountinghitsPayableAccounting(Transfer)??Program
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whichwillcreateaccounting.
9.RunTransfertoGLConcurrentProgram
10.JournalImport
11.Postjournals
12.Hitsbalances.
11)HowdouTransferfromAPtoGL?
Ans)PayablestransfertoGLprogramisusedtotransferfromAPto
GL.

12)HowmanytypesofinvoicesarethereinAP.
Ans)
1.Standaradinvoice
2.DebitMemo
3.CreditMemo
4.MixedInvoice
5.RetainageInvoice
6.Transportationinvoice
7.Prepaymentinvoice
8.ExpensesReportInvoice
9.PaymentRequestInvoice
10.Podefault
13)Howmanytypesofpurchaseordertypes/agreementsarethere?

A)StandardPurchaseOrder:Yougenerallycreatestandardpurchase
ordersforonetimepurchaseofvariousitems.Youcreatestandard
purchaseorderswhenyouknowthedetailsofthegoodsorservicesyou
require,estimatedcosts,quantities,deliveryschedules,andaccounting
distributions.Ifyouuseencumbranceaccounting,thepurchaseorder
maybeencumberedsincetherequiredinformationisknown
B)PlannedPO:Aplannedpurchaseorderisalongtermagreement
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committingtobuyit
itemsorservicesfromasinglesource.Youmustspecifytentative
deliveryschedulesandalldetailsforgoodsorservicesthatyouwantto
buy,includingchargeaccount,quantitiesandestimatedcost.
EX:BuyinggoodsforChristmasfromaspecificdealer.
C)ContractPO:Youcreatecontractpurchaseagreementwithyour
suppliertoagreeonspecifictermsandconditionswithoutindicatingthe
goodsandservicesthatyouwillbepurchasingi.e.for$amountyou
mustsupplythismuchquantity.YoucanlaterissuestandardPO
referencingyourcontractsandyoucanencumberthesepurchaseorders
ifyouuseencumbranceaccounting.
D)BlanketPO:Youcreateblanketpurchaseagreementswhenyou
knowthedetailofgoodsorservicesyouplantobuyfromaspecific
supplierinaperiod,butyoudonotyetknowthedetailofyourdelivery
schedules.Youcanuseblanketpurchaseagreementstospecify
negotiatedpricesforyouritemsbeforeactuallypurchasingthem.
ABlanketPurchaseAgreementisasortofcontractbetweentheyou
andursupplieraboutthepriceatwhichyouwillpurchasetheitems
fromthesupplierinfuture.Hereyouenterthepriceoftheitemnotthe
quantityoftheitems.Whenyoucreatethereleaseyouenterthequantity
oftheitems.Thepriceisnotupdatableintherelease.Thequantity*
pricemakestheReleasedAmount.Nowsupposeyourcontractwith
yoursupplierissuchthatyoucanonlypurchasetheitemsworthafixed
amountagainstthecontract.

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
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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 eCommerce 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
suppliers account with appropriate funds. You provide your bank
with your suppliers bank information, and your bank sends you
confirmation of your transaction. Your suppliers bank sends your
supplier confirmation of the payment. You then record the
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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.Whatidrecurringinvoices?WhatareAPsetupsteps?

Ans)sometimessupplierswouldnotbesendinganyinvoices.butstill
thepaymenthavetomadetohome:rent,leaserentals.inthissituation
wehavetocreateinvoiceeveryperiodwise.Forthatpurposewehave
tocreateonerecurringinvoicetemplate.Templatemeanswithone
mastercopycreatingthemultipleinvoicesiscalledtemplate.Herewe
arecreatingtheoneinvoicemastercopyisformallyknownas
recurringinvoiceorrecurringinvoicetemplate.
SETUP:
1)wehavetocreateonespecialcalendar
2)wehavetocreateonefulldistributionset
3)wehavetoenterpaymenttermsintherecurringinvoicewindow
4)enterthetemplateno,firstinvoiceamount,specialinvoiceamounts

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6 comments

Add a comment as DEEPAK SHARMA

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