Perform Periodic Processes MB-310 Practice Questions (Page 7)

Questions 31–35

1. 31application · medium

   A parent company consolidates its two subsidiaries. The subsidiaries have intercompany sales transactions that must not appear in the consolidated financial statements. What should you do to remove these transactions during consolidation?

   • ASet up elimination rules that automatically generate elimination journal entries during consolidation.
   • BManually delete the intercompany transactions from the subsidiaries' ledgers before consolidation.
   • CCreate a separate consolidation company and exclude the intercompany accounts from the mapping.
   • DUse the Ledger settlement process to settle the intercompany balances.
   Reveal Solution Discussion Select an answer first
2. 32application · medium

   An accountant needs to reconcile the vendor prepayment account. There are multiple open prepayment transactions and corresponding vendor invoices. The accountant wants to match them so the account balance reflects only the remaining prepayments. What should you do?

   • ARun the year-end close to clear the account.
   • BPost a reversing journal entry for the prepayment amount.
   • CCreate a closing schedule task to manually adjust the account.
   • DUse ledger settlement to mark the prepayment and invoice transactions as settled.
   Reveal Solution Discussion Select an answer first
4. 33expert · hard

   A parent company consolidates two subsidiaries. One subsidiary uses a different chart of accounts and currency. The parent wants to use Consolidation online. The controller is concerned about intercompany transactions being double-counted. What should you configure to ensure accurate consolidated financials?

   • ASet up account mappings for the different chart of accounts and configure elimination rules for intercompany transactions.
   • BUse the same chart of accounts for all subsidiaries and manually remove intercompany transactions.
   • CUse the Ledger settlement process to eliminate intercompany transactions.
   • DRun the consolidation without mapping and then adjust the balances manually.
   Reveal Solution Discussion Select an answer first
5. 34application · medium

   Fabrikam Inc. is preparing for its fiscal year-end. The CFO wants to ensure that the year-end close generates the required financial statements and that the opening balances for the new fiscal year are correct. What should you configure?

   • AEnable the ledger settlement feature for all balance sheet accounts.
   • BCreate a closing schedule with a task to post the year-end close.
   • CRun the consolidation online process for all legal entities.
   • DSet up the year-end close template with the appropriate main accounts and reporting definitions.
   Reveal Solution Discussion Select an answer first
6. 35expert · hard

   A company is preparing for year-end close. The controller wants to ensure that the retained earnings account is updated correctly, but the company has multiple retained earnings accounts for different dimensions. The controller also wants to prevent any postings to the old fiscal year after the close. What should you do?

   • AUse the Consolidation online tool to update retained earnings.
   • BRun the year-end close once and then manually adjust the retained earnings balances.
   • CConfigure the year-end close to use the appropriate retained earnings account for each dimension and set the old fiscal year to On hold.
   • DUse the Ledger settlement process to update retained earnings and then lock the period.
   Reveal Solution Discussion Select an answer first