When deciding how to set up the system to recognize revenue, it is important to understand the extent of revenue deferral and the subsequent timing of revenue recognition.
Which two statements are true when you consider that recognition depends on the nature of the contingency?
When you consider that recognition depends on the nature of the contingency, these two statements are true:
Payment-based contingencies do not always require payment before the contingency can be removed and revenue recognized. For example, if a customer pays a deposit or an advance payment, the contingency is removed and revenue is recognized at that point.
Post-billing customer acceptance clauses must expire (implicit acceptance), or be manually accepted (explicit acceptance), before the contingency can be removed and revenue recognized. For example, if a customer has 30 days to accept or reject a product after receiving an invoice, the contingency is removed after 30 days or when the customer accepts the product, whichever comes first. The other statements are not true because:
Pre-billing customer acceptance clauses require the recording of customer acceptance in the feeder system, and its expiration, before importing into Receivables for invoicing. Customer acceptance or its expiration must occur before invoicing, not before revenue recognition.
Time-based contingencies can expire, but the contingency will have to be removed manually before the revenue is recognized if payment is not due yet. For example, if a customer has a one-year warranty period, the contingency is removed after one year, but revenue is recognized when payment is due or received, whichever comes later.
Time-based contingencies must expire before the contingency can be removed and revenue recognized, not must not expire. Verified Reference: https://docs.oracle.com/en/cloud/saas/financials/23b/faofc/manage-revenue-for-receivables.html#FAOFC-GUID-1F9E7B6A-8F4D-4A0C-9E3B-8C0D1F2C5E3A
Manage Transaction Types
Scenario
A US based company acquired on January 1. 2023. requires Supremo US Business Unit to capture invoices in Oracle Financials Cloud.
Task:
Define a new Transaction Type for the class invoice, where:
Name of the transaction type is XXinvoice (Replace XX with 03.
which is your allocated User ID.)
Customer bills assigned to this transaction type must be printed
Transaction type is meant for billing transactions With open balances
Balances need to be maintained for invoices associated with this
transaction type
Freight charges must be allowed
Cash applications to invoices assigned to this transaction type must not exceed the invoice balance due
Invoices associated with this transaction type must be accounted for in the General Ledger application.
Revenue GL account 41000 should be assigned as a reference account for the business unit in question and the company segment must be 120 Supremo Fitness
Log in to Oracle Financials Cloud.
Click on theTransaction Typesicon in theReceivableswork area.
Click on theCreatebutton.
In theTransaction Typewindow, enter the following information:
Name:XXinvoice
Class:Invoice
Transaction Action:Create
Transaction Source Type:Customer
Print Customer Bills:Yes
Allow Freight Charges:Yes
Allow Cash Applications:Yes
Accounting:
Reference Account:41000
Company Segment:120 Supremo Fitness
Click on theSavebutton.
The new transaction type will be created and the customer bills associated with this transaction type will be printed. The balances will also be maintained for invoices associated with this transaction type. Freight charges will be allowed and cash applications to invoices assigned to this transaction type must not exceed the invoice balance due. The invoices associated with this transaction type will be accounted for in the General Ledger application. The revenue GL account 41000 will be assigned as a reference account for the business unit in question and the company segment must be 120 Supremo Fitness.
Steps to confirm the Oracle Applications Cloud version:
Click on theSettings and Actionsmenu under your profile in the Oracle Applications Cloud window.
Click onAbout This Applicationin the Settings and Actions menu.
Copy the complete version number from theAbout this Applicationpop-up in the Oracle Application Cloud window.
Paste the version number in the box below.
ClickConfirm.
Your customer receives their invoices via the XML delivery method. They want to receive billing transactions for specific sites only. Now you have been tasked with creating a very focused delivery method of XML transactions for this customer site that should be receiving the invoice.
To define this setup, you must add a new lookup code to the AR Features lookup type in the Manage Receivables Lookups task. Which lookup code would you use?
This lookup code is used to define the XML delivery method for a customer site. You can specify the XML delivery method in the customer profile or in the transaction source. Verified Reference: [Overview of Oracle Receivables - Oracle]
Upon approval of a remittance batch of type Factored with Recourse, the Receivables application creates a receipt and establishes risk.
How does Receivables establish risk?
When you approve a remittance batch of type Factored with Recourse, Receivables creates a receipt and records an entry to the Remitted Bills Receivable account to establish risk. This entry reduces the balance of the Bills Receivable account and increases the balance of the Remitted Bills Receivable account. Verified Reference: [How You Remit Bills Receivable - Oracle]
Your organization has decided to use the Portal Upload delivery method for some of their customers. You will be using this in place of other options, such as Print Email, or XML to deliver customer invoices.
Which step must be performed in the system to deliver transactions to your customers by using the Portal Upload method?
