SAP Financial Accounting (SAP FI) Practice Exam

In which scenario can a GL account be posted in foreign currency while having its balance reported in local currency?

1. When the GL account currency is the same as the company code currency

2. When the GL account is managed in local currency

3. When the GL account has a different currency than the company code currency

4. When the account is blocked for foreign currency transactions

The correct answer is: When the GL account is managed in local currency

The scenario in which a General Ledger (GL) account can be posted in foreign currency while having its balance reported in local currency is accurately described by the assertion that the GL account is managed in local currency. When a GL account is designated to operate in local currency, it means that transactions can be entered and recorded in any foreign currency. However, the account's balance will ultimately be converted and presented in the local currency. This is a common practice in accounting, allowing organizations to conduct transactions in different currencies while ensuring that their financial reports reflect the figures in the currency that is most relevant to their operations, usually the local currency of the company code. The system manages the conversion and reporting process, maintaining clarity in financial statements for stakeholders who may not be familiar with foreign currencies. While the other options describe different account settings, they do not support the ability to post in foreign currency while retaining a local currency balance as effectively as this scenario does.