SAP Financial Accounting (SAP FI) Practice Exam

What occurs when a down payment is received in SAP?

1. It is posted to a revenue account

2. It is posted to a GL account and shown on financial statements

3. It is ignored in the financial process

4. It triggers a workflow approval process

The correct answer is: It is posted to a GL account and shown on financial statements

When a down payment is received in SAP, it is posted to a General Ledger (GL) account, which means it is recorded in the financial books of the organization. This recording is crucial because it affects the financial statements, reflecting the cash inflow and impacting the overall financial position of the company. By posting the down payment to a GL account, it provides a comprehensive view of the organization's liabilities and assets. This correct treatment ensures that the financial statements display accurate information about the company's transactions, specifically in terms of what has been received as a down payment. Such postings typically go into a liability account since the company now has an obligation to deliver goods or services related to that payment. In contrast, other options are not suitable for describing the treatment of received down payments. For instance, while revenue is recognized when goods or services are delivered, posting a down payment directly to a revenue account would not be accurate, given that the revenue recognition principle dictates that revenue should only be recorded when the related performance obligation is satisfied. Ignoring down payments would overlook important financial data, and triggering a workflow approval process is not a standard requirement related to the receipt of a down payment. Thus, the correct statement about how a down payment is accounted for in SAP is that