Oracle Financials Cloud: Accounts Payable 2017 Implementation Essentials — Question 9

You entered an invoice of 12,000 and paid it for Office Suppliers. The payment was never received by the supplier, and you decide to return the entire order. What should you do?

Answer options

• A. Cancel the invoice, which debits the liability and credits the expense.
• B. Issue a credit memo, which will debit the liability and credit the expense.
• C. Void the payment, which debits cash and credits the liability, and then issue a credit memo, which debits the liability and credits the expense.
• D. Void the payment, which debits cash and credits the liability, and then cancel the invoice, which debits the liability and credits the expense.

Correct answer: D

Explanation

The correct action is to void the payment to reverse the cash transaction and then cancel the invoice to remove the liability and adjust the expense. Options A and B do not address the payment voiding step, which is necessary because the payment was never received. Option C incorrectly suggests issuing a credit memo instead of canceling the invoice, which is not the appropriate step to fully return the order.