Oracle Planning 2017 Implementation Essentials — Question 44

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

Answer options

• A. Void the payment, which debits cash and credits the liability, and then issue a credit memo, which debits the liability and credits the expense.
• B. Issue a credit memo, which will debit the liability and credit the expense.
• C. Cancel the invoice, 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 answer is D because voiding the payment reverses the cash transaction and adjusts the liability, while canceling the invoice ensures that the expense is also adjusted. Option A is incorrect because issuing a credit memo after voiding the payment is unnecessary since both actions should be taken together. Option B does not address the need to void the payment, and Option C fails to account for the payment already made.