Oracle Financials Cloud: General Ledger 2017 Implementation Essentials — Question 15

Which two statements are true about Accounting for Tax on Receivables? (Choose two.)

Answer options

• A. For Miscellaneous receipts, if the receivable activity tax rate code source is Activity for the activity type of Miscellaneous Cash, Receivables use the tax account that is defined on the receivable activity.
• B. For Adjustments, if the receivable activity tax rate code source is Invoice, Receivables derive the tax account from auto-accounting.
• C. For Adjustments, if the receivable activity tax rate code source is Invoice, Receivables use the tax account that is defined on the receivable activity.
• D. For Adjustments, if the receivable activity tax rate code source is Invoice, Receivables use the tax account of the tax code.
• E. For Credit memos, if the profile "AR: Use Invoice Accounting for Credit Memos" is set to Yes, Receivables derive the item distribution from the invoice and the tax account from auto-accounting.
• F. For Credit memos, if the profile "AR: Use Invoice Accounting for Credit Memos" is set to No, Receivables derive the tax account from auto-accounting.

Correct answer: C, E

Explanation

Option C is correct because it states that for Adjustments with an Invoice tax rate code source, Receivables use the defined tax account on the receivable activity. Option E is also correct as it indicates that if the profile for Credit memos is set to Yes, Receivables derive the tax account from auto-accounting. The other options either misrepresent the tax account derivation process or apply to different scenarios than those specified in the question.