FINANCIAL-USER Financial User Practice Questions
Prepare for FINANCIAL-USER with more than an answer.
- Exam fee
- $250 USD
- Level
- Associate
- Valid for
- Not permanent - ongoing requirements needed
Domains covered on the exam 10
- Subsidiaries, Classifications, and Chart of Accounts10%
- Accounts Receivable15%
- Billing Schedules5%
- Accounts Payable15%
- Banking and Payment Processing10%
- Journal Entries10%
- Budgeting8%
- Expense Allocations7%
- Financial Reports and KPIs10%
- Period and Year-End Close10%
- 1
A holding company (Parent) has two subsidiaries: a manufacturing company (Sub A) and a sales company (Sub B). Sub A sells inventory to Sub B at a 20% markup. For consolidated financial statements, this intercompany profit must be removed. Which records and transactions are essential to properly account for and eliminate this profit? (Select THREE)
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Correct answer: A, C, D
- 2
True or False: When an expense allocation schedule is configured with a 'Dynamic' allocation mode, the weighting must be manually updated on the schedule record before each time it is run.
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Correct answer: B
This statement is false. The purpose of the 'Dynamic' allocation mode is to automate the recalculation of weighting. It does this by referencing the period-end balance of a specified statistical account. The user updates the statistical account's balance (e.g., via a journal entry), and the allocation schedule automatically uses that latest balance to calculate the weights when it runs.
- 3
A sales order for an inventory item is approved and then fulfilled, generating an Item Fulfillment record. Subsequently, the sales order is billed, creating an Invoice. At which point in this process is the Cost of Goods Sold (COGS) account debited?
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Correct answer: C
For inventory items, the recognition of COGS and the reduction of the Inventory Asset account occurs at the point of fulfillment (specifically, when the status is 'Shipped'). The sales order is a non-posting commitment, and the invoice records the revenue and receivable. The physical (and financial) departure of inventory is recorded by the Item Fulfillment.
- 4
Which of the following transactions, when saved, will credit the Undeposited Funds account? (Select TWO)
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Correct answer: C, E
Customer Payments and Cash Sales typically DEBIT the Undeposited Funds account. The 'Make Deposit' transaction is used to move the balance OUT of Undeposited Funds (a CREDIT) and into a specific bank account (a DEBIT). A Cash Refund can also credit Undeposited Funds if it is sourced from that account before the funds have been deposited.
- 5
A new controller has joined a company that uses NetSuite OneWorld. They are trying to understand the flow of intercompany transactions and eliminations. The following diagram illustrates a basic intercompany sale. Where should the journal entry to eliminate the intercompany profit be posted?
graph TD subgraph ParentCo [Holding Company] A[Subsidiary A (Manufacturing)] B[Subsidiary B (Sales)] E[(Elimination Subsidiary)] end A -- Intercompany Sale --> BShow answer details
Correct answer: C
The purpose of an Elimination Subsidiary is to serve as a container for journal entries that only affect consolidated financial statements. Posting the elimination entry here ensures that the individual ledgers of Subsidiary A and Subsidiary B remain accurate for their standalone reporting, while the consolidated view correctly removes the intercompany profit.
- 6
A global company is performing its year-end close. The North American subsidiary uses a December 31st fiscal year-end, while the Australian subsidiary uses a June 30th fiscal year-end. The controller needs to run a consolidated financial report as of December 31st. Which statement accurately describes how NetSuite handles this scenario?
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Correct answer: C
NetSuite's OneWorld is designed to handle multiple fiscal calendars across subsidiaries. The system intelligently maps accounting periods together based on period end dates when generating consolidated reports. This allows each subsidiary to operate on its required local fiscal calendar while still enabling seamless global consolidation without manual data manipulation or proration.
- 7
During the month-end close process, a junior accountant is unable to complete the 'Lock A/R' task on the Period Close Checklist. All other preceding tasks have been successfully completed. What is the most likely cause preventing this task from being marked as complete?
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Correct answer: C
The 'Lock A/R' task specifically checks for transactions that affect the accounts receivable ledger. The system will prevent this task from completing if there are any outstanding A/R transactions, such as unapproved invoices, pending customer payments, or unapproved credit memos, that have a transaction date within the period being closed. These must be resolved before the A/R module can be locked.
- 8
A company needs to allocate its monthly rent expense from a single corporate account to three departments: Sales, Marketing, and Operations. The allocation is fixed and based on square footage: Sales 50%, Marketing 30%, and Operations 20%. Which components must be configured on the Expense Allocation Schedule to achieve this? (Select THREE)
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Correct answer: A, B, D
- 9
A controller is reviewing a dynamic expense allocation schedule that distributes IT costs based on departmental headcount. The schedule ran, but the resulting journal entry allocated amounts that are inconsistent with the current month's headcount figures. What is the most likely cause of this discrepancy?
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Correct answer: B
Dynamic allocations rely on the balance of a specified statistical account at the time the allocation is run. For the allocation to be correct, the statistical data (in this case, headcount) for the current period must be entered and posted via a statistical journal entry before the expense allocation schedule is executed. If the headcount data is outdated, the allocation will be based on the last available figures.
- 10
A company sells a software product with a recurring annual license fee. However, to help customers with cash flow, they are billed in equal quarterly installments. Which type of billing schedule should be used to automate this process?
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Correct answer: D
A standard billing schedule is ideal for time-based, recurring billing. By setting the schedule to bill in advance or in arrears with a frequency of every 3 months and a count of 4, the system will automatically generate four equal invoices over the course of the year, matching the quarterly installment requirement.
