1Z0-1074-26 Oracle Cost Management Cloud 2026 Implementation Professional Practice Questions
Prepare for 1Z0-1074-26 with more than an answer.
- 1
When defining a Cost Profile in Oracle Cost Management, an implementer must choose a Costing Method. Which costing method calculates unit costs by maintaining individual transaction acquisition cost layers and consumes inventory on a strict First-In, First-Out basis?
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Correct answer: A
Under the Actual Cost method in Oracle Cost Management, items are costed based on their actual receipt costs, and layers are maintained in cost tables. When transactions consume on-hand quantities, the engine depletes the oldest open receipt cost layers first according to the FIFO (First-In, First-Out) receipt layer sequencing.
- 2
Cost accountants must execute batch processes in a specific sequential order to translate physical warehouse inventory movements into accounted subledger journal entries. Which TWO steps are mandatory prerequisites before the 'Create Accounting' process can generate final journal entries for Cost Accounting? (Select TWO)
sequenceDiagram participant Inv as Inventory / Receiving participant Prep as Cost Preprocessor participant Dist as Create Cost Distributions participant SLA as Create Accounting Inv->>Prep: 1. Extract Transactions Prep->>Dist: 2. Process Costing Events Dist->>SLA: 3. Create Subledger EntriesShow answer details
Correct answer: B, E
'Create Cost Accounting Distributions' evaluates transactions staged by the preprocessor, derives valuation units, computes transaction costs based on cost profiles, updates layer balances, and generates the underlying distribution lines that Subledger Accounting consumes.
The 'Transfer Transactions from Inventory to Costing' process extracts completed material, receiving, and work order transactions from supply chain source tables and stages them into the cost management interface tables for processing.
- 3
A manufacturing firm implements the Periodic Average Cost (PAC) method to satisfy statutory reporting requirements in Latin America. When running the periodic cost computation across multiple cost organizations that transfer materials among one another in complex circular flows, which configuration setting governs the convergence and resolution of unit costs across iterative cycles?
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Correct answer: A
Under Periodic Average Costing (PAC), recursive transfers between cost organizations within a periodic cost group require iterative calculation runs. The 'Maximum Iterations' and 'Tolerance Percentage' parameters define how many mathematical loops the calculation engine will perform to resolve circular transfer costs until the change between successive iterations falls below the defined tolerance threshold.
- 4
A multinational automotive supplier, Titan Powertrain Ltd., operates an engine manufacturing plant in Poland. Titan maintains two separate financial reporting requirements: one under US GAAP using USD currency for corporate consolidated reporting, and another under local Polish Statutory accounting using PLN currency.
To satisfy both standards, the implementation team establishes a Primary Cost Book linked to the US GAAP Primary Ledger (USD) utilizing Standard Costing, and a Secondary Cost Book linked to the Statutory Secondary Ledger (PLN) utilizing FIFO Actual Costing.
During user acceptance testing, a cost accountant executes a standard material issue transaction from on-hand inventory to a discrete manufacturing work order. When reviewing the accounting entries, the accountant observes that distributions were created successfully for the Primary Cost Book, but no cost distributions or journal entries exist for the Secondary Cost Book. What is the root cause of this issue?
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Correct answer: C
In multi-book cost accounting, every cost book must have an active cost profile assignment mapped to the item or item category within that cost organization. Furthermore, the 'Create Cost Accounting Distributions' scheduled process takes a Cost Book parameter. If left restricted or if the cost profile assignment rules for the secondary book are not populated, the cost distribution processor processes only the primary cost book.
- 5
A procurement specialist creates a purchase order for non-inventory operational supplies destined for an administrative expense department. The line item is flagged with 'Accrue at Receipt = No'. When the receiving clerk records the physical receipt of these goods in Oracle Receiving, which accounting impact occurs in Receipt Accounting upon running the 'Create Receipt Accounting Distributions' process?
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Correct answer: C
When 'Accrue at Receipt' is set to No (typical for period-end expense purchases), physical receipt recording does not generate accounting distributions in Receipt Accounting. Instead, at the close of the financial accounting period, the 'Create Receipt Accruals - Period-End' process identifies uninvoiced receipts for these lines, calculates the accrual amount, and generates temporary accrual entries that automatically reverse on the first day of the subsequent period.
- 6
A lead cost accountant notices that several receipt accrual balances remain open in Receipt Accounting long after the corresponding purchase orders were fulfilled and paid. The investigation reveals that the invoice lines were matched to the purchase orders rather than the receipts, with minor quantity discrepancies within the tolerance limit. Which task should the implementer configure or execute to close out these lingering accrual balances without impacting inventory asset valuation?
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Correct answer: D
To reconcile and close open accrual balances caused by quantity or price mismatches, Oracle Receipt Accounting provides the 'Adjust Accrual Balances' task and automated accrual clearing rules. Running this clears the residual balance from the accrual account to an accrual clearing adjustment expense account without artificially distorting inventory valuation.
