Accounts Payable Certification Practice Test

For intercompany transactions, which two options are valid if the amount involved needs to be $3,000 or more?

1. Approval rules must allow transactions to be routed accordingly.

2. The intercompany system option must be set to a minimum amount of $3,000.

3. Invoices will be generated for the minimum accountable amount at the payable invoice options.

4. The minimum transaction currency cannot be updated.

The correct answer is: The intercompany system option must be set to a minimum amount of $3,000.

The correctness of the selected answer hinges on the nature of intercompany transactions and their corresponding management systems. When dealing with intercompany transactions, the system settings play a critical role in ensuring accuracy and compliance. Setting the intercompany system option to a minimum amount of $3,000 ensures that any transaction that does not meet or surpass this threshold is either processed differently or not processed at all. This prevents unnecessary clutter in accounting records and ensures that only significant transactions are tracked and managed within the system, which is vital for accurate financial reporting and analysis. While approval rules and invoice generation related to other amounts may have their own importance, they do not specifically address the foundational requirement of establishing a clear threshold for processing transactions. The limitation on currency updates does not pertain directly to the management of minimum transactional amounts in intercompany dealings. Thus, defining a minimum in the intercompany system is paramount for maintaining effective financial operations.