Accounts Payable Certification Practice Test

What happens to the payment when the “Apply credits up to zero amount” option is enabled during a payment process request with a $200 invoice and a $225 credit memo?

1. The payment process applies $200 of the credit memo to the invoice, creating a payment for $0.

2. The payment process does not select any documents for payment due to a negative balance.

3. The payment process creates a refund for the entire credit memo amount.

4. The payment process pays only the invoice amount without applying any credits.

The correct answer is: The payment process applies $200 of the credit memo to the invoice, creating a payment for $0.

When the option to "Apply credits up to zero amount" is enabled during the payment process, it allows for the application of any available credits to invoices until the invoice balance is reduced to zero. In this scenario, with a $200 invoice and a $225 credit memo, the payment process will apply $200 of the credit memo against the invoice. This effectively pays the invoice in full, resulting in a net payment amount of $0. Since the credit memo is greater than the invoice amount, it will not be fully utilized, leaving a remaining balance of $25 on the credit memo for future use. This functionality is typically designed to ensure that invoices can be covered by available credits, thereby simplifying the payment process and reducing the need for additional cash outflow when credits can be utilized. Other scenarios outlined in the question would not hold true because they either ignore the application of the credit memo or would not fulfill the intent of utilizing available credits to clear the invoice.