General Ledger Interview Questions Part 3

1.Explain the steps for Mass Budget?

Mass budget means allocation of budget amounts to the range of accounts.

Before going to the mass budget we have to ensure whether Budgetary control is checked at the Budgetary control Tab of Set of Books.

Step-1: Define parent segment value and assign the Child segment values.

In chart of accounts we have to create the on parent segment value. Then we have to assign the child segment value to the parent segment value and compile the chart of account.

Step-2:  Define Budget

Define the name of the budget and description, select the status of the budget and check the require budget journal box. Specify the first period and last period save the form and click on the open next year.

Step-3: Define Budget Organization.

Define the name of budget organization and description and choose the display sequence and set password (optional). Then go the ranges define the Low and High ranges one for cost pool a/c and other one for child values a/c. The cost pool a/c should type entered choose the functional currency and fund check level is absolute and select the defined budget in the step –1.  Foe the Child values give the type as calculated and functional currency. The funds check level by default it will be none. Then save the ranges till the status become Current. Then go to the range assignments then define one by one account which you mentioned in the ranges.

Step –4: Define budget Journals

Enter the budget amounts to the cost pool a/c through budget JVs and observe the status of funds if the status is passed then the funds are reserved. And post the JVs. Define the stat Journal for the allocation of the budget amounts and post the same.

Step-5: Define Mass budget.

To enter the mass budget define the name and description and create formula. In formula specify the cost pool account for allocating the budget amount to the child values on the bases of the stat journal proportion.

Formula: Target a/c = A*B/C  

Where

A= Cost pool A/c

B= Usage factor

C= Sum of usage factors

For Stat currencies define the balance type is actual other than this mention budget. Then save the work and validate the mass budget.

 

2.What are the options available with respect to budgets at set of books level and explain each in brief?

The options available with respect to budget at set books level are as follows

• Reserves for Encumbrance.
• Enable Budgetary control
• Require Budget Journals.

 

Reserve for encumbrance: If you enter an out-of-balance encumbrance entry, General Ledger automatically posts the difference against the account you specify here. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a Reserve for Encumbrance account for each balancing entity.

Enable Budgetary Control: To define the funding budget this should be optioned. then only we can create the funding budget. For planning budget it is optional.

Require budget Journals: Check Require Budget Journals to allow only those budget journal entry methods that create journal entries. If you are using budgetary control, General Ledger requires you to create budget journals for your funding budget. If you want to require budget journals for all budgets, choose this option. However, if you want to require budget journals for your funding budget only, do not choose this option

 

 

3.What are different types of budgets and explain each in brief?

There are two types of budgets as follows.

1. Non – funding budget (Planning Budget)
2. Funding budget.

 

Non – funding Budget: The budget is prepared for comparing the actual with budget figures to know the variance. This budget will have no impact on the transaction. For defining the budgets we can directly enter the amounts to this budgets.

Funding Budget: The funding budget is requires budget journal for defining the budget amounts. It will control the actual transaction. There are three fund check levels are there in funding budget they are None, Absolute, Advisory.

 

4.What is the profile name for setting Aliases option?

Profile name for Aliases is  Flexfield Shorthand entry

 

5.What is the mandatory source and category combination for Inter Company Accounts?

Source: Other

Category: Other

6.What do you mean by budget formula?

You define budget formulas to calculate budget amounts. Your budget formulas can be simple or complex. You can use any combination of fixed amounts and account balances, including actual or budget amounts, statistics, and period-to-date or year-to-date balances from the current period, prior period or same period last year.

When you define budget formulas, you create a budget formula batch. The batch contains one or more budget entries, and each entry contains one or more formulas. Use budget batches and entries to group your budget formulas. For example, you might combine all formulas for a single department or division into one batch, or group all formulas for certain types of calculations into separate entries.

When you calculate budgets using a budget formula, General Ledger replaces any existing budget amounts directly, it does not create a budget journal.

 

7.What is the maximum Aliases Size?

 The maximum aliases Size is 20 characters.

 

8.How to disable one particular Alias instead of all?

Go to the Aliases, Effective Tab page of Aliases screen, there uncheck the enable for a particular alias.

 

9.What is the difference between summery and detail balance option in Inter company accounts?

Summery: Summery means it will show single journal for account balance.

Detail: Detail means it will show Transaction wise balance.

10.If set of books is defined with enabling “ Require Budget journals” option, can I change it later?

Yes, once you have saved your work, you cannot choose to require budget journals later provided if there is any planning budget in set of books. You can, however, disable this option at any time.

 

11.What are fund check levels available?

 There are three-fund check levels available in budget they are

• None
• Advisory
• Absolute

 

12.What are different statuses of Budget Organization?

 There are four statuses in Budget organization they are.

• Adding
• In Process
• Reporting
• Current

 

13.What do you mean by Master Budget?

Compilation of all budgets is called Master budget. Master budgets are informational only when used with budgetary control. Master budgets do not affect funds checking, budgetary control options, or the relationships between detail and summary accounts used for budgetary control.

 

14.Is there a limit to the number of periods in a budget year? And how many years a budget can span?

Yes, budget can include up to sixty periods per year, and can span an unlimited number of fiscal years.

15.Is it required to open accounting periods before defining budget for that period?

 No, it is not required to open the accounting periods before defining budget for that period provided budget periods should be opened.

 

16.Can I post a Budget Journal to a closed period?

Yes, We can post a Budget Journal to a closed period also.

 

17.What are different status of Budgets?

There are three statuses of Budget they are

• Current
• Frozen
• Open

 

18.If I delete my Budget Organization, will the budget amounts be deleted?

 No, by deleting the budget organization the budget amounts will not be deleted.

 

19.Can I Update or adjust an existing account range in my budget Organization?

 You cannot update or adjust an existing account range in budget organization because as the account range field is grayed out after saving the account range. But we can delete the existing account range and redefine the required account range.

 

20.Is it required to provide offset account in Mass Budget formula?

 

No, You can enter an Offset account if you want to generate balanced MassBudget journals. The offset formula line is optional for MassBudgets, since budgets do not have to balance.