SAP Business One Certification Practice Exam

In what scenario can you automatically generate a Capitalization document?

1. From an A/R Invoice only

2. From an A/P Invoice only

3. From any financial document

4. From a purchase order

The correct answer is: From an A/R Invoice only

The generation of a Capitalization document in SAP Business One is specifically associated with the accounting process related to assets. When dealing with capitalization, the system allows you to automatically generate a Capitalization document from an A/R invoice. This is particularly relevant when you are selling items that are part of a capital asset or when the sale involves integrating the asset into the company’s financial books as a capital expenditure. A/R invoices typically reflect sales and can involve items that are deemed as assets once sold, triggering the capitalization process. The functionality ensures that all relevant financial and asset records are updated simultaneously, maintaining accuracy and compliance in financial reporting. In contrast, A/P invoices typically relate to purchases rather than sales and may not directly trigger capitalization for existing company assets. While any financial document could theoretically involve capital assets, only specific types like sales invoices directly lead to the automatic generation of a Capitalization document as per standard practices in SAP Business One. Purchase orders, on the other hand, do not represent a financial transaction until an invoice is generated and, therefore, do not automatically create capitalization entries.