SAP Business One Certification Practice Exam

What action does the system take once a cost center is created?

1. Creates a report with the cost center name

2. Generates an invoice linked to the cost center

3. Creates a distribution rule with the same name as the cost center

4. Assigns a budget automatically to the cost center

The correct answer is: Creates a distribution rule with the same name as the cost center

When a cost center is created in SAP Business One, the system takes the action of creating a distribution rule with the same name as the cost center. This is important as distribution rules are essential for managing expenses associated with various cost centers. They allow for the allocation of costs and revenues according to defined criteria, which helps in maintaining the financial structure and reporting accuracy across different sections of the business. By associating the distribution rule directly with the cost center name, it allows users to easily identify and apply the correct rules for financial transactions tied to that specific cost center. This linking simplifies accounting processes and ensures that financial reports and statements reflect accurate allocation of resources. While the other options may seem plausible, they do not accurately reflect the functionality of the system in relation to cost centers. Reports and invoices may be created, but those actions are not direct immediate results of creating a cost center. Similarly, the automatic assignment of a budget might be a subsequent step but is not the initial action taken upon cost center creation.