SAP Business One Certification Practice Exam

What does the Aging report primarily show?

1. Monthly sales transactions

2. Open invoices and their ages

3. Cash balances over time

4. Annual profit analysis

The correct answer is: Open invoices and their ages

The Aging report primarily shows open invoices and their ages, which provides a clear view of a company's outstanding receivables. By categorizing invoices based on how long they have been overdue—typically into time frames like 0-30 days, 31-60 days, 61-90 days, and more—this report helps businesses manage their cash flow effectively. It allows businesses to identify overdue invoices, track customer payments, and assess the overall credit risk associated with outstanding debts. This information is vital for maintaining healthy cash flow, allowing businesses to take proactive measures such as following up with customers on overdue invoices or adjusting credit terms and policies. Other choices, while relevant to financial reporting, do not reflect the primary purpose of an Aging report. Monthly sales transactions, cash balances, and annual profit analysis all provide different insights into a business's financial health but do not focus specifically on the overdue nature of accounts receivable.