SAP Business One Certification Practice Exam

When a customer uses checks for payments, which order of processing steps is correct?

1. Deposit, Incoming Payment, Invoice

2. Invoice, Deposit, Incoming Payment

3. Invoice, Incoming Payment, Deposit

4. Incoming Payment, Invoice, Deposit

The correct answer is: Invoice, Incoming Payment, Deposit

The sequence of Invoice, Incoming Payment, and Deposit accurately reflects the typical order of processing when a customer makes payments using checks. Initially, the invoice is created to record the sale and due amount owed by the customer. This step establishes the basis for the transaction and provides the details necessary for the customer to know how much they need to pay. Once the customer is ready to make the payment, the Incoming Payment step is executed. This involves recording the receipt of the check against the outstanding invoice. By doing this, the payment is officially noted in the system, affecting the accounts receivable balance. It is crucial because it effectively marks the transaction as paid while still pending the physical transfer of funds to the company's bank account. Finally, the Deposit step occurs, where the payment is physically deposited into the bank. This step reflects the finalization of the transaction within the banking procedures and is essential for accurate cash flow tracking. This order ensures that financial records are maintained in a clear and structured manner, allowing for accurate tracking of sales, payments received, and cash flow status. In contrast, other sequences presented do not align with accounting best practices, leading to potential discrepancies in financial reporting and cash management.