SAP Financial Accounting (SAP FI) Practice Exam

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A customer informs you of a broken item deducted from their invoice payment. What should you do upon receiving the payment?

  1. Post the payment received and write off the difference to a charge off account

  2. Request an additional payment from the customer

  3. Issue a refund for the broken item

  4. Notify the shipping department

The correct answer is: Post the payment received and write off the difference to a charge off account

When you receive a payment from a customer who has deducted the cost of a broken item from their invoice, the appropriate action is to post the payment received and write off the difference to a charge-off account. This is an appropriate accounting practice as it comprehensively reflects the actual cash received while acknowledging the customer’s deduction due to the broken item. By posting the payment, you accurately record the transaction in the financial system, reflecting the reduced amount the customer paid against the total invoice. Writing off the difference to a charge-off account ensures that the financial records remain clear and organized, showing that this portion of the receivable will not be collected due to the circumstances of the broken item. This approach maintains accurate financial reporting while preserving the customer relationship, as it acknowledges their issue without causing further inconvenience. Issuing a refund, although it may seem like a valid option, usually takes place if the customer returns the item or if there was a significant problem. Requesting further payment from the customer is not advisable, as it might lead to dissatisfaction or disputes regarding the transaction. Notifying the shipping department, while good for awareness, does not address the financial aspect of the situation directly. Therefore, the best course of action is to document the payment and adjust the records accordingly