Analytics & Enterprise operations

Accounting processes are broadly divided into what two main categories:

Financial accounting and management accounting.

Which method of accounting must be used by publicly traded companies?

Accrual Basis

Which term refers to an ordered listing of accounts that comprise a company's general ledger?

Chart of Accounts

What does an income statement measure?

The financial performance of a firm over a period of time

Cash flow from operating activities

net income + depreciation +  changes in working capital

Cash flow from financial activities

dividends + net changes from borrowings

Cash flow from investing activities

investments in PP&E - sales/disposal of assets

Why can a company generate profits but still go bankrupt?

Paying bills is dependent on a company's ability to generate cash, and cash flow is not equal to profit.

How do you calculate free cash flow (FCF)?

operating income less capital expenditures

Which of the following management moves must a firm undertake in order to manage cash flow optimally?

Manage inventories carefully to avoid stockouts while minimizing the total cost of ordering and holding

In SAP, the list of accounts that comprise the general ledger is called master data.

false

In SAP, the highest organizational level for financial reporting is called the Company Code.

false

MRP generates

purchase requisitions and planned orders

Supply chain 5 core processes

Plan, Source, Make, Deliver, Return

SAP Enterprise systems use what 3 types of data

organizational data, master data, transactional data

Client

• Highest organizational level

• Only one client per enterprise

• Can have one or multiple company codes

Company Code

• Highest organizational level for financial reporting (external, legal reporting)

• Four-digit alphanumeric field

• Smallest entity that supports a full set of books

• General ledger, journals, etc.

• At least one CC is required; can have more than one

Business Areas

• Internal division to generate financial statements

• Key use is managerial performance analysis

• Can span multiple Company Codes