SAP Financial Accounting (SAP FI) Practice Exam

What is the output for the value adjustments?

1. Net profit account

2. Uncollected receivables account

3. Accounts payable account

4. Valuation reserve account

The correct answer is: Uncollected receivables account

The correct choice for the output of value adjustments is the uncollected receivables account. In the context of SAP Financial Accounting, value adjustments are necessary to reflect the expected collection risk associated with accounts receivable. These adjustments effectively lower the value of the receivable on the balance sheet to represent the realistic potential for collection. The uncollected receivables account captures this adjustment, indicating the amount that is unlikely to be collected. This process is essential for accurate financial reporting, as it ensures that the financial statements present a true and fair view of the company's financial position. In contrast, the other options do not serve as appropriate outputs for value adjustments. The net profit account is related to overall performance and profitability rather than specific asset valuations. The accounts payable account pertains to obligations the company owes to suppliers and does not directly involve valuation adjustments on receivables. Lastly, while a valuation reserve account might seem relevant, it is generally used for broader adjustments across various asset classes rather than specifically tracking uncollected receivables.