SAP Financial Accounting (SAP FI) Practice Exam

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What object should a customer use to verify account balances with customers and vendors for audit purposes at year-end?

  1. Account statement

  2. Balance confirmation

  3. Invoice summary

  4. Financial report

The correct answer is: Balance confirmation

The most appropriate object for a customer to use for verifying account balances with customers and vendors for audit purposes at year-end is the balance confirmation. A balance confirmation entails directly seeking verification from the customer or vendor regarding their accounts, ensuring both parties agree on the outstanding balances. This method is particularly important during audits, as it provides a way to substantiate the accuracy of reported figures and serves as an official document that can be used to validate the financial records. Account statements typically detail transactions over a specific period and may not capture the precise balances needed for audit verification. An invoice summary provides information on invoices issued but does not deliver confirmation of their balances. Financial reports, while comprehensive for overall business insights, might not provide the specific account level clarity necessary for confirming balances with customers and vendors. Hence, balance confirmations are the most reliable and direct method for year-end reconciliation and audit purposes.