SAP Financial Accounting (SAP FI) Practice Exam

Which types of accounts are impacted by foreign currency valuation?

1. Asset and liability accounts only

2. Customer, vendor, and G/L accounts managed on an open item basis

3. Only G/L accounts

4. Only cash accounts

The correct answer is: Customer, vendor, and G/L accounts managed on an open item basis

The correct option highlights that customer, vendor, and G/L accounts managed on an open item basis are significantly impacted by foreign currency valuation. This is because these accounts often involve transactions denominated in foreign currencies, which require conversion to the local currency for accurate financial reporting. Foreign currency valuation ensures that all monetary items in financial statements reflect their correct value. For customer and vendor accounts, this approach is crucial as it directly influences accounts receivable and payable figures, impacting cash flow and financial planning. Since these accounts are open item managed, they require regular monitoring and valuation adjustments to account for fluctuations in exchange rates. In contrast, asset and liability accounts can also be impacted, particularly where they are related to foreign currency balances, but they do not encompass the broader scope of customer and vendor interactions. It's also important to note that not all G/L accounts are subject to foreign currency valuation, specifically those that do not involve foreign currency transactions. Cash accounts represent a specific category that may involve valuation but do not encapsulate the full range of accounts referenced in the correct answer. Thus, option B appropriately captures the full scope of accounts that are involved in foreign currency valuation within the context of SAP FI.