Quiz BA

Revenue recognition occurs when:

• Control of the product has transferred to the Customer
• The Invoice was send to Customer
• The Sales Order was created for the Customer.

Reductions from Sales Revenue are called Off-Invoice deductions which are the following:

• Chargebacks, MDFs, Sales Rebates
• Product Recalls, Returned Goods, Shipping issues
• both A. and B.

This procedure does not cover:

• Export activity where sales and cost of goods are reclassified to the ship-to location.
• Inter-Company activity which identifies inter-company activity for elimination.
• Allocation and recharge requirements for cost centers, including Global Pool allocation.

Manual journal entries to alter contribution results between entities are:

• not allowed
• allowed when are related to a specific approved deviation
• allowed when are related to a specific approved deviation, or to correct a material error to achieve compliance with this document.

All legal entities must record financial inputs that support:

• US GAAP and internal management contribution reporting
• local statutory and internal management contribution reporting
• All - US GAAP, local statutory and internal management contribution reporting

Extended Terms of Sale - Revenue deferral is required if extended terms are unusual or excessive. For 3M, extended terms granted for more than:

• 30 additional days beyond normal 3M contracted terms to one customer.
• 60 additional days beyond normal 3M contracted terms to one customer.
• 90 additional days beyond normal 3M contracted terms to one customer.

Government Customers are considered as Notable Revenue Transactions:

• No
• Yes
• Depends on Country

When an invoice for License revenue cannot be issued by 3M in the correct period, an accrual must be made to record the revenue in the same accounting quarter it is earned when it is above:

• 5M annually.
• 1M annually.
• 500K annually.

Which of the below statement is not compliant with MJE GFP:

• The minimum dollar threshold for manual journal entries made to P&L accounts to reclassify or adjust balances is $50,000 USD per line;
• Amounts cannot be accumulated over time to meet the minimum threshold;
• this procedure applies to system generated/automated journal entries;
• Creating offsetting amounts that exceed the minimum dollar threshold to make an entry less than the threshold is prohibited

In which situation MJE must not be made, including those less than the minimum dollar threshold?:

• Entries permanently adjusting balance sheet accounts as a result of account reconciliations. For example, writing off a difference on a balance sheet account;
• Correction of automatically posted accruals where the correction is less than $50,000;
• Entries required to close accounts or cost centers (SAP)/departments (Legacy);
• d) Entries related to acquisition integration, such as beginning balance corrections;