While reviewing open transactions in a vendor account balance, the accountant notices an outgoing payment the company paid in advance and two A/P invoices that relate to this payment. Which action…

Question

Options

• AExternal reconciliation for the bank account
• BInternal reconciliation for the bank account
• CInternal reconciliation for the vendor master data record
• DExternal reconciliation for the vendor master data record

• A
  11% (6)
• B
  7% (4)
• C
  78% (43)
• D
  4% (2)

Explanation

Internal reconciliation for the vendor master data record (Option C) is correct because the goal is to link transactions within the same business partner account - matching the advance outgoing payment against the two A/P invoices that belong to it. In ERP systems like SAP Business One, "internal reconciliation" is specifically the function used to offset open items (payments and invoices) against each other inside a vendor or customer account.

Why the distractors are wrong:

• A & B (Bank account options): The bank account is not the right object here - the open transactions live in the vendor account, not the bank account. Bank reconciliation addresses matching book entries to external bank statements, not linking invoices to payments within a vendor ledger.
• D (External reconciliation for the vendor master data record): "External" reconciliation applies to bank accounts (comparing internal records with an external bank statement). Vendor/customer accounts use internal reconciliation to match their own open items.

Memory tip: Think of it this way - Internal reconciliation = matching items inside a business partner record (vendor or customer); External reconciliation = matching a bank account against an outside bank statement. Since both the payment and invoices are sitting inside the vendor's account, you need internal reconciliation on the vendor record.

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