One of Tiny Toys' vendors has branches all around the world. Therefore, the vendor issues invoices in various foreign currencies. Tiny Toys has defined the vendor's master data currency as 'All…

Question

Options

• AIn local currency, system currency and specified foreign currency.
• BIn the local currency and system currency.
• CIn local currency and specified foreign currency.
• DIn every foreign currency that is used in the invoices.

• A
  4% (2)
• B
  87% (48)
• C
  2% (1)
• D
  7% (4)

Explanation

When a vendor's master data currency is set to "All Currencies" in SAP Business One, the system still needs a consistent way to maintain the account balance, so it stores it in the two "home" currencies: local currency (the company's base currency) and system currency (the second reporting currency). Each incoming foreign currency invoice is converted at posting time, so the balance rolls up into these two stable currencies rather than being tracked per foreign currency.

Why the distractors are wrong:

• A is wrong because "specified foreign currency" implies one fixed foreign currency - irrelevant when "All Currencies" is selected, and the balance isn't stored in any foreign currency anyway.
• C is wrong for the same reason: no single foreign currency is designated for balance storage in this setup.
• D is wrong because storing a cumulative balance in every foreign currency used would be impractical; individual transaction documents retain their original foreign currency amounts, but the account balance does not.

Memory tip: Think of the balance as living in the company's "two home bases" - Local + System. Foreign currencies are for transactions, not for the running balance.

No community discussion yet for this question.