The client has implemented automatic revenue recognition using Revenue Polity Definitions. The
payment term threshold of 150 days has been entered in the revenue policy. An invoice of $5,000 is
imported with payment term that has four equal installment terms.
• Net 60
• Net 90
• Not 120
• Net 180
Select the amount of revenue that would be deferred in this case.
A.
$1, 250
B.
$2,500
C.
$1.750
D.
$5,000
E.
$4, 750
Explanation:
Use the Payment Terms Threshold column to enter the maximum time period in days before
payment terms become extended.
When you enter or import a transaction with payment terms or an installment schedule that
exceeds the payment terms policy, Receivables:
Assigns the Extended Payment Term contingency to the transaction.
Defers revenue on the entire transaction.
Recognizes revenue on the transaction only to the extent of payments received.
For example, you enter a payment terms threshold of 180 days on your revenue policy, and you later
enter or import an invoice with payment terms that have four installments:
Net 60
Net 90
Net 120
Net 200
Receivables defers the entire revenue amount on the invoice because the last installment exceeds
the 180-day threshold by 20 days.
Oracle Fusion Applications Financials Implementation Guide, Payment Terms Threshold