Top 50 Oracle Apps Functional Interview Questions and Answers by IT Trainings Institute
Introduction
So, let’s dive into this comprehensive collection of Oracle Apps Functional Interview Questions and Answers, carefully categorized by IT Trainings Institute to support your interview preparation journey:
Oracle Apps Functional Interview Questions and Answers for Freshers
Oracle Apps Functional Interview Questions and Answers for Experienced Professionals
Oracle Apps Functional Interview Questions and Answers for Freshers
1. What is Oracle E-Business Suite (EBS)?
Answer:
Oracle E-Business Suite (EBS) is an integrated set of business applications that help companies manage:
Finance (Oracle Financials)
Human Resources (HRMS)
Supply Chain Management (SCM)
Manufacturing, Projects, Procurement, CRM, and more
It provides a centralized and modular ERP solution.
2. What is the role of a Functional Consultant in Oracle Apps?
Answer:
A Functional Consultant:
Understands business requirements
Maps them to Oracle ERP features
Configures modules (like AP, AR, GL, PO, OM)
Provides support for testing, training, and documentation
Coordinates with technical teams for custom solutions
3. What are the major modules in Oracle EBS?
Answer:
Oracle Financials: GL, AP, AR, FA, CM
Supply Chain Management (SCM): PO, OM, INV, WIP
Human Resource Management (HRMS)
Customer Relationship Management (CRM)
Project Accounting
Manufacturing
4. What is a Set of Books / Ledger in Oracle Financials?
Answer:
A Set of Books (in R12, it is called a Ledger) defines the accounting setup:
- Chart of Accounts
- Currency
- Calendar
- Accounting Method
Each ledger maintains its own financial records.
5. What is Multi-Org in Oracle Apps?
Answer:
Multi-Org allows a business to manage data across multiple organizations (legal entities, operating units, inventory orgs) in one installation. It includes:
Business Group
Legal Entity
Operating Unit
Inventory Org
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6. What is a Chart of Accounts (COA)?
Answer:
A Chart of Accounts is a list of accounts used to define a company’s financial structure. It includes multiple segments like:
Company
Department
Account
Product
Each segment helps classify and report transactions accurately.
7. What is a Payable Invoice and its types?
Answer:
A Payable Invoice is a document to record what the company owes to suppliers. Types:
Standard Invoice
Credit Memo
Debit Memo
Prepayment
Expense Report
8. What is the Procure to Pay (P2P) Cycle?
Answer:
The P2P cycle is the process of buying and paying for goods/services:
Requisition
Purchase Order (PO)
Receipt
Invoice
Payment
9. What is the Order to Cash (O2C) Cycle?
Answer:
The O2C cycle is the process from receiving a sales order to collecting payment:
Sales Order
Shipping
Invoice
Receipt
Revenue Recognition
10. What is Subledger Accounting (SLA)?
Answer:
SLA in R12 is a rules-based engine that determines how accounting entries are created from subledgers like AP, AR, PO, etc.
It provides more flexibility and audit tracking.
11. What is a Responsibility in Oracle Apps?
Answer:
A Responsibility in Oracle Apps defines a user’s access privileges. It determines:
- Which menus and functions a user can access.
- Which data they can view and modify.
- Which reports and concurrent programs they can run.
Example: A “Payables Manager” responsibility would allow a user to create invoices, make payments, and view payable reports, but likely not access General Ledger functions.
12. What are Flexfields in Oracle Apps? What are the two main types?
Answer:
Flexfields are highly customizable fields within Oracle Applications that allow organizations to capture additional, user-defined information to meet specific business needs without modifying standard Oracle code. The two main types are:
- Key Flexfields (KFF): Used to build intelligent keys (e.g., Chart of Accounts, Item Flexfield) that represent unique identifiers with a structured format.
- Example: In the Chart of Accounts, segments like Company, Department, and Account combine to form a unique account code.
- Descriptive Flexfields (DFF): Used to capture additional descriptive information that is not part of the standard Oracle data model. They provide “extra” fields for forms and tables.
- Example: On a Purchase Order line, you might add a DFF to capture “Project Code” or “Customer Reference Number” if those aren’t standard fields.
13. What is a Value Set in Oracle Apps?
Answer:
A Value Set is a list of predefined values that can be associated with a Flexfield segment or a report parameter. It ensures data integrity and helps enforce data validation rules by restricting user input to a controlled list.
14. Explain the concept of Profile Options in Oracle Apps.
Answer:
Profile Options are user-definable parameters that control the behavior and appearance of Oracle Applications at various levels (Site, Application, Responsibility, User). They allow administrators to customize the system without code changes.
Example:
The “MO: Operating Unit” profile option determines which operating unit’s data a user can access when logged in with a specific responsibility.
15. What is Concurrent Program in Oracle Apps?
Answer:
A Concurrent Program is an executable program (e.g., SQL*Plus, SQL Loader, PL/SQL, Java) that runs in the background. They are used for long-running tasks, data processing, and generating reports.
Example:
The “AutoInvoice Import Program” is a concurrent program used to import and create AR invoices from external systems.
16. What is the significance of the GL (General Ledger) module?
Answer:
The General Ledger (GL) module is the core of Oracle Financials. It is responsible for:
- Recording and summarizing all financial transactions from various subledgers (AP, AR, FA, etc.).
- Maintaining the Chart of Accounts.
- Generating financial statements like the Income Statement and Balance Sheet.
- Performing period-end closing activities.
17. Differentiate between a Primary Ledger and a Secondary Ledger in Oracle Financials.
Answer:
- Primary Ledger: The main accounting record for a legal entity, defined with its primary Chart of Accounts, Calendar, Currency, and Accounting Method.
- Secondary Ledger: An optional, supplementary ledger that maintains accounting data for the same legal entity as the primary ledger but uses a different accounting convention (e.g., different Chart of Accounts, currency, or accounting method) for statutory reporting or management analysis purposes.
Example: A company might have a Primary Ledger in USD using US GAAP, and a Secondary Ledger in EUR using IFRS for European reporting.
18. What is the purpose of AutoAccounting in Oracle Apps?
Answer:
AutoAccounting is a feature primarily used in modules like Oracle Receivables (AR) and Project Accounting. It automatically generates account code combinations for transactions based on predefined rules. This simplifies data entry and ensures consistent accounting.
Example: In AR, AutoAccounting can derive the revenue account based on the sales item, customer, or sales representative.
19. Explain the concept of Approvals in Oracle Purchasing (PO).
Answer:
Approvals in Oracle Purchasing allow organizations to define and enforce a hierarchy for approving purchase requisitions and purchase orders. This ensures that spending is controlled and authorized by appropriate personnel.
Example: A purchase order for a large amount might require approval from the department manager, followed by a finance manager, and finally the procurement head.
20. What is an Inventory Organization?
Answer:
An Inventory Organization in Oracle EBS represents an entity that tracks and transacts items. It can be a manufacturing plant, a warehouse, or a distribution center. It defines the physical location where items are stored and managed.
Example: A company might have an “East Coast Warehouse” inventory organization and a “West Coast Manufacturing Plant” inventory organization.
21. What is the difference between a Standard Purchase Order (PO) and a Blanket Purchase Agreement (BPA)?
Answer:
- Standard Purchase Order (PO): A legally binding document that specifies the details (items, quantities, prices, delivery dates) for a one-time purchase from a supplier.
- Blanket Purchase Agreement (BPA): A long-term agreement with a supplier for specific items or services, with agreed-upon terms and conditions, but no specific delivery dates or quantities specified upfront. Releases (mini-POs) are created against a BPA as items are needed.
22. What is a Requisition in Oracle Purchasing?
Answer:
A Requisition is an internal document used to request goods or services within an organization. It’s the first step in the Procure-to-Pay cycle, signaling a need for procurement. Requisitions can be internal (for stock) or external (from a supplier).
23. What is the role of an Item Master in Oracle Inventory?
Answer:
The Item Master (or Master Item Organization) is a central repository for defining and maintaining all items that a company buys, sells, manufactures, or stocks. It stores common attributes for items, ensuring consistency across all inventory organizations.
Example: An item like “Laptop Model X” is defined once in the Item Master, and its attributes (e.g., unit of measure, purchasing category) are inherited by specific inventory organizations where it is stocked.
24. What is a Sales Order in Oracle Order Management?
Answer:
A Sales Order is a document that records a customer’s request for goods or services. It captures details like customer information, items ordered, quantities, prices, shipping details, and payment terms. It initiates the Order-to-Cash cycle.
25. Explain the purpose of Item Categories in Oracle Inventory.
Answer:
Item Categories are used to group items that share similar characteristics. This helps in:
- Reporting and analysis.
- Defaulting accounting information.
- Defining purchasing and inventory controls.
Example: All “Electronics” could be in one category, while “Office Supplies” are in another.
26. What is the purpose of Fixed Assets (FA) module?
Answer:
The Fixed Assets (FA) module in Oracle Financials manages the entire lifecycle of a company’s fixed assets (e.g., buildings, machinery, vehicles). This includes:
- Asset acquisition.
- Depreciation calculation and accounting.
- Asset revaluation.
- Asset retirement/disposal.
27. What is a Journal Entry in Oracle GL?
Answer:
A Journal Entry is a record of a financial transaction in the General Ledger. It typically consists of at least two lines, with a debit to one or more accounts and an equal credit to one or more other accounts, maintaining the accounting equation.
Example: To record a cash payment for rent:
- Debit: Rent Expense Account
- Credit: Cash Account
28. What are the key elements of a Payable Invoice?
Answer:
Key elements of a Payable Invoice include:
- Supplier Name: The vendor from whom the goods/services were purchased.
- Invoice Number: Unique identifier from the supplier.
- Invoice Date: Date of the invoice.
- Invoice Amount: Total amount due to the supplier.
- Currency: Currency of the invoice.
- Line Items: Details of goods/services purchased (description, quantity, unit price).
- Distribution Accounts: The GL accounts to which the invoice amount will be expensed or capitalized.
- Payment Terms: Agreed-upon terms for payment (e.g., Net 30, 2% 10 Net 30).
29. What is a Debit Memo in Oracle Payables and Receivables?
Answer:
- Payables Debit Memo: A document created by the buyer (your company) to reduce the amount owed to a supplier, often due to returned goods, damaged goods, or overcharges. It effectively requests a credit from the supplier.
- Receivables Debit Memo: A document created by the seller (your company) to increase the amount a customer owes, typically for additional charges, interest, or corrections.
30. What is a Credit Memo in Oracle Payables and Receivables?
Answer:
- Payables Credit Memo: A document received from a supplier reducing the amount your company owes them. This is typically issued when goods are returned, or there’s an overcharge.
- Receivables Credit Memo: A document issued by your company to a customer, reducing the amount they owe, often due to returned goods, service issues, or billing errors.
