SAP FICO Interview Question and Answer

Part 1:

SAP FICO is the Finance and Cost controlling module in SAP ERP, where FI stands for Financial Accounting, and CO stands for Controlling. SAP FICO module is very robust and covers almost all business processes encountered in various industries. It is one of the very important and widely implemented modules in SAP.

1) Explain the term SAP FICO?

SAP FICO stands for FI ( Financial Accounting) and CO (controlling). In SAP FICO, SAP FI take cares about accounting, preparation of financial statements, tax computations etc, while SAP CO take cares of inter orders, cost sheet, inventory sheet, cost allocations etc. It is the software that stores data, and also computes them and retrieves the result based on the current marketing scenario. SAP FICO prevents data lost and also does the verification and reporting of data.

2) What are the other modules to which ‘Financial Accounting’ is integrated?

The other modules to which ‘Financial Accounting’ is integrated are

a) Sales and Distribution
b) Material Management
c) Human Resource

10 Most Common Interview Questions and Answers ????

d) Production Planning
e) Controlling of financial transaction

3) In SAP FI what are the organizational elements?

The organizational elements in SAP FI are:

a) Company Code
b) Business Area
c) Chart of Account
d) Functional Area

4) Explain what is posting key and what does it control?

In order to determine the transaction type which is entered in the line item, a two digit numerical is used known as ‘Posting Key’

Posting key determines

a) Account Types
b) Types of posting. Debit or Credit
c) Field status of transaction

5) What is the company code in SAP?

To generate financial statements like Profit and Loss statement, Balance sheets etc. company code is used.

6) How many Chart of Accounts can company code have?

You can have one Chart of Account for one company code which is assigned.

7) For a Company Code how many currencies can be configured?

There are three currencies that can be configured for a Company code, one is a local currency and two are the parallel currencies.

8) What are the options in SAP for Fiscal years?

Fiscal year in SAP is the way financial data is stored in the system. In SAP, you have 12 periods and four special periods. These periods are stored in fiscal year variant that is:

a) Calendar Year: From Jan-Dec, April-March
b) Year dependent fiscal year

9) What is a ‘year shift’ in SAP calendar?

SAP system does not know what is broken fiscal year e.g April 2012 to March 2013 and only understand the calendar year. If, for any business, the fiscal year is not a calendar year but the combination of the different months of two different calendar year and then one of the calendar year has to classified as a fiscal year for SAP and the month falling in another year has to be adjusted into the fiscal year by shifting the year by using the sign -1 or +1. This shift in the year is known as ‘year shift’.

Example: April 2012 to Dec 2012 is our first calendar year, and Jan 2013 to March 2013 is our second year, now if you are taking April-12 to Dec-12 as your fiscal year, then Jan-13 to March-13 automatically becomes the second year, and you have to adjust this year by using -1 shift, and vice versa if the scenario is reversed, here you will use +1 shift.

10) What is year dependent fiscal year variant?

In a year dependent fiscal year variant, the number of days in a month is not as per the calendar month. For example, in year 2005, month January end on 29^th, month Feb ends on 26^th etc.

11) In SAP how input and output taxes are taken care?

For each country tax procedure is defined, and tax codes are defined within this. There is a flexibility to either expense out the Tax amounts or capitalise the same to stocks.

12) Explain what is validations and substitutions in SAP?

For each functional area in SAP Validation or Substitution is defined eg, Assets, Controlling etc. at the following levels

a) Document Level
b) Line item Level

13) What are the application areas that use validation and substitutions?

a) FI- Financial accounting
b) CO-Cost accounting
c) AM-Asset accounting
d) GL-Special purpose ledger
e) CS-Consolidation
f) PS-Project system
g) RE-Real estate
h) PC-Profit center accounting

14) In SAP what is the use of FSV ( Financial Statement Version) ?

FSV ( Financial Statement Version) is a reporting tool. It can be used to extract final accounts from SAP like Profit and Loss Account and Balance Sheet. The multiple FSV’s can be used for generating the output of various external agencies like Banks and other statutory authorities.

15) What is a field status group?

‘Field status groups’ control the fields which come up when the user does the transactions. In FIGL (Financial General Ledger) master, the field status group is stored.

16) What is FI-GL (Financial- General Ledger) Accounting does?

To get an overview of external Accounting and accounts, G L (General Ledger) Accounting is used. It does the recording of all business transactions incorporated with all other operational areas in a software system and also ensures that the Accounting data is always complete and accurate.

17) What is the default exchange rate type which is picked up for all SAP transactions?

For all SAP transaction, the default exchange rate is M (Average Rate).

18) What are the methods by which vendor invoice payments can be made?

a) Manual payment without the use of any output medium like cheques etc.
b) Automatic payments like DME (Data Medium Exchange), cheques, Wire transfer

19) What are the problems when business area is configured?

The problem faced when a business area is configured, is splitting of account balance which is more pertinent in the case of tax accounts.

20) For document clearing what are the customizing prerequisites ?

The customizing pre-requisite for document clearing is to check the items cleared and uncleared, and this is done by open item management. Open item management manages your outstanding account, i.e account payable and account receivable. For instance, an invoice item that has not yet been paid is recorded as open account until it is paid.

21) What is the importance of GR/IR ( Good Received/ Invoice Received) clearing account?

GR/IR ( Good Received/ Invoice Received) is an interim account. In the legacy system, if the goods are received and the invoice is not received, the provision is made, in SAP at the goods receipt. It passes the Accounting entry debiting the Inventory and crediting the GR/IR account. Similarly, when an invoice is received the vendor account is credited, and the GR/IR account is debited, the GR/IR will show as an un-cleared items till the time the invoice is not received.

22) What is parallel and local currency in SAP?

Each company code can have two additional currencies, in addition to the company code, currency entered to the company code data. The currency entered in the company code creation is called local currency and the other two additional currencies are called parallel currencies. Parallel Currencies can be used in foreign business transactions. In order to do international transaction, parallel currency can be used. The two parallel currencies would be GROUP CURRENCY and HARD CURRENCY.

23) Where can you use the internal order?

To track the cost, internal orders are used; they are proposed to be incurred over on a short term basis.

24) Is it possible to calculate depreciation to the day?

Yes, it is possible to calculate depreciation, to do that you have to switch on the indicator Dep. to the day in the depreciation key configuration.

25) In Asset Accounting what is the organizational assignments?

In Asset Accounting, chart of depreciation is rated as the highest node, and this is assigned to the company node. All the depreciation calculations are stored under the chart of depreciation.

26) What is the importance of asset classes? What asset classes are there?

The asset class is the main class to classify assets. Every asset must be assigned to only one asset class. Example of asset class is Furniture & Fixtures, Plant & Machinery, and Computers etc. The asset class also contains G1 account, when any asset is procured, G1 account is debited. Whenever you create and asset master, it becomes mandatory to mention the assest class for which you are creating the required assets. So, whenever any asset transaction occurs, the G1 account attached to the asset class is automatically picked up and the entry is passed. You can also specify the default values for calculating the depreciation values and other master data in each asset class.

27) How capital WIP (Work In Process) and Assets accounted for in SAP?

‘Capital WIP’ is referred to as Assets under construction in SAP and is represented under specific asset class. Depreciation is not charged under ‘Capital WIP’ usually. The cost incurred on building a capital asset can be booked to an ‘internal order’ and through the settlement procedures, and can be posted onto an ‘Asset Under Construction’.

28) What are the major components of Chart of Accounts?

The major components of Chart of Accounts are:

a) Chart of account key
b) Name
c) Maintain Language
d) Length GL account number
e) Controlling Integration
f) Consolidation-Group chart of accounts
g) Block indicator

29) What is credit control area in SAP?

To immune your company from the risk of bad debts and multiple outstanding receivable, you can set a credit limit for your customer by using credit control area in SAP. With the help of SAP, you can block the deliveries to your customer based on the credit limit and the accounts receivable balance in their account which is maintained by you.

30) How can you create Credit Control Area in SAP?

By using transaction code OB45 or path you can create Credit Control Area in SAP

SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and then enter the following description

a) Update
b) Name of the credit control area in SAP
c) Currency
d) Description
e) Credit Limit
f) Risk Category
g) Fiscal Variant
h) Rep group

31) What is posting period variants?

In fiscal year posting period is a period for which the transactions figures are updated. The posting period variants in SAP is accountable to control which Accounting period is open for posting and ensures that the closed periods remain balanced.

32) Explain in simple terms what is field status and what does it control?

Field status group is a group configured in FSV (Field Status Variant) to maintain field status for G/L (General Ledger) accounts. It controls which field should suppress, display, optional and required.

33) What is short-end fiscal year?

A short-end fiscal year results when you change from a normal fiscal year to a non-calendar fiscal year, or other way around. This type of change happens when an enterprise becomes part of a new co-corporate group.

34) What is an account group and where it is used?

To control the data that needs to be entered at the time of the creation of a master record an account group is used. Account group exist for the definition of GL account, Customer Master and Vendor.

35) What is the purpose of “Document type” in SAP?

The purpose of ” Document type” in SAP is

a) Number range for documents are defined by it
b) Types of accounts that can be posted are controlled by it, e.g Assets, Vendor, Customer, Normal GL account
c) It is used for the reversal of entries

36) Is business area at company code level?

No. Business area is at client level which means other company codes can also be posted to the same business area.

37) In SAP, Customer and Vendor code are stored at what level?

The Vendor and Customer codes are stored at the client level. It means that by extending the company code view any company code can use the customer and vendor code.

38) How are tolerances for invoice verification defined?

Tolerance determines whether the payable places matching or tax hold on the invoice. The following are the instances of tolerance can be defined for Logistic Invoice Verification.

a) Small differences
b) Moving average price variances
c) Quantity variances
d) Price variances

39) What is a country Chart of Accounts?

Country Chart of Accounts contains G/L (General Ledger) accounts needed to meet the country’s legal requirements.

40) What is APP in SAP Fico?

APP stands for ‘Automatic Payment Program’; it is a tool provided by SAP to companies to pay its vendors and customers. APP tools help to avoid any mistakes taken place in posting manually. Also, when number of employees is more in the company, payment through APP becomes more feasible.

41) In SAP FICO what are the terms of payment and where are they stored?

Payment terms are created in the configuration and determine the payment due date for vendor/customer invoice.

They are stored on the customer or vendor master record and are pulled through onto the customer/vendor invoice postings. The due date can be changed on each individual invoice if required.

42) What are one-time vendors?

In certain companies, especially the one dealing with high cash transactions, it is not practical to create new master records for every vendor trading partner. One time vendors allows a dummy vendor code to be used on invoice entry and also the information which is usually stored in the vendor master.

43) What are the standard stages of the SAP payment run?

The following steps are the standard stages of the SAP payment run

a) Entering of parameters ( Vendor Accounts, Company Codes, Payment Methods)
b) Proposal Scheduling – the system proposes the list of invoice paid
c) Payment booking- the booking of the actual payments in the ledger
d) Printing of payment forms ,example cheques

44) In Accounts Receivable, what is the difference between the ‘Residual Payment’ and ‘Part Payment’ methods of allocating cash?

‘Residual payment’ and ‘Part payment’ are the two methods for allocating partial methods from customers. For example, an invoice for $100 is generated, customer has paid $70. Now this $70 will be off-set and leaving the remaining balance $30. With residual payment, the invoice is cleared for the full value of $100 and a new invoice is generated for the remaining balances $30.

45) What is “dunning” in SAP?

‘Dunning’ is the process by which payment chasing letters are issued to customers. SAP can determine which customers should receive the letters and for which overdue items. Different letters can be printed in SAP depending on the overdue payment date, with a simple reminder. With the help of dunning level on the customer master, we can know which letter has been issued to the customer.

46) What is the purpose of the account type field in the GL (General Ledger) master record?

At the end of the year, profit and loss accounts are cleared down to the retained earnings balance sheets account. The field contains an indicator which is linked to a specific GL (General Ledger) accounts to use in this clear down.

47) Explain what is recurring entries and why are they used?

Recurring entries can eliminate the need for the manual posting of Accounting documents which do not change from month to month. For example, an expense document can be generated which can be scheduled for the last days of each month or whenever an individual wants it. Usually multiple recurring entries are created at one go and then processed all together as a batch month end using transaction.

48) What is a ‘Value Field’ in the CO-PA module?

Value fields are number or value related fields in profitability analysis such as quantity, sales revenue, discount value etc.

49) What are the statistical internal orders?

Statistical internal orders are dummy cost objects used for reporting and analysis purposes. It must be posted to in conjunction with a real object such as a cost center.

50) For what purposes internal orders can be used?

You can use internal orders for

a) Overhead Orders: It monitors internal jobs settled to cost centres
b) Investment Orders: It monitors internal jobs settled to fixed assets
c) Accrual Orders: Offsetting posting of accrued costs calculated in CO
d) Orders with Revenue: It display the cost controlling parts of Sales and Distribution, it does not affect the core business of the company

Part 2:

1) Explain the term SAP FICO?

Ans:

2) What are the other modules to which ‘Financial Accounting’ is integrated?

Ans:

The other modules to which ‘Financial Accounting’ is integrated are

Sales and Distribution
Material Management
Human Resource
Production Planning
Controlling of financial transaction

3) In SAP FI what are the organizational elements?

Ans:

The organizational elements in SAP FI are:

Company Code
Business Area
Chart of Account
Functional Area

4) Explain what is posting key and what does it control?

Ans:

In order to determine the transaction type which is entered in the line item, a two digit numerical is used known as ‘Posting Key’

Posting key determines
Account Types
Types of posting. Debit or Credit
Field status of transaction

5) What is the company code in SAP?

Ans:

To generate financial statements like Profit and Loss statement, Balance sheets etc. company code is used.

6) How many Chart of Accounts can company code have?

Ans:

You can have one Chart of Account for one company code which is assigned.

7) For a Company Code how many currencies can be configured?

Ans:

There are three currencies that can be configured for a Company code, one is a local currency and two are the parallel currencies.

8) What are the options in SAP for Fiscal years?

Ans:

Fiscal year in SAP is the way financial data is stored in the system. In SAP, you have 12 periods and four special periods. These periods are stored in fiscal year variant that is:

Calendar Year: From Jan-Dec, April-March
Year dependent fiscal year

9) What is a ‘year shift’ in SAP calendar?

Ans:

10) What is year dependent fiscal year variant?

Ans:

In a year dependent fiscal year variant, the number of days in a month is not as per the calendar month. For example, in year 2005, month January end on 29^th, month Feb ends on 26^th etc.

11) How taxes are taken care of in the SAP FICO?

Ans:

One of the major issues is Tax Slabs are not similar in all the countries. Also, there are additional taxes applicable there. SAP FICO has tax procedure already defined in it for various nations and the users are free to get the information regarding the same. The Tax amounts can be sent to stocks by default or the users are free to make challenges in them as per their need and convince. Thus, taxes are not an issue with the SAP FICO.

12) What do you know about the Substitutions and validations in SAP?

Ans:

They are generally defined assets for the different functional area. They can be accessed through two options and they are Document level and the line level.

13) What are the major applications of SAP FICO you are familiar with?

Ans:

SAP FICO has some major applications for which it is actually known. It is widely considered I Financial accounting for handling a lot of tasks that matters to the organizations. In fact, all that matters in the accounting can easily be managed with this approach. It also has applications in the Asset and Cost Accounting. The Project system accounting can also be managed through it in a reliable manner. The users are free to consider it for the purpose of Consolidation. In addition to this, SAP FICO has large scale application in the Real Estate which is one of the emerging domains across the globe in the present scenario.

14) What is WIP in SAP FICO?

Ans:

It stands for Work in Progress and basically defines the status of the asset that is under development mode in the SAP FICO. It is possible for the users to customize it if required.

15) Can you name a few methods with the help of which the vendor invoice payments can be taken care of?

Ans:

There are options for manual payments that can be made either in cash or through cherubs. Other options include electronic transfer. The SAP FICO keeps a close eye on all the transactions made through the latter option when the same is integrated with the accounts.

16) What exactly posting key is in FICO and what is its significance?

Ans:

It is basically an approach that enables users to determine the transaction type among the various possible options in the domain. Generally, it is a two digit number when is entered during defining of item. It simply give idea about the type of posting which can either be credit or debit as well as the type of accounts. Also, the status of transactions can also be recorded through it.

17) What is the significance of financial general ledger accounting?

Ans:

It is used whenever there is a need for the organization to access the external accounts. It simply incorporate all the financial transactions of a business made within a specific time period. The users are free to keep up the pace simply even when the operational areas needs core accounting skills or have problems associated with them.

18) What are the biggest benefits that you can have with the SAP FICO?

Ans:

There are certain benefits and a few major ones are spotlighted below:

One of the major benefit is accounting data is always correct. The users doesn’t need to worry about this
There is no upper limit on handling the accounts. Any number of accounts can be managed
It is useful in auditing as an eye can be kept on the transactions made by the business
It make sure of financial transparency
The detailed information about the expenses can be prepared and the same can then be considered for the purpose of preparing the future budgets
A lot of time and money can be saved
The users can make sure of financial outputs that can be trusted in the long run

19) What is Financial Statement version in the SAP FICO?

Ans:

It is basically a tool that is used for reporting. All the financial accounts can be extracted through it along with all the relevant information required by the users. It is possible to deploy it for the purpose of generating the outcomes of different agencies associated with a business. The same information can then be passed to the concerned authorities for the betterment.

20) Tell something you know about a field status Group?

Ans:

When transactions are done, there are often fields which come up, this option is used or is enabled when they are not required while handling the tasks.

Top of Form

Bottom of Form

21) Describe the short-end fiscal year?

Ans:

The short-fiscal year is the result of the process when the user changes from the fiscal year to non-fiscal year or do the other way around. Such big changes take place when an organization becomes a part of the co-corporation group.

22) What is the role of “document type” in SAP FICO?

Ans:

The primary role of document type is to define the number range of documents, types of accounts that are controlled by it and reversal of entries.

23) In SAP, customer and vendor codes are stored at which level?

Ans:

When it comes to storing customer and vendor codes in the SAP, they are carefully stored at the client level. Moreover, it also means that extending the company code any organization can leverage the customer and vendor code.

24) Explain the tolerance for the invoice verification?

Ans:

Tolerance defines whether the accounts or tax hold are on the invoice or not. Here are some of the common examples of tolerance that can be further defined in logistic invoice verification: –

Small differences
Quality variance
Price variance

25) What are the country charts of accounts?

Ans:

Country charts of accounts contain the general ledger accounts that are necessary to meet the legal requirements of a country.

26) Describe the concepts of one-time vendors in SAP FICO?

Ans:

For companies that deal with the high cash transaction, it is not practical to create the transaction code for each trading vendor. Therefore, the one-time vendor provides the one- time code for a vendor that can be used to make transactions and store the information.

27) Define the dunning in SAP?

Ans:

Dunning refers to the process through which the payment chasing letters are issued to the customers. SAP is responsible to determine which letter will be issued to which customer for which overdue.

28) What information do users need to provide while creating the credit area?

Ans:

The user who is creating the credit area in SAP needs to provide the description, controller name, currency, and risk category. Once done, they need to fill the fiscal variant to complete the credit area creation which will limit down their credit.

29) What is posting period variants?

Ans:

Posting period variants refers to the time frame in which the transaction figures should be updated. It usually depends upon the control accounting period.

30) What is field status?

Ans:

The field status refers to a method that is used to maintain the general ledger accounts in the SAP. It generally controls the fields which provide information to other primary accounts.

31)What are substitutions and validations? What is the precedent?

Ans:

Validations are used to check settings and return a message if the prerequisite check condition is met.

Substitutions are similar to validations; they actually replace and fill in field values behind the scenes without the user’s knowledge unlike validations that create on-screen msgs to the user.

32)What is a controlling area?

Ans:

The Controlling Area is the central organizational unit within CO module. It is representative of a contained Cost Accounting envt where costs and revenues can be managed.

33)Define relationship between controlling area and company code?

Ans:

A controlling area may include one or more company codes which must use the same operative chart of accounts as the controlling area. A Controlling Area can contain multiple company code assignments but a single company code can be assigned to only one controlling area.

34)What is a fiscal year variant?

Ans:

Fiscal Year is a period of 12 months and SAP provides 4 special periods to posting adjustment Entries. Fiscal year determines posting periods. Posting periods are used to assign business transactions. Fiscal year may be year dependent or year independent.

35)What are special periods used for?

Ans:

The Special periods in a fiscal year variant can be used for things like posting audit or tax adjustments to a closed fiscal year.

36)What do you mean by year dependent in fiscal year variants?

Ans:

Year Dependent: the financial year is same as calendar year. Starting from 1st Jan to 31st Dec (where posting periods and the calendar months are equal)

Year Independent: the financial year is different from calendar year Starting from 1st April to 31st March (where the posting period months are not equal to calendar year months)

37)What are shortened fiscal year? When are they used?

Ans:

Shortened Fiscal Year: a financial year, which has less than 12 periods.

38)What are posting periods?

Ans:

The Posting period variant controls which posting periods, both normal and special, are open for each company code. It is possible to have a different posting period variant for each company code in the organization. The posting period is independent of the fiscal year variant.

39)What are document types and what are they used for?

Ans:

Document type is the identifier of different account transactions like SA for G/L,AA for Asset Accounting etc.The doc. Types controls things like type of the account that can be posted to, the number range assigned to it, and required doc header fields.

40)How are tolerance group for employees used?

Ans:

Tolerance group stores Posting amount defaults. Tolerance groups are assigned to User ID’s that ensures only authorized persons can make postings.

41)What are field status groups?

Ans:

Field status groups control the additional account assignments and other fields that can be posted at the line item level for a G/L account.

42) Why would you use SAP FICO over other approaches?

Ans:

Employers ask this question to measure how well you understand the advantages of using SAP FICO. Your answer should show why SAP FICO is helpful in a financial career and how it could provide advantages that similar programs may not offer.

Example: “SAP FICO tends to be more flexible than other approaches. It gives you more options for accounting integration and control, which is often missing in other systems. Unlike some other approaches, SAP FICO also lets you control financial statements that include multiple currencies.”

43) Why are financial statements necessary for a company?

Ans:

Companies need accurate financial reports to run smoothly. When answering this question, show the interviewer you understand how, why and when to generate financial statements. Explaining why financial reports are important to a company will help you assure your potential employer that you have the expertise needed to manage their financial data with minimal supervision.

Example: “Financial statements allow a company to track how much they spend on specific transactions. These reports are beneficial since you create a digital record you can refer to in the future. Having electronic documents makes it easier to prepare and send them when the company needs to make decisions or plans. The ability to create electronic documents makes SAP FICO especially useful.”

44) What does Year-Dependent Fiscal Year mean?

Ans:

When using SAP FICO, know how to create and monitor fiscal year reports for your company, which could span any 12-month period. Your answer to this question should show that you know how this term applies to SAP FICO. Consider also giving an example of how it might affect a company’s financial statement.

Example: “Year-Dependent Fiscal Year is a useful function in SAP FICO systems that lets you generate and review financial reports for a specific fiscal year, which may be different from that calendar year. For example, not all months have 30 working days in a fiscal year. Based on various projects they are working on, an organization might need to end the month a few days early. One month might only have 20 days according to the Year-Dependent Fiscal Year.”

45) What are some common reasons for errors in accounting, and what impact can they have on an organization?

Ans:

You may encounter some errors when using SAP FICO, so let your interviewer know that you can recognize the more common ones and what to do about them. When giving your answer, list some examples of common errors that a user can make in SAP FICO.

Example:“Errors occur in SAP FICO for many reasons. It can be easy for the user to make a mistake, as even entering one number wrong will cause many issues in the organization. This mistake can lead to false information about profits and losses. Errors may also occur due to a fault in the system, accounting mistakes, bills or claims that are prepared incorrectly and failure to update sheets. To help prevent these types of situations, anyone who works in SAP FICO should carefully check their work before submitting it.”

46) How do you take care of taxes in SAP FICO?

Ans:

You can configure taxes in SAP FICO and many finance careers will require you to do so. When you answer this question, show the interviewer you thoroughly understand how you can complete taxes using this system.

Example: “Every company needs to configure their taxes according to their country, which you can easily do with SAP FICO. Additional taxes are also applicable in different countries. SAP FICO defines its tax procedure for different nations, so if I ever need to determine additional taxes in other countries, I can look them up in the SAP system.”

47) What major applications of SAP FICO do you know?

Ans:

SAP FICO comes with multiple applications, so familiarize yourself with some of the system’s most common features before your interview. This will help you assure your potential employer that you can transition easily into a position that requires regular use of the SAP system.

Example: “I try to stay up-to-date with SAP FICO as a whole, but I became especially familiar with accounts receivable statements in my last position. I can quickly generate reports that track new customer accounts, down payments and monthly invoices.”

48) Explain the purpose of Document type in SAP?

Ans:

It is used to define the range of documents. It is used to control the types of accounts like assets, customers, etc. Moreover, it is also used for the reversal of entries.

49) What is APP in SAP Fico?

Ans:

Automatic Payment Program or APP is a tool given by SAP to companies for paying to their customers. It is a very useful tool used to avoid mistakes that can happen if perform manually.

50) Where do we use SAP FI?

Ans:

SAP FI module is used to manage financial accounting data in multiple companies, languages, and currencies. This module is mainly deal with the components like Inventory, Cash Journal, Accrual, Inventory, Fixed asset, Tax accounting, Account receivable and payable, General Ledger, Parallel valuations, financial statements, Master data governance, and Fast close functions.

51) Do you know about different submodules in SAP FI?

Ans:

Banks
AR/AP
General Ledger
Travel Management
Lease Accounting
Fixed Assets, etc.

52) How can internal orders be used?

Ans:

We can use the internal orders for:

Investment orders: In this, we can monitor internal jobs related to fixed assets.
Overhead orders: In this, we can monitor those internal jobs that relate to the cost center.
Accrual orders: In this, the accrued cost is calculated in CO as per offsetting posting.
Orders with Revenue: In this, we only calculate the cost controlling parts of sales and distribution.

53) What are the advantages of using Business areas in a company?

Ans:

When we use the business area, it becomes easy to configure. For this, we need to attach the company code along with other information in the business area. Moreover, with the usage of business areas in control, we can create a balance sheet, profit, and loss statement, and more ledger accounts for business areas. Thus, business areas are used for management accounting in some companies.

54) How can we manage the credit limit for the customer in FI?

Ans:

With the help of credit control in FI, it is possible to find out the credit limit for the clients. It is used in application components (sales and distribution, Account receivable) for credit management. We can use the credit control in this way- User exit- Distribution channel-Customer master- Company code.

55) How can you create Credit Control Area in SAP?

Ans:

By using transaction code OB45 or path you can create Credit Control Area in SAP

SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and then enter the following description

Update
Name of the credit control area in SAP
Currency
Description
Credit Limit
Risk Category
Fiscal Variant
Rep group

56) What is posting period variants?

Ans:

57) Explain in simple terms what is field status and what does it control?

Ans:

58) What is short-end fiscal year?

Ans:

59) What is an account group and where it is used?

Ans:

To control the data that needs to be entered at the time of the creation of a master record an account group is used. Account group exist for the definition of GL account, Customer Master and Vendor.

60) What is the purpose of “Document type” in SAP?

Ans:

The purpose of ” Document type” in SAP is:

Number range for documents are defined by it
Types of accounts that can be posted are controlled by it, e.g Assets, Vendor, Customer, Normal GL account
It is used for the reversal of entries

61) Is business area at company code level?

Ans:

No. Business area is at client level which means other company codes can also be posted to the same business area.

62) In SAP, Customer and Vendor code are stored at what level?

Ans:

The Vendor and Customer codes are stored at the client level. It means that by extending the company code view any company code can use the customer and vendor code.

63) How are tolerances for invoice verification defined?

Ans:

Tolerance determines whether the payable places matching or tax hold on the invoice. The following are the instances of tolerance can be defined for Logistic Invoice Verification.

Small differences
Moving average price variances
Quantity variances
Price variances

64) How Does Firstlogic’s Global Data Quality Connector For Sap Systems Work?

Ans:

Firstlogic’s Global Data Quality Connector is integrated at the BASIS layer and communicates with the SAP Applications via TCP/IP leveraging SAP’s Remote Function Call (RFC) interface. As users make postal validation inquiries in either batch or real-time, calls are made outside of the SAP Application to Firstlogic’s RFC Server. Once the customer’s address has been received by Firstlogic’s technology, our Information Quality Suite parses, standardizes, and corrects records according to configurable business rules and local postal authority standards.

To ensure your customer view is optimized, Firstlogic’s technology catches duplicates at the point of entry; not after redundant information has infected your SAP Environment. Before any customer, vendor, or business partner is committed to the database, Firstlogic’s Information Quality suite will immediately inspect the data upon input. The connector scans the entire database for duplicates and assigns a similarity match score to potential duplicates. At that point, the user can determine whether the entered record is unique or a duplicate that should be eliminated from the system. In addition, convenient Error Tolerant Searching is available for prompt and precise address recognition. This improves transaction processing, saves time locating records, and optimizes system efficiency.

65) What Are The Benefits Of A Data Quality Solution?

Ans:

The biggest benefit is the confidence you have that your data is accurate. A data quality solution also allows you to: Manage customer data in different formats initially residing in separate databases Build and maintain successful relationships Better understand and service your customers Enhance knowledge management and business intelligence initiatives with reliable and accurate information Deliver clean, reliable data throughout your expanding information supply chains to all varieties of operational and analytical applications throughout your enterprise.

66) Will First Logic’s Global Data Quality Connector For Sap Manage My International Data?

Ans:

Yes. Built on a global framework capable of validating address information for over 190 countries in a single processing pass, First logic’s Global Data Quality Connector for SAP allows you to identify country names, format and standardize addresses, correct missing address information, and assign postal codes for each respective country. Furthermore, First logic’s Easy IQ technology offers the ability to complete/populate addresses with minimal data or offer suggestions for possible matches. This easy address system is ideal in call centers or any transactional environment where data needs to be cleansed at the point-of-entry. The software improves real-time transactions for your call centers, sales, and support centers by providing accurate address data for your customer-facing employees. How easy is it to maintain First logic’s Global Data Quality Connector for SAP after implementation? Ongoing maintenance should be minimal. Once the solution is implemented and configured, typically maintenance will only be required when you receive postal directory updates, upgrade to a new data quality release, or decide to change your application or business rules.

67) Can I Integrate A Data Quality Solution Within Other Software Applications?

Ans:

Data quality solutions can be fully integrated into CRM, ETL (Extract Transform Load), ERP, or BI solutions and have the advantage of being “seamless” to the end-user – reducing the learning curve, as well as decreasing the implementation time frames. Your data process flow should not have to be modified to add a new data quality solution. Through integration and strategic partnerships, you are assured that you are getting a best-of-breed solution. However, keep in mind it is not absolutely necessary for the solution to be fully integrated. First logic also provides tools that your organization can easily integrate on your own, and oftentimes stand-alone solutions may be more effective for specific projects.

68) Is Linux Supported As A Frontend Platform?

Ans:

The “SAPGUI for the Java Environment” can be downloaded from the SAP FTP servers. This project (formerly known as PlatinGUI – platform-independent GUI) started in spring 1998 with the following objectives: build one GUI for all platforms (macOS, Linux, OS/2, Win32, AIX, HP/UX, Solaris, Tru64 …) provide Control-Enabling with Java Beans create a new, flexible GUI-architecture support web browser integration.

69) Which Server Configurations Of mysap Business Suite Will Be Supported On Linux?

Ans:

SAP supports mySAP Business Suite on Linux for database and application servers in homogeneous and heterogeneous environments. Please get in contact with your hardware partner for system sizing and similar.

70) Will A Customer Get Support When Recompiling The Linux Kernel Or Using 3rd-party Software That Modifies It?

Ans:

Usually there should be no need for recompiling the Linux kernel when using SAP software on Linux since the supported Linux distributors are shipping optimized kernels for the respective hardware architectures with revised and tested drivers. Any modification to the tested environment would furthermore make it nearly impossible for the Linux distributor to track a problem down. The same applies to 3rd party software that modifies the Linux kernel and is distributed only in a closed, binary-only, way. Therefore the following can’t be supported: Recompiling the Linux kernel, with or without source modifications Loading of 3rd party binary Linux kernel modules which have not been shipped by the Linux distributors Loading of any unsupported Linux kernel modules Loading of any closed source drivers.

71) Which Databases Are Supported For my sap Business Suite On Linux?

Ans:

Supported databases for mySAP Business Suite on Linux are IBM DB2/UDB, Informix, Oracle, and SAP DB/MaxDB.

72) Which Releases Of mysap Business Suite Are Supported On Linux?

Ans:

MySAP Business Suite on Linux is generally available for use in a productive environment starting with release 4.0B.

73) What Are The Main Reasons For Sap Customers Choosing Linux?

Ans:

Each SAP customer has a unique set of reasons for running SAP on Linux, depending on the very specific customer’s SAP scenario. Among many reasons customers decide for Linux as the operating system of choice, because they seek increased Flexibility, Scalability with different sized commodity, or even large former Unix or mainframe systems, Freedom of choice for technology vendors, Replacing larger Unix-based SAP servers.

74) Will Pricing Be Changed For my sap Business Suite On Linux?

Ans:

Standard pricing for mySAP Business Suite applies also to mySAP Business Suite on Linux.

75) Where Can I Get Linux For my sap Business Suite?

Ans:

Linux distributors like Debian, Mandrake, Red Hat or SUSE offer Linux together with a set of other software packages, installation routines, documentation, and support. Whereas there is a de-facto standard for the Linux kernel itself, the distributions differ in other areas, especially in the administration area.

76) Where Can I Get The Mysap Business Suite On Linux?

Ans:

You can order the mySAP Business Suite on Linux just like mySAP software on any other platform. If you are an SAP customer already, there will be no additional charges. From Release 4.6 onwards, the mySAP Business Suite on Linux is part of the standard delivery.

77) Can I Execute User Exits? If Yes, How?

Ans:

Yes you can. after finding the user exit, you need to use, goto CMOD adds your user-exit to your project. Then activate the FM which you require. Now go into that function module there will be an Include program wit name ZX*. Double click on it, it will ask to create an object, answer it Yes and then write your code in it.

78) When Entering Foreign Currency Fi Transactions Describe The Various Ways In Which The Exchange Rate Is Derived By SAP?

Ans:

The exchange rate can be entered through the following:

Directly on the document header.
Derived from the exchange rate table.
Indirectly, by entering the explicit local currency amount so the system is forced to use a specific exchange rate.

79) What is the parallel and local currency in SAP?

Ans:

Each company code will have two Extra currencies, in addition to the company code, currency entered the company code data. The currency entered within the company code creation known as local currency and therefore the other two additional currencies are called parallel currencies.

80) What is the short-end fiscal year?

Ans:

A short-end fiscal year results once you change from a normal fiscal year to a non-calendar fiscal year, or another way around.

81) What is the report painter?

Ans:

The report painter is a default SAP reporting tool for the controlling module. It helps SAP to generate reports at a faster rate.

82) Can We Change The Reconciliation Account In The Vendor Master?

Ans:

Yes, the reconciliation account can be changed in the vendor master provided that the authority to change has been configured.

83) How Is Bank Reconciliation Handled In Sap?

Ans:

First of all the payment made to a vendor is posted on an interim bank clearing account. Subsequently, while operating reconciliation, an entry is posted to the Main bank account. One can do bank reconciliation either manually or electronically.

84) What Are Terms Of Payments And Where Are They Stored?

Ans:

Payment terms are formulated in configuration and resolve the payment scheduled date for client/Vendor inventory postings. The planned date obtained via the payment is often modified on the individual bill if required.

85) What Are Exchange Rate “factors”?

Ans:

Exchange Rate factors are the relation between one currency and another to which an exchange rate is enforced. For example, you may define the Indonesia Rupiah to US$ factor as 10000: 1. Combined with an exchange rate of 0.95 this would equalize to 9500 IDR to 1 USD.

86) What is the importance of asset classes? What asset classes are there?

Ans:

The asset class is the main class to categorize assets. Every asset must be designated to only one asset class. Example of the asset class is furniture and fixtures, plant and machinery, and computers, etc. The asset class also contains G1 account which is debited. Whenever you create an asset master, it becomes mandatory to mention the assets class for which you are generating the required assets. So, whenever any asset transaction takes place, the G1 account connected to the asset class is automatically picked up and also the entry is passed.

87) What is a ‘Value Field’ in the CO-PA module?

Ans:

Value fields are numbers or value related fields in profitability analysis such as quantity, sales, revenue, discount value, etc.

Part 3:

Q.1 If we have multiple assets, can we depreciate only one asset?

Ans: Yes, it is possible to depreciate only selective assets in SAP using Asset master AS0. In Asset Master AS0, an option for “asset shut down” signals SAP to stop calculating any selective asset(s) depreciation.

You can also schedule this “asset shut down” feature, allowing you to set a period to halt depreciation and restart when this period is over.

Q.2 What are the baseline method and decline balance method?

Ans:Baseline method is a straight-line depreciation method. The depreciation is calculated based on a defined percentage or life of the asset, which must be maintained in the asset master.

It can be calculated by subtracting an asset’s cost and its expected salvage value and then dividing by the number of years it is expected to be used.

For example, the acquisition value of an asset is Rs. 10,000, and the life of the purchase is maintained as 20 years. Therefore, the system will calculate depreciation @ Rs. 500 every year for 20 years.

The declining balance method is also referred to as the written down value method. This is because we record significant depreciation expenses in the initial years of an asset’s life and more negligible depreciation during later years of an asset’s life in this method.

It can be calculated by multiplying an asset’s book value and its rate of depreciation. For example, if a 10% declining balance method is chosen, the depreciation will be calculated @ Rs in the first year. 2,000. In the second year, the base for the calculation of depreciation will be Rs. 18,000 and depreciation will be Rs. 1,800.

Q.3 Why do we need to run jobs/job overviews?

Ans: We need to run a job overview because some transactions need significant time to run. Therefore, we run these time-consuming jobs as background jobs to save time. E.g., Depreciation posting AFAB, ASKB, etc., are run as background jobs.

Also, users can schedule jobs that consume significant time, such as automatic clearing at night time, when the system load is low. The results can be checked after completion from SM37, in which a spool is created.

Q.4 How will you upload asset data?

Ans:You can upload asset data in 2 steps:

Step 1:In the first step, we will identify asset master data. This data includes the Gross Block and Accumulated depreciation of each asset master. The summation should be tallied with the balance in respective GL accounts in the legacy system.

Assets are further segregated into different asset classes. Once this is ready, asset legacy data can be created from transaction AS91.

Simultaneously, the user can upload the balance of Gross Block and Accumulated Depreciation on the cut-over date. This step updates the balances in the asset module; however, it does not create a financial entry.

Step 2:As the GL accounts for Gross Block and Accumulated Depreciation cannot be posted manually, there is a specific transaction code “OASV” through which the financial entry is posted.

In this step, financial entry is posted for all assets combined for each asset class. For example, all Furniture & Fixture asset balances will be combined and posted into the GL as a combined entry.

The financial entry will be as below:

Gross Block Furniture & Fixtures A/c Dr.
Legacy Balance upload (Fixed Assets) A/c Cr.
Legacy Balance upload (Fixed Assets) A/c Dr.
Accumulated Depreciation Furniture & Fixtures A/c Dr.

After Step 1 & 2, the balances in the FI & Asset module will match. FI balance can be checked from S_PL0_86000030 and asset balance from S_ALR_87011990.

Q.6 What is the Available amount in APP and the principle behind it?

Ans: The available amount represents the maximum amount that can be paid out from the APP per entry. This principle/concept is similar to the process followed by banks to process cheques. A given set of signatories cannot sign a cheque above a certain amount.

Similarly, the system will not allow the user to process the APP transaction for more than the available amount.

Q.7 Imagine a user has posted wrong depreciation data for ten assets, and the financial year is closed. Now, how will you rectify this issue and reset this data?

Ans: If the financial year is closed, the rectification can be done only in the next financial year.

For reversing the excess depreciation that has been posted, use transaction ABSO and transaction type 700. The financial entry will be generated at the time of posting depreciation (AFAB).

Q.8 While posting through APP, Payment documents got terminated due to server shutdown. How to start the terminated payment run?

Ans: You can restart F110 & select the same run id and run date. By doing this, scheduled payment will run again. One can also do a drop-down for identification. All the payment that runs for a particular date can be displayed.

Q.9 If we change the reconciliation account in the vendor master, What is the impact on the old balance?

Ans: The vendor’s reconciliation account cannot be changed unless the vendor has NIL open items. Once the reconciliation account is changed, the old balances appear in the old reconciliation account. Since there are already old entries, it does not have any problems reporting updated balances.

Q.10 Is it possible to mention the purchase organization after posting in vendor master? If yes, then how?

Ans: Yes, purchasing organizations can be updated in the vendor master after posting. We can do this by enabling the MM module (extend it to the MM module).

One can easily update the changes to an existing vendor from transaction code XK01 or MK01. Just make sure to put the same vendor account in the “reference” field.

Q.11 While uploading the vendor’s master data, how to upload the opening balance of the vendor?

Ans: Balances of vendors & customers should be uploaded line by line, i.e., all the open items in legacy systems should be uploaded as open items in SAP. While uploading, make sure to fill in the purchase or sales invoice number in the reference field. This will help in the future clearing.

Also, while receiving payment or making payment, the relevant open items will be cleared automatically. Just make sure to upload the baseline date.

Q.12 While uploading data, how do we confirm that the data we have uploaded is correct?

Ans: Legacy balance upload GL accounts are created for uploading the opening balance. Ideally, at least 5 Legacy balance upload GL accounts should be created, like:

Legacy balance upload Vendors
Legacy balance upload Customer
Legacy balance upload Fixed Asset
Legacy balance upload Inventory
Legacy balance upload GL accounts

Once the upload is done, Check the closing balance in all these accounts. It should be zero, which will confirm the correct upload in all the required fields. You can also pass a JV for verifying the balance in all these accounts once your uploading activity is over.

Q.13 Can you make multiple cash journals with different currencies posted in one Cash GL account with local currency?

Ans: Yes, this is possible, but it is not advised because it is complex and welcomes errors.

A better practice is to maintain a separate GL account for different cash journals.

Q.14 How do you maintain multiple shift depreciation in asset master?

Ans: While creating a Depreciation Key, users can select the option of multiple shifts & increasing the depreciation. In the asset master, under time-dependent data, the user can define a shift factor.

Q.15. What do you understand by WRICEF?

Ans:Typical SAP implementation involves different types of custom developments to address various business requirements. These Custom developments in SAP implementation projects can be broadly classified into six distinct categories of development types: workflow, report, interface, conversion enhancement, and forms (WRICEF).

Q.16 As you know, While creating an asset master, we have two options. One is using asset classes, and another one is using an existing asset master. So my question is, what default values should be provided by asset class and existing asset master to a newly created asset master?

Ans: If you create a new asset with reference to an existing asset master data, all the data of the existing asset gets copied to the new asset code, and the user can make the changes while creating the new asset code.

Suppose you create a new asset with reference to an asset class. In that case, only default account assignments will be copied to the new asset class, Such as depreciation keys.

Q.17 What is foreign currency valuation? Why do we need to maintain ratios?

Ans: According to IAS 21, a foreign currency transaction should be recorded initially during the rate of exchange of the date in the transaction. Then, the foreign currency monetary amounts should be reported using the closing rate at each step, subsequent balance sheet date.

Vendors and customers fall under the category of monetary items. Therefore, the transaction code FAGL_FC_VAL is used to post the foreign currency valuation.

A separate exchange rate type should be maintained for doing foreign currency revaluation. The exchange rate ratio associated with each exchange rate type should also be maintained in OB08 for the relevant closing date.

Q.18 Imagine you acquired an asset and its useful life is 10years. Now the client proposed its life to be 6years only. How will you manage the time of depreciation?

Ans: As one year of expired useful life has already expired, you can maintain five years as the new life in the asset master. The system will depreciate the remaining balance in the asset over the next five years.

Q.19 Say, Acquisition assets are valued at Rs 100000, and respective account depreciation is 10000. What are the updated entries if I sell the assets to a customer for 120000?

Ans: In the above transaction, the Netbook value is Rs. 90,000, and the asset has been sold at Rs.1,20,000, thereby giving you a profit of Rs. 30,000 on disposal.

This has to be done from transaction code F-92. The user has to do only the first two entries, and the following entries (3, 4, 5, 6) are created automatically by the system.

While doing F-92, tick the box “asset retirement” after entering the Asset clearing account. Following will be the accounting entries:

Customer A/c Dr. 1,20,000
Asset clearing A/c Cr. 1,20,000
Gross block Cr. 1,00,000
Accumulated Depreciation Dr. 10,000
Profit on disposal of assets Cr. 30,000
Asset clearing A/c Dr. 1,20,000

For simplification, GST is excluded from the above entry. However, if customers have to include GST, then the GST amount will also be debited, and your GST payable account will be credited. The relevant tax code should be filled in F-92.

Q.20 Imagine a company having different branches in each state and having a unique bank a/c for each branch under SBI. Next, Should we create one house bank or create a house bank for each branch a/c?

Ans: The creation of multiple house banks for each separate account number is a good practice. While doing FBZP, the ranking order can be set up for every house bank.

According to this ranking order, the house bank is picked during APP. For branch-wise APP, users can fill the house bank in vendor masters or at the transaction time (FB60 or MIRO).

Q.21 In SAP FICO what does a ‘Posting Period’ refer to?

SAP is divided into several posting period, in a typical fiscal year, with a definite start and end date and the same is defined specifically for each of these periods. Only when the posting periods are in place that’s when in the system any document posting. Generally, there are 12 posting periods. Each posting period comprises of a month and a year.

Q.22 In SAP FICO what is a ‘Special Period’?

SAP permits the defining of a maximum of four more posting periods, which are referred to “Special Periods”, as these are utilized for year-end closing activities. All of this is made possible by dividing the last posting period into more than one, but a maximum of four, period. Typically, all the postings in these special periods should be counted in the last posting period. It is not possible to determine the special periods automatically based on the posting date of the document. The special period has to be entered manually in the document header, in the ‘posting period’ field.

Q.23 What does APP in SAP Fico refer to?

APP refers to ‘Automatic Payment Program’ this is a tool provided by SAP to companies for paying the customers and vendors. The APP tools helps in avoiding any mistakes which take place in posting manually. The payment through APP becomes more reasonable and doable when the number of employees is more in the company.

Q.24 In APP, Can we use check and bank transfer simultaneously to send the payments to vendors?

You have to assign APP payment method to bank & vendor.

Q.25 What is Back Order?

A customer places an order to a company. If the current stock level is insufficient or the company has no stock then company places a Back-order which simply means that they do not have sufficient stock and they need to order more from the supplier or distributor. Thus back order is an unfilled customer order.

Q.26 In finance accounting, what is General Ledger?

A General Ledger comprises of all the transaction details listed in a company. This serves as primary record for maintaining all accounting details. Common general ledger entries include purchases from vendors, customer transactions, along with internal company transactions.

Q.27 What are the component of GL documents?

Company code
Fiscal year
Posting periods
Field status group
Tolerance
Document type

Q.28 What is TAN number?

TAN number is a tax deduction and collection Account Number which is used for deducting the taxes at source.

Q.29 Transaction code to know that new General Ledger is activated?

There is no T.code for New G/L and we can activate it through this path Financial a/c-FAGL-Activate New G/L then you can tick mark and activate the New G/L after this configuration you can new changes in configuration path under Financial Accounting.

Q.30 What are some of the std SAP reports available on allocations (assessments and distribution)?

KSU6 for actual assessment.
KSV6 for actual distribution.
KSVC for planned distribution.
KSUC for actual distribution.

Q.31 How to Close Outstanding Items for Output Control Documents that Cannot be Cleared?

Please use the below transaction codes:

GL clearing – F-03
Customer clearing – F-32
Vendor clearing F-44

Q.32 How to Transfer Posted Cost Center Costs to Profitability Analysis?

Please follow the path below:

Explanation -> Options -> Assessment -> Indirect activity allocation -> Indirect activity allocation.

Q.33 How many chart of A/c will be used if the client have two company code One in INDIA and other One in US?

It depends on client requirements. If client wants to have single COA for both Country or If they want to have different COA they can go ahead. If they want to have both company codes reports in single as consolidation, they can use group COA which captures consolidation report.

Q.34 What is the t-code to Check Open and Close Posting Periods?

Kindly use T-code OB52 to check with open & close posting period.

Q.35 How to Block inv value more then 1,00,000?

Please use transaction code OMR6 and Cross check for tolerance keys PP and DQ for your company code where system allow you to post vendor invoice with payment block status.

Q.36 What is the procedure to display Form16?

First navigate to T.code J1incert then fill the all fields and execute it in order to display form no 16A.

Q.38 What are the GL accounts which is hit during vendor invoice entry?

Bank ac and sundry creditors.

Q.39 During payment how is the double entry like for vendor only?

Vendor acc dr bank ac cr.

Q.40 What are the various scenarios when a Zero Tax Rate GL Posting is possible?

Items which are Tax Exempt
Transaction is a Tax Exempt

Q.41 How to configure number ranges in controlling?

It is controlling from basic configuration, you can get it from T-Code SPRO.

Q.42 How to derive exchange rate line item billing during VF04?

You please combile all deliveries in one billing invoice like given below

Payer
Actual GI Date from Delivery
Payment Terms
Inco Terms
Account Assignment Group of customer
Exchange Rate

Q.43 What is year Specific fiscal year variant?

Periods can vary from year to year ie :-A fiscal year variant has to be defined as year specific if one of the following conditions is fulfilled.

1) Some fiscal years use a different number of posing periods.

2). the start and end dates of the posing periods for some fiscal years are different to the dates for other fiscal years.

Q.44 How to set the Print Parameter for Generate Account Statement and Payment Form?

You can request those two FI-CA correspondences from FCC. For the printing, some print options need to be defined. The system therefore calls FI-CA event 2821. The standard delivered implementation FKK_SAMPLE_2821 copies the printer parameter from the user data in FI-CA of the invoking user. An adjustment may also be needed on the project side.

If you use the correspondence function from FCC, it is always advisable to test this function first in the FI-CA back end. For example, you could create an account statement using transaction FPL9.

Part 4:

Compare SAP FICO with any general financial accounting and controlling approach

S.No	SAP FICO	Others
1	In terms of flexibility, SAP FICO is good	Other parallel approaches are not as flexible as SAP FICO
2	There are additional options for accounting controlling and integration	Account integration is either complex or missing
3	SAP FICO allow multiple currencies to be managed	No additional options for currency

While handling the SAP FICO for the first time, why it is necessary for the users to pay attention to the exchange rate?

The default exchange rate in the FICO is the Average Rate. It is not always necessary that everyone needs to use the FICO in the same manner. Therefore, it needs to be changed as per the requirement.

Why the financial statements are important for any business?

Well, it simply enables them to keep an eye on the purposes for which a specific amount sent including all its information. The users can simply keep a digital record of all the funds received or transferred to any other account. This enables them to prepare documents for the future on which some important plans and decision-making strategies are based. Financial statements also enable businesses to get reductions in taxes in a few cases. In addition to this, the users can access the record of all the financial transactions anytime the same is required.

Can you name a few modules with which it is possible for the users to integrate financial accounting?

There are several useful modules where it is possible for the users to consider this approach in an integrated manner. These include Material Management, Sales & Distribution, Production Planning, financial transaction management, as well as Human resource.

What is Year Dependent Fiscal Year in SAP?

In businesses, it’s not necessary that all months have 30 days working. Depending on the type of projects which vary largely, the organizations have to end a month a day earlier or two. For example, the Month of May can have 29 days. The same can be done with an option in the SAP which is known as Year Dependent Fiscal Year.

What exactly do you know about the SAP FICO?

FICO stands for Financial Accounting and Controlling. It is basically an important tool that is useful in preparing statements about the finance related to an organization or a business. In addition to this, FICO can also be considered for the purpose of accounting, tax computations, preparing the inventory sheets, financial data storage. The users need not worry about the security of the data and in addition to this, it simply makes sure of managing and utilizing the data in a reliable manner.

What are the common reasons for errors in accounting and what impact do they actually have on the organization?

Errors are of a lot of types and can be due to a diverse array of reasons. The users can often make mistakes. A single wrong entry of only one digit can bring a lot of issues in the organization and can mislead about the profits and losses. Errors can be due to negligence of users, fault in the system, wrongly prepared bills or claims, gross errors, basic accounting errors, errors due to not updating the sheets, and so on.

What is the company code and when it is used? What is the limit on the currencies which you can configure?

It is basically a code that needs to be entered into the system when it comes to generating the Loss or the profit statements. It is not always necessary that all the employees are given access to the same. It is possible for the users to configure up to 3 currencies and among which one generally remains local and the other can be considered as parallel.

How many periods are there in the SAP FICO?

There is a total of 165 periods among which 4 are considered special. They are generally used when it comes to defining any data that is related to the fiscal year. A user is free to consider the special period anytime when the need for the same is felt.

In the SAP calendar, what exactly is “Year Shift”?

SAP doesn’t have any provision to access broker year. It only understands the calendar year. However, it is not always necessary that for all organizations the calendar year is the financial year. There is often a need to change months. They needed to be added or removed. This can be done easily in the SAP and the same procedure is known as Year Shift.

How taxes are taken care of in the SAP FICO?

One of the major issues is Tax Slabs are not similar in all countries. Also, there are additional taxes applicable there. SAP FICO has a tax procedure already defined in it for various nations and the users are free to get the information regarding the same. The Tax amounts can be sent to stocks by default or the users are free to make challenges in them as per their need and convince. Thus, taxes are not an issue with the SAP FICO.

What do you know about the Substitutions and validations in SAP?

They have generally defined assets for the different functional areas. They can be accessed through two options and are Document level and line level.

What are the major applications of SAP FICO you are familiar with?

SAP FICO has some major applications for which it is actually known. It is widely considered I Financial accounting for handling a lot of tasks that matter to the organizations. In fact, all that matters in accounting can easily be managed with this approach. It also has applications in Asset and Cost Accounting. The Project system accounting can also be managed in a reliable manner. The users are free to consider it for the purpose of Consolidation. In addition to this, SAP FICO has large-scale applications in Real Estate which is one of the emerging domains across the globe in the present scenario.

What is WIP in SAP FICO?

It stands for Work in Progress and basically defines the status of the asset that is under the development model in the SAP FICO. It is possible for the users to customize it if required.

Can you name a few methods with the help of which the vendor invoice payments can be taken care of?

What exactly posting key is in FICO and what is its significance?

It is basically an approach that enables users to determine the transaction type among the various possible options in the domain. Generally, it is a two-digit number when is entered during defining of an item. It simply gives an idea about the type of posting which can either be credit or debit as well as the type of accounts. Also, the status of transactions can also be recorded through it.

What is the significance of financial general ledger accounting?

It is used whenever there is a need for the organization to access external accounts. It simply incorporates all the financial transactions of a business made within a specific time period. The users are free to keep up the pace simply even when the operational areas need core accounting skills or have problems associated with them.

What are the biggest benefits that you can have with the SAP FICO?

There are certain benefits and a few major ones are spotlighted below:

One of the major benefits is accounting data is always correct. The users don’t need to worry about this
There is no upper limit on handling the accounts. Any number of accounts can be managed
It is useful in auditing as an eye can be kept on the transactions made by the business
It makes sure of financial transparency
The detailed information about the expenses can be prepared and the same can then be considered for the purpose of preparing the future budgets
A lot of time and money can be saved
The users can make sure of financial outputs that can be trusted in the long run

What is the Financial Statement version in the SAP FICO?

Tell something you know about a field status Group?

When transactions are done, there are often fields that come up, this option is used or is enabled when they are not required while handling the tasks.

What prerequisites are there which users need to handle when it comes to document clearing?

The first thing to make sure of is whether the items get cleared status by the management or not. Next is to make sure that the document is valid or not.

What exactly do you call a short-end Fiscal Year?

A Short-end Fiscal Year is basically when a calendar year is modified as per need. This can happen due to a very large number of reasons and the organizations have to adopt the new calendar.

What is the internal order option in the SAP FICO?

It is basically an option that is used to track the overall cost associated with an item or a project. It is used widely during certain situations and while handling some important tasks.

Why Asset classes are important in SAP?

The asset class is the primary class that is used for the purpose of justifying the assets. The entire asset category is generally assigned or integrated into one asset class. It is also possible for the users to use the default values for the same.

Name a few important components of the charts that matter in accounting?

The first and the foremost is the main language. Next is controlling the integration level, name, Block Indicator, GL, account number, and the chart of Account Key.

Tell me something about the credit-control area in the SAP?

The credit-control is in the SAP enables the organization to impose a strict upper limit on the credit for the customers. This can be done by using the option controls are in the SAP. It simply makes sure of avoiding the situation such as the risk of bad debts and outstanding receivables.

What options do you need to fill when it comes to creating the Credit Control Area?

The user needs to provide the controller name, Description, Currency option is to be selected, risk category is to be selected and then the information about the Fiscal variant is also to be provided.

What do you mean by posting period Variants?

It is basically a time frame during which the transaction figures are updated. Generally, it is accountable to control accounting periods that are complex.

What exactly Field Status is?

It is basically an approach that is used for the purpose of maintaining the General Ledger accounts. It controls the fields which should provide information on the concerned accounts.

Tell something about Parallel local currency in SAP?

Organizations are allowed to add two more currency options than their local. They can be used in the transactions made at the International level by an organization. The organizations are free to use any two options for parallel that they seem to have more need. They can be tagged as Group currency and hard currency.

Part 5 :

Q1. What do you mean by SAP FICO?

Answer: In the term SAP FICO, FI stands for Financial Accounting, and CO stands for control. SAP FI concerns with accounting, tax computations, preparations of financial statements, and more while SAP CO concerns with an inventory sheet, cost sheet, etc. This software is used to store data, computes it, and analyses the results depended upon the current market scenario. Data is prevented for loss and also get verified with SAP FICO.

Q2. What is the posting key, and how can it control?

Answer: The posting key is a two-digit numerical used to find out the transaction type that was entered in the line term. Posting key is used to find out:

Account Types
Field status of the transaction
Types of posting-Debit or Credit

Q3. What are the other modules in which Financial Accounting is integrated?

Answer:

Material Management
Human Resource
Production Planning
Sales and Distribution
Controlling of financial transaction

Q4. What are the organizational elements in SAP FI?

Answer:

Business Area
Company Code
Functional Area
Chart of Account

Q5. What do you mean by company code in SAP?

When there is a need to generate financial statements like Balance sheets, P/L statements, etc. then company code is used.

Q6. how many currencies for a company code can be configured?

Answer: For a company code, three currencies can be configured;

One-A Local currency,

Two-The parallel currencies

Q7. How many charts of accounts a company code has?

Answer: We can use only one chart of account for one company code that is assigned.

Q8. What do you mean by ‘year shift’ in the SAP calendar?

Answer: The broken fiscal year doesn’t have any understanding of SAP systems like January 2017- May 2018. It only understands the calendar year. In a case, a business has a different fiscal year and calendar year; however, Mixing the different months of two different calendar years, then one of the calendar years has to considered as a fiscal year for SAP. The month that is falling in another year needs to be shifted into the fiscal year. To shift, we use the sign either +1 or -1. This shifting of year is known as ‘Year Shift.’

Q9. Which options in SAP available for Fiscal years?

Answer: In SAP, the fiscal year is the way where financial data is placed in the system. We use 12 periods and four special periods that are stored in fiscal year variant like:

Year dependent fiscal year
Calendar year: From January-December, April-March

Q10. What do you mean by validations and substitutions in SAP?

Answer: The validation function allows us to analyze values and also the ranges of values when these are entering into the SAP system. The rule manager is used to storing the validation rules. When the values are entered into the SAP system, it automatically checks for standard validation rules.

The substitution function validates the values entered into the SAP system as per the prerequisite specified by the user.
Q11. What do you mean by year dependent fiscal year variant?

When the number of days in a month is not accordingly to the calendar month, then it is known as year dependent fiscal year variant. For instance: in the year 2007, March month ends on 28th and April ends on 25th, etc.

Q12. In which application areas, we can use validation and substitutions?

AM-Asset accounting
CS-Consolidation
CO-Cost accounting
FI- Financial accounting
PC-Profit centre accounting
PS-Project system
GL-Special purpose ledger
RE-Real estate

Q13. Which problems is a business area configured?

When there is a split of the account balance that is highly relevant in the case of tax accounts, then a business faced problems.

Q14. What is the field status group?

Answer: When a user performs the transactions, then field status groups are used to control the fields which taken into consideration.

Q15. Explain the use of the Financial Statement Version in SAP?

Answer: Financial Statement Version or FVS, is a reporting tool that is used to take out final accounts from SAP, such as the Balance sheet. When there is a need to generate the output of different external agencies, then we use multiple FSV’s.

Q16. What is the importance of Goods Received/ Invoice Received clearing account?

Answer: GR IR or Goods Received/ Invoice Received is an intermediary clearing account. It is used in SAP to record the goods and invoices in transit. It also records goods received but not invoiced. It means it also includes invoices for products that are still pending receive.

Q17. What is Financial General Ledger Accounting does?

Answer: When we need to get a recording of the external accounting and accounts, then we use GL or General Ledger. It is used to record all business transactions and also assure us that accounting data is always authentic and complete.

Q18. How do invoice payments make?

Answer:

Automatic method: When the payments are made via data medium exchange (DME), wire transfer, drafts, cheque, then it is known as automatic payments.

Manual method: When the payment is made without any cheque or draft or DME, then the process is known as manual.

Q19.How it possible to create a Credit Control Area in SAP?

Answer: With the help of transaction code OB45, the credit-control area is created in SAP.

First, write SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and after then, entering the information, i.e., Currency, Update, Name of the credit control are used in SAP, Credit limit, fiscal variant, description, risk category, and rep group.

Q20. Explain by posting period variants?

Answer: The SAP FI accounting period variant is used to manage the accounting periods open for validation and for all closed periods to be deleted. It is used for the opening and closing periods of the financial year for reservation purposes. We can assign these posting periods to one or more companies.

In SAP FI, posting period variant is needed to maintain accounting periods which are open to post while all closed period is in a balanced position. It is used to open or close period in the fiscal year for posting. Even these posting periods can assign to one or more company codes.

Q21. What do you mean by the short-end fiscal year?

Answer: When there is a change from a typical fiscal year to a non-calendar fiscal year, it is known as a short-end fiscal year. These sorts of changes happen when a business becomes a part of the new group.

Q22. Explain the purpose of Document type in SAP?

Answer: It is used to define the range of documents. It is used to control the types of accounts like assets, customers, etc. Moreover, it is also used for the reversal of entries.

Q23. What do you mean by country Chart of Accounts?

Answer: Country Chart of Accounts has General Ledger accounts that are required to fulfil the country’s legal requirements.

Q24. What is APP in SAP Fico?

Answer: Automatic Payment Program or APP is a tool given by SAP to companies for paying to their customers. It is a very useful tool used to avoid mistakes that can happen if perform manually.

Q25. What is dunning in SAP?

Answer: When payment chasing letters are issued to clients, it is known as dunning. Only SAP can decide which clients must get the letters and also about overdue. Accordingly, for overdue payments, different letters are used to print in SAP. Moreover, with the assist of the dunning level on the client master, it is possible to decide with ease which letter has already issued to the client.

Q26. Where do we use SAP FI?

Answer: SAP FI module is used to manage financial accounting data in multiple companies, languages, and currencies. This module is mainly deal with the components like Inventory, Cash Journal, Accrual, Inventory, Fixed asset, Tax accounting, Account receivable and payable, General Ledger, Parallel valuations, financial statements, Master data governance, and Fast close functions.

Q27. Do you know about different submodules in SAP FI?

Answer:

Banks
AR/AP
General Ledger
Travel Management
Lease Accounting
Fixed Assets, etc.

Q28. How can internal orders be used?

Answer: We can use the internal orders for;

Investment orders: In this, we can monitor internal jobs related to fixed assets.
Overhead orders: In this, we can monitor those internal jobs that relate to the cost centre.
Accrual orders: In this, the accrued cost is calculated in CO as per offsetting posting.
Orders with Revenue: In this, we only calculate the cost controlling parts of sales and distribution.

Q29. What are the advantages of using Business areas in a company?

Answer: When we use the business area, it becomes easy to configure. For this, we need to attach the company code along with other information in the business area. Moreover, with the usage of business areas in control, we can create a balance sheet, profit, and loss statement, and more ledger accounts for business areas. Thus, business areas are used for management accounting in some companies.

Q30. How can we manage the credit limit for the customer in FI?

Answer: With the help of credit control in FI, it is possible to find out the credit limit for the clients. It is used in application components (sales and distribution, Account receivable) for credit management. We can use the credit control in this way- User exit- Distribution channel-Customer master- Company code.

Q31. How can you differentiate the field status variant and field status group?

Answer: Files status groups are found in the field status variant. The filed status group is used to maintain in General Ledger account. It also specifies the fields while posting to General Ledger.

Q32. Name the different account types in SAP FI? How do you know about account types?

Answer: To know about account types (A, D, K, M, and S), posting keys in SAP FI is used. SAP FI has different accounts like; A-assets, D-customers, K-Vendors, M-Material, S-General Ledger Account.

Q33. List the common document types in FI?

Answer:

AA described as Asset Posting
AN described as Net Asset Posting
DR described as Customer Invoice
DZ described as Customer Payment
KA described as Vendor Document
KG described as Vendor Credit Memo

Q34. How can we Account Receivables in FI?

Answer: To record and manage accounting data of all customers, the SAP FI Accounts Receivable component is used. It is a significant part of sales management. Moreover, we directly record all posting in accounts receivable in General Ledger. Updation of GL is done as per transactions.

Q35. What is the company and company code?

Answer: The company is used in the legal consolidation module, while an entire self-contained set of accounts is recorded for purposes of external reporting in company code to record the financial statements of different company codes.

Q36. Do you know the most common G/L reports in SAP FI?

Answer: The most common G/L reports in SAP FI are:

G/L Account Balances
G/L Account List
G/L Account Totals and Balances
G/L Chart of Accounts List

Q37. How can you define tolerances for invoice verification?

Answer: Tolerance helps to find out does the tax shown on the invoice or the payable places matches. Tolerance is defined in logistic invoice verification like:

Quantity variances
Small differences
Price variances
Moving average price variances

Q38. What do you mean by payment in SAP FICO, and where does it store?

Answer: The payment term is used in SAP FICO to find out the payment due date for the customer or vendor invoice. It is stored on the vendor master record and fetched out through the vendor invoice postings.

Q39. What do you mean by one-time vendors?

Answer: In a one-time vendor, a vendor has a very temporary relationship. It can be used more than once. However, it is mostly used for one or two transactions.

Q40. Which are the standard stages of the SAP payment run?

Answer: For SAP payment run, the following standard stages are used:

Entering of parameters: In which, the details like payment methods, company codes, vendor accounts, etc. are recorded.

Proposal Scheduling: In which, the system shows the list where the invoices are needed to pay.
Payment booking: It includes the booking of the payments in the ledger
Printing of payment forms: It includes the printing of payment made.

Q41. How capital Work In Process and Assets accounted for in SAP?

Answer: Capital work in process or WIP is concerned with assets under construction in SAP. This term is used in the specific asset class. Kindly note that no depreciation is charged under Capital WIP.

The cost that is concerned with building a capital asset is treated as internal order, and until the settlement processes, it is kept treating as an Asset under construction.

Q42. What are asset classes essential? What asset classes are there?

Answer: The asset class is treated as the main class to classify the assets. Kindly note for each asset, only one class is assigned. Plant & Machinery, Furniture & Fixtures, etc. are examples of asset classes.

The asset class also has a G1 account has obtained, then the G1 account is debited. Moreover, whenever we create an asset master, it becomes compulsory to specify the asset class to whom we create the required assets. It means whenever an asset transaction is done, then the G1 account is automatically attached, and entry is done. We can also mention the default values to calculate depreciation values and also other master data in every asset class.

Q43. What do you mean by parallel and local currency in SAP?

Answer: Every company code can have two more currencies apart from the company code; the currency is also added to the company code data. When the currency is added in the company code creation, it is known as the local currency code, while the other two more currencies are known as parallel currencies. When we need to do any international transaction, then the parallel currency is used. The two parallel currencies that are used in SAP are HARD currency and GROUP currency.

Q44. How to use internal order?

Answer: Whenever we need to track costs, then we use internal order. These can be incurred for a short time only.

Q45. What do you mean by ‘Value Field’ in the CO-PA module?

Answer: The term value field means to value or number-related fields in profitability like sales revenue, quantity, etc.
Q46. What do you mean by the statistical internal orders?

Answer: When dummy cost objects are used to report or analyse purposes, it is known as statistical internal orders.

Q47. How do you differentiate between Residual Payment and Part Payment methods of allocating cash in account receivable?

Answer: Part-payment and residual payment are used methods that are used in allocating particle methods from clients.

For instance: When an invoice of INR 10000 is generated, and the client has paid INR 7000, now this INR 7000 will be treated as off-set, and the remaining balance will be INR 3000. An invoice is cleared for the entire value, i.e., INR 10000, while a new invoice will be generated for the remaining payment.
Q48. Explain the use of the fiscal year variant in SAP FI? How many variants of it can be used?

Answer: Up to 16 posting periods can be used in the fiscal year. We need to define the fiscal year variant for every company code. In a case, we create a controlling area; we need to define the fiscal year variant.

It may be noted that the controlling area and company code may be different in several special periods used. We should ensure that fiscal year variants should be matched.

Q49. In case the General Ledger document is not completed, then how can you save the document at a later stage, and how can you manage this in FI?

Answer: We can either hold posting of the general ledger document or temporarily save the data or document in the following conditions:

Inaccurate or incomplete information in the document
When general ledger document is incomplete
To save the document for the later stage.

Q50. Which scenarios can use document reversal?

Answer: Even we can able to reverse an inaccurate document. A document can be reversed only if:

It has only vendor, customer, or general ledger account items.
It has no cleared items, and
It was shown with financial accounting.

Part 6 :

What do you know about SAP FICO?

The term FICO refers to Financial Accounting and Controlling. It is a central tool that helps in preparing the monetary statements, tax statements, and accounting of an association. It also serves key software to direct the data and make the results on the foundation of the present marketing trends.

Name the submodules in the SAP FI?

The four modules are:

Banks
Management
Fixed Assets
General Ledger

Define the company code in SAP?

The company is major when it comes to generating profit and loss account balance sheet, etc. As a vital aspect of the SAP FICO, the company code is used to organize each financial sheet.

Define the options in SAP for fiscal years?

The fiscal year in SAP is the method financial data is stored in the organization. In SAP, you have 12 periods and four particular periods. These periods are stored in a fiscal year variant that is:

Year dependent fiscal year
Calendar Year: From Jan-Dec, April-March

Explain the field status group?

Field status groups’ manage the fields which come up when the consumer does the dealings. In FIGL master, the field rank group is stored.

What are the problems when the business area is configured?

The complicatedness faced when a business area is configured, is splitting of account balance which is more relevant in the case of tax accounts.

Is it possible to calculate depreciation to the day?

Yes, it is possible to evaluate depreciation, to do that you have to control on the pointer Dep. to the day in the reduction key pattern.

Define the credit control area in SAP?

To untouchable your company from the risk of bad debts and numerous outstanding receivable, you can set a recognition limit for your customer by using credit control area in SAP. With the assist of SAP, you can block the deliveries to your customer based on the magnificence limit and the accounts receivable balance in their account, which is maintained by you.

Name the one time vendors?

One time vendors permit a dummy vendor code to be used on-demand entry and also the information which is frequently stored in the vendor master.

Define the statistical internal orders?

Statistical internal orders are replica cost objects used for coverage and analysis purposes. It must be posted to in combination with a useful object such as a cost center.

What is the year dependent fiscal year in SAP?

Depending on the kind of projects which vary largely, the organizations have to end a month a day previous or two. For example, Month Feb can have 29 days. The same can be complete with an option in the SAP, which is known as Year Dependent Fiscal Year.

How many periods are there in the SAP FICO?

There are total 165 periods amid which four are measured as special. They are normally used when it comes to relevant any data that is associated with the fiscal year. A user is free to judge the unusual period anytime when they want of same is felt.

How taxes are managed under the SAP FICO?

One of the most common issue people faces while scheming the tax is slabs are never similar in every country. Every nation has its appropriate charges, it can be hard to calculate and pay consequently. The SAP FICO has a variety of tax events defined and alienated according to diverse nations.

Define values field in the CO-PA module?

Value fields are figure or value connected fields in productivity analysis such as quantity, sales income, discount value etc.

Define country charts of accounts?

Country Chart of Accounts contains G/L accounts desirable to gather the country’s lawful requirements.

Is the business area at the company code level?

No. The business area is at the customer level, which means other corporation codes can also be posted to the identical business area.

What do you mean by account group and where it is used?

To manage the data that needs to be entered at the instance of the construction of a master proof an account group is used. Account group live for the meaning of GL account, buyer Master and Vendor.

How do you create a credit control area in SAP?

By using business code OB45 or path you can generate Credit Control Area in SAP:

SPRO> enterprise structure >uphold structure>meaning financial accounting>preserve credit control region and then enter the following account

Name of the credit-control area in SAP

Update
Currency
Description
Risk Category
Credit Limit
Fiscal Variant
Rep group

Where can you use the internal order?

To track the cost, interior orders are used; they are planned to be incurred over on a diminutive term basis.

In Asset accounting what are the organizational assignments?

In Asset Accounting, chart of reduction is rated as the uppermost node, and this is assigned to the company node. All the reduction calculations are stored under the plan of decrease.

So, above are the following interview questions for SAP FICO jobs, candidates should go through it and prepare well to ace job interviews.

Part 7:

1) What do you understand by the term SAP FICO?

We already know that SAP stands for Systems, Applications & Products in Data Processing. In SAP FICO, FI stands for (Financial Accounting) and CO stands for (Controlling). To understand the concept well, we can divide the SAP FICO into two parts: SAP FI and SAP CO. The SAP FI takes care of accounting, preparation of financial statements, tax computations, etc. On the other hand, SAP CO takes care of inner orders, cost sheets, inventory sheets, cost allocations, etc.

SAP FICO is the software that stores data, and also computes them, and retrieves the result according to the current marketing scenario. It is responsible for preventing data loss and also does the verification and reporting of data.

2) What is the main usage of SAP FICO?

The SAP FICO modules are mainly used within a company to manage financial tasks within an international framework of languages and currencies.

The FI part of SAP FICO deals mainly in financial accounting such as fixed assets, accrual, cash journal, tax accounting, general ledger, and other financial tasks.
On the other hand, the CO part of SAP FICO deals with buying orders, stock sheets, cost sheets, cost assignments, and other tasks in this category.

3) What is the posting key, and why is it used?

Posting Key is a two-digit numerical used to control and determine the transaction type entered in the line item.

C++ vs Java

Posting Key is used to determine the following things:

Account Types
Types of posting. Debit or Credit
Field status of a transaction

4) What are the most important organizational elements in SAP FI?

The most important organizational elements in SAP FI are:

Company Code
Business Area
Chart of Account
Functional Area

5) What is the best way to manage transactions originating from different lines of businesses within a company?

The best way to manage transactions originating from different lines of businesses within a company is to create Business Areas. Another way is to create different company codes for each business line.

6) What are the other modules to which ‘Financial Accounting’ of SAP FICO is integrated?

The other modules to which ‘Financial Accounting’ of SAP FICO is integrated are:

Sales and Distribution
Production Planning
Material Management
Human Resource
Controlling of financial transaction

7) What is the function of credit control in SAP FICO?

Credit control is used to safeguard the business from overstretching its financial assets. Generally, we set a credit limit for the customers using SAP when the payment is made after the product’s sale. Using this way, we can restrict the customer’s amount to clear in their account before further starting a new purchase.

8) What is the use of company code in SAP FICO?

In SAP FICO, the company code generates financial statements such as Profit and Loss Statements, Balance sheets, etc.

9) What are the options in SAP FICO for Fiscal years?

In SAP FICO, the fiscal year is the way to store the financial data in the system. In SAP, you have 12 periods and four special periods. These periods are stored in fiscal year variant in the following way:

Calendar Year: From Jan-Dec, April-March
Year dependent fiscal year

10) How many Chart of Accounts can a company code have?

You can have only one Chart of Accounts for one company code that is assigned.

11) What is the use of Chart of Accounts in SAP FICO?

In SAP FICO, the Chart of Accounts is used to meet the daily needs of the company as well as the legal requirements of the country.

The Chart of Accounts has two types:

Operating Chart of Accounts (COA): The Operating Chart of Accounts or operating COA is a record assigned to the company code and contains all the general ledger accounts.
Country Chart of Accounts (COA): The Country Chart of Account is the list of general ledger accounts required to meet the country’s legal requirements.

12) How many currencies can we configure for a Company Code?

We can configure three currencies for a Company Code, one is a local currency, and two are parallel currencies.

13) What do you understand by ‘year shift’ in the SAP calendar?

The SAP system does not understand what a broken fiscal year is. For Example, from April 2020 to March 2021, it will only understand the calendar year. Suppose that the fiscal year is not a calendar year but the combination of the different months of two different calendar years for any business. In that case, one of the calendar years has to be classified as a fiscal year for SAP and the month falling in another year has to be adjusted into the fiscal year by shifting the year by using the sign -1 or +1. This shifting in the year is called the ‘year shift’.

For ExampleExample April 2020 to Dec 2020 is our first calendar year, and Jan 2021 to March 2021 is our second year, now if you are taking April-2020 to Dec-2020 as your fiscal year, then Jan-2021 to March-2021 automatically becomes the second year, and you have to adjust this year by using -1 shift, and vice versa if the scenario is reversed, here you will use +1 shift.

14) What are the different types of modules to which FI is integrated?

FI is integrated into the following types of modules:

Production Planning
Human Resource
Material Management
Sales and Distribution

15) How input and output taxes are handled in SAP FICO?

Every country has a tax procedure where tax codes are defined within this. It provides the flexibility to either expense out the Tax amounts or capitalize the same to stocks.

16) What is the field status variant and field status group?

The field status variants are contained within field status groups. On the other hand, the field status groups are maintained within the General Ledger account. You use it to define the fields while you post to the general ledger.

17) What are validations and substitutions in SAP FICO?

In SAP FICO, validations are used in the FI and CO modules to help ensuring data integrity when entering actual transactions online or in batch. On the other hand, the substitutions are used in the FI / CO / EC modules to derive or correct values being passed via integration or entered into the FI / CO modules.

Validation and Substitution are defined for each functional area at the following levels:

Document Level
Line item Level

18) What are the application areas in SAP that use validation and substitutions?

Following are the application areas in SAP that use validation and substitutions:

FI- Financial accounting
CO- Cost accounting
AM- Asset accounting
GL- Special purpose ledger
CS- Consolidation
PS- Project system
RE- Real estate
PC- Profit center accounting

19) What do you understand by year-dependent fiscal year variant?

A year is called a year-dependent fiscal year variant if the number of days in a month is not as per the calendar month. For Example, in the year 2021, the month January ends on 30th, the month February ends on 27th, etc.

20) How can you make vendor payments?

There are two methods to make the vendor payments:

Manual Payment: The manual payment method is done without the use of a medium such as cheques.

Automatic Payment: The automatic payment method is done through DME (Data Medium Exchange), such as wire transfer or cheque.

21) What is the use of FSV (Financial Statement Version) in SAP FICO?

The Financial Statement Version or FSV is a reporting tool in SAP FICO. It can be used to extract final accounts from SAP like Profit and Loss Account and Balance Sheet. We can use multiple FSV’s for generating the output of various external agencies such as Banks and other statutory authorities.

22) What are the different steps involved in G/L posting?

After completing the payroll run, we have to add results to the GL accounts, including cost centers. GL posting includes the following steps:

Groups together posting-relevant information from the payroll results.
Creates summarized documents.
Performs the relevant postings to appropriate GL accounts and cost centers.

23) What do you understand by a field status group?

A field status group is used to control the fields which come up when the user does the transactions. In FIGL (Financial General Ledger) master, the field status group is stored.

24) What are the most common G/L reports in SAP FI?

Following are the several most common G/L reports that can be generated in SAP FI:

G/L Chart of Accounts List
G/L Account Balances
G/L Account List
G/L Account Totals and Balances

25) What is the importance of financial statements within a business in SAP FICO?

In SAP FICO, the financial statements are used to manage the company’s financial assets. By creating and handling such financial statements and records, we create data that we can use later to develop further plans and investments for our company.

26) How can you manage the credit limit for the customer in SAP FI?

In SAP FI, the credit control is used to check the credit limit for the customer, and it can use one or more codes. It is used for credit management in Application components- Account Receivable (AR) and Sales and Distribution.

27) How many fiscal year variants can you use at a time?

We can define up to 16 posting periods in a fiscal year in the controlling component CO. We need to specify the fiscal year variant for each company code. When you create a controlling area, you also need to specify the fiscal year variant. Each company code requires a specific fiscal year variant. Thus, while creating a controlling area, you should also specify that code’s fiscal year variant.

The credit control area is determined in the following sequence:

User exit
Distribution channel
Customer master
Company code for the sales organization

28) What is the use of Account Receivables in SAP FI?

In SAP FI, Accounts Receivable components are used to record and manage the accounting data of all customers, and it is also an integral part of sales management. All postings in Accounts Receivable are also recorded directly in General Ledger. Different G/L accounts are updated depending on the transaction involved (for example, receivables, down payments, and bills of exchange).

29) What are the benefits of using Business areas in a company?

Business areas in a company can be used if other company codes require the same areas. Following are the benefits of using Business areas:

The business area is easy to configure as you need to attach to the company code and the other details in the business area, and it will get attached by itself.
By using Business areas in controlling, you can create Profit and loss statements, Balance sheets, etc., for business areas, which is used for management accounting in a few companies.

30) What do you understand by company and company code in SAP FICO?

In SAP FICO, a company is an organizational unit used in the legal consolidation module to roll up financial statements of several company codes. On the other hand, the company code is the smallest organizational unit for which a completely self-contained set of accounts can be drawn up for external reporting purposes.

31) What is the relationship between company code and controlling area in SAP FICO?

A controlling area may contain one or more company codes that must use the same operative chart of accounts as the controlling area. A controlling area can contain multiple company code assignments, but a single company code can be assigned to only one controlling area.

32) What are the problems faced when we configure the business area?

The main problem encountered when a business area is configured splitting of account balance which is more pertinent in the case of tax accounts.

33) What do you understand by parallel and the local currency in SAP FICO?

The local currency is the currency that is entered in the company code creation. The other two additional currencies are called parallel currencies. Parallel currencies can be used in foreign business transactions, and it is also used to do international transaction. The examples of two parallel currencies are GROUP CURRENCY and HARD CURRENCY.

34) What are the customizing prerequisites for document clearing?

The customizing prerequisite for document clearing is to check the items cleared and uncleared. This is done by open item management. Open item management is a process used to manage outstanding accounts, i.e., account payable and accounts receivable. For example, an invoice item that has not yet been paid is considered an open account until it is paid.

35) What do you understand by FI-GL Accounting? Why is it used?

The FI-GL Accounting stands for Financial- General Ledger. It is used to get an overview of external Accounting and accounts. It records all business transactions incorporated with all other operational areas in a software system and ensures that the Accounting data is always complete and accurate.

36) What are the methods used to make vendor invoice payments?

There are two methods used to make vendor invoice payments:

Manual payment method is done without the use of any output medium like cheques etc. Automatic payment method is done using some output medium such as DME (Data Medium Exchange), cheques, Wire transfer, etc.

37) What is the default exchange rate type picked up for all SAP transactions?

For all SAP transactions, the default exchange rate type is M (Average Rate).

38) What is the importance of GR/IR (Good Received/ Invoice Received) clearing account in SAP FICO?

In SAP FICO, GR/IR stands for Good Received/ Invoice Received as an interim account. If the goods are received in the legacy system, and the invoice is not received, the provision is made. It passes the Accounting entry debiting the Inventory and crediting the GR/IR account. In the same way, when an invoice is received, the vendor account is credited, and the GR/IR account is debited. The GR/IR shows as un-cleared items till the time invoice is not received.

39) What are the different accounting groups that can be created in Account Receivable in SAP FI?

Following are the different accounting groups that can be created in Account Receivable in SAP FI:

Group	Name
X001	Domestic Customers
X002	Export Customers
X003	One Time Customers

40) Is it possible to calculate depreciation to the day? How can you do that?

Yes, it is possible to calculate depreciation to the day. The depreciation to the day function becomes active for an asset as soon as the asset has a corresponding depreciation key and is capitalized (posted to). Once this takes place, you cannot switch off this function for the asset, even if you change the depreciation key.

41) What is the use of Account payable in SAP FI? How is it related to G/L?

In SAP FI, Accounts payable is used to manage and record the accounting data for all the vendors. It is related to G/L in the following ways:

All invoices and deliveries are managed as per vendor requests.
Payables are managed as per the payment program, and all payments can be made using checks, transfers, electronic transfers, etc.
All the postings made in Account payable are also updated in General Ledger simultaneously, and the system also maintains forecasts and standard reports that can be used to keep track of all the open items.

42) What are the internal orders in SAP FICO? Where can you use this?

Internal orders are generally used to plan, collect, and settle the costs of internal jobs and tasks. Internal orders can also be used to track the cost, and they are proposed to be incurred over a short-term basis.

43) What do you understand by blocking a customer in SAP FI?

When you block a customer account in AR so that postings are no longer made to that Account, this process is called blocking. We have to block a customer account before marking a customer master record for deletion.

We should also block a customer that we use only as an alternative dunning recipient to ensure that nobody can post to that customer by mistake. We can set the following blocks for a customer in the Sales and Distribution (SD) application component:

Posting block
Order block
Delivery block
Invoicing block

44) What are the different blocks that can be applied to a vendor account in SAP FI?

We can apply the following blocks to a vendor account in SAP FI:

Posting block for certain company codes or all company codes.
Purchasing block for certain purchasing organizations or all purchasing organizations. This block is only used if you have purchased and installed the purchasing application component.

45) What is the chart of depreciation in Asset Accounting?

In Asset Accounting, the chart of depreciation is rated as the highest node, which is assigned to the company node. All the depreciation calculations are stored under the chart of depreciation.

46) How can you create Credit Control Area in SAP FI?

We can create Credit Control Area in SAP FI by using transaction code OB45 or path. To do this, follow the steps given below:

SPRO>enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and then enter the following description:

Update
Name of the credit-control area in SAP
Currency
Description
Credit Limit
Risk Category
Fiscal Variant
Rep group

47) How can you manage the relationship between two currencies in SAP FI?

To define and manage the relationship between two currencies in SAP FI, we use exchange rates. It is also used to translate an amount into another currency.

Exchange rates are defined in the system for the following purposes:

Posting and Clearing: It translates amounts posted or cleared in foreign currency or checks a manually entered exchange rate during posting or clearing.
Exchange Rate Differences: It is used to determine gains or losses from exchange rate differences.
Foreign Currency Valuation: It is used to evaluate open items in foreign currency and foreign currency balance sheet accounts as part of the closing operations.

48) What is the field status group, and what does it use to control?

The field status group is configured in FSV (Field Status Variant) to maintain field status for G/L (General Ledger) accounts.

49) What are some most important tables in SAP FICO?

SAP FICO tables are used to store the data on a screen. Sometimes, more than one table is linked to a particular screen. An SAP FICO consultant must know the table in the SAP software and its data structure.

Following is a list of some most important tables of SAP FICO:

SAP Tables: Enterprise structure

Table	Description
T001	SAP Company-Code
T005	Countries in SAP
TCURC	SAP Currency-codes
TCURR	Exch-rate in SAP
TCURT	Currency-name in SAP
T077S	G/L Account-group
T009	Fiscal year variants in SAP
T880	Global-company-data in SAP
T014	Credit-control-area SAP
T004	SAP Chart of accounts (COA)
T010O	SAP Posting-period-variant (PPV)
T010P	Posting period variant names in SAP
T001B	Permitted posting periods in SAP
T003	Document-types in SAP
T012	House-banks in SAP

SAP FI G/L Tables

Table	Description
SKA1	Chart of accounts segment GL master data
SKB1	Company code segment G/l master data
BNKA	Bank master record in SAP
BKPF	SAP Accounting documents header
BNKA	Bank master record SAP
BKPF	Accounting documents header in SAP

SAP Accounts Receivable Table

Table	Description
KNBK	Bank details
KNVK	Contact persons
KNVH	Customer hierarchy
KNVI	Customer master tax indicator
KNB1	Customer master-Company code data
KNA1	Customer master-General data
KNVV	Customer master-Sales data
KNVP	Customer partners
KNVS	Shipment data for customer

SAP FI Accounts payable tables

Table	Description
LFBK	Bank details
LFM2	Purchasing data
LFM1	Purchasing organization data
LFB5	Vendor dunning data
LFB1	Vendor master-Company code data
LFA1	Vendor master-General data

SAP tables: Assets Accounting

Table	Description
ANKB	Asset classes: Depreciation area
ANKT	Asset classes: Description
ANKA	Asset classes: General data
ANEP	Asset line items
ANLU	Asset master record user fields
ANEK	Document header asset posting
ANLZ	Time-dependent asset allocation

SAP CO Tables

Following is the list of important SAP CO tables:

Cost Center accounting tables

Table	Description
CSKS	Cost center master data
CSKT	Cost center texts
CRCO	Assignment of work center to cost center
COSP	Cost totals for external postings
COEP	Line items (by period)
COBK	Document header
COST	Price totals

Profit center Accounting tables

Table	Description
GLPCA	Actual line items – Profit center
GLPCO	Object table for the account – Profit center
GLPCP	Plan line items – Profit center
GLPCC	Transaction attributes – Profit center
CEPC	Profit center master data table
CEPCT	Texts for profit center master data

50) What do you understand by posting period variants?

In SAP FI, the posting period variants are accountable to control which Accounting period is open for posting and ensure that the closed periods remain balanced. In the fiscal year, the posting period is a period for which the transactions figures are updated.

51) What is APP in SAP FICO?

In SAP FICO, APP stands for “Automatic Payment Program”. It is an SAP tool provided to companies to pay their vendors and customers. APP tools facilitate users to avoid mistakes that take place in posting manually. Another benefit is that payment through APP becomes more feasible when the number of employees is more in the company.

52) How can you define the tolerances for invoice verification?

In SAP FICO, the term tolerance specifies whether the payable places matching or tax hold on the invoice.

Following is the list of instances of tolerance that can be defined for Logistics Invoice Verification:

Small differences
Moving average price variances
Quantity variances
Price variances

53) What do you understand by the short-end fiscal year?

A short-end fiscal year comes into existence when you change from a normal fiscal year to a non-calendar fiscal year or the other way around. This type of change occurs when an enterprise becomes part of a new co-corporate group.

54) What do you understand by account group, and what is the use of it?

Account group exists for the definition of GL account and Customer Master and Vendor. It is mainly used to control the data that needs to be entered at the time of the creation of a master record.

55) What do you understand by cost center and profit center in Controlling?

Cost Center: A Cost center is a component in an organization that is added to the cost and indirectly added to the organization’s profit. For example, Marketing and Customer Service. A company’s business unit can be classified as a profit center, cost center, or investment center. The simple and straightforward division of an organization can be classified as a cost center as the cost is easy to measure.

Profit Center: In SAP FICO, a profit center is used to manage internal controlling. When a company is divided into profit centers, it allows you to delegate responsibility to decentralized units and allows you to treat them as separate companies in a company.

56) What is the purpose of “Document type” in SAP FICO?

Following is the list of main purposes of “Document type” in SAP FICO:

It is used to define the number range for documents.
It is used to control the types of accounts posted, such as Assets, Vendor, Customer, Normal GL account, etc.
It is also used for the reversal of entries.

57) In which application areas, validation and substitutions are used?

Validation and substitutions are used in the following application areas:

AM-Asset accounting
CS-Consolidation
CO-Cost accounting
FI- Financial accounting
PC-Profit center accounting
PS-Project system
GL-Special purpose ledger
RE-Real estate

58) Is the business area at the company code level?

No. Business area is at the client level instead of the company code level, and it means other company codes can also be posted to the same business area.

59) What are the one-time vendors in SAP FICO?

In such companies especially dealing with high cash transactions, it is not practical to create new master records for every vendor trading partner. In these cases, one-time vendors come into existence, and they allow a dummy vendor code to be used on invoice entry and the information usually stored in the vendor master.

60) In SAP, at what level the Customer and Vendor codes are stored?

In SAP FICO, the Vendor and Customer codes are stored at the client level. By extending the company code view, any company code can use the customer and vendor code.

61) What do you understand by accounting period variants and posting period variants in SAP FICO?

In SAP FICO, accounting period variants are used to manage the accounting periods open for validation and for all closed periods to be deleted. These are used for opening and closing periods of the financial year for reservation purposes. These posting periods can be assigned to one or more companies.

In SAP FICO, posting period variants are used to maintain accounting periods open to post while all closed periods are balanced. These are used to open or close periods in the fiscal year for posting. We can also use these posting periods to assign to one or more company codes.

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