Q1. Explain the term SAP FICO.
ANS: SAP FICO stands for FI ( Financial Accounting) and CO (controlling). In SAP FICO, SAP FI takes care of accounting, preparation of financial statements, tax computations, etc, while SAP CO takes care of inter orders, cost sheets, inventory sheets, cost allocations, etc. It is the software that stores data, and also computes the,m, and retrieves the result based on the current marketing scenario. SAP FICO prevents data loss and also does the verification and reporting of data.
Q2. What are the other modules into which ‘Financial Accounting’ is integrated?
ANS: The other modules to which ‘Financial Accounting’ is integrated are
a) Sales and Distribution
b) Material Management
c) Human Resource
d) Production Planning
e) Controlling financial transaction
Q3. In SAP FI what are the organizational elements?
ANS: The organizational elements in SAP FI are:
a) Company Code
b) Business Area
c) Chart of Account
d) Functional Area
Q4. Explain what is posting key is and what it controls.
ANS: In order to determine the transaction type that is entered in the line item, a two-digit numerical is used known as a ‘Posting Key’
The posting key determines
a) Account types and
b) Types of posting. Debit or Credit
c) Field status of the transaction
Q5. What is the company code in SAP?
ANS: To generate financial statements like Profit and Loss statements, Balance sheets,s, etc. company code is used.
Q6. How many Chart of Accounts can a company code have?
ANS: You can have one Chart of Account for one company code which is assigned.
Q7. 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
Q8. 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:
a) Calendar Year: From Jan-Dec, April-March
b) Year dependent fiscal year
Q9. What is a ‘year shift’ in the SAP calendar?
ANS: The SAP system does not know what is broken fiscal year e.g. April 2012 to March 2013 and only understands 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 years then 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 shift in the year is known as the ‘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.
Q10. 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 the year 2005, the month of January ends on the 29th, the month Feb ends on the 26th, etc.
Q11. In SAP how input and output taxes are taken care of?
ANS: 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 capitalize the same to stocks.
Q12. Explain what is validations and substitutions in SAP.
ANS: 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
Q13. What are the application areas that use validation and substitutions?
ANS: 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
Q14. In SAP what is the use of FSV ( Financial Statement Version)?
ANS: FSV (Financial Statement Version) is a reporting tool. It can be used to extract final accounts from SAP like Profit and Loss Accounts and Balance Sheet. The multiple FSVs can be used for generating the output of various external agencies like Banks and other statutory authorities.
Q15. What is a field status group?
ANS: ‘Field status groups’ control the fields that come up when the user does the transactions. In the IGL (Financial General Ledger) master, the field status group is stored.
Q16. What is FI-GL (Financial- General Ledger) Accounting do?
ANS: 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.
Q17. What is the default exchange rate type that is picked up for all SAP transactions?
ANS: For all SAP transactions, the default exchange rate is M (Average Rate).
Q18. What are the methods by which vendor invoice payments can be made?
ANS: a) Manual payment without the use of any output medium like cheques etc.
b) Automatic payments like DME (Data Medium Exchange), cheques, Wire transfer
Q19. What are the problems when the business area is configured?
ANS: The problem faced when a business area is configured, is the splitting of account balance which is more pertinent in the case of tax accounts.
Q20. For document clearing what are the customizing prerequisites?
ANS: 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. accounts payable and accounts receivable. For instance, an invoice item that has not yet been paid is recorded as an open account until it is paid.
Browse our course links: SAP FICO Training in Pune
To Join our FREE DEMO Session: Click Here
Q21. What is the importance of GR/IR ( Good Received/ Invoice Received) clearing account?
ANS: 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 un-cleared items till the time the invoice is received.
Q22. What is the parallel and local currency in SAP?
ANS: Each company code can have two additional currencies, in addition to the company code, currency entered into 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. For international transactions, parallel currency can be used. The two parallel currencies would be GROUP CURRENCY and HARD CURRENCY.
Q23. Where can you use the internal order?
ANS: To track the cost, internal orders are used; they are proposed to be incurred on a short-term basis.
Q24. Is it possible to calculate depreciation for the day?
ANS: 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.
Q25. In Asset Accounting what are the organizational assignments?
ANS: In Asset Accounting, the 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.
Q26. What is the importance of asset classes? What asset classes are there?
ANS: The asset class is the main class to classify assets. Every asset must be assigned to only one asset class. Examples of asset classes is Furniture & Fixtures, Plant & Machinery, Computers, etc. The asset class also contains a G1 account, when any asset is procured, the G1 account is debited. Whenever you create an asset master, it becomes mandatory to mention the asset 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.
Q27. How are capital WIP (Work In Process) and Assets accounted for in SAP?
ANS: ‘Capital WIP’ is referred to as Assets under construction in SAP and is represented under a 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’.
Q28. What are the major components of the Chart of Accounts?
ANS: The major components of the 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
Q29. What is the credit control area in SAP?
ANS: To immune your company from the risk of bad debts and multiple outstanding receivables, you can set a credit limit for your customer by usingthe 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.
Q30. How can you create a Credit Control Area in SAP?
ANS: By using transaction code OB45 or path you can create a 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
Q31. What are posting period variants?
ANS: In the fiscal year posting period is a period for which the transaction figures are updated. The posting period variants in SAP are accountable for controlling which Accounting period is open for posting and ensuring that the closed periods remain balanced.
Q32. Explain in simple terms what is field status and what it controls.
ANS: The 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 be suppressed, displayed, optional, and required.
Q32. What is the short-end fiscal year?
ANS: A short-end fiscal year results when you change from a normal fiscal year to a non-calendar fiscal year, or the other way around. This type of change happens when an enterprise becomes part of a new corporate group.
Q33. 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 groups exist for the definition of GL account, Customer Master, and Vendor.
Q34. What is the purpose of “Document type” in SAP?
ANS: The purpose of ” Document type” in SAP is
a) The number range for documents is defined by it
b) Types of accounts that can be posted are controlled by it, e.g Assets, Vendor, Customers, Normal GL account
c) It is used for the reversal of entries
Q35. Is the business area at the company code level?
ANS: No. The business area is at the client level which means other company codes can also be posted to the same business area.
Browse our course links: SAP FICO Training in Pune
To Join our FREE DEMO Session: Click Here
Q36. In SAP, Customer and Vendor codes 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.
Q37. How are tolerances for invoice verification defined?
ANS: Tolerance determines whether the payable places a matching or tax hold on the invoice. The following are the instances of tolerance that can be defined for Logistic Invoice Verification.
a) Small differences
b) Moving average price variances
c) Quantity variances
d) Price variances
Q38. What is a country Chart of Accounts?
ANS: Country Chart of Accounts contains G/L (General Ledger) accounts needed to meet the country’s legal requirements.
Q39. What is APP in SAP Fico?
ANS: 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 that take place in posting manually. Also, when a number of employees are in the company, payment through APP becomes more feasible.
Q40. In SAP FICO what are the terms of payment and where are they stored?
ANS: Payment terms are created in the configuration and determine the payment due date for vendor/customer invoices.
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.
Q41. What are one-time vendors?
ANS: In certain companies, especially the ones dealing with high cash transactions, it is not practical to create new master records for every vendor trading partner. One-time vendors allow a dummy vendor code to be used on invoice entry and also the information which is usually stored in the vendor master.
Q42. What are the standard stages of the SAP payment run?
ANS: 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 invoices paid
c) Payment booking- the booking of the actual payments in the ledger
d) Printing of payment forms, for example, cheques
Q43. In Accounts Receivable, what is the difference between the ‘Residual Payment’ and ‘Part Payment’ methods of allocating cash?
ANS: ‘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 offset 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 balance of $30.
Q44. What is “dunning” in SAP?
ANS: ‘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 the dunning level on the customer master, we can know which letter has been issued to the customer.
Q45. 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 sheet account. The field contains an indicator that is linked to a specific GL (General Ledger) account to use in this clear-down.
Q46.Explain what is recurring entries and why are they used.
ANS: 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.
Q47. What is a ‘Value Field’ in the CO-PA module?
ANS: Value fields are number or value-related fields in profitability analysis such as quantity, sales revenue, discount value, etc.
Q48. What are the statistical internal orders?
ANS: Statistical internal orders are dummy cost objects used for reporting and analysis purposes. It must be posted in conjunction with a real object such as a cost center.
Q49. For what purposes internal orders can be used?
ANS: You can use internal orders for
a) Overhead Orders: It monitors internal jobs settled to cost centers
b) Investment Orders: It monitors internal jobs settled to fixed assets
c) Accrual Orders: The offsetting posting of accrued costs calculated in CO
d) Orders with Revenue: It displays the cost-controlling parts of Sales and Distribution, it does not affect the core business of the company
Q50. What is the posting key? What purpose does it serve?
ANS: A two-digit numerical for controlling and determining the transaction type documented in the line item is referred to as a posting key. It helps determine the following:
Account types
Types of posting: debit or credit
Field status of a transaction
Browse our course links: SAP FICO Training in Pune
To Join our FREE DEMO Session: Click Here
Get More Information