Hello friends if you are looking for SAP FICO interview questions for beginners | SAP FICO Interview Questions for Freshers and experienced candidate then you will get related questions along with answers on this blog.
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.
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
d) Production Planning
e) Controlling of financial transaction
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
Explain what is posting key and what does it control?
Posting Key Is a Two Digits Numerical Code. Posting Key In order to determine the transaction type which is entered in the line item and Posting key determines
a) Account Types
b) Types of posting. Debit or Credit
c) Field status of transaction
What is the company code in SAP?
Company Code is Smallest Organization Unit and Legal Entity in SAP. Company code Mainly Used to Extract the External Reporting Purpose it generates financial statements like Profit and Loss statement, Balance sheets.
How many Charts of Accounts can company code have?
You can have one Chart of Account for one company code which is assigned.
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
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
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 29th, month Feb ends on 26th etc.
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 capitalize the same to stocks.
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
What are the application areas that use validation and substitutions?
a) FI- Financial accounting
b) CO-Cost accounting
c) AM-Asset accounting
d) PC-Profit center accounting
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.
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.
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.
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).
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
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.
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.
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.
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.
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.
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
What is credit control area in SAP?
In SAP Provided Credit Control Area to Avoid the Risk of Bad Debts and Multiple Outstanding Receivables from You Customers, You Can Set Credit Limit for Your Customers by Using Credit Control area. You Can Block the delivers to you customer based on the Credit Limit Credit Control area in SAP Enable Organization to Impose Strict Upper Limit on the Credit for the Customers… We will Define Credit Control Area by Using T Code OB45 …in that time we will fill the fields like, Credit Control Area Key, Description currency, risk category credit limit,Fiscal Year variant also be provided
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) Name of the credit control area in SAP
b) Currency
c) Description
d) Credit Limit
e) Risk Category
f) Fiscal Variant g) Rep group
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.
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.
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.
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.
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
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.
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.
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
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.
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.
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. Onetime vendors allow a dummy vendor code to be used on invoice entry and also the information which is usually stored in the vendor master.
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 invoices paid
c) Payment booking- the booking of the actual payments in the ledger
d) Printing of payment forms, example cheques
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) account to use in this clear down.
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.
What is Posting Period Variant?
The Posting period variant Specifies which Periods Allow to post the Financial Transactions and which posting Period are open & closed for financial transactions posted. Posting period can be controlled by Account Type wise. Posting period variant is contains Two period Ranges 1st one Control the Normal Posting Periods and 2nd one is Control the Special Posting Periods.
What is Document Types In SAP
Document Types Can be Called as Voucher Types Also In SAP.
a) RV-Billing Document
b) SK-Cash Payment
c) WA-Goods Issue
d) WE-Goods Receipt
e) WI-Inventory Document
f) WL-Goods Delivery to Customer
X1-Recurring Documents
X2-Sample Documents
What is Tolerance group?
Tolerance Group Specify the Authorization to post Upper Limit of Posting for the
General Document .and while posting to the customer and vendors payments
that time maximum cash Discount percentage allowed and it specify maximum
permitted payment.
- Group Tolerance: – if You Have Leave This Field as Blank then this control
applicable all users ids. otherwise, if you have mentioned particular user,
they will assigned individual tolerance group. (ob57) - Amount per document :- the Maximum Authorized Amount for the
employee to post the accounting Document - Amount per Open Item Account: –
posted amount permitted for
the employee while posting to customer and vendors. These controls do
not apply to automatically created line item - Cash Discount per line-item:- Maximum Cash Discount percentage rate
permitted for the employee while posting to customer and vendor
accounts - Permitted payment difference:- the Maximum authorized amount for the
employee while accounting payment against the invoice or Clearing the
Invoices if any Differences arises .
How Many Levels we will Crete G L Account?
G L account creation —Chart of Accounts Segment Level, Company Code Segment
Level
Under COA Segment Data –Type/description tab, Keyword Transaction Tab, Information System
Under Company Code Segment Data-Control Data Tab, Create Bank / Interest tab Information System
COA Segment Data – The COA Segment it contains the general information the is valid for all company code which are using same chart of accounts Company code segment-It Contain the data specify to the company code. we can maintain the different data for the same g l accounts based on the company code data.
What is Trading Partners in SAP FICO
The Trading Partners is Used to Track the Intercompany Transactions and also it used for Consolidation Purpose. the Trading Partners normally Assign in the intercompany customers and vendor Master data to Track the intercompany sales and purchase Information. We can assign the Trading Partners in the G l account creation.