SAP FICO Interview Questions

The term SAP FICO can actually be divided in to 2 for understanding. FI means Financial Accounting and CO stands for Controlling. SAP FICO is a software that takes in and computes information that has been loaded, and in turn, offers the needed results in line with the marketing situation. SAP FI is the part of the software that deals with the accounting of the business while SAP CO deals with all the individual sheets and segments that contribute to the final account.

• Human Resources
• Sales and Distribution
• Financial Transaction Controls
• Planning of Production
• Material Management

These are the segments of SAP FI that make up the organizational aspect:

• Company Code
• Business Area
• Chart of Account
• Functional Area

Posting Key is a double numerical that allows the user to identify the type of transaction that is input in the Line Item.

The Posting Key helps in identifying three major elements of any transaction:

The Type of Account

Whether the transaction is Debit or Credit and,

Status of the Transaction on the field.

The company code is a feature in SAP that needs to be entered whenever financial statements need to be created.

Each Company Code can be used for only one Chart of Account.

A total number of three currencies are possible to configure for every Company Code. The first currency is the business’s local currency. The other two are foreign currencies running parallel to the home currency.

SAP gives the user two main choices over the way in which the financial data is stored in the computer system, that is, the fiscal year. There are 12 regular time periods provided along with 4 special time periods. These periods are contained in two types of fiscal years:

January to December OR April to March
Fiscal Year dependent on the particular year.

Many businesses work in broken fiscal years, that is, financial years that don’t follow calendar months. The fiscal year of a business could contain some months from one year and certain months from another year, so as to complete 12 months, but now from the same year. Thus, in order to adjust this gap into the SAP software, Year Shift is required to be used.

This feature of SAP basically is an arrangement for years in which, for the business perspective, the months did not have the same number of days. Thus, to tweak the SAP calendar according to the calendar of the business, this feature has been provided.

Since SAP is a country-independent software, and so as to have an option for customization of the software according to the various tax laws of each country, there has been provided with some flexibility. Users can choose to either expense out the tax amounts or capitalize on the stocks.

There are various areas of functionality in the SAP software. Some of these include assets, control, etc. For each of these areas, the concept of validation and substitution is explained at two major stages:

• Document Stage
• Line Item Stage

• 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

The Financial Statement Version tool or the FSV tool is used in order to procure the various types of financial statements for a particular institution or business. Some examples of the type of financial statements that can be generated are Profit and Loss Accounts, Balance sheet, etc.

When a user of the software inputs a financial transaction, the various fields into which he or she enters the data are controlled by the Field Status Groups.

The Financial General Ledger Accounting feature is one of the major parts of the SAP software. Basically what it does is that it records all of the business and financial transactions of the company and merges them with the other functional segments in the software, thus creating a complete and overall record of the transactions done by the company.

The exchange rate type that is selected by default in the SAP Software is the M, or the Average Exchange Rate.

There are mainly two methods to make vendor invoice payments:

• Manual physical payment, or
• Automatic payment methods

The nagging problem faced whenever a business area is configured, is normally splitting of balance which is normally more pertinent in the entire case of taxes accounts.

The customizing prerequisite for record clearing is to check on the things uncleared and cleared, and this is performed by open item management. Open up item administration manages your excellent accounts, i.e. accounts payable and accounts receivable. For example, an invoice item which has not however been paid is normally documented as open accounts until it really is paid.

GR/IR (Great Received/ Invoice Received) can be an interim account. In the legacy program, if the products are received and the invoice isn't received, the provision is manufactured, in SAP at the receipt of the product. The Accounting is passed because of its entry debiting the Inventory and crediting the GR/IR account. Likewise, when an invoice is normally received owner accounts is normally credited, and the GR/IR accounts are debited, the GR/IR will show as uncleared items till the proper time the invoice isn't received.

Each ongoing company code can have two extra currencies, as well as the ongoing company code, currency entered into the ongoing business code data. The currency entered in the business code creation is named regional currency and the additional two extra currencies are known as parallel currencies. Parallel Currencies can be utilized in international business transactions. To carry out an international deal, parallel currency may be used. Both parallel currencies will be GROUP HARD and CURRENCY.

To monitor the price, users can use internal order from only a short-term settlement.

Yes, it is possible by using the SAP FICO software.

In Asset Accounting, chart of depreciation is rated as the best node, which is assigned to the ongoing business node. All of the depreciation calculations are kept beneath the chart of depreciation.

The asset class is the primary 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 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.

'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 '.

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

To immune your company from the risk of bad debts and multiple outstanding receivable, a credit can be set by you limit for your customer through the use of credit control area in SAP. By using SAP, you can prevent the deliveries to your client predicated on the borrowing limit and the accounts receivable balance within their account which can be taken care of by you.

By using deal code OB45 or route you may create Credit Control Region in SAP

SPRO>  enterprise structure > maintain structure> definition> monetary accounting> maintain credit control area and enter the next description then

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

Field position group is an organization configured in FSV (Field Position Variant) to keep up field position for G/L (General Ledger) accounts. It settings which field should suppress, display, required and optional.

Short-End fiscal year outcomes when you differ from a standard fiscal year to a non-calendar fiscal year or another method around. This kind of modification occurs when a business becomes component of a fresh co-corporate group.

To control the info that should be entered during the creation of an expert record a merchant account group can be used. Accounts group can be found for this is of GL accounts, Customer Vendor, and Master.

The objective of "Document type" in SAP is

a) Quantity range for papers are defined because of it
b) Types of accounts which can be posted are managed because of it, e. g Resources, Vendor, Customer, Regular GL account
c) It all is used for the reversal of entries

No, they are not.

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

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

The APP means 'Automatic Payment System'; it really is a tool supplied by SAP to businesses to pay out its clients and vendors. APP equipment help avoids any errors occurred in publishing manually. Also, when the quantity of workers is even more in the ongoing business, payment through APP turns into more feasible.

The next steps will be the standard stages of the SAP payment run

Getting into parameters (Vendor Accounts, Business Codes, Payment Strategies)

Proposal Scheduling - the machine proposes the set of invoice paid

Payment booking- the booking of some of the obligations in the ledger

Printing of payment forms, example cheques