For someone looking to pursue career in SAP as a SAP FICO Functional Consultant, the SAP FICO Interview Questions are crucial. Before attending the SAP FICO interview, it is crucial to prepare your interview questions. Interviewers typically ask questions about logic and business processes instead of configuration.

Explain the term SAP FICO.

SAPFICO stands for Financial Accounting (FI) and Controlling (CO).SAP FI is responsible for accounting, the preparation of financial statements, tax computations, and so on, whereas SAP CO is in charge of inter orders, cost sheets, inventory sheets, cost allocations, and so on. It is the software that stores data, computes it, and retrieves the results based on the current marketing scenario. SAP FICO prevents data loss while also verifying and reporting on data.

What are the other modules into which Financial Accounting is integrated?

What are SAP FI’s organizational elements?

The organizational components of SAP FI are:

Company code

Profit center

Segment

Functional Area

What is postingkey, and what does it control, please?

Posting Key Is a Two Digits Numerical Code.Posting Key In order to determine the transaction type that is entered in the line item, and the posting key determines AccountTypes , Types of posting , Debit or Credit

What is the company code in SAP?

Company Code is 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, Balancesheets.

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 CompanyCode 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 4 special periods.The periods are stored in fiscal year variant that is:
CalendarYear:From Jan-Dec, April-March
Year dependent fiscal year

What is a fiscal year-variant year-dependent?

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 2022,month January end on 29th, month Feb ends on 26th etc.

How are input and output taxes handled in SAP?

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

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 FI – (Financial General Ledger ) master, the field status group is stored.

What is FI-GL(Financial-GeneralLedger) 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 used for all SAP transactions?

In SAP, the default exchange rate type used for all transactions is typically the “M” (Average Rate) exchange rate type. This is a system-wide default, and it is used when no specific exchange rate type is specified in a transaction.

It’s important to note that organizations can customize their SAP systems, and in some cases, they might configure a different default exchange rate type based on their specific business requirements.

What are the issues that arise when business areas are configured?

The problem encountered when configuring a business area is the splitting of account balances, which is more relevant in the case of tax accounts.

What are the requirements for customization in document clearing?

Checking the items cleared and uncleared is a customizing prerequisite for document clearing, and open item management helps with this. Account payable and account receivable are the outstanding accounts that are managed by open item management. For example, an item on an invoice that has not been paid for is recorded as an open account until it is paid.

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

GR/IR (Good Received/Invoice Received) is an interim account. In the legacy system, if the goods are received but the invoice is not received, a provision is made at the time of receipt. It completes 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; however, the GR/IR will remain uncleared as long as the invoice has not been received.

In SAP, what is parallel and local currency?

Each company code can have two additional currencies, in addition to the currency entered into the company code data. The currency entered when creating the company code is referred to as the local currency, while the other two additional currencies are referred to as parallel currencies. Parallel currencies can be used for international business transactions. Parallel currencies can be used in international transactions. The two parallel currencies would be GROUPCURRENCY and HARD CURRENCY.

Is it feasible to compute depreciation up to today?

It is possible to compute depreciation; however, to do so, you must enable the indicator Dep. to the day in the configuration of the depreciation key.

Which are the main elements of the accounts chart?

The major components of Chart of Accounts are:
Chart of account key
Name
Maintain Language
Length OF GL account number
Controlling Integration
Consolidation-Group chart of accounts
Block indicator

What is SAP’s credit control area?

You can lower the risk of bad debts and numerous outstanding receivables from your customers by setting a credit limit for them using the SAP credit control area. Customers’ credit limits can be strictly capped by you by preventing deliveries to them in accordance with the SAP Enable Organization’s Credit Limit Credit Control section. To specify the Credit Control Area, we will utilize TCode OB45.After that, we will fill in the fields for the credit control area key, description, currency, credit limit for the risk category, and fiscal year variance that will also be supplied.

fields like, Credit Control Area Key, Description currency, risk category credit limit,Fiscal Year variant also be provided

How do you make a Credit Control Area in SAP?

Use transaction code OB45 or the path to create the Credit Control Area in SAP SPRO. Then, enter the following description: enterprise structure >maintain structure>definition>financial accounting>maintain credit control area.

Posting Period Variants: What is it?

In fiscal year posting period is a period for which the transactions figures areupdated. The posting period variants in SAP is accountable to control whichAccounting period is open for posting and ensures that the closed periods remainbalanced.

Explain in simple terms.What is field status, and what does it control?

A group called Field Status Group is set up in Field Status Variant (FSV) to maintain field status for General Ledger (GL) accounts. It determines which fields are required, optional, suppressed, and displayed.

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 an corporate group.

What is an account group, and where is it used?

An account group is utilized to control the data that needs to be entered during the creation of a master record. Account groups exist for the definition of GL accounts, Customer Master, and Vendors.”

“Purpose of Document Type:

In SAP, the ‘Document Type’ function controls the types of accounts that can be posted, encompassing Assets, Vendor, Customer, and Normal GL A/C, along with determining the range of documents that can be posted. It is employed in the reversal of entries for GL accounts.

The Document Type is utilized in the entry reversal process. Is the business area at the company code level for GL accounts?

No, the business area is at the client level, allowing other company codes to also post to the same business area.”

“In SAP, at what level are Customer and Vendor codes stored?

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

How are tolerances for invoice verification defined?

Tolerances determine whether the payable places matching or tax hold on the invoice. The following instances of tolerance can be defined for Logistic Invoice Verification:

• Small differences
• Moving average price variances
• Quantity variances
• Price variances

What is a Country Chart of Accounts?

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

In 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 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.

What are one-time vendors?

In certain companies, especially those 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 store information typically found 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:

• Entering of parameters (Vendor Accounts, Company Codes, Payment Methods)
• Proposal Scheduling – the system proposes the list of invoices paid
• Payment booking – the booking of the actual payments in the ledger
• Printing of payment forms, for 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 sheet account. The field contains an indicator linked to a specific GL (General Ledger) account used in this clear down.

Explain what recurring entries are and why are they used?

Recurring entries eliminate the need for manual posting of accounting documents that do not change from month to month. Multiple recurring entries are created and processed together as a batch at month-end using transactions.

What is a Posting Period Variant?

The Posting period variant specifies which periods allow posting financial transactions and which posting periods are open or closed for financial transactions posted. Posting period variants contain two period ranges: one to control normal posting periods and the other to control special posting periods.

What are Document Types in SAP?

Document Types in SAP can be called Voucher Types. Examples include RV (Billing Document), SK (Cash Payment), WA (Goods Issue), WE (Goods Receipt), WI (Inventory Document), WL (Goods Delivery to Customer), X1 (Recurring Documents), X2 (Sample Documents).

What is a Tolerance Group?

A Tolerance Group specifies the authorization to post the upper limit of posting for the general document. It defines maximum cash discount percentage allowed during payments and specifies the maximum permitted payment. Questions related to Amount per document, Amount per Open Item Account, Cash Discount per line-item, and Permitted payment difference are also covered.

How many levels do we create GL Accounts?

GL account creation involves two levels: Chart of Accounts Segment Level and Company Code Segment Level. These levels contain different data, specifying information valid for all company codes using the same chart of accounts and data specific to the company code, respectively.

What is the purpose of Trading Partners in SAP?

Trading Partners are used to track intercompany transactions and for consolidation purposes. They are assigned in intercompany customer and vendor master data to track intercompany sales and purchase information.

What is the Group Account Number in SAP?

The Group account number is used for consolidation purposes and acts as the main link between primary GL accounts and group GL accounts. It collects data from primary GL accounts.

What does the “Only Balance in Local Currencies” indicator indicate in SAP?

The “Only Balance in Local Currencies” indicator, when activated, displays the GL account balance in local or company code currency. It avoids generating exchange rate differences during the clearing of transactions.

What is the Alternative Account Number in SAP?

The Alternative Account Number can be called a Country-Specific GL Account. If the Country-Specific GL Account is activated, it needs to be assigned in the Alternative Account in the creation of General Ledger Master Data.

What is the significance of Line-Item Display in GL Master Data Creation in SAP?

The Line-Item Display, when enabled during GL Master Data Creation, allows viewing transactions line-item-wise for a specific GL account. It can be selected for all types of GL accounts.

What is Partial Payment and Residual Payment in SAP?

Partial Payment involves showing both invoice amount and payment amount as open items until the full payment is settled. Residual Payment shows the remaining balance as an open item after part payment is made, and the remaining balance is generated as a new invoice. Examples for both scenarios are provided.

Certainly! Here is the corrected version with the questions highlighted in bold:

What are the standard stages of the SAP payment run?

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

• Entering parameters (Vendor Accounts, Company Codes, Payment Methods)
• Proposal Scheduling – the system proposes the list of invoices paid
• Payment booking – the booking of the actual payments in the ledger
• Printing payment forms, for 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 sheet account. The field contains an indicator linked to a specific GL (General Ledger) account used in this clear down.

Explain what recurring entries are and why are they used?

Recurring entries eliminate the need for manual posting of accounting documents that do not change from month to month. Multiple recurring entries are created and processed together as a batch at month-end using transactions.

What is a Posting Period Variant?

The Posting period variant specifies which periods allow posting financial transactions and which posting periods are open or closed for financial transactions posted. Posting period variants contain two period ranges: one to control normal posting periods and the other to control special posting periods.

What are Document Types in SAP?

Document Types in SAP can be called Voucher Types. Examples include RV (Billing Document), SK (Cash Payment), WA (Goods Issue), WE (Goods Receipt), WI (Inventory Document), WL (Goods Delivery to Customer), X1 (Recurring Documents), X2 (Sample Documents).

What is a Tolerance Group?

A Tolerance Group specifies the authorization to post the upper limit of posting for the general document. It defines the maximum cash discount percentage allowed during payments and specifies the maximum permitted payment. Questions related to Amount per document, Amount per Open Item Account, Cash Discount per line-item, and Permitted payment difference are also covered.

How many levels do we create GL Accounts?

GL account creation involves two levels: Chart of Accounts Segment Level and Company Code Segment Level. These levels contain different data, specifying information valid for all company codes using the same chart of accounts and data specific to the company code, respectively.

What is the purpose of Trading Partners in SAP?

Trading Partners are used to track intercompany transactions and for consolidation purposes. They are assigned in intercompany customer and vendor master data to track intercompany sales and purchase information.

What is the Group Account Number in SAP?

The Group account number is used for consolidation purposes and acts as the main link between primary GL accounts and group GL accounts. It collects data from primary GL accounts.

What does the “Only Balance in Local Currencies” indicator indicate in SAP?

The “Only Balance in Local Currencies” indicator, when activated, displays the GL account balance in local or company code currency. It avoids generating exchange rate differences during the clearing of transactions.

What is the Alternative Account Number in SAP?

The Alternative Account Number can be called a Country-Specific GL Account. If the Country-Specific GL Account is activated, it needs to be assigned in the Alternative Account in the creation of General Ledger Master Data.

What is the significance of Line-Item Display in GL Master Data Creation in SAP?

The Line-Item Display, when enabled during GL Master Data Creation, allows viewing transactions line-item-wise for a specific GL account. It can be selected for all types of GL accounts.

What is Partial Payment and Residual Payment in SAP?

Partial Payment involves showing both invoice amount and payment amount as open items until the full payment is settled. Residual Payment shows the remaining balance as an open item after part payment is made, and the remaining balance is generated as a new invoice. Examples for both scenarios are provided.