SAP FI/CO PEDANT SOFTECH PVT. LTD. Enterprise Structure What is a Company Code and what are the basic organizational assignments to a company code? Company Code & a legal entity for which financial statements like Profit and Loss and Bakince Sheets are generated. Plants are assigned to the company code, Purchasing orginization is assigned to the company code, and Sales organization is assigned to the company code. ‘What is the relation between a Controlling Area and a Company code? A Controlling area can have the following 2 type of rekutionship with a Company code a. Single Company code relation b. Cross Company code relation This means that one single controlling area can be assigned to several different company codes. Controlling can have a one is to one relationship or a one is to many relationship with different company codes. Controlling Area is the umbrella under which all controlling activities of Cost Center Accounting, Product Costing, Profit Center and Profitability Analysis are stored. Ina similar way Company Codes is the umbrella for Finance activities. How many Chart of Accounts can a Company code have? A single Company code can have only one Chart of Account assigned to it, The Chart of Accounts is nothing but the list of General Led ger Accounts. ‘What are the options in SAP when it comes to Fiseal years? Fiscal year is nothing but the way financial data is stored in the system. SAP provides you with the combination of 12 normal periods and also four special periods. These periods are stored in what is called the fiscal year variant Thete are two types of Fiscal Year Variant Calendar Year e.g. Jan-Dec 1 Year Dependent Fiscal Year. ‘What is a year dependent fiscal year variant? In a year dependent fiscal year variant the number of days in a month are not as per the calendar month. Let us take an example:- For the year 2005 the period January ends on 29th, Feb ends on 27th, March ends on 29. For the year 2006 January ends on 30¢h, Feb ends on 26th, March ends on 30th, This is applicable to many countries especially USA. Ever year this fiscal year variant reeds to be configured in such a case How does posting happen in MM (Materials Management) during special periods? Thete is no posting which happens ftom MM in special petiods. Special periods are only applicable for the FI module. They are required for making any additional posting such as closing entries, provisions which happen during quarter end or year end. How many currencies can be configured fora company code? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 1 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. A company code can have 3 currencies in total. They are local currency ie., company code currency and 2 parallel currencies. This gives the company the flexibility to report in the different currencies. Do you require to configure additional ledger for parallel currencies? Where only 2 currencies are configured (Company code currency and a parallel currency) there is no need for an additional ledger. In case the third parallel currency & also configured and if it is different than the second currency type, you would then need to configure additional ledger. If there are two company codes with different chart of accounts how can you consolidate their activities? In this case you either need to write an ABAP program or you need to implement the Special Consolidation Module of SAP. If both the company codes use the same chart of accounts then standard SAP reports give you the consolidated figure. What is a variant? When executing a program, different selection parameters may be used. These seketion parimeters are stored in the SAP system as variants What is the IMG IMG is Implementation Guide that S AP system developers use to customize the client they are working in What is ASAP? ASAP is Accelerated SAP, a project management software tool that is used on SAP implementations to guide the project through different phases. ASAP can take a project from the designing of the "blueprint" through to "going live". Accelerated SAP is SAP’s total process- oriented solution for accelerated implementation and continuous optimization of RIS. What are the core modules of SAP? The core functional moduks in SAP R/3 are Financial Accounting (FD) usually in combination With Controlling (CO) or Treasury (TR) - Human Resourees (HR), and log ‘modules: Sales and Distribution (SD), Materials Management (MM), Quality Management (QM), Plant Maintenance (PM), and Production Planning (PP). How can you create Credit Control Area in SAP? By using transaction code OBAS or path you can create Credit Control Area in SAP SPRO> enterprise structure >maintain structure>de finition> financial accounting> maintain credit control area and then enter th: following description a) Update bb) Name of the credit control area in SAP ©) Currency 4) Description ©) Credit Limit 1) Risk Category Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 2 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 2) Fiscal Variant ‘h) 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 GIL (General Ledger) accounts. It controls which field should suppress, displ, 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 ofa 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. Is business aren 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 evel 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 hol on the invoice. The following are the instances of tolerance can be defined for Logistic Invoice Verification. 4) Small differences ) Moving average price variances ©) Quantity variances d) Price variances, What is a country Chart of Accounts? Country Chart of Accounts contains G/L (General Ledger) accounts needed t0 meet the country’s legal requirements, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 3 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Tell me about FI Organizational structure? Ans: Client! Operating Concern (Controlling areal Controlling Area 2 |Co. Code 1 Co. Code. 21 Busarea 1 Bus area? Bus Area Bus Area 4 How many Normal and Special periods will be there in fiscal year, why do u use special periods? Ans: 12 Normal posting period and 4 special periods are in the fiscal year which can be used for posting tax and audit adjustments to a closed fiscal year, Where do you open and close periods? Ans: PPY is used to open and close the periods based on a/c types considering GL Accounts Tr.Code. OBS2. ‘What do youenter in Company code Global settings? Ans:4 digit Alpha-numeric key. Name of the company City Country Cureney Language Address ‘What is document type, and what does it control? Examples. ‘Ans: Document type is nothing vouchers containing line items, Several business transactions can be identified within a particular document type. It controls the document number ranges. Itcontrols the Header part of document TT-controls the line item level of the document Helps filing of physical document ‘What is the purpose of “Document type” in SAP? ‘The purpose of “Doctument type” in SAP is. a) Number range for documents are defined by it ) Types of accounts that can be posted are controlled by it, ¢.g. Assets, Vendor, Customer, Normal GL account ©) It is used for the reversal of entries, What is posting key and what does it control? Ans: These are special chssification keys. Two character numerical key it controls the entry of line items. Posting key determines Account type, Debivcredit posting, Field status of transaction. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 4 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. ‘What is field status group, what does it control? Ans: FSG is mandatory fiel! in GL Creation, You tse this fie to define which fies are displayed when you post business transactions to a G/L account. A field may have one of the following statuses. - Suppressed - Disphy = Optional + Required What is chart of account and how many charts of accounts can be assigned to a company? Ans: Chart of account isa list of all G/L accounts used by one or several company codes. For each G/L. account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how a G/L account is created in a Company code. You have to assign a chart of accounts to each company code. This chart of accounts is the Operating chart of accounts and is used for the daily postings in this company code, You have the following options when using multiple company codes. You can use the same chart of accounts for all company codes Ifthe company codes all have the same requirements for the chart of accounts set up, assign all of the individual company codes to the same chart ofaccounts. This coukl be the case if all company codes are in the same country. In addition o the operating chart of accounts, you can use two additional charts of accounts. If the individual company codes need different charts of accounts, you can assign up to two charts of accounts in addition to the operating chart of accounts. This could be the case if company codes lic in multiple countries, ‘The use of different charts of accounts has no effect on the balance sheet and profit and loss statement. When creating the balance sheet or the profit an oss statement, you can choose whether to balance the company codes which use different charts of accounts together or separately. What does definition of a chart of account contains? Ans: chart of accoum key Name Maintenance language Length of the GL Account Number Controlling Integration Group chart of accounts (Consolidation) Block Indicator Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 5 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Can one COA be assigned to several companies? Ans: yes. One COA can be assigned 10 several companies. What is account group and what does it control? ‘Ans: Account group determines which fiekls you can configure on the G/L. master record, Its necessary to have at least two one for B/S and another one for P&L. alc Iteontrols the Number ranges of GL A/C. The status of fields of the master record of GL belongs to company code area, What is a functional area? Functional area is assigned to the query. It is the representation of a logical database or tables with their respective table joins, This defines which tables and fields the query can reference, What is a batch input? Batch input facility in SAP isa convenient ‘ool for capturing data into SAP or updating karge amounts of information in SAP transactions, The simplest way to utilize batch input is by : 1) Record the batch input for the transaction used to enter the data in SAP; 2) Then export the batch input recording ta text file. From the recording, you know what data is required, Create a spreadsheet or word processor document containing all the data to be captured or changed. Then ‘mail merge the exported text files with the data in a word processing pro gram, Finally, import the merged file, upload the file into SAP, and execute the batch input in S AP. 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 inte grated? ‘The other modules to which ‘Financial Accounting” is integrated are a) Sakes and Distribution bb) Material Managemen c) Human Resource 4) Production Planning e) Controlling of financial transaction InSAP FI what are the organizational elements? The organizational elements in SAP FI are: a) Company Code b) Business Area ©) Chart of Account 4d) Functional Area Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 6 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. What is the company code in SAP? To generate financial statements like Profit and Loss statement, Balance sheets etc. company code is used. ‘What is a ‘year shift” in SAP calendar? SAP system does not know what 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 knownas “year shift Example: April 2012 to Dee 2012 is our first calendar year, and Jan 2013 to March 2013 is our secon! year, now if you are taking April-12 to Dec-12 as your fiscal year, then Jan-13 toMareh- 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 shitl. ‘What is year dependent fiscal year variant? Ina 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 InSAP 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 fiom 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 isa 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 fick! status group is stored What is the difference between company and company code? A set of accounts can be drawn up for purposes of external reporting. Company is the organizational unit used in the legal consolidation module to roll up financial statements of several company codes. The Company Code is the smallest organizational unit for which a complete self-contained How many chart of accounts ean be attached to a company code? One or more Operative Chart of Accounis can be assigned to a company code. ACOA must be assigned to a company code. This COA is the operative COA and is used in both FI and CO. One Chart of Account can be assigned to many Company codes i.., Multiple company codes can either share the same or have separate COA. But a company code (Country specific Company code or International Company code) can have a country specific COA also along with Operative COA. The link between the regular COA and the country COA appears in the altermate number field of the G/L master record Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 7 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. E.g- Ifa company’s subsitiaries are located inboth US & Mexico. We need to configure 2 Company codes ~ one for US and another for Mexico, for e.g. U100 and M100. The same way wwe cteate 2 COA’s one for US & one for Mexico, USCA and MXCA. Mexico has different govt reporting requirements than the US so we will need to define a company code specific to Couniry Mexico and also create a country specific COA to be wsed, in addition to normal COA. In teode OBY6 (Comp Code Global Parameters) of CC M100 we define normal COA ie., USCA in Chart of Accounts field and MXCA in Country Chart/Accts field What is a controlling area? The Controlling Area is the central organizational unit within CO. modu. I is representative of ‘contained Cost Accounting envt where costs and revenues can be managed Define relationship between controlling area and company code? 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 buta single company code can be assigned to only one controlling area. What is a fiscal year variant? Fiscal Year isa 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. What are special periods used for? The Special periods in fiscal year variant can be used for things like posting audit or tax adjustments to a closed fiscal year. ‘What do you mean by year dependent in fiscal year variants? Year Dependent: the financial year is same as calendar year. Starting from Ist Jan to 31st Dec (where posting periods and the calendar months are equal) Year Independent: the financial year i different from calendar year Starting from Ist April to 3st March (where the posting perind months are not equal to calendar year months) What is shortened fiscal year? When are they used? Shortened Fiscal Year is a financial year, which has less than 12 periods. What are posting periods? 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 ‘What are document types and what are they used for? Document type isthe identifier of different account transactions like SA for G/LAA 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 fies Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page & Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Howare tolerance group for employees used? Tolerance group stores posting amount defaults, Tolerance groups ate assigned to User ID's that, ensures only authorized persons can make postings, What are field status groups? Field status groups control the additional account assignments and other fields that can be posted at the line item level fora G/L account, ‘We always copy company code or we can create manually also? If possible give reasons also. Answer: There are loads of tables that get copied over when copying co codes. This might be incomplete ina manual copy, and hence the manual route is not ad visable, How many financial statement versions can be assigned to co.code? Answer: AS many FSVs as you want can be assigned to the co code i.e. 1: as of Co Code: FSV. Is Business area at company code Level? No. Business area is at client level. What this means is that other company codes eanalso post to the same business area. What is Country and operational chart of account? Why do you use group chart of, account? Ans: Operational chart ofaccount ~ Day to day activities It is mandatory, Country COA — It’s used for legal specific requirement ofeach country. It’s additional and optional, Group COA used for consolidation of Company codes. This is for group consolidation purpose, What is a field status group? Field status groups control the fields which come up when the user does the transactions. There are three options for field selection. They are: Display only Suppressed Mandatory So basically you can have any field either for display only or you can totally suppress i or make it mandatory. The field status group is stored in the FI GL Master Record, What is a Financial Statement Version? A FSV (Financial Statement Version) is a reporting tool and can be wed to depict the manner in which the financial accounts like Profit and Loss Account and Balance Sheet needs to be extracted from SAP. It's fively definable and multiple FSV's can be defined for generating the output for various external agencies like Banks and other statutory authorities. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 9 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. GL Give some examples of GL accounts that should be posted automatically through the system and how is this defined in the system. Stock and Consumption accounts are instances of GL. accounts that should be automatically posted. In the GL account mister record, a check box exists wherein the automatic posting option is selected called “Post Attomatically Only” What is an Account group and whe eis it used? An Account group conirols the data that needs to be entered at the time of creation of a master record. Account groups exist for the definition of a GL account, Vendor and Customer master. It basically controls the fiekis which pop up during master data ereation in SAP. What is the purpose of a “Document type” in SAP? ‘A Document type is specified at the Header level during transaction entry and serves the following purposes: It defines the Number range for documents It controls the type of accounts that can be posted toe.g. Assets, Vendor, Customer, Normal GL account 7] Document type to be used for reversal of entries 0 Whether it canbe used only for Bateh input sessiens Document Type is created for differentiating business transactions. E.g. Vendor Invoice, Credit Memo, Accrual Entries, Customer Invoice. It is a two digit character. Howare input and output taxes taken care of inSAP? A tax procedure is defined for each country and tax codes are defined within this, There is flexibility to either expense out the Tax amounts or capitalize the same to Stocks. What are Validations and Substitutions? Validation ubstitutions in SAP are defined for each functional area Eg. FEGL, Assets, Controlling etc atthe following levels, Document level 2. Line item level These needs to be specifically activated and setting them up is complex and done only when itis really needed. Offen help of the technical team is taken to do that. Is it possible to maintain plant wise different GL codes? Yes. To be able to do so the valuation group code should be activated. The valuation grouping code is maintained per plant and is configured in the MM module. Account codes should be ‘maintained per valuation grouping code after doing this configuration, What are the different scenarios under which a Business Area or a Profit Center may be defined? This question is usually very disputable. But both Business Areas and Profit centers are created for internal reporting. Each has its own pros and cons but many companies nowadays go for Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 10 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Profit center as there is a eling that business area enhancements would not be supported by SAP in future versions, There are typical month end procedures which need to be executed for both of them and many times reconciliation might become a big issue. A typical challenge in both of them is in cases where you do not know the Business Arca or Profit Center of the transaction at the time of posting. What are the problems faced when a Business area is configured? The problem of splitting of account balance is more pertinent in case of tax accounts, Is it possible to default certain values for particular fields? For e.g. company code. Yes itis possible to defiult values for certain fields where a parameter i is present. Step 1 Go to the input fiek! to which you want to make defaults, Step 2 Press Fi, and then click technical info push button, This would open a window that displays the corresponding parameter id (if one has been allocated to the field) in the field data section, Step 3 Enter this parameter id using the following path on SAP Easy access screen System 1) User profile (| Own data. Step 4 Click on parameter tab, Enter the parameter id code and enter the value you want as defauik. Save the user settings. Which is the default exchange rate type which is picked up for all SAP transactions? The default exchange rate type picked up for all SAP transactions is M (average rate) Is it possible to configure the system to pick up a different exchange rate type for a particular transaction? Yes it is possible. In the document type definition of GL, you need to attach a different exchange rate type, What are the master data pre-requisites for document clearing? The GL. Account rmist be managed as an ,open item management", This checkbox is there in the General Ledger Master Record called Open Item Management. It helps you to manage your accounts in terms of cleared and uncleared items. A typical example woul be GR/IR Account in SAP (Goods Received/Invoice Received Account) Explain the importance of the GR/IR clearing account. GRAR is an interim account. In the legacy system of a client if the goods are received ane the invoice is not received the provision is made for the same. In SAP at the Goods receipt stage the system passes an accounting entry debiting the Inventory and crediting the GR/IR Account Suibsequently when an invoice is reed this GRIIR account is debited and the Vendor account is credited. That way till the time that the invoice is not received the GRIIR is shownas uncleared items, How many numbers of line items in one single entry you ean have? The number of line items in one document you can accommodate is 999 lines. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 11 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. A Finance Document usually has an assignment field. This field automatically gets populated during data entry. Where does it get its value? This value comes from the Sort key entered in the GL. master record, How do you maintain the number range in Production environment? Do you directly create it in the Production box or do you do it by means of transport? Number range is to be created in the production client. You can tansport it ako by way of request but creating in the production client is more ad visable. Incustomizing “company code productive “means what? What does it denote? Once the company code is live (real time transactions have started) this check box helps prevents deletion of many programs accidentally. This check box is activated just be fore go live. What is done by GR/IR regrouping program? The balance in a GRAR account is basically because of 2 main types of transactions:- Goods delivered but invoice not received — Here the Goods receipt i mide but no invoke has yet been received from the vendor. In such a scenario GR/IR account will have a credit balance. Invoiced received but goods not delivered — Here the Invoice is received from the vendor and accounted for, but goods have not been received. In such a scenario GRMIR account will have a debit balance. The GRR account woukl contain the net value of the above two types of transactions. ‘The GRAR regrouping program amilyses the above transactions and regroups them to the correct adjustment account. The balance on account of first transactions will be regrouped to another liability account and the balance on account of second transactions will be regrouped {0 an asset account, ‘What are the functionalities available in the financial statement version? In the financial statement version the most important functionality available is the debit credit, shift. This is more important in case of Bank overdraft accounts which can have a debit baince oractedit balance. Thus in case of a debit balance you woull require the overdraft account to be shownon the Asset side. In case of credit balance you would require the account to be shown on the Liability side, Is it possible fo print the financial statement version ona SAP script form? Yes. [tis possible to print the financial statement version on a SAP script form, How do you configure the SAP script form financial statement version? It's possible to generate a form from the financial statement version and print the financial statements on a SAP script form. In the customizing for financial statement version select the FSV you created and choose Go to [| Generate form {One column orwo column form, You can ako copy form from the standard system, Is it possible to generate a financial statement form automatical Yes. Its possible to generate a form automatically Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 12 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Is it possible to keep the FI posting period open only for certain GL codes? Yes. It is possible to keep open the FI posting period only for certain GL codes. How do you keep the FI posting period open only for certain GL codes? In transaction code OBS2 click on new entries and maintain an interval or a single GL code for the account type S with the posting period variant. If the GL codes are not in sequence then you need to maintain further entries for the posting period variant and account type S. Can posting period variant be assigned to more than 1 company code? Yes. Posting period variant can be assigned to more than one company code. What is FI-GL (Finaneial- General Ledger) Accounting does? To get an overview of external accounting and accounts, GL (General Ledger) accounting is used. It does the recording of all business transactions incorporated with all other operational areas in a software system and ako ensures that the accounting data always complete and accurate. 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 spliting 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, ie. account payable and account receivable. For instance, an invoice item that has not yet been paid is recorded as open account until itis paid, What is a Document in SAP? SAP is based on the document principle meaning that a document is created out of every business transaction in the system. The Document is the result of a posting in accounting in SAP, ‘and is the connecting link between various business operations. There are two types of documents 1, Original Documents: these documents relate to the origin of business transactions such as invoices, receipts, statement of accounts fiom bank, ete. 2. Processing Documents: These include accounting documents generated fiom postings in the system, reference documents, sample documents, etc Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 13 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. The processing documents other than the accounting ones are also kaowa as special documents ‘and they aid in the simplification of document entry in the system. Every document consists of © A Document Header © Twoor more Line Items, Before attempting to enter a document, call up the relevant document entry function as the system provides a variety of ready-made document entry templates suited to different transactions such as regular GL eniry, customer invoice posting, etc. The details entered in a document can be simulated and displayed before the document is actually posted in the system, ‘You may also choose to park the document and post it inter. ‘What is a Document Header? ‘The Document Header contains information that is valid for the whole document such as: © Document Date ©© Document Type (Control Information) @© Document Number © Posting Date © Posting Period © © Company Code Besides the above, the document header also has information (editable, later on) such as (a) Trading partner, (b) Document header text, (c) Reference, (d) cross-Company Code number, etc, What is a Document Type? SAP comes delivered with a number of Document Types, which are used in various postings. The document type helps to classify an accounting transaction within the system, and is used 10 control the entire transaction and determine the account types a particular document type can post to. For example, the document type AB allows you to post to all the accounts, whereas type DZ allows you to post only the customer payments. Every document type is assigned a number range. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 14 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. The common document types include: AA --- Asset posting Vendor credit memo AB ---Accounting document Net vendors Depreciation postings Vendor invoixe Customer credit memo Vendor payment Customer invoice Vendor credit memo Customer payment GL account document Recurring entry doc. Sample document Howis Account Type Connected to Document Type? The Document Type is characterized by a 2-character code such as AA, DG, ete., whereas an Account Type is denoted by a I-character code such as A, D, ete., specifying which accounts a particular document can be posted to, The common account types include: OO A Assets © DCustoner (Debtor) @© K Vendor (Creditor) © © M Materials eo SGL ‘What do you mean by Net Postings? Usually, when a transaction is posted, for example, a vendor invoice (document type: KR), the system posts the Gross amount with the tax and discount included. However, SAP provides you the option of posting these tems as Net. In this case, the posting excludes tax or discounts, Remember to use the special document type KN. (Similarly, you will use the document type DN for customer invoice-Net compared to the normal invoice postings for the customer using the document type DR.) For using this net method of posting you should have activated the required settings in the customization. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 15 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Explain the Various Reference Methods? SAP recommends Reference Methods as a document entry tool to info the system, when you are required to enter the same data time and again, Besides making the document entry process less time-consuming, this also helps in error-free document entry. The various Reference Methods used in SAP include 1. Reference Documents 2. Account Assignment Models 3. Sample Documents ie faster and easier document ent What is the Document Change Rule? The functionality Document Change Rules configured in the system maintains the information relating to what fields can be changed? And under what circumstances? As you are already aware, SAPs document principle does not allow changing the rele vant fiekls once a document is posted: any changes can only be achieved through Reversal or additional postings. Fiekls such as company code, business area, account number, posting Key, amount, currency, etc., can never be changed once the document is posted. However, SAP allows changing some of the fiekds in the line items such as payment method, payment block, house bank, dunning level, dunning block, etc, These can be changed document by document or by using mass change for a number of documents in a single step. The changes to master data are tracked and stored per user for an audit trail Differentiate between Account Assignment Model, Recurring entries, and Sample Document? Account Assignment Model is a reference method used in document entry when the same distribution of amounts to several Company Codes, cost centers, accounts, etc., is frequently used. Instead of manually distributing the amount among accounts or Company Codes, you may use equivalence numbers for distributing both the credit and debit amounts. A cross-Company Code account assignment model can also be created. The account assignment model may contain any number of GL accounts. The GL account items need not be complete. The model can be used across several Company Codes, include Company Codes from non-SAP systems. nd_can even © you camuse the account assignment model while parking a document (but you cannot use a reference document for parking). © The use of account assignment models is limited to GL accounts. Unlike a Sample Document, an account assignment model may be incomplete and can be completed during document entry by adding or deleting or changing the data already saved in the model. The Recurring Entry original document is used by the system as a reference document for Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 16 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. enabling posting of periodically recurring postings such as loan repayments, insurance premium payments, rent, ete. Since this document is not anaccounting document, the account balances are not affected. Ina recurring entry original document, you will not be able to change the (a) Posting key (b) Account, (©) Amount The recurring entry documents are defined with a special number range (X1). Unlike an account assignment model, these documents cannot be wsed for cross-Company Code postings. ‘The recurring entry document does not update transaction figures, per se, but acts only as a reference and as the basis for creating accounting documents. The SAP program SAPF120 creates the accounting documents ftom the recurring entry original document. There are two ‘ways to set the exact date when this document should be posted to: @© posting frequency: enter the day of the month and the period (in months) between two postings. © Scheduled run: configure the run schedule specifying the calenlar days on which the program should post these documents A Sample Document is like a template, which is created and stored so that the information contained therein can be easily copied into new documents and posted in the system. But once a sample document is created note that you will not be able 10 change the fine items already contained in that document; all you can do is change the amounts in that sampk document, But you can overcome this by defining a new sample document that can contain other line items or you may add new line items to the FI document, which & created by copying from the original sample document. Sample documents have separate number ranges (X2). What is a Line Item? The Line Items contain information relating to account number, amount, debi credit, tax code, amount, etc. SAP allows a maximum of 999 line items in a single document, Besides the one entered by you during an document entry, the system may also create its own line items called system generated line items, such as tax deductions, etc. Irrespective of the number of line items entered, ensure that the total of these is always zero (that is, total debits should equal total credits). Otherwise, the system will not allow you to post the document, What is a Posting Key? A Posting Key in SAP is a 2-digit alphanumeric key that controls the entry of line items. SAP comes with many posting keys for meeting the different business transaction requirements 40 GL debit), Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 17 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 50(GLeredit), 01 (customer invoice), L1 (customer credit memo), 21 (vendor credit memo), 31 (vendor payment), ete. The posting key determines: 1. What account can be posted to? 2. Which side of the account (lebit or credit) to be posted to, and 3. What layout screen needs to be used for that particular transaction? Its normal practice not to change any of the default posting keys in th: system, as you would very rarely require additional posting keys Differentiate between the Parking and the Holding of Documents? The Parking of a Document in SAP is one of the two preliminary postings (the other being the Hokling of documents) in the system and refers to the storing of incomplete documents in the system. These documents can later be called on for completion and posting. While parking a document, the system does not carry out the mandatory validity checking. ‘The system does not ako carry out any automatic postings (such as creating tax fine items) or balance checks, AS a result, the transaction figures (account balances) are not updated, This is true in the ease of all financial transactions except in the area of TR-CM (Cash management) where parked documents will update the transactions, The parking of documents can be used to park data relating to customers, vendors, or assets (acquisition only). When a cross-Company Code document is parked, only one document is created in the initial Company Code; when this parked document is posted all other documents relevant for all other Company Codes will also be created. However, it is to be noted that substitution functionality cannot be used with document parking, as substitution is activated only ontransaction processing. The added advantage is that a document parked by an accounting clerk can be called on for completion by someone else. The parked documents can be displayed individually or as alist from where the required document can be selected for completion and posting. The number of the parked document is transferred to the posted document, The original parked document, if necessary, can be displayed even after it has been posted to. During a transaction when you do not have a pice of required information, you can Hokl the Document and complete it later. As in the case of parked documents, here ako the document does not update the transaction figures, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 18 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. What is an Automatic Posting? When you post documents in SAP, there are instances where the system ako adds some more line items (such as tax, cash discount, gain/loss from foreign exchange transactions, etc.) besides, the ones you have enfered in the document, This helps to reduce your work as the system calculates these automatically. However, you need to define accounts you want the system to automatically post to; this will ensure that no manual posting is allowed to any of these accounts, What is clearing? Clearing in SAP refers to squaring-offopen debit entries with that of open credit entries. Clearing is allowed in GL accounts maintained on an open item basis and inall customer/vendor accounts, The clearing can either be manual or automatic. In the case of manual clearing, you will view the open items and select the matching items for clearing. In the case of automatic caring, a program determines what items need to be cleared based on certain pre-determined open item selection criteria and proposes assignments before clearing these assigned tems, Whatever the type of clearing, the system creates a clearing document with the details and enters, the clearing number against each of the cleared open items. The clearing number is derived from the document number of the clearing document, You will also be able to do a partial clearing when youare unable to match open items exactly; In this case, the balance amount not cleared is posted as a new open item. You may also configure clearing tolerance and also define rules on how to fackle the situation where the net amount afier clearing is not zero (such as, writing off, posting the difference to a separate clearing difference account, etc.) In the case of customers who are ako vendors, you will be able to clear between these wo provided it is duly configured in the relevant master data (by entering the customer number in the vendor master recond and the vendor number in the customer master record), Explain Reversal of Documents in SAP? If you need to change some of the accounting information relating to an already posted document, you can only achieve this by reversing the original document and posting a new one with the correct information, However, reversal is possible only when: © The origin of the document is in FI (not through SD or MM, etc.) © The information such as business area, cost center, ete., is still valid (that you have not deleted these business objects) © © The original document has no cleared items Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 19 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. © © The document relates only to the line items of eustomer/vendor/GL. While reversing, the system automatically selects the appropriate document type for the reversal, and defaults the relevant posting keys. (Remember that the document type for the reversal document woul! have already been configured when the document type was defined in the configuration.) Ako note that if you do not specify the posting date for the reversal document, the system defaults to the posting date of the original document What is Fast Entry? Instead of the regular document entry screens, SAP provides Fast Entry sereens for facilitating a quick way of entering repetitive line items in a transaction. For achieving this, you need to define Fast Entry Screen Layout, which will specify what fields you will require for data entry, and in what order. You may configure these fast entry screen layouts for GL account line items, eredit ‘memos, and customer/vendor invoices. Each of these fast entry screen layouts will be denoted by 4 S-character screen variant in the system, Fast entry screens are used in complex (general) postings. SAPs enjoy postings are also meant for similar data entry screens, but the difference is that in the case of fast entry you will start from serateh when identifying the fields, positioning them in the line item, etc., whereas in enjoy postings, the system comes with all the fiek!s activated and you ill select the fie is that youxdo not want to be made available for data entry. How do you Create GL Account Master Data? GL Account Master Data can be created using any one ofthe following methods: 1. Manually 2. Creating with reference 3. Through Data Transfer Workbench 4. Copying from existing GL accounts The Manual Creation of GL account mister recond is both laborious and time consuming. You will resort to this only when you can’t create master records using any of the other methods listed above. You will follow the second method, Creating With Reference, when you are akeady in SAP and have an existing Company Code (Reference Company Code) from which youcan copy these records to a new Company Code (Target Company Code). You will be able to do this by accessing the Menu: General Ledger Accounting>GL Accounts>Master Data>GL Account Creation> Create GL Accounts with Reference. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 20 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. While doing this, you can copy the account assignments as well ensuring that the integration of GL with other applications is intact. SAP facilitates so that you can (i) Limit the number of GL records thus copied to the target Company Code, (ii) Create new reconds if necessary and (iii) change the account number/name. When your GL accounts are in a non-SAP system and you feel that these accounts will meet your requirements you will then use the Data Transfer Workbench of SAP to transfer these records into SAP, and change them to suit the SAP environment. Since this will not have Account Assignment logic as defined in SAP, you need to be careful when defining these assignments You will resort to the last option of Copying from Existing GL Accounts only when you feel that there isa Chart of Accounts in the system that meets your requirements 100%. Otherwise, follow the second method described above. ‘What is Collective Processing of GL Accounts? Collective Processing helps you to make systematic changes to a number of GL accounts ina single step. For example, you have used the creating with reference method to create GL accounts ina new Company Code and you want to change the aecount names as well as the GL account type (P&L or B/S). Then you will use the mass processing method. You can make changes to: 1. Chart of: 2. Company Code data Use Menu Path: Accounting>Financial accounting>General ledger accounting>Master records>Collective processing. This can be achieved in IMG through: Financial Accounting>General Ledger Accounting>GL Accounis> Master Data>GL_ Account Creation>Change GL Accounts Collectively. scounts data, Remember that the collective processing helps only to edit and you cannot we this method if you rced to create new muster records. What is Individual Processing of GL Accounts? In contrast to the collective processing of GL accounts where you edit a number of accounts in a single step, Individual Processing helps to edit or create GL account master records one at a time. Here you can edit (including displ, change, block, unblock, and delete) or ereate a new GL account in three different ways 1. Centrally: You will be editing or creating a GL account master record in both the Chart of Accounts area and Company Code area inone step. This is ako known as one-Step GL. creation. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 21 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 2. In the Chart of Accounts area: you first edit or create the recon here before doing it in the Company Code area. 3. In the Company Code area: you edit or create the record here after it has been done in the Chart of Accounts area, Put together, steps 2 and 3 relate t0 the step-by-step creation of GL. account master records. Is it Possible to Change an Existing B/S GL A/Cto the P&L Type? Technically, you will be abl to change all the fields, except the account number, of a GL. account in the Chart of Accounts area. However, in this particular instance when you change the GL account type ftom B/S to P&L, make sure that you again run the balance carry-forward program afier saving the changes so that the system corrects the account balances suitably, Why doesn’t the System allow you to Change the Tax Category ina GL A/C Master? You will be able to change the Company Code related fiekis such as tax category, currency, ete, provided that there has not been any posting to these accounts, Pay attention to the following: 1. If you need to denote an existing GL account to later be managed on an open item basis or vice versa, then make sure that the account balance is zero in either case. 2. If you are trying to change anexisting reconciliation account (to a regukir GL), then make sure that the account has not been posted to, 3. If you are attempting to denote an existing ordinary GL account into a reconciliation account, ensure that the account has a zero balance. ‘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 bakince sheets account. The fiekl contains an indicator which is linked to a specific GL. (General Ledger) accounts 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 key and what does it control? re special chssification keys. Two character numerical key it controls the entry of key determines Account type; Debit/credit post FieH status of transaction ‘What is reconciliation account; can you directly enter documents in that a/c?” Ans: When you post items to a subsidiary led ger, the system automatically posts the same data (o the general ledger. Each subsidiary kdger his one or more reconeiliation accoun's in the Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 22 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. general ledger. ‘We can’t we reconciliation account for direct postings, How do you control field status of GL master records and from where do you contro} Ans: Field status variant is maintained all FSGs. What are the segments of GL master record? Ans: - COA Segment AIC group Nature of account Short text GL ak long text Trading partner Group Account Number Company code segment Account currency Tax Reconciliation ale for ale type OIM.LID FSG. What does Field status group assigned to a GL master record controls? Ans: It controls the account assignments that are made to the account. Specifically the field ats group conirols whether postings to cost ceniers, internal orders, profitability segments and so onare required, not allowed (suppressed), or optional What are all the segments in a Customer/Vendor master record? Ans: Segments in Customer Segments in Vendor General Data segment General data segment Company code segment Company code segment Sales area segment Purchasing organization Segment ‘What is open line item management? What do you mean by clearing open line items? Ans: Open item management is further reconciliation function. OIM allows you to display the open and cleared items and amounts in an account. OIM should be used if an offsetting entry is made for every line item posted in the account. The a/c is reconciled and cleared against another account, Ex. Salary clearing account and GR/R Clearing account. ‘What is residual payment and part payment? ‘Ans: Residual payment i clears original invoice with incoming amount and create new line item for remaining outstanding amount Partial payment it leaves the original invoice amount and creates new line item for incoming amount Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 23 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. What is internal and external number ranges? Ans: Internal Number Ranges: Doc. No will be provided by the system automatically in serial order allotting the next available progressive number, The number must be in numerical External Number ranges: Doc. No will be given manually by the end user. System will not Jock no automatically in this case. User can pick the number randomly. Number may be an alpha What does document header control? Field status. Afier entering a document can you delete the entry? Can you change the document? Which, fields’ can/not is changed? Document header cannot be changed, affer posting the document you cannot change, Only if you want to change the document the reversal entry, What is a special GL transaction? The transaction other than A/P and A/R is called the special g/l transaction for ex: Bills of exchange, Interest payable, acquisition How do you reverse cleared documents? By doing reversal posting, ‘What is base line date? Why is that used? Can this be changed? For payment terms it is used. Base line date is the due date. What is the document principle in SAP? Every transaction in SAP creates a document. This is a means of documenting all transactions, being able to trace your actions in the system. What are the two pieces of a document? What must all line items consist of? Header and fine items. All line items must at least consist of a posting key, account and amount ‘What do document types control? What is their function? Document types 1) distinguish between the types of business transactions - you specify the type. Le. Is ita general Jedger accounting document, customer payment, etc 2) controls which account types may be posted to - you specify the account types that may be posted to. Le. Some document types are only for asset accounts. Some are only for venwlor accounts, etc. 3) assigns the document number - each document type is assigned a number range 4) and is used as.a sort criteria - by all of the above, you are grouping the documents or sorting them accordingly. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 24 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. Define posting periods, fiscal year variants, company codes and the relation between each. Posting periods define which periods are open for posting documents, and also which accounts are open for posting within these periods. Fiscal year variant define what your posting periods are, in lation to the calendar year. For example, if your fiscal year runs from July to June, you need to define, through a fiscal year variant, how that relates to the calendar year, so that SAP can interpret your fiscal year Fiscal year variants and posting periods are assigned t0 a company code ‘What is a posting key? What does it control? Posting keys determines how line items are entered, They control 1) debit or credit entry? 2) what account type - posting keys are designated for specific account types 3) field status - how are the line items going to look if you use this posting key?? 4) Other properties - is ita sales related transaction? is a special g/l transaction? What is the reversal posting key? What are automatic line items? Howare they configured in the system? Give some examples of automatic line items. Thete are certain activities defined at the Chart of Account level in FI that create automatic line items, Examples include discount expenses, r-venve from over/under payment, taxes. There is a 3-character system-specific coxle in SAP that corresponds with each of these activities, and usually you must specify a G/L account to correspond with these. This determines which G/L account i hit when the automatic fine item is generated Define composite profile, profile, authorization, value, field, authorization object, and object class. Describe the relationship between each. Composite profile is assigned to a user and contains one or several profiles. The profiles contain the authorizations or allowed activities that a person may performon an object, for a particular value. Similar authorizations can be grouped in to object classes - such as an SD object class, and Fl object class What are employee tolerances? Why do they exist? Give an example. They control the maximum amount that employees are allowed to post. All control the maximum, payment difference that employees are allowed to post. This is a control or authorization mechanism. An example would be, you wouldn't wanta brand new clerk to be able to post more than $100,000 and wouldn't want them to post an incoming payment that was 10% less than the (otal All users must be allocated (o an employee tolerance group in order to post, ‘What are custome r/vendor tolerances? Why do they exist? Give an example. They control the maximum payment difference allowed for customerv/vendors, specify how to post residual items fiom payment difference, and contain details of ckaring procedures. An example would be: Customer One can post a 5% difference b/e they've been a customer longer and are more credible. Customer Two can only post a 1% difference b/c they are a new customer and haven't established credibility Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 25 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Define sort key, allocation field. Describe the relationship between the two. Line items are displayed in the order designated by the allocation field. The allocation field is populated by the sort key. The sort key specifies the fields thatthe line tems are sorted by. Why would a project team want to configure its own line item layout? Why would a project team want to configure its own fast entry structure? Sone fields are more relevant for some customers than others, For instance, maybe the value date or dunning areas are not important fora group of accounting clerks to see. So a line item Jayout woul! be made that did not include these fields. Also, i may be typical that crks always retrieve line items according to the posting date. This woukl be a necessary field located in the line item layout What are posting keys? State the purpose of defining posting keys? Posting keys determine whether a line item eniry is a debit or a credit as well as the possible field status for the transaction, Posting keys are SAP delivered. If u wants changes like making additional fields optional on payment type posting keys then the best possible action is to copy the posting key that needs to be modified and then modify it. What are ad justme nt postings and its use? Give t.codes and paths if possible? Answer: £50, £02 and others could be used for adjustments. These adjustments are to correct, any financial represe ntation that has already been booked into the account. Accounts Receivable and Accounts Payable At what level are the customer and vendor codes stored in SAP? The customer and vendor code are at the client level. That means any company code can use the customer and vendor code by extending the company code view. Howare Vendor Invoice payments made? Venklor payments can be mide in the following manner: Manual payments without the use of any output medium like cheques etc. Automatic Payment program through cheques, Wire transfers, DME ete. How do you configure the automatic payment program? The following are the steps for configuring the automatic payment program:= Step 1 Set up the following: Co. code for Payment transaction Define sending and paying company code. Tolerance days for payable Minimum ‘% for cash discount Maximum cash discount Special GL transactions to be paid Step 2 Set up the following: Paying company code for payment transaction Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 26 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Minimum amount for outgoing payment No exchange rate diff Separate payment for each ref Billexch payment Form for payment advice Step 3 Set up the following: Payment method per country Whether Outgoing payment Check or bank transfer or B/E, Whether allowed for personnel payment Required master data Doc types Payment medium programs Currencies allowed Step 4 Set up the following: Payment method per company code for payment transactions Set up per payment method and co. code The minimum and maximum amount. Whether payment per due day Bank optimization by bank group or by postal code or no optimization Whether foreign cumency allowed Customer/Vendor bank abroad allowed Attach the payment form check Whether payment ad vice required Step 5 Set up the following: Bank Determination for Payment Transactions Rank the house banks as per the following Payment method, currency and give them ranking no" Set up house bank sub account (GL. code) Available amounts for each bank House bank, account id, curency, available amount Value date specification Where do you attach the check payment form? Is attached (0 the payment method per company code. Where are Payment terms for customer master maintained? Payment terms for customer master can be maintained at two places ie. in the accounting view and the sales view of the vendor master record, Which is the payment term which actually gets defaulted when the transaction is posted for the customer (accounting view or the sales view)? The payment term in the accounting view of the customer master comes into picture if the transaction originates ftom the FI module. Ifan FI invoice is posted (FB70) to the customer, then the payment terms is defaulted from the accounting view of the customer master. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 27 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. The payment ferm in the sales view of the customer master comes into picture if the transaction originates from the SD module. A sales order is created in the SD module, The payment terms are defaulted in the sales order from the sales view of the customer master. Where are Payment terms for vendor master maintained? Payment terms for Vendor muster can be maintained at two places ie. in the accounting view and the purchasing view. Which is the payment term which actually gets defaulted in transaction (accounting view or purchasing view)? The payment term in the accounting view of the vendor master comes info picture if the transaction originates from the FI module. If an FI invoice is posted (FB60) to the Vendor, then the payment terms is defaulted from the accounting view of the vendor master. The payment term in the purchasing view of the vendor master comes into picture if the transaction originates ftom the MM mndule. A purchase order is created in the MM module. The payment terms are defaulted in the purchase order from the purchasing view of the vendor master. How can be or in what way baseline date is important in Automatic Payment Program The Baseline date is used to calculate the due date by taking into account the payment terms. On the APP, the baseline date helps to pick the relevant invoices for payment. During the APP run when invoices are pulled into the run, the system checks the ‘Next Payment Date’ be fore picking the invoices to be paid Can we run Payment Program programme? ‘Yes can be possible, this can resolved through ranking order and bank optimization in FBZP. ‘You use further selection in proposal parameter, if you would like to filter the open item based onthe city ng (Hdfe vendor details) Payment run, Explain the entire process of Invoice verification from GR to Invoice verification in SAP with accounting entries? These are the following steps: A goods receipt in SAP for a purchased material is prepared referring a purchase order. ‘When the goods receipt s posted in SAP the accounting entry passed is: Imentory account Debit GRAR account credit A GRIIR (which is Goods receipt/Invoiee receipt) is a provision account which provides for the liability for the purchase, The rates for the valuation of the material are picked up from the purchase order, ‘When the invoice is booked in the system through Logistics invo ice verification the entry passed is as follows GRAR account debi Vendor credit Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 28 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Howare Tolerances for Invoice verification defined? The following are instances of tolerances that canbe defined for Logistic Invoice Verification, Small Differences, Moving Average Price variances Quantity variances Price variances Based on the client requirement, the transaction can be “Blocked” or Posted witha “Warning” in the event of the Tolerances being exceeded. Tolerances are nothing but the differences between invoice amount and payment amount or differences between goods receipt amount and invoice amount which is acceptable to the client. Can we change the reconciliation account in the vendor master? Yes. Reconciliation account can be changed in the vendor master provided that the authority to change has been configured. Normally we should not change the reconciliation account. ‘What is the impact on the old balance when the reconciliation account in the vendor master is changed? Any change you make to the reconciliation account is prospective and not retrospective. The old items and balances do not reflect the new account only the new transactions reflect the account. ‘There is an advance given by the customer which lies ina special GL account indicator A. Will this advance amount be considered for credit check? It depends on the configuration setting in the special GL indicator A. If the “Relevant to credit limit” indicator is switched on in the Special GL indicator A the advances will be relevant for credit check, otherwise it will not be relevant In payment term configuration what are the options available for setting a default baseline date? There are 4 options available:- 1) No defiult 2) Posting date 3) Document date 4) Entry date ‘What is generally configured in the payment termas a default for baseline date? Generally document date is configured in the payment termas a default for base line date. Tor F The credit fora customer can be checked at various points along the sales cycle? True. What is a payment advice? Why would one be used? Give some examples of payment advices. A payment advice contains information about an incoming payment, such as amount, payment date, reasons for underpayment, and document number. Itis used for the automatic search and ‘matching of open items during the clearing process. Instead of match ment Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 29 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. against the open items manually, the cerk only needs to enter the payment advice in order to car, ‘What is a reason code? Why would a reason code be used? Give an example, The reason code specifies the reasons for over or under paymert. Italso determines if the difference will be written off a G/L account. An example would be a reason code set up for damaged goods. Ifa business decision is made to write off damaged goods to a G/L account then all payment ad vices with that reason code specified will cause differences to be written off to the GiLaccount. Tor F the FI module does not currently support Lockbox functionality. False. What is dunning and why is it used? Dunning is a process whereby customer and vendors canbe sent late notices for overdue mounts, ‘What are the 4 necessary inputs for running the dunning program? Define each and give examples of the data in each. Data in master records - such as address and payment terms Basic parameters - dunning procedure suchas texts, -vels, charges, interest On-line parameters - such as company code, range of customer vendors, O1- payment terms, baseline date in open items Why are separate dunning levels supported by SAP? What is the purpose of the leveb? Because you may want to specify amounts, charges, texts depending on the number of days an anpunt is outstanding, For example, you would wantto send a firmer Keer to customer when. they become more overdue, ‘Tor F you may not change the dunning letters that are shipped with SAP. False. They can be edited with SAPSCRIPT Why would you use Dunning Areas? Give example: Dunning areas are used when you want run different procedures for different groups of customer/vendors. For exampie, you would send a different eter to your more reliable customers, than for brand new customers b/c the reliable letter may be more friendly. Also, you may send a differently worded letter for your plastics buyers than your electronics buyers. What does the payment program do? Payment program is the procedure whereby payments are made to customer/vendors for outstanding amounts. The procedure automatically clears outstanding items and updates the comespondling bank accounts to reflect outgoing payments, They system evaluates all open items based on payment terms and days outstanding to decide if the item is due, What are the 4 necessary inputs for running the payment program? Define each an Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 30 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. examples of the data in each. 1)Master Records - includes payment methods, house bank 2)Configuration - payment procedure includes banks, payment methods in co. code, payment ‘methods in country, specifications for sending and paying co. codes 3)0mline parameters - things you specify when running the program like the company code. the payment method 4)O1 -open items. The payment method in the open item, the payment terms, The amounts. What are the 3 levels that the payment program in configured at? data that is configured on each level Company Code - specify your paying and sending company codes Bank - specify your house banks, bank accounts you are paying or receiving money from. Abo configure the balances in the accounts, and their rank order per payment method Payment Methods - must specify payment methods for in the country and in the company code. ive examples of the Tor F The payment method must be configured for a country before it can be configured fora paying company? True Deseribe how SAP decides which open items must be paid by the payment program. First, you specify whether you want to always maximize your cash discounts, or always minimize, Then each open item is looked at individually by the system. In particular, the payment terms are evaluated, If you are always maximizing, the program looks at the first payment tier, if the payment program will not be run again in time to get the. maximum discount then the amount if paid. Ifthe payment program will be run again before the first payment tier expires, then the amount will be paid at the next run. Ifyou specify to always minimize the discount, the amount will only be paid when the program will notbe run again before the net amount is due (the third payment tier) How do you configure a special GL indicator for Customer? You can use an existing special GL. indicator ID or create a new one. Affer creating indicator id, update the chart of need to update the special GL. code. ‘The special GL code should ako be marked as a Reconciliation account, Switch on the relevant for credit limit and commitment warning indicators in the master record be changed on each individual invoice if required. special GL ‘ounts and the Reconciliation account, Also as a hst step you What are one-time vendors? In certain companies, especially the one dealing with high cash transactions, it 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 uswally stored in the vendor master. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 31 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 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) bb) Proposal Scheduling — the system proposes the list of invoice paid ©) Payment booking- the booking of the actual payments in the led ger 4) Printing of payment forms, example cheques In Accounts Receivable, what is the difference between the ‘Residual Payment’ and ‘Part Payment” metho ds 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 cared for the full value of $100 anda new invoice is generated for the remaining balances $30. ‘What is “dunning” in SAP? ‘Dunning’ is the process by which payment chasing letters ate issued to customers. SAP can determine which customers shoul! 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 ktter has been issued to the customer. What are the 3 levels that a customer master record can be maintained at? Why do these three levels exist? Give an example of the information stored on these levels. Client, company code, and sales (if maintained certrally). Exists so that you can tailor the customization at each evel. Adds more flexibility to the structure of a master record. For example, if you have one customer named ABC Co.; you define it once for your client Pepsi Co. That customer exists in two companies of the client, Taco Bell and Frito Lay. However, in Taco Bell the customer has different dunning areas, banks, payment terms than in Frito Lay. This is an example of how all information isthe same for ABC at the client level, but different at the company code vel Of course, Sales information woull be different in each company code as well What are the 3 levels that a vendor master record can be mal dat? Why do these three levels e9 ive an example of the information stored on these levels See the example given above. Exists so that you can tailor the customization at each level. Adds more flexibility © the structure of a master record. In the above exampk, if ABC Co, is a vendor in the companies Taco Bell and Frito Lay, under the client Pepsi Co, and the payment terms, payment methods are different at the company kvel. Of couse, purchasing information would be different in each company code as well. ‘What are the two purposes of the customer/vendor Account Gro how the Account Group is used. »? Give an example of 1) Establishes number range of the customer/vendor master records - a number ra assigned toan account group. This adds flexibility, you are able to keep similar accounts, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 32 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. numbered distinctly. For example customers are 1-100,000, vendors might be 200,000 - 300,000. ‘One-time customers might be 400,000-500,000. 2) Establishes the screen layout for customer/vendor master records, All fields at the client ‘and company code level for customer/vendor master records can be designated either suppressed, optional, required or mandatory. For example, some vendors my not use dunning areas, so you would establish a separate account group for those vendors, where the dunning fields are suppressed, What are screen layout link rules? Why are sereen Layout link rules used for customer/endor master records? Why are they used for line items? Since the same information can be designated required, optional, mandatory, suppressed in 3 different places, the link rules determine which designation rules out over another. These 3 places are at the account group level, company code vel, and the activity/transaction level, For line items, the same information can be designated required, optional, mindatory, suppressed in 2 different places. The link rules determine which designation rules out over another. These 2 places are at the posting key level, and the field status group of the G/L master record Tor F, Account Groups are mandatory when creating a sub-Jedger account. True. Account Groups are always mandatory when creating customer/vendor master records. Tor F. Number ranges may overlap for sub-ledger accounts. True. When setling up number ranges for account groups of customer! vendor master records, you cannot create one that overlaps with an existing number range, Define bank directory, house bank, bank account, bank ID, bank key, and account ID. Describe the relationship between all of these and G/L accounts. The bank directory isthe repository in SAP that contains all of the banks. Itcan be downloaded into the system or manually keyed in. In order to establish house banks, which are banks in which your company does business, the bank must first exist in the bank directory. The house bank is named with a bank ID, and has a distinctive or unique, universally recognized bank key. Allof the accounts in a house bank are referred to as bank accounts and are named with an account ID. Each bank account must contain a respective G/L account, Each G/L account must contain the house bank and account ID. This allows SAP to maintain the bank books accurately, For example, when you are running the payment program, you specify the bank accounts that youare paying out of When a payment is made, itis accurately reflected in the corresponing GiL account. ‘What are payment terms? Why are they used? How are they define in SAP? Payment terms define how you deal with a customer/vendor in terms of payment. For a customer, it defines when a customer must pay you, in order to receive discounts. Fora vendor, itdefines when you must pay the vendor in order to receive discounts The terms can be sot up with3 terms, which are usually cash discount term I, cash discount term Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 33 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 2, and due date for net payment Question 1: Additional Log What is the additional log in the AP payment program and how can it be used for troubleshooting? Az The additional fog is an important setting when performing a payment run, The amount of information stored in the log can be selected (see below), If there are any errors with the payments run, due to either missing or incorrect master data ;S, negative balances due fo credit memo’ s ete, the system will report these in the additional log Support position interviews offen ask this question as a way of determining if you know how to troubleshoot day-to- day Accounts Payable operations sets Question 2: Master Data How can you link customer and vendor master records and what is the purpose of doing so? ‘A: On the customer master there is a field “vendor” and likewise on the vendor master there is @ fiekl “customer”, By entering these master data numbers, a link can be created between the APYAR sub ledgers for use in the payment program, dunning routine and the clearing of open items. For exampe in the payment program, if specific business partner & your vendor but ako your customer, linking their master records together will allow the open AR invoices to be offset against the outstanding AP invoices. Question 3: Payment Terms What are terms of payments and where are they stored’? : Payment terms are created in configuration and determine the payment due date for customer/vendor invoices. They are stored on the customerivendor master record and are pulled through onto the customer/vendor invoice postings. The due date derived via the payment can be changed on each individual invoice if required Question 4: Baseline Date What is meant by a “baseline date” in SAP AR and AP? A: The baseline date is the date from which the payment terms (specified in IMG transaction OBB) apply Usually this is the document date on the invoice but can abo be the date of entry or posting date from the ledger Question 5: One Time Vendor What are one-time verxiors? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 34 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Az In certain industries (especially where there are a high volume of cash transactions), it is aot practical to create new master records for every vendor trading partner. One-time vendors allow for a dummy vendor code to be used on invoice entry and the information which normally stored in the vendor master (payment terms, address etc), is keyed on the invoice itself. Question 6: AP Vendor Group ‘What factors should be considered when configuring an Accounts Payable Vendor Group? [Az The following are determined by the creation ofa new AP vendor group (transaction OBD3) 0) Whether the vendors in this group are onetime vendors ~ i.e. no master record i created but the address and payments details are entered against each invoice (o this vendor 7 Field status group — which fiekls on the ventor master are suppressed, optional or mandatory when creating vendors belonging to this group additionally the vendor number ranges defined in transaction XKNI need to be assigned to your vendor account groups in transaction OBAS. The decision needs to be made whether to assign an external number range (where the user chooses the master record number) or an internal number range (system assigned) Question 7: Payment Run Name the standard stages of the SAP Payment Run. 2 The following steps are usually performed during the payment run 1 Entering of parameters (company codes, payment methods, vendor accounts ets) 7 Proposal Scheduling the system proposes list of invoices to be paid 1 Payment booking the booking of the actual payments into the kedger 0 Printing of payment forms (cleques etc) Variations on the above may be found in different SAP customers, but the interviewer will be looking for the basic steps above. Question 8: Payment Methods ‘What is the purpose of payment methods and where are they stored? ‘As Generally payment methods are one digit alphunumeri: identifiers that indicate the type of payments made to verelors or received from customers. There are many standard delivered SAP entries for each country. For example for the UK, the following are pre-delivered:~ The payment methods are stored in the vendor/customer master record as well on vendor/customer line items. (The default from master record can be changed during manual postings) Question 9: Electronic Banking Explain briefly how you can import electronic bank statements into SAP. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 35 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. A: A text file is received fiom the bank which is then uploaded into the SAP system. The file contains details of the company” s bank movements e.g cheques, bank interest, bank charges, cash receipts ete, Depending on the system configuration SAP will attempt t0 book these transactions automatically to the correct accounts to avoid the need for minual entries by SAP users. Any postings which the system cannot detive automatically can be booked trough ‘post- processing” Question 10: Residual Payments In Accounts Receivable, what’ the difference between the ,xesidunl payment” and part payment” methods of allocating cash? [Az These are the two methods for allocating partial payments fiom customers. Asanexampk, let's say invoice A123 exists for 1008 and a customer pays 60S. With partial payment, the 60S simply offsets the invoice leaving a remaining balance of 40S With residual payment, invoice A123 is cleared for the full value 100S and a new invoice line item is booked for the remaining balance of 408, Question 11: Correspondence Types ‘What are correspondence types in AR/AP? Az Comespondence types are different outputs which can be printed and sent to your business partners based around either customer vendor or GL. information. Popular correspondence types include customer statements, payment notices and line items lists Within the most common AP/AR functions (such as Display vendor line items" below there is the option to generate correspondence requests. At the end of the working day these can be printed together as a batch and sent out, Question 12: Dunning ‘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 ktters can be printed in SAP depending on how far overdue the payment is; from a simple reminder to a legal eter. The dunning level on the customer master indicates which letter has been issued to the customer Bank Accountin; Howis Bank Reconciliation handled in SAP? The bank reconciliation typically follows the below procedure: Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 36 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. First, the payment made to a Vendor is posted to an interim bank clearing account. Subsequently, while performing reconciliation, an entry is posted t the Main Bank account. You can do bank reconeiliation either manually of electronically How do you configure check deposit? The following are the steps for configuring check deposit: Step: Create account symbols for the main bank and incoming check account. Step2: Assign accounts to account symbols Step3: Create keys for posting rules Steps: Define posting rules StepS: Create business transactions and assign posting rule Step6: Define variant for check deposit ‘What is the clearing basis for check deposit? In the variant for check deposit we need to set up the following a) Fields document number (which is the invoice number), b) Amount ¢) Short description of the customer. The document number and the invoice amount acts as the ckaring basis. How do you configure manual bank statement? The following are the steps for configuring manual bank state ment:- Step1:Create account symbols for the main bank and the sub accounts Step2: Assign accounts to account symbols Step3: Create keys for posting rules Step4: Define posting rules StepS: Create business transaction and assign posting rule Step6: Define variant for Manual Bank statement How do you configure Electronic bank statement?” The steps for Ek-cironic Bank Statement are the same except for couple of more additional steps which you will see down below Step Create account symbols for the main bank and the sub accounts Step2: Assign accounts to account symbols Step3: Create keys for posting rules Step4: Define posting rules StepS: Create transaction type Step6: Assign external transaction type to posting rules Step7: Assign Bank accounts to Transaction types Fixed Assets What are the organizational assignments in asset accounting? Chart of depreciation is the highest node in Asset Accounting and this is assigned to the company code. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 37 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Under the Chart of depreciation all the depreciation calculations are stored. How do you go about configuring Asset accounting? The configuration steps in brief are as follows:- a) Copy a reference chart of depreciation areas b) Assign Input Tax indicator for non taxable acquisitions, ©) Assign chart of depreciation area to company code 4) Specify account determination e) Define number range interval 1) Define asset classes 2) Define depreciation areas posting to general edger h) Define depreciation key What is APC? APC stands for Acquisition and Production costs. Acquisition means any asset which you may acquire/ purchase externally. It includes invoice price and other related exp. Associated with it like customs, octopi, freight which you add and arrive at total cost of acquisition for pitalization of the asset. For ex Saya computer. The total cost which you incur for the acquisition of the computer including installation will be your APC Production cost means any asset which is created internally within the organization. This is normally created by means of AUC and you go on adding cost to the AUC as and when you incur exp. for the same. Forex. say addition to the office building, Therefore APC includes any external acquisition or internal construction of exp. which needs to be capitalized Explain the importance of asset classes. Give examples? The asset class is the main criterion for classifying assets. Every asset must be assigned to only one asset class. Examples of asset class are Plant& Machinery, Furniture & Fixtures, and Computers etc. The asset class ako contains the GL accounts which are debited when any asset is procured. It also contains the GL accounts for depreciation calcutation, scrapping etc Whenever you create an asset master you need to mention the asset class for which you are creating the required asset. In this manner whenever any asset transaction happens the GL accounts attached to the asset class is automatically picked up and the entry passed. You can also specify certain control parameters and default values for depreciation cakulation and other ‘master data in each asset class. Howare depreciation keys defined? The specifications and parameters that the system requires © calculate depreciation amounts are entered in Calculation methods. Calculation methods replace the internal calculation key of the depreciation key. Depreciation keys are defaulted in Asset Master from the asset class. A company has its books prepared based on Jan -Dec calendar year for reporting to its parent company. It is also required to report accounts to tax authorities based on April- March. Can assets be managed in another depreciation area based ona different fiseal year variant? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 38 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. No. Assets accounting module cannot manage differing fiscal year variant which has a different start date (January for book depreciation and) April for tax depreciation) and different end date (December for book depreciation and March for tax depreciation), In this case you need to implement the special purpose ledger. What are the special steps and care to be taken in fixed asset data migration into SAP system especially when Profit center accounting is active? Data migration is slightly different from a normal transaction which happens in Asset accounting module. Normally, in asset accounting the day to day transactions is posted with values through Fl bookings and at the same time the asset reconciliation is updated online reabtime. Whereas In data Migration the asset master is updated with values through a transaction code called as AS91 The values updated on the master are Opening Gross value and the accumulated depreciation The reconciliation GL account is not automatically updated at this point of time. The reconciliation accounts (GL codes) are updated manually through another transaction code called as OASV. If profit center is active, then after uploading assets through AS91_ you should transfer the asset balances to profit center accourting through a program Thereafter you remove the Asset GL coxe (reconciliation accounts) from the 3KEH table for PCA and update the Asset reconciliation account (GL. code) through OASV. After this step you again update the Asset recomiliation account in the 3KEH tabk. The reason you remove the Asset reconciliation code. from 3KEH table is that double posting will happen to PCA when you update the Asset reconciliation manually Is it possible to calculate multiple shift depreciation? Is any special configuration required? Yes it is possible to calculate multiple shift depreciation in SAP for all types of depreciation except unit of production. No special configuration is required. How do you maintain multiple shift depreciation in asset master? The following steps are needed to maintain multiple shift depreciation: 1. The variable depreciation portion as a percentage rate is to be maintained in the detail screen of the depreciation area 2. The multiple shift factors are to be maintained in the time dependent data in the asset master record. This shift factor is multiplied by the variable portion of ordinary depreciation. Once you have done the above the SAP system calculates the total depreciation amount as follows:- Depreciation amount = Fixed depreciation + (variable depreciation * shift factor) Let” s say you have changed the depreciation rates in one of the depreciation keys due to changes in legal requirements. Does system automatically calculate the planned depreciation as per the new rate? No. System does not automatically calculate the planned depreciation after the change is mide. ‘You need to run program for recalculation of planned depreciation. What are evaluation groups? The evaluation groups are an option for classifying assets for reports or user defined match code (search code). You can configure 5 different evaluation groups, You can update these evaluation groups onto the asset master record Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 39 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. What are group assets? The tax requirements in some countries require calculation of depreciation at a higher group or level of assets. For this purpose you can group assets together into so-called group assets. What are the steps to be taken info account during a depreciation run to ensure that the integration with the general ledger works smoothly? For each depreciation area and company code, specify the following: I The frequency of posting depreciation (monthly, quarterly etc) 2.CO account assignment (cost center) 3 For each company code you must define a document type for automatic depreciation posting: This document type requires its own external number rang. 4 Youalso need to specify the accounts for posting. (Account determination) Finally to ensure consistency between Asset Accounting and Financial Accounting, you must process the batch input session created by the posting report. If you fail to process the batch input session, an error message will appear atthe next posting run. The depreciation cakbulition is a month end process which is run in batches and then once the batch input is run the system posts the accounting entries into Finance. How do you change fiscal year in Asset Accou 1] Rumthe fiscal year change program which would open new annual value fickds for each asset. ie next year The earliest you can start this program is in the last posting period of the current year. You have to runthe fiscal year change program for your whole company code. ‘You can only process a fiscal year change in a subsequent year if the previous year has already been closed for business. Take care not t0 confuse the fiscal year change program with year-end closing for accounting purposes. This fiscal year change is needed only in Asset Accounting for various technical reasons. Is it possible to have depreciation calculated to the day? Yes it is possible. You need to switch on the indicator “Dep to the day” in the depreciation key configuration, Is it possible to ensure that no capitalization be posted in the subsequent years? Yes it & possible. You need to set it in the depreciation key configuration. Howare Capital Work in Progress and Assets accounted for in SAP? Capital WIP is referred to as Assets under Construction in SAP and is represented by a specific Asset class. Usually depreciation is not charged on Capital WIP. All costs incurred on building a capital asset can be booked t0 an Internal Order and through the settlement procedure can be posted onto an Asset Under Construction, Subsequently on the actual readiness of the asset for commercial production, the Asset Under Construction gets capitalized to an actual asset. ‘The company has procured 10 cars. You want to create asset masters for each of this car. How do you create 10 asset masters at the same time? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 40 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. While creating asset master there & a field on the initial create screen called as number of similar assets. Update this field with 10. When you finally save this asset master you will get a pop up asking whether you want to maintain different texts for these assets, You ean update different details for all the 10 cars. Difference between Depreciation, Accumulated Depreciation and APC? What is APC? Depreciation —a decrease in the value of an asset due to wear and tear Accumulated Depreciation ~ the total amount of depreciation calculated on a particular asset APC — refers to Asset transactions other than depreciation 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. 10 the day in the depreciation key configuration, 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. ‘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 chss, Example of asset class is Furniture & Fixtures, Plant & Machinery, and Computers etc The asset chss also contains G1 account, when any asset is procured, Gl account is debited. Whenever you create and 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 Gl account attached to the asset class is automatically picked up and the entry is passed. You can ako specify the default values for cakulating the depreciation values and other master data in each asset clas. 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 incured on building @ capital asset can be booked to an ‘internal order’ and through the settlement procedures, and can be posted onto an“ Asset Under Construction’ Suppose in 2004 I have depreciation key ‘AB&in 2005 depreciation key I have changed toCD”. In what way my balances would be affected like bakances of depreciation, accumulated depreciation, assets ete. Answer: The difference in the depreciation that is posted already and what should be posted with. historical effect will be posted in the current accounting period. FI-MM-SD Integration How do you go about setting the FIMM account determination? FI MM settings are maintained in transaction code OBYC. Within these there are various transaction keys to be maintained like BSX, WRX, GBB, PRD etc. In each of these transaction Keys you specify the GL accounts which get automatically passed at the time of entry. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 41 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Few examples could be: BSX- Stands for Inventory Posting Debit, GBB-Stands for Goods Issue/Scrapping/delivery of goods ete PRD- Stands for Price Differences. At what level is the FI-MM, FI-SD account determination settings? They are at the chart ofaccounts vel. What are the additional settings required while maintaining or creating the GL codes for Inventory accounts? In the Inventory GL accounts (Bakince sheet) you should switch on the “Post automatically only” tick. It is ako advisable to maintain the aforesaid setting for all FI-MM accounts and Fl- SD accounts, This helps in preserving the sanctity of those accounts and prevents from having any difference between FI and MM, Fl and SD. What is master data? Master data is used in an SAP system to represent the basic components of a procedure and 10 ensure data. integrity throughout the SAP business process. This guarantees that one common record is accessed for different procedures, Exumpke - a customer mister recon! may be referenced by more than one functional module: FI (financial and SD (sakes and distribution), What is Valuation and Account assignment in SAP? This is actually the link between Materials Management and Finance. The valuation in SAP can be at the plant evel or the company code level. If you define valuation atthe plant level then you can have different prices for the same material in the various plants. If you keep at the company code evel you can have only price across all plants. Valuation also involves the Prive Control Each material is assigned to a material type in Materials Management and every material is valuated either in Moving Average Price or Standard Price in SAP. These are the two types of price control availabk. What is a sales area? Sales area is a Segment that combines the sales organization, the distribution channel, and the sas division What is Valuation Class? The Valuation Class in the Accounting | View in Material Master is the main link between Material Master and Finance. This Valuation Class along with the combination of the transaction keys (BSX, WRX, GBB, PRD) defined above determine the GL account during posting. We can s70up together different materials with similar properties by valuation clas, Exg. Raw material, Finsihed Goods, Semi Finished We can define the following assignments in customizing: All materials with same material type are assigned to just one valuation class Different materia with the same material type can be assigned to differe nt valuation classes. Materials with different material types are assigned to a single valuation class. ‘What is the importance of GR/IR (Good Received/ Invoice Received) clearing account? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 42 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. GRAR (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 GRR account. Similarly, when an invoice is received the vendor account is credited, and the GR/IR account is debited, the GRR will show as an un-cleared item till the time the invoice is not received. Can we change the valuation class in the material master once it is assigned? Once a material is assigned to a valuation class in the material master record, we can change it only if the stocks for that material are nil, Ifthe stock exists for that material, then we cannot change the valuation class. In such a case, if the stock exists, we have to transfer the stocks or issue the stocks and make the stock nil for the specific valuationclass. Then only we will be able to change the valuation class Does the moving average price change in the material master during issue of the stock assuming that the price control forthe material is Moving Average? The moving average price in the case of goods issue remains unchanged. Goods issue is always valuated at the current mo ving average price. It is only in goods receipt that the moving average price might change. A goods issue only reduces the total quantity and the total value in relation to the price and the moving price remains unchanged. Also read the next question to earn more about this topic. If the answer to the above question is ,,Yes™, then list the scenario in which the moving average price of the material in the material master changes when the goods are issued. The moving average price in the material master changes in the scenario of Split Valuation which is sometimes used by many organizations, Ifthe material is subject to split valuation, the material is managed as several partial stocks and each partial stock is valuated separately. In spit valuation, the material with valuation header record will have v" moving average price. This is where the individual socks of a material are managed cumulatively. Here two valuation types, are created, one valuation type can have “v" (MAP) and the other valuation type can have “S” (standard price). In this ease, whenever the goods are issued from the respective valuation types, always the MAP for the valuation header changes. What is the accounting entry in the financial books of accounts when the goods are received in unrestricted use stock? Also mention the settings to be done in the ,A.utomatic postings" in SAP for the specific G/L. accounts. Onreceipt of the goods in unrestricted- use stock, the Inventory account is debited and the GR/IR account gets credited. In customization, in the automatic postings, the Inventory G/L account is, assigned to the Transaction event key BSX and the GR/IR account s assigned 10 the Transaction event key WRX. ‘What are the two types of creating a Master Recon? Ans.: Centrally, Step-by-step ie. at COA kvel then at Co. Code vel Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 43 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. If a material has no material code in SAP, can you default the G/L account in Purchase order or it has to be manually entered? Ifa material has no material code in SAP, we can still, defvult the G/L account with the help of ‘material groups. We can assign the valuation class to a material group and then in FI-automatic posting, we can assign the relevant G/L account in the Transaction event key. The assignment of a valuation class to a material group enables the system to determine different G/L. accounts for the individual material groups. What is the procedure in SAP for initial stock uploading? Mention the accounting entries also. Initial stock uploading in SAP fom the kegacy system is done with inventory movement type 561(a MM transaction which is performed). Material valuated at standard price: For a material valuated at standard price, the initial entry of inventory data is valuated on the basis of stankard price in the material master. If you enter an ‘akernative value at the time of the movement type 561, then the system posts the difference to the price difference account. Material valuated at moving average price: The initial entry of inventory data is valuated as follows: If you enter a value when uploading the initial data, the quantity entered is valuated at this price. If you do not enter a value when entering initial data, then the quantity entered is, valuated at the MAP present in the material master. The accounting entries are: Inventory account & debited and Inventory Historical upload account is credited. What is GR/IR? What journal entries we should pass for tl The GRIIR — the goods receipU/Invoice Receipt account is used to post. to whenever goods that are not yet invoiced have been received or when invoices arrive bd the delivery of goods. During the time between the invoice being created and delivery of goods, there can be a timing difference, in order to accommodate this timing difference; a GR/IR account is maintained temporarily to recon the flow. What are the accounting entries take place in MM and SD? Value fiom MM to FI is defined in OBYC.... on the material master the ow of values are assigned on the Costing, acctg, etc tabs where the system helps (0 post the necessary stock values into the appropriate GL accounts helps to determine, the GL accounts updated when there is a movement of goods. SD-FI- VKOA Can we assign one Controlling area to two different Company Codes (but the company codes having different fiscal years/different currencies Company code shoul have same financial year, may have different currencies You can assign 2 or more company codes to one controlling area as long as the chart of accounts, are same, Furthermore, if you have different fiscal year variant in the company code, then make sture that the number of period remains the same, While posting transaction, can we give cost centre / produetion order at time. Yes itis possible, but in such situation cost centre will be real and production order is statistical Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 44 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. If you assign both cost center and Prd Order then since Prod. Order are realco object, Cost center entry would be statistical What is credit management? Why is it used in SAP? The SAP functionality that allows you to maintain credit for customers on various levels, based on the customer's creditworthiness. Basically credit checks can be performed for customers throughout the sales cycle. Credit management is hugely integrated with SD. Howis FI credit management integrated with SD? You can set up risk categories, automatic credit checking, and update groups to check invoices they proceed throughout the sales cycle. What is a Credit Control Area? Where does it fallin the organizational structure? Credit Control Area is the highest hierarchical level in Credit Management, It falls below the client vel, above companies, You create credit control areas and assign companies to them, Each company can only be assigned to one credit control area. Obviously, customers can span Credit Control Areas since the same customer can exist in more than one company code. What are the levels of configuring credit management for a customer? First, a credit limit can be assigned to a credit controlarea. Then, any customer assigned to that credit control area, will have that limit. On the next level, specifications can be macle for each customer individually. For each customer, you specify the maximum limits across all credit control areas and per credit control areas. Then on the lowest level, you specify the current limit across all ered control areas and the current limit per credit control area, Please fell me the procurement cycle how it works? Procurement cycle ~ a sales order is placed ona requirement made by a customer, after which it is passed on to create a purchase order (this could either happen based on the requirements onthe SO, ora planned SO)-The value flow gets passed on o FI at the time of goods mpyement. In the case of SD (Sales and Distribution), the impact on FI happens only at the time of billing How do you configure FI-SD account determination? ‘The FISD account determination happens through an access sequence. ‘The system goes about finding accounts from more specific eriteria to less specific criteria, This is the sequence it would follow: 1) It will first access ant look for the combination of Customer accounts assignment sxp/ Material account assignment gmp/ Account key. 2) If it does not find the accounts for the first combination it will look for Customer account assignment stp and account key combination. 3) Furthermore, if it does not find accounts for the first 2 criteria’ s then it will look for Material account assignment grp/Account key. 4) [fit does not find accounts for the all earlier criteria’ s then finally it will bok for Account key and assign the GL code, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 45 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Thus posting of Saks Invoices into FI awe effected on the basis of a combination of Sales organization, Account type, or Customer and Material Account assignment groups and following are the op tions available, a. Customer AAG/Material AAG/Account type b. Material AAG/Account type ©. Customer AAG/Account type For each of this option you can define a GL account. Thus the system uses this GL. account to automatically pass the entries. Inthe SD document, what are the three levels of a sales document? Each sales document comprises of three main levels and each level is represented by a table that holds the data for that level. Data for the header level is stored in table VBAK, data for the item levels is stored in table VBAP, and data forthe schedule line level is stored in table VBEP. Suppose I have purchased goods of 10 units (raw mate ials or semi-finis hed goods) worth Rs10000 from vendor A (suppose) and also made payment for the same, Now during the manufacturing process, it was observed that 3 units are defective, now my question is how do we deal with the defective units in SAP as I have already made payment for the 10 units (ie, R510000), Answer: If you have a GRN against these materials, then the same can be return delivered. An Appropriate movement type needs to be configured for the same, As for the payment, raise a credit note onthe vendor. ** Using Debit Memo you can get the money for defective 3 units. Thave created Company Code and all other configuration related to the CCode. Also in MM Ihave created purchase order, created vendor, material ete. I couldn't activate the PO due to the following error messages in red: 1, MAINTAIN TOLERANCE LIMITS FOR TOLERANCE KEY PE ACCOUNT ASSIGNMENT 2. CONTROL INDICATORS FOR CONTROLLING AREA DO NOT EXIST. I have assigned controlling area to company code and I could see the controlling area in existence via master file and GL verification. 1. MAINTAIN TOLERANCE LIMITS FOR TOLERANCE KEY PE ACCOUNT ASSIGNMENT —> Please follow this. —link_-— > SPRO MM—> Purchasing > Purchase Onder. -> Set Tolerance limits for_—_ pre variance > Here you have to set for Tokramce keys PE and SE. Just copy them from std co, code. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 46 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. 2. CONTROL INDICATORS FOR CONTROLLING AREA DO NOT EXIST. — In Controlling = > General Controlling > Maintain Controlling Area > Maitain Controlling Area > Activate ComponentsControl Indicators > you need to check if you want to activate the ~—oder-—smanagement/activity based _—_—_costing/commitment ‘management etc. Logistics Invoice Verification Can you assign multiple G/L accounts in the Purchase order for the same line item? Yes, we can assign multiple G/L accounts in the Purchase onder for the same line item, The costs can be allocated on a percentage ot quantity basis. Ifthe partial goods receipt and partial invoice receipt has already taken place, then the partial invoice amount can be distributed proportionall ic. evenly among the account assigned items of a Purchase order. Alternatively the partial invoice amount can be distributed on a progressive fill-up basis, ic. the invoiced amount is allocated to the individual account assignment items one after the other. What is Credit memo and subsequent debit in Logisties Invoice verification? The term credit memo refers to the credit memo from the vendor. Therefore posting a credit memo always leads to a debit posting on the vendor account. Credit memos are used if the quantity invoiced is higher than the quantity received or if part of the quantity was returned, Accounting entries are: Vendor account is debited and GR/IR account is credited. Subsequent debit: If @ transaction has alfeady been invoiced amt additional costs are invoiced later, then subsequent debit is necessary. In this case you can debit the material with additional costs, ie. GRMR account debit and Vendor account credit. When entering the Subsequent debit, if there is no sufficient stock coverage, only the portion for the available stock gets posted to the stock account and rest is posted to the price difference account. What do you mean by Invoice parking, Invoice saving and Invoice confirmation? Invoice parking: Invoice Parking is a functionality which allows you fo create incomplete documents and the systemdoes not check whether the entries are balanced or not. An accounting document is ako not created when the invoice is in parked mode. Thus you can create incomplete documents and then post it ter to accounting when you feel it is complete. You can even rectify the Parked invoice. This feature is used by many companies as on many occasions alldata relating t0 the invoice might not be available Invoice saving: This is also called Invoice processing or Invoice posting, The accounting document gets created when the invoice is posted in SAP. Invoice confirmation: There is no terminology in SAP as Invoice confirmation, What are planned delivery costs and unplanned delivery costs? Planned delivery costs: are entered at the time of Purchase order. At goods receipt, a provision is posted to the freight or customs clearing account. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 47 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Eg. FRE is the account key for freight condition, hence the system can post the freight charges, to the relevant freight revenue account and FR3 is the account key for Customs duty, hence the system can post the customs duty t0 the relevant G/L account, These account keys are assigned to the specific condition types in the MM Pricing schema, In terms of Invoice verification: If the freight vendor and the material vendor is the same: then wwe can choose the option: Goods service items + planned delivery costs. If the freight vendor is different from the material vendor: then for erediting only the delivery costs, we can choose the option: Planned delivery costs. Unplanned delivery costs: are the costs which are not specified in the Purchase order and are only entered when you enter the invoice. ‘What is the basis on which the apportionment is done of unplanned delivery costs? Unplanned delivery costs are either uniformly distributed among the items or posted to a separate GIL account. For a material subjected to Moving average price, the unplanned delivery costs are posted 0 the stock account provided sufficient stock coverage exists. For a material subjected to Standard price, the unplanned delivery costs are posted to the Price difference account. ‘There are cases where Invoice verification is done first before the Goods receipt is made for the purchase order, In these cases with what values would the Goods receipt be posted? Since the invoice verification has been done first the Goods Receipts will be valued with the Inwice value, FI Month End Closing Activities ‘What are the Month End Closing Activities in Finance? 1. Recurring Documents. ) Create Recurring documents ) Create Batch Input for Posting Recurring Documents, ) Run the Baich Input Session . Posting Accruals or Provisions entries at month end . Managing the GRAR Account-Run the GR/R Automatic Cearing |. Foreign Currency Open Item Revaluation-Revalue Open Items in AR. AP Maintain Exchange Rates Run Balance Sheets —Run Financial Statement Version Reclassify Payables and Receivables if necessary 5. Run the Depreciation Calculation ). Fiscal Year Change of Asset Accounting if it & year end 10, Run the Bank Reconciliation 11, Open Next Accounting Period Explain Cash Management in SAP? The Cash Management sub module takes care of the following by integrating bank-related accounting with the respective sub ledger accounting: © © Check Deposit Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 48 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. @@ Cash Position © ® Cash Concentration © Bank Statement © Liquidity Forecast @@ Cash Concentration © Money Market ‘What is the Cash (Management) Position? The Cash Management Position helps to reproduce the activities of bank accounts, With input controls for preventing data duplication, parallel management of foreign currencies, and with the required documentation for revision of all planning activities, you will be abke to view up-to-date activities in bank accounts and forecast cash position or daily liquidity. The cash management position is set up using groupings, which determine the levels and accounts to be displayed. The data required for this activity is supplied from (a) Fl postings in cash management relevant GL accounts, (b) Payment advices entered manually, and (c) cash-flow transactions transferred from th: Treasury Management module. The data can be displayed using any of the following formats: © Agoregated, either as account balance (K) or as individual values of inflow/outflow (D) © © For any data in the past, present, or future © @ In increments (days, weeks, etc.) Explain Groupings and Levels? Groupings determine how to summarize the data, with various groups and kevels defined. A Group adds up various bank accounts and contains @ number of levels. A Level, thus, denotes the sources of data or account transactions. Below the Ievels are the line items, which are displayed using a list display. Explain Liquidity Forecast? The Liquidity Forecast helps to reproduce the activities in sub ledger accounts by (a) Linking to all the system resident data such as customer open items in a customer account, (b) Receipts and disbursements form FUSD/MM, and (c) Maintaining items such as reversal, document change, open item clearing, etc., automatically The liquidity forecast helps to Mentify the liquidity trends in the sub ledger accounts based on the information on expected payment flows. The incoming and outgoing payments per open item, from FI-AR and FI-AP, form the basis of the liquidity forecast. You will be able to branch to FI-AR or AP information systems from the liquidity forecast. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 49 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. How do you set up Cash Management in SAP? Under customizing, you need to define the Cash Management Groups and assign these groups 10 planning level. In customer/vendor master records, you need to enter the cash management groups to enable the system to transfer data between customer/vendor accounls and the liquidity forecast. The cash management groups help to differentiate customer vendors based on certain characteristics such as behavior (whether the customer takes a cash discount), risk (credit rating), ete Explain Bank State ment in Cash Management? Bank Statement (manual or electronic) functionality runs on the same principle as Check Deposit Processing. Note that it is not necessary for Cash Management to be active for bank statement processing. During processing, customer payments (except checks) are first posted to the bank caring account; then customer open items are cleared when balancing the bank ckaring account, Similarly, vendor payments are posted to a bank clearing account for outgoing payments where the balancing is done from the entries made from the payment program, Other payments suchas bank charges, bank interest, etc., are posted to the respective GL accounts, and they will not go through the bank clearing accounts. In the case of unidentified payment transactions, you will post them first to the bank clearing accounts and then clear them when you have the appropriate information. ‘What are the Configurations for Bank Statement Processing? Before you mike use of the Bank Statement Processing functionality in SAP, you need to have the following defined or configured in your system: © Start Variant © ScachID © Processing Type @@ Internal Bank Determination Differentiate Manual Check Deposit from Electronic Check Deposit? The Manual Check Deposit function enables you to enter all checks received by posting the entries in two steps: in GL and in sub ledger accounts. It also helps to clear customer invoices You may also make use of additional functions for additional processing of checks thus entered , in contrast to the manual check deposit function, enables you to process data even from an external data entry system provided the data is delivered in the SAP defined format. You will be able to enter check deposit details electronically so that you may complete and post individual data later with manual check deposit processing. 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 t0 stocks. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 50 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Explain what is validations and substitutions in SAP? For each functional area in SAP Validation or Substitution is defined e.g., Assets, Controlling etc. at the following levels ) Document Level b) Line item Level What are the application areas that use validation and substitutions? a) Fl- Financial accounting b) CO-Cost accounting ©) AM-Asset accounting 4) GL-Special purpose ledger e) CS-Comolidation 4) PS- Project system 2) RE-Real estate hy PC-Profit center accounting ‘What are substitutions and validations? What is the precedent? 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 (0 the user, 1. Tiek the incorrect answers Fl configuration is divided into the following evels a. Organization Definition b. Global settings ©. Transaction codes d. Accounting functions 2. Tick the correct answer The procedure model 1. Provides steps required for creating clients, users and authorization b. Contains documentation for the configuration of applications . Provides Planning basis for imple mentation project. 3. Views within IMG allow for grouping of transactions based on various criteria True/False 4, Business Area is set up within organization structure and is linked to the Company Code. Truc/False 5, Parameters for processing accounting data is must when creating a Company Code. True/False Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 51 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. 6. One customer can belong to multiple dunning areas. True/False 7. Customer created in one company code can be allocated to several Credit Control Areas. True/Palse 8. Tick the incorrect answer Benefits of Organizational Structure in SAP R/3 a. Flexibility 0 reflect complex organizational structure. b, Data entry during creation of a transaction is minimized, c. Possibility to consider future changes in organizational structure. 4. Separation of data into different functional modules 9. Customer and Vendor Master Records can be accessed from the IMG side. True/False 10, Master records may be assigned to an Account Group. True/False LL, Posting to a Blocked G/L master record gives a warning and then lets the user post to the master record. True/False 12, Only one vendor master record is defined for a client having four different companies, ‘True/Fake 13, Ifthe Currency key of a Balance Sheet Account is not same as the Local Currency then the monthly debits and credits are stored only in the specified foreign currency. True/False 14, When creating a Customer Master Record the monthly debits and credits are entered at the Client level True/False 15, What is the third level of information contained in a Vendor Master Record when a Vendor is ‘maintained centrally’? Purchasing Information 16 which field in the Customer Master Record controls the One Time Accounts? Account Group, 17. What are the three levels of controlling sereen layout of a Master Record? Field status of "Account Group", " Company Code" and " Activity Type" 18, Do you need to maintain line item display of'a Vendor Reconciliation Account? Yes/No Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 52 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. 19, To manage foreign Currency bank accounts, the G/L master record must have the same currency as the foreign currency bank account ‘True/False 20, In SAP for each payment term youcan define up to 3 individual levels. True/Fake 21. In the SAP system multiple documents are created for every business transaction, True/Ralse 22. Tick the incorreet answer Document type a. Distinguishes between the type of business transactions b. Assigns the document Number . Controls the account types that can be posted to the document d. Used as a sort Criteria e. None of the above. 23. Tick the correct answer a. Number Ranges must be defined for a Document Type. b, Recurring Document Number Range is not associated with any Document Type. ©. Sample Document Number Range is associated with a Document Type 24. In SAP only one posting period is allowed to remain open at any point of time. True/False 25, Maximum of how many posting periods can be defined in SAP? 161in FI and 366 inSpell. Ledger 26, Tick the incorree Posting Key specify ©. Debit or Credit Entry 4. Data entry sereen for line items 27. Field Status Group of a posting key is defined at the Client Level. True/False Company Level 28, What are the kevels of controlling kryout ofa Document Entry screen? Field status of "Posting Key", "G/L account master record". 29, Is ta must to associate all revenue and loss accounts to a retained earning account? Yes/No Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 53 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. 30, Each Inter Company Transaction generates three documents. True/Fale 31. What are the two types of "Fields" defined in SAP for authorization purpose? Ans.: Operational Object like transaction table, Company code ete Activities like Create, Change, Delete etc. 32. There canbe only one Authorization Object defined for an Object Class. True/Ralse Several Authorization Objects ( Object Class (e.g. FD. . Customer, Account authorization) can belong to one 33. Tick the correct answer. ‘Allocation field in Document Line Item is used for 4 controlling the screen layout b, Allocating amount to different cost centers . Forsorting of docume nts 4. For referencing another document. 34. Tick the correct answer Sub-Sereen Processing is used a. To control the layout of the subsequent sereen based on the data entered in the first serven. (Posting Key controls the Layout of the subsequent sereen) b. To maintain the document flow ftom one functional module to another ¢. To control the layout of the screen on which the data is entered 4. To display all the referenced documents of the existing documents. 35, There is only one validation table defined per Company Code. True/False 36. Are validations and Substitutions module specific? Yes/No 37. What is a Call Up point? Call up point isa point within a document where a validation or substitution is called. A validation can be called at document header level or atthe line item level. 38. Tick the incorrect answer caring is the process of a. Posting a document , Matching Debit Eniries to Credit Bntries d. Clearing Open items d. taking the account balances of Profit and Loss Accounts to Ref -d earning Account, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 54 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. 39, Tick the correct ans wer/answers a. Residual payment leaves the original invoice intact and creates a negative amount in the account for the amount of partial payment b. Partial Payment resulls in clearing the original invoice an ereating a new open item for the difference between the payment and the original invoice. c. A parti payment cannot refer to more than one open item. 4. None of the above. 40. The process of clearing open items fora customer who is also a vendor of the company is called a. Partial Payment b. Resilual Payment ©. Transfer with clearing d. Verxlor Caring. 41. Which of the following statements is incorrect for Account Assignment Model? a. Itcan contain multiple company codes. b, The transaction currency can be different from the currency defined in the Account assignment Model. c. Ability to change all the fields dd, More number of line items ean be added 42. Which all fields in a Recurring Document can be changed a. posting Keys b. Account c. Line Item amounts 4. None of the above 43, Creation of the recurring reference document updates transaction figures of the associated accounts True/Ralse 4, Preliminary posting is posting of incomplete documents before extensive entry checks. True/False 45, Can the cross company transaction be parked? Yes/No 46, Difference between a Parked Document and a Held Document is: The Parked document gets document number based on the user ID where as the Held Document gets the document number assigned in the same way as in the standard document posting function, True/Ralse Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 55 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. 47, What determines the document fields that can be changed”? Document Update Rule 48, What does GAAP rule specifies in context of Document Update Rule? Account, Amount and Posting keys cannot be changed fora posted document 49, A document posted in MM and SD can be reversed in Fl True/False 50, Which field in the master record determines the way in which the line items are sorted? Ans. Sort Key 51. Only system True/False populate the Allocation Field, 52, Can you create customized line layout, otals variant, or lists? Yes/No 53. What are Total Variants? Ans. It determines the fields according to Which the line items are totaled, For each Total Variant up to three fields can be specified. For example, the line items of an account can be totaled and separated by: document type/document date, business area/month, or year/month/posting date. 54. Tick the correct answer A "Work List" is a. List of pending jobs b. List of scheduled jobs ¢. No of Employees and their job status 4. combination of accounts or company codes 55, In GLIS from the business ratio field can you drill-down to the line item level? Yes/No 56. You must assign Company Codes to Credit Control Area, True/Fakse 57. What is an "Update Group" in context of Credit Management? Ans. An Update Group is assigned to a credit control area which affects how the accounts are updated. Forexample one update group can specify what credit statistics such as open order value, open delivery value, or open invoice value are updated based upon what document is, being posted. 58. Tick the element that needs to be configured for automatic credit checking a. Credit Group Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 56 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. b. Credit Control Area ¢. Risk Category d. None ofthe above 59. In SAP which one of the followings is not a type of payment advice? a. EDI b. Lockbox Adviee c. Bank Advice 4. Dunning letter 60, Cana customer be dunned twice within the same Dunning Interval? Yes/No 61. The due date for dunning is calculated from which date? a, Document date b, Baseline date c. Value Date 4. posting Date 62. Cana customer receive dunning letters from two dunning areas? Yes/No 63. Dunning Keys are used to a, Mark specific items that should not triggerspecific dunning levels b. identify the Dunning procedure ©. List the customers under same dunning area 4. Allof the above 64, Payment method must be defined at the country level before itis specified at the Payment program level True/False 65. Tick the incorrect answer Payment program is controlled at a. Client parameter level b. Company Code parameter level . Payment method parameter level d. Bank parameter Jevel 66, What are the criteria based on which the open items to be paid are selected? Ans. Date of Payment run, Next posting date, Blocked accounts, 67. Tax codes are set up at the a. Client level b. Company Code level Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 57 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. ©. Group Level 4. Country level 68. Where are the data to calculate tax are defined in SAP? Ans. I. Line item when posting a document 2. GIL Account Master 3. Country definition table 4. Tax Code table 5. Tables controlling automatic postings 69. To define a new tax code the following must be specified a. Tax Type b. posting key ©. G/Ltax accounts 70, What is a tax jurisdiction code and where it is set up? Ans. Tax Jurisdiction codes are used in conjunction with tax codes to further specify the taxes applied to a purchase. This is recommended for implementations crossing multiple tax jurisdictions, Tax Jurisdiction codes are tied to customer/vendor master records. Using tax jurisdiction codes allows the user of fewer tax codes and easier tax determination by deriving tax. information from the master recond, This minimizes the burden of determining the appropriate ‘ax information on a purchase order or invoice for a PO creator or Accounts Payable Clerk. 71. Can the taxes on parked document be calculated? Yes/No 72. What are the criteria considered by SAP when archiving a document? Ans. The longest of Minimum days inthe system, Life by Document Type and Life by account determines the life of any document before it is archived (These are to be configured). 73, Once a change is made to the coding block, its permanent and cannot be deleted. True/Fabe 74, Explain the two steps of adding a field to a Coding Block. Ans. Light Mode: Only the absolute minimum amount of information required to create afield is entered. Expert Mode: More detailed data dictionary and table information to be entered to create anew fie. This is more complex. Afier a field is been entered a sub screen is generated to build the particular posting screen and to position the new field. 75. When posting document in FI, if only one line item has a business area, the system will automatically populate the blank records in the other Ii True/False 76 Multinational corporations can issue P&L statements and B/S in up to 4 currencies, True/False Ans. 3 Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 58 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 77. Index cumency is used in high inflationary environment True/False Ans. Hard Current 78, Which field determines where to post the exchange rate differences of foreign currency during revaluation? Ans, Exchange rate difference key in G/L Account master records 79, The special G/L transactions per customer/vendor are tracked in the customer and vendor reconciliation accounts, True/False Ans. reconciliation accounts other than reconciliation account for customer and vendor 80. A special G/L transaction is defined by the special G/L indicator and the account type. True/False 81, Cana financial statement structure be deleted ftom the syst Yes/No Controlling Module Explain the organizational assignment in the controlling module? Company codes are assigned to the controlling area. A controlling area is assigned to the operating concern. Controlling Area is the umbrella under which all controling activities of Cost Center Accounting, Product costing, Profitability Analysis and Profit Center are stored, Operating Concern is the highest node in Profitability Analysis ‘What is primary Cost element and secondary cost element? Every Profit and Loss GL account that needs to be controlled has to be defined as a cost element SAP, Just as in FI General Ledger Accounts exist, in Controlling we have Cost element. Each FI General Ledger Account that is a Profit and Loss Account is also created as a Cost element in SAP. Primary Cost Elements are those which are created from FI general Ledger Accounts and impact the financial accounts e.g. Travelling expenses, consumption account infact, any Profit and Loss GL account Secondary Cost Elements are that which are created only in controlling and does not affect the financials of the company. It is used for internal reporting only. The postings to these accounts, do not affect the Profit or Loss of the company. The following categories exist for secondary cost elements: 21 Internal Settle ment: Cost elements of this category is used t0 settle order costs to objects in controlling such as cost centers, pa segments etc. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 59 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 31 Onder/Results Analysis: Used to caleulate WIP on the order/project 41 Overhead Used to calculate indirect costs from cost centers (© orders 42, Assessment Used to caleulate costs during assessment 43 Internal Activity Allocation Used to allocate costs during internal activity allocation such as Machine Labour ete What are cost objects? A cost object means a cost or a revenve collector wherein all the costs or revenues are collected for a particular cost object. Examples of this coukd be cost center, production order, internal order, projects, sales order So whene ver you look at any controlling function the basic thing you need to ask yourself is What is the cost element(expense) I want to control and what is the cost object her the production order, sales order, internal order) I am using to control this cost ekment. Sounds confusing read it again itis very simple Controlling is all about knowing the cost element and the cost object. Every time pose this question to yourself what is the cost ekment what is the cost abject. At the end of the period all costs or revenues in the cost object are settled to their respective receivers which could be a GL account, a cost center, profitability analysis or asset. It is very important that you understand this otherwise you would struggk to understand Controlling. Cost Center Accounting: Howis cost center accounting related to profit center? In the master data of the Cost Center there is a provision fo enter the profit center. This way all costs which flow to the cost center are ako captured in the profit center, Cost centers are basically created to capture costs e. created to capture cost and revenue for a particular plant, business unit or product line. What is a cost element group? Cost element group is nothing but a group of cost elements which help one to track ark control cost more effectively. You can mike as many number of cost ement groups as you feel necessary by combining various logical cost eleme nts. ‘admin cost center, canteen cost center ete Profit centers are What is a cost center group? Ina similar line the cost center group is ako a group of cost centers which help one fo track and control the cost of a department more effectively. Youcan make as many number of cost centers as you feel necessary by combining various logical cost centers Infact you can use various Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 60 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. combinations of cost center gs 1up with the cost element group to track and control your costs per department or across departme nts ‘What is the difference between Distribution and Assessment? Distribution uses the original cost element for allocating cost to the sender cost center. Thus on the receiving cost center we can see the original cost element from the sender cost center. Distribution only allocates primary cost, Assessment uses assessment cost element No 43 defined above to allocate cost. Thus various costs are summarized under a single assessment cost ckment, In receiver cost center the original cost breakup fom sender is not availabk. Assessment allocates both primary as well as secondary cost. What are the other activities in Cost center? Ifyou have a manufacturing set up, entering of Activity prices per cost centerfactivity type is an important exercise undertaken in Cost center accounting, What is an Activity Type? Activity types classily the activities produced in the cost centers. Examples of Activity Type could be Machine, Labour, Utilities You want to calculate the activity price through system? What are the requi that? In the activity type master you need to select price indicator 1 Plan price, automatically based on activity. ments for When activity price is calculated through system whethe! variable? Normally when activity price is calculated through system it is shown as fixed activity price since primary cost are planned as activity independent costs. tivity price is shown as fixed or What is required to be done if activity price is to be shown both fixed and variable? In this ease you need to plan both activity independent costs which are shown as fixed costs and activity dependent costs which are shown as variable costs Is it possible to calculate the planned activity output through system? Yes. It is possible to calculate the planned activity output through system by using Long term Planning process in PP modu Explain the process of calculating the planned activity output through Long term planning? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 61 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. In Long term planning process the planned production quantities are entered for the planning year in a particular scenario, The Long term planning is executed for the scenario. This generates, the pinned activity requirements taking the activity quantities from the routing and multiplying with the planned production. The activity requirements are then transferred to the controlling module as scheduled activity quantities. Thereafter you execute a plan activity reconciliation which will reconcile the schedule activity and the activity you hae planned manually. ‘The reconciliation program updates the scheduled activity quantity as the planned activity in the controlling modu. You want to revalue the production orders using actual configuration setting? Yes. There is a configuration setting to be done. ctivity prices. Is there any Where is the configuration setting to be done for carrying out revaluation of planned activity prices in various cost objects? The configuration setting is to be done in the cost certer accounting version maintenance for fiscal year. This is to be maintained for version 0. You need to select revalue option either using own business transaction or original business transaction. At month end you calculate actual acti production orders with this actual a system for revaluation? The options available are as follows:- ‘You can revalue the transactions using periodic price, average price or cumulative price. Further you can revalue the various cost objects as follows:- (Own business transaction — Differemtal entries are posted Original business transaction — The original business transaction is changed. ty prices in the system. You want to revalue the ity prices. What are the options available in the Internal orders What is the purpose of defining Internal orders? Anexample would help us understand this much better. Lat’s say in an organization there are various events such as trade fairs, training seminars, which occur during the year. Now let's assume for a second that these Trade fairs are organized by the Marketing cost center of the organization, Therefore in this case marketing cost center is responsible for all the trade fairs costs. All these trade fairs costs are posted to the marketing cost centers, Now if the management wants an analysis of the cost incurred for each of the trade fair organized by the marketing cost center how would the marketing manager get this piece of information across to them? ‘The cost center report would not give this piece of info Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 62 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Now this is where Internal Order steps in .IF you go through all cost center reports this information is not readily available since all the costs are posted to the cost center. SAP, therefore provides the facility of using internal orders which comes in real handy in such situations. In the above scenario the controlling department would then need (o create an internal order for each of the trde fair organized. The cost incurred for each of the trade fair will be posted (0 the internal orders during the month. At the month end, these costs which are collected in the internal order will be settled from these orders to the mirketing cost center. Thus the controlling person & now in a position to analyze the cost for each of the trade fair separately Thus internal onder is used to monitor costs for short term events, activities. It helps in pro vidin more information than that is provided on the cost centers. It can be widely used for various purposes. How can you default certain items while creation of internal order master data? You can do so by ereating a model order and then update the fies which you want to default in this model order. Finally attach this mode! order in the internal order type in the field reference order. Once the above is done whenever you create an internal order for this order type the field entries will get copied from the model order. What is the configuration setting for the release of the internal order immediately after creation? You have to check the “release imme diately” check box in the internal order type. Product Costing ‘What are the important Terminologies in Product Costing? Results Analysis Key ~ This key determines how the Work in Progress is calculated Cost Components - The breakup of the costs which get reflected in the product costing e.g Material Cost, Labour Cost, Overhead ete Costing Sheets - This is used to calculate the overhead in Controlling Costing Variant - For All manufactured products the price control recommended is Standard Price. To come up with this standard price for the finished good material this material has to be costed. This is done using Costing Variant. Further questions down below will explain this concept better. What are the configuration settings maintained in the costing variant? Costing variant forms the link between the application and Customizing, since all cost estimates, are carried out and saved with reference to a costing variant, The costing variant contains all the control parameters for costing. The configuration parameters are maintained for costing type, Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 63 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. valuation variants, date control, and quantity structure control. In cost fiek! in the material master should be updated, In valuation variant we specify the following 4) The sequence or order the system should go about accessing prices for the material master (planned price, standard prive, moving average price etc). b) Italso contains which price should be considered for activity price calculation and ©) How the system should select BOM and routing, type we specify which How does SAP go about costing a Product having multiple Bill of materials within it? SAP first costs the lowest level product, arrives at the cost and then goes and cost the next highest level and finally arrives at the cost of the final product. What does the concept of cost roll up mean in product costing context? The purpose of the cost roll up & to include the cost of goods manufactured of all materials in a multilevel production structure at the topmost levelof the BOM (Bill of Material) The costs are rolled up automatically using the costing levels. 1) The system first cakulates the costs for the materinls with the lowest costing level and assigns them to cost components. 2) The materials in the next highest costing level (such as semi finished materials) are then costed. The costs for the materials costed first are rolled up and become part of the material costs of the next highest level. What is a settlement profile and why is it needed? Al the costs or revenues which are collected in the Production order or Sales order for example have to be settled to a receiver at the end of the period. This receiver coukl be a Gl account, a cost center, profitability analysis or asset, Also read the question “What is a cost object “in the section Controlling Inorder to settle the costs of the production order or saks order a settlement profile & needed. In asetilement profile you define a range of conirol parameters for settlement. You must define the settlement profile before you can enter a settlement rule for a sender. The Settlement Profile is maintained in the Order Type and defaults during creating of onder. Settlement profile includes 1) The retention period for the settlement documents 2) Valid receivers GL account, cost center, onder, WBS element, fixed asset, material, profitability segment, sales order, cost objects, order items, business process 3) Document type is also attached here 4) Allocation structure and PA transfer structure is also attached to the settlement profile e.g. Al ‘The settlement profile created is then attached to the order type. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 64 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. What is Transfer or Allocation structure? The transfer structure is what helps in settling the cost from one cost object to the receiver. It is ‘maintained in the Settlement profile defined above. The Transfer structure bs 2 parts: a) Source of cost elements you want to settle b) Target receiver whether itis a Profitability segment or fixed asset or cost center So basically for settling the costs of a cast object you need to define the ‘Transfer structure where you mention what are the costs you want to settle and the target receiver for that. This information you fit it in the settlement profile which contains various other parameters and this settlement profile is defaulted in the Order type. So every time a order is executed the relevant settlement rule is stored and at the month end by running the transaction of the settlement of orders all the cost is passed on to the receiver So to put in simple terms: a) You define your cost object which could be a production order a sales order for e.g. b) You collect costs or revenues for it ©) You determine where you want to pass these casts or revenues to for e.g. if the sales order is the cost object all the costs or revenues of a sales order could be passed to Profitability Analysis What do you mean by primary cost component split? Primary cost split is defined when you create a cost component structure. When you switch on this setting, the primary cost fiom the cost center are picked up and assigned (0 the various cost components. How do primary costs get picked up from cost center into the cost component structure? This is possible when you do a plan activity price calculation from SAP. The primary cost component structure is assigned to the plan version 0 in Controlling. Is it possible to configure 2 cost component structures for the same product in order to have 2 different views? Yes it is possible. We create another cost component structure and assign it to the main cost component structure. This cost component structure is called Auxiliary cost component structure which provides another view of the cost component structure. How do you go about configuring for the sales order costing? The flow is as follows: Sales order -> Requirement Type-C] Requirement Class> All settings for controlling Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 65 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. Inassales order you have a requirement type In configuration, the requirement Class is attached to the requirement type and in this requirement class all configuration settings are maintained for Controlling In the requirement class we attach the costing variant; we attach the condition type EKO2 where ‘we want the sales order cost to be updated, and the account assignment category. In the account assignment category we define whether the sales order will carry cost or not. In case if we do not ‘want to carry cost on the sales order we keep the consumption posting fick! blink. We also define here the Results Amlysis version which helps to calculate the Results Analysis for the Sales onler if required. ‘There are 2 plants in a company code. First plant is the manufacturing plant and another plant is the selling plant. Finished goods are manufactured at the manufacturing plant and transferred to the selling plant. How is standard cost estimate calculated at the selling plant given the fact that the cost at both the plant should be the same? The special procurement type needs to be configured which specifies in which plant the system is to look up for cost, Here a special procurement key specifying plant 1 (manufacturing plant) should be configured. This special procurement type must be enfered in the costing view or the MRP view of the finished good material master record in plant 2. When you cost the finished good at plant 2, the system will transfer the standard cost estimate from plant 1 to plant 2 What is mixed costing in AP? Give an example to explain, Mixed costing is required when different processes are used to manufacture the same material Mixed costing is required when you have different sources of supply for purchasing the material Let us take an example: There isa finished good Xylene which can be manufactured by 3 different processes, The first process uses an old machine and labour. The processing time is 9 hrs to manufacture, The second process uses a semi-automatic machine and labour. The processing time is 7 hrs to ‘manufacture The third process uses. fully automatic machine and the processing time is 5 hrs, Thus cost of manufacture for the 3 processes is different. By using Mixed costing you can create a mixed price for the valuation of this finished good. ‘What configuration needs to done for using Mixed costing? Quantity Structure type for mixed costing must be configured. Here we specify the time dependency of the structure type. The following options exist a) You have no time dependency. b) It is based on fiscal year ©) It is based on perio! This quantity structure type is then assigned to the costing version. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 66 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Let's say for a product there exists three production versions, Explain the process how you ‘would go about creating a mixed cost estimate? The process of creating a Mixed cost estimate would be as follows:- 1) Create procurement alternatives for each of the production version, 2) Define Mixing ratios for the procurement alternatives 3) Select the configured quantity structure type and execute a material cost estimate based on the costing version. What is mixing ratios and why are they required to be maintained before creation of cost estimate? Mixing ratios are weighting factors assigned to the procurement alternatives. This weighting factor obtained from the planning department based on the usage of the procurement akernatives during the planning year. Fores. Procurement alternative | (production version 1) 40% will be manufactured Procurement alternative 2 (production version 2) 35% will be manufactured Procurement alternative 3 (production version 3) 25% will be manufactured This % will be maintained as mixing ratios. Thus when system calculates the mixed cost estimate, system will first cost each of the production version and then multiply each of the costs with the weighting factors. Thus 240 (cost of prod. Vers 1) X 40 = 9600 210 (cost of prod. Vers 2) X 35 = 7350 160 (cost of prod vers 3) X 25 = 4000 Mixed costs 17350/100 = 173.5 ‘There are Result analysis categories in WIP (Work in Process). What do you mean by the result analysis category Reserves for unrealized costs? If you are cakulating the work in process at actual costs, the system will create reserves for unrealized costs if the credit for the production order based on goods receipts is greater than the debit of the order with actual costs incurred, The Result analysis category RUCR (Reserves for unrealized cost) would need to be maintained. Normally this is not maintained in most of the companies. Which is the Result analysis category which is normally m Process) calculation? The Result analysis category WIPR - Work in process with requirement to capital normally maintained for WIP calculation tained for the WIP (Work costs is Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 67 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. How do you define a By-product in SAP? A By-product in SAP is defined as an item with a negative quantity in the Bill of Material, By. product reduces the cost of the main product. There is no Bill of Material for a By-product. How do you calculate the cast fora By-product in SAP? The cost for the By-product is the net realizable value. This is manually maintained in the system for the by-product through transaction code MR2I Price change. How do you define a Co-Product in SAP? A Co-product (primary product or by-product) is indicated by a tick in the costing view of the ‘material master. In the BOM all the primary products are represented as an item with negative quantity. A primary product is also indicated as a co-product in the BOM of the leading co- product For primary products the costs are calculated using the apportionment method, while for by- products the net realizable value method applies, Is it possible to use Standard SAP Co-product functionality in Repetitive manufacturing? No. It is not possible to use the Standard Co-product functionality in repetitive manufacturing How do you got about defining CO-Product functionality in Repetitive manufacturing? In the Repetitive manufacturing you need to use the Costing BOM for the other co-product. Through arithmetical calculation you need to maintain the quantities in the costing BOM, This co-product will be shown as a negative item in the leading co-produet. You get an error while executing a cost estimate which says” Item no 1 (which is a raw material) is not assigned to the cost component structure? What could be the possible cause of errorin this scenario? The consumption GL code for the material master is not assigned to the cost component structure. To find out how you can know which GL code to assign read the next question. Inthe above scenario how do you know which cost element is being ealled for? In this case you need to the use simulation mode OMWB in MM and enter the material code plant and the movement type 261 (issue against production order). You will see the account modifier VBR and against which the GL code is available, You get an error while executing a cost estimate, which says” Item mo. 1 (which is a raw material) is not assigned to the cost component structure? In this case everything is perfectly configured, what could be the possible error in this scenario? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 68 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. In the material master of the raw material the valuation class updated in the accounting view will be incorrect. Is it possible to calculate standard cost estimate fora past date’? No. It is not possible to calculate standard cost estimate for a past date What is the difference between a product cost collector and production order? Both of these are cost objects which collect production costs for manufactured product, Product cost collector is a single order created for a material. All the costs during the month for that material is debited t0 single product cost collector. No costing by lot size is required in case of product cost collector. The latter is where there are many production orders for a single material during the month. Costs are collected on each of this production onder. Costing by ot size is the min requirement in case of production orders. What is the meaning of preliminary cost estimate for product cost collector? Preliminary costing in the product cost by period component calculates the costs for the product, cost collector, In repetitive manufacturing you can ereate cost estimate for specific production version. Why is preliminary cost estimate required? The preliminary cost estimate & required for the following:= Confirm the actual activity quantities Valuate work in process Calculate production variances in variance calculation Valuate the unplanned serap in variance calculation Is it possible to update the results of the standard cost estimate to other fields such as comme reial price, tax price fields in the accounting vie w? Yes. It is possible to update the standard cost estimate fo other fields such as commercial price etc. in accounting view How do you configure that the results of the standard cost estimate are updated in other fields other than the standard price? The price update in the material master is defined in Costing type. This costing type is attached to the costing variant, ‘What do you mean by Assembly scrap and how is it maintained in SAP? Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 69 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Assembly scrap is scrap that & expected to occur during the production of a material which is used as an assembly. If a certain amount of scrap always occurs during the production of an assembly, the quantities and activities used must be increased by the system so that the required lot size canbe produced. To increase the lot size of an assembly you canenter a percentage, flat rate assembly scrap in the MRP | view of the material master record. This assembly scrap is reflected in all the subordinate components. The system increases the quantity to be produced by the calculated scrap quantity. This increases both the materials consumed and the activities consumed and consequently the cost How are scrap costs shows in the standard cost estimate? Scrap costs are assigned to the rekvant cost component and can be shown separately for a ‘material in the costed multilevel BOM. Howare serap variances calculated? Scrap variance are calculated by valuating the scrap quantities with the amount of the actual costs less the planned scrap costs. What do you mean by Component scrap and how is it maintained in SAP? Component scrap is the scrap of a material that is expected to occur during production. When an sembly is produced with this component, the system has to increase the component q uantity to tenable (0 reach the required lot size. The component scrap canbe entered in the BOM item or in the MRP 4 view of the material master ‘What do you mean by Operation serap and how is it maintained inS AP? Operation scrap is a scrap that is expected to occur during production. Operation scrap is used to reduce the planned input quantities in follow up operations and to calculate the precise amount of assembly scrap. Operation scrap can be maintained in % in the routing and in the BOM. What are the implications if the operation scrap is maintained in the routing and if it maintained in the BOM? If the operation scrap is maintained only in the routing, the costing lot size is reduced by this percentage. If the operation scrap is maintained in the BOM, the planned input (not the output quantity) is inereased and any assembly scrap is reduced. What is the meaning of additive costs in SAP and why is it required? Additive costs are used to add costs manually to a material cost estimate when it cannot be calculated by the system. Examples of such costs are freight charges, insurance costs and stock twansfer costs. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 70 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. ‘What is the configuration required for additive costs? To include additive costs in the material cost estimate you need to set the indicator “Incl additive costs” for each valuation strategy in the valuation variant. Further youalso need to set in the costing variant to include additive costs. How do you configure split valuation? The configuration steps involved in split valuation 1) Activate split valuation ~ Configure whether split valuation is allowed for the company code. 2) Determine the valuation categories and valuation types that are allowed for all valuation areas. 3) Allocate the valuation types to the valuation categories 4) Determine the local valuation categories for each valuation area and activate the categories to be used in your valuation area, ‘What is valuation category and valuation type in split valuation? In split valuation the material stock i divided according to valuation category and valuation ‘ype, Valuation category determines how the partial stocks are divided according to which criteria The following valuation categories are preset in the standard SAP R/3 system — B - Procurement type H—Origin type X— Automatic batch valuation Valuation type describes the characteristic of individual stock. E.g EIGEN In house production (SAP standard) FREMD External procurement (S AP standard) Valuation types are assigned to valuation categories. ‘What are the steps involved before you run.a cost estimate fora split valuated material? The following are the steps: 1) Create procurement alternatives based on the valuation types for the material 2) Maintain Mixing ratios for the procurement alternatives How do you create a material master with split valuation? To create a split yaluated material master proceed as follows:- 1. First create a valuation header record for the material, Update the Valuation category field on the accounting screen; eave the Valuation type field blank, In the Price control field, enter V (moving average price). When you save, the systemcreates the valuation header recon 2. Then create the material for a valuation type. Call up the same material in ereation mode again, Due to the fact that a valuation header record exists, the system requires you to enter a valuation type for the valuation category. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 71 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. 3. Repeat Step two for every valuation type planned, When a standard cost estimate is run for a finished good does SAP calculate cost estimate for its components such as raw and packing material? Yes. SAP calculates the cost estimate even for raw and packing material and stores it in the standard price field for information purposes How do you prevent the system from caleulating the cost estimate for raw and packing material when you runa standard cost estimate for the finished goods? To prevent the system from calculating cost estimates for raw and packing material, you need to select the “No costing” checkbox in the costing view of the material master. Howis it possible to apply 2 different overhead rates for 2 different finished goods? Its possible through overhead groups. You configure 2 overhead keys. Define rates for each of this overhead key, These two overhead key’ is then assigned to the two overhead groups, These overhead groups are attached in the costing view of the finished goods material master Work in Progress In period I there is a WIP posted of 22000 USD in period 2 some further goods issue are done to the extent of 15000 USD . How will system calculate WIP for period 2? System will post a delta WIP of 15000 USD in perind 2. What is the hasic difference in WIP calculation in product cost by order and product cost by period (repetitive manufacturing)? Generally in product cost by order, WIP is calculated at actual costs and in product cost by period WIP is calcubted at target costs What are the configuration settings for calculating WIP inSAP? You define secondary cost elements of type 31 first. You then need to define the Results Analysis version This results analysis contains line ids which are basically nothing but break up of costs Next you define assignments-> here you assign source cost elements to the line ids defined above You abo define the secondary cost elements which are assigned to the line ids. In the end you define the Finance GL accounts which are debited and credited when a Work in Progress is calculated, Please refer to the configuration document for more detailed information Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 72 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. How does SAP calculate Work in Process (WIP) in product cost by order? The system first runs through all the production order for the month and checks for the status of each production onder. If the status of the production order is REL (Released) or PREL (Partially rekased) and if costs are incurred for that order system calculates WIP for the production order. The system cance the WIP for the production order when the status of the onder becomes DLV (delivered) of TECO (Technizally complete) There is a production order with order quantity 1000 kgs. During the month 500 kgs of goods were produced. What will be the system treatment at the month end? The system will first check the status of the production onder. Since the status of the order is not DLV (Delivered) it will calculate a WIP for the production order. Why does the system not calculate variance for the 500 kgs which has been delivered? In the product cost by order component the system does not calculate variance for partially delivered stock on the production order. Whatever is the balance on the production order is considered as WIP. In the product cost by period component, system will calculate WIP as well as variance provided Is the WIP calculated in the product cost by order component at actual costs or standard costs? In the product cost by order component the WIP is calculated at actual costs, Is the WIP calculated in the product cost by period component at actual costs or target costs? In the product cost by period component the WIP is calculated at target costs, Material Ledger ‘What precautions have to be taken while switching on the material ledger for a plant? A material led ger once activated fora plant cannot be switched off. Therefore itis important that the material ledger be activated carefully for a plant. How do you go about configuring material ledger? The following are the steps:- 1) Activate Valuation Areas for Material Ledger 2) Assign Currency Types to Material Ledger Type 3) Assign Material Led ger Types to Valuation Area 4) Maintain Number Ranges for Material Led ger Documents 5) Activate Actual costing (whether activity update rele vant for price determination) Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 73 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. 6) Activate Actual cost component split 7) Customizing settings in OBYC ‘What are the problems faced when a material ledger is activated? When a material ledger is activated itis imperative that actual costing run has to be done every month, Actual costing run needs to be done immediately afier the new month roll over. After the actual costing run you cannot post any MM (Materials Management) entry to the previous period. What are the options available while performing revaluation in an actual costing run? There are 2 options available:- Revaluation Youcan revalue the finished goods stock Accrual — You can accrue the revaluation gain or loss without actually changing the price in the ‘material master. What is the configuration setting to be done for posting the accrual run? In transaction code OBYC select transaction key LKW and maintain the balance sheet account for accrual. the actual costing ‘What are the steps to be taken before you execute an actual costing run? The following are the steps to be taken: 1.) Execute all the allocation cycles in the cost center accounting module. 2.) Execute actual activity price calculation. 3.) Revalue all the production orders with the actual activity prices. The under or over absorbed cost on cost centers are passed on to the production order through this step of revaluation of production onders. 4.) Caculate overheads, do a variance calculation and finally settle the production order. 5.) Finally execute the actual costing run, ‘What happens in an actual costing run? In actual costing run there is a process of single level price determination and multi level price determination. The production price difference variances are collected on the material ledger for each of the finished goods and semi finished goods, During single evel price determination the prive difference collected on a single finished product is allocated to consumption. ‘This allocation to the consumption i not individually allocated to the good issues. In multi level price determination the price difference is allocated to individual goods issue. ‘The prive differences are passed on to the next level of consumption, The system calculates a weighted average price Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 74 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. for the finished goods and semi finished goods. This weighted average prive is called as the periodic unit price ‘What happens when the revaluation is done in actual costing run for the previous period? When revaluation is performed in actual costing for the previous period the price control in the material master is changed from S fo V and the periodic price & updated as the valuation price for the previous period. What is the importance of the price determination indicator in the material master for the purpose of actual costing run? There are 2 price determination indicators in the material master when material ledger is activated. They are as follows: 2—Transaction based 3—Single level / multi level In case of material masters having price determination indicator 2 no actual costing will take place. In case of material masters having price determination indicator 3 actual costing will take place. What should be the price control for a material master which has a price determination indicator 3 where material ledger is activated? In such a case only price control S is possible where the price determi material master ion 3 is activated in Profitability Analysis Explain the organizational assignment in the PA module? The operating Concern i the highest node in Profitability Analysis. The operating concern is assigned to the Controlling Area, Within the operating concern all the transactions of Profitability Analysis are stored. The operating concern is nothing but a nomenclature for defining the highest node in PA. ‘What is the functionality of the PA module? PA module is the most important module when it comes to analyzing the results of the organization, In this module you basically collect the revenues from the sale order, the costs from the production order, cost center or internal order an analyze their results. The interesting part about this moduk is that when it collects the costs and revenues it also collects the charicteristics associated with the costs and revenues and this is what makes it stand out So for e.g. using PA module youcan find out the following: Profit of a certain product Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 75 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Profit ofa certain product in a certain region Profit ofa certain product in a certain region by a certain customer Profit ofa certain product in a certain region by a certain sales person And the list can go on in depth It is one of the most wonderful modules in the SAP How do you get all those characte risties defined above and how do you analyze them? To do so while defining Operating concern one has to define Characteristics and Value fields. What are characteristics and Value Fields? In the operating concern two things are basically defined a) Characteristics b) Value Picks Characteristics are nothing but those aspects on which we want to break down the profit logically suchas customer, region product, product hierarchy, sales person etc Value Fie ids are nothing but the values associated with these characteristics, Exg. Sales, Raw Material Cost, Labour Cost, Overheads ete Once you define the characteristies and value fields these values are updated in the table, From whe re does the characteristics come from? The characteristics which are defined above ba the Material Master lly come from either the Customer Master or How does various values (revermes and costs) flow into PA? The Sak’s Revenue comes from th Condition Type in SD. We need to map the Condition Type in SD to the respective value fies in customizing to have the revenue flow into PA. The Cost comes from Cost estimates which are transferred using the PA transfer structure which wwe have covered in the Product costing section The various cost components of the cost component structure is assigned to the value field of PA module and this is how the costs come into PA. Once the actual revenue and the std cost defined above are captured in PA the variances are also transfemed into PA. This way the std cost variances equal the actual cost, So actual revenue- actual cost helps us determine the pro How do you configure the assignment of variances from product costing to COPA module? The variance categories from product costing along with cost element is to be assigned 0 the value fields in COPA Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 76 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Once you haye captured all the costs and revenues how do you analyze them? The costs and revenues which we have captured in the above manner are then analyzed by writing reports using the Report Painter Functionality in SAP. What is characteristic Derivation in Profitability Analysis Module? Characteristic Derivation is usually used when you want to derive the characteristics. An example of this could be say you want to derive the first two characteristics of product hierarchy. In such eases you define characteristic derivation where you maintain the rules, which contain the table names of the product hierarchy fields and the number of characters to be extracted, and italso specifies the target characteristic field in PA. What is the basic difference in customizing in Profitabil modules? In PA when we configure the system ie. creating operating concern, maintain structures no customizing request is generated. The configuration needs to be transported through a different wansaction called as KEST. yy analysis as compared to other What is the difference between Account based Profitability Analysis and Costing based Profitability Analysis? Account based Profitability analysis is a form of Profitability analysis (PA) that uses accounts as its base and has an account based approach. It uses costs and revenue elements, Costing based Profitability Analysis is a form of profitability analysis that groups costs and revenues according to value fields and costing based valuation approaches. The cost and revenues are shown in value fields. What are the advantages and disadvantages of Account based profitability analysis vis-a- vis costing based profitability analysis? The advantage of Account based PA is that it iS permanently reconciled with Financial accounting. The disadvantages are that it is not powerful as the costing based PA, since it wes accounts to get values. No Contribution margin planning can be done since it cannot access the standard cost estimate. Further no variance analysis is readily available The advantages of the Costing based PA are manifold. They are as follows: ~ 1 Greater Reporting capabilities since lot of characteristies are available for analysis, 0 This form of PA accesses the Standard cost estimate of the manufictured product and gives a split according to the cost component split (from the proxluct costing module) when the bills are posted. 0 Contribution margin can be planned in this module since the system automatically accesses the standard cost estimate of the product based on the valuation approaches. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 77 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. 0 Variance amalysis is ready available here since the variance categories can be individually ‘mapped to the value fields Disadvantages: Since i uses a costing based approach, itdoes not sometime reconcile with financial accounting, Can both Account based and Costing based Profitabi time? Yes. It is possible to con analysis be configured at the same both types of costing based profitability analysis at the same time. What is the advantage of configuring both the type of Profitability analysis together? The advantage of activating account based profitability analysis along with costing based PA is that you can easily reconcile costing based profitability analysis to account based profitability analysis, which means indirectly reconciling with financial accounting Is there any additional configuration required for Account based profitability analysis as compared to costing based profitability analysis? No. There are no special configurations required except for activating the account profitability analysis while maintaining the operating concern, sed What is the difference between Profitability analysis and Profit center accounting? Profitability arsalysés lets you analyz the profitability of segments of your market according to products, customers, regions, division. It provides your sales, marketing, planning and ‘management organizations with decision support from a market oriented view point. Profit center accounting lets you analyze profit and loss for profit centers, It makes it possible to evaluate different areas or units within your company. Profit center can be structured according to region, plants, functions or products (product ranges), ‘What configuration settings are available to set up valuation using material cost estimate in costing based profitability analysi In Costing based Profitability analysis you define costing keys. A costing key is a set of access parameters which are used in valuation to determine which data in Product cost planning should be read. Inthe costing key you attach the costing variant. In the costing key you specify whether the system should read the current standard cost estimate, the previous standard cost estimate or the future standard cost estimate ora saved cost estimate. The configuration settings to determine this costing key is as follows 1) Assign costing keys to the products — Three costing keys can be attached to a single product fora specific point of valuation, record type, plan version. 2) Assign costing keys to Material types Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 78 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. 3) Assign costing keys to any characteristics ~ You can use your own strategy to determine the costing keys. This is through user defined assignment tables. Profit Center ‘What is the basic purpose of creating a Profit Center? The basi purpose of creating a Profit Center is to analyze the m-yenues and costs for a particular product line, or a plant or a business unit. Though you can generate bakunce sheets and profit and Joss accounts per Profit Center still a profit center should basically be used as a tool only for infernal reporting purposes. If legally one has to produce the Bakunve sheets and Profit and Loss Accounts for a profit center then it is advisable to create it as a company code instead of a profit center How does the cost and revenue flow to the Profit Center? The profit center is stored in the cost center this way the costs flow to the profit center. The profit center is also stored in material master. This way all sales orders created for the finished product automatically picks up the profit center from the material master and all the revenues and costs coming from this sales order for that finished product is passed on to this profit center. A profit center document is created in addition to the Finance document whenever revenue or consumption takes place. This document contains the details of the profit center. Once both the costs and revenues flbw to the profit center you can write reports using the Report Painter to get intelligent analysis. You can also use SAP standard reports, Statistical key figures are created in the cost center accounting module. Now the same tistical key figures are required in the profit center accounting module. Is it required to the statistical key figure in PCA module? the statistical key figures are created in a controlling area, Profit center is a sub module within controlling area. The statistical key figure is ereated for the controlling area and as such & available in profit center accounting module, ‘What are the precautions to be taken while maintaining the 3KEH table for profit center accounting? You shoul! not maintain the customer and vendor reconciliation accounts in the 3KEH table. Further you should also not maintain the special GL accounts in this table, Since we are transferring the customer and vendor balances to profit center module through separate: month end programs. If the reconciliation accounts are maintained here it will result in double posting in the profit center module. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 79 Mail id: upendarhere@gmailSAP FI/CO PEDANT SOFTECH PVT. LTD. Should secondary cost elements be maintained in the 3KEH table? No. Since here we maintain only those accounts for which the value should flow from FI to PCA. Secondary cost ements are already defined in the controlling module which will reflect in the postings in PCA ako How can the default settings be maintained for cost elements per comy The default settings can be maintained in transaction OKBS. Here we can specify fora company code, cost element which is the cost center to be defaulted or whether profitability segment is to be automatically derived. Further we can also maintain whether business area is mandatory or profit center is mandatory and can maintain the default business areas and profit centers. ny code? What are the other important activities in Profit Center? The assignments of profit center to the cost center and also assignment of profit center to the material master is whit will determine the success of the Profit center posting, If these assignments are wrongly done then the profit center postings will not come in properly, Period End Closing Activities in Controlling: What are the period end closing activities in controlling? The following are the period end closing activities in Controlling: Repost CO Documents that was incorrectly posted Run Distribution or Assessment Cycles Run the Overhead Calculation in Product Costing Run the WIP Cakulation in Product Costing Run the Variance Cakulation in Product Costing Run the Settlement Calculation in Product Costing which will post all the WIP and variance to Finance and PA. Calculate FI Data for Transfer to Profit Center Transfer Balance Shect Items like Receivables, Payables, Assets and Stock Run Results Analysis for Sales Order if applicable Run Settlement of Sales Onders to PA. Describe how cost center ac cou CO is for internal reportis indirect and overhead costs, which donit affect G/L. These ing differs from financial accounting? I reporting. CO relates more to costs hit the G/Lonce, after that all where FI is more for external the allocations are behind the scenes, Describe the possible options fora controlling area - company code relationship Put Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 80 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. emphasis on the option you have in terms of different currencies. A controlling area can encompass one or more company codes. These company codes may have different cuencies, but they must use the same churt of accounts. The controling area is igned a currency, but can also support multip company code currencies. [fall the companies have the same currency, then the object currency is feely definable (if curency type 10 is used). Ifthe company codes do not have the same curency, then the object currency inherits the currency of the company code. Discuss the cross-company controlling? Cross-company-code controlling embles cross-company transfers and reports to be made in CO, but increases the organizational overhead at the cost center. In cross-company-code accounting involving different currencies, the CO account assignment object (€.g, cost center) inherits its currency from the company code. What are the three types of currencies used in cross-company-code accounting and what conversion rates are used? EachCO document is updated in three currencies, In cross-company-code accounting with different currencies, these are designated the document currency, the company code curreney and the controlling area currency. Conversions in CO use the average exchange rate (M).. Define the types of master data that exist in cost center accounting? Cost center - units of. company that incur costs Cost element - define types of costs Activity type - units of measure for allocatin Statistical key figures - allocation basis for distribution and assessment ivities Define the relationship between the chart of accounts and cost elements in cost center accounting. The chart of accounts contains all G/L accounts for financial accounting and all primary cost ekments for cost accounting, Secondary cost elements are not contained on the chart of accounts. What is the difference between primary and secondary cost elements? Primary cost elements are costs that originate outside of the company (posted to G/L). Secondary costelements are costs resulting from the internal exchange of activites, and do not exist in the GIL. They exist solely within Controlling. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 81 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. Is it possible to plan on cost centers in more than one plan version - elaborate your answer? Yes, when planning for cost centers, changes can be made to all plan versions. This includes copying these planning versions, to create separate scenarips with when calling up the planning screen you will be asked to enfer the plan version number. Discuss how distribution for cost centerallocation is used in the system. Primary postings are pooled in a cost center and allocated out at the end of the period specified by user. Originalcost elements are retained, and line items are produced for sender and receiver. Receiver line items contain information about the sending ‘ost center. Discuss howassessment for cost center allocation is used in the system. Designed for cost center settlement, primary and secondary postings are allocated atthe end of period according o a user defined key. The original cost elements are totaled and posted to a secondary cost element (assessment cost element). Line items for sender and receiver are provided, with receiver cost center getting information on sender cost center. Assessments can include all or a portion of costs from the sending cost center. Distinguish between the two cost allocations techniques: assessment and distribution. Ina distribution, all receiving cost objects are debited with a portion of an original cost element that had been posted (o a sending cost center. This portion is determined as part of configuration, In assessment, a secondary assessment cost element is used. Within the sending cost center, all costs to be allocated are totaled and the sender is credited with this assessment cost element while all receivers are debited with a portion of assessment costs, This coukd be all costs or a portion of the costs (both primary and secondary that had been originally posted to the send cost center) ig What is the difference between direct and indirect activity allocation? With direct activity allocation an individual activity confirmation takes place. Thus the activities, directly allocated to the cost centers. The purpose of indirect activity allocation is to automatically allocate planned and actual activities. There are two kinds of indirect activity allocation. What are the two allocation categories for indirect activity allocation? Activity volume known: The pinned and actual activity volume is known, The total actual volume is manually entered for the sender and allocated to the receiver cost centers (or orders) based upon some planned/actual quantity! statistic. Activity volume not known: This uses management units to provide an actual activity quantity Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 82 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. to the sender cost center using statistical key figures so that the system can caleubate an operat rate for the target cost calculation, What is actual cost splitting and its purpose? Actual costs can only be posted to cost centers within cost center accounting. Therefore, in order (© compare target versus actual costs on activity types and ( display variane ‘ype, it is necessary t0 split (apportion) the actual costs to each activity type. +s for each activity What are the two stages which splitting actual costs based on the activity ty pe occurs? The actual costs are split in two stages (Ist stage is not necessary in planning): 1) Inthe first stage, the actual cost are apportioned by cost element to the activity type based on the target costs or target quantities. If no costs exist for a cost element, the target cost of the cost ekment group is used as the fist splitting step. 2) Inthe second stage, the remaining costson the cost center level are apportioned to the activity types according to the splitting rules (user defined), Ifthe spliting rules are not defined, the actual costs are split based on the equivalence numbers for the activity type. Internal orders What are the primary functions of an order? 1) Quantitative control of input factors and sales performance (sales and production order). 2) Monitors costs and supports decision making (Inte mal overhead orders and capital spending orders). Define and contrast individual orders and standing orders. Give examples of each Individual - Collects costs of one-time business activity (Christmas party, capital spending order) Standing - Allocated each month to a cost center, itis used to collect the costs of regularly occurring activities (maintenance order, small repairs orders ‘What is a statistical order? Why would you use one? A statistical order collects costs for informational purposes and does not sett costs against another object. You would use this to track costs in a separate fashion without double counting them, An example would be one car ina fleet of cars, Typically, a statistical order could collect data that also was posted (0 a cost center. In what two ways can an internal order be processed? Anorder can be processed individually or with collective processing. Anexample of this is that Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 83 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. it is possible to call all orders which have already been released but not yet have a settlement rule. Users can enter recipient cost centers in the list screen or alternatively, they can reach the entry of the distribution rule via the Settlement rule function. (This is not the same as choosing an order group.) Describe briefly the collective automatic processing of internal orders. This allows you to select a group of orders so that you can change them all quickly and accurately. Manual collective processing requires the use ofa list variant and allows changes to be made to the onder master data, Automatic collective processing is used to release orders or settle them. This changes the status ofan order, not the master data. What is a selection variant and what is it used for within CO? A selection variant is SAP or user-defined to select orders. The variant chosen determines which master data fields are offered for seection of collective processing, whether a status profile can be used, whether a selection rule can be used and what default values will appear in the fies. What is a list variant? AA list variant defines which master data fields can be maintained for collective processing. ‘What options do you have for additional account assignments when would you get a statistical posting? There canbe two additional account assignments excluding business areas and profit centers, These canbe chosen from an order, project, or profitability segment. If the order or other object is not marked for statistical postings, the profit center is always statistical in a CO posting and What are the different commitment types the system can record for an internal order? For which type do you have to performa manual reduction? Purchase Requisition Purchase Order The availability control allows you to warn a user if/when budget is exceeded. You set tokrances for these availability controls. Funds Reservations must be manually reduced by the user. ‘What canan order be settled to? 1) Extemal receivers - G/L Account, asset. 2) Internal receivers - cost center, order, project, network, profitability segment What is hierarchical settlement? The settlement hierarchy is used to ensure that settlement of orders is occurring in the right Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 84 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. sequence. Anexampk would be if order A is sett to order B and this is settled to order C, then you want to mike sure that order B is not settled before A, otherwise you will not be able to settle onder A to onder B because it will be closed. The hierarchy is setup in the settlement parameters, and each order can be given a number from0 to 999 allowing up to 1000 onters in the hierarchy. The onders are settled in descending onder - highest number first. What is the reconciliation ledger? The Reconciliation Ledger is a Standard Ledger configured and delivered by SAP. The data modeland functionality defined for specific business requirements are available. It is primarily aan information source. What is Reconciliation posting? A reconciliation posting is used to transfer costs to financial accounting which were made across company code or business area boundaries in controlling. This allows for more freedom with CO postings, and the ability to reconcile back to FI. Profitability Analysis TFA profitability segment is a combination of characteristics and value fields. TF The primary source of input to Profitability Analysis isthe Sales and Distribution module. TF The Profitability Analysis portion of the Controlling module cannot be used as a standalone system TF There are 4 tables created by the system when an operating concern is generated. Deserie how costs in Cost Center Accounting are transferred to Profitability Analysis Costs in cost center accounting are assessed to Profitability Analysis through assessment cycles that specily which value fickd(s) will be affected, who the sender cost center(s) are, which cost ekment(s) will be summed and transferred via a secondary cost element, and which characteristic values will be affected is performed when values are estimated within Profitability Analysis. (Valuation) TF There are 2 kinds of Profitability Analysis: Cost Based and Value Field Based T F Derivation is used to define values for non-system delivered fields. TF Derivation can be multi-level but not multi-dimensional. T F Sales information is received into PA at the time the Billing Document is rekased. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 85 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT.LTD. is the organizational unit within Profitability Analysis, (Operating Concern) Explain the relationship between Controlling Area and Operating Concern within the Controlling module. The Operating Concern can be defined to have a 1 to I relationship with the Controlling Area, or multiple Controlling Areas canbe assigned to one Operating Concern, One Controlling Area cannot be assigned to more thin one Operating Concern Define and provide anexample of a profitability segment within Profitability Analysis. A profitability segment is @ unique combination of characteristic values. An example for the characteristics Sales Area and Distribution Channel woukl be North (Sales Area) Wholesale (Distribution Chane). Report Painter and Report Writer 1. TF Libraries are used in both Report Painter and Report Writer. TF Report Writer and Report Painter both gemerate ABAP reports. TF Report Writer isa graphical reporting tool and is therefore easier to use to write reports. TF A Report Painter report can be converted to a Report Writer report by naming the Report Painter report as a model for the Report Writer report. In Report user can create a report without understanding the creation of sets. (Painter) AL isa collection of characteristics, key figures, and predefined columns for specific table, All reports are assigned to it. (ibrary) TFA basic set canbe made up of values from various fields/characteristis, TFA single characteristic set can have one single characteristic set combined with another single characteristic se. TF The point at which a row and a column cross is called a cell. TF Report Writer cannot be used with the Controlling module. Formulas cam be used in sets and in sets, (basic, data) TF In Report Writer, the elimination of internal business volume is supported. TF In Report Painter, actualand planned values do not have valid ity periods. Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 86 Mail id: upendarhere@gmail.comSAP FI/CO PEDANT SOFTECH PVT. LTD. TF Downloading reports from Report Painter to the PC is possibke. TF The ser can define texts that utilize variables. Howare subtotals formed in Report Writer? Subtotals are formed for each set. The hierarchy of the set determines how any subtotals are formed. A field or column of a database table. (characteristic) All the sets contained in a __ characteristic set refer to the SAME characteristic. (Single) Usin, ___ sets you define which value fields or quantities are shown ina report. (Data) What is a ‘Value Field! inthe CO-PA module? Value fields are number or value related fields in profitability analysis such as quantity, sales, revenue, discount value ete. 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. For what purposes internal orders can be used? You can use internal orders for 1) Overhead Orders: It monitors internal jobs settled to cost centres bb) Investment Orders: It monitors internal jobs settled to fixed assets, ©) Accrual Orders: Offsetting posting of accrued costs calculated in CO 4) Orders with Revenue: It display the cost controlling parts of Sales and Distribution, it does not affect the core business of the company Faculty: UPENDAR REDDY, ICWAland SAP FI/Co Consultant 9246212199 Page 87 Mail id: upendarhere@gmail.com