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.
Why do we use SAP FI?
SAP Financials accounting module enables you to manage financial accounting data within an international framework of multiple companies, currencies, and languages. SAP FI module mainly deals with the below financial components −
Fixed asset
Accrual
Cash journal
Accounts receivable and payable
Inventory
Tax accounting
General ledger
Fast close functions
Financial statements
Parallel valuations
Master data governance
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.
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In SAP FI what are the organizational elements?
The organizational elements in SAP FI are:
a) Company Code
b) Business Area
c) Chart of Account
d) Functional Area
What is chart of account and how many charts of accounts can be assigned to a company?
Chart of account is a 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
If the 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 of accounts. This could be the case if all company codes are in the same country.
In addition to 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 lie 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 and loss statement, you can choose whether to balance the company codes which use different charts of accounts together or separately.
What is a fiscal year variant?
Fiscal Year is a 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 a fiscal year variant can be used for things like posting audit or tax adjustments to a closed fiscal year.
Explain what is posting key and what does it control?
In order to determine the transaction type which is entered in the line item, a two digit numerical is used known as ‘Posting Key’
Posting key determines:
a) Account Types
b) Types of posting. Debit or Credit
c) Field status of transaction
What is a field status group?
‘Field status groups’ control the fields which come up when the user does the transactions. In FIGL (Financial General Ledger) master, the field status group is stored.
What is the difference between company and company code?
A 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 set of accounts can be drawn up for purposes of external reporting.
What is the importance of GR/IR (Good Received/ Invoice Received) clearing account?
GR/IR (Good Received/ Invoice Received) is an interim account. In the legacy system, if the goods are received and the invoice is not received, the provision is made, in SAP at the goods receipt. It passes the Accounting entry debiting the Inventory and crediting the GR/IR account. Similarly, when an invoice is received the vendor account is credited, and the GR/IR account is debited, the GR/IR will show as un-cleared items till the time the invoice is not received.
What are the benefits of using Business areas in a company?
You can use these business areas if other company codes require the same areas.
It is easy to configure if you use Business Area as you just need to attach to the company code and the other details in business area will get attach itself.
By using Business areas in controlling, you can create Profit and loss statement, Balance sheet, etc. for business areas so this is used for management accounting in few companies.
What are posting keys? State the purpose of defining posting keys?
Posting keys determine whether a line item entry is a debit or a credit as well as the possible field status for the transaction. Posting keys are SAP delivered. If u want 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 is open line item management? What do you mean by clearing open line items?
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/IR Clearing account.
What is document type, and what does it control?
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.
It controls the Header part of document.
It controls the line item level of the document.
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 class. Example of asset class is Furniture & Fixtures, Plant & Machinery, and Computers etc. The asset class also contains G1 account, when any asset is procured, G1 account is debited. Whenever you create and asset master, it becomes mandatory to mention the assest class for which you are creating the required assets. So, whenever any asset transaction occurs, the G1 account attached to the asset class is automatically picked up and the entry is passed. You can also specify the default values for calculating the depreciation values and other master data in each asset class.
How are tolerance group for employees used?
Tolerance group stores posting amount defaults. Tolerance groups are assigned to User ID’s that ensures only authorized persons can make postings.
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What are adjustment postings and its use? Give t.codes and paths if possible?
fb50, f-02 and others could be used for adjustments. These adjustments are to correct any financial representation that has already been booked into the accounts.
What is internal and external number ranges?
Internal Number Ranges: 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: No will be given manually by the end user. System will not lock no automatically in this case. User can pick the number randomly. Number may be an alpha numeric.
How do you perform Profitability analysis in SAP CO? What are the different types of profitability analysis?
SAP CO-PA is used to analyze the market segments classified as products, customers, sales area, business area, etc.
SAP CO Profitability Analysis (CO-PA) is used for the evaluation of Market segments, which is classified according to −
products, customers, and orders
any combination of these
Strategic business units such as sales organizations
business areas, with reference to company’s profit
contribution margin
There are two types of Profitability Analysis are supported −
Costing-based
Account-based
