SAP-Enterprise Structure Interview Questions

February 18, 2013

1. 1. What are the various Organizational assignments to a company code?

Company code is a legal entity for which financial statements like profit & loss and
Balance sheets are generated. Plants are assigned to a company code, purchasing
organization is assigned to the company code, and sales organization is assigned to the
company code.

1. 2. What is relation between a controlling areas and a company code?

A controlling area can have the following 2 types of relationship with a company code.

 Single company code relation

 Cross company code relation

This means that one single controlling area can be assigned to several different Company
Codes.

Controlling area can have a one is to one relationship or a one is to many relationship
with different company codes.

Controlling area is the umbrella which all controlling activities of cost center Accounting.
Product costing, Profit center and Profitability Analysis are sorted.

In a similar way Company Codes is the umbrella for Finance activities.

1. 3. 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 ledger Accounts.

1. 4. What are the options in SAP when it comes to Fiscal years?

Fiscal year is nothing but the way financial data is stored in the system. You have 12
periods in SAP and also 4 special periods. These periods are stored in what is called the
Fiscal year Variants.

There are two types of Fiscal year Variant

 Calendar year – Jan to Dec , April to Mar

 Year dependent Fiscal year
 1. 5. 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.

Example: For the year 2012 the period January ends on 29th, Feb ends on 27th, March
ends on 29th. For the year 2013 January ends on 30th, Feb ends on 26th, March ends on 30th.
This is applicable to many countries especially USA. Every year Fiscal year variant needs
to be configured.

1. 6. How does posting happen in MM during special periods?

There is no posting which happens from MM in special periods. 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.

1. 7. How many currencies can be configured for a company code?

A company code can have 3 currencies in total. One which is called the local currency (ie
Company code currency) and 2 parallel currencies can be configured.

1. 8. Do you require configuring additional ledger for parallel currencies?

In case 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 is configured
and is different than the second currency type, you need to configure additional ledger.

1. 9. 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.
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Enterprise Structure
What is a Company Code and what are the basic organizational assignments to a
company code?

Ans: Company Code is a legal entity for which financial statements like Profit and Loss
and Balance Sheets are generated. Plants are assigned to the company code, Purchasing
organization is assigned to the company code, and Sales organization is assigned to the
company code.

Q.What is the relation between a Controlling Area and a Company code?

Ans: A Controlling area can have the following 2 type of relationship 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. In a similar way Company Codes is the umbrella for
Finance activities.

Q.How many Chart of Accounts can a Company code have?

Ans: 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 Ledger Accounts.

Q.What are the options in SAP when it comes to Fiscal years?

Ans: 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.
There are two types of Fiscal Year Variant
· Calendar Year – e.g. Jan-Dec
· Year Dependent Fiscal Year .

Q.What is a year dependent fiscal year variant ?

Ans: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 30th,
Feb ends on 26th, March ends on 30th. This is applicable to many countries especially
USA. Ever year this fiscal year variant needs to be configured in such a case

Q.How does posting happen in MM (Materials Management) during special periods?

Ans: There is no posting which happens from MM in special periods. 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.

Q.How many currencies can be configured for a company code?

Ans: 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.

Q.Do you require to configure additional ledger for parallel currencies?

Ans: 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 is
also configured and if it is different than the
second currency type, you would then need to configure additional ledger.

Q.If there are two company codes with different chart of accounts how can you
consolidate their activities?
Ans. 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.

2. 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.

3.Where do you open and close periods?

Ans: PPV is used to open and close the periods based on a/c types considering GL
Accounts. Tr. Code. OB52.

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4.What do you enter in Company code Global settings?

Ans: 4 digit Alphanumeric key.

Name of the company
City
Country
Currency
Language
Address

5.What is document type, and what does it control? Examples.

Ans: Document type is nothing vouchers containing line items. Several business transac!
tions 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
Helps filing of physical document

6. What is posting key and what does it control?

Ans: These are special classification keys. Two character numerical key it controls the
entry of line items.
Posting key determines Account type, Debit/credit posting, Field status of transaction.

7. What is field status group, what does it control?

Ans: FSG is mandatory field in ! GL Creation. You use this field to define which fields
are displayed when you post business transactions to a G/L account.

A field may have one of the following statuses.

- Suppressed
- Display
- Optional
- Required
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8. What is chart of account and how many charts of accounts can be assigned to a
company?

Ans: 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 co! mpany codes which use different charts of accounts
together or separately.

9. What does definition of a chart of account contains?

Ans: chart of account key

Name
Maintenance language
Length of the GL Account Number
Controlling Integration
Group chart of accounts (Consolidation)
Block Indicator
10. Can one COA be assigned to several companies?

Ans: yes. One COA can be assigned to several companies.

11) What is account group and what does it control?

Ans: Account group determines which fields you can configure on the G/L master
record. It is necessary to have at least two one for B/S and another one for P&L a/c.
It controls the Number ranges of GL A/C.

The status of fields of the master record of GL belongs to company code area.

12) What is reconciliation account; can you directly enter documents in that a/c?

Ans: When you p! ost items to a subsidiary ledger, the system automatically posts the
same data to the general ledger. Each subsidiary ledger has one or more reconciliation
accounts in the general ledger.
We can’t use reconciliation account for direct postings.

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13) How do you control field status of GL master records and from where do you
control!

Ans: Field status variant is maintained all FSGs.

14) What are the segments of GL master record?

Ans: - COA Segment
A/C group
Nature of account
Short text
GL a/c long text
Trading partner
Group Account Number
Company code segment
Account currency
Tax
Reconciliation a/c for a/c type
OIM,LID,FSG.

15) 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 status group controls whether postings to cost centers, internal orders, profitability
segments and so on are required, not allowed (suppressed), or optional.
16) What is Country and operational chart of account? Why do you use group chart
of account?

Ans: Operational chart of account – Day to day activities It is mandatory.

Country COA – It’s used for legal specific requirement of each country. It’s additional
and optional.Group COA used for consolidation of Company codes. This is for group
consolidation purpose.

17) 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

18) 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/IR Clearing
account.

19) What is residual payment and part payment?

Ans: Residual payment it 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.

20) What is internal and external number ranges?

Ans: Internal Number Ranges: Doc. No will be provided by the system automatical! ly 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 lock no automatically in this case. User can pick the number randomly. Number may
be an alpha numeric.

SAF FI Technical Interview Questions 2

Questions are answer best of my knowledge, if I am wrong, please correct me..anyone

1. How can be or in what way baseline date is important in Automatic Payment

Program run?

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’ before picking the invoices to be paid.

2. Please tell me the procurement cycle how it works?

Procurement cycle – a sales order is placed on a requirement made by a customer, after

which it is passed on to create a purchase order (this could either happen based on the
requirements on the SO, or a planned SO). the value flow gets passed on to FI at the
time of goods movement. In the case of SD(Sales and Distribution), the impact on FI
happens only at the time of billing.

3. 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

4. What is GR/IR?What journal entries we should pass for this?

The GR/IR – the goods receipt/Invoice Receipt account is used to post to whenever goods
that are not yet invoiced have been received or when invoices arrive b4 the 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 record the flow .

5. What are the accounting entries take place in MM and SD?

Value from MM to FI is defined in OBYC…. on the material master the flow of values
are assigned on the Costing, acctg, etc tabs where the system helps to 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

6. Can we assign one Controlling area to two different Company Codes (but the
company codes having different fiscal years/different currencies

Company code should 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 sure that the number of period remain the same.

7. While posting transaction, can we give cost centre / production order at time.

Yes it is posiiable , but in such situation cost centre will be real and production order is
stastical.
If you assign both cost center and Prd Order then since Prod. Order are real co object,
Cost center entry would be statistical.

8. Which Master data uploads will be done?

The question is not very clear. If you are talking about CO Master data. Then Cost center
need to be uploaded. You can use Data Transfer Workbench or write abap for it.
9. Can we run Payment Programe giving ( Hdfc vendor detailes ) City bank in
Payment run programe?

Yes can be possible , this can resolved through ranking order and bank optimization in
FBZP.
You use use further selection in proposal paramater, if you would like to filter the open
item based on the city

10. What does document header control?

Field status.

11. After entering a document can you delete the entry? Can you change the
document? Which fields’ can/not is changed?

Document header cannont be changed, after posting the document you cannot change.
only if you want to change the document the reseversal entry.

12. 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 , aqusition

13. How do you reverse cleared documents?

By doing reversal posting.

14. What is base line date? Why is that used? Can this be changed?

For paymentterms it is used. base line date is the due date.

15. How many statistical objects can be selected in when you post an FI document?
Where CCtr, PCtr, OM are active?
FI/CO Interview Questions

Implementation exp.:

Brief about the project you did: w.r.t. the main activity of the client, How many plants
they had, What modules were implemented, Who were the implementers, What’s the
implementation team size, How many were in your module team, What’s your role in the
project with respect to the activities you partook in the project, The Enterprise Structure
with regard to the no. of Company Codes, any Business Areas or Profit Centers defined,
Cost Centers defined, What’s the period of the project, When did they Go-Live?, Any
issues you’d solved during ‘Support’ phase?

Questions on conceptual understanding:

a) SAP R/3 definition and 3-Tier Architecture

b) ‘Real time integration’ advantage of SAP
c) ASAP methodology
d) Solution Manager
e) Client / Company / Company Code / Business Area
f) Business Area vs Profit Center Approach
g) How effective will be the Financial Statements generated through Business Areas
h) With Holding Taxes vs Extended WHT
i) Field Status Concepts (G/L master fields controlled through Account Group
and Document entry through Field Status Group set in the G/L master
j) Special G/L transactions
k) Open item management
l) Reconciliation Accounts
m) Subsidiary Ledgers
n) Sort key
o) Negative Postings Allowed
p) Special periods
q) Only balances in local currency
r) Important Posting keys for G/L, A/R, A/P, AA, Stock Entries
s) Assessment vs Distribution
t) Org. Structure for FI
u) Org. Structure for CO
v) Product Costing: How the values flow in the system

Configuration:

a) Extended With Holding Taxes configuration steps – right from creation of WH Tax
Types, Codes to Annual Return
b) FI-MM Integration (OBYC configuration with particular reference to Off-Setting
entries)
c) FI-SD integration
d) Down Payments transactions
e) Interest – Balances / Arrears
f) Asset Accounting: Asset Class, Main Asset, Sub-Asset, Group Asset, Dep. Areas,
Dep. Key, Transaction No.s (100- External acquisition, 210 – Retirement with
Revenue, etc.), Imp. Transaction Codes.

General questions:

a) Educational Background
b) What influenced you to go in for SAP career?
c) Functional Career
d) Present earnings vs Expected pay
e) Inclination to relocate

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, octroi, freight which you add and arrive at total cost of
acquisition for capitalisation of the asset.For ex Say a computer. The total cost which you
incurr for the acquisition of the computer including installation will be your APC
Production cost means any asset which is created internally within the organisation. This
is normally created by means of AUC and you go on adding cost to the AUC as and when
you incurr exp. for the same.For ex. say addition to the office building. Therefore APC
incudes any external acquisition or internal construction of exp. which needs to be
capitalised.

In OADB under 01 deprn area Acquisition & prod Cost tick is activated. Marazban D.
Dalal
This is umapathy, I have intereview tomorrow, if anybody have taken interview
with any company, kindly let me know what the questions they will be asking, how
will be the interview. How the questions will be on configuration, implementation
side and other questions plz.. share with me.
Pl. prepare yourself on the following broad lines:

Implementation exp.:
Brief about the project you did: w.r.t. the main activity of the client, How many plants
they had, What modules were implemented, Who were the implementers, What’s the
implementation team size, How many were in your module team, What’s your role in the
project with respect to the activities you partook in the project, The Enterprise Structure
with regard to the no. of Company Codes, any Business Areas or Profit Centers defined,
Cost Centers defined, What’s the period of the project, When did they Go-Live?, Any
issues you’d solved during ‘Support’ phase?

What is a breakpoint ?
Breakpoint is used to help the user scrutinize how the system behaves at a certain point in
the ABAP code. At that point the system goes into debug mode. This breakpoint is
useful in investigating how routines and requirements function. By accessing the routine
source code and setting a breakpoint at its execution point, a user can follow the routine
through each step.

What is a CATT ?

CATT means Computer Aided Test Tool. It is SAP's tool for processing transactions
automatically. CATT is used in bringing in data, such as a mass maintenance of the
material master in EXCEL, from an application to modify master data.

What is a user exit ?

User exit is a point in an SAP program at which a customer's own program can be called.
User exits allow developers to access program components and data objects in the
standard system. There are two types of user exits -
user exits that use includes (customer enhancements that are called from the program)
and user exits that use tables, which are used and managed directly via customizing.

What is a client ?

Client in a SAP work environment is the highest organizational structure. Many clients
can be found in each system. QA (quality analysis) and Development are clients in
Training and Production system.

What is an authorization ?

Authorization gives an SAP user permission to perform a given set of transactions.

Who is a user ?

Anyone who is given access to the SAP system by the system (basis) administrator is
known as a user.

What is a variant ?

When executing a program, different selection parameters may be used. These selection
parameters are stored in the SAP system as variants.

What is a SQL trace ?

SQL trace records all open, prepare, fetch, execute and actual SQL statements and the
duration time for each step in a procedure.

What is master data ?

Master data is used in an SAP system to represent the basic components of a procedure
and to ensure data integrity throughout the SAP business process. This gaurantees that
one common record is accessed for different procedures. Example - a customer master
record may be referenced by more than one functional module : FI (financial) and SD
(sales and distribution).

What is the IMG ?

IMG is Implementation Guide that SAP 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 R/3.

What are the core modules of SAP ?

The core functional modules in SAP R/3 are Financial Accounting (FI) usually in
combination with Controlling (CO) or Treasury (TR) - Human Resources (HR), and
logistic modules : Sales and Distribution (SD), Materials Management (MM),
Quality Management (QM), Plant Maintenance (PM), and Production Planning
(PP).

What is the ABAP Workbench?

ABAP Workbench is SAP's graphical programming environment. It is used to write

ABAP code, design screens, create user interfaces, obtain database information, debug
and test applications for effeciency.

In the 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 for the schedule line level is
stored in table VBEP.

What is a user profile?

User profile is a set of authorizations that enable user access to certain parts of the SAP
system.
What is a sales area ?

Sales area is a segment that combines the sales organization, the distribution channel, and
the sales division.

What is a logical database ?

Logical database is an ABAP program that combines the contents of database tables. It
is linked to an ABAP report program as one of the program attributes. It supplies the
report program with a set of hierarchically structured table entires derived from different
database tables. This saves the developer from having to program the data retrieval.

What is a requirement ?

Requirement is a portion of code that is used to determine if a function or formula should

be executed.

What is an ABAP Query ?

ABAP Query is a reporting tool that uses a logical database (LDB), individual table, or
combined tables to form a report.

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 is a convenient tool for capturing data into SAP or updating
large 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 to a 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 file with the data in a word
processing program. Finally, import the merged file, upload the file into SAP, and
execute the batch input in SAP.

What is LIS ?

LIS is Logistics Information System. LIS consists of following information systems -

Sales Information System
Purchasing Information System
Inventory Controlling
Shop Floor Information System
Plant Maintenance Information System
Quality Management Information System
These information systems can be used to plan, control, and monitor business events at
different stages in the decision-making process. They are flexible tools for collecting,
aggregating, and analyzing data from the operative applications.

What is OSS ?

OSS is an Online Service System which can be used to access information about a
module in a given release. OSS is a database of notes on known issues and their
remedies. Any user with a logon name and password can access this information. OSS
can be used to obtain quick responses from the SAP help desk representatives,
administration and registration of new users.

What is an SAP GUI ?

GUI means Graphical User Interface. It is responsible for the graphical layout of the SAP
software. GUIs in SAP R/3 differ from version to version of SAP

FICO Questions

Courtsey of ZZ:

1. Tick the incorrect answers

FI configuration is divided into the following levels
a. Organization Definition
b. Global settings
c. Transaction codes
d. Accounting functions

2. Tick the correct answer

The procedure model
a. Provides steps required for creating clients, users and authorization
b. Contains documentation for the configuration of applications
c. Provides Planning basis for implementation 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.
True/False

5. Parameters for processing accounting data is must when creating a Company Code.
True/False

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/False

8. Tick the incorrect answer Benefits of Organizational Structure in SAP R/3 are

a. Flexibility to reflect complex organizational structure.

b. Data entry during creation of a transaction is minimized.
c. Possibility to consider future changes in organizational structure.
d. 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

11. What are the two types of creating a Master Record?

Ans. : Centrally, Step-by-step i.e. at COA level then at Co. Code level.

12. Posting to a Blocked G/L master record gives a warning and then lets the user post to
the master record.
True/False

13. Only one vendor master record is defined for a client having four different
companies.
True/False

14. What is a Data Transfer Rule in the context of Sample Accounts?

15. If the 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

16. When creating a Customer Master Record the monthly debits and credits are entered
at the Client level.
True/False

17. What is the third level of information contained in a Vendor Master Record when a
Vendor is maintained centrally?
Purchasing Information

18 Which field in the Customer Master Record controls the One Time Accounts?
Account Group

19. What are the three levels of controlling screen layout of a Master Record?
Field status of "Account Group", "Company Code" and "Activity Type"

20. Do you need to maintain line item display of a Vendor Reconciliation Account?
Yes/No

21. To manage foreign Currency bank accounts, the G/L master record must have the
same currency as the foreign currency bank account.
True/False

22. In SAP for each payment term you can define up to 3 individual levels.
True/False

23. In the SAP system multiple documents are created for every business transaction.
True/False

24. Tick the incorrect answer

Document type
a. Distinguishes between the type of business transactions
b. Assigns the document Number
c. Controls the account types that can be posted to the document
d. Used as a sort Criteria
e. None of the above.

25. 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.
c. Sample Document Number Range is associated with a Document Type

26. In SAP only one posting period is allowed to remain open at any point of time.
True/False

27. Maximum of how many posting periods can be defined in SAP?

16 in FI and 366 in Spell. Ledger

28. Tick the incorrect answer

Posting Key specify
a. Account Type
b. Account Number
c. Debit or Credit Entry
d. Data entry screen for line items

29. Field Status Group of a posting key is defined at the Client Level.
True/False Company Level
30. What are the levels of controlling layout of a Document Entry screen?
Field status of "Posting Key", "G/L account master record".

31. Is it a must to associate all revenue and loss accounts to a retained earning account?
Yes/No

32. Each Inter Company Transaction generates three documents .

True/False

33. What are the two types of "Fields" defined in SAP for authorization purpose?

Ans.: Operational Object like transaction table, Company code etc.

Activities like Create, Change, Delete etc.

34. There can be only one Authorization Object defined for an Object Class.
True/False

Several Authorization Objects(i.e. Customer, Account authorization) can belong to

one Object Class(e.g. FI).

35. Tick the correct answer.

Allocation field in Document Line Item is used for

a. Controlling the screen layout.
b. Allocating amount to different cost centers
c. For sorting of documents
d. For referencing another document.

36. Tick the correct answer

Sub-Screen Processing is used

a. To control the layout of the subsequent screen based on the data entered in the
first screen. (Posting Key controls the Layout of the subsequent screen)
b. To maintain the document flow from one functional module to another
c. To control the layout of the screen on which the data is entered.
d. To display all the referenced documents of the existing documents.

37. There is only one validation table defined per Company Code.
True/False

38. Are validations and Substitutions module specific?

Yes/No

39. What is a Call Up point?

Call up point is a point within a document where a validation or substitution is called. A

validation can be called at document header level or at the line item level.

40. Tick the incorrect answer

Clearing is the process of

a. Posting a document
b. Matching Debit Entries to Credit Entries
d. Clearing Open items
d. Taking the account balances of Profit and Loss Accounts to Retained earning
Account.

41. Tick the correct answer/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 results in clearing the original invoice and creating a new open item
for the difference between the payment and the original invoice.
c. A partial payment can not refer to more than one open items.
d. None of the above.

42. The process of clearing open items for a customer who is also a vendor of the
company is called

a. Partial Payment
b. Residual Payment
c. Transfer with clearing
d. Vendor Clearing

43. Which of the following statements is incorrect for Account Assignment Model.

a. It can 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
d. More number of line items can be added

44. Which all fields in a Recurring Document can be changed

a. Posting Keys
b. Account
c. Line Item amounts
d. None of the above

45. Creation of the recurring reference document updates transaction figures of the
associated accounts.
True/False
46. Preliminary posting is posting of incomplete documents before extensive entry
checks.
True/False

46. Can the cross company transaction be parked?

Yes/No

47. Difference between a Parked Document and a Held Document is: The Parked
document gets a 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/False

48. What determines the document fields that can be changed?

Document Update Rule

49. What does GAAP rule specifies in context of Document Update Rule?
Account, Amount and Posting keys can not be changed for a posted document

50. A document posted in MM and SD can be reversed in FI.

True/False

51. Which field in the master record determines the way in which the line items are
sorted?
Ans. Sort Key

52. Only system can populate the Allocation Field.

True/False

53. Can you create customized line layout, totals variant, or lists?
Yes/No

54. 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.

55. Tick the correct answer

A "Work List" is
a. List of pending jobs
b. List of scheduled jobs
c. No of Employees and their job status
d. combination of accounts or company codes
56. You must assign Company Codes to Credit Control Area.
True/False

You can have more information regarding SAP FICO

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. For example 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 elements that needs to be configured for automatic credit checking
a. Credit Group
b. Credit Control Area
c. Risk Category
d. None of the above

59. In SAP which one of the followings is not a type of payment advice?

a. EDI
b. Lockbox Advice
c. Bank Advice
d. Dunning letter

60. Can a 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
d. Posting Date

62. Can a customer receive dunning letters from two dunning areas?
Yes/No

63. Dunning Keys are used to

a. Mark specific items that should not trigger specific dunning levels
b. Identify the Dunning procedure
c. List the customers under same dunning area
d. All of the above

64. Payment method must be defined at the country level before it is 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
c. Payment method parameter level
d. Bank parameter level

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
c. Group Level
d. Country level

68. Where are the data to calculate tax are defined in SAP?

Ans. 1. Line item when posting a document

2. G/L 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
c. G/L tax 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 record. This minimizes the
burden of determining the appropriate tax 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 in the 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, it is permanent and can not be deleted.
True/False

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 a
field is entered. Expert Mode: More detailed data dictionary and table information to be
entered to create a new field. This is more complex. After a field is been entered a
subscreen 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 line items. True/False

76 Multinational corporations can issue P&L statements and B/S in up to 4 currencies.

True/False Ans. 3

77. Index currency is used in high inflationary environment.

True/False Ans. Hard Currency

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. Can a financial statement structure be deleted from the system.?
Yes/No

82. In GLIS from the business ratio field can you drill-down to the line item level?
Yes/No

CO Interview Questions

Again courtsey of ZZ:

Cost center accounting

1. Describe how cost center accounting differs from financial accounting?

CO is for internal reporting where FI is more for external legal reporting. CO relates
more to indirect and overhead costs, which don't affect G/L. These costs hit the G/L once,
after that all the allocations are behind the scenes.

2. Describe the possible options for a controlling area - company code relationship
Put 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 currencies, but they must use the same chart of accounts. The
controlling area is assigned a currency, but can also support multiple company code
currencies. If all the companies have the same currency, then the object currency is freely
definable (if currency type 10 is used). If the company codes do not have the same
currency, then the object currency inherits the currency of the company code.

5. Discuss the cross-company controlling?

Cross-company-code controlling enables 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 (e.g.
cost center) inherits its currency from the company code.

6. What are the three types of currencies used in cross-company-code accounting

and what conversion rates are used?

Each CO document is updated in three currencies. In cross-company-code accounting

with different currencies, these are designated the document currency, the company code
currency and the controlling area currency. Conversions in CO use the average exchange
rate (M).

8. Define the types of master data that exist in cost center accounting?

Cost center - units of a company that incur costs

Cost element - define types of costs
Activity type - units of measure for allocating activities
Statistical key figures - allocation basis for distribution and assessment

12. 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 elements for cost accounting. Secondary cost elements are not contained on the chart
of accounts.

15. 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 cost elements are costs resulting from the internal exchange of activities, and
do not exist in the G/L. They exist solely within Controlling.

Get more idea on SAP HANA

26. Is it possible to plan on cost centers in more than one plan version - elaborate
youranswer?

Yes, when planning for cost centers, changes can be made to all plan versions This
includes copying these planning versions, to create separate scenarios with When calling
up the planning screen you will be asked to enter the plan version number.

30. Discuss how distribution for cost center allocation 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. Original cost elements are retained, and line items are produced for
sender and receiver. Receiver line items contain information about the sending cost
center.

31. Discuss how assessment for cost center allocation is used in the system.

Designed for cost center settlement, primary and secondary postings are allocated at the
end of period according to 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.

33. Distinguish between the two cost allocation techniques: assessment and
distribution.

In a distribution, all receiving cost objects are debited with a portion of an original cost
element that had been posted to 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 could be all costs or a portion of the costs (both primary and secondary that
had been originally posted to the sending cost center).

39. What is the difference between direct and indirect activity allocation?

With direct activity allocation an individual activity confirmation takes place. Thus the
activities are 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.

40. What are the two allocation categories for indirect activity allocation?

Activity volume known: The planned 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 to the sender cost center using statistical key figures so that the system can
calculate an operating rate for the target cost calculation.

42. What is actual cost splitting and its purpose?

Actual costs can only be posted to cost centers within cost center accounting. Therefore,
in order to compare target versus actual costs on activity types and to display variances
for each activity type, it is necessary to split (apportion) the actual costs to each activity
type.

43. What are the two stages which splitting actual costs based on the activity type
occurs?

The actual costs are split in two stages (1st stage is not necessary in planning):

1) In the 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 element group is used as the first splitting step.

2) In the second stage, the remaining costs on the cost center level are apportioned to the
activity types according to the splitting rules (user defined). If the splitting rules are not
defined, the actual costs are split based on the equivalence numbers for the activity type.

Internal orders
2. 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 (Internal overhead orders and
capital spending orders).

3. Define and contrast individual orders and standing orders. Give examples of
each.

Individual - Collects costs of a one-time business activity (Christmas party, capital

spending order).
Standing - Allocated each month to a cost center, it is used to collect the costs of
regularly occurring activities (maintenance order, small repairs orders).

4. What is a statistical order? Why would you use one?

A statistical order collects costs for informational purposes and does not settle 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 in a fleet of cars. Typically, a
statistical order could collect data that also was posted to a cost center.

9. In what two ways can an internal order be processed?

An order can be processed individually or with collective processing. An example of this

is that 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.)

10. 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 of a list variant and allows
changes to be made to the order master data. Automatic collective processing is used to
release orders or settle them. This changes the status of an order, not the master data.

12. 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 selection 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 fields.

13. What is a list variant?

A list variant defines which master data fields can be maintained for collective
processing.

14. What options do you have for additional account assignments within a CO
posting and when would you get a statistical posting?

There can be two additional account assignments excluding business areas and profit
centers. These can be 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.

15. What are the different commitment types the system can record for an internal
order? For which type do you have to perform a manual reduction?

Purchase Requisition
Purchase Order
The availability control allows you to warn a user if/when budget is exceeded. You set
tolerances for these availability controls.
Funds Reservations must be manually reduced by the user.

16. What can an order be settled to?

1) External receivers - G/L Account, asset.
2) Internal receivers - cost center, order, project, network, profitability segment

17. What is hierarchical settlement?

The settlement hierarchy is used to ensure that settlement of orders is occurring in the
right sequence. An example would be if order A is settled to order B and this is settled to
order C, then you want to make sure that order B is not settled before A, otherwise you
will not be able to settle order A to order B because it will be closed.
The hierarchy is setup in the settlement parameters, and each order can be given a
number from 0 to 999 allowing up to 1000 orders in the hierarchy. The orders are settled
in descending order - highest number first.

18. What is the reconciliation ledger?

The Reconciliation Ledger is a Standard Ledger configured and delivered by SAP. The
data model and functionality defined for specific business requirements are available. It is
primarily an information source.

19. What is a 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
1. T F A profitability segment is a combination of characteristics and value fields.
T F The primary source of input to Profitability Analysis is the Sales and Distribution
module.
T F The Profitability Analysis portion of the Controlling module can not be used as a
stand alone system.
T F There are 4 tables created by the system when an operating concern is generated.

2. Describe 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 specify which value field(s) will be affected, who the sender cost center(s) are,
which cost element(s) will be summed and transferred via a secondary cost element, and
which characteristic values will be affected

3. ___________ is performed when values are estimated within Profitability Analysis.

(Valuation)

4. T F 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.
T F Derivation can be multi-level but not multi-dimensional.
T F Sales information is received into PA at the time the Billing Document is released.

5. __________________ is the organizational unit within Profitability Analysis.

(Operating Concern)

6. Explain the relationship between Controlling Area and Operating Concern within the
Controlling module. The Operating Concern can be defined to have a 1 to 1 relationship
with the Controlling Area, or multiple Controlling Areas can be assigned to one
Operating Concern. One Controlling Area cannot be assigned to more than one Operating
Concern

7. Define and provide an example of a profitability segment within Profitability Analysis.

A profitability segment is a unique combination of characteristic values. An example for
the characteristics Sales Area and Distribution Channel would be North (Sales Area)
Wholesale (Distribution Channel).

Report Painter and Report Writer

1. T F Libraries are used in both Report Painter and Report Writer.

T F Report Writer and Report Painter both generate ABAP reports.
T F Report Writer is a graphical reporting tool and is therefore easier to use to write
reports.
T F 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.

2. In Report __________ a user can create a report without understanding the creation of
sets.
(Painter)

3. A ___________ is a collection of characteristics, key figures, and predefined columns

for a specific table. All reports are assigned to it.
(library)

4. T F A basic set can be made up of values from various fields/characteristics.

T F A single characteristic set can have one single characteristic set combined with
another single characteristic set.
T F The point at which a row and a column cross is called a cell.
T F Report Writer can not be used with the Controlling module.

5. Formulas can be used in __________sets and in ____________sets.

(basic, data)

6 T F In Report Writer, the elimination of internal business volume is supported.

T F In Report Painter, actual and planned values do not have validity periods.
T F Downloading reports from Report Painter to the PC is possible.
T F The user can define texts that utilize variables.

7. How are subtotals formed in Report Writer?

Subtotals are formed for each set. The hierarchy of the set determines how many
subtotals are formed.

8. A _________ is a single field or column of a database table. (characteristic)

9. All the sets contained in a _________-characteristic set refer to the SAME

characteristic. (single)

10. Using _________ sets you define which value fields or quantities are shown in a
report. (data)

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 centrally). Exists so that you can tailor the
customization at each level. 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 is the same for ABC at the
client level, but different at the company code level. Of course, Sales information would
be different in each company code as well.
What are the 3 levels that a vendor master record can be maintained at? Why do
these three levels exist? Give 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 to the structure of a master record. In the above example, 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 level. Of
course, purchasing information would be different in each company code as well.

What are the two purposes of the customer/vendor Account Group? Give an
example of how the Account Group is used.

1) Establishes number range of the customer/vendor master records - a number

range is assigned to an account group. This adds flexibility, you are able to keep similar
accounts 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 may 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 screen Layout link rules used for
customer/vendor 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 level, and the
activity/transaction level.

For line items, the same information can be designated required, optional, mandatory,
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.

T or F. Account Groups are mandatory when creating a sub-ledger account.

True. Account Groups are always mandatory when creating customer/vendor master
records.

T or F. Number ranges may overlap for sub-ledger accounts.

True. When setting 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. Draw a picture if
necessary.

The bank directory is the repository in SAP that contains all of the banks. It can 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.

All of 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 you are paying out of. When a payment is made, it is
accurately reflected in the corresponding G/L 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. For a
vendor, it defines when you must pay the vendor in order to receive discounts.

The terms can be set up with 3 terms, which are usually cash discount term 1, cash
discount term 2, and due date for net payment.

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 line 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. Ie. Is it a
general ledger accounting document, customer payment, etc.
2) controls which account types may be posted to - you specify the account types that
may be posted to. Ie. Some document types are only for asset accounts. Some are only for
vendor 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.

Define posting periods, fiscal year variants, company codes and the relation between
each. Draw a picture if necessary.
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 relation 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 to 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 it a sales related transaction? is a special g/l transaction? what is
the reversal posting key?

What are automatic line items? How are they configured in the system? Give some
examples of automatic line items.

There are certain activities defined at the Chart of Account level in FI that create
automatic line items. Examples include discount expenses, revenue from over/under
payment, taxes. There is a 3-character system-specific code 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 is hit when the automatic line item is
generated.

Define composite profile, profile, authorization, value, field, authorization object, and
object class. Describe the relationship between each, draw a picture if necessary.

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 perform on an object,
for a particular value. Similar authorizations can be grouped in to object classes - such as
an SD object class, and FI 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 want a 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 total. All users must be allocated to an employee tolerance
group in order to post.

What are customer/vendor tolerances. Why do they exist? Give an example.

They control the maximum payment difference allowed for customers/vendors, specify
how to post residual items from payment difference, and contain details of clearing
procedures. An example would be: Customer One can post a 5% difference b/c 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.

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 that the line items 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?

Some fields are more relevant for some customers than others. For instance, maybe the
value date or dunning areas are not important for a group of Accounting clerks to see. So
a line item layout would be made that did not include these fields. Also, it may be typical
that clerks always retrieve line items according to the posting date. This would be a
necessary field located in the line item layout.
In the same concept

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.

How is FI credit management integrated with SD?

You can set up risk categories, automatic credit checking, and update groups to check
invoices as they proceed throughout the sales cycle.

What is a Credit Control Area? Where does it fall in the organizational structure?

Credit Control Area is the highest hierarchial level in Credit Management. It falls below
the client level, 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 control area. Then, any customer assigned
to that credit control area, will have that limit. On the next level, specifications can be
made 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 credit control areas and the current limit per credit
control area.

T or F The credit for a 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. It is used for the
automatic search and matching of open items during the clearing process. Instead of
matching an incoming payment against the open items manually, the clerk only needs to
enter the payment advice in order to clear.

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 payment. It also determines if the
difference will be written off to a G/L account. An example would be a reason code set
up for damaged goods. If a business decision is made to write off damaged goods to a
G/L account then all payment advices with that reason code specified will cause
differences to be written off to the G/L account.

T or 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 can be sent late notices for overdue
amounts.
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 such as texts, levels, charges, interest
On-line parameters - such as company code, range of customers/vendors
OI - payment terms, baseline date in open items

Why are separate dunning levels supported by SAP? What is the purpose of the
levels?

Because you may want to specify amounts, charges, texts depending on the number of
days an amount is outstanding. For example, you would want to send a firmer letter to
customer when they become more overdue.

T or 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 examples.

Dunning areas are used when you want run different procedures for different groups of
customer/vendors. For example, you would send a different letter 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 corresponding 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
and give 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)On-line parameters - things you specify when running the program like the company
code, the payment method
4)OI -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? Give examples of
the 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.
Also 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.

T or F The payment method must be configured for a country before it can be configured
for a paying company?
True.

Describe 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. If the payment program will be run again before the
first payment tier expires, then the amount will be paid at the next run.
If you specify to always minimize the discount, the amount will only be paid when the
program will not be run again before the net amount is due (the third payment tier).