TEST PAPER – SAP FI/CO (Preliminary Round-Technical)

ALL QUESTIONS ARE COMPULSORY.

Q1: why company should refer SAP Software for their company
operation.
A: As local softwares has no integration with other departments, SAP has integration
with other departments to get integrated reporting for quick decision making purpose.
This SAP Software is helpful only for MNCs having more than 1000 employees.

Q2: Explain Tolerance for GL Accounts and

What are the pre-requisites?
1) To create GL Account?
Tolerance for G L Accounts: To account automatically partial payments-incoming or
outgoing.
Pre-requisites to create G L Accounts: are Edit Chart of Accounts, Accounts
group, Retained earnings account and Field status variant. Without this
customization in Co. Code, we cannot create GLs.
2) Prerequisite to Posting an Entry after defining Company Code?
Pre-requisites are Define Accounting year, posting period variant, Tolerance
for employees, Document type with no. range. Without this customization, in SAP,
we can’t post any entries.

Q3. Explain steps in Depreciation Key configuration?

Steps: Define Base method (0014), declining method (001), Define rate for
depreciation key (AFAMS), Period control method (AFAMP).

Q4. Explain Journal Entries in FI-MM Integration as per goods movement?

A4: Refer Controlling material integration part to know about journal entries in MM
Module as per goods movement types.

Q5. What is the purpose of Special Posting Period in MM?

A5: Special posting period is applicable only for FI Module. No special Posting
periods in MM Module.

Q6. What is Reconciliation Accounts?

In SAP, we have three Reconciliation Accounts: 1. Sundry creditors a/c 2. Sundry
debtors accounts 3. Fixed Assets Accounts.
For these reconciliation accounts, postings will happen through sub-ledgers. We
can’t do direct postings to these Reconciliation accounts.

Q7. Can we assign different types of Tax Types to same company code? If not,
mention the reason. In Tax Code, what will be configured?
We can assign different (TDS) tax types to co. code. In Tax code, we configure tax
rate for calculation of TDS.

Q8: At what stage we activate Vendor for TDS deduction?

We activate TDS at vendor level when we assign Tax types to vendor master date
by selecting “Liable” check box.

Q9: In which cases we define Special GL Indicator?

For Down Payment and Bills of Exchange.

Q10. What are all the pre-requisite for APP execution?

To Run APP, Purchase entry, assign payment method to vendor master data,
House bank with check lot and check nos.

Q11: House Bank and Account ID

Without House Bank and Account ID, we can’t maintain check payments in SAP.

Q12: In Asset Accounting, after creating Asset Master, when we pass an entry for
asset purchasing (F-90), we get an error “contact your system administrator”. What is
the reason for this error?

For that particular asset master data, we have not configured Asset Retirement.

Q13: Can we produce Business area wise Balanced Sheet report?

A13: Yes, we can produce Business Area Wise Balance Sheet Report.

Q14: What is Valuation Class? How it is going to help in assigning G L Master in

Integration?
A14: Valuation class represents different types of stocks in inventory. Ex: Raw
materials, Finished Goods, Semi-finished goods, packaging materials and trading
goods. Valuation class it is used in FI and MM integration. It determines the G/L
A/c’s to be posted automatically. The valuation class will determines the GL codes
for the stock postings.
In material master we specify valuation class:
- for valuation class, we assign G/L A/c’s based on nature of transaction,
- at the time of goods receipt/ issue, stores person enters movement type,
- our a/c's will be updated automatically based on account assignment to valuation
class which is specified in material master.

A:Sand Box: Under development server, this sand box is for rough use. Whatever
we do in this sand box, will not affect other clients.
Golden Client: here we have to configure without any errors for testing.
ABAP Client: Here ABAP Developers develop Functional specifications for real time
reporting.

Q15: Why integration of FI to MM & SD is compulsory? Explain.

In MM Module, purchase of raw materials increases stock and they will pay input VAT
and in SD Module, as Sales effect, stock will reduce and they will collect Output VAT.
These two accounting factors (Stock and VAT) of MM & SD should reflect
automatically in FI Module for FI reporting. Hence integration is compulsory.

Q16: What is GR/IR Account? Explain?

A16: 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 before the delivery of goods. GR/IR Account is a temporary account.

Q17: What is the difference between Cost Centre and Profit Centre?
Cost Centre: Normally companies define departments as Cost centres for controlling
expenditures.
Profit Centre: Company wants report Product wise/Region wise as profit centres.

Q18: For which purpose Internal Order will be used?

Internal Orders will be used to get special report on exclusive expenditures report,
for ex: telephone number-wise, vehicle number-wise, etc. Even for trade fair or
exhibition, we use internal orders.
Q19: Capitalization Date:
The date from which SAP has to calculate depreciation for Fixed Assets.

Q20: What is dummy profit centre?

A20: The dummy profit center is the default profit center to which data is posted
when the corresponding object has not been assigned to a profit center.
Q21: What is Cost Centre Standard Hierarchy? Why this will be maintained in CO
Module?
A21: A cost center hierarchy comprises all cost centers for a given period and
therefore represents the whole enterprise. This hierarchy is known as the standard
hierarchy. The cost center structure is a hierarchically organized data object that is
used to assign and capture costs in a meaningful manner thereby permitting
managerial accounting analyses that support decision-making. A cost center is an
area of responsibility within a company that is deemed to be accountable for
incurring and influencing costs.
Whenever you customize in CO, you have to link this hierarchy for reporting and
controlling.

Q22: What is the applicability of V0 and A0 in Tax on Sales and Purchases for Asset
Accounting?
Without assignment of V0 & A0, we can’t customize asset accounting, as you will
come across non-taxable transactions in Asset Accounting.

Q25: What is I F R S?
A25: International Financial Reporting Standards (IFRS) are principles-based
Standards, Interpretations and the Framework adopted by the International
Accounting Standards Board (IASB). IFRS implementation affects several areas of a
business entity – presentation of accounts, accounting policies and procedures,
drafting of legal documents, approach to assets and their usage, and communication
with stakeholders.

Currently, over 100 countries permit or require IFRS for public companies, with more
countries expected to transition to IFRS by 2015. Proponents of IFRS as an
international standard maintain that the cost of implementing IFRS could be offset by
the potential for compliance to improve credit ratings.

BASIC CONFIGURATION QUESTIONS:

Q1: What is the purpose of Field Status Variant and how it is related to Document
Type?
In FSV, we copy all voucher formats and we edit some fields as mandatory in
FSG, as per company policy reporting, which will affect document type. While
customizing GLs, we link this FSG to affect Required entry for End Users
operation.
 Q2: While defining Retained Earnings Account in OB53, we configure “X” in P&L
Statement Column. What is the function of “X” here?
It activates carry forwards of Profit from P&L Accounts to Balance Sheet and it also
activates to create P&L Ledgers.

Q3: What is SAP Landscape?

A3: Landscape is the arrangement of the Servers. This SAP Landscape picture will
be given by the SAP Consultancy firm, to Companies/Customers where SAP has
been implemented. In this Landscape, SAP Consultancy firm gives full picture of
Clients used in SAP Implementation.

Q4: In Fiscal Year Variant, we define -1 for Jan, Feb and March periods. Why we
have to define -1 in Accounting Year?
A4: In Fiscal Year Variant -1 indicates data belongs to previous year.

Q5: In General Ledger creation, why we have to select “Relevant to cash flow”
Check Box?
A5: This check box in the GL account helps u to take the account for cash flow
analysis.

Q6: We edit Field status Variant as Text and Business Are fields as mandatory. But
where this customization will effect?
This will be affected when we assign to GLs (FS00) to FSG.

Q7: When we creating Sundry Creditors Ledger, why SAP will not accept “Only
Balances in Local Currency” Check Box selection?
As Customers/Vendors may be foreign, due to foreign exchange rate applicability,
we can’t expect local currency reporting.
Q8: While creating General Ledgers, in which cases we select “Post automatically
only” check Box?
These GLs we assign for automatic postings.

Q9: Before creating Vendor Master data, we assign Number Ranges to Vendor
Group. What is the purpose of this number range?
This no. range indicates limits to create vendor master data in particular group.

Q10: While creating Vendor Master Data, assigning Sundry Creditors Ledger is it
compulsory? If so, what is the function of Sundry Creditors Ledger here?
A10: Assigning S. Crs is compulsory which facilitates to post sub-ledger postings
automatically to S.crs.
Q11: In Accounts Payable, we define House Bank and Account ID. For which
purpose this configuration is compulsory?

A11: The Account ID is used for the Payment Program specifications and in the
account master records to make a reference to the bank account. A G/L Account
master record must be created for each Bank Account. The House Bank and
Account ID must be entered in the G/L Account master record to ensure that
accounting transactions involving the Bank Account will be reflected in the General
Ledger. The banks with which your company (company code) maintains a bank
account are referred to as house banks.

Q12: In House Bank, what is Bank Key?

Bank key represents current account number.

Q13: While creating Check Lots, What is the purpose of “Non-sequential” Check Box
in Control data?
A13: If you want to use the Cheque Nos. for manual operation, select Non-sequential
Checkbox.

Q14: While configuring Automatic Payment Program, in Bank Determination step,

what is the meaning of “Rank Order”?
A14: Its the priority assigned to each house bank which helps Automatic Payment
program choose the house bank for payment in case there are more than one bank
satisfying the payment program.

Q15: While configuring Withholding Tax, why we have to configure both Invoice level
as well Payment Level?
A15: TDS should be deducted Invoice level or payment level, whichever is earlier.

Q16: Following is the list of support issues. Suggest solution to solve the issues?
Q16A: Could not determine the year for TDS certificate number range?
You have to define start of the accounting year at Logistics-General>Tax on goods
movement>Inda>Basic settings> Company code settings.
Q16B: The entry 3155 is missing in table T043G?
For the company code 3155, tolerance group /NOBA3 is not defined.
Q16C: Specify payment period baseline date?
Define date for discount calculation.
Q16D: In Table T030R, the entry F104 SKE is missing?
A16D: Assign a GL account “Cash Discount Recvd” at T-code /NOBXU.

Q16E: GL Account 300120 does not exist in company code

A16E: Please check whether the GL A/c 300120 is present in the company code are
not. TC: /NFS00

1. What is Segment ?

The segment is defined as a subarea of a company with activities that

generate expenses and revenues, with an operating result that is regularly
used by management for profit assessment and resource allocation
purposes, and for which separate financial data is available.
2. Segment report ?

IAS
Business segment: a component of an entity that (a) provides a single product or
service or a group of related products and services and (b) that is subject to risks and
returns that are different from those of other business segments. [IAS 14.9]
IFRS
that engages in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions with other
components of the same entity)

3.Lock box?
Lockbox are special depository accounts set up at a bank to which customer
remit their invoice payments. Banks daily than submit company's an electronic
file listing all deposits and invoices that are paid against. Company's than upload
these files in SAP and update their balance and clear customers i.e. A/R
accounts.

4.Solution manager? ( standard SAP tool)

SAP Solution Manager is a product developed by the software
company SAP SE. It is an integrated end-to-end platform intended to assist
users in adopting new developments, managing the application lifecycle, and
running SAP solutions.
5.Procure to pay
6.O TO C ( ORDER TO CASH)
Order-to-Cash is an integration point between Finance (FI) and Sales (SD). It is
also known as OTC or O2C in short form. It is a business process that involves
sales order from customers to delivery and invoice. ... Both major ERP
software SAP and Oracle include this process.
7. COST OBJECTS
Examples of cost objects that are represented by objects of other applications
are production orders, sales orders, and projects. Cost Object Controlling allows
you to: ... Transfer actual costs to other objects in the SAP system.

8. How many tags Did u find in GL creation? Is there any use of remaining tags?
You have check in FS00

9.Instants?
A time series can represent information about an instant in time or intervals. In some cases,
a single column may contain a values such as temperature in one row and consumption in
another. In this case, the table can be defined as instant; extra semantic information can be
used to convert to an interval series for further analysis where appropriate.

10.Incident?
SAP now offers technical support with Expert Chat. To access Expert Chat, simply begin the
process of submitting an incident. If Expert Chat is available for the component you have
chosen, you will see the ‘Start Expert Chat’ button next to the 'Submit' button in your incident
form. The details you’ve entered will be passed through to the support expert.

11.Transport request?
Transport Requests (TRs) – is a kind of 'Container / Collection' of changes that
are made in the development system. It also records the information regarding
the type of change, the purpose of transport, request category and the target
system. It is also known as Change Requests.

13..Zero balance clearing a/c

As the name indicates it, a zero-balance clearing account is a balance sheet account which
is maintained for the purpose of posting additional clearing entries in the event of the
documents are not balanced with the respect to different dimensions used for your reporting
such as profit center,
business area, segment, etc.

15.Advance payment through app to vendors.

In OBYR assign the G/L Accounts (Reconciliation A/C & Advance A/C) for a Special G/L
Indicator.
Assign this Special G/L Indicator in FBZP Configuration, sp. g/l indicators to be paid over.

15.PARTIAL PAYMENT AND RESIDUAL PAYMENT DIFFERENCE

Partial payment in SAP is a payment that is posted to an account without any
open items being cleared. ... Residual item in SAP results when a payment is
made for less than the actual amount outstanding. The original open item is
cleared and the system posts a new open item
16.tell me the configuration of document splitting
When you are creating a new company code in Ecc 6.0 then by default document splitting
will be active. Now for document splitting to work, u have to do the following configurations
steps:
1.Define Document splitting characteristics for GL
2. Classify GL accounts for document splitting
3. Check that the document splitting method is 0000000012 which is the standard one.

17.what is the use of non leading ledger

Non Leading Ledger – This Non leading ledgers are used for the purpose of
reporting like International Financial Reporting Standards (IFRS) and taxation.
It is parallel to leading ledger and based on the local accounting principles.
18. Difference between leading and non leading
Leading Ledger – In the Leading Ledger all the postings are taken as primarily
and default. It is based on accounting principles that is used for the consolidation
of financial statements. Leading Ledger in SAP system is defined as 0L and
company codes are assigned to this ledger by default.
Non-Leading ledgers will be defined to get Local GAAP or IFRS as per the
requirements.

19. What is the exact use of document splitting

In SAP ERP the document splitting is the most powerful tool is widely and most
commonly used. With this function the document splits the line items based on
the “Characteristics” we define in system. Often this function is used to get the
financial statements correctly for segment reporting.

20. Difference between Business area and segment

Earlier in SAP we used to have very limited reporting hierarchies, in which

business area is one like Company Code. But obviously in FI or CO either use/
partner/ management always interested in viewing the business on different
entities in different forms of reports.
So, with the new GL SAP has given a provenance to users to create their own
reporting entities. So, with the new GL customers can generate balance sheets
by almost any dimension by defining a SEGMENT, meaning: cost center, plant,
etc even you can define business area as a segment.