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Hi,
Hope U well at there. As you are in Recruitment Profession, I want to keep in touch with you. So
pl. Give me your Contact No. And Mail-id therefore , I can send details to you.
My Mail-id : [email protected]
Mobile : +91 9853207800
Awaiting your reply.
With regards,
Manoranjan Satapathy
Q-37 : What is High value sale?
A:-
SAP - FICO Interview Questions [ B ]
1) Differences between company code and company.
A:- A ‘Company Code’ in SAP is the smallest organizational unit for which you can draw individual
Financial Statements (Balance Sheet and Profit & Loss Account) for your external statutory
reporting. It is denoted by a 4-character alphanumeric code. The creation of a Company Code is
mandatory; you need to have at least one Company Code defined in the system, for implementing
FI. Financial transactions are viewed at the company code level. Company Codes can be created for any
business organization whether national or international.
A Company is the unit to which your financial statements are created and can have one to many
company codes assigned to it. A company is equivalent to your legal business organization. Consolidated
financial statements are based on the company’s financial statements. Companies are defined in
configuration and assigned to company codes.
2) Business area and Profit Center Accounting (PCA).
A:- Business area is an organisational unit which corresponds to the specific business segment or
area of responsibility. Identification of business area helps in segment reporting of a company in
its financial statements. Business areas can be identified based on the products of the company or
based on geographical area.
1
Profit centers are internal areas of a company that have the responsibility for achieving
target profits or productivity goals.
3) Retained earnings Account
A:- You can define as many ‘Retained Earnings Accounts’ as you need. But normally, companies
use only one retained earnings account. Remember, to define more than one, you should use the
profit & loss account type.
Normally it is sufficient if you use one ‘retained earnings’ account. However, if you are
configuring for a multinational company where the legal requirements require treating some of
the tax provisions differently from other countries, then you will need more than one retained
earnings account.
.
4) Account group functionality
A:- The ‘Account Group’ (or GL Account Group), a 4-character alphanumeric key, controls how the
GL account master records are created in the system. This helps to ‘group’ GL accounts according
to the ‘functional areas’ to which they must belong. Account group is mandatory for creating a
master record. The same account groups can be used by more than one more Company Code if
they all use the same Chart of Accounts. Each GL account is assigned to only one account group.
5) Field status variant
A:- In this activity you can define and edit field status variants and groups. You group several field status groups together in one field status variant. You assign the field status variants to a company code in the activity Assign Company Code to Field Status Variants . This allows you to work with the same field status groups in any number of company codes.
You can also define and process field status groups. You must define a field status group in the company code-specific area of each G/L account. The field status group determines which fields are ready for input, which are required entry fields, and which are hidden during document entry. Bear in mind that additional account assignments (i.e. cost centers or orders) are only possible if data can be entered in the corresponding fields.
6) Fiscal year variant Vs posting period variant
A:- Financial statements are drawn for a fiscal year. The fiscal year, in SAP, is defined as a ‘Fiscal
Year Variant.’ All Calendar Year Fiscal Year Variants, in standard SAP, are denoted usually as
2
K1,K2,K4, V3 etc. The fiscal year may or may not correspond to the calendar year. In the standard
SAP system, the Non-Calendar Fiscal Year Variants are denoted V1, V2, etc.
A ‘Posting Period Variant’ is useful in ‘opening/closing’ posting periods across many
Company Codes at one time. You define a posting period variant and assign it to various Company
Codes. Since the posting period variant is cross-Company Code, the opening and closing of the
posting period is made simple. Instead of opening and closing individually for different Company
Codes, you just need to open or close the posting period variant.
7) Withholding taxes
A:-
8) Tax on sales and purchases
A:-
9) Use tax
A:-
10) Vat
A:-
11) Jurisdiction code
A:- A ‘Jurisdiction Code,’ used in countries such as the United States, is a combination of the codes
defined by tax authorities. It is possible to define up to four tax levels below the federal level. The
four levels can be the:-
▪ Sub-city level
▪ City level
▪ Country level
▪ State level
Before you can use the jurisdiction codes for tax calculation, you need to define the following:-
1) Access Sequence (to include the country/tax code/jurisdiction fields)
2) Condition Types (which references the access sequence as defined above)
3) Jurisdiction Codes
3
The tax rates are defined in the tax code by jurisdiction. When posting taxes with a
jurisdiction code, note that the taxes may be entered per jurisdiction code or per tax level.
12) External number range and internal number rangeA:-
13) FI organizational structure
A:-
14) CO organizational structure
A:-
15) FI tables
A:-
16) CO tables
A:-
17) CO-PA tables
A:-
18) APP configuration steps
A:-
19) APP run steps
A:-
20) Importance of base line date
A:-
21) Importance of next posting date in APP run
A:-
22) Dunning configuration
4
A:-
23) Dunning run steps
A:-
24) Check printing program
A:-
25) Void and reprint checks
A:-
26) Pre numbered checks
A:-
27) House banks
A:- A ‘House Bank’ is the bank (or financial institution) in which the Company Code in question
keeps its money and does the transactions from. A house bank in SAP is identified by a 5-character
alphanumeric code. You can have any number of house banks for your Company Code, and the
details of all these house banks are available in the ‘bank directory.’
Each ‘House Bank’ in the system is associated with a country key (U.S., IN, etc.)
representing the country where the bank is located, and a unique country specific code called a
‘bank key.’ The system makes use of both the ‘country key’ and the ‘bank key’ to identify a ‘house
bank.’
28) If vendor is a customerA:-
29) Dunning area
A:- The ‘Dunning Area’ is optional and is required only if dunning is not done at the Company Code level. The Dunning area can correspond to a sales division, sales organization, etc.
30) Dunning key
A:-
31) Dunning block
5
A:-
32) Payment block
A:-
33) Journal entries in SD integrations
A:-
34) Journal entries Billing and PGI
A:-
35) Journal entries in FI-MM integrations
A:-
36) Journal entries for goods issue, scraping and goods issued to production
A:-
37) Valuation class
A:-
38) Validations and substitutions
A:-
39) Valuation area
A:-
40) Valuation modification
A:-
41) General modification
A:-
42) Material master views
6
A:-
43) FS00 all tabs
A:-
44) Vendor and customer master creation( all tabs)
A:-
45) ASAP methodology
A:-
46) All five phases in ASAP methodology
A:-
47) Testing process
A:-
48) Documentation
A:-
49) Functional specs
A:-
50) User exits
A:-
51) Customer exits
A:-
52) Enhancements
A:-
53) Tables view
7
A:-
54) Work bench request and customizing requests
A:-
55) SM35 and SE38 screens
A:-
56) DEV, testing and PRD clients
A:-
57) Tickets / messages
A:-
58) Problems faced in implementation and support
A:-
59) Client, cross client, transport of configuration
A:-
60) LSMW
A:-
61) BDC
A:-
62) Debugging a program
A:-
63) Special GL accounts, Special GL Transactions, Alternative GL accounts
A:-
64) Down payment Request, Down payments,
8
A:-
65) Noted items
A:-
66) Parking a document and holding a document
A:-
67) Sample document and recurring document
A:-
68) BRS
A:-
69) Clearing accounts
A:-
70) Open item management
A:-
71) Line item display
A:-
72) Bank sub accounts
A:-
73) Payment terms
A:-
74) Controlling area
A:-
75) Versions
9
A:-
76) Link between FI and CO
A:-
77) Assessment and distributions
A:-
78) Allocation structure
A:-
79) What is cost center
A:-
80) What is a profit center
A:-
81) Profit center configuration steps
A:-
82) Report painter
A:-
83) Report
A:-
84) Report groups
A:-
85) Report library
A:-
86) Statistical and Real postings
10
A:-
87) Standard hierarchy and alternative hierarchy
A:-
88) Transferring data to SD to COPA configurations
A:-
89) CO-PA configuration all steps
A:-
90) Month end closing
A:-
91) Year end closing
A:-
92) Go-Live activities
A:-
93) Lock Box concept
A:-
94) Cross company code transactions
A:-
95) Settlements in CO
A:-
96) Difference between Cost Centers and Internal Orders
A:-
97) Reconciliation Accounts
11
A:-
98) Extended With Holding Taxes configuration steps – right from creation of WH Tax Types,
Codes to Annual Return
A:-
99) What is chart of account and how many charts of accounts can be assigned to a company
A:-
100) What is residual payment and part payment
A:-
101) Procurement cycle in MM
A:-
102) Goods movement
A:-
103) What is GR/IR? What journal entries
A:-
104) Primary cost elements and secondary cost elements
A:-
105) How to configure FI and CO reconciliation account
A:-
106) Steps for electronic bank reconciliation statement
A:-
107) CO-PA Transfer of Incoming Sales Orders
A:-
12
108) Report Painter, How to reverse +/- signs
A:-
1.What are depreciation areas?
2.What are financial versions?
3.What are the components of enterprise structure?
4.What are the disadvantages of Business Area?
5.What are the documents require for Born in sale in relation to sales tax?
6.What are the segments of GL master record?
7.What data is required for automatic a/c determination
8.What does definition of a chart of account contains?
9.What does document header control?
10.What does Field status group assigned to a GL master record controls?
11.what is a profit center?
12.What is a special GL transaction? (Ref. TAFI40_2 )
13.What is account group?
14.What is accrual calculation?
15.What is activity type?
16.What is asset class?
17.What is asset master?
18.What is automatic payment programmer?
19.What is base line date?
20.What is born in sale?
21.What is chart of account and how many charts of accounts can be assigned to a coy.
22.what is cost center
23.What is Country and operational chart of account?
24.What is dummy Profit center? What is the necessity of this?
25.What is dunning?
26.What is enterprise structure?
27.What is Evaluate option in APP?
28.What is field status group?
13
29.What is GR/IR account?
30.What is GR/IR? What journal entries
31.What is High value sale?
32.What is integration between FI and other modules?
33.What is open line item management?
34.What is posting key?
35.What is residual payment and part payment
36.What is residual payment and part payment?
37.What is reversal posting?
38.What is sub ledger?
39.What is the difference between profit center and business area?
40.What is the difference between the R/3 4.6version to R/3 4.7 version?
41.What is the main control parameter for settlement?
42.What is the purpose of version?
43.What is the relationship between Report Groups and the report groups
44.What is tolerance group?
45. How do you control Document line item fields?
46. How do you identify a document?
47. How do you reverse cleared documents?
48. How due date of a document is calculated?
49. How is sub ledger linked to GL?
50. How to configure FI and CO reconciliation account
51. How to copy an existing company code to new ones?
14
SAP FICO Interview Questions in - General Ledger Accounting
Q-1) What is a General Ledger Accounting Document?
A:- A general ledger is a business’s primary financial record, in which every financial transaction
made by the business gets recorded.
The individual transactions may also be recorded in a sub-ledger, like accounts receivable
or expenditures, but the general ledger account is what is used to track all of the financial
statements in the business in a single, reviewable document.
The accounts included in a general ledger can vary depending on the type and size of
business, but in most cases, the accounts included consist of liabilities, assets, revenue, expenses,
gains and losses, and owner’s equity.
Q-2) Explain the Document Principle in SAP
A:- The R/3 System consistently uses the document principle as a reference. For that reason,
postings are always stored in document form. The document remains as a complete unit in the
system until it is archived.
Only complete documents can be posted. A document is complete when its debit and
credit items balance to zero. You must enter the minimum account assignments designated by the
system: document date, posting date, document type, posting key, account number, and amount.
Data must also be entered in all other fields that were chosen as required fields when making
system settings.
During document entry, the system ascertains whether these conditions have been
fulfilled. It also checks your entries, insofar as that is possible. If you enter a key that is not defined
in the system, you will get an error message. You have to correct your entry before you can enter
15
any more documents. These checks prevent incorrect, inconsistent, or incomplete entries from
being made.
Q-3) What is the significance of Document Type and Document Header?
A:- A key that is used to classify accounting documents and distinguish between business
transactions to be posted. The document type is entered in the document header and applies to
the whole document.
Document types are used to identify the business transactions. Sap has already defined the
document types for various transactions; we can use those document types. Otherwise we can
create the document types as per the request of the client.
The document header contains data that applies to the entire document. To enter a
document, you must first enter the document header.
Q-4) What is the connection between Account Type and Document Type?
A:- The document type helps to classify an accounting transaction within the system, and is used
to control the entire transaction and determine the account types a particular document type
can post to. For example, the document type ‘AB’ allows you to post to all the accounts,
whereas type ‘DZ’ allows you to post only the customer payments.
The ‘Document Type’ is characterized by a 2-character code such as AA, DG, etc., whereas an
‘Account Type’ is denoted by a 1-character code such as A, D, etc., specifying which accounts a
particular document can be posted to. The common account types include:
A - Assets
D - Customer (Debtor)
K - Vendor (Creditor)
M - Material
S - GL
Q-5) What are GROSS and NET postings?
A:- Gross Postings :- In the Gross Postings the amount is just deducted by Input Tax.
Net Postings :- In the Net Postings the amount is deducted by input tax as well as discounts, i.e.
in net postings the Discounts are taken into account while making internal calculations.
Q-6) Why are Reference Methods used?
16
A:- The reference method is a document entry tool. If you frequently post the same documents
with the same data, you can save time and avoid errors by using different reference methods for
document entry.
To facilitate faster and easier document entry into the system a document entry tool called
Reference method is used in SAP. This comes handy when the same data is to be entered again
and again.
The advantages of using reference method are -
Makes the document entry process less time consuming.
Helps in error free document.
The various reference methods are -
Sample documents
Reference documents
Account Assignment Models
Q-7) Give an example of Document Change Rule.
A:- You can change documents that have already been posted. However, you need to observe
certain conditions that are specified system-internally. This is necessary to prevent any changes to
documents that could result in the undesired manipulation of data, which would then make
reconciliation impossible.
After a document was posted, and you found a value in one field was wrong entered and
you don't want to reverse this document as well, then you can consider to define a document
change rule for correct this wrong value to right one.
You can also define your own conditions in the form of company-specific rules for changing
documents. However, SAP recommends that you use the standard rules.
"You can call up documents and change them or you can change the line items for an
account. If you want to change the line items for an account, the account needs to be managed
using line item display. The change rules apply to changing documents and also to changing line
items."
Q-8) How are Account Assignment Model, Recurring Entries and Sample Document different?
A:- Account Assignment Model:
17
A reference for document entry that provides default values for posting business
transactions. An account assignment model can contain any number of G/L account items and can
be changed or supplemented at any time. In contrast to sample documents, the G/L account items
for account assignment models may be incomplete.
Recurring Entries:
A periodically recurring posting made by the recurring entry program on the basis of
recurring entry original documents.
The procedure is comparable with a standing order by which banks are authorized to debit
rent payments, payment contributions or loan repayments.
Sample Documents:
Special type of reference document. Data from this document is used to create default
entries on the accounting document entry screen.
Unlike an accounting document, a sample document does not update transaction figures
but merely serves as a data source for an accounting document.
Q-9) What is a Line Item? What is Line Item Display?
A:- Line Item means the number of item records in a document. line item is a row where it
contains all the details of particular item in columns in sequence manner if you want to get the
information in detailed manner, double click on the row, You will get all the item details of that
particular item .
Line Item Display is used to view the account whenever you take a report. If you set the
"Line item display" indicator in the master record for an account, all line items that have been
posted to this account are displayed if they have not been archived.
Q-10) Why are Posting Keys used?
A:- The posting key controls entry and processing of line items in that it defines which side of an
account (debit or credit) and which account type is posted to, as well as which fields are contained
in entry screens.
18
When you enter a posting, enter a posting key for each item. This key determines how the
item is posted. Posting keys are defined at client level and therefore apply to all company codes.
The posting key determines:-
The data you can enter in the line item
How data you post is processed
How the system updates the data you enter
Posting keys are differentiated by customer, vendor and G/L accounts. Apart from the
General Ledger Accounting (FI-GL) and Accounts Receivable and Payable (FI-AR/AP) components,
there are also posting keys for asset and material accounts.
Q-11) What is the difference between Parking and Holding documents?
A:- Parking Doc:
You can use document parking to enter and store (park) incomplete documents in the SAP
System without carrying out extensive entry checks. Parked documents can be completed,
checked, and then posted at a later date. When documents are parked, data (for example,
transaction figures) is not updated.
Holding Doc:
When you are entering data, you may be interrupted, or you may not have all the data you
need for entering a document, for example bank charges or the appropriate cost center.
In this case, you can temporarily save the data you have entered, and then continue with
the document entry at a later time. If you want the system to hold a document, it does not have to
be complete. Account balances are not updated and the document data is not available for
evaluation. A document number is not assigned.
Anaswer-2
Parking refers to the stage where you have entered all the information in the document, but
waiting for the same to be approved by another user.
Where as in Holding, you are yet to complete the data entry. This may be because you are
not in possession of the complete data to be entered or you are not sure of the data that is with
you.
In short Parking is a stage where the Document has been moved to another user for
approval and in case of Holding the Document is still with you for some additional information to
be keyed in.
19
Q-12) How does Automatic Postings work?
A:- The automatic posting of the data from the electronic bank statement in the R/3 System.
After importing the electronic bank statement, the R/3 System searches through it for the
information that it requires for the automatic part of the processing.
For example: Your customer pays an open invoice by bank transfer to your house bank .
You have configured the electronic statement in such a way that this transaction triggers the
following two-level posting transaction in your system:
1. The cash receipt is posted to a clearing account, for example, a cash receipt account (bank
posting)
2. The customer is determined and the item cleared from this account (sub-ledger posting)
Answer-2
The Automatic posting function allows you to automatically process flows that occur at regular
predefined intervals for previously fixed amounts.
You can use this function for fixed-interest securities to post interest flows or
repayments automatically, or flows generated by the conditions.
There are two procedures for processing these regularly recurring flows:
One-step procedure :- When you use the one-step procedure, the selected flows that have
planned status are transferred to actual flows in the sub-ledger by the automatic posting
function, and the amounts are posted directly to the bank clearing account in Financial
Accounting. The items are cleared in the bank clearing account when the account
statement is imported.
If you want to post the flows individually, you can use the Incoming Payments function.
Example: Automatic posting process flow
20
Two-step procedure :- You can also use the automatic posting function together with the
Incoming payments function. (To do this, you have to make certain Customizing settings as
described in the prerequisites). The automatic posting function not only posts the existing
planned records as actual records, but at the same time generates new incoming payment
flows as planned records (or actual records) in a receivables account.
When you have imported the ‘account statement’, you can use the Incoming
Payments function to post the incoming payment in the Treasury sub-ledger.
Example: Process flow for automatic posting with incoming payments
Q-13) What is Manual and Automatic Clearing?
A:- Manual Clearing
In this clearing procedure, you manually select open items that balance to zero from an account.
The following are examples of situations where you would carry out clearing manually:
For bank subaccounts and clearing accounts
Where you have agreed a debit memo procedure
If your vendor is making a refund
Automatic Clearing
Automatic program clears open items from customer, vendor and G/L accounts like Bank accounts
and GR/IR accounts (in particular, GR/IR clearing accounts) automatically.
Different types of clearing and how it is done
a) Vendor account clearingTransaction Meaning Functionality
21
Code
F.13 Automatic clearing Automatic clearing allows you to clear many vendor accounts in one transaction run.
F-44 Manual clearing You need to choose the items to be cleared manually.
b) Customer account clearing
F.13 Automatic clearing Automatic clearing allows you to clear many customer accounts in one transaction run.
F-32 Manual clearing You need to choose the items to be cleared manually.
c) G/L account clearing
F.13 Automatic clearing
Automatic clearing allows you to clear many G/L accounts in one transaction run.
FB1S Manual clearing You need to choose the items to be cleared manually.
Q-14) How do we Reverse document in SAP?
A:- Go to T.code- FB08 give your accounting document no, company code, fiscal year and
reversal reason, finally save the document.
To reverse posting doc, in PCP0 - check mark on posting id - go to menu Edit - Reversal -
Reverse Doc or you can manually run SAP prog. RPCIPR00.
Answer-2 : Reversal of SAP accounting document can be performed individually by using SAP
transaction ( T code) u2013 FB08 or Mass- used SAP t code F.80.
If the SAP FI accounting document to be reversed contains cleared items, then cleared item
must be reset before the reversal of cleared SAP accounting document.
Q-15) What is the different between True Reversal and Regular Reversal?
A:- Any reversal results in opposite postings to the credit/debit sides of the original posting,
leading to an increase in the account balances and the ‘trial balance’ is automatically inflated on
22
both the sides. This is against the law in some countries such as France where it is required that
even after reversal, there should not be an increased account balance.
As a result, SAP came out with ‘True Reversal’ which overcomes this problem by ‘negative
postings’ to the same line item(s) during reversal. The account balance, which was originally
increased, is restored to the actual balance during the reversal:
Account 100000 Account 200000
Type of Reversal Type of Posting Debit Credit Debit Credit
Traditional Reversal - Original Posting - $2500 $2500
Reversal - $2500 $2500
‘True’ Reversal - Original Posting - $2500 $2500
Q -What is the difference between Cancellation and Reversal?
A - Cancellation means total purchase item or a part of it can be cancelled when we feel it is not
required and material has not yet been received by the company.
Reversal means Purchase Return when the material has reached your company and you want
to return it back due to some reason then you can go for reversal.
Q-16) What is a Fast Entry?
A:- Instead of the regular document entry screens, SAP provides ‘Fast Entry’ screens for facilitating
a quick way of entering repetitive line items in a transaction. For achieving this, you need to define
a Fast Entry Screen Layout, which will specify what fields you will require for data entry, and in
what order. You may configure these fast entry screen layouts for GL account line items, credit
memos, and customer/vendor invoices. Each of these fast entry screen layouts will be denoted by
a 5-character screen variant in the system. Fast entry screens are used in complex (general)
postings.
Q-17) What are the methods used to create GL Account Master Data?
A:- G/L account master records are split into a chart of accounts area and a company code-
specific area.
23
The system offers a variety of techniques and procedures for creating G/L accounts. Your system
administrator should choose the method which best meets your company’s requirements from
the choices below:
1. Copying chart of accounts and company code
2. Using a reference
3. Data transfer using ABAP workbench for G/L account master data
4. Sample account technique (Copying from existing GL accounts)
5. Manual master data creation
Q-18) What is the difference between Individual and Collective Processing of GL Accounts?
A:- ‘Collective Processing’ helps you to make systematic changes to a number of GL accounts in a
single step. For example, you have used the ‘creating with reference’ method to create GL
accounts in a new Company Code and you want to change the account names as well as the ‘GL
account type’ (P&L or B/S). Then you will use the mass processing method. You can make changes
to:
1. Chart of accounts data
2. Company Code data
In contrast to the ‘collective processing’ of GL accounts where you edit a number of accounts in a
single step, Individual Processing helps to edit or create GL account master records one at a time.
Here you can edit (including display, change, block, unblock, and delete) or create a new GL
account in three different ways:
1. Centrally: You will be editing or creating a GL account master record in both the Chart of
Accounts area and Company Code area in one step. This is also known as ‘one-Step’ GL creation.
2. In the Chart of Accounts area: you first edit or create the record here before doing it in the
Company Code area.
3. In the Company Code area: you edit or create the record here after it has been done in the
Chart of Accounts area.
Q-19) Can you change existing Balance sheet GL account to Profit and Loss account?
A:- Technically, you will be able to change all the fields, except the account number, of a GL
account in the Chart of Accounts area. However, in this particular instance when you change the
‘GL account type’ from ‘B/S’ to ‘P&L,’ make sure that you again run the ‘balance carry-forward’
program after saving the changes so that the system corrects the account balances suitably.
24
Q-20) How Account Group helps in defining GL accounts?
A:- The account group is a summary of accounts based on criteria that effects how master records
are created. The account group determines:-
The number interval from which the account number is selected when a G/L account is
created.
The screen layout for creating G/L accounts in the company code-specific area
When you create a G/L account in the chart of accounts area, you must specify an account group.
Using the account group, you can group the G/L accounts according to functional area.
The ‘Account Group’ (or GL Account Group), a 4-character alphanumeric key, controls how the GL
account master records are created in the system. This helps to ‘group’ GL accounts according to
the ‘functional areas’ to which they must belong. Account group is mandatory for creating a
master record. The same account groups can be used by more than one more Company Code if
they all use the same Chart of Accounts. Each GL account is assigned to only one account group.
Q-21) What is a Number Range?
A:- A ‘Number Range’ refers to a number interval defined in the system so that when documents
are posted, the system assigns a number from this range. You will define different number ranges
for different document types. Each document in SAP is uniquely identified by the combination of
(a)document number, (b) company code, and (c) fiscal year.
Q-22) What are the options while configuring Screen Layout?
A:- The ‘account group’ determines which ‘Screen Layout’ should be used while creating a GL
account master record. For each of the account groups, you can define different screen layouts,
which essentially determine the ‘Field Status’ of a field.
The field status refers to whether the field is:
1. Suppressed (field is invisible, hidden from display)
2. Required (display on, entry mandatory)
3. Optional (display on, entry not mandatory)
Q-23) What is the use of Field status Group?
A:-The ‘field status’ of an individual field or a group of fields is marked in a ‘Field Status Group,’
which is then assigned to individual GL account master records. You may attach field status
25
groups to a field status variant so that the ‘field status groups’ are used in various Company
Codes.
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:
Hidden (suppressed)
Entry required (required field)
Ready for input (optional field)
Q-24) Why do we set "Balance in Local currency only" for a GL account?
A:- When you create GL account master records, it is necessary to decide whether you want an
account to have the transactions updated only in local currency. You will set this indicator
accordingly in the ‘Company Code area’ of the master record. Make sure to set this indicator for
clearing accounts such as:-
▪ Cash discount clearing accounts
▪ GR/IR clearing accounts
Note that you need to set this indicator ‘on’ for all the ‘clearing accounts’ where you use the local
currency to clear the line items in various currencies so that the transactions are posted without
posting any exchange rate difference that otherwise might arise.
Q-25) How is Archiving different from Deletion?
A:- ‘Archiving’ refers to deleting data from the documents in the database and storing the data in
a file, which can be transferred to an ‘archiving system’ later on. Archiving does not physically
delete the documents. ‘Deletion’ actually removes the documents from the database.
Q-26) What is a House Bank? How do we configure House banks?
A:- A ‘House Bank’ is the bank (or financial institution) in which the Company Code in question
keeps its money and does the transactions from. A house bank in SAP is identified by a 5-character
alphanumeric code. You can have any number of house banks for your Company Code, and the
details of all these house banks are available in the ‘bank directory.
Each ‘house bank’ in the system is associated with a country key (U.S., IN, etc.)
representing the country where the bank is located, and a unique country specific code called a
‘bank key.’ The system makes use of both the ‘country key’ and the ‘bank key’ to identify a ‘house
bank.’
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A ‘House Bank’ is defined using transaction code FI12. A ‘bank key’ represents the bank.
The house bank can contain several accounts; for each of these accounts you need to maintain a
GL account. The bank determination, for an automatic payment program, is configured using the
Transaction Code FBZP.
Q-27) When and how can we manually clear open items?
A:- Under ‘Manual Clearing,’ you will select the open items, based on the incoming payment so
that the selected ‘open items’ are ‘cleared’ (knocked-off). In cases like refunds from a vendor or
transactions involving bank sub-accounts and clearing accounts, etc., you will use manual clearing.
When cleared, the system flags these line items as ‘cleared,’ creates a clearing document, and
enters the clearing document number and clearing date in these open items.
Besides the clearing document, the system may also generate ‘additional documents’ in
cases such as partial or residual processing, and for posting the loss/gain to the assigned GL
account.
Q-28) What are the steps involved to perform Period Closing in SAP?
A:- You do a ‘(Period) Closing’ in SAP in three steps:-
Completing the Pre-closing activities♦
Financial Closing♦
Managerial Closing♦
Q-29) What do we mean by Pre-Closing activity?
A:- You need to ensure the following as part of the ‘Pre-closing’ activities:
1. Post all the Recurring Entries for expenses and accruals.
2. Ensure that all the interfaced programs have been run so that the required data have
been transferred to the system.
3. Post all the depreciation, material receipts, invoices, salaries, etc. In short, ensure that all
the transactions for the period in question have been duly recorded and posted
into the system.
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Q-30) How do we perform a Financial Closing?
A:- ‘Financial Closing’ involves completing the following activities and taking out the financial
statements for the period concerned:
1. Revaluate/Regroup:
♦ Revalue Balance Sheet items managed in foreign currencies
♦ Clear Receivables or Payables with the ‘exchange rate difference.’
♦ Valuate all the Open Items using the report SAPF100.
♦ Regroup GR/IR using the program RFWERE00 to allocate the net balance
2. Ensure accounting accuracy:
Use the program SAPF190 to compare the totals created by the system in the (1) indexes
(customers, vendors, and GL) and documents (customers, vendors, and GL) with that of the (2)
account balances (customers, vendors, and GL) to ensure the transaction accuracy.
3. Run required reports:
Generate the financial statements (balance sheet and profit & loss account) using the
financial statement versions. You may also generate the key figure/ ratio reports (use the GL
account information system).
Q-31) What is meant by Financial Statement Versions? What are the items in FSV?
A:- A ‘Financial Statement Version’ helps to define the Financial Statements (both the Balance
Sheet and Profit & Loss statements). When you copy the settings from an existing Company Code
to a new one, you will also be copying the financial statement version defined for the ‘source’
Company Code.
Irrespective of the details you require in a ‘Financial Statement Version,’ it is mandatory
that you
have, at least, the following items defined:
1. Assets
2. Liabilities
a. Net Result: Profit
b. Net Result: Loss
3. P/L result (during annual closing, when you run the program RFBILA00, the system
calculates the profit or loss by subtracting the ‘total liabilities’ from ‘total assets’ and updates the
relevant Net Result item—Profit or Loss).
4. Not assigned (posted amounts but not yet assigned to any of the account groups).
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Q-32) Explain Annual Closing in SAP
A:- ‘Annual Closing’ is like any other ‘period closing’ and you will be performing all the activities
that
are required for a period-end-close. In addition to those activities, you will also:
▪ Carry forward Vendor and Customer accounts
▪ Carry forward the GL account balances of all the Balance Sheet items
▪ Close the Profit & Loss Accounts and carry forward the balance (profit or loss) to the
retained earnings account(s)
For a GL account ‘carry forward,’ use the program SAPF011.
Q-33) How is this different from Managerial closing?
A:- In ‘Managerial Closing’ you will :-
▪ Do a preliminary Controlling period closing
▪ Settle/re-allocate costs across Controlling organization
▪ Draw and review internal reports
▪ Re-open the Controlling period
▪ Correct and adjust the accounting data, if required
▪ Reconcile FI and CO by running the FICO Reconciliation Ledger
▪ Run re-adjustment programs to ensure that the Business Areas and the Profit Centers
are balanced
▪ Draw reports and analyze
Q-34) Explain the New FI-GL in ECC.
A:- The traditional or ‘Classic FI-GL accounting’ in FI has been focused on providing comprehensive
external reporting by recording all business transactions in the system. However, to meet modern-
day requirements, this has now been enhanced, called the ‘New FI-GL,’ and includes the
following:-
♦ Parallel accounting:- Maintaining several parallel ledgers to meet different accounting
principles.
♦ Integrated legal and management reporting:- Unlike the traditional GL, the ‘New FI-GL’
enables you to perform internal management reporting along with legal reporting. So you are in a
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position to generate Financial Statements for any dimension (for example, profit center) in the
business.
♦ Segment reporting:- With the introduction of the Segment dimension, SAP now enables you
to produce Segment Reports based on IFRS (International Financial Reporting Standards) and the
GAPP (Generally Accepted Accounting Principles) accounting principles.
♦ Cost of sales accounting:- It is now possible to perform cost of sales accounting in the ‘New FI-
GL.’
**********************************************************************************
Questions on conceptual understanding: Q-a) SAP R/3 definition and 3-Tier Architecture
A:- SAP R/3 is based on a 3-tier Client-Server model, represented by the:
♦ Database Layer
♦ Application Layer
♦ Presentation Layer
In a 3-tier Client server model, all the above three layers run on three different machines.
The Database Layer consists of an RDBMS (Relational Database Management System), which
accepts the database requests from the Application Layer, and sends the data back to the
Application Layer, which in turn passes it on to the Presentation Layer.
The Application Layer or the server interprets the ABAP/4 programs, receiving the inputs from
them and providing the processed output to them.
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The Presentation Server or ‘Presentation Layer’ is what is installed on the typical workstation of a
user. This is nothing but the SAPGUI, which when started provides the user with the interface of
SAP R/3 menus. This interface accepts the inputs from the user, passes them on to the Application
Server, processes the inputs and sends back the output. If database processing is required, the
Application Server sends the details to the Database Layer, receives the data, and then processes
it at the Application Layer level and sends back the output to the Presentation Layer where the
SAPGUI may format the data before displaying it on the screen.
Q-b) 'Real time integration' advantage of SAP
A:- Real time integration is nothing but the data posting to all the affected areas instantly when
an activity is performed. For E.g. When you do a FI-SD integration, when a PGI is posted, the
following entry is affected
1. Cost of Goods Sold Dr 100
To Inventory Account Cr 100
Here the Cost of Goods Sold is an FI entry and Inventory Account related to MM but both
of them gets affected immediately when you post a PGI in SD.
The updation of these entries when PGI is done is called Real Time Integration. The affect is
shown in all FI, MM and SD modules once you save the entry.
Q-c) ASAP methodology
A:- ASAP stands for Accelerated SAP. Its purpose is to help design SAP implementation in the most
efficient manner possible. Its goal is to effectively optimize time, people, quality and other
resources, using a proven methodology to implementation. ASAP focuses on tools and training,
wrapped up in a five-phase process oriented road map for guiding implementation.
The road map is composed of five well-known consecutive phases:-
• Phase 1 - Project Preparation
• Phase 2 - Business Blueprint
• Phase 3 - Realization
• Phase 4 - Final Preparation
• Phase 5 - Go-Live and support
Q-d) Solution Manager
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A:- The SAP Solution Manager supports you throughout the entire lifecycle of your solutions, from
the Business Blueprint thru configuration to production operation. It provides central access to
tools methods and preconfigured content, that you can use during the evaluation,
implementation, and productive operation of your systems.
Q-e) Client / Company / Company Code / Business Area
A:- A ‘Client’ is the top-most organizational structure, which has its own set of master records. A
Client is denoted by a 3-character alphanumeric code in SAP, and is a mandatory element. The
settings made at the Client level, data maintained, etc., are available across all the Company
Codes. A Client should have at least one Company Code defined.
SAP comes delivered with Clients 001 and 002, which contain all the default settings.
Usually, copying from the default Clients creates additional and new Clients.
Typically, in SAP, you will have different ‘types’ of Clients; namely:
1. Development Client
2. Test Client
3. Production Client
A ‘Company’ in SAP is represented by a 6-character alphanumeric code and usually
represents the enterprise or the group company. A Company can include one or more Company
Codes. The creation of a Company, in SAP, is optional.
A ‘Company Code’ in SAP is the smallest organizational unit for which you can draw
individual Financial Statements (Balance Sheet and Profit & Loss Account) for your external
statutory reporting. It is denoted by a 4-character alphanumeric code.
‘Business Areas’ correspond to specific business segments of a company, and may cut
across different Company Codes (for example, product lines). They can also represent different
responsibility areas (for example, branch units). The Business Areas are optional in SAP.
Q-f) Business Area vs Profit Center Approach
A:- Business area is an organisational unit which corresponds to the specific business segment or
area of responsibility. Identification of business area helps in segment reporting of a company in
its financial statements. Business areas can be identified based on the products of the company or
based on geographical area.
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Profit centers are internal areas of a company that have the responsibility for achieving
target profits or productivity goals.
The objective of business area is more for reporting purposes whereas profit center allows
to analyse areas of responsibility and to delegate responsibility to decentralised units (eg., the
various divisions within a company). Thus, profit center are basically treated as "companies within
a company" and ensures effective control.
Q-g) How effective will be the Financial Statements generated through Business
Areas ?
A:-
Q-h) With Holding Taxes vs Extended WHT
A:- Withholding tax is calculated and posted to the appropriate withholding tax accounts at
different stages, depending on the legal requirements in each country. As a rule, withholding tax is
posted at the same time that the payment is posted, in other words the outgoing payment
(Accounts Payable) or incoming payment (Accounts Receivable), is reduced by the withholding tax
amount.
In certain countries, such as Brazil, the Philippines, and Spain, withholding tax can or must
be posted when the invoice is posted. This means that the amount receivable or payable is
reduced by the withholding tax amount. Extended withholding tax supports both concepts.
The key concept in Extended withholding tax is the distinction between withholding tax
type and withholding tax code. While withholding tax types represent basic calculation rules,
specific features of these rules - in particular the percentage rate - are represented by the
withholding tax code. You can define any number of withholding tax codes for a given withholding
tax type.
Q-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)
A:- You have to define field status outside of the master record. Mark the field status you need
for each field or field group under a field status group. Then assign the field status group to
individual G/L accounts in the G/L account master records.
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Field status groups are independent of company code, attaching instead to the field status
variant. A separate variant exists in each company code for field status groups in the standard
delivered system. The variant name is the same as the company code, and each company code is
assigned to this variant.
Q-j) Special G/L transactions
A:- ‘Special GL Transactions’ are not directly posted to the GL (Reconciliation Accounts) though
these are related to sub-ledger accounts such as AR/AP. The transactions to these accounts are
shown separately in the balance sheet. There are specific posting keys/indicators defined in the
system to regulate the postings to these items.
You need to specify a Special GL Indicator (such as a F-Down Payment Request, A-Down
Payment) for processing such a transaction. And the system will make use of the specially defined
posting keys (09-customer debit, 19-customer credit, 29-vendor debit, and 39-vendor credit) for
posting these special GL transactions.
There are three types of Special GL transactions:-
▪ Free Offsetting Entries (Down Payment)
▪ Statistical Postings (Guarantee)
▪ Noted Items (Down Payment Request)
Q-k) Open item management
A:- Open item means the line item is open and it’s not cleared by a clearing transaction i.e. it’s an
unfinished transaction. This allows us to check whether a particular vendor transaction has been
paid or not. If it’s paid then the item should not show as an open item as the net impact of both
the transaction is zero. At a particular point, the balance of an open item managed account is the
sum of all the open items of that account.
When these open items are cleared with an exact amount the system gives a clearing
document number and a date of the clearing.
Q-l) Reconciliation Accounts
A:- A SAP reconciliation account is a general ledger account that receives postings from subsidiary
ledgers. A ledger is a two-faceted accounting form that enables bookkeepers to record
transactions by posting debits and credits in financial accounts. A general ledger has multiple
subsidiary ledgers.
For example, a corporate accounts receivable general ledger may have three subsidiary
ledgers related to Customer A, Customer B and Customer C. Financial accounts are assets, 34
liabilities, expenses, revenues and equity items.
Answer-2 : Reconciliation account is a sub-ledger account with in the general ledger account. The
reconciliation account in G/L accounting is the account which is updated parallel to the sub-ledger
account for normal postings (for example, invoice or payment).
For special postings (for example, down payment or bill of exchange), this account is replaced
by another account (for example, 'down payments received' instead of 'receivables'). The replacement
takes place due to the special G/L indicator which you must specify for these types of postings.
*The reconciliation accounts are maintained in the master record of customers/vendors, so that all
postings made to subsidiary ledger are also posted to the G/L. when the items are posted to
subsidiary ledger the sap system automatically posts the same data to the G/L a/c's via.
Reconciliation a/c in the G/L.
Q-m) Subsidiary Ledgers
A:- Special or supporting ledger (such as cost ledger, purchases ledger, sales ledger) that provides
more detailed information about individual accounts than a general ledger. Used by firms with
larger number of customers (or creditors), these ledgers divide masses of financial data into more
manageable parts. Total of all individual accounts in a subsidiary ledger equals the balance of the
corresponding summary account (called control account) in the general ledger.
A-2 :- Subsidiary ledgers are used as a per-account summary for the multiples of a particular
transaction. Maintaining subsidiary ledgers for each multiple allows for traceability of data in
an accounting system. In addition, it provides a summary of the accounting entries involving
each creditor’s or borrower’s account. This would serve as ready references in determining
how much is yet to be paid to the creditor or how much is yet to be received from the
borrower.
Q-n) Sort key
A:- Sort Keys are used to populate the Assignment number field in the line items of customers or
vendors or general ledgers.
The content of this Assignment number field can be populated in a customer or vendor or
general ledger document when the document is created:
either manually
or automatically by the system
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Whenever a document is created, the Assignment number field in the document line items
will be populated automatically, if the requisite sort keys are assigned to the customers or vendors
or general ledgers master record.
Sort keys are stored in customer, vendor and GL master records. They determine what
value is populated in the ‘assignment’ field in the document line items posted. There are
several standard entries in a pre-delivered SAP system and additional entries can be
configured if required.
Q-o) Negative Postings Allowed
A:- Reverse and adjustment postings can also be marked as negative postings. Negative postings
are used to reduce the transaction figures in G/L, customer, and vendor accounts. This allows you
to give the transaction figures (following the reversal) the status they would have had without
posting the reversed document and its reversal document. This type of reversal is called a negative
posting.
Q-p) Special periods
A:- Special posting periods that subdivide the last regular posting period for closing operations.
Besides the normal posting periods, SAP allows for defining a maximum four more posting periods,
which are known as Special Periods as these are used for year-end closing activities. This is
achieved by dividing the last posting period into more than one (maximum four) period. However,
all the postings in these special periods should fall within the last posting period.
Example: Take fiscal year with 12 posting periods and 4 special periods. If the posting date
falls in the 12th period, the transaction can instead be posted in one of the four special periods.
The special periods cannot be determined automatically by the system based on the
posting date of the document. The special period needs to be manually entered into the ‘posting
period’ field in the document header.
Q-q) Only balances in local currency
A:- Indicates that balances are updated only in local currency when users post items to this
account. You would set this indicator for accounts in which you do not want the system to update
transaction figures separately by currency. Setting this indicator for accounts managed on an open
item basis affects the clearing procedures. Set the indicator in cash discount clearing accounts and
GR/IR clearing accounts. It cannot be set in reconciliation accounts for customers or vendors.
Setting it in all other instances is optional.36
When creating a G/L account in a company code, you can decide whether the transaction
figures should only be kept in the local currency for this account.
You have to set this indicator for clearing accounts you use to clear line items in various
currencies with one local currency amount and without posting any exchange rate differences that
may occur.
Q-r) Important Posting keys for G/L, A/R, A/P, AA, Stock Entries
A:- Two-character numerical key that controls the entry of line items. The document type specifies
which account types you can post to. The posting key specifies which account types you can post
to. A posting key can only be entered for an account type which is permitted for that document
type.
As well as the predefined posting keys in the standard system, you can also define your
own keys in Customizing. To do this, proceed as follows in Customizing: Financial Accounting
Financial Accounting Global Settings Document Line Item Controls Define Posting Keys.
1-19 = customer
20-39 = Vendor
40 & 50 = GL
70 - Debit Asset
75 - Credit Asset
Posting key Name Debit/Credit Account type
21 Credit memo Debit Vendor
22 Reverse invoice Debit Vendor
24 Other receivables Debit Vendor
25 Outgoing payment Debit Vendor
26 Payment difference Debit Vendor
27 Clearing Debit Vendor
28 Payment clearing Debit Vendor
29 Special G/L debit Debit Vendor
31 Invoice Credit Vendor
32 Reverse credit memo Credit Vendor
34 Other payables Credit Vendor
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35 Incoming payment Credit Vendor
36 Payment difference Credit Vendor
37 Other clearing Credit Vendor
38 Payment clearing Credit Vendor
39 Special G/L credit Credit Vendor
Posting key Name Debit/Credit Account type
01 Invoice Debit Customer
02 Reverse credit memo Debit Customer
03 Bank charges Debit Customer
04 Other receivables Debit Customer
05 Outgoing payment Debit Customer
06 Payment difference Debit Customer
07 Other clearing Debit Customer
08 Payment clearing Debit Customer
09 Special G/L debit Debit Customer
11 Credit memo Credit Customer
12 Reverse invoice Credit Customer
13 Reverse charges Credit Customer
14 Other payables Credit Customer
15 Incoming payment Credit Customer
16 Payment difference Credit Customer
17 Other clearing Credit Customer
18 Payment clearing Credit Customer
19 Special G/L credit Credit Customer
Posting key Name Debit/Credit Account type
40 Debit entry Debit G/L account
50 Credit entry Credit G/L account
70 Debit entry Debit Asset
75 Credit entry Credit Asset
Q-s) Assessment vs Distribution
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A:- Assessment and distribution of relevant overhead costs is performed at period closing (actual
data) or plan closing (plan data). This is usually done directly in CO. It is then reflected in the data
in Profit Center Accounting.
Assessment is made using a special cost/revenue element.
In distribution, the original cost/revenue element/account number is retained.
Distribution : The following information is passed on to the receivers:-
♦ The original, primary, cost element is retained.
♦ Sender and receiver information is documented with line items in the CO document
Assessment : The following information is passed on to the receivers:-
♦ The original cost elements are grouped together into assessment cost elements
(secondary cost elements).
♦ The original cost elements are not displayed on the receivers.
♦ Sender and receiver information is displayed in the CO document.
Q-t) Org. Structure for FI
A:- Client
|
Operating Concern
|
Controlling area 1 Controlling Area 2
|
Company Code 1 Company Code 2
|
Business area 1 Business area 2 Business Area 3
Q-u) Org. Structure for CO
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A:- Business process associated with the SAP CO module:-
Subcomponents of the SAP Controlling (SAP CO) Module:
CO-OM - Overhead Management
- CO-OM-CCA - Cost Center Accounting
- CO-OM-OPA - Internal Order Accounting
- CO-OM-CEL - Cost Element Accounting
- CO-OM-ABC - Activity Based Costing
CO-PCA - Profit Center Accounting
CO-PA - Profitability Analysis
CO-PC - Product Costing
Q-v) Product Costing: How the values flow in the system
A:-
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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
######################################
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Finance TerminologyClient: In commercial, organizational and technical terms, a self-contained unit in an R/3 System with separate master records and its own set of tables.Company Code: The smallest organizational unit of Financial Accounting for which a complete self-contained set of accounts can be drawn up for purposes of external reporting.Business Area: An organizational unit of financial accounting that represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated.Enterprise structure: A portrayal of an enterprise's hierarchy. Logical enterprise structure, including the organizational units required to manage the SAP System such as plant or cost center.Social enterprise structure, description of the way in which an enterprise is organized, in divisions or user departments. The HR application component portrays the social structure of an enterprise
41
fiscal year variant: A variant defining the relationship between the calendar and fiscal year. The fiscal year variant specifies the number of periods and special periods in a fiscal year and how the SAP System is to determine the assigned posting periods.Fiscal Year: A period of usually 12 months, for which the company produces financial statements and takes inventory.Annual displacement/Year shift: For the individual posting periods various entries may be necessary. For example, in the first six periods the fiscal year and calendar year may coincide, whereas for the remaining periods there may be a displacement of +1.Chart of Accounts: Systematically organized list of all the G/L account master records that are required in a company codes. The COA contains the account number, the account name and control information for G/L account master record.Financial statement version: A hierarchical positioning of G/L accounts. This positioning can be based on specific legal requirements for creating financial statements. It can also be a self-defined order.Account group: An object that attributes that determine the creation of master records. The account group determines: The data that is relevant for the master record A number range from which numbers are selected for the master records.Field status group: Field status groups control the additional account assignments and other fields that can be posted at the line item level for a G/L account.Posting Key: A two-digit numerical key that determines the way line items are posted. This key determines several factors including the: Account type, Type of posting (debit or credit),Layout of entry screens .Open item management: A stipulation that the items in an account must be used to clear other line items in the same account. Items must balance out to zero before they can be cleared. The account balance is therefore always equal to the sum of the open items.Clearing: A procedure by which the open items belonging to one or more accounts are indicated as cleared (paid).Reconciliation account: A G/L account, to which transactions in the subsidiary ledgers (such as in the customer, vendor or assets areas) are updated automatically.Special G/L indicator: An indicator that identifies a special G/L transaction. Special G/L transactions include down payments and bills of exchange.Special G/L transaction: The special transactions in accounts receivable and accounts payable that are shown separately in the general ledger and sub-ledger.They include:
Bills of exchange
Down payments
Guarantees
House Bank: A business partner that represents a bank through which you can process your own internal transactions.Document type: A key that distinguishes the business transactions to be posted. The document type determines where the document is stored as well as the account types to be posted.Account type: A key that specifies the accounting area to which an account belongs.Examples of account types are:
Asset accounts
Customer accounts
Vendor accounts
G/L accounts
Dunning procedure: A pre-defined procedure specifying how customers or vendors are dunned.For each procedure, the user defines
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Number of dunning levels
Dunning frequency
Amount limits
Texts for the dunning notices
Dunning level: A numeral indicating how often an item or an account has been dunned.Dunning key: A tool that identifies items to be dunned separately, such as items you are not sure about or items for which payment information exists.Year-end closing: An annual balance sheet and profit and loss statement, both of which must be created in accordance with the legal requirements of the country in question.Standard accounting principles require that the following be listed:
All assets
All debts, accruals, and deferrals
All revenue and expenses
Month-end closing: The work that is performed at the end of a posting period.Functional area: An organizational unit in Accounting that classifies the expenses of an organization by functions such as:
Administration
Sales and distribution
Marketing
Production
Research and development
Classification takes place to meet the needs of cost-of-sales accounting.Noted item: A special item that does not affect any account balance. When you post a noted item, a document is generated. The item can be displayed using the line item display. Certain noted items are processed by the payment program or dunning program - for example, down payment requests.Accrual and deferral: The assignment of an organization's receipts and expenditure to particular periods, for purposes of calculating the net income for a specific period.A distinction is made between:
Accruals -
An accrual is any expenditure before the closing key date that represents an expense for any period after this date.
Deferral -
Deferred income is any receipts before the closing key date that represent revenue for any period after this date.Statistical posting: The posting of a special G/L transaction where the offsetting entry is made to a specified clearing account automatically (for example, received guarantees of payment).Statistical postings create statistical line items only.Valuation area: An organizational unit in Logistics subdividing an enterprise for the purpose of uniform and complete valuation of material stocks.Chart of depreciation: An object that contains the defined depreciation areas. It also contains the rules for the evaluation of assets that are valid in a specific country or economic area. Each company code is allocated to one chart of depreciation. Several company codes can work with the same chart of depreciation. The chart of depreciation and the chart of accounts are completely independent of one another.Asset class: The main criterion for classifying fixed assets according to legal and management requirements.For each asset class, control parameters and default values can be defined for depreciation calculation and other master data.
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Each asset master record must be assigned to one asset class.Special asset classes are, for example:
Assets under construction
Low-value assets
Leased assets
Financial assets
Technical assets
Depreciation area: An area showing the valuation of a fixed asset for a particular purpose (for example, for individual financial statements, balance sheets for tax purposes, or management accounting values).Depreciation key: A key for calculating depreciation amounts.The depreciation key controls the following for each asset and for each depreciation area:
Automatic calculation of planned depreciation
Automatic calculation of interest
Maximum percentages for manual depreciation
The depreciation key is defined by specifying: Calculation methods for ordinary and special depreciation, for interest and for the cutoff
value
Various control parameters
Period control method: A system object that controls what assumptions the system makes when revaluating asset transactions that are posted partway through a period.Using the period control method, for example, you can instruct the system only to start revaluating asset acquisitions in the first full month after their acquisition.The period control method allows different sets of rules for different types of asset transactions, for example, acquisitions and transfers.Depreciation base: The base value for calculating periodic depreciation.The following base values are possible, for example:
Acquisition and production costs
Net book value
Replacement value
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