SAP Financials and Controlling FAQ's

SAP FINANCIALS & CONTROLLING FAQ’S Prepared By: Ms.Pramila Nagaraj First Class MBA Finance Graduate (2009-10) Global Academy of Technology, Bangalore (VTU- Belgaum) Trained up in SAP FICO @ SAPTAC Bangalore (FRESHER)

© 2010-2012 ALL RIGHTS RESERVED SAPTAC BANGALORE


SAP Finance FAQs - SAP Financial System 1. What are the two major areas within the SAP environment? Describe each.

(1) Configuration – Maintenance of settings in the system to support customized

business requirements of the client.

(2) Application – On going processes required to record and report business activity.

2. What are the two methods available for accessing the configuration functions in FI?

Describe each.

• Implementation Guide (IMG) – leads you through the steps required for configuration

in an implementation.

• Transaction codes – takes you directly to the first screen of a transaction without the

use of the IMG or menu paths.

3. What are the four configuration areas of the IMG? Describe each.

• General Settings – non-application dependent specifications

• Enterprise Structure – definition of organizational units and their relationships

• Cross-applications component

• Functional Areas (e.g., Financial Accounting, Sales and Distribution)

4. Give examples of activities performed on the configuration side in SAP? On the

application side in SAP?

Configuration:

• Create Organizational structures

• Define foreign currencies

• Define financial statements

• Outline Credit Management functionality

Application:

• Post Accounting transactions

• Post Customer Invoice

• Post Vendor Invoice

• Create Master records

• Process financial statements

• Display accounting documents

5. What are three major components of Customizing?

• Implementation Guide

• Basic Functions

• Procedure Model

6. What is the SAP Procedure Model?

Provides planning basics for an implementation project and describes the different

phases of the SAP implementation for all applications (SAP’s implementation

methodology).


7. What are the phases (4) in the SAP Procedure Model?

• Organization and Conceptual design

• Detailed design and set-up

• Preparations for going live

• Productive Operation

8. What does the menu path: System>Status do?

It gives the transaction code and other identifying information for the current (active)

transaction.

9. What is the highest level of information in SAP? Where is this configured?

General Settings, which is configured in the IMG

10. What are the tables that are configured under global settings?

Calendar, Units of Measure, Country Table, and Currency & Exchange Rate Table

11. Who is usually responsible for establishing the organizational structure on an

implementation?

FI/CO Team

12. What are some examples of units set up under organizational structure?

• Company Code

• Business Area

• Credit Control Area

• Functional Area

13. What is meant by “cross-application” components in the IMG?

Cross-application components encompass all areas of configuration that are not specific

to one application. They are used across the functional modules. Examples include:

• Document Management

• Documentation Tools

• ALE

• EDI

14. What are the three versions of the IMG? Describe each.

• Reference IMG: Complete Version

• Enterprise IMG: Subset of the Reference IMG that includes all modules to be

implemented for a specific organization.

• Project IMG: Subset of the Enterprise IMG based on the individual projects or areas

within an implementation


15. What is the correction and transport system? Who operates this system?

The Correction and Transport System provides a method to move configuration and

program code from system to system or Client to Client. It would be used to move

customized data from a development system to a test system, and then to a production

system. The Correction and Transport System is usually operated by the System

Administrator.

SAP Finance FAQs – SAP FI Introduction 1. What is the SAP Financial Accounting (FI) module?

The SAP Financial Accounting (FI) Module provides integrated, on-line, real-time

functionality for processing, recording and maintaining the financial accounting

transactions of the business for external reporting purposes.

2. List and describe sub-modules of FI?

Accounts Receivable (A/R) – sub-module where customer transactions are recorded and

administered within FI.

Accounts Payables (A/P) – sub-module where vendor transactions are recorded and

administered within FI.

General Ledger (G/L) – sub module where financial accounting data for a legal entity is

recorded.

Special Ledger (S/L) – provides summary information from multiple applications at a

level of detail that the user defines that provides summary information from multiple

applications at user defined levels.

Asset Accounting (AA)- encompasses the entire lifetime of the assets from purchase

order or the initial acquisition through retirement. To a large extent the system

automatically calculates the values for depreciation, interest, insurance.

Legal Consolidations: (FI-LC) is the sub-module with the central task of combining the

financial operating results of the companies within a group to provide overall results for

the group.

Funds Management: (FI-FM) is the sub-module that supports financial checking and

control using budgeting techniques.

Travel Management (FI-TM): processes business trip and expense data. It may be

integrated with HR (Personnel Data and Payroll).

3. Describe the SAP concept of “Integration.”

Integration is the process by which data entered in one module is used by or updates

another module on a real-time basis.

4. The General Ledger receives simultaneous postings from which other sub modules

within FI?

The Accounts Receivable (FI-AR), Accounts Payable (FI-AP), and Asset Accounting (FI-AA)

modules.


5. FI-AR is closely integrated with which other module(s) within SAP? Which cycle does

this support?

The Accounts Receivable (FI-AR) module is closely integrated with the Sales &

Distribution and Material Management modules. FI-AR supports the Sales cycle

6. FI-AP is closely integrated with which other module(s) within SAP? Which cycle does

this support?

The FI-AP module is a closely integrated with the Materials Management (MM) module.

The Accounts Payable module supports the Procurement Cycle.

7. List (3) features of the FI-GL module.

• Multiple currency capability

• Flexible real-time reporting

• Real-time transaction entry

8. Cash Management is a sub-module of which module?

Treasury module

9. Can depreciation be processed from Asset Accounting sub-module directly to the FI

and CO Modules?

Yes


SAP Finance FAQs 1. Define the major organizational hierarchy elements within the Financial Accounting

module and explain the relationship between each of them.

The hierarchy, from the highest organizational unit to the lowest, is the Client, Chart of

Accounts (COA), Company Code and the optional Business Areas (BA). Two other

optional areas include the Dunning Area and the Credit Control Area (CCA). Credit

Control Areas come above the Company Code, and Dunning Areas come below the

Company Code. There is only one Client and its values are the same across all Company

Codes that are attached to it. Every Company Code is a legal independent entity.

Business Areas can be shared among Company Codes (many-to-many relationship) and

they are used for internal reporting purposes. Each Company Code is assigned a COA.

The COA may be the same for multiple Company Codes, but each Company Code may

only use one COA.

2. What is the highest hierarchy level in SAP? Define this term and explain how it is used

in the SAP system.

The Client is the highest level in the SAP organizational structure. Anything specified for

a Client applies to all Company Codes that are attached to that Client. Clients have a

one-to-many relationship with Company Codes. Clients are generally not reported on

with balance sheet and P&L’s, the company codes are the legal entities and serve for this

purpose. However, clients can be reported on as part of consolidation or extended G/L.

3. Explain the relationship between company code, business areas and financial

statements.

A Company Code represents an independent legal entity that is required by law to issue

financial statements (Balance Sheet and P&L Statement). Business Areas are defined

independently of Company Codes and can be shared across Company Codes. Internal

Balance Sheets and P&L Statements can be generated by Business Area though they are

not required.

4. Discuss three benefits of the SAP organizational structure.

• It gives flexibility to reflect complex organizational structures

• It helps to consider future changes in the organizational structure

• It is clearly defined into logistical (sales, purchasing) and financial views (cost

accounting, financial accounting).

5. Can you report on business areas across companies? If so, explain how this is

accomplished conceptually in the system.

Yes, because BA’s are defined independent of company codes. They can be added to the

detail of a line item in a document, thus enabling the system to keep track of business

area information for reporting and controlling purposes.

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6. What is a credit control area? Describe its relationship to company codes?

A credit control area (CCA) is used to set and control credit limits for customers. They

include one or more company codes. There can only be one CCA per company code.

Customers in several company codes can exist under several CCA’s. As part of credit

management, an individual customer’s credit limit is set based on an individual credit

control area or across several credit control areas.

7. The chairman of the P&W Holding Co. wants to link each of his four company codes

to three dunning areas and two credit control areas. Can this be done? Why or why not?

Technically, an individual company code can only be assigned to one credit control area;

however, a list of allowable credit control areas may be created. A company code can

have multiple dunning areas.

8. Where does the chart of accounts fall in the FI organizational structure?

Under Client and above company code.

9. How many chart of accounts can be assigned to one company code?

Only one

10. How many company codes can be assigned to one chart of accounts?

Many

11. What is dunning?

The process of automatically notifying and requesting payment from customers with

past due invoices.

12. How many dunning areas can a company code have?

Many

13. How many company codes can a dunning area have?

Many


SAP Finance FAQ’s

1. When setting up company code global parameters, what are the general data the

configurer will need to define? What are the global data the configurer will need to

define?

General Data

o Company Code

o Company Name

o City

o Currency

o Country Key

o Language

Global Data

o Chart of Accounts

o Credit Control area

o Fiscal year variant

o Field status variant

o Posting Period Variant

2. Explain the copy function in SAP when creating a new company code.

The copy function can be used to partially copy a company code by allowing the

configure to select specific data desired.

3. Explain what is meant by the “deletability” check performed by SAP before a company

code is deleted?

SAP performs a “deletability” check before processing the activity, “Delete Company

Code.” If the company code meets the delete conditions (e.g., there is no

linked/dependent data from other areas), the process may proceed.

4. What happens when the company code does not meet delete conditions?

The user will be informed that there is dependent data in the system that must be

deleted before the company code can be deleted.

5. During an interview, you learn that your client uses 12 normal posting periods during the

year, and 4 special periods for year-end adjustments. Where is this configured in SAP?

The number of normal posting periods and the number of special periods for year-end

adjustments are defined in the Fiscal Year Variant in SAP.

6. In a follow up meeting, your client decides they would like to use 12 normal periods and

5 special periods instead. What would you (as a consultant) recommend? Why?

SAP does not allow the sum of the normal posting periods and the special periods to

exceed 16. When there are more than 16 periods required, the Special Purpose Ledger

with up to 366 posting periods may be used.

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7. Now assume your client indicates they are on a July-June fiscal year. How and where is

this configured?

To define a fiscal year (which differs from a calendar year) in SAP, you must specify the

last day of each individual posting period and indicate that the fiscal year differs from

the calendar year. On the other hand, when the fiscal year does represent the calendar

year, each calendar month corresponds to a posting period.

8. Your client indicates they would not like the “cost center” field to appear when a user

enters a general ledger posting to an asset account. They would, however, like the cost

center to be required when a user makes a GL posting to an expense account. Where is

this configured?

The field status group defines what fields will be suppressed (do not appear), required

(must enter value during document creation), or optional for a specific type of account.

A collection of field status groups makes up a field status variant. The field status variant

is tied to a company code in the “company code global parameters” in the IMG.

Note: Suppressing a field will not cause it to be invisible in an Enjoy posting. The screen

variant is necessary to actually hide a field from view.

9. After month-end close, your client would like the ability to close (restrict document

entry) the prior period and open the next period for postings. Where is this done in the

SAP? Can this be controlled based on individual account types (e.g. G/L Accounts,

Customer Accounts, Vendor Accounts)?

A posting period variant controls the status (open or closed) of posting periods for

document creation and maintenance. It can also control the posting status by account

types and ranges of accounts within account types. Posting Period Variants make it

possible to maintain the status of Posting Periods independent of the Company Code

(one Posting Period Variant can be assigned to multiple company codes). The Posting

Period Variant is assigned to a company code in the “Company Code Global Parameters”

in the IMG.

10. What is an account type?

An account type specifies the accounting area to which an account belongs

11. What are the account types used in the FI module?

S = General Ledger

D = Customers

K = Vendors

A = Assets

12. How would you specify a posting period to be valid for all account types?

Account type “+” is used to specify for all account types.


SAP FI FAQs - Special Topics of Financials 1. Answer True or False to the following:

True/False. Multiple currencies may be used within a single cash journal.

True/False. A company code may have may cash journals.

True/False. The cash journal balance may be negative.

2. List the types of tasks you can perform using Schedule Manager.

• Worklists (via workflow)

• Background jobs

• Online (real-time) jobs

• Transactions

• Text reminders

3. Answer True/False to the following:

True/False. In order to use Travel Management, the HR module must be implemented.

False, SAP provides a mini-master record that can be used by FI when HR is not

implemented.

True/False. You must enter a Travel Request and Travel Plan before you can submit an

Expense Report.

False, Travel Requests and Travel Plans are optional functions in Travel Management.

They provide additional travel information that is not necessary for reimbursements.

True/False. The vendor payment program is used to reimburse employees.

True, the payment program processes expense reimbursements using the vendor master

records that are created for each employee.

4. List the components of the mini-master record.

• Personnel actions

• Organizational assignment (of the employee)

• Personal information

• Addresses

• Bank Details

• Travel privileges

• Travel preferences

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SAP FI FAQs – Automatic Account Assignment 1. The level at which valuation should take place should be determined early in the

project. Once the level is set, it cannot be changed.

True or False

2. Which is not an example of Valuation Class?

(a) Finished Products

(b) High priced labor

(c) Raw Materials

(d) Semi-Finished Products

3. The _________ results in the creation of an invoice sent to the customer.

Billing Document

4. List three prerequisites for configuring automatic assignments

• Maintain the Chart of Accounts

• Assign Plants to a Company Code.

• Maintain the necessary Material Types.

5. _________ is the level at which material valuations are carried out. It corresponds to

either a single plant or all plants within a company code.

Valuation Area

6. The valuation class allows the user to group together materials with similar

properties so they can be managed under the same stock account.

True or False

7. The billing document results in the creation of an invoice sent to the customer. This

is a major integration point between the Production Planning Module and the Financial

Accounting Module?

True or False

False. The billing document results in the creation of an invoice sent to the customer.

However, this is a major integration point between the Sales and Distribution and the

Financial Accounting Module.

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SAP FI FAQs – Procurement Cycle and Documents

1. Name the five major activities (in the order they occur) in the Procurement Cycle.

• Purchase Requisition (MM)

• Purchase Order (MM)

• Goods Receipt (MM)

• Invoice Verification (MM)

• Vendor Payment (FI)

2. What is a Purchase Requisition?

A Purchase Requisition is a document that identifies an organization’s demand for a

product or service from an outside vendor. It is an internal document (i.e., it is not visible

to the vendor or any other outside organization).

3. What are the two ways a Purchase Requisition can be created?

• Automatically as a result of a Materials Requirements Planning (MRP) run.

• Manually by a user.

4. What is a Purchase Order?

A Purchase Order is a legal contract between a buyer and a vendor. It lists the materials

or services to be purchased on specified terms and conditions (quantity, price / pricing

conditions, delivery date).

5. Name the four steps necessary for creation of a Purchase Order.

• Source Determination

• Vendor Selection

• Purchase Order Processing

• Purchase Order Follow-Up

6. What are the different types of goods movements?

Goods receipts, goods issues, and transfer postings.

7. What is Invoice Verification?

Invoice verification is the process of matching Vendor Invoices to the Purchase Order

and Goods Receipt documents. For matched vendor invoices, a payable is automatically

created in the FI General Ledger.

8. How is the Payment Program used to make Vendor Payments?

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The Payment Program is set to maximize cash discounts when paying open vendor

items. It creates a list of proposed vendor items to be paid and suggests payment

methods for each proposed payment. The user has the ability to make any changes

before payments are made.

Note: The payment program selection strategy (e.g., maximization of cash discounts) is

configurable.

9. Name the three different types of Materials Management documents.

• Order documents

• Goods receipt documents

• Invoice Receipt documents

10. From which modules can the above documents be viewed?

• Order documents can be viewed only in Materials Management.

• Goods and Invoice Receipt documents can be viewed from both Materials

Management and Financial Accounting modules.

11. What is a Request for Quotation (RFQ)?

A RFQ is a request of quotes from vendors for a particular good or service. An RFQ can

be created with reference to a Purchase Requisition or be created directly.

12. How is a Purchase Order created in SAP?

A Purchase Order (PO) can be created directly or with reference to a RFQ, a Contract, a

Purchase Requisition, or another Purchase Order.

13. What is an Outline Agreement?

An Outline Agreement documents a long-term arrangement with a vendor to provide

materials or services at an agreed price. It is valid for a period of time or until a pre-

defined total quantity or total value is reached.

14. What are the different types of Outline Agreements?

Contracts and Scheduling Agreements

15. For what is an Account Assignment Category used?


Account Assignment category is used to manually create Order documents. It

determines which account assignment data is required for an item in order to allocate

costs.

16. What is the purpose of a Goods Receipt document?

A Goods Receipt document is created when goods are received at a plant/warehouse.

At this time, an accounting document is created to make a General Ledger entry, and a

materials document is created to record changes in physical inventory.

17. What is the purpose of an Invoice Receipt document?

When invoices are received from a Vendor, an Invoice Receipt document is created in the

system. This document can be linked to a Purchase Order, a Goods Receipt, a Delivery

Note, or a Vendor. In addition to the materials document, an accounting document is

created, which updates the relevant Vendor Account (sub-ledger) and General Ledger

Accounts.


SAP FI FAQs – Sales Cycle and Documents

1. What are the five steps in the Sales Cycle and what Modules do they originate from?

Sales Order : SD Module

Deliver Note : SD Module

Goods Issue : MM Module

Billing Document : SD Module

Receive Payment: FI Module

2. Of the five steps listed above, which ones generate accounting documents and what

are they?

Goods Issue: Debit COGS and Credit Inventory

Billing Document: Debit Accounts Receivable and Credit Sales/Revenue

Payment Receipt: Debit Cash and Credit Accounts Receivable

3. What are all the activities in the Sales Cycle?

Inquiries, Quotations, Sales Order Processing, Credit Management, Delivery Processing,

Goods Issue Processing, Billing Document Processing, Incoming Payment Processing,

Automated General Ledger Update

4. What is an Inquiry in the Sales Cycle?

An Inquiry is a document created in the Sales & Distribution module that represents a

query from a customer or prospective customer.

5. What is a Quotation?

A Quotation is a document created in the Sales & Distribution module that records

information about materials possibly desired by a customer or prospective customer.

The material number, price and alternative items is usually included on a quotation.

6. What is a Sales Order?

A Sales Order is a contractual agreement between a Sales Organization and a customer

concerning goods to be delivered or services rendered.

http://www.erpdb.info/sap-fi-faqs-sales-cycle-and-documents/


7. When a Sales Order is processed, the system automatically executes what functions?

The system automatically executes:

Credit Checking

Pricing

Material Availability Checking

Transfer requirements to Materials Requirements Planning (MRP)

Shipping Point and Route Determination

8. What is a Delivery Note?

The Delivery Note is a document created in the Sales & Distribution module that initiates

the shipping activities associated with delivering materials to a customer

9. What financial transaction occurs when the Delivery Note is processed?

A Delivery Note does not create a financial transaction in the General Ledger.

10. What is the purpose of a Goods Issue?

A Goods Issue is a document posted in the Materials Management module that is used

as the source document for recording changes in stock levels associated with delivering

materials to customers and for recording the financial impact of such transactions in the

General Ledger.

11. What is a Billing Document?

A Billing Document is a document posted in the Sales & Distribution module, which

supports the creation of Customer Invoices, Credit or Debit Memos, and the recording of

the financial impact of these transactions in the General Ledger.

12. What accounting transaction occurs when a Billing Document is posted?

As a result of a Billing Document, integration to the Financial Accounting module occurs

with the automatic creation of an Accounting Document containing the following

accounting entries:

Debit to the Customer Account and the appropriate General Ledger

Reconciliation Account assigned to it.

Credit to the appropriate General Ledger Revenue Account.


SAP Cash Management FAQs – Overview 1. What is Cash Management?

Cash management is a sub-module of Treasury that may be utilized as a planning tool

for cash control and for reliable, up-to-date liquidity analysis of the company.

2. Name and describe at least two functions of Cash Management.

Bank statements, manual planning, cash position, liquidity forecast

• Cash concentration = allows companies to maximize their cash pooling strategy with

various cash accounts

• Cash budget management = identifies impending illiquidity or possible budget

overshoots and controls payment flows taking account of profitability and liquidity

See others below or in the following chapters.

3. Describe the differences between Cash Position and Liquidity Forecast.

Cash position – reproduces the activity in bank accounts, forecasts daily liquidity or cash

position in 0-5 days time frame. It receives data on bank accounts and clearing accounts.

The example of data flowing there is

• Payments from a bank statement and payments from a payment program (FI)

• Loans, transfers and deposits from TM

• Manually planned items from CM

Liquidity forecast – reproduces the activity in sub-ledger accounts, projecting cash

inflows and outflows in 1-24 weeks time frame. It receives data from AR, AP, FI, MM, SD,

TM.

The example of data flowing there is

• Invoices from FI or MM and SD (including parked documents),

• Securities related receivables and payables from TM,

• Down payment requests from FI,

• Manually planned items from CM, etc.

4. Define planning levels.

Planning levels explain the origin of the data in Cash management, reflect typical

financial transactions (e.g., F0-posting to a bank account in FI, AP-payment advices) and

thus enable users to better estimate its reliability

5. True/False? To be able to use Cash Position and Liquidity Forecast the “CM active”

indicator must be selected in the company code global parameters definition.

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SAP Cash Management FAQs – Check Deposit Overview

1. True/False? The SAP principle for the bank statement processing and the check

deposit processing is the same.

2. True/False? The check deposit processing cycle is completed with the bank

statement processing.

When the bank statement is processed after depositing a check with a bank (cashing it),

the incoming check account is cleared and the bank account is debited.

3. What accounts in FI are check deposits mapped to?

Check deposits are mapped to bank accounts and bank clearing accounts (subaccounts)

– similarly to the bank statements.

4. Is it possible to enter more checks at the same time?

Yes, however, all of them must require the same posting processing since in the header

of the check a transaction name is assigned applying to all the checks contained in a

particular deposit run.

5. What is the purpose of account assignment (screen) variants? Can a start variant be

substituted during the check entry?

They allow users to enter different clearing or additional information for each check

through different fields ready for input in various variants. The start variant can be

changed any time during the check entry.

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SAP Cash Management FAQs – Manual Bank Statement 1. Does the bank statement processing functionality affect only the CM sub module?

The bank statement processing is a special CM functionality which, however, sends

information into FI. It is not dependent on any other CM functionality or the CM sub

module activation.

2. What are the two main parts of a manual bank statement in SAP?

• A bank statement header

• Line items

3. How does a user determine the way in which a particular line item will be posted?

By assigning each line item a transaction name.

4. True or False ? The batch input session for bank posting stands for G/L posting and

is always created if the bank statement is posted without errors.

5. True or False? When a batch-input session is incomplete or wrong the bank

statement needs to be entered again.

False. Remove the errors or complete data when processing the session in foreground.

6. What does account assignment variant (screen variant) influence? Can it be

customized?

It determines what fields are going to be ready for entry when inputting bank statement

line items. It can be customized.

7. What are the alternative names for internal transactions and what side of the system

are they maintained at (application or configuration)?

Internal transactions = posting rules = internal activities are customized on the

configuration side. Indirectly, they are assigned to line items through transaction names

and determining the posting details for them (accounts, posting keys, etc.).

8. What is the function of a value date in the bank statement processing ?

The value date is the date when the bank transaction involving a line item takes place. It

is assigned to every line item when the bank statement is entered by a user.

9. How is masking used in manual bank statement customizing?

Masking allows us to substitute for a real account number when defining posting rules.

The actual account number is derived from a bank account number (account ID) entered

and the partial or full masking.

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SAP Asset Accounting FAQs – Organizational Structure

1. What is the Asset Accounting sub-module?

The Asset Accounting sub-module manages a company’s fixed assets. Within the

Financial Accounting system, FI-AA serves as a sub-ledger to the General Ledger,

providing detailed information on asset-related transactions.

2. Define the chart of depreciation.

The chart of depreciation contains the defined depreciation areas. It also contains the

rules for the evaluation of assets that are valid in a given country or economic area. The

chart of depreciation is a catalog of country-specific depreciation areas structured to

meet the various business needs.

Each company code is allocated to one chart of depreciation. Several company codes

can work with the same chart of depreciation.

3. What is the difference between the chart of accounts and chart of depreciation?

The chart of accounts can be global, country specific and industry specifics based on the

needs of the business. The chart of depreciation is only country specific. The charts are

independent of each other.

4. How is Asset Accounting integrated with Cost Accounting (CO)?

Postings to depreciation can be made through a cost object such as a cost center or

internal order. Also, an asset can be assigned to a cost center, internal order, activity

type, or a maintenance order.

5. What is an asset class?

This is the main criterion for classifying assets by business and legal requirements. The

asset class, created at the client level, consists of a master data and depreciation area

section. Each asset master record must be allocated to one asset class.

6. Define depreciation area.

A depreciation area shows the valuation of assets for a particular purpose (for example,

for individual financial statements, balance sheets for tax purposes, and cost accounting

values).

http://www.erpdb.info/ap-asset-accounting-faqs/


SAP Asset Accounting FAQs – Old Assets Data Master

1. Base on quantity, what are the three methods of old asset data transfer? In what

status does the company code have to be so that the transfer is possible?

1) small quantity - Create old asset manually (dialog transaction)

2) large quantity - Batch-input procedure (RAALTD01)

3) very large quantity – Direct data import (RAALTD11)

The company code must be set up to the status for old assets data takeover when no

posting is possible.

2. True or False? With the old assets data transfer through any of the three methods,

appropriate G/L accounts in Financial Accounting are updated.

False. Balance reconciliation with the relevant G/L accounts must take place separately.

G/L personnel can input these via FI or AA personnel can input them via the transfer

balance screen in AA With up-to-date accounts in the already productive FI there is no

need to update them.

3. What are the two possibilities for the transfer date.

• At the end of the last closed fiscal year

• In the fiscal year following the last closed fiscal year

4. What data is transferred at the year-end transfer and the sub-annual transfer?

Year-end transfer and transfer during fiscal year:

• Master data

• Cumulative values as of the end of the last closed fiscal year

Sub-annual transfer (if the transfer date after the closed fiscal year)

• Master data

• Cumulative values as of the end of the last closed fiscal year

• Depreciation and asset transactions posted in the current year (transfer parameters)

5. Explain the two methods of transferring the depreciation posted in the current year.

• Transferring the depreciation posted in the current fiscal year up to the point of

transfer- it is necessary to specify the last posted depreciation period In the legacy

system for each depreciation area for every asset company code.

• Posting the total depreciation for the current fiscal year up until the transfer date

after the old data transfer –it is done in AA by performing a posting run for unplanned

depreciation.

http://www.erpdb.info/sap-asset-accounting-faqs-old-assets-data-master/


6. Which activities should be done before the production start-up? Give a brief

description of each of them.

Check consistency – major components configured, i.e. chart of depreciation,

company codes, depreciation areas, asset classes, asset G/L accounts, AA

customizing

Reset company code – test application data can be deleted (asset master records

and transactions of AA) but only of the company code has a test status.

Customizing settings are not deleted.

Reset posted depreciation – this function is performed when errors occurred

during testing the depreciation posting run and it is necessary to return to the

original status (includes depreciation data of an old assets data transfer). Manual

adjustments in the relevant G/L expense and depreciation accounts need to be

performed. The reset is possible only for a company code in a test status.

Set/reset reconciliation accounts – The G/L accounts relevant for AA are defined

as reconciliation accounts by a report changing their master records. After the

transfer date these accounts can no longer be directly posted to.

Transfer balances – Balances to the G/L accounts, which have been defined as

reconciliation accounts, are transferred. (old data at fiscal year end)

Activate company code – This function terminates the production start–up.


SAP Asset Accounting FAQ’s – Information Systems 1. True or False? – The Asset Accounting Information System is a hierarchical structure

containing standard reports creating a report tree that cannot be changed.

False. The standard reports provided by SAP can be copied and modified. Branches can

be added or removed from a report tree.

2. What is the asset value display used for?

Asset value display offers extensive possibilities for planned as well as already posted

asset values. For example, it is possible to compare results from different depreciation

areas, simulate asset values over time, view posted transactions, and execute reports.

3. Describe simulation in the context of AA and simulation versions.

Simulation in the AA context is an experimental change to parameters affecting the

valuation of assets. It can apply to a single asset, the entire asset portfolio, or a test

depreciation area.

Simulation versions allow you to simulate a change in depreciation method (depreciation

key and useful life) for asset value/depreciation reports and this way to forecast asset

depreciation.

4. Describe the asset history sheet.

The asset history sheet is the most important and most comprehensive year-end report

or intermediate report. It displays the various stages of a fixed asset’s history – from the

opening balance through the closing balance – including any acquisitions, retirements or

accumulated depreciation. SAP supplies country-specific versions of the sheet. It is

often a required appendix to the balance sheet.

5. What is a sort version, and what is the maximum number of sort levels in a sort

version?

The sort version defines the formation of groups and totals in an asset report. All fields

of the asset master record can be used as group and/or sort criteria for defining of a sort

version. It consists of a maximum of 5 sort levels determined via fields.

http://www.erpdb.info/sap-asset-accounting-information-systems/


SAP Asset Accounting – Valuation and Periodic Processing 1. What is periodic processing, and what is it used for in Asset Accounting?

Periodic processing comprises the tasks that must be performed at periodic intervals.

Since only the values from one depreciation area can be automatically posted online in

Financial Accounting, the changes to asset values (transactions) from other areas with

automatic postings have to be posted periodically to the appropriate reconciliation

accounts.

2. What is the role of a depreciation area in handling different types of valuation? Why

do we need to handle different types of valuation?

By using various depreciation areas that differ from each other in

• kinds of depreciation (ordinary, special, unplanned depreciation)

• depreciation terms (depreciation method, useful life)

• base values for depreciation calculation (APC, replacement value)

It is possible to perform different valuation and meet the calculation needs for specific

purposes (e.g., balance sheet, cost accounting or taxes).

3. The system supports three direct types of depreciation. What are they? Define

them.

• Ordinary depreciation is the planned reduction in asset value due to normal wear and

tear. Therefore, the calculation of depreciation should be based on the normal expected

useful life.

• Special depreciation represents depreciation that is solely based on tax regulations.

In general, this form of depreciation allows depreciation by percentage within a tax

concession period without taking into account the actual wear and tear of the asset.

• Unplanned depreciation is concerned with unusual circumstances, such as damage to

the asset that leads to a permanent reduction in its value.

4. True or False? Depreciation is calculated by solely using the depreciation keys,

which are defined at the chart of depreciation level and available in all company codes.

False. The depreciation keys are defined at the chart of depreciation level. Therefore,

they are available in all company codes. SAP supplies depreciation keys for every chart

of depreciation. The system calculates depreciation using depreciation keys and internal

calculation keys.

http://www.erpdb.info/sap-asset-accounting-valuation-and-periodic-processing/


5. What is a depreciation key and internal calculation key?

Depreciation key is used for calculating depreciation amounts. It controls automatic

calculation of planned depreciation, interest and maximum percentage for manual

depreciation.

Internal calculation key makes up a part of the depreciation key and it defines a method,

base value and rate of percentage for depreciation, changeover rules (for declining

depreciation), treatment of depreciation after useful life and period control for

transactions.

6. Define derived depreciation area.

A derived depreciation area is calculated from two or more real areas using a calculation

formula. You can use derived depreciation areas, for example, to calculate special

reserves as the difference between tax and book depreciation. The book value rule in a

derived depreciation area is checked each time a posting is made or depreciation is

changed in the corresponding real area.

7. True or False? Generally, the system determines the depreciation start date from

the asset value date of the first acquisition posting.

True.

8. True or False? If the definition of the depreciation key or depreciation terms is

changed depreciation values are recalculated automatically. Only if the depreciation

terms change values are recalculated

False.

9. When imputed interest is calculated, how does the system post this expense to the

CO (Cost

Accounting) module?

For cost accounting, you might have to calculate imputed interest on the capital tied up

in assets. The system posts interest simultaneously during the periodic depreciation

posting run. It posts to the accounts that are entered in the relevant account

determination for each depreciation area. Furthermore, an additional account

assignment can be made to the cost center or the internal order entered in each asset

master record (same for depreciation).


10. What does the system use to calculate the replacement values, and what are the

two ways of calculating the current replacement value?

Index series entered in the asset or in the asset class.

The two ways of calculating the current replacement value are historical (current year:

acquisition year) and normal (current year: previous year).

11. True or False? The depreciation posting program automatically updates the asset

values and G/L accounts. The program generates a batch-input session for the update of

the G/L accounts.

False.

12. True or False? Replacement value of an asset can be determined by using an index

series.

True. The “indexed replacement values” component makes it possible to calculate

replacement values for assets, and to use replacement values as the basis for calculating

depreciation. You determine the replacement value using index series. You enter the

index series in the asset or in the asset class.

13. True or False? When the depreciation posting program (RABUCH00) is run, the

system posts individual documents for the different depreciation types.

False. The depreciation posting program RABUCH00 updates the assets values and

generates a batch-input session for the update of the general ledger. The posting

session also posts the different depreciation types, interest and revaluation, in addition

to the writing-off and allocation of special reserves. The system does not create

individual documents, only summarized posting documents (per business area per

account determination).

14. For automatic depreciation postings, should the document type be assigned an

external or internal number range?

For each company code a document type must be defined for posting depreciation. The

depreciation program should only use a document type that is limited to being used for

batch input. In this way, unintentional use of the document type can be prevented. It is

also essential that the document type is assigned a number range with an external

number assignment. The depreciation program can then assign the document numbers

itself. If the numbers are assigned in this way, the depreciation posting program can

keep a check on posting to Financial Accounting. If errors occur, this numbering also

makes it possible to make corrections.

15. Explain the difference between the methods for distributing forecasted

depreciation to the posting periods.


The smoothing method distributes depreciation evenly to the periods from the current

depreciation period to the end of the fiscal year (regardless of the value date of the

transaction). With the catch-up method, the depreciation on the transaction (from the

start of capitalization up to the current period) is posted as a lump sum. The

depreciation posting program, posts this amount in the posting period, in which the

value date of the transaction lies.


SAP Asset Accounting FAQs – Asset Transactions

1. Define a transaction type.

During the life of an asset there are a number of changes that affect the value of the

asset. The FI-AA System recognizes a wide range of business transactions. Transaction

types make it possible to handle all of the necessary postings appropriately.

2. It is possible that an asset acquisition is posted in two steps or in two different

departments? How do the two entries clear?

When the asset acquisition is posted in two steps or two different departments, you

normally post to a clearing account. Use a general ledger account with open item

management to guarantee that this account can be cleared. Either the FI department

includes this clearing account in their periodic run of SAPF123 (Automatic clearing

program) or the clearing account has to be cleared in an additional step (Menu path:

Posting > Acquisition > External acquisition > Clearing offsetting entry).

3. What is the difference between non-valued and valued? Explain their implications

on Asset Accounting.

For non-valued, the goods receipt takes place before the invoice receipt and the values

are not yet posted to Asset Accounting. The line items are created and the values are

updated instead at the time of the invoice receipt. However, the system uses the date of

the goods receipt as the capitalization date. At time of invoice receipt the asset is

capitalized, line items are created, and the value fields are updated.

For valued, the goods receipt takes place before the invoice receipt and the values are

posted directly to Asset Accounting. The asset is capitalized, line items are created, and

the value fields in the asset are updated. When the invoice is received later, there may

be differences between the invoice amount and the amount posted at the time of goods

receipt. In this case, the corresponding adjustment postings are made to the asset.

4. There are certain pieces of information automatically set in the asset master record

at time of acquisition. What are they?

The following information is automatically set in the asset master record at the time of

the first acquisition posting:

• Date of capitalization

• Posting date of original acquisition

• Acquisition period

• Depreciation start date per depreciation area.

http://www.erpdb.info/sap-asset-accounting-faqs/


5. Most asset transfers are described as either inter-company or intra-company. What

is the difference?

Inter-company transfer indicates a transfer between company codes. This transfer

creates a new record at the target company and posts the values according to the

posting method selected.

Intra-company transfer indicates a transfer within one company. Reasons for such a

transfer include:

• The asset has changed location. As a result, you have to change organizational

allocations (i.e., asset class, business area) in the master record that cannot otherwise be

changed.

• The asset needs to split. Therefore, a portion of the original asset will be transferred

to a new asset.

• The asset under construction needs to transfer its costs to a real (depreciable) asset.

6. Define transfer variant.

The transfer variant specifies:

• The method according to which the transferred asset is valued in the receiving

company code

• The transaction types (retirement/acquisition) that are used for the transfer

Your specification of the transfer variant can be dependent on the following:

• The type of relationship between the company codes involved (legally

dependent/independent)

• The cross-system depreciation area

7. For assets that the company produces itself, why are there two phases relevant to

Asset Accounting? What are they?

The two phases relevant to Asset Accounting for assets produced in house are the under

construction phase and the useful life phase. The assets have to be shown in two

different balance sheet items during these two phases. Therefore, they have to be

managed using a different object or asset master record for the under-construction

phase and for the completed asset. The transfer from under-construction phase to

completed asset is referred to as “capitalization of the asset under construction”.

8. True or False? Using the Asset Accounting module, it is no longer necessary or

possible to manually plan depreciation.

False. In addition to the automatic calculation of depreciation using depreciation keys,

you can also plan manual depreciation for individual assets in the FI-AA system.


SAP Asset Accounting FAQs – Master Data

1. Describe the function of depreciation areas.

Depreciation area 01, which can be set up as the book depreciation, can make automatic

postings to the general ledger. Other depreciation areas may get their values from

depreciation area 01 but calculate and post different depreciation values to the general

ledger. Other depreciation areas can be set up to show: country specific valuation (i.e.,

tax depreciation); values/depreciations that differ from depreciation area 01 (i.e., cost-

accounting reasons); consolidated versions in local/group currency, book depreciation in

group currency; and the difference between book, 01, and country-specific tax

depreciation (‘derived depreciation area’).

2. What information (sections) are included in the asset class?

An asset class consists of three main sections:

• A header, containing control parameters for master data maintenance and account

determination,

• A master data section with default values for administrative data in the asset master

record,

• A valuation section with control parameters for valuation and depreciation terms.

3. Describe the function of an asset class.

The most important function of an asset class is to establish the connection between the

asset master records and the relevant accounts in the general ledger. The account

determination in the asset class determines the posting top the general ledger accounts.

Several asset classes can use the same account determination assuming the asset classes

use the same chart of accounts and post to the same general ledger accounts.

4. If the company code is in implementation status and assets exist in an asset class

with no transactions, you can delete and add new asset classes.

[True] or False

When the company code is in implementation status:

• No assets have been created in an existing asset class; this class is deleted and

generated again

• There are assets in an existing asset class (but no transactions)

- Delete all asset classes and their assets and generate them again or

- Only add new asset classes.

• Transactions exist for the assets: you can only add new asset classes

http://www.erpdb.info/sap-asset-accounting-faqs-master-data/


If the company code is in production status: the system creates only asset classes that

were not yet created. Exiting classes remain unchanged.

5. Define maintenance level. What are the possible maintenance levels?

Maintenance level defines the level (asset class, main asset number, sub-number) at

which a field in an asset master record is to be maintained. Maintenance level definition

is part of the screen layout rule.

If, for example, you define the maintenance level ‘main asset number’ for a field, then the

field will be filled with a default value from the asset class. However you will be able to

change the field when maintaining master data at the asset main number level.

The three maintenance levels are:

• Asset class

• Asset main number

• Asset sub-number

6. What significance is depreciation key ‘0000’?

Depreciation key ‘0000’ is a SAP delivered key that ensures depreciation and interest is

not calculated and posted. This key can be used for the assets under construction,

however, special tax depreciation and investment support are possible even on assets

under construction.

7. What are the options for creating and asset master record?

The two options for creating an asset master record are:

• Use the asset class, to which the asset will belong, to provide default values. The

asset class then supplies the most important control parameters in the asset master

record.

• Use an existing asset as a reference for creating the new asset master record (possibly

the reference asset has default values that are more suitable than those in the asset

class).

8. Why might assets be divided up using sub-numbers?

A complex fixed asset can be represented in the system using several master records,

that is, sub-numbers. Assets may be divided using sub-numbers if:

• Managing the values for subsequent acquisitions in following years (i.e., buildings)

separately

• Managing the values for individual parts of assets separately,

• Dividing the asset according to various technical aspects.


9. Define work lists.

Work lists are used for mass retirements, mass changes and work on incomplete assets.

There are three steps in using work lists:

• Select the objects (assets) to be changed

• Assign the task to be performed on the objects

• Release the work list and process the Workflow


SAP FI FAQs – Taxes

1. Briefly explain the difference between a value-added tax and sales and use tax.

Value-added taxes are assessed on the additional value that is added to a product as it

moves through the production chain from raw material to producer and finally to the

consumer. Sales and use taxes are based on the final sales value of the product.

2. For what are jurisdiction codes used?

Jurisdiction codes are used in multi-level taxes to identify each taxing authority. When

using jurisdiction codes, each level must be defined. For example, if there is a state,

county and city sales tax then the following three codes would be created:

• State: 2500000000

• County: 2510200000

• City: 2510280930

3. Briefly describe the following:

a) Calculation Table – Contains all of the logic for calculating taxes including the access

sequence, condition type, and tax procedure.

b) Tax Procedure – A country-specific template containing all of the processing logic

and algorithms that support the tax amount computations. It contains the steps,

condition types, reference steps, and account keys

c) Tax Code – Assigned to a tax procedure and is entered in the G/L master record and

accessed when the G/L account is used in a document.

4. What settings are necessary for automatic tax account assignment?

The account key must be configured with posting keys, rules, and tax accounts. The

rules determine if the tax code or account key will be used for account determination.

5. How can taxes be calculated?

Taxes may be calculated automatically by the system or entered manually by the user. In

the case of manual entry, the system will verify that the amount entered is correct.

http://www.erpdb.info/sap-fi-faqs-taxes/


SAP FI FAQs – Financial Statements

1. Discuss the concept of hierarchy levels with regard to the balance sheet in SAP.

There are ten levels possible in the financial statement hierarchy. For each level, an item

name and total is assigned to a group of accounts. Higher levels provide more

summarization than lower levels, level one being the highest and therefore, least

detailed.

2. Describe how G/L accounts are assigned to the financial statement hierarchy.

G/L accounts are attached to the lowest level of the financial statement hierarchy.

3. Discuss planning in FI.

Planning in FI utilizes the financial statement version to determine the layout of the

planning screens. Changes to the Financial Statement version are immediately reflected

in the planning screens (upon re-entry). Values entered in the planning screen are

allocated between the periods using a Distribution Key. The figures are entered based

on the following:

• Fiscal Year

• Version -

• Business area -

• Currency -

4. True or False. An account may be assigned to more than one node? Why?

True. In some cases, an account may be listed in one group when it has a credit balance

and another when it has a debit balance. For example, a cash account is an asset when

there is a debit balance and a liability when there is a credit (overdraft) balance. This

feature is also available for account groups via the debit/credit shift.

5. Explain the difference between Cost of Sales Accounting and Period Accounting.

Cost of Sales Accounting attempts to match revenues with their associated expenses;

whereas, Period Accounting is primarily concerned with the activity occurring over a

given time period.

http://www.erpdb.info/sap-fi-faqs-financial-statements/


SAP FI FAQs – Closing

1. Discuss the monthly closing process in SAP.

The only technical requirements of period-end closing are to close the current posting

period and to open the new one. Month-end reports can be run after the posting period

has been closed. There are additional business processes (e.g., valuing foreign currency

open items and G/L accounts, analyzing open items and accounts that will be closed out,

etc.) that should also be completed for proper control, even though they are not

required for closing.

2. Discuss the annual closing process in SAP.

1. Execute the month-end closing process for the last period.

2. Run the balance sheet adjustment programs and make any manual adjusting entries.

3. Generate year-end reports.

4. Carry G/L, customer, and vendor accounts forward.

5. Open the new posting period.

3. Explain the purpose of running the GR/IR clearing account program.

The GR/IR (Goods received/invoice received) clearing account program reclassifies the

entries in the GR/IR account as either assets or liabilities for reporting purposes. At the

end of a period the company can be in a situation where goods have been received but

an invoice has not, or vice versa. Therefore, there may be a debit or credit balance in the

GR/IR account.

4. Explain the basic process of valuing accounts for closing before running a balance

sheet.

Before running a balance sheet, you need to value both open items and G/L accounts

that use foreign currencies. Open items need to be valued for vendor and customer

accounts, reconciliation accounts, clearing accounts, and expense and revenue accounts.

This process is completed to accurately record the value of your assets and liabilities in

the reporting (local) currency.

5. What is the exchange rate difference key used for?

The exchange rate difference key is defined in the account master records of G/L

accounts managed in foreign currency. It is the key that defines which gain/loss account

is updated when the G/L account is re-valued.

http://www.erpdb.info/sap-fi-faqs-closing/


6. How is an exchange rate difference accounted for when posting and clearing an

invoice in foreign currency?

The exchange rate difference between the invoice and payment is accounted for in a

gain/loss account defined by the exchange rate difference key. It is posted

automatically.

7. Explain how accounts managed in a foreign currency are valued.

Each account managed in foreign currency is defined with an exchange rate difference

key. This key identifies a valuation gain/loss account that is updated when the account is

valued using program RFSBEWOO. The valuation process itself takes the difference

between the original exchange rate used in the transactions and the current exchange

rate and posts the difference to a gain or loss account.

8. What is the difference between valuation of open items and valuation upon receipt

of payment.

When valuing open items, the system will post any differences to an unrealized gain/loss

account. When payment is actually received, the difference becomes a realized

gain/loss.


SAP FI FAQs – Currencies

1. How can a document obtain exchange rate information?

• From the Exchange rate table

• From a manual entry in the document exchange rate field

2. What are exchange rate types used for? List and describe five exchange rate types.

Exchange rate types are used for foreign currency revaluations and postings.

– B (Bank Selling Rate)

– G (Bank Buying Rate)

– M (Average Rate) – The default rate type for posting documents.

– EURO – Used for exchange rates between EU member nation currencies (e.g.,

DEM:FRF)

– EURX – Used for exchange rates between an EU member nation currency and a non-

member nation currency (e.g. DEM:USD)

3. List the currency types used in FI.

The available currency types are transaction, group, hard, index, global, and company

code (local). Please note that this list is not exhaustive as other modules may also have

their own currency types (e.g., controlling area currency).

4. How many currency types can be used at one time for each company code?

Up to four currencies can be used for each company code. They are transaction, local,

and up to two optional parallel currencies.

5. Explain the base currency function

A base currency is set up to eliminate the need for entering every possible exchange rate

combination into the exchange rate table. A base currency is established on the

exchange rate type table for a specific exchange rate. The base currency and base rate

are then used to translate from Currency A to the base currency and then from the base

currency to Currency B.

6. Explain why a translation ratio is useful.

A translation enables SAP to process extremely large or small exchange rates that would

exceed the maximum allowable number of digits (i.e., 9999.99999 or 0.00001).

http://www.erpdb.info/sap-fi-faqs-currencies/


7. What are the prerequisites for posting a document using foreign currencies.

– Local currency must be defined in the Company Code Global Parameters

– The foreign currency must be defined in the Currency Code Table

– A translation ratio must beset between the foreign and local currencies

– An exchange rate must be defined between the foreign currency and the local

currency in the Exchange Rate Table.


SAP FI FAQs – Outgoing Payment Processing

1. Discuss the steps involved with configuring and running the payment program.

A) Payment Program Configuration

- Set up paying and sending company codes

- Payment methods per country

- Payment method per company code

- Bank Selection (rank banks, available amounts, G/L account assignment)

B) Check Lot Configuration

- Per house bank and account

C) Running the Payment Program (application side)

- Maintain parameters (company codes, payment method, next run date, vendors,

Additional Log)

- Schedule Proposal

- Display/Edit Proposal

- Create Variant for Print Program

- Schedule Payments (clears vendors’ accounts)

- Schedule Print (cuts checks)

2. The payment program is controlled at three parameter levels. What are they?

• Company Code

• Payment Method

• Bank

3. Describe the bank optimization options for efficient payments within the payment

program.

Optimization by bank group – Money transfer is made from the house bank to the bank

of the customer/vendor as fast as possible. To use this feature, assign all banks (in the

master record) to a bank group (which you define).

Optimization by postal code – Selection of the house bank according to the location of

the customer/vendor.

4. What are the dates relevant for the payment program (PP) open item selection?

A) Document date of an open item (falling into the range specified in the PP

parameters)

B) Baseline date (important for calculating due date and discounts)

C) Next posting date specified in the PP parameters

http://www.erpdb.info/sap-fi-faqs-outgoing-payment-processing/


5. Where does the payment program get bank information?

A) Vendor /customer master record

B) Open item

C) PP configuration ( payment method, house bank)

6. The PP configuration can be set up so that PP clears special G/L items (down

payment requests) and other G/L open items.

True/False

The PP configuration can be set up so that PP clears special G/L items (down payment

requests) but it cannot clear other G/L open items (only customer and vendor open

items).

7. Briefly explain the purpose of intermediary banks.

When two banks are not able to communicate directly, an intermediary bank may be

used to facilitate the flow of funds. If necessary, up to three intermediary banks may be

used to complete this process.

8. Briefly explain the concept of alternate payment currencies.

An alternate payment currency is a currency that is specified in the header of a payable

or receivable. When specified, the open item will be paid in the alternate currency not

the document currency. It is typically used when consolidating payments into a single

currency or when the document currency is difficult or too expensive to obtain.


SAP FI FAQs – Invoice Verification

1. Invoice verification provides a link between which modules?

Invoice verification provides a link between Materials Management and the Financial

Accounting, Controlling and Asset Accounting modules.

2. What are the two ways to enter taxes on invoices?

(a) Manually enter it in the Tax field

(b) Leave the Tax Amount field blank and turn on the Calculate Tax indicator to have

the system calculate the tax based on the Tax Code.

3. When a Vendor invoice is posted in the system, what 5 things happen?

• An Invoice Receipt document is created

• The Material Master record is updated when appropriate.

• The Purchase Order History is updated when appropriate.

• Entries are posted to the appropriate General Ledger Accounts

• The Vendor account (Sub-ledger) is updated.

4. When the Vendor Invoice is posted which accounts are effected?

A debit is posted to the GR/IR Clearing Account and a credit is posted to the Vendor

Account. At the same time, a credit is posted to the appropriate General Ledger

Reconciliation Account (i.e., A/P account) assigned to the Vendor.

5. What are the four types of variances in Invoice Verification?

• Quantity Variance

• Price Variance

• Order Price Quantity Variance

• Schedule Variance

6. What are subsequent debit/credit memos?

Subsequent debit/credit memos are used to process additional invoices or credit

memo(s) received from a vendor after the (Purchase Order) transaction has been settled

(paid).

http://www.erpdb.info/sap-fi-faqs-invoice-verification/


SAP FI FAQs – Dunning

1. What is dunning?

The process of notifying customers/vendors that they have overdue items. There are

varying levels that can be used by the client depending upon the business relationship

with their customer.

2. What determines how often a customer can be dunned? Where is this configured?

Once an account has been dunned at a certain level, it must meet the criteria at the next

level before it can be dunned again. These settings are configured in the dunning area

and linked in the customer master.

3. What is a dunning area?

The dunning area is an optional unit in the organizational structure used to group

customers/vendors for dunning and it can be based for certain policies or organizational

units such as divisions.

4. To what is the dunning procedure assigned?

A dunning procedure can be assigned to a dunning area or to customer/vendor master

records.

5. What are the 4 basic parameters of a dunning procedure? Discuss them.

1) Dunning level – Up to 9 dunning levels may be defined. A customer/vendor can only

be dunned in a certain level if he has already been dunned in the previous level.

2) Minimum amount – A user defined overdue threshold amount of the total account

balance that must be exceeded to reach a dunning level.

3) Dunning charges – These charges are used to cover postage and handling of the

dunning letter. Dunning charges are not reflected in the G/L. You can define dunning

charges for each dunning level.

4) Dunning text – A form written in SAPScript. It can be shared by more than one

dunning level.

6. A customer has three items in arrears. Which open item determines the next

dunning letter sent?

Assuming Dunning by Level is not selected, the item at the highest dunning level

determines which dunning letter will be sent.

http://www.erpdb.info/sap-fi-faqs-dunning/


7. What is a grace period?

A grace period is the period during which an overdue item will not be dunned. An item,

whose days in arrears are smaller or identical to the grace period, is treated as not due

for the current notice.

8. What are minimum days in arrears?

Minimum days in arrears is the number of days overdue after which a dunning notice will

be sent.


SAP FI FAQs – Incoming Payment Processing

1. Explain the purpose of the payment advice functionality.

Payment advice notes are early notices containing detailed information about incoming

payments.

Payment advice notes can be used for automatically finding and allocating open items

for clearing. Instead of enterig selection criteria and processing the open items, all you

have to do with this method is specify the payment advice number.

2. List the payment advice types delivered by the system.

• Lockbox advice

• Advice from an account statement

• Advice created during manual clearing

• Manually entered advice

• Bank advice

• EDI advice

3. Can other payment advice types be created? If yes, how?

Yes, other payment advice types can be created through configuration.

4. For what is a reason code used?

The reason code determines how the payment difference is handled:

If the difference is going to be charged to a different G/L account

-or-

If a new item will be generated

Also, the reason code determines which correspondence type is sent to the customer to

notify them of the discrepancy.

5. Explain the flow between customer and vendor involving payment advice.

The customer receives goods and sends payment.

The vendor sends goods and receives payment.

http://www.erpdb.info/sap-fi-faqs-incoming-payment-processing/


The customer executes his payment program, which generates payment advice notes.

These payment advice notes are sent to the vendor, who processes them, clears the

open items, generates clearing documents.

6. Explain the lockbox processing flow.

The bank collects all of the checks and creates a Lockbox File following the BAI (Bank

Administration Institute) standard format. This file is imported into the system and a

payment advice is created for each check in the imported file. These payment advice

notes are stored in a Payment Advice Database from where they are processed and

posted. The postings clear open items and generate cleared documents.


SAP FI FAQs – Credit Management

1. For what is credit management used?

Credit management is used to set and control customer credit limits.

2. Is credit management an integration point? If yes, with which module.

Yes, with the SD and FI modules.

3. What is a credit control area?

A credit control area is the organizational unit used to set and control credit limits for

customers

4. Describe the organizational structure related to credit management. Units and

relationships.

• A client can have many credit control areas.

• A credit control area can have many company codes.

• A company code may be assigned to exactly one credit control area, but a list of

allowable credit control areas may be configured.

• A company code can have many customers and customers can be related to many

company codes.

Therefore, a credit control area can have many customers and customers can be related

to several credit control areas

5. Describe the two ways that you can set credit limits in the system.

A) You can set a credit limit per credit control area, which is then the credit limit for

any customer within the credit control area, unless otherwise assigned.

B) You can set unique credit limits per customer

6. When maintaining the credit limits of a specific customer, what are the two levels

that you can set credit limits?

A) Globally – The maximum limit of a customer around the world, across credit control

areas.

B) For a credit control area – The limit for the customer in one particular credit control

area.

http://www.erpdb.info/sap-fi-faqs-credit-management/


SAP FI FAQs – Line Item Configuration

1. The client does not like SAP’s standard document line layouts. Explain how you

would assist the client in developing better line layouts.

In Complex Postings, customized line layouts can be developed for fast entry screens. In

Enjoy Postings, Screen Variants may be used to modify the line items and document

headers.

2. What are automatic line items and how are they used?

Automatic line items are additional lines added to documents by SAP to balance the

transaction being entered. These additional lines are based on configuration of

“additional account assignments”

3. What are some examples of automatic line items?

Examples include exchange rage differences, balance carried forward, down payments,

cash discounts, and tax postings.

http://www.erpdb.info/sap-fi-faqs-line-item-configuration/


SAP FI FAQs – Display Accounts and Documents

1. What is the purpose of the assignment field?

The assignment field is used to sort line items when they are first displayed. It is

populated based on the definition of an accounts sort key. This field does not have to

be displayed in a line layout. The lines are displayed in the order of numbers, capital

letters, lower-case letters.

2. What is a sort key?

The sort key determines what appears in the assignment field. It is made up of at least

one field on a document. It may consist of combination of complete and partial fields up

to a maximum of 18 characters

3. Can you manually enter data into the assignment field? What affect does this have

on the sort key?

Yes, you can manually enter data into the assignment field, which will overwrite the entry

made by the sort key.

4. Your client would like to create special views for displaying account line items. How

can this be done?

Display Variants can be configured to customize the information displayed in the

account line item screen. Changes to the variants may be made directly in the line item

screen.

http://www.erpdb.info/sap-fi-faqs-display-accounts-and-documents/


SAP FI FAQs – Document / Account Maintenance

1. Under what circumstances can a document be changed?

Most fields in a document can be changed up until it is posted. After that, only fields

that do not have a financial impact can be changed (e.g., text fields). In the document

header, only the reference document and text can be changed.

2. For what are document update rules used?

With document update rules, you determine which document fields are allowed to be

changed and under what circumstances. They are stored in the “document change

rules” table. Note that some fields may not be changed regardless of the specifications

in this table.

3. What specific document fields cannot be changed?

Fields mandated by GAAP (Generally Accepted Accounting Principles) cannot be

changed (e.g., account number, amount, posting key).

4. Explain how document reversing works.

Document reversal automatically reverses entries and creates a new document with

reference to the original posting. Therefore, document reversal offers a better audit trail

than manually adjusting entries to correct errors.

You can reverse a document only if:

* The document has no cleared line items

* The document contains only D, K or S items (customer, vendor or G/L account line

items)

* The document was posted with the FI system (not SD or MM)

* All specific values (such as cost center) are still valid

5. Explain the difference between a Traditional Reversal and a True Reversal.

A Traditional Reversal results in a debit entry being offset by a credit entry. When

viewing the account balance, you will see entries in both the debit and credit columns. A

True Reversal posts a negative amount to the entry in question. When viewing the

account balance, the entry appears to be removed from the system. Both reversals offer

a complete audit trail, and the reversal documents are identical except for an indicator

noting the type of reversal.

http://www.erpdb.info/sap-fi-faqs-docuementaccount-maintenance/


SAP FI FAQs – Preliminary Documents

1. What is a preliminary posting?

In SAP, a preliminary posting allows you to enter and store incomplete documents

without carrying out extensive entry checks.

2. What is a parked document?

A parked document is a type of preliminary posting. Parking documents do not update

any data in the system, such as transactional figures (except for cash management).

However, you can evaluate parked documents since preliminary postings are linked to

the reporting functions in financial accounting.

Parked documents can be completed, checked, and then posted at a later date, even by

a different entry clerk.

3. What types of data can you park?

You can park data for customer, vendor, general ledger and asset accounts.

4. What are the differences between parked documents and held documents?

Parked Documents

• Assigned a document number

• Can be viewed by any other user

• Can be viewed through line item display

• Documents linked to accounts even though amounts do not update balances

Held Documents

• Temporary document number controlled by the user ID

• Can only be viewed by the creator

• Cannot view through line item display

• Can only be viewed during document entry through “Open Held Doc”

5. Describe the approval process for parked documents.

An important use of parked documents is to allow for an approval process before a

document can be posted. When a clerk parks a document for his manager’s approval,

the clerk must manually notify his manager of the parked document. SAP workflow may

be used to automate the approval process of preliminary postings.

6. Explain how parked documents are numbered when posted.

When a parked document is posted, the number is simply transferred over as the newly

posted document number.

http://www.erpdb.info/sap-fi-faqs-preliminary-documents/


SAP FI FAQs – Reference Documents

1. List the different types of reference documents

Sample documents,

Account assignment model (Complex Postings)

Account assignment template (Enjoy Postings)

Recurring document or Recurring Entry.

2. What are the main characteristics of each?

Sample document

o Cannot add new line items

o Not all fields are changeable

o Can only use one at a time

Account assignment model =

o If the currency is defined then the model can only be used for postings in that specific

currency

o Can use more than one when posting documents

o Most fields are changeable after it has been created

o May only be used with complex postings

Account assignment template

o The only reference document that can be used in the Enjoy Posting screen.

o Created directly in the Enjoy Posting screen

o The posting does not need to be complete.

o Primarily used to post transactions to General Ledger Accounts rather than sub-ledger

accounts since it does not save customer or vendor numbers.

o The only mandatory field is the Name that is provided by the user.

Recurring entry

o Static document

o Fields cannot be changed

o Posting occurs after periodic posting program is run and batch input session is

executed.

3. What are the advantages of reference documents?

They simplify data entry and help reduce errors.

4. Explain the difference between the Hold Data and Set Data functions.

Hold Data -> data defaults into fields and is editable

Set Data -> data defaults into fields and is not editable

http://www.erpdb.info/sap-fi-faqs-reference-documents/


5. What are the steps to creating an account assignment model?

A) Configure the line layout for the account assignment model and name this variant

B) Activate the screen variant

C) Create the account assignment model by pre-assigning values into the fields.

6. In what applications can an account assignment model be used?

General Ledger, Accounts Payable and Accounts Receivable.

7. Explain the differences between a sample document and an account assignment

model.

Sample documents will not allow for additional line items to be added nor do they have

the ability to change all of the pre-assigned fields. The account assignment model

supports both features. The account assignment model allows amounts to be

distributed between multiple accounts based on ratios. Sample documents allow

distribution of amounts by dollar amounts only – no percentage or ratio calculation is

performed by the system.

8. What information is required on the header of an account assignment model?

The only required information is the name of the account assignment model itself.

Optional information includes currency, chart of accounts, sample text, authorization,

and equivalence number option.

9. Explain the purpose of the currency key on the account assignment model header.

Currency is not a required field, unless you want to enter predefined amounts. Keep in

mind that the account assignment model must have the same currency as the document

to be posted.

10. List three ways to call up an account assignment model in your document.

Click on the “Account Assignment Model” push-button

Menu Path: Go To/Account Assignment Model

Enter “00” as the posting key and the “Name of the Model” in the account field.

11. Can account assignment models contain multiple company code information?

Yes. As a result, inter-company transactions can be initiated with account assignment

models.

12. Explain the use of the equivalence number.


Equivalence numbers allow you to distribute journal entry amounts over more than one

G/L account using ratios. Used mostly with Acct. Assignment Models

13. What is a recurring entry?

Recurring entries are business transaction entries that occur on a regular basis such as

monthly rental expenses or insurance payments.

14. How are recurring entries configured and processed in SAP?

A) Setup of recurring entry reference document (document header, line items, validity

period, run times)

B) Run recurring posting program periodically (create batch input session for all the

recurring entries during a period)

C) Process the batch input session (system will create the journal entries).

15. What data can never be changed in recurring entries?

Posting keys

Accounts

Line item amounts

16. Can Screen Variants be used with Account Assignment Templates? Why or why

not?

Yes, Screen Variants may be used; however, care must be taken to ensure that the fields

used by the Account Assignment Template are included in any Screen Variants that will

be used.


SAP FI FAQs – Document Entry

1. When entering data, what steps does the system follow?

User defined substitutions are inserted in the appropriate line item, derived characters

are brought into the document, master data availability and compatibility are checked

(via Coding Block), user defined validations are carried out.

2. What functionality is available to the user to view a document as it will be posted?

Simulate

3 What determines which fields are present and whether or not information must be

entered in them when entering the line items of a document?

Link Rules, which compare the field status of the posting key, field status group of the

G/L account, and the field status group of the reconciliation account of the customer or

vendor master record.

In Enjoy Postings, Screen Variants determine the status of fields in addition to and

independently of the field status groups.

http://www.erpdb.info/sap-fi-faqs-document-entry/


SAP FI FAQs – Document Configuration

1. What is the document principle?

The document principle requires that one FI document is created for every business

transaction. Each document receives a unique number. It is a 1:1 relationship.

2. Discuss the various sections of a SAP document and give an example of the data

stored in each section.

Document header – posting date, document number, document type, currency,

document date, document header text.

Line items – Minimum of two line items and at most 999, consisting of posting key,

account number, amount, and other account assignments.

3. What is a document type? Discuss its various uses in the system.

A document type is a 2-character alphanumeric key that is used to identify documents. It

distinguishes between business transactions (e.g., SA – G/L postings, DR – customer

invoice), controls the account types posted to (D – customer, K – Vendor, S – G/L

account, A – Assets, M – Materials), assigns document numbers and is used as a sort

criteria.

4. Discuss all aspects of the posting key. Explain what it is, how it is used in the system,

and any special properties that can be defined for it.

The posting key:

Defines the type of account (e.g., Customer, Vendor, G/L account, Material, Asset)

Determines whether the entry is a debit or credit

Indicates special properties (e.g. Reversal Posting Key, Special G/L transaction, etc.)

Data entry screen for the line item via the field status group

5. Explain the relationship between posting keys and accounts.

Each posting key is linked to a specific account type and determines if the entry to that

account will be a debit or credit entry.

6. Explain the various ways one can control the data that appears on the line item

screen when entering a document in the system.

The data that appears on a line item screen is controlled by using the field status in the

posting key, the field status group defined in the G/L account master, and the field status

group of the reconciliation account of a customer or vendor master record (if

http://www.erpdb.info/sap-fi-faqs-document-configuration/


applicable). Line items may also be controlled by a Screen Variant, which works

independently of the field status variant.

7. Define the term field status and list the various places it is used throughout the

system.

Field status determines what the user will see on certain screens; the status of a field is

suppressed, mandatory, optional, or display (for master records only). Field status is

used in account groups for controlling the fields used when defining master records. It

is also used in field status groups specified in G/L master records and in posting keys to

define the field layout of the document-posting screen.

8. What are the two main components that make up a document?

The document header and the document line items.

9. Explain how documents get numbered in the system.

Documents are numbered based on the number range defined in the document type.

Number ranges are defined as internal or external and linked to a number range code in

a table. Document numbers must be unique.

10. TRUE OR FALSE

(True) You can only post a document if the debits equal the credits, except for noted

items.

(False) It is not possible to drill-down on a document to see the line items.

(True) It is possible to restrict user access to a document type by authorizations.

(True) Document number ranges are defined by company code and are established for

all documents in the system.

(True) Document numbers per company code uniquely identify documents in the

system.

(False) The number ranges can only be assigned internally by the system.

11. Define what a validation is.

A Boolean logic statement (true/false statements) that directs the system to check the

combination of specified criteria for validity before posting of the document is possible.

12. Define what a substitution is.

A Boolean logic statement (if/then statements) that directs the system to replace values

of assigned field according to user-defined specifications.


13. How are validations and substitutions configured?

For each validation and/or substitution, you must define the application area and call-up

point for the validation/substitution (e.g., FI document header, line item) during

document entry.

14. What is a user exit and how is it used?

A user exit is a break in the ABAP program that serves to check data. It is used for

complicated validations, substitutions, and rules.

15. What is the trace function?

It allows a person to trace a validation or substitution to determine why it is not

delivering the expected message when the validation or substitution is not met.


SAP FI FAQs – Bank Master Record

1. What is a house bank? What information does it contain?

A house bank refers to the bank a company uses for receivables and/or payments. It is

any bank with which your company code does business. Each house bank contains a

company’s bank accounts. It also contains a bank key that defines address and control

data for the bank. The house bank establishes a link between the various G/L cash

accounts and the actual bank accounts.

2. How does data enter the bank directory?

Automatically, if master data exists for the Bank Directory on tape or disk. ). Data can

also be manually entered when creating a customer or vendor master record, a one-time

account, or by directly creating an account.

3. What is the relationship between a bank account and a G/L account master record?

A G/L account master record must be created for each bank account. The house bank

and account ID must be entered in the GL account master record to ensure the

accounting transactions involving the bank account will be reflected in the general

ledger.

4. Where are bank master records created in SAP?

Unlike customer, and vendor master records, the bank master records may be

maintained on the configuration side in SAP. They are also created on the application

side in the Banking and Treasury sections.

5. What does the Bank Directory contain?

The Bank Directory contains complete details about each house bank.

6. Describe the purpose of the Bank Key.

The Bank Key is a unique country-specific code. The system uses a combination of the

Country Code/Bank Key to identify the house bank.

7. Describe the Account ID.

Each of the bank accounts created within a house bank must be assigned a unique freely

definable five-character Account ID. The Account ID is used for the payment program

specifications and in the account master records to make a reference to the bank

account.

http://www.erpdb.info/bank-master-record/


SAP FI FAQs – Customer Master Records

1. What are the three segments of a customer master record? Give an example of data

that is stored at each level.

General data – account name, address

Company code level – payment terms

Sales data – shipping information, billing information

2. What are the two levels of a customer master record from a financial perspective?

Client level: Data at this level pertains to all company codes in which the customer

master record is opened.

Company Code level: Company specific data is entered at this level and can vary for each

company code.

3. Your client indicates that they have problems with duplicate customer master

records being created in their current system. How can this problem be alleviated in

SAP?

A check for duplicates can be configured to prevent the creation of more than one

master record for the same customer. This check is configured on address match code

fields and occurs when creating new accounts or when changing the address on an

existing account.

4. Indicate the segment (General or Company Code data)where each of the following

appear on the customer master record:

Address General

Phone Number General

Reconciliation Account Company Code

Sort Key Company Code

Payment Methods Company Code

Fax Number General

Language General

Vendor General

Group Key General

Payment Terms Company Code

Tolerance Group Company Code

http://www.erpdb.info/sap-fi-faqs-customer-master-records/


5. Your client indicates they use a graded scale of discounts as an incentive for

customers to pay invoices early. Can this be accomplished using SAP? Where is this

configured?

Yes. Payment terms are established in SAP to represent the due date for payment of

invoices. The terms include a graded scale of discounts used as an incentive to pay the

invoice early.

6. Explain the concept of a baseline date.

For each payment term, the system can default a date for the baseline date. The

baseline date is the date from which the payment terms begin to calculate. This default

can be overwritten.

7. Your client indicates they would like to restrict the maximum amount a specific

employee can post per line item. They would also like to restrict how much of an

over/under payment that an employee can accept. Can this be accomplished in SAP?

How?

Yes. Tolerances are defined in SAP per company code. Employees are assigned to an

Employee Tolerance Group. The maximum amount an employee can post per document

per line item, and the amount of payment differences allowed for an employee are

specified in the Employee Tolerance Group.

8. Which department usually maintains Sales Area data in the system?

Sales and Distribution Department

9. What is included in Sales Area data in SAP?

Sales Order

Pricing

Shipping

Delivery and Payment Terms

Accounting

10. Your client indicates they would like “Country” to be a required field, and “P.O. Box”

to be an optional field when creating customer master records. Where is this

configured?

The Account Group for a customer master record determines the field status group for a

particular type of account. The field status group defines the fields that appear on data

screens along with their data entry status.


11. How is the account number on a customer master record determined?

The Account Group determines the numbering for a customer master record. A number

range is assigned to an account group. Number ranges can be defined to force the

system to automatically assign a number to a master record or to force the user to

manually assign a number to a master record.

12. How many levels are there for determining field status groups for customer master

records?

Field status can be defined at three levels within the system: customer account level,

company code level, and activity type level.

13. Describe the concept of link rules. Why are they required?

Since there are three levels for determining screen layout, link rules exist to determine

which level takes precedence as to whether a field will be mandatory, optional, display or

suppressed.


SAP FI FAQs – Vendor Master Records

1. What are the three segments of a vendor master record? Give an example of data

stored at each level.

General data – account name, address

Company code level – payment terms

Purchasing data – Terms and conditions

2. What is a reconciliation account? Explain its significance with respect to posting

data to customer and vendor accounts.

A reconciliation account is a G/L account that is defined within each customer/vendor

master record. By posting to a customer/vendor account, the reconciliation account

balance is automatically updated.

3. What can be done to prevent duplicate vendor master records from being created?

A check for duplicates can be configured to prevent the creation of more than one

master record for the same vendor. This check is configured on address match code

fields and occurs when creating new accounts or when changing the address on an

existing account.

4. What information is included in the General Data section of the vendor master

record?

Address and Communication

Account Control

Bank Details

5. What information is included in the Company Code section of the vendor master

record.

Account Management

Payment Data

Automatic Payment Transactions

6. Your client indicates they would like to use a graded scale of discounts as an

incentive to pay invoices early. How can this be accomplished in SAP?

Payment Terms are established to represent the due date for payment of invoices. The

terms include a graded scale of discounts used as an incentive to pay the invoice early.

http://www.erpdb.info/sap-fi-faqs-vendor-master-records/


7. How are payment terms identified in SAP?

Payment terms are identified using a four character alphanumeric key.

8. Explain the concept of Baseline Date.

For each payment term, the system can default a Baseline Date. The Baseline date is the

date from which the payment terms begin to calculate. This default can be overwritten.

9. When creating a transaction, what happens when the default payment terms data is

changed?

Payment terms data can be changed manually when creating a transaction. The system

will prompt the user with a warning message acknowledging the change.

10. The client has expressed a concern with certain employees having the ability to

post documents above a dollar amount. Can SAP handle this concern?

Employees are assigned to an Employee Tolerance Group. For each Employee Tolerance

Group, a maximum amount for posting procedures (how much an employee can post

per document and per line item) can be specified. In addition, the Employee Tolerance

Group specifies the payment differences allowed.

11. Who usually maintains purchasing organization data in SAP?

The Purchasing Department.

12. What is included in the purchasing organization data?

Conditions (order currency, payment terms, minimum order value)

Sales Data (Salesperson, Telephone)

Control Data (GR based invoice verification, evaluated receipt settlement,

acknowledgment required, automatic PO).

13. What does the account group control?

The account group controls the numbering for the Vendor master record. A number

range is assigned to an account group. The account group also determines the field

status group and is used to designate one time accounts.

15. Your client indicates they would like to allow for alpha-numeric number ranges on

vendor accounts. What type of number range would you recommend? Why?

External number range. An external number range can be alpha-numeric. An internal

number range, on the other had, can only be numeric and is automatically assigned by

the system.


16. What are the three levels for field status groups that determine the screen layout

for a vendor master record?

Account group

Company code

Activity type

17. If the field status group for the account group is different from that of the

company code and the activity type, how is the screen layout (field status) determined?

Since there are three levels for determining screen layout, link rules exist to determine

which level takes precedence as to whether a field will be mandatory, displayed,

suppressed, or optional.


SAP FI FAQs – G/L Account Master Records

1. Discuss the concept of account groups and how they are used with respect to

general ledger master data.

The account group contains a number interval specified by a lower and upper limit that

controls the numbering for the G/L account master record. The user must specify the

number to be given to the G/L account at the time it is created. Account group

determines the field status (required, optional, suppressed) when creating the company

code segment.

2. What is the chart of accounts?

The chart of accounts is a list of G/L accounts. A client may contain many COA’s, but

each company code can be tied to only one specific COA. Every G/L Account master

record must be created at the COA level before it can be created for a Company Code.

The COA segment contains information such as the Account Number, Account Name,

and Account Group.

3. What are the segments of a general ledger master record? Give an example of data

that is stored at each level.

General data (COA level, Client level) – account name, type of account

Company code level – Field status group

4. Company Codes 0001 and 0005 share the same Chart of Accounts. They both share

the same G/L Cash Account (110000); however, Company Code 0001 posts in USD while

Company Code 0005 posts in DEM. How will this affect the configuration of the G/L

Account master record?

The Currency field in the Company Code segment of G/L Account master record 110000

for Company Code 0001 will be defined as USD, and in Company Code 0005, the

Currency field will be defined as DEM.

5. Lists two ways to create a G/L account.

1. Create the account at the COA level and then at the company code level (Step-by-Step)

2. Create the G/L account centrally, which allows the account to be created at the COA level

and company code level at the same time.

http://www.erpdb.info/sap-fi-faqs-%e2%80%93-gl-account-master-records/


6. You have just logged on to SAP and you find that the text on your screen is in

Danish. Why?

The language chosen on the logon was Danish. Logoff, and logon with English as the

chosen language.

7. Describe a sample account.

A sample account is a template that can be used to create GL accounts. When used, the

information defined in the sample account is defaulted into the company code segment

of the GL account being created. A sample account is not an actual account in the G/L.

8. Your client has a division in Mexico. They are interested in translating the chart of

accounts from English into Spanish in SAP. Can this be done? Please explain.

Yes. For every chart of accounts, the language in which the GL account name can be

displayed must be defined. The user maintains the GL account name for the languages

specified. The system does not translate the names of the accounts automatically;

however, once the GL account name is translated in the desired languages, the system

will select the correct name in the correct language.

9. Explain open item management.

When selected (at the company code level), this setting will allow items in the account to

be matched against an offsetting item and closed. The GR/IR account is an example of

an account that should be managed on an open item basis.

10. Company code data on a GL account master record is categorized as Account

Control, Account Management, and Document Creation Control. Give examples of the

data included for each of these.

Account Control:

Account Currency

Reconciliation Account for Account Type

Account Management:

Open Item Management

Line Item Display

Sort Key

Document Creation Control:

Field Status Group


Post automatically only

11. Explain the relationship between the Sort Key and the Assignment Field.

The Sort Key defines the field(s) used to populate the Assignment field when a

document is posted in the GL. The assignment field is used as a sort criterion when

displaying GL account line items.

12. An account has been set up for a USD company code with account currency USD.

When postings are made to this account, the transaction will be managed in what

currency?

USD – If the currency specified on an account is the same as the local currency (the

company code currency), then the transactions posted to the account are managed in

the local currency.

13. An account has been set up for a USD company code with account currency MXN.

When postings are made to this account, the transaction will be managed in what

currency?

Both MEX and USD – If the currency specified is not the same as the local currency, then

transactions posted to the account are posted in the specified foreign currency (MXN),

and the local currency (USD).

14. Your client has determined they would no longer like users to make postings to a

specific expense account. How can postings be prevented?

“Blocking” can be used to prevent posting to a vendor, customer, or G/L account or the

creation of an existing master record at the company code level.

15. What happens if a user attempts to make a posting to an account that has been

marked for deletion?

When attempting to post a business transaction to an account marked for deletion, a

warning message will appear. Since it is only a warning (versus a hard error), the

message can be overridden by pressing the enter key and the transaction can be

completed.

16. In addition to marking an account for deletion, what additional step is

recommended to prevent postings.

It is recommended that in addition to marking an account for deletion, the account is

also blocked. Blocking the account will ensure future postings are not made until the

account can be deleted.


SAP FI FAQs – Overview of Master Records

1. There are three primary types of data in the system. What are they? Describe each.

Master Data is constant over a long period of time. Transaction Data is created by a

transaction in the system. Transactions can be created manually or automatically. Table

Data is the data that is specifically configured for a client’s business.

2. Identify each of the following as Master Data or transaction data:

Invoice – (Transaction)

Vendor – (Master)

Goods Receipt – (Transaction)

Material – (Master)

GL Account – (Master)

GL Account Posting – (Transaction)

3. Are master records accessed from the configuration side or the application side in

SAP?

Typically the Application Side; however, some records (e.g., bank and G/L) are accessible

through the IMG

4. What are the two levels for creating customer and vendor accounts?

Client and Company Code

5. What are the two levels for creating GL accounts?

Chart of Accounts and Company Code

6. XYZ client indicates they would like an expense account set up to be used by only 2

of their 3 subsidiaries (Co. Code 001 & Co. Code 002). Each subsidiary is set up as a

separate company code in SAP. XYZ has only one chart of accounts. How can this be

achieved? Please explain.

The expense account will be setup at the chart of accounts level for client XYZ. In

addition this expense account will be set up at the company code level for company

codes 001 and 002.

http://www.erpdb.info/sap-fi-faqs-overview-of-master-records/


SAP Controlling FAQs – Overview

1. Describe the major differences between Managerial Accounting and Financial

Accounting.

Managerial Accounting

Generally no constraints.

Future orientation

Data is used by managers at various levels within the company.

Financial Accounting

Constrained be GAAP and/or IAS

Past orientation

Data is used by outside parties like banks, investors and other stakeholdes.

2. Define the term cost object.

A cost object is a responsibility center, project, product or other item for which a

separate measurement of cost is desired. Cost objects are defined by management.

Cost objects can include cost centers, projects and activities.

3. Describe overhead costs and provide an example.

Overhead costs are indirect costs that cannot be directly assigned to a cost center.

Utilities, rent and telephone expenses could be examples of overhead costs.

4. What are the two major components of the controlling module (CO)?

Configuration and application. The purpose of configuration is to customize CO to meet

the specific needs of the client. The application component supplies the tools necessary

for internal reporting and analysis.

5. Please list the five CO sub modules.

• Cost Center Accounting (CCA)

• Overhead Orders and Projects (CO-OPA)

• Activity Based Costing (CO-ABC)

• Product Cost Accounting (CO-PC)

• Profitability Analysis (CO-PA)

6. True or False? Activity based costing is primarily used to capture the costs of

internal events, such as travel costs and trade fairs.

False. ABC provides a business process view of overhead costs. Internal Orders are used

primarily for internal company events.

http://www.erpdb.info/sap-controlling-faqs-overview/


7. List 3 major functions of the PC module.

Product cost planning enables:

• Calculation of standard internal cost for manufactured goods

• Calculation of WIP during month end closing

• Calculation of period end variances

• Settlement of Product Costs

8. True or False? PCA is generally used for margin reporting and cost of sales

accounting.

False. PA is used for margin reporting and cost of sales accounting. PCA is used for

period based accounting and complete financial statements.

9. What is the primary integration point between the CO and FI modules?

G/L expense accounts are the primary cost elements in CO.


SAP Controlling FAQs – Organisation Structure 1. True or False? A controlling area has a one to one relationship with company codes.

False. A controlling area has a one to one relationship with the chart of account and, a

one to many relationship with company codes.

2. After the controlling area has been configured, the assignment of company codes

cannot be changed.

[True] or False.

3. When a number of company codes are assigned to a controlling area, cross

company code accounting is possible. However, each company code must share what

three attributes:

• The same chart of accounts

• The same fiscal year variant and year end date (the same fiscal year variant must be

assigned to the controlling area and to all attached company codes)

• The same standard hierarchy of cost centers

4. Name three types of cost objects used in the CO.

• Cost centers

• Internal orders

• Profitability segment

5. If the controlling area currency is the same as the company code currency, the object

currency is freely definable.

[True] or False.

6. Define the document currency.

The document currency is the currency of the transaction. The document currency is

defined at the time the document is entered.

7. Define account assignment objects in CO and name three of them.

Account assignment objects in CO represent units to which costs are assigned. They are

used to collect costs (‘cost bucket’) and can be planned and budgeted on. Three

examples: cost center, internal order, business process.

8. CO number ranges are defined on company code level.

[True] or [False]. CO number ranges are defined for each controlling area.

http://www.erpdb.info/sap-controlling-faqs-organisation-structure/


SAP Controlling FAQs – Master Data

1. List the five types of master data in cost center accounting (CCA).

• Cost centers

• Cost elements

• Activity types

• Statistical key figures

• Resources

2. What characteristics do the master data types in CCA share?

• Time dependency (except for SKF)

• Can not be deleted once transaction data has been posted (except for SKF and

resources)

• Can be arranged in groups (except for SKF)

3. Name the two types of cost elements and explain them.

Primary cost elements: They originate from outside the CO module (i.e. posted through

FI). They have counter-parts in FI and are used as a method for moving costs into the CO

module.

Secondary cost elements: Originate from within CO and have no FI counter-part.

Secondary cost elements are used as a tool for moving costs for internal reporting within

CO. They exist exclusively in CO.

4. True or False? Once a cost center has been created, the open or validity period of

such center cannot be changed.

True. CCA master data is time dependent and once created cannot be changed.

However, creating a new item and attaching its date range to the original date range

may extend the effective date.

5. Define a cost center group.

A cost center group is a hierarchical structure consisting of nodes and attached cost

centers. Cost center groups can facilitate the analysis of costs by allowing costs to be

reported on the cost center level or at the group level.

6. Define the Standard Hierarchy and explain its use.

The standard hierarchy must, by definition, contain all cost centers from all company

codes attached to the controlling area. This ensures that all costs posted in FI and

assigned to a cost center are captured in CO.

7. True or False? All cost centers must be attached to either the standard hierarchy or

an alternate hierarchy (cost center group).

False. All cost centers must be attached to the standard hierarchy in order to ensure that

all costs posted in FI are captured in CO. They may furthermore be attached to as many

alternate hierarchies (cost center groups) as desired.

http://www.erpdb.info/sap-controlling-faqs-master-data/


8. True or False? Cost centers can be attached at any node level within the hierarchical

structure.

False. Cost centers can only be attached to the lowest node levels within the hierarchical

structure.

9. True or False? A cost center cannot be attached to more than one alternate

hierarchy.

False.

10. Define activity types.

Activity types are units of measurement for the internal allocation of costs from within

CO. Activity types define the main cost drivers or services performed by a cost center.

Examples include direct labor hours, machine hours and maintenance hours.

11. Define activity price.

Activity types are used to derive the activity price. The total costs are divided by the

total planned or actual activity quantity to derive the activity price (cost / activity type

unit).

12. Provide two examples of statistical key figures.

Statistical key figures are derived from non-financial statistical data, such as the number

of telephones or the square footage of a building. Statistical key figures are used for the

allocation or planning of costs.

13. What are Resources?

Resources are goods and services, which are supplied internally and externally to an

organization in order to produce business activities. They Resources are used to carry

out detailed, quantity-based primary cost planning below the cost element level for cost

centers, orders and WBS elements.

14. Name the two types of internal orders and explain the major distinctions.

An Individual Order collects costs of a one-time business activity. This order is typically

settled in full at the time of completion and is closed after settlement.

A Standing Order collects costs for smaller, recurring jobs. These costs are settled on a

periodic basis (typically at month-end). After settlement the order remains open for

postings. The benefit of a Standing Order is, not having to create a new order for the

same costs each month.

15. Define statistical orders.

A Statistical Internal Order can be defined to collect costs for informational purposes

only and therefore need a real cost assignment (e.g. to a cost center) at the same time.

The costs posted to a statistical internal order are not settled.


SAP Controlling FAQs – Planning

1. True or False? In SAP Integrated Planning Cycle the planning process begins with a

Profit Plan.

False, in SAP Integrated Planning Cycle the planning process begins with a Sales Plan

2. True or False? Sales volumes calculated in sales planning or order volumes stored in

the Sales Information System (SIS) can be fed into Production Process.

True, sales volumes calculated in sales planning or order volumes stored in the Sales

Information System (SIS) can be fed into Production Process.

3. True or False? A version is a comprehensive set of planning data.

True. A version is a comprehensive set of planning data.

4. True or False? There can be multiple plan versions for “what if analysis”.

True.

5. Each plan version has information set by _____________.

Each plan version has information set by fiscal year.

6. Describe plan revaluation and its use in CO planning.

Revaluation is the process of increasing or decreasing a plan based on a percentage.

Different percentages may be specified by cost center or by cost element.

Example: Management states that all planned costs will be at 95% of last year’s planned

costs. To implement this directive, copy last year’s planned data into another version.

Then revalue the new version by -5%.

Revaluation percentages may be changed at any time. A repeated revaluation with a

different percentage reverses all previous revaluations. Revaluations are always based

on the original plan values. To prevent resetting the results of a revaluation (during a

repeated revaluation), a new revaluation with a different percentage can be defined.

• Value Column: Planning amounts or quantities for the associated lead column(s).

• Lead Column: Contains information describing the nature of the amount in the

associated value column, such as cost center, cost element or activity type.

7. Describe what a planning layout is.

A planning layout determines the column and row structure for entering plan data. A

layout must be defined for each type of planning to be performed.

8. Describe what a planning profile is.

Planning profiles are used to group planning layouts together. Planning profiles also

determine the effective dates or time frame for planning. Multiple planning profiles may

be created. Planning profiles can be assigned to user groups.

http://www.erpdb.info/sap-controlling-faqs-planning/


9. True or False? The planning profiles must be set in the application side for planning

to take place.

True, the planning profile to be used must be set into the system from the application

side before planning can occur, this tells the system which profile you will be using and

defaults in the correct layouts.

10. Describe the steps involved in setting up a plan.

• Define Planner Profile: Assign the layouts previously created to the profile, up to 3

layouts (one for each type of planning), may be assigned.

• Set Planner Profile: Defaults in the appropriate layouts in each area based on the

profile.

• Planning Transactions: Enter planning data as required.

11. Define Statistical Key Figure planning.

Statistical Key Figure Planning – Statistical key figures are used in the calculation of plan

activity and as allocation bases for distributions and assessments.

12. Define Activity Type Planning.

Activity Type Planning – Planned activity output for a cost center will determine the

planned volume of costs. Activity for a sending cost center must be planned before

secondary cost planning can take place.

13. Define primary and secondary Cost Planning.

Primary/Secondary Cost Planning – This type of planning is performed last, since activity

quantities are required to plan costs.

14. Define Activity Dependent Cost, Activity Independent Cost and Mixed Cost.

• Activity Dependent Costs are variable costs and they are costs that fluctuate based

on activity. The greater the activity, the greater the cost. Example: Direct Labor costs

that increase as production increases.

• Activity Independent Costs are Fixed Costs. Activity independent costs DO NOT

fluctuate based on activity. Example: Insurance expense – regardless of output,

insurance premiums will not change.

• Mixed Costs are a combination of both fixed and variable costs, therefore displaying

the characteristics of both. Example: Utilities expense – the basic cost of heating a

building (fixed portion) would increase as production increases (variable portion).

15. ___________ are used by the system to spread planned amounts across periods.

Distribution Keys are used by the system to spread planned amounts across periods. It

allows for the entry of planned annual figures, which are then automatically spread

across months.

16. The two automated methods for planning primary costs are _____________.

There are two automated methods for the planning of primary costs, imputed cost

calculation and distribution. Cost which has no direct equivalent in FI, such as imputed


rents. Cost which has a different equivalent in FI, primarily as it relates to the timing of

cost. Imputed cost calculations are used to smooth the effect on cost centers for large,

one-time charges, such as insurance premiums or employee bonuses. By smoothing

one-time expenses in CO, price fluctuations from period to period can be avoided.

Distribution is the allocation of primary costs from a clearing cost center to the cost

center responsible for incurring them. The identity of the primary cost is retained at the

receiving cost center. Distribution may be used for allocating planned or actual primary

costs only. Distribution simplifies the process of planning primary costs that are

attributable to more than one cost center. Instead of manually planning individual

amounts to many different cost centers, the total planned expense is planned to a

clearing cost center, and the allocation to the receiving cost centers is performed

automatically through a distribution cycle. Clearing cost centers (also called pooled cost

centers) act as temporary holding areas for costs, they are not responsible for the costs

but only exist to facilitate distributions and other allocation methods.

17. Define an Assessment and an Assessment Rule.

Assessment is the allocation of cost from one cost center to one or more other cost

centers. The original cost center or the nature of the costs themselves are not retained,

but are reclassified as a secondary cost element. Assessment is designed to group

together and reclassify costs while simultaneously allocating them. Assessment may be

used to allocate both planned and actual primary and secondary costs.

An assessment rule, using fixed amounts, statistical key figures or percentages, is defined

to break down the assessment among the receiving cost centers.

18. Define a Cycle and a Segment

Cycles and Segments are utilized by the SAP system to perform automated allocations,

such as distributions, assessments and repostings (covered in Ch.5) of both planned and

actual costs.

A cycle may be defined as a holding place for the various rules that will define an

automated allocation. Cycles are comprised of segments, each segment represents one

set of data needed to complete the automated allocation.

A segment consists of the following:

• Allocation Characteristics – Identification of sending and receiving cost centers.

• Sender Values – What types of costs will be allocated, whether they are planned or

actual amounts, and what percentage of total sender costs will be allocated.

• Receiver Values (Tracing Factors) – The basis for allocation – percentage, fixed

amount or statistical key figure.

19. Describe plan reconciliation.

The plan reconciliation is used to check and reconcile the internal activity exchange. With

the plan reconciliation, you can adjust the entire plan activity quantities automatically on

the basis of scheduled activity on the cost centers.


20. What is done in the final step of the planning process?

The planning process is completed by performing an Activity Price Calculation within the

system. This process calculates an activity price based on planned activities and costs

and uses the calculated price to valuate planned secondary costs at receiver cost centers.

Alternatively, a political activity price may be used in place of a calculated activity price,

but the procedure must still be performed.

21. What is budgeting?

Budgeting may by implemented to augment the planning process. The CCA module

supports budgeting at the cost center level. From an SAP standpoint, budgeting

represents a top down approach to controlling costs, whereas planning represents a

bottom up approach to cost control.


SAP Controlling FAQs – Variance Analysis

1. What is the purpose of variance analysis?

Variance analysis is used to calculate and interpret differences between planned costs

and actual cost within a cost center or cost center group. It also provides vital

information that can be used to modify and improve planning in subsequent periods.

2. All variances in SAP can be classified as what two types of variances?

• Input Side Variance

• Output Side Variance

3. True or False? In SAP, Variance analysis can only be done in plan version 0.

True. Variance analysis can only be done in plan version 0; because, plan version 0 is the

only planning version that can have actuals posted to it.

4. What are four input side variances SAP can identify?

• Price Variance

• Quantity Variance

• Resource Usage Variance

• Input Variance

5. Give an example and a root cause for a Price Variance.

Example: Wage increase from 12.00 to 12.50 an hour. Cause: Cost of living adjustment

not accounted for in planning wages.

6. Give a mathematical formula for Price Variance

(Planed Price — Actual Price) X Quantity Planed

7. Give an example and a root cause for a Quantity Variance.

Example: Reduction in the hours it takes to produce a widget. Cause: Productivity

increase not planned due to PwC reengineering efforts that exceeding company’s

expectations.

8. Give a mathematical formula for Quantity Variance

Planed Price X (Planned Quantity- Actual Quantity)

9. Give an example and a root cause for a Resource Usage Variance

Example: Cost Element posted to wrong Cost Center. Cause: Error in planning or actual

posting.

10. Give an example and a root cause for a Input Variance

Example: Cost element were planned and posted in actual, but no consumption

quantities were recorded. Cause: Consumption quantity unknown during variance

analysis.

http://www.erpdb.info/sap-controlling-faqs-variance-analysis/


11. What are the types of output side variances SAP can identify?

• Output Price Variance

• Volume Variance

• Output Quantity Variance

• Remaining Variance

12. What is the difference between an “Output Price Variance” and a “Price Variance”

as defined in SAP?

• Output Price Variance is an output side variance

• Price Variance is an input side variance

13. Give an example and a root cause for a Volume Variance.

Example: 1000 man hours are planed for maintenance at 10 dollars. In actual 1100 hours

of maintenance is produced by the maintenance cost center. Cause: Unforeseen

requirement for additional maintenance.

14. What is the two step Process for calculating a Variance

Configuration

• Create Variance Variant

• Maintain Target Version

Execution

• Enter Parameters

• Execute Variance Calculation

• Print Variance Report

15. How many variances can be activated by the user in the variance variants?

4 input and 3 output

16. What is the purpose of the Variance Variant?

It indicates to the system which variance the system should attempt to calculate and

identify during execution of the variance calculations

17. How can additional information be obtained on the cause of a variance, After

running a Variance Report?

The drill-down function may be used for each line item

18. What are some of the options available to fully relieve all remaining cost, after

variances have been calculated and reported?

• Sweep the remaining balance into another module (Such as PA) for further analysis

• Perform additional allocations within CCA to move all variance amounts to one or

more other cost centers

• Perform an Actual Activity Price Calculation.


SAP Controlling FAQs – Actual Posting and Allocations 1. [True] or False? Posting actual cost in Controlling involves the transferring of

primary costs from other modules to Controlling, as well as moving costs within

Controlling.

2. List the two main types of actual posting to CO.

There are two types of actual postings to CO, Transaction Based Postings and Periodic

Allocations.

Transaction Based Postings (also known as Transaction based allocations) are posted on

a real-time basis from other modules or within CO. This enables up-to-the-minute

reporting of costs incurred on the cost centers at any time during the period. There are

four transaction-based postings to CO:

From other modules:

• Direct postings to cost centers from other modules, such as FI, AM, and MM.

Within CO:

• Reposting

• Activity Allocation

• Posting of Statistical Key Figures.

Periodic Allocations exist entirely within CO. They occur at the end of the period after all

primary postings have been completed. Periodic allocations require cycles and

segments to be executed. There are five main types of periodic allocations:

• Periodic repostings (periodic transfers)

• Distribution

• Assessment,

• Imputed Cost Calculation

• Indirect Activity Allocation.

3. [True] or False Transaction based posting within CO may be accomplished through

the use of any of the following: Reposting, Activity Allocation and posting of Statistical

key figures.

4. How many documents are created when primary costs are posted to CO from

another module?

Two documents are created when primary costs are posted to CO from another module:

• The original document in FI, AM or MM

• A parallel document in CO which displays the data from a cost accounting viewpoint.

The CO document is summarized according to cost element and cost object.

http://www.erpdb.info/sap-controlling-faqs-actual-posting-and-allocations/


5. True or False? Re-postings are used to reallocate costs that were incorrectly posted

to a cost center.

True. Re-postings are used to reallocate costs that were incorrectly posted to a cost

center. There are two types of internal re-postings, Full-Transaction Reposting (i.e.

Reposting of the entire transaction) and Line Item Reposting (i.e. Reposting of a portion

of the original transaction).

In a Transaction Based Reposting, the entire original cost center posting is reversed and

reposted to a different, corrected, cost center. The FI document number does not need

to be referenced for the reposting. A new CO document number is created for the

reposting. The original FI document remains unchanged (references old cost center).

A Line Item Reposting is used when only certain line items in the original posting are

incorrect. The FI document number must referenced for the reposting. A new CO

document number is created and the old cost center is referenced on the FI document.

6. List and define the two types of internal Reposting.

See answer to question 5 above.

7. Describe Manual Cost Allocation.

Manual Cost Allocation can be used to post primary cost as well as secondary costs to

avoid the creation of a cycle for simple allocations, to transfer external data or to correct

false secondary postings. Manual cost allocation applies to actual data only. You cannot

copy this data into planning.

8. Define Direct Internal Activity Allocation.

Direct Internal Activity Allocation is the process of recording activities performed by a

cost center and simultaneously allocating those activities to receiving cost centers based

on consumption. In the case of direct activity allocation, the sender (output), and the

receiver (consumption) activity volumes are known.

9. [True] or False? In direct activity allocation, the sender (output), and the receiver

(consumption) activity volumes are known.


10. True or False? Periodic allocations of cost exist in both FI and CO.

False, Periodic Allocations exist entirely within CO. They generally occur at the end of

the period after all primary postings have been completed and they require cycles and

segments to be executed. There are five main types of periodic allocations: Periodic

repostings (periodic transfers), Distribution, Assessment, Imputed Cost Calculation and

Indirect Activity Allocation.

11. [True] or False? Periodic allocations require cycles and segments to be executed.



12. List three types of periodic allocations.

See Question 9

13. ___________enables the correction of multiple posting made to cost centers during

the period, therefore producing the same results as several transaction-based repostings.

Periodic reposting enables the correction of multiple postings made to cost centers

during the period, therefore producing the same results as several transaction-based

repostings. This reposting functionality can also be utilized at the end of a period to

transfer costs from a clearing cost center to appropriate receiving cost centers. When

used in this fashion, periodic reposting is very similar to distribution.

The main difference between periodic repostings and distribution is the purpose for

usage envisioned by SAP when the methods were created. Periodic reposting

functionality, similar to transaction-based repostings, was designed for error correction,

whereas distribution was designed as a primary cost allocation method. However, other

than their intended purposes, the two methods are practically identical and either

method may be used whenever desired.

14. Explain both the iterative and cumulative form of cycle processing.

Iterative processing: iterative sender/receiver relationships (sender is also amongst the

receivers) are considered when this cycle is processed. The iteration is repeated until

each sender is fully relieved of costs provided. Cycles may be set to iterative processing

for both plan and actual data.

Cumulative processing: all posted sender amounts since the first period are accumulated

and allocated based on the tracing factors accumulated since this period. The difference

between the accumulated amount and the posted amounts in previous periods is posted

in the current period. The postings in previous periods remain unchanged. Cycles may be

set to cumulative processing for actual data only.

15. Describe imputed cost calculation in CO.

Imputed cost calculations are used to smooth the effect on cost centers for large, one-

time charges, such as insurance premiums or employee bonuses. By smoothing one-

time expenses in CO, price fluctuations from period to period can be avoided. There are

two methods for calculating imputed costs in the R/3 system Cost Element Percent

Method and Target = Actuals Method.

16. List and define the two main types of indirect activity allocations.

Indirect activity allocation is the process of allocating activities from a sender to a

receiver cost object. The activities allocated to the receiver are multiplied by the planned

activity price to determine the total amount.

There are two types of indirect activity allocations:

• Sender activities known

The activity type is allocated from the sender to the receiver based on receiver tracing

factors (i.e. actual receiver statistical key figures, planned receiver activity types, etc.)

This type of indirect activity allocation must be set up with an activity type of Category


3. This category is defined for manual entry (of known sender values), using indirect

allocation (tracing factors).

• Sender activities unknown

Activities are inversely allocated from the sender cost center using receiver tracing

factors or fixed amounts/percentages.

This type of indirect activity allocation must be set up with an activity type of category 2.

This category is defined for inverse determination (of sender values based on receiver

consumption) using automatic allocation (to receivers).

17. Describe the use of the reconciliation ledger.

The reconciliation ledger keeps track of transactions between company codes within one

controlling area, since such cross company allocations result in an imbalance between

CO totals and FI totals. Because legal reporting is based in FI, all transactions that cross

company codes in CO must be reflected in FI.