SAP FICO Interview Questions and Answers
Last updated on 21st Oct 2020, Blog, Interview Question
SAP FI is concisely known as financial accounting. It is very significant in ERP (Employee Resource Planning) module. It concerns with the financial transactions within SAP, assisting the employees in managing their data related to business and financial transactions flawlessly.
This fast-paced technology is increasing the demand for SAP FICO. To use this software, thorough knowledge of financial calculations, and also ledger balances are required. It means that employees having SAP experience are highly demandable. There are several positions available for SAP FICO employees. However, the interview process is quite daunting if you are not familiar with the SAP FICO question and answers.
But, when you are familiar with questions and answers asked throughout the interview process, then surely you will pass the round very quickly. To offer you a list of SAP Training questions, we have framed where you will find 50 SAP FICO interview questions and answers. Thus, read it to the end to enhance your confidence level for the interview and also be able to clear it in the first attempt:
1. What do you mean by SAP FICO?
In the term SAP FICO, FI stands for Financial Accounting, and CO stands for control. SAP FI concerns for accounting, tax computations, preparations of financial statements, and more while SAP CO concerns with an inventory sheet, cost sheet, etc. This software is used to store data, computes it, and analyses the results depended upon the current market scenario. Data is prevented for loss and also get verified with SAP FICO.
2. What is the posting key, and how can it control?
Posting key is a two-digit numerical used to find out the transaction type that was entered in the line term. Posting key is used to find out:
- Account Types
- Field status of the transaction
- Types of posting-Debit or Credit
3. What are the other modules in which Financial Accounting is integrated?
- 1. Material Management
- 2. Human Resource
- 3. Production Planning
- 4. Sales and Distribution
- 5. Controlling of financial transaction
4. What are the organizational elements in SAP FI?
- Business Area
- Company Code
- Functional Area
- Chart of Account
5. What do you mean by company code in SAP?
When there is a need to generate financial statements like Balance sheets, P/L statements, etc. then company code is used.
6. How many currencies for a company code can be configured?
For a company code, three currencies can be configured;
- 1. One-A Local currency
- 2. Two-The parallel currencies
7. How many charts of accounts a company code has?
We can use only one chart of account for one company code that is assigned.
8. What do you mean by ‘year shift’ in the SAP calendar?
The broken fiscal year doesn’t have any understanding of SAP systems like January 2017- May 2018. It only understands the calendar year. In a case, a business has a different fiscal year and calendar year; however, Mixing the different months of two
different calendar years, then one of the calendar years has to considered as a fiscal year for SAP. The month that is falling in another year needs to be shifted into the fiscal year. To shift, we use the sign either +1 or -1. This shifting of year is known as ‘Year Shift.’
9. Which options in SAP available for Fiscal years?
In SAP, the fiscal year is the way where financial data is placed in the system. We use 12 periods and four special periods that are stored in fiscal year variant like:
- 1. Year dependent fiscal year
- 2. Calendar year: From January-December, April-March
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10. What do you mean by validations and substitutions in SAP?
The validation function allows us to analyze values and also the ranges of values when these are entering in the SAP system. The rule manager is used to storing the validation rules. When the values are entered in the SAP system, it automatically checks for standard validation rules.
The substitution function validates the values entered into the SAP system as per the prerequisite specified by the user.
11. What do you mean by year dependent fiscal year variant?
When the number of days in a month is not accordingly to the calendar month, then it is known as year dependent fiscal year variant. For instance: in the year 2007, March month ends on 28th and April ends on 25th, etc.
12. In which application areas, we can use validation and substitutions?
- 1. AM-Asset accounting
- 2. CS-Consolidation
- 3. CO-Cost accounting
- 4. FI- Financial accounting
- 5. PC-Profit center accounting
- 6. PS-Project system
- 7. GL-Special purpose ledger
- 8. RE-Real estate
13. Which problems is a business area configured?
When there is a split of the account balance that is highly relevant in the case of tax accounts, then a business faced problems.
14. What is the field status group?
When a user performs the transactions, then field status groups are used to control the fields which taken into consideration.
15. Explain the use of the Financial Statement Version in SAP?
Financial Statement Version or FVS, is a reporting tool that is used to take out final accounts from SAP, such as the Balance sheet. When there is a need to generate the output of different external agencies, then we use multiple FSV’s.
16. What is the importance of Goods Received/ Invoice Received clearing account?
GR IR or Goods Received/ Invoice Received is an intermediary clearing account. It is used in SAP to record the goods and invoices in transit. It also records goods received but not invoiced. It means it also includes invoices for products that are still pending to receive.
17. What is Financial General Ledger Accounting does?
When we need to get a recording of the external accounting and accounts, then we use GL or General Ledger. It is used to record all business transactions and also assure us that accounting data is always authentic and complete.
18. How do invoice payments make?
Automatic method: When the payments are made via data medium exchange (DME), wire transfer, drafts, cheque, then it is known as automatic payments.
Manual method: When the payment is made without any cheque or draft or DME, then the process is known as manual.
19. How it possible to create a Credit Control Area in SAP?
With the help of transaction code OB45, the credit-control area is created in SAP.
First, write SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and after then, entering the information, i.e., Currency, Update, Name of the credit control are used in SAP, Credit limit, fiscal variant, description, risk category, and rep group.
20. Explain by posting period variants?
The SAP FI accounting period variant is used to manage the accounting periods open for validation and for all closed periods to be deleted. It is used for the opening and closing periods of the financial year for reservation purposes. We can assign these posting periods to one or more companies.
In SAP FI, posting period variant is needed to maintain accounting periods which are open to post while all closed period is in a balanced position. It is used to open or close period in the fiscal year for posting. Even these posting periods can assign to one or more company codes.
21. What do you mean by the short-end fiscal year?
When there is a change from a typical fiscal year to a non-calendar fiscal year, it is known as a short-end fiscal year. These sorts of changes happen when a business becomes a part of the new group.
22. Explain the purpose of Document type in SAP?
It is used to define the range of documents. It is used to control the types of accounts like assets, customers, etc. Moreover, it is also used for the reversal of entries.
23. What do you mean by country Chart of Accounts?
Country Chart of Accounts has General Ledger accounts that are required to fulfill the country’s legal requirements.
24. What is APP in SAP Fico?
Automatic Payment Program or APP is a tool given by SAP to companies for paying to their customers. It is a very useful tool used to avoid mistakes that can happen if perform manually.
25. What is dunning in SAP?
When payment chasing letters are issued to clients, it is known as dunning. Only SAP can decide which clients must get the letters and also about overdue. Accordingly, overdue payments, different letters are used to print in SAP. Moreover, with the assist of the dunning level on the client master, it is possible to decide with ease which letter has already issued to the client.
26. Where do we use SAP FI?
SAP FI module is used to manage financial accounting data in multiple companies, languages, and currencies. This module is mainly deal with the components like Inventory, Cash Journal, Accrual, Inventory, Fixed asset, Tax accounting, Account receivable and payable, General Ledger, Parallel valuations, financial statements, Master data governance, and Fast close functions.
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27. Do you know about different submodules in SAP FI?
- General Ledger
- Travel Management
- Lease Accounting
- Fixed Assets, etc.
28. How can internal orders be used?
We can use the internal orders for;
- 1. Investment orders: In this, we can monitor internal jobs related to fixed assets.
- 2. Overhead orders: In this, we can monitor those internal jobs that relate to the cost center.
- 3. Accrual orders: In this, the accrued cost is calculated in CO as per offsetting posting.
- 4. Orders with Revenue: In this, we only calculate the cost controlling parts of sales and distribution.
29. What are the advantages of using Business areas in a company?
When we use the business area, it becomes easy to configure. For this, we need to attach the company code along with other information in the business area. Moreover, with the usage of business areas in control, we can create a balance sheet, profit, and loss statement, and more ledger accounts for business areas. Thus, business areas are used for management accounting in some companies.
30. How can we manage the credit limit for the customer in FI?
With the help of credit control in FI, it is possible to find out the credit limit for the clients. It is used in application components (sales and distribution, Account receivable) for credit management. We can use the credit control in this way- User exit- Distribution channel-Customer master- Company code.
31. How can you differentiate the field status variant and field status group?
Files status groups are found in the field status variant. The filed status group is used to maintain in General Ledger account. It also specifies the fields while posting to General Ledger.
32. Name the different account types in SAP FI? How do you know about account types?
To know about account types (A, D, K, M, and S), posting keys in SAP FI is used. SAP FI has different accounts like;
- 1. A – assets,
- 2. D – customers,
- 3. K – Vendors,
- 4. M – Material,
- 5. S – General Ledger Account.
33. List the common document types in FI?
- AA described as Asset Posting
- AN described as Net Asset Posting
- DR described as Customer Invoice
- DZ described as Customer Payment
- KA described as Vendor Document
- KG described as Vendor Credit Memo
34. How can we Account Receivables in FI?
To record and manage accounting data of all customers, SAP FI Accounts Receivable component is used. It is a significant part of sales management. Moreover, we directly record all posting in accounts receivable in General Ledger. Updation of GL is done as per transactions.
35. What is the company and company code?
The company is used in the legal consolidation module, while an entire self-contained set of accounts is recorded for purposes of external reporting in company code to record the financial statements of different company codes.
36. Do you know the most common G/L reports in SAP FI?
The most common G/L reports in SAP FI are:
- 1. G/L Account Balances
- 2. G/L Account List
- 3. G/L Account Totals and Balances
- 4. G/L Chart of Accounts List
37. How can you define tolerances for invoice verification?
Tolerance helps to find out does the tax shown on the invoice or the payable places matching. Tolerance is defined in logistic invoice verification like:
- Quantity variances
- Small differences
- Price variances
- Moving average price variances
38. What do you mean by payment in SAP FICO, and where does it store?
The payment term is used in SAP FICO to find out the payment due date for the customer or vendor invoice. It is stored on the vendor master record and fetched out through on the vendor invoice postings.
39. What do you mean by one-time vendors?
In a one-time vendor, a vendor has a very temporary relationship. It can be used for more than once. However, it is mostly used for one or two transactions.
40. Which are the standard stages of the SAP payment run?
For SAP payment run, the following standard stages are used:
Entering of parameters: In which, the details like payment methods, company codes, vendor accounts, etc. are recorded.
- 1. Proposal Scheduling: In which, the system shows the list where the invoices are needed to pay.
- 2. Payment booking: It includes the booking of the payments in the ledger
- 3. Printing of payment forms: It includes the printing of payment made.
41. How capital Work In Process and Assets accounted for in SAP?
Capital work in process or WIP is concerned with assets under construction in SAP. This term is used in the specific asset class. Kindly note that no depreciation is charged under Capital WIP.
The cost that is concerned with building a capital asset is treated as internal order, and until the settlement processes, it is kept treating as Asset under construction.
42. What are asset classes essential? What asset classes are there?
The asset class is treated as the main class to classify the assets. Kindly note for each asset, only one class is assigned. Plant & Machinery, Furniture & Fixtures, etc. are examples of asset classes.
The asset class also has a G1 account has obtained, then the G1 account is debited. Moreover, whenever we create an asset master, it becomes compulsory to specify the asset class to whom we create the required assets. It means whenever an asset transaction is done, then the G1 account is automatically attached, and entry is done. We can also mention the default values to calculate depreciation values and also other master data in every asset class.
43. What do you mean by parallel and local currency in SAP?
Every company code can have two more currencies apart from company code; the currency is also added to the company code data. When the currency is added in the company code creation, it is known as the local currency code, while the other two more currencies are known as parallel currencies. When we need to do any international transaction, then the parallel currency is used. The two parallel currencies that are used in SAP are HARD currency and GROUP currency.
44. How to use internal order?
Whenever we need to track costs, then we use internal order. These can be incurred for a short time only.
45. What do you mean by ‘Value Field’ in the CO-PA module?
The term value field means to value or number-related fields in profitability like sales revenue, quantity, etc.
46. What do you mean by the statistical internal orders?
When dummy cost objects are used to report or analysis purposes, it is known as statistical internal orders.
47. How do you differentiate between Residual Payment and Part Payment methods of allocating cash in account receivable?
Part-payment and residual payment are used methods that are used in allocating particle methods from clients.
For instance: When an invoice of INR 10000 is generated, and the client has paid INR 7000, now this INR 7000 will be treated as off-set, and the remaining balance will be INR 3000. An invoice is cleared for the entire value, i.e., INR 10000, while a new invoice will be generated for the remaining payment.
48. Explain the use of fiscal year variant in SAP FI? How many variants of it can be used?
Up to 16 posting periods can be used in the fiscal year. We need to define the fiscal year variant for every company code. In a case, we create a controlling area; we need to define the fiscal year variant.
It may be noted that controlling area and company code may be different in a number of special periods used. We should ensure that fiscal year variants should be matched.
49. In a case General Ledger document is not completed, then how can you save the document at a later stage, and how can you manage this in FI?
We can either hold posting of the general ledger document or temporarily save the data or document in the following conditions:
- 1. Inaccurate or incomplete information in the document
- 2. When general ledger document is incomplete
- 3. To save the document for the later stage.
50. Which scenarios can use document reversal?
Even we can able to reverse an inaccurate document. A document can be reversed only if:
- It has an only vendor, customer, or general ledger account items.
- It has no cleared items, and
- It was shown with financial accounting.
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