SAP FICO Questions

SAP FICO stands for FI (Financial Accounting) and CO (controlling). In SAP FICO, SAP FI take cares about accounting, preparation of financial statements, tax computations etc, while SAP CO take cares of inter orders, cost sheet, inventory sheet, cost allocations etc. It is the software that stores data and computes them and retrieves the result based on the current marketing scenario. SAP FICO prevents data lost and also does the verification and reporting of data.

The other modules to which ‘Financial Accounting’ is integrated are

  • Sales and Distribution
  • Material Management
  • Human Resource
  • Production Planning
  • Controlling of financial transaction
  • The organizational elements in SAP FI are:
  • Company Code
  • Business Area
  • Chart of Account
  • Functional Area

In order to determine the transaction type which is entered in the line item, a two digit numerical is used known as ‘Posting Key’

Posting key determines

  • Account Types
  • Types of posting. Debit or Credit
  • Field status of transaction

To generate financial statements like Profit and Loss statement, Balance sheets etc. company code is used.

You can have one Chart of Account for one company code which is assigned.

There are three currencies that can be configured for a Company code, one is a local currency and two are the parallel currencies.

Fiscal year in SAP is the way financial data is stored in the system. In SAP, you have 12 periods and four special periods. These periods are stored in fiscal year variant that is:

  • Calendar Year: From Jan-Dec, April-March
  • Year dependent fiscal year

SAP system does not know what is broken fiscal year e.g April 2012 to March 2013 and only understand the calendar year. If, for any business, the fiscal year is not a calendar year but the combination of the different months of two different calendar year and then one of the calendar year has to classified as a fiscal year for SAP and the month falling in another year has to be adjusted into the fiscal year by shifting the year by using the sign -1 or +1. This shift in the year is known as the ‘year shift’.

Example: April 2012 to Dec 2012 is our first calendar year, and Jan 2013 to March 2013 is our second year, now if you are taking April-12 to Dec-12 as your fiscal year, then Jan-13 to March-13 automatically becomes the second year, and you have to adjust this year by using -1 shift, and vice versa if the scenario is reversed, here you will use +1 shift.

In a year-dependent fiscal year variant, the number of days in a month is not as per the calendar month. For example, in the year 2005, month January ends on 29th, month Feb ends on 26th, etc.

For each country, tax procedure is defined, and tax codes are defined within this. There is flexibility to either expense out the Tax amounts or capitalize the same to stocks.

For each functional area in SAP Validation or Substitution is defined eg, Assets, Controlling etc. at the following levels

  • Document Level
  • Line item Level
  • 13) What are the application areas that use validation and substitutions?
  • FI- Financial accounting
  • CO-Cost accounting
  • AM-Asset accounting
  • GL-Special purpose ledger
  • CS-Consolidation
  • PS-Project system
  • RE-Real estate
  • PC-Profit center accounting

FSV (Financial Statement Version) is a reporting tool. It can be used to extract final accounts from SAP like Profit and Loss Account and Balance Sheet. The multiple FSV’s can be used for generating the output of various external agencies like Banks and other statutory authorities.

‘Field status groups’ control the fields which come up when the user does the transactions. In FIGL (Financial General Ledger) master, the field status group is stored.

To get an overview of external Accounting and accounts, G L (General Ledger) Accounting is used. It does the recording of all business transactions incorporated with all other operational areas in a software system and also ensures that the accounting data is always complete and accurate.

For all SAP transactions, the default exchange rate is M (Average Rate).

  • Manual payment without the use of any output medium like cheques etc.
  • Automatic payments like DME (Data Medium Exchange), cheques, Wire transfer

The problem faced when a business area is configured, is splitting of account balance which is more pertinent in the case of tax accounts.

The customizing pre-requisite for document clearing is to check the items cleared and uncleared, and this is done by open item management. Open item management manages your outstanding account, i.e account payable and account receivable. For instance, an invoice item that has not yet been paid is recorded as open account until it is paid.

GR/IR ( Good Received/ Invoice Received) is an interim account. In the legacy system, if the goods are received and the invoice is not received, the provision is made, in SAP at the receipt of the goods. It passes the Accounting entry debiting the Inventory and crediting the GR/IR account. Similarly, when an invoice is received the vendor account is credited, and the GR/IR account is debited, the GR/IR will show as an un-cleared items till the time the invoice is not received.

Each company code can have two additional currencies, in addition to the company code, currency entered to the company code data. The currency entered in the company code creation is called local currency and the other two additional currencies are called parallel currencies. Parallel Currencies can be used in foreign business transactions. In order to do international transaction, parallel currency can be used. The two parallel currencies would be GROUP CURRENCY and HARD CURRENCY.

To track the cost, internal orders are used; they are proposed to be incurred over on a short-term basis.

Yes, it is possible to calculate depreciation, to do that you have to switch on the indicator Dep. to the day in the depreciation key configuration.

In Asset Accounting, chart of depreciation is rated as the highest node, and this is assigned to the company node. All the depreciation calculations are stored under the chart of depreciation.

The asset class is the main class to classify assets. Every asset must be assigned to only one asset class. Example of asset class is Furniture & Fixtures, Plant & Machinery, and Computers etc. The asset class also contains G1 account, when any asset is procured, G1 account is debited. Whenever you create and asset master, it becomes mandatory to mention the assest class for which you are creating the required assets. So, whenever any asset transaction occurs, the G1 account attached to the asset class is automatically picked up and the entry is passed. You can also specify the default values for calculating the depreciation values and other master data in each asset class.

‘Capital WIP’ is referred to as Assets under construction in SAP and is represented under specific asset class. Depreciation is not charged under ‘Capital WIP’ usually. The cost incurred on building a capital asset can be booked to an ‘internal order’ and through the settlement procedures and can be posted onto an ‘Asset Under Construction’.

The major components of Chart of Accounts are:

  • Chart of account key
  • Name
  • Maintain Language
  • Length GL account number
  • Controlling Integration
  • Consolidation-Group chart of accounts
  • Block indicator

To immune your company from the risk of bad debts and multiple outstanding receivable, you can set a credit limit for your customer by using credit control area in SAP. With the help of SAP, you can block the deliveries to your customer based on the credit limit and the accounts receivable balance in their account which is maintained by you.

By using transaction code OB45 or path you can create Credit Control Area in SAP

SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area and then enter the following description

  • Update
  • Name of the credit control area in SAP
  • Currency
  • Description
  • Credit Limit
  • Risk Category
  • Fiscal Variant
  • Rep group

In fiscal year posting period is a period for which the transactions figures are updated. The posting period variants in SAP is accountable to control which Accounting period is open for posting and ensures that the closed periods remain balanced.

Field status group is a group configured in FSV (Field Status Variant) to maintain field status for G/L (General Ledger) accounts. It controls which field should suppress, display, optional and required.

A short-end fiscal year results when you change from a normal fiscal year to a non-calendar fiscal year, or other way around. This type of change happens when an enterprise becomes part of a new co-corporate group.

To control the data that needs to be entered at the time of the creation of a master record an account group is used. Account group exist for the definition of GL account, Customer Master and Vendor.

The purpose of ” Document type” in SAP is

  • Number range for documents are defined by it
  • Types of accounts that can be posted are controlled by it, e.g Assets, Vendor, Customer, Normal GL account
  • It is used for the reversal of entries.

No. Business area is at client level which means other company codes can also be posted to the same business area.

The Vendor and Customer codes are stored at the client level. It means that by extending the company code view any company code can use the customer and vendor code.

Tolerance determines whether the payable places matching or tax hold on the invoice. The following are the instances of tolerance can be defined for Logistic Invoice Verification.

  • Small differences
  • Moving average price variances
  • Quantity variances
  • Price variances
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Country Chart of Accounts contains G/L (General Ledger) accounts needed to meet the country’s legal requirements.

APP stands for ‘Automatic Payment Program’; it is a tool provided by SAP to companies to pay its vendors and customers. APP tools help to avoid any mistakes taken place in posting manually. Also, when number of employees is more in the company, payment through APP becomes more feasible.

Payment terms are created in the configuration and determine the payment due date for vendor/customer invoice.

They are stored on the customer or vendor master record and are pulled through onto the customer/vendor invoice postings. The due date can be changed on each individual invoice if required.

In certain companies, especially the one dealing with high cash transactions, it is not practical to create new master records for every vendor trading partner. One time vendors allows a dummy vendor code to be used on invoice entry and also the information which is usually stored in the vendor master.

The following steps are the standard stages of the SAP payment run

  • Entering of parameters (Vendor Accounts, Company Codes, Payment Methods)
  • Proposal Scheduling – the system proposes the list of invoice paid
  • Payment booking- the booking of the actual payments in the ledger
  • Printing of payment forms ,example cheques

‘Residual payment’ and ‘Part payment’ are the two methods for allocating partial methods from customers. For example, an invoice for $100 is generated, customer has paid $70. Now this $70 will be off-set and leaving the remaining balance $30. With residual payment, the invoice is cleared for the full value of $100 and a new invoice is generated for the remaining balances $30.

‘Dunning’ is the process by which payment chasing letters are issued to customers. SAP can determine which customers should receive the letters and for which overdue items. Different letters can be printed in SAP depending on the overdue payment date, with a simple reminder. With the help of dunning level on the customer master, we can know which letter has been issued to the customer.

At the end of the year, profit and loss accounts are cleared down to the retained earnings balance sheets account. The field contains an indicator which is linked to a specific GL (General Ledger) account to use in this clear down.

Recurring entries can eliminate the need for the manual posting of accounting documents which do not change from month to month. For example, an expense document can be generated which can be scheduled for the last days of each month or whenever an individual wants it. Usually, multiple recurring entries are created at one go and then processed all together as a batch month end using transaction.

Value fields are number or value related fields in profitability analysis such as quantity, sales revenue, discount value etc.

Statistical internal orders are dummy cost objects used for reporting and analysis purposes. It must be posted to in conjunction with a real object such as a cost center.

You can use internal orders for

  1. a) Overhead Orders: It monitors internal jobs settled to cost centres
  2. b) Investment Orders: It monitors internal jobs settled to fixed assets
  3. c) Accrual Orders: Offsetting posting of accrued costs calculated in CO
  4. d) Orders with Revenue: It display the cost controlling parts of Sales and Distribution, it does not affect the core business of the company
  1. Posting to special purpose ledger
  2. Posting from CO to FI
  3. Posting to special periods
  4. Authorization control for posting periods
  1. Create task groups
  2. Create template
  3. Define person responsible for tasks
  4. Release task list
  5. Define task dependencies

Note:There are 3 correct answers to this question.

  1. Change a document.
  2. Block a line item.
  3. Change the dunning data of an account.
  4. Lower the dunning level of an item.
  5. Block an account.
  1. Customer down payment
  2. Bill of exchange
  3. Vendor down payment request
  4. Guarantee given
  1. The data is analysed after it is extracted and loaded in the reporting system.
  2. The data is available in real time at line item detail.
  3. The data is aggregated on the fly from any line item table.

a) It is possible to calculate and post depreciation in the balance sheet depreciation area for assets under construction.

b) It is impossible to use assets under construction with Investment Management.

c) It is possible to post special tax depreciation and investment support for assets under construction.

d) It is possible to post credit memos, even after assets under construction are fully capitalized.

a) It can be used to remind the user about due payments.       

b) It has an automatic statistical offsetting entry.

c) It can be accessed by the payment program.

d) It updates the sub-ledger and the general ledger.

a) The posting key must allow negative postings.

b) The company code must allow negative postings

c) The reversal reason must be configured to allow negative postings

d) The reversal accounts must be configured to allow negative postings.

  1. It is considered for consolidation.
  2. It can be assigned to a company code.
  3. It represents separate areas of operation within an organization.
  1. You can create a tile group with all the apps required for your daily business for easy access.
  2. You can adapt the Launchpad color theme according to predefined values for the cash report.
  3. You can manage user access to relevant apps for the North American accounts payable group that reports to you.
  4. You can create an app to take you directly to the cash position of the North American business market.
  1. Business partner type
  2. Business partner category
  3. Business partner role
  4. Business partner grouping

When posting a supplier invoice to a primary cost account,  which field is mandatory by standard procedures?

  1. Segment
  2. Functional Area
  3. Cost center
  4. Internal Order

Note: There are 2 correct answers to this question.

  1. Consulting services
  2. Insurance premiums
  3. Fixed Asset purchases
  4. Raw material purchases
  1. When an account is used as a reconciliation account
  2. When an account is required for clearing
  3. When an account has a zero balance
  4. When an account is set up as a cost element
  1. At the client level
  2. At the company code level
  3. At the company level
  4. At the credit control area level
  1. Account required
  2. Document number required
  3. Number of date fields required
  4. Reason code required
  5. Company code required
  1. Define Copy the chart of depreciation and maintain depreciation area.
  2. Define general ledger accounts per each category of legacy asset.
  3. Define asset classes and maintain their attributes. d. Configure depreciation keys and calculation keys.
  1. Financial document number ranges defined at client level should not overlap
  2. All financial document number ranges can contain numbers and/or letters.
  3. Financial document number ranges are defined at company code level.
  4. Financial document number ranges must be defined for the year in which they are used.
  5. The same financial document number range can be assigned to several document types.
  1. It checks the tax codes and automatically updates the tax rates based on changes by the tax authorities.
  2. It checks the tax amount entered and automatically calculates the tax.
  3. It posts the tax amount to tax accounts.
  4. It performs tax adjustments for cash discounts and other forms of deductions.
  5. It adjusts the tax codes and automatically updates the procedure.

Note: There are 2 correct answers to this question.

  1. Group currency
  2. Document currency
  3. Company code currency
  4. Controlling area currency
  1. Extension ledgers can be assigned their own fiscal year variant.
  2. Extension ledgers can have different currencies than the underlying ledger.
  3. Multiple extension ledgers can point to the same underlying ledger.
  4. Extension ledgers can be assigned their own posting period variant

Note: There are 3 correct answers to this question.

  1. Value date
  2. Entry date
  3. Posting date
  4. Goods receipt date
  5. Document date

Note: There are 2 correct answers to this question.

  1. You want to use document splitting for General Ledger.
  2. You want to deploy SAP S/4HANA Cloud.
  3. You want to clean up your system and use SAP Best Practices.
  4. You want to integrate the system to the SAP Cloud Platform.
  1. The type of payment notice sent to a customer.
  2. The special GL indicator for the down payment.
  3. The exclusion of disputed residual items from credit limit checks.
  4. The document type of the payment.
  5. The account where a residual item is posted
  1. Which account types are allowed for postings
  2. Whether negative postings are permitted
  3. Whether exchange rate differences are permitted
  4. Which posting keys are allowed for postings
  1. For any GL account defined as reconciliation account.
  2. For any account that is managed on an open item basis.
  3. For any balance sheet account.
  4. For any account that is managed on a line item basis.

Note: There are 2 correct answers to this question.

  1. All currencies of the general ledger are supported.
  2. Accrual postings with a maximum of two line items are supported.
  3. All accrual calculations must be reviewed and approved before posting.
  4. The fiscal year variant of the general ledger is supported.
  1. Archive transactional data no longer legally required.
  2. Add required authorizations for data aging to your role.
  3. Define the logical file path as a global path for data aging.
  4. Switch on the data aging business function.

How can you set this up in the system?

  1. Define two valuation areas and two accounting principles with relevant links to ledgers.
  2. Define two valuation methods and assign the accounting principles to the new valuation methods.
  3. Define a valuation area and extension ledger to link with the new valuation area.
  4. Define a valuation area and ledger group for two ledgers to ink with the new valuation area.

Note: There are 2 correct answers to this question.

  1. You must enter a posting date in the last posting period.  
  2. The special period must be open for posting in the period control.
  3. The balance carry-forward to the new fiscal year must have taken place.
  4. The last posting period must be open for posting in the period control.
  1. In the ledger approach, you assign a ledger group to every depreciation area, unike the accounts approach.
  2. In the ledger approach, you maintain additional depreciation areas to post the delta valuation of each accounting principle, unlike the accounts approach.
  3. In the accounts approach, you assign a separate set of accounts for each accounting principle, unlike the ledger approach.
  4. In the accounts approach, you define a technical clearing account for integrated asset acquisitions, unike the ledger approach

Note:There are 2 correct answers to this question.

  1. Field status variant
  2. Document number range
  3. Business transact on variant
  4. Document type
  1. Balance sheet adjustments must be posted.
  2. Profit center carry-forward must be posted.
  3. Ledger balances must be carried forward.
  4. Foreign currency valuation must be posted.
  1. Specify the company code currency as the base currency.
  2. Set up the relationship between currencies using translation ratios.
  3. Maintain exchange rates daily.
  4. Specify a purpose for the exchange rate type.

Which organizational unit do you need to create for each legal  entity?

  1. Consolidation group
  2. Company code
  3. Company
  4. Segment
  1. Rank bank accounts for payment.
  2. Define maximum amounts to be paid per supplier.
  3. Review the payment proposal exception list.
  4. Maintain open item select on parameters
  1. Dunning area
  2. Dunning group
  3. Dunning key
  4. Dunning block reason
  1. Enter depreciation area mapping during intercompany transfer posting.
  2. Configure the cross-company depreciation areas in Customizing.
  3. Assign the group chart of depreciation to the relevant fixed assets.
  4. Correct the depreciation area assignment in the asset master record after posting.
  1. Each asset number range must be assigned to a unique asset class.
  2. Each asset class can have either an internal or external number range.
  3. Asset number ranges are defined at chart of depreciation level.
  4. Asset number ranges are defined for asset classes and are company code specific.
  1. Posting date
  2. Document date
  3. System date
  4. Value date
  1. According to the reason code, as long as all the tolerance groups carry the same correspondence type
  2. According to the reason code, as long as all the reason codes carry the same correspondence type
  3. According to the tolerance group, as long as all the reason codes carry the same correspondence type
  4. According to the tolerance group, as long as all the tolerance groups carry the same correspondence type
  1. Update product cost estimates with standard prices
  2. Perform valuations of open items in foreign currency
  3. Regroup Receivables and payables on the balance sheet.
  4. Run plan assessment cycles for profit centers.


  • Store the data
  • Present reconciled and non-reconciled data.
  • Communicate differences
  • Post the correction documents


  • Post the correct on documents.
  • Store the data.
  • Present reconciled and non-reconciled data.
  • Communicate differences.


  • Present reconciled and non-reconciled data.
  • Post the correct on documents.
  • Store the data.
  • Communicate differences.


  • Store the data.
  • Present reconciled and non-reconciled data.
  • Post the correct on documents.
  • Communicate differences.
  1. It is the only object from which segments can be uniformly derived.
  2. It must be used simultaneously with segments to create separate balance sheet and P&L statements.
  3. It is an element for which separate balance sheet and P&L statements can be created.
  4. It is the only object that can be uniformly derived using segments.
  1. Account determination
  2. Number ranges
  3. Financial statement version
  4. Screen layout rules
  5. Posting keys

Which of the following settings is NOT permitted?

  1. Area posts in real-time
  2. The area does not post
  3. Area Posts Revaluation only
  4. Area posts depreciation only
  1. It enriches all secondary cost element account lines with the defined splitting characteristics.
  2. It enriches all revenue account lines with the defined splitting characteristics.
  3. It enriches all relevant balance sheet account lines with the defined splitting characteristics.
  4. It enriches all profit and loss account lines with the defined splitting characteristics.
  1. Define the substitution rule with its different steps using the formula editor.
  2. Choose the area of application GL.
  3. Select the correct call-up point.
  4. Assign the substitution rule to the controlling area.
  5. Activate the substitution rule
  1. It creates a transfer posting by resetting the transaction figures.
  2. It creates an inverse posting by increasing the transaction figures.
  3. It creates an inverse posting by resetting the transaction figures.
  4. It creates the inverse posting of a cleared document before  resetting it

Note: There are 2 correct answers to this question.

  1. Number range and document types must be maintained.
  2. The posting period variant must be created and assigned.
  3. Tax types and tax codes must be maintained.
  4. Line item text templates must be maintained.
  1. Items with withholding tax
  2. Items with sales and use tax
  3. Statistical postings
  4. Noted items
  5. Items with value-added tax
  1. The chart of depreciation substitutes the operational chart of accounts in asset-related postings.
  2. The chart of depreciation manages the country-specific legal valuation of fixed assets.
  3. The chart of depreciation is a reporting tool that structures your assets for hierarchical reporting.
  4. The chart of depreciation defines the asset classes for which you can create fixed assets.
  1. A down payment request is created as an Fl noted item, which automatically generates an SD billing document.
  2. A down payment request is created as an SD sales order, which is automatically posted in Fl as a noted item.
  3. A down payment request is created as an SD billing document, which is automatically posted in Fl as a noted item.
  4. A down payment request is created as an Fl noted item, which automatically generates an SD sales order.
  1. Ensure depreciation areas always post to the general ledger.
  2. Assign a ledger group to each depreciation area.
  3. Assign depreciation area 01 to the leading ledger.
  4. Ensure each accounting principle is assigned to a depreciation area .
  1. SAP HANA is optimized to organize data using column stores
  2. Index SAP HANA allows transactional and analytical processing from the same tables.
  3. SAP HANA is optimized to work with aggregates and index tables.
  4. SAP HANA is built on a hierarchical data model architecture

How would you define the document number range?

  1. You must use continuous number assignment.
  2. You can use internal, external, or continuous number assignment.
  3. You must use external number assignment.
  4. You must use internal number assignment
  1. The balance of the new account is added to the notes in the financial statement item section and is excluded from the calculation.
  2. The balance of the new account is added to the notes in the financial statement item section and is included in the calculation.
  3. The balance of the new account is added to the non assigned section and is included in the calculation.
  4. The balance of the new account is added to the non assigned section and is excluded from the calculation.
  1. You can only post to the account in CAD.
  2. You can only post to the account in USD.
  3. You can only post to the account in CAD,USD, and EUR.
  4. You can only post to the account in CAD and USD
  1. Sales area
  2. Business area
  3. Controlling area
  4. Functional area
  1. Standard account assignment using constants
  2. BAdl implementation (FAGL_DERIVE_SEGMENT)
  3. Configuration of the derivation logic with derivation sequence and steps
  4. Definition of validation rules
  1. Payment terms
  2. Tax code
  3. Cost center
  4. Special GL indicator
  1. The asset capitalization date is empty.
  2. The asset belongs to a specific asset class.
  3. The ordinary depreciation start date is empty.
  4. The asset is assigned to NO depreciation area.

What account does the system use to post the valuation  differences?

  1. Individual supplier accounts with special GL indicator
  2. Adjustment account for foreign currency
  3. Statistical FOREX noted item account
  4. Supplier reconciliation GL account