SAP FICO Interview Questions and Answers - 6

165. What do You mean by ‘Balances in Local Currency’ Only?

When you create GL account master records, it is necessary to decide whether you want an

account to have the transactions updated only in local currency. You will set this indicator

accordingly in the ‘Company Code area’ of the master record. Make sure to set this indicator for

clearing accounts such as:

􀂃 Cash discount clearing accounts

􀂃 GR/IR clearing accounts

Note that you need to set this indicator ‘on’ for all the ‘clearing accounts’ where you use the local

currency to clear the line items in various currencies so that the transactions are posted without

posting any exchange rate difference that otherwise might arise.

Example: Consider an invoice for USD 1,000, which on that day translates into an amount of INR

45,000 with an exchange rate of I USD=INR 45. Imagine that when the goods are received, the

exchange rate was 1 USD=INR 44.

􀂃 If the indicator is set, the system ignores the exchange rate as if the line items have been

maintained only in the local currency (INR), and the items are cleared.

􀂃 If the indicator is NOT set, the system makes a posting for the ‘exchange rate difference’

(INR 1, 000) before clearing the two line items.

166. What is ‘Line Item Display’?

To display line items of an account, you need to set the indicator ‘Line Item Display’ to ‘on’ in

that account’s master record. This is mandatory for customer and vendor accounts. The line

items can be displayed using the classical display or the SAP List Viewer (ALV). You can also

use several ‘display variants’ to display various fields when you feel that the Standard Variant is

not meeting your requirements.

167. What is ‘Archiving’? How does it differ from ‘Deletion’?

‘Archiving’ refers to deleting data from the documents in the database and storing the data in a

file, which can be transferred to an ‘archiving system’ later on. Archiving does not physically

delete the documents. ‘Deletion’ actually removes the documents from the database. To proceed

with archiving and deletion you need to:

1. Block posting to these archived master records.

2. Mark (the master records) for deletion: Mark for deletion at the ‘Chart of Accounts area’

to delete the records from all the Company Codes. However, if you do not want to delete

from all the Company Codes, but only from one or more Company Codes then do the

same in the ‘Company Code area’ of the master record(s).

3. Archive all the transaction figures from the relevant documents.

4. Call up a special program to ‘delete’ the records: The program will check whether that

particular document could be deleted. If yes, it will proceed to ‘archive’ and then to

‘deletion.’

168. Tell me the Two uses of ‘Blocking’ an Account.

You may use ‘Blocking’ to:

1. Block an account from further postings.

2. Block the creation of the account itself (at the Company Code level or Chart of Accounts

area).

169. How do You Configure the GL A/C for the ‘House Bank’?

A ‘House Bank’ is defined using transaction code FI12. A ‘bank key’ represents the bank. The

house bank can contain several accounts; for each of these accounts you need to maintain a GL

account. The bank determination, for an automatic payment program, is configured using the

Transaction Code FBZP.

170. What is an ‘Intermediate Bank’?

‘Intermediate Banks’ are used in SAP in addition to the house banks and partner banks for

making or receiving payments from business partners abroad. The payment processing, involving

an intermediate bank, makes use of the ‘bank chain,’ which may consist of a house bank, a

partner bank, and a maximum of intermediate banks.

171. Explain ‘Intercompany Postings.’

‘Intercompany Postings’ arise when a Company Code, for example, in a centralized

procurement, pays for itself and on behalf of other Company Codes. When posted, the

transaction results in three documents: (1) one for the paying Company Code (say, 1111) (2) one

for the other Company Codes (say, 2222 and 4444), and (3) one for the intercompany transaction

itself.

Before making intercompany transactions, you need to configure both ‘intercompany payables’

and ‘intercompany receivables.’ For each combination of these Company Codes, you will be

required to maintain a ‘clearing account,’ which must be referenced in each of these Company

Codes. You will also be able to configure whether you manually input the transaction number or

allow the system to automatically assign the numbers. In the case of system-generated

transaction numbers, this 16-digit number consists of (1) a 10-digit document number

(1222222222) of the paying Company Code, followed by (2) 4 digits representing this paying

Company Code (1111), and (3) 2 digits representing the last two digits of the financial year (07)

(for example, 1222222222111107).

172. How can You Manually ‘Clear’ ‘Open Items’? When?

Under ‘Manual Clearing,’ you will select the open items, based on the incoming payment so that

the selected ‘open items’ are ‘cleared’ (knocked-off). In cases like refunds from a vendor or

transactions involving bank sub-accounts and clearing accounts, etc., you will use manual

clearing. When cleared, the system flags these line items as ‘cleared,’ creates a clearing

document, and enters the clearing document number and clearing date in these open items.

Besides the clearing document, the system may also generate ‘additional documents’ in cases

such as partial or residual processing, and for posting the loss/gain to the assigned GL account.

While doing this, if there is a payment difference, it can be treated the way it is configured in the

system:

􀂃 If the difference is within the tolerance limit, defined in the system using the tolerance

groups (defined at the Company Code level), the cash discount is adjusted or the system

automatically posts the difference to a gain/loss GL account.

􀂃 When the payment difference exceeds the limits of defined tolerance, then the incoming

amount may be processed as a partial payment (the original open item is not cleared, but the

incoming payment is posted with a reference to that invoice) or the difference is posted as a

residual item (the original open item is cleared and a new open item is created by the system

for the difference amount) in the system.

T Code F- 28  (FI-AR)  F-06  (FI-GL)

You may also use the Menu Path: Accounting>Financial Accounting> Account

Receivable>Document entry>Incoming payment>Post or Accounting >Financial

Accounting>GL>Document entry>Incoming payment>Post

173. How do You Perform ‘Period Closing’ in SAP?

You do a ‘(Period) Closing’ in SAP in three steps:

􀂃 Completing the Pre-closing activities

􀂃 Financial Closing

􀂃 Managerial Closing

174. What is ‘Pre-closing’?

You need to ensure the following as part of the ‘Pre-closing’ activities:

1. Post all the Recurring Entries for expenses and accruals.

2. Ensure that all the interfaced programs have been run so that the required data have

been transferred to the system.

3. Post all the depreciation, material receipts, invoices, salaries, etc. In short, ensure that all

the transactions for the period in question have been duly recorded and posted into the

system.

175. Explain ‘Financial Closing.’

‘Financial Closing’ involves completing the following activities and taking out the financial

statements for the period concerned:

1. Revaluate/Regroup:

􀂃 Revalue Balance Sheet items managed in foreign currencies—use the report

RFSBEW00 to valuate GL Balance Sheet Accounts managed in a foreign currency.

(The report generates a Batch Input session to post the revenue or expense resulting

from any exchange rate differences.)

􀂃 Clear Receivables or Payables with the ‘exchange rate difference.’

􀂃 Valuate all the Open Items using the report SAPF100. This is used to valuate all

the open receivables and payables, using the period-end exchange rates. Here also,

the report generates a Batch Input session to post the entries resulting from any

exchange rate differences.

􀂃 Regroup GR/IR using the program RFWERE00 to allocate the net balance

(depending on whether the balance is a net debit or credit) in the GR/IR Account to

one of two GL Accounts (created to actually depict the net effect of the balance in the

GR/IR Account).

2. Ensure accounting accuracy:

Use the program SAPF190 to compare the totals created by the system in the (1) indexes

(customers, vendors, and GL) and documents (customers, vendors, and GL) with that of

the (2) account balances (customers, vendors, and GL) to ensure the transaction accuracy.

3. Run required reports:

Generate the financial statements (balance sheet and profit & loss account) using the

financial statement versions. You may also generate the key figure/ ratio reports (use

the GL account information system).

176. What is a ‘Financial Statement Version’?

A ‘Financial Statement Version’ helps to define the Financial Statements (both the Balance

Sheet and Profit & Loss statements). When you copy the settings from an existing Company

Code to a new one, you will also be copying the financial statement version defined for the

‘source’ Company Code.

Figure 37: Financial Statement Versions

You may also define a new financial statement version and build the financial statements from

scratch. You may create the financial statements both for external reporting (Company Code

financial statements) and internal reporting (business area financial statements).

You may also create the balance sheets for a group of Company Codes using FI-SL (Special

Purpose Ledgers). The financial statements may be defined to provide information from a period

accounting point of view (GL account groups wise) or a cost of sales point of view (functional area

financial statements).

All the above statements can be configured and defined to provide different levels of detail:

Figure 38: Financial Statement Version—BAUS

A financial statement version can have a maximum of 10 hierarchy levels, with each level

assigned with an item (account category). As you go down the hierarchy, you define the account

categories in more detail, with the lowest level being represented by the GL accounts. The

system displays the relevant amount for each of these items.

177. What Items are Required in a ‘Financial Statement Version’?

Irrespective of the details you require in a ‘Financial Statement Version,’ it is mandatory that you

have, at least, the following items defined:

1. Assets

2. Liabilities

a. Net Result: Profit

b. Net Result: Loss

3. P/L result (during annual closing, when you run the program RFBILA00, the system

calculates the profit or loss by subtracting the ‘total liabilities’ from ‘total assets’ and

updates the relevant Net Result item—Profit or Loss).

4. Not assigned (posted amounts but not yet assigned to any of the account groups).

178. How do You Ensure ‘Correct’ Balances in the ‘Financial

Statement Version’?

In order to have a balanced statement (Profit & Loss and Balance Sheet) you need to ensure that

the accounts are correctly and completely assigned to the nodes of the Financial Statement

Version. You may do this by resorting to the necessary assignments at the account balance level

or node balance level.

At the account balance level, you need to ensure that the account is shown in two different

nodes, but you will turn “ON” the ‘debit indicator’ of the account on one node and turn “ON” the

‘credit indicator’ on the other node. Imagine that you have a bank current account 10001000.

When you turn “ON” the debit indicator, this account shows only the debit balances and is

construed as the asset. On the other hand, when the credit indicator is turned “ON,” the balances

on this node now indicate that you owe to the bank (overdraft).

You may also use the node-level assignment. In this case, the system uses the ‘debit/credit

shift’ and shows only the ‘effective’ balance at the node and not at the individual account level.

179. How do You Perform ‘Annual Closing’ in SAP?

‘Annual Closing’ is like any other ‘period closing’ and you will be performing all the activities that

are required for a period-end-close. In addition to those activities, you will also:

􀂃 Carry forward Vendor and Customer accounts

􀂃 Carry forward the GL account balances of all the Balance Sheet items

􀂃 Close the Profit & Loss Accounts and carry forward the balance (profit or loss) to the

retained earnings account(s)

For a GL account ‘carry forward,’ use the program SAPF011.

180. Explain ‘Managerial Closing.’

In ‘Managerial Closing’ you will:

􀂃 Do a preliminary Controlling period closing

􀂃 Settle/re-allocate costs across Controlling organization

􀂃 Draw and review internal reports

􀂃 Re-open the Controlling period

􀂃 Correct and adjust the accounting data, if required

􀂃 Reconcile FI and CO by running the FICO Reconciliation Ledger

􀂃 Run re-adjustment programs to ensure that the Business Areas and the Profit Centers

are balanced

􀂃 Draw reports and analyze