Top 10 SAP FICO Interview Questions and Answers

Sap Fico Interview Questions And Answers

Presented below are a compilation of SAP FICO interview questions and answers that cater to both freshers and experienced candidates, aiding them in securing their desired employment opportunity.

Contents

SAP FICO Interview Questions and Answers for Entry-Level Candidates

SAP FICO is an abbreviation for Financial Accounting (FI) and Controlling (CO). In the SAP FICO system, FI handles tasks related to accounting, financial statement preparation, tax calculations, etc., while CO manages inter-orders, cost sheets, inventory sheets, cost allocations, etc. This software stores data and performs computations based on the current market conditions. It ensures data integrity and also verifies and reports the data.

Integration of Financial Accounting with Other SAP Modules

The various modules that are connected to “Financial Accounting” include.

SAP FICO Interview Questions: Organizational Elements in SAP FI

To identify the type of transaction recorded in a line item, a numerical code called the “Posting Key” is utilized.

SAP FICO Interview Questions: What is the Company Code in SAP?

In order to produce financial statements such as the Profit and Loss statement and Balance sheets, the company code is utilized.

6) How many Chart of Accounts can company code have?

In India, it is possible to have a single Chart of Accounts that is assigned to one company code.

SAP FICO Interview Questions: Exploring Fiscal Year Options

The fiscal year in SAP refers to how financial information is stored within the system. It consists of 12 regular periods and four additional special periods. These specific timeframes are organized and managed using a fiscal year variant.

SAP Calendar: Understanding the Concept of Year Shift

The SAP system does not recognize a broken fiscal year, such as April 2012 to March 2013, and only works with calendar years. In cases where the fiscal year is not aligned with the calendar year for a business, adjustments need to be made in SAP by designating one of the calendar years as the fiscal year and shifting the other months into that fiscal year using -1 or +1 signs. This adjustment in the year is referred to as a “year shift.

From April 2012 to December 2012, we consider it as our first calendar year. Then, from January 2013 to March 2013, it becomes the second year. However, if you choose April-12 to Dec-12 as your fiscal year, then Jan-13 to Mar-13 automatically becomes the second year and requires a -1 shift adjustment. On the other hand, if the scenario is reversed, you would use a +1 shift adjustment.

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Sap Fico Interview Questions And Answers: Understanding Year Dependent Fiscal Year Variant

In a fiscal year variant that is dependent on the year, the length of each month does not follow the regular calendar month. For instance, in 2005, January ended on the 29th and February ended on the 26th.

How are input and output taxes managed in SAP?

In India, a tax procedure is established for each country, and within this procedure, tax codes are defined. There is an option to either treat the tax amounts as expenses or include them in stock capitalization.

SAP FICO Interview Questions and Answers: Validations and Substitutions Explained

In SAP, Validation or Substitution is established for different functional areas such as Assets, Controlling, etc. These validations or substitutions are implemented at various levels within the system.

Sap Fico Interview Questions And Answers: Application Areas Utilizing Validation and Substitutions

FSV, also known as Financial Statement Version, is a useful reporting tool in SAP. It allows users to extract important financial statements such as the Profit and Loss Account and Balance Sheet. Multiple FSVs can be utilized to generate outputs for different external entities like banks and statutory authorities.

15) What is a field status group?

The fields that appear during transactions are controlled by the field status groups. The field status group is stored in the Financial General Ledger (FIGL) master.

Sap Fico Interview Questions And Answers: Understanding FI-GL (Financial-General Ledger) Accounting

G L (General Ledger) Accounting is utilized to gain a comprehensive understanding of external Accounting and accounts. It involves the recording of all business transactions in a software system, ensuring that the Accounting data remains complete and precise while integrating with other operational areas.

SAP FICO Interview Questions: Default Exchange Rate Type for SAP Transactions

In SAP, the standard exchange rate for all transactions is set as M (Average Rate).

Methods for Making Vendor Invoice Payments in SAP FICO: Frequently Asked Questions and Answers

Payment made without the need for physical instruments such as checks or any other form of output.

b) Automated payment methods such as DME (Data Medium Exchange), checks, and wire transfers.

Sap Fico Interview Questions And Answers: Common Issues with Business Area Configuration

One challenge that arises during the configuration of a business area is the division of account balances, which becomes particularly important when dealing with tax accounts.

SAP FICO Interview Questions: Customizing Prerequisites for Document Clearing

In order to clear documents, it is necessary to review the cleared and uncleared items, which is accomplished through open item management. Open item management oversees your outstanding accounts, such as accounts payable and accounts receivable. For example, an unpaid invoice remains recorded as an open account until it has been paid.

Importance of GR/IR Clearing Account in SAP FICO Interviews: Questions and Answers

The GR/IR (Good Received/Invoice Received) account serves as a temporary holding place in the SAP system. In the previous system, if goods were received but no invoice was received, a provision would be made. In SAP, this provision is created at the time of goods receipt and results in an accounting entry that debits the Inventory and credits 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 account will continue to show as outstanding until the invoice has been received and cleared.

SAP Fico Interview Questions And Answers: Understanding Parallel and Local Currency in SAP

Every company code has the option to include two extra currencies, apart from the local currency entered in the company code data. The primary currency entered during company code creation is known as the local currency, while the other two additional currencies are referred to as parallel currencies. These parallel currencies can be utilized for foreign business transactions and enable international transactions to take place. The two types of parallel currencies commonly used are group currency and hard currency.

Sap Fico Interview Questions And Answers: Where can internal orders be utilized?

Internal orders are utilized to monitor expenses and are intended for short-term use.

Can depreciation be calculated on a daily basis?

Certainly, it is feasible to compute depreciation by activating the Dep. to the day indicator in the configuration of the depreciation key.

25) In Asset Accounting what is the organizational assignments?

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.

What is the primary purpose of SAP FICO?

In addition to managing financial data, SAP FICO also empowers businesses with insights for corporate planning purposes. The software offers tools and functionalities that aid decision-making processes related to investments, budgeting, cost control measures, and more. For instance, it enables organizations to analyze profitability across different business segments or evaluate the impact of potential scenarios on future finances.

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To maximize the benefits from using SAP FICO effectively within your organization:

1. Ensure proper training: Provide adequate training sessions or workshops for employees who will be working with the software regularly. This will help them understand its features thoroughly and utilize its capabilities optimally.

3. Regularly update system configurations: Stay up-to-date with new releases or updates provided by SAP for better performance optimization and enhanced functionality.

4.Implement strong internal controls: Establish robust internal control measures to safeguard financial data integrity and prevent any unauthorized access or misuse of information within the SAP FICO system.

By following these practical tips, businesses in India can effectively utilize SAP FICO to streamline their financial management processes, make informed decisions, and drive overall growth.

SAP FICO Interview Questions and Answers for Experienced Candidates

The asset class is the primary classification for assets. Each asset must be assigned to a single asset class, such as Furniture & Fixtures, Plant & Machinery, or Computers. Within the asset class, there is also a G1 account which is debited when an asset is procured. When creating an asset master record, it is mandatory to specify the corresponding asset class. This ensures that whenever there is an asset transaction, the associated G1 account from the relevant asset class will be automatically selected and recorded accordingly. Additionally, default values can be set within each asset class for depreciation calculations and other master data requirements.

27) How capital WIP (Work In Process) and Assets accounted for in SAP?

In SAP, the term “Capital WIP” is used to describe Assets under construction. These assets are categorized under a specific asset class and typically do not incur depreciation. The expenses associated with constructing a capital asset can be recorded on an internal order and then transferred to an Asset Under Construction through settlement procedures.

Sap Fico Interview Questions And Answers: Major Components of Chart of Accounts

To establish a Credit Control Area in SAP, you can utilize either the transaction code OB45 or follow a specific path.

To access the required settings in SAP FICO, navigate to SPRO and select “enterprise structure.” From there, go to “maintain structure” and choose “financial accounting.” In this section, you can find the option to maintain the credit control area. Enter the necessary description as prompted.

Sap Fico Interview Questions And Answers: Understanding Posting Period Variants

The posting period in SAP is a designated time frame during which transaction figures are updated for the fiscal year. It is managed by posting period variants, which regulate the availability of open accounting periods for posting and ensure that closed periods remain balanced.

Sap Fico Interview Questions And Answers: Understanding Field Status and Its Control

The field status group is a designated group within the Field Status Variant (FSV) that is used to manage the field status of General Ledger (G/L) accounts. It determines which fields should be hidden, shown, optional, or mandatory.

33) What is short-end fiscal year?

A short-end financial year occurs when there is a transition from a regular fiscal year to a non-calendar fiscal year, or vice versa. This change typically takes place when an organization becomes part of a different corporate group.

SAP FICO Interview Questions: What is an account group and its usage?

An account group is utilized to manage the information that must be inputted when generating a master record. Account groups are created for defining GL accounts, Customer Masters, and Vendors.

35) What is the purpose of “Document type” in SAP?

The SAP FICO module has the ability to control and determine which types of accounts can be posted. These account types include assets, vendors, customers, and normal general ledger (GL) accounts.

Is business area determined at the company code level?

No, the business area is applicable at the client level, allowing multiple company codes to be associated with the same business area.

What level are Customer and Vendor codes stored at in SAP?

Tolerance is a crucial factor in determining whether an invoice will be matched or put on hold for tax purposes. Logistic Invoice Verification offers various instances where tolerance can be defined.

Sap Fico Interview Questions And Answers: Exploring the Country Chart of Accounts

The Chart of Accounts for a specific country includes the necessary General Ledger accounts to comply with the legal regulations in that particular country.

SAP Fico Interview Questions And Answers: Understanding APP in SAP Fico

In some organizations, particularly those involved in frequent cash transactions, it may not be feasible to create new vendor master records for every trading partner. To address this issue, one-time vendors can be utilized by using a dummy vendor code during invoice entry and including the necessary information typically stored in the vendor master record.

43) What are the standard stages of the SAP payment run?

The below mentioned points outline the typical steps involved in conducting a payment run using SAP.

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b) Proposal Scheduling – the system generates a suggested schedule of paid invoices.

c) Recording payments – the process of entering the actual payment details in the accounting records.

SAP FICO Interview Questions and Answers: Understanding the Distinction between Residual Payment and Part Payment Methods in Accounts Receivable

Recurring entries in SAP FICO can automate the posting of Accounting documents that remain consistent from month to month. This eliminates the need for manual posting and saves time. For instance, an expense document can be generated and scheduled to be posted on specific dates, such as the last days of each month or any preferred timing. Typically, multiple recurring entries are created together and processed as a batch at the end of each month using a transaction in SAP FICO.

48) What is a ‘Value Field’ in the CO-PA module?

Statistical internal orders are fictitious cost objects that are utilized for the purposes of reporting and analysis. They need to be associated with a genuine object, like a cost center, during posting.

Purposes of using internal orders in SAP FICO: 50 Interview Questions and Answers

Overhead Orders: It keeps track of internal tasks that are allocated to cost centers.

b) Investment Orders: It tracks internal projects related to fixed assets.

c) Accrual Orders: Offsetting the posting of computed accrual costs in CO.

d) Sales Orders with Revenue: This feature shows the cost control aspects of the Sales and Distribution process, without impacting the main operations of the company.

These interview questions can also be beneficial for your viva or oral examination.

Deloitte SAP FICO Salary

The average salary of a SAP Fico Consultant at Deloitte in India is ₹14.3 Lakhs for individuals with 2 to 10 years of experience. However, the salary range can vary between ₹5.9 Lakhs and ₹24.4 Lakhs depending on factors such as expertise and seniority level. Compared to the average SAP Fico Consultant salary in India, this estimate suggests that working at Deloitte can provide an 84% higher income.

SAP Fico Consultants play a crucial role in managing financial accounting and controlling processes using the SAP software system. They are responsible for implementing and maintaining financial modules within organizations, ensuring accurate data entry, generating reports, analyzing financial data, and providing recommendations for improvement.

– The average annual salary of a SAP Fico Consultant at Deloitte India is around ₹14.3 Lakhs.

– The salary range varies from ₹5.9 Lakhs to ₹24.4 Lakhs based on experience and skills.

– Working as a SAP Fico Consultant at Deloitte can offer significantly higher compensation compared to the industry average in India.

What knowledge do you need for SAP FICO?

– Professionals with advanced degrees like MBA or CA in finance-related fields find it easier to grasp SAP FICO.

– Previous experience in finance or accounting roles can provide additional benefits when working with SAP FICO.

– While knowing about SAP and ERP concepts is useful for using SAP FICO effectively, it is not compulsory.

Distinguishing SAP FI from SAP FICO

SAP FICO offers businesses a comprehensive overview of their financial status, enabling them to make well-informed decisions using data-driven insights. The key distinction between SAP FICO and SAP FI lies in the fact that SAP FICO encompasses additional management accounting functionalities, whereas SAP FI solely concentrates on financial accounting.

2. It enables informed decision-making based on data-driven insights.

3. SAP FICO includes both financial accounting and management accounting features.

4. On the other hand, SAP FI focuses solely on financial accounting aspects.

What does SAP FICO stand for?

SAP FICO, which stands for Finance and Controlling, is a module within SAP ERP that combines the functionalities of Financial Accounting (FI) and Controlling/Management Accounting (CO). FI focuses on managing financial transactions such as general ledger accounting, accounts payable/receivable, and asset accounting. On the other hand, CO deals with cost controlling activities like budgeting, planning, and monitoring costs.

The integration of FI and CO in SAP FICO allows organizations to have a comprehensive view of their financial data while effectively managing costs. This module enables businesses to track financial transactions in real-time and generate accurate reports for decision-making purposes. It also provides tools for analyzing profitability by evaluating various cost elements associated with different business processes.

In the Finance component (FI), SAP FICO covers areas such as general ledger accounting where all financial transactions are recorded systematically. It also includes accounts payable/receivable management to handle vendor invoices and customer payments efficiently. Additionally, asset accounting helps manage fixed assets throughout their lifecycle from acquisition to disposal.

Within the Controlling component (CO), SAP FICO offers features like cost center accounting that tracks expenses incurred by specific departments or divisions within an organization. Profitability analysis allows companies to evaluate profit margins based on different dimensions such as products or regions. Furthermore, product costing assists in determining the actual costs involved in manufacturing goods or providing services.