SAP FICO Interview Questions and Answers for IBM

SAP is known as System Analysis Program Development. SAP sets the global standard for enterprise resource planning (ERP) software. It is the name of the software and also the name of the company. SAP software is a European multinational company. It was founded in 1972 and grew from a small company of five people into a multinational company. The goal of the software is to develop business operations and customer relationship management solutions. The company is based in Walldorf, Germany and employs more than 101,000 people worldwide. The SAP system consists of several fully integrated modules covering virtually every aspect of business management.

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SAP FICO Interview Questions and Answers for IBM

Q1. What is SAP?

Ans. SAP was founded in 1972. SAP is a German multinational software company. Develops enterprise software to manage business operations and customer relationships. SAP is the world’s leading software manufacturer. SAP develops software solutions for business operations and customer relationship management. SAP is number 1 in the enterprise resource planning market

 Q2. What is FICO?

Ans. FICO is a software company that provides products and services to businesses and consumers. This data analytics company is based in San Jose, California. It focused on credit evaluation services. The full form of FICO is Fair Isaac Corporation. FICO was founded by Bill Fair and Earl Issac in 1956.

 Q3. What is SAP FICO?

Ans. SAP FICO refers to “financial accounting” and “controlling”. SAP FI and SAP CO are important core modules in SAP that are interconnected and help businesses and organizations maintain and create financial statements for decision making and reporting. FI and CO are different modules where SAP FI deals with external accounting and SAP CO is linked with internal accounting.

 Q4. What are SAP development modules?

Ans. Some of the SAP development modules are:-

• SAP Financial Accounting (FI)
• SAP Controlling (CO)
• SAP Sales and Distribution (SD)
• SAP Production Planning (PP)
• SAP Material Management (MM)
• SAP Quality Management (QM)
• SAP Human Capital Management (HCM)

Q5. What are the causes of accounting errors and how do they affect the organization?

Ans. The error can occur for various reasons. A single wrong entry of one digit can bring a lot of problems in the organization and the profit and loss information can be wrong. Errors can also be due to errors in the system,  poorly prepared accounts, carelessness of users, gross errors, errors in accounting, errors due to failure to update sheets, etc.

Q6. Name the organizational element in SAP FI.

Ans. The organizational elements in SAP FI are:
1. Functional area
2. Company code
3. Business area
4. Chart of accounts

Q7. What is a company code and when is it used?

Ans. To generate financial statements such as Profit and Loss Statement, Balance Sheets, Profit and Loss Statements, etc. It is a code that needs to be entered into the system when it generates profit or loss statements.

Q8. How many currencies can be configured for a company code?

Ans. Users can configure up to three currencies, one generally remains local and the other can be considered parallel.

Q9. What are the options in SAP for fiscal years?

Ans. A fiscal year in SAP is a way of storing financial data in the system. SAP has 12 periods and four special periods. These periods are stored in fiscal year variants as:

• Calendar year – from January to December, April to March
• Fiscal year dependent on year.

Q10. What is dependent fiscal year in SAP?

Ans. In enterprises, depending on the type of projects, which vary widely, the organization must end a month a day earlier. For example, the month of July can have 29 days. The same process can be followed with an option in SAP known as Year Dependent Fiscal Year.

Q11. Explain what a posting key is and what it means.

Ans. A billing key is a two-digit number that allows users to identify transaction types. It gives an idea about the type of posting which can be credit or debit and also about the type of accounts. The status of the transaction can also be recorded through it.

Q12. How many charts of accounts does the company code contain?

Ans. One chart of accounts is assigned to one company code.

Q13. How many periods are there in SAP FICO?

Ans. There are a total of 165 periods, of which 4 are considered special. They are mostly used when it comes to defining any data that is associated with a fiscal year.

Q14. What is “year shift” in SAP calendar?

Ans.  SAP has no provision for accessing a non-functional fiscal year. It only understands the calendar year. For all organizations, it is not necessary for the calendar year to be a financial year. It is usually necessary to change the months. May need to be added or removed. This process can easily be done in SAP and the same procedure is known as Year Shift.

Q15. What are Validation and Substitution in SAP?

Ans. The validation feature allows us to analyze the values ​​and also analyze the range of values ​​when they are entered into the SAP system. When values ​​are entered into the SAP system, the system automatically checks standard validation rules. The function of the substitution is to validate the values ​​entered into the SAP system according to the assumption. Each functional area in SAP Validation or Substitution is defined at:- document level, line item level.

Q16. What is the use of financial statement version in SAP?

Ans. It is a tool used for reporting. It can be used to post final accounts from SAP like Profit and Loss Statement etc. If there is a requirement to generate outputs of various external agencies, we can use multiple FSVs.

Q17. How does SAP handle input and output taxes?

Ans. Tax procedures and tax codes are defined for each country. There is flexibility to either issue the tax amounts or capitalize them into shares.

Q18. In what application areas are validations and substitutions used?

Ans. They are used in the areas of application:
1. Financial accounting – FI
2. Cost accounting- CO
3. Property accounting – AM
4. Special Purpose Ledger-GL
5. Consolidation – CS
6. Project system – PS
7. Real estate-RE
8. Accounting of the profit center-PC

Q19. What is field state group?

Ans. When a transaction is performed by a user, then field state groups are used to control which fields are considered. A field status group is stored in the financial general ledger.

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Q20. What is the role of general ledger financial accounting?

Ans. To get an overview of external accounting and accounts, use General Ledger Accounting. It is used to record all transactions in a business and always provides a guarantee that the accounting data is authentic and complete.

Q21. What are the ways in which supplier invoice payments can be made?

Ans. Manual Method – If the payment is made without any check or draft or DME (Data Medium Exchange) then the process is called manual.
Automatic Method – If payments are made through DME, bank transfer, draft or check, it is called automatic payments.

Q22. What is the problem area that occurs when configuring a business area?

Ans. A problem that can arise when a business area is configured is the distribution of the account balance, which is highly relevant in the case of tax accounts, then the business can face a problem.

Q23. What is the meaning of the Goods Received / Invoice Received clearing account?

Ans. This is an intermediary clearing account. This is used in SAP to record goods and invoices in transit. Records goods received but not invoiced. The reservation is made in SAP when the goods are received into the legacy system, if the goods are received and the invoice is not delivered.

Q24. What does parallel and local currency mean in SAP?

Ans. Each company code can have two other currencies, in addition to the company code, the currency is entered in the company code data. When a currency is added to a company code, the creation of the code is called the local currency, and the other two additional currencies are called parallel currencies. Two parallel currencies are used in SAP, one is the HARD currency and the other is the GROUP currency. If any international transaction needs to be done, the parallel currency will be used.

Q25. How can internal commands be used?

Ans. Internal orders can be used for:
Investment orders: We can track internal orders related to fixed assets.
Accrual orders: Accruals are calculated in CO as compensation calculations.
Overhead orders: We can track internal orders that are related to a cost center.
Orders with revenue : we count only the cost controlling parts of sales and distribution.

Q26. How to calculate depreciation to date?

Ans. To do this, you need to turn on the Dep indicator. to date in the depreciation key configuration.

Q27. What are organizational assignments in asset accounting?

Ans. The property accounting table of depreciation is evaluated as the highest node. Depreciation calculations are stored below this chart.

Q28. What asset classes are there? Why is an asset class necessary?

Ans. Asset class is defined as the main class for asset classification. Only one class is assigned for each asset class. Examples of asset classes are Furniture and Fixtures, Plant and Machinery and Computers etc.

The asset class also includes a G1 account where any of the assets are acquired to the credit of the G1 account. It is necessary to mention the asset class for which you are creating the required assets.

Hence, whenever any asset transaction occurs, the G1 account attached to the asset class is automatically picked up and posted. Default values ​​can also be specified for calculating depreciation values ​​and master data in each asset class.

Q29. What is the term APP in SAP FICO?

Ans. APP stands for “Automatic Payment Program”. It is a tool that SAP provides to companies to pay their vendors and customers. This is a very useful tool to avoid errors that can occur when doing it manually.

Q30. What does a country’s chart of accounts mean?

Ans. It contains the general ledger accounts (General Ledger) needed to meet the legal requirements of the country.

Q31. What is a reminder in SAP?

Ans. A dunning letter is how letters are issued to customers asking for payment. Through SAP, he can determine which customers should receive the letter and also about the delay. In SAP, it is possible to print different letters that depend on the due date with a reminder. Using the reminder level on the custom template, we can know which letter was issued to the customer.

Q32. What is the “Document Type” feature in SAP?

Ans. A document type is used to define a range of documents. The purpose of “Document Type” in SAP is
It governs the types of accounts that can be posted.
It defines a number series for documents.
It is used to cancel records.

Q33. What is the significance of a short fiscal year?

Ans. A short fiscal year occurs when there is a change from a regular fiscal year to a non-calendar fiscal year. These types of changes occur when a business becomes part of a new group.

Q34. At what level are customer and supplier codes stored in SAP?

Ans. Both codes are stored at the client level. It means that by extending the company code display in SAP, it can use customer and supplier code.

Q35. What is the purpose of the account type field in the general ledger master record?

Ans. Profit and loss statements are settled at the end of the year to the retained earnings balance sheet account. This field contains an indicator that is linked to specific general ledger accounts.

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Conclusion

After completing the SAP FICO course, the candidate can work as a SAP FICO consultant in any IT company. If the person is already working in the accounting field, it will bring several opportunities in the field of SAP. As SAP is implemented in top 500 large companies, the importance of FICO consultants and career opportunities is very good.