SAP FICO Interview Questions in Cognizant

SAP FICO is one of the SAP ERP modules that is used for both external and internal financial reporting. Important modules in SAP are SAPFI and SAPCO. Both modules are tightly integrated and help the business organization maintain and generate financial statements for effective decision making and reporting.

Join to learn SAP FICO from the Experts! Click for the demo class!

SAP FICO Interview Questions in Cognizant

1) What do you mean by SAP FICO?

We already know that SAP stands for Systems, Applications & Products in Data Processing. In SAP FICO, FI stands for (Financial Accounting) and CO stands for (Controlling). To understand the concept well, we can divide SAP FICO into two parts: SAP FI and SAP CO. SAP FI takes care of accounting, preparation of financial statements, tax calculations, etc. internal orders, cost sheets, inventory sheets, cost accounting, etc.

SAP FICO is a software that stores data and also calculates it and retrieves the result according to the current marketing scenario. It is responsible for data loss prevention and also performs data validation and reporting.

2) What is the main use of SAP FICO?

SAP FICO modules are primarily used within a company to manage financial tasks in an international framework of languages ​​and currencies.

The FI part of SAP FICO mainly deals with financial accounting such as fixed assets, accruals, cash journal, tax accounting, general ledger and other financial tasks.

On the other hand, the CO part of SAP FICO deals with purchase orders, stock slips, cost slips, cost assignments and other tasks in this category.

3) What is an accounting key and why is it used?

The billing key is a two-digit number that is used to check and determine the type of transaction entered in the line item.

The posting key is used to determine the following:

• Types of accounts
• Billing types. Debit or credit
• Transaction field status

4) What are the most important organizational elements in SAP FI?

The most important organizational elements in SAP FI are:

• Company Code
• Business area
• Chart of accounts
• Functional area

5) What is the best way to manage transactions originating from different lines of businesses within a company?

The best way to manage transactions originating from different lines of businesses within a company is to create Business Areas. Another way is to create different company codes for each business line.

6) What are the other modules that SAP FICO “Financial Accounting” is integrated into?

Other modules in which SAP FICO “Financial Accounting” is integrated are:

• Sales and distribution
• Production planning
• Material management
• Human Resources
• Controlling financial transactions

7) What is the function of credit check in SAP FICO?

Credit control is used to protect a business from overstretching its financial assets. In general, for customers using SAP, we set a credit limit when paying after the product is sold. In this way, we can limit the amount to be charged to the customer’s account before starting a new purchase.

8) What is the use of company code in SAP FICO?

In SAP FICO, the company code generates financial statements such as Profit and Loss Statements, Balance Sheets, etc.

9) What are the options in SAP FICO for fiscal years?

In SAP FICO, the fiscal year is a way to store financial data in the system. In SAP you have 12 periods and four special periods. These periods are stored in the fiscal year variant as follows:

• Calendar year: January to December, April to March
• Fiscal year dependent on year

10) How many Chart of Accounts can a company codebook have?

You can only have one chart of accounts for one company code that is assigned.

11) What is the use of Chart of Accounts in SAP FICO?

In SAP FICO, the Chart of Accounts is used to meet the day-to-day needs of the company as well as the legal requirements of the country.

Chart of accounts has two types:

• Operating Chart of Accounts (COA): The operating chart of accounts or operating COA is a record assigned to a company code and contains all general ledger accounts.
• Country Chart of Accounts (COA): A country chart of accounts is a list of general ledger accounts that are required to meet a country’s legal requirements.

12) How many currencies can we configure for a company code?

We can configure three currencies for the company code, one is local currency and two are parallel currencies.

13) What do you mean by “annual shift” in SAP calendar?

SAP does not understand what a non-functional fiscal year is. For example, from April 2020 to March 2021, it will only understand the calendar year. Assume that a fiscal year is not a calendar year but a combination of different months of two different calendar years for any business. In such a case, one of the calendar years must be classified as a fiscal year for SAP, and the month falling in another year must be adjusted to the fiscal year by shifting the year using the -1 or +1 sign. This shift in a year is called the “annual shift”.

14) What are the different types of modules in which FI is integrated?

FI is integrated into the following types of modules:

• Production planning
• Human Resources
• Material management
• Sales and distribution

15) How are input and output taxes handled in SAP FICO?

Each country has a tax procedure in which tax codes are defined. It provides the flexibility to either spend the tax amounts or capitalize them into inventory.

16) What is Field Status Variant and Field Status Group?

Field status variants are contained in field status groups. On the other hand, field status groups are maintained within the general ledger account. You can use it to define fields when posting to the general ledger.

17) What are Verifications and Substitutions in SAP FICO?

In SAP FICO, validations are used in the FI and CO modules to help ensure data integrity when entering actual transactions online or in batch. On the other hand, substitutions are used in FI / CO / EC modules to derive or correct values ​​passed by integrations or entered into FI / CO modules.

Validation and substitution are defined for each functional area at the following levels:

• Document level
• Line item level

18) What are the application areas in SAP that use validation and substitution?

Below are the application areas in SAP that use validation and substitution:

FI– Financial Accounting
CO– Cost Accounting
AM– Asset Accounting
GL– Special purpose book
CS– Consolidation
PS– Project system
RE– Real Estate
PC– Profit Center Accounting

19) What do you understand by the term annual variant of a fiscal year?

A year is called a year-dependent variant of a fiscal year if the number of days in a month does not correspond to a calendar month. For example, in 2021, the month of January ends on the 30th, the month of February ends on the 27th, etc.

20) How can you make payments to suppliers?

There are two ways to make vendor payments:

• Manual Payment: Manual payment method is done without using a medium like cheques.
• Automatic Payment: Automatic payment method is done through DME (Data Medium Exchange) such as bank transfer or check.

21) What is the use of FSV (Financial Statement Version) in SAP FICO?

The Financial Statement Version, or FSV, is a reporting tool in SAP FICO. It can be used to extract final accounts from SAP such as Profit and Loss Statement and Balance Sheet. We may use multiple FSVs to generate output from various external agencies such as banks and other statutory bodies.

22) What are the various steps involved in general ledger posting?

After completing the payroll, we need to add the results to the GL accounts including the cost centers. GL posting involves the following steps:

• It groups information relevant for posting from payroll results.
• Creates summary documents.
• Makes the appropriate postings to the appropriate general ledger accounts and cost centers.

23) What do you mean by array status group?

The Field States group is used to control the fields that appear when the user performs transactions. In the FIGL (Financial General Ledger) master, the field status group is stored.

24) What are the most common general ledger statements in SAP FI?

The following are some of the most common general ledger reports that can be generated in SAP FI:

• General Ledger Chart of Accounts List
• General ledger account balances
• List of general ledger accounts
• General ledger account totals and balances

25) What is the importance of financial statements within a business in SAP FICO?

In SAP FICO, the financial statements are used to manage the company’s financial assets. By creating and handling such financial statements and records, we create data that we can use later to develop further plans and investments for our company.

26) How can you manage credit limit for a customer in SAP FI?

In SAP FI, ​​a credit check is used to check the credit limit for a customer and can use one or more codes. It is used for credit management in the Application Components – Accounts Receivable (AR) and Sales & Distribution.

27) How many fiscal year variants can you use at once?

In the CO controlling component, we can define up to 16 accounting periods in a fiscal year. For each company code, we must specify a variant of the accounting year. When you create a controlling area, you must also specify a fiscal year variant. Each company code requires a specific fiscal year variant. Therefore, when creating a management area, you should also specify the fiscal year variant of this code.

The credit control area is determined in the following order:

• User Termination
• Distribution channel
• Customer Master
• Company code for the sales organization

28) What is the use of Account Receivable in SAP FI?

In SAP FI, ​​the Accounts Receivable component is used to record and manage the accounting data of all customers and is also an integral part of sales management. All postings to accounts receivable are also recorded directly in the general ledger. Various general ledger accounts are updated depending on the relevant transaction (for example, accounts receivable, advances, and bills of exchange).

Join to learn SAP FICO from the Experts! Click for the demo class!

29) What are the advantages of using business areas in a company?

Company business areas can be used if other company codes require the same areas. Below are the benefits of using business areas:

• The business area is easy to configure as you just need to connect it to the company code and other details in the business area and it will connect itself.
• By using business areas in controlling, you can create profit and loss statements, balance sheets, etc. for business areas, which is used in several companies for managerial accounting.

30) What do you mean by company and company code in SAP FICO?

In SAP FICO, Company is the organizational unit used in the Legal Consolidation module to roll up financial statements of several company codes. In contrast, the ID is the smallest organizational unit for which a completely separate set of accounts can be compiled for external reporting purposes.

31) What is the relationship between company code and controlling area in SAP FICO?

A controlling area can contain one or more company codes that must use the same operational chart of accounts as the controlling area. A controlling area can contain multiple company code assignments, but one company code can only be assigned to one controlling area.

32) What problems do we face when we configure a business area?

The main problem that occurs when the account balance distribution is configured in the business area, which is more relevant in the case of tax accounts.

33) What do you mean by parallel and local currency in SAP FICO?

The local currency is the currency that is entered when creating the company code. The other two other currencies are called parallel currencies. Parallel currencies can be used in foreign business transactions and are also used to conduct international transactions. Examples of two parallel currencies are GROUP CURRENCY and HARD CURRENCY.

34) What are the customization requirements for deleting documents?

A prerequisite for customizing for document deletion is checking deleted and non-deleted items. This is done by managing open items. Open item management is the process used to manage outstanding accounts, i.e. payables and receivables. For example, an invoice item that has not yet been paid is considered an open account until it is paid.

35) What do you understand by FI-GL Accounting? Why is it used?

FI-GL Accounting stands for Financial-General Ledger. It is used to get an overview of external accounting and accounts. Records all business transactions incorporated into all other operational areas in the software system and ensures that accounting data is always complete and accurate.

36) What methods are used to pay supplier invoices?

There are two ways to pay supplier invoices:

Manual payment method is done without using any output medium like checks etc. Automatic payment method is done using some output medium like DME (Data Medium Exchange), cheques, bank transfer etc.

37) What type of default exchange rate is selected for all SAP transactions?

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

38) What is the meaning of GR/IR (Good Received/Invoice Received) clearing account in SAP FICO?

In SAP FICO GR/IR stands for Good Received/Invoice Received as a temporary account. If the goods are received in the original system and the invoice is not delivered, a correction item is made. It forwards the Accounting entry to debit the stock and credit the GR/IR account. In the same way, when an invoice is received, the amount is credited to the supplier’s account and the amount is debited from the GR/IR account. GR/IR is displayed as unaccounted items until the invoice is received.

39) What are the different account groups that can be created in Accounts Receivable in SAP FI?

Below are the different account groups that can be created in Accounts Receivable in SAP FI:

40) Is it possible to calculate depreciation to date? how can you do that

Yes, it is possible to calculate depreciation to date. The depreciation to date feature becomes active for an asset once the asset has a corresponding depreciation key and is activated (posted). Once this happens, you cannot turn off this feature for the asset, even if you change the depreciation key.

41) What is the purpose of Accounts Payable in SAP FI? How does this relate to G/L?

In SAP FI, ​​Accounts Payable accounts are used to manage and record accounting data for all suppliers. It is related to G/L in the following ways:

• All invoices and deliveries are managed according to supplier requirements.
• Liabilities are managed according to the payment program and all payments can be made by cheques, money orders, electronic transfers, etc.
• All postings made in Payables are simultaneously updated in the general ledger as well, and the system also maintains forecasts and standard reports that can be used to track all open items.

42) What are internal orders in SAP FICO? Where can you use it?

Internal jobs are generally used to plan, collect, and settle costs for internal jobs and tasks. Internal orders can also be used to track costs and are suggested to be incurred in the short term.

43) What do you mean by blocking a customer in SAP FI?

When you block a customer account in AR so that no more charges are made to that account, this process is called blocking. Before we mark a customer master record for deletion, we must block the customer account.

We should also block a customer that we only use as an alternate dunning recipient to ensure that no one can post to that customer by mistake. In the Sales and Distribution (SD) application component, we can set the following blocks for the customer:

• Broadcast block
• Order block
• Delivery block
• Billing block

44) What are the various blocks that can be applied to a vendor account in SAP FI?

We can apply the following blocking to the vendor account in SAP FI:

• Billing block for specific company codes or all company codes.
• Purchasing block for specific purchasing organizations or all purchasing organizations. This block is only used if you have purchased and installed the shopping application component.

45) What is the depreciation table in Property Accounting?

The depreciation table is evaluated in Asset Accounting as the highest node that is assigned to the company node. All depreciation calculations are stored in the depreciation table.

46) How can you create a credit control area in SAP FI?

We can create a credit control area in SAP FI using transaction code OB45 or a route. To do this, follow these steps:

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

• Update
• Credit management area name in SAP
• Currency
• Description
• Credit limit
• Risk category
• Fiscal option
• A group of representatives

47) How can you manage the relationship between two currencies in SAP FI?

We use exchange rates to define and manage the relationship between two currencies in SAP FI. It is also used to convert an amount to another currency.

Exchange rates are defined in the system for the following purposes:

• Billing and Posting: Translates amounts posted or cleared in a foreign currency or checks a manually entered exchange rate during posting or settlement.
• Exchange Rate Differences: Used to determine gains or losses from exchange rate differences.
• Foreign Currency Valuation: Used to value open foreign currency items and foreign currency balance sheet accounts as part of closing operations

48) What is field state group and what does it use to control?

A field status group is configured in FSV (Field Status Variant) to maintain the field status for general ledger accounts (General Ledger).

49) What are some important tables in SAP FICO?

SAP FICO tables are used to store data on the screen. Sometimes more than one table is attached to a particular screen. A SAP FICO consultant must know the table in SAP software and its data structure.

Below is a list of some of the most important SAP FICO tables:

SAP Tables: Enterprise structure

SAP FI G/L Tables

SAP Accounts Receivable Table

SAP FI Accounts payable tables

SAP tables: Assets Accounting

SAP CO Tables

Following is the list of important SAP CO tables:

Cost Center accounting tables

Profit center Accounting tables

50) What do you understand by accounting for period variants?

In SAP FI, ​​accounting period variants are responsible for checking which accounting periods are open for posting and ensure that closed periods remain balanced. In a fiscal year, the accounting period is the period for which transaction data is updated.

Career Prospects for SAP FICO- After completing the SAP FICO course, a 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.

Join to learn SAP FICO from the Experts! Click for the demo class!

The best institute to take SAP FICO course is Entri.  This SAP FICO course from Entri is a well-featured updated course material. The course provides students with specific information about financial accounting and controlling and helps them master the art of using SAP FICO software.