Tue, Nov 28, 2023
Most Asked 50 Interview Questions for SAP FICO with Answers

What is SAP FICO?

SAP FICO deals with the finance and cost controlling module in SAP ERP where FI stands for financial accounting and CO stands for control. Its module is very important and covers almost all business process encountered in various industries. It is one of the most powerful and widely implemented modules in SAP. Here are some interesting questions which might help you out in your next interview.

 50 interview questions and answers for SAP FICO

1. Explain the term SAP FICO?

Financial accounting and controlling when merged together give birth to SAP FICO. Where in FI stands for Financial accounting and CO stands for Controlling. SAP FICO handles the preparation of financial documents, tax computations, and also basic accounting. It is a software which stores data and also processes them while retrieving the results based on the current marketing scenario. It also helps in the prevention of data loss and also does data verification.

2. Explain what is posting key and what does it control?

Posting key is a two-digit numerical used to determine the transaction type which is entered in the line item. Posting key determines:

  1. Account types
  2. Types of posting. Debit or Credit.

3. What are the other modules to which “Financial Accounting” is integrated?

Financial accounting is integrated into the following modules:

  1. Material management
  2. Human resource
  3. Production planning
  4. Sales and distribution
  5. Controlling of financial transaction

4. While handling the SAP FICO for the first time, why is it necessary for the users to pay attention to the exchange rate?

The exchange rate in the FICO is always the Average rate. So it is not always needed for everyone to use the FICO in the same manner. Hence it needs to be changed as per the requirements. 

5. For a company code how many currencies can be configured?

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

6. How many charts of Accounts can a company code have?

There can only be one chart of account for one company code which is assigned.

7. What is the year dependent fiscal year variant?

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

8. In SAP how input and output taxes are taken care of?

Every country has a defined tax procedure and tax codes are defined within this. There is a Choice to either expense out the Tax amounts or capitalize the same to stocks.

9. In SAP what is the use of Financial Statement Version?

FSV is a tool used for reporting. It can also be used to extract financial accounts from Profit and Loss account and balance sheet. Multiple FSV’s can be used for generating the output of assorted external agencies like banks and different statutory authorities.

10. What is WIP in SAP FICO?

WIP stands for work in progress and it defines the status of asset that is under the Development mode in the SAP FICO.

11. What are the problems when the business area is constructed?

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

12. What exactly field status is?

Field status is a technique used for the purpose of maintaining the General ledger accounts.

It provides information on the concerned accounts.

13. What do you mean by posting period Variants?

Period Variants are a time frame during which the transactions are updated. Generally, it is used to control accounting periods that are complex.

14. What are the application areas that use validation and substitutions? 

  1. FI- Financial accounting
  2. CO-Cost accounting
  3. AM-Asset accounting
  4. GL-Special purpose ledger
  5. CS-Consolidation
  6. PS-Project system
  7. RE-Real estate
  8. PC-Profit center accounting

15. Where are payment terms for Vendor master maintained?

The payments for Vendor master are generally maintained at two places i.e. in the accounting view and the purchasing view.

16. How many periods are there in SAP FICO?

There are a total of 165 periods among which 4 are considered as special. They are used to define the data related to the fiscal year.

17. What do you know about the Validations and Substitution in SAP?

Validations and Substitutions are the assets used for the different functional parameters which can be accessed through the Document level and the Line level.

18. Where can you use the internal code?

Internal codes are used to track the cost inside the internal orders, which are proposed to be incurred over on a short term basis.

19. Is it possible to calculate depreciation to the day?

Depreciation can be calculated by the depreciation key configuration after switching on the indicator department.

20. What are the major components of the Chart of Accounts?

The major components of the COA are as follows:

  1. Chart of the account key
  2. Name
  3. Length GL account number
  4. Maintain language
  5. Block indicator
  6. Consolidation-Group charts of accounts
  7. Controlling integration

21. What is Credit Control area in SAP?

To immune the organization from the risk of bad debts and multiple outstanding receivable, to set a credit limit for your customer by using credit control area in SAP.

22. Is the business area at the company code level?

Business space is at the consumer level which implies different company codes that can also be posted to the same business area.

23. What is the APP in SAP FICO?

APP stands for “Automatic payment Program”, it is a tool developed by SAP to companies so that it can pay its vendors and customers. It also avoids any mistakes which take place in posting manually. Also to cater a number of employee’s, payment through APP becomes more feasible.

24. What are one time vendors?

In companies dealing with high cash transactions, to create new master records for every vendor trading partner is not practical which is why the company allows a dummy vendor code to be used on invoice entry and also the data which is typically stored within the vendor master.

25. What is the purpose of the account type field in the General ledger master record?

When the profit and loss accounts are cleared down to the maintained earnings balance sheets account. The field contains an indicator which is linked to a specific GL account, which can be used in the clear down.

26. What is a “Value Field” in the CO-PA module?

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

27. What are the statistical internal orders?

Statistical internal orders are the dummy cost objects used for reporting and analysis purposes. It should be placed in conjunction with a real object like a cost center.

28. What is ERP?

ERP is a package with the techniques and concepts for the integrated management of the business as a whole, for effective use of management resources, to improve the efficiency of an enterprise.

29. Different types of ERP?

SAP, BAAN, JD Edwards, Oracle Financials, Siebel and People Soft are the different types of ERP. Most of the companies use SAP because of the number of advantages it provides over other ERP packages.

30. Can you name a few modules with which it is possible for the users to integrate the financial accounting?

There are a lot of useful modules where it is possible for the users to accept this in an integrated manner. These include Material Management, Sales and Distribution, Product planning, Financial Transaction management, as well as Human Resource.

31. Tell me something about a field status group?

When transactions are completed, a lot of times there are fields which come up, this option is used or is enabled when they are not required while handling the tasks.

32. What prerequisites are there which users need to handle when it comes to document clearing?

The First thing to make sure is whether the things get cleared stature by the management or not. Next is to check whether the document is valid or not.

33. What are the organizational Assignments in Asset Accounting?

Chart of Depreciation is the highest node in Asset Accounting and this can be allotted to the organization code. Under the chart of depreciation, all the depreciation calculations are stored.

34. What is meant by a Baseline date in SAP Ar and Ap?

The date from which the payment terms apply. Basically, this is the document date on the invoice but can also be the date of entry or posting date from the ledger.

35. What are Fi substitution rules?

Fi substitution rules allow field values to be replaced when certain pre-requisites are met with.

36. When Entering Foreign Currency Fi Transactions Describe The Various Ways In Which The Exchange Rate Is Derived By SAP?

The exchange rate can be entered through the following:

  1. Directly on the document header.
  2. Derived from the exchange rate table.
  3. Indirectly, by entering the explicit local currency amount so the system is forced to use a specific exchange rate.

37. In SAP FI what are the organizational elements?

The organizational elements in SAP FI are:

  1. Company code
  2. Business Area
  3. Chart of Account
  4. Functional area

38. What is the parallel and local currency in SAP?

Each company code will have two Extra currencies, in addition to the company code, currency entered the company code data. The currency entered within the company code creation known as local currency and therefore the other two additional currencies are called parallel currencies.

39. What is the short-end fiscal year?

A short-end fiscal year results once you change from a normal fiscal year to a non-calendar fiscal year, or another way around.

40. In SAP, Customer and Vendor code are stored at what level?

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

41. What is the report painter?

The report painter is a default SAP reporting tool for the controlling module. It helps SAP to generate reports at a faster rate.

42. Can We Change The Reconciliation Account In The Vendor Master?

Yes, the reconciliation account can be changed in the vendor master provided that the authority to change has been configured.

43. How Is Bank Reconciliation Handled In Sap?

First of all the payment made to a vendor is posted on an interim bank clearing account. Subsequently, while operating reconciliation, an entry is posted to the Main bank account. One can do bank reconciliation either manually or electronically.

44. What Are Terms Of Payments And Where Are They Stored?

Payment terms are formulated in configuration and resolve the payment scheduled date for client/Vendor inventory postings. The planned date obtained via the payment is often modified on the individual bill if required.

45. What is “dunning” In Sap?

Dunning is the method by which payment chasing letters are issued to customers. SAP can confirm which customers should receive the letters and for which overdue items.

46. What Are Exchange Rate “factors”?

Exchange Rate factors are the relation between one currency and another to which an exchange rate is enforced. For example, you may define the Indonesia Rupiah to US$ factor as 10000: 1. Combined with an exchange rate of 0.95 this would equalize to 9500 IDR to 1 USD.

47. What is the importance of asset classes? What asset classes are there?

The asset class is the main class to categorize assets. Every asset must be designated to only one asset class. Example of the asset class is furniture and fixtures, plant and machinery, and computers, etc. The asset class also contains G1 account which is debited. Whenever you create an asset master, it becomes mandatory to mention the assets class for which you are generating the required assets. So, whenever any asset transaction takes place, the G1 account connected to the asset class is automatically picked up and also the entry is passed.

48. What is the purpose of “Document type” in SAP?

The purpose of “Document type” in SAP is

  1. Number range for documents is defined by it which is the number.
  2. The number of accounts that can be posted is controlled by it, e.g. Assets, Vendor, Customer, Normal GL account.
  3. It is used for the reversal of entries.

49. What is a ‘Value Field’ in the CO-PA module?

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

50. For what purposes internal orders can be used?

The following are the uses of internal orders:

  1. Overhead Orders: It watches over internal jobs settled to cost centers
  2. Investment Orders: It monitors internal jobs settled to fixed assets
  3. Accrual Orders: Offsetting posting of accrued costs calculated in CO
  4. Orders with Revenue: It displays the cost controlling parts of Sales and Distribution, it does not affect the core business of the organization.


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