50 top SAP FICO Interview Questions with answers for freshers and experienced

1. What is FICO?
This is the original module of SAP and its most popular. SAP started out as an accounting package, then expanded into other business functions. FICO consists of two major modules – financial (FI) and controlling (CO). As with all accounting packages, you can create a FICO for more than one company.

2. What are the basic steps to using the FI module?
Create a company, set up a general ledger, set up accounts receivable, set up accounts payable, generate reports, do monthly closing. The FI module covers the main business processes.

3. What is the CO module for?
This is the internal accounting module. Free of legal restrictions, this is designed for managers to make decisions about various processes within a company. It houses a cost center, internal order and profit center.

SAP FICO Interview Questions
SAP FICO Interview Questions

4. What is in the General Ledger?
Just like a manual general ledger, this is where the chart of accounts is set up, transactions are posted, financial statements are set up and generated.

5. What is Accounts Receivable?
This is the customer side of accounting, where the company receives payment from the customer. This is for regular and one-time customers. Sales invoices are generated, credit is issued and controlled, payments received are recorded, and sales tax charged and tracked.

6. What is Accounts Payable?
This is the vendor side. This ledger handles purchase invoices, credits and returns, payments to vendors, residual payments, partial payments, clearing transactions, even automatic payments.

7. What reports does the FI module generate?
Aside from dunning letters, FI generates thirteen reports. From the General Ledger you can get a chart of accounts list, account list, account balances and totals. From Accounts Receivable (AR) you can get a series of customer reports — master list, balances, line items, open item analysis and payment history. From the Accounts Payable (AP) you can get vendor reports – master list, balances, line items, and open items.

8. Explain the value of creating a cost center?
This is where costs are incurred. It provides information for overhead cost accounting based on areas of responsibility, functional requirements, geographical location, activities, services provided, and/or allocation criteria.

9. What is internal order?
To make decisions about action planning, monitoring and allocation of costs, there needs to be a description of the individual jobs within a controlling area. This covers not only overhead jobs, but investment orders, accrual costs, and revenue orders that are not from direct sales.

10. What is a profit center?
The profit center is an opportunity to evaluate business practices and their profitability. You can compare sales to cost of sales, or evaluate non-sales revenue (stocks, investments, equity). You can analyze overhead options. You can analyze ROI, EVA and cash flow.

11. What is a Company Code and what are the basic organizational assignments to a company code?
Company Code is a legal entity for which financial statements like Profit and Loss and Balance Sheets are generated. Plants are assigned to the
company code, Purchasing organization is assigned to the company code, and Sales organization is assigned to the company code.

12. What is the relation between a Controlling Area and a Company code?
A Controlling area can have the following 2 type of relationship with a Company code
a. Single Company code relation
b. Cross Company code relation
This means that one single controlling area can be assigned to several different company codes. Controlling can have a one is to one
relationship or a one is to many relationship with different company codes.
Controlling Area is the umbrella under which all controlling activities of Cost Center Accounting, Product Costing, Profit Center and Profitability
Analysis are stored.
In a similar way Company Codes is the umbrella for Finance activities.

13. How many Chart of Accounts can a Company code have?
A single Company code can have only one Chart of Account assigned to it. The Chart of Accounts is nothing but the list of General Ledger Accounts.

14. What are the options in SAP when it comes to Fiscal years?
Fiscal year is nothing but the way financial data is stored in the system.
SAP provides you with the combination of 12 normal periods and also four special periods. These periods are stored in what is called the fiscal
year variant.
There are two types of Fiscal Year Variant
•?Calendar Year – e.g. Jan-Dec
•?Year Dependent Fiscal Year .

15. What is a year dependent fiscal year variant ?
In a year dependent fiscal year variant the number of days in a month are not as per the calendar month. Let us take an example:- For the year
2005 the period January ends on 29th, Feb ends on 27th, March ends on

29. For the year 2006 January ends on 30th, Feb ends on 26th, March
ends on 30th. This is applicable to many countries especially USA. Ever year this fiscal year variant needs to be configured in such a case

16. How does posting happen in MM (Materials Management) during special periods?
There is no posting which happens from MM in special periods. Special periods are only applicable for the FI module. They are required for making any additional posting such as closing entries, provisions. which happen during quarter end or year end.

17. How many currencies can be configured for a company code?
A company code can have 3 currencies in total. They are local currency ie company code currency) and 2 parallel currencies. This gives the company the flexibility to report in the different currencies.

18. Do you require to configure additional ledger for parallel currencies?
Where only 2 currencies are configured (Company code currency and a parallel currency) there is no need for an additional ledger. In case the
third parallel currency is also configured and if it is different than the second currency type, you would then need to configure additional ledger.

19. If there are two company codes with different chart of accounts how can you consolidate their activities?
In this case you either need to write an ABAP program or you need to implement the Special Consolidation Module of SAP. If both the company codes use the same chart of accounts then standard SAP reports give you the consolidated figure.

20. Give some examples of GL accounts that should be posted automatically through the system and how is this defined in the system.
Stock and Consumption accounts are instances of GL accounts that should be automatically posted . In the GL account master record, a check box exists wherein the automatic posting option is selected called “ Post Automatically Only”

21. What is a Account group and where is it used?
An Account group controls the data that needs to be entered at the time of creation of a master record. Account groups exist for the definition of a GL account, Vendor and Customer master. It basically controls the fields which pop up during master data creation in SAP.

22. What is a field status group?
Field status groups control the fields which come up when the user does the transactions. There are three options for field selection. They are:
Display only
So basically you can have any field either for display only or you can totally suppress it or make it mandatory.
The field status group is stored in the FI GL Master Record.

23. What is the purpose of a “Document type” in SAP?
A Document type is specified at the Header level during transaction entry and serves the following purposes:
•?It defines the Number range for documents
•?It controls the type of accounts that can be posted to
eg Assets, Vendor, Customer, Normal GL account
•?Document type to be used for reversal of entries
•?Whether it can be used only for Batch input sessions
Document Type is created for differentiating business transactions.
Vendor Invoice, Credit Memo, Accrual Entries,Customer Invoice. It is a two digit character.

24. What is a Financial Statement Version?
A FSV (Financial Statement Version) is a reporting tool and can be used to depict the manner in which the financial accounts like Profit and Loss Account and Balance Sheet needs to be extracted from SAP. It is freely definable and multiple FSV’s can be defined for generating the output for various external agencies like Banks and other Statutory authorities.

25. How are input and output taxes taken care of in SAP?
A tax procedure is defined for each country and tax codes are defined within this. There is flexibility to either expense out the Tax amounts or Capitalize the same to Stocks.

26. What are Validations and Substitutions?
Validations/Substitutions in SAP are defined for each functional area e.g. FI-GL, Assets, Controlling etc at the following levels
1. Document level
2. Line item level
These need to be specifically activated and setting them up are complex and done only when it is really needed. Often help of the technical team is taken to do that.

27. Is it possible to maintain plant wise different GL codes?
Yes. To be able to do so the valuation group code should be activated.
The valuation grouping code is maintained per plant and is configured in the MM module. Account codes should be maintained per valuation grouping code after doing this configuration.

28. Is Business area at company code Level?
No. Business area is at client level. What this means is that other company codes can also post to the same business area.

29. What are the different scenarios under which a Business Area or a Profit Center may be defined?
This question is usually very disputable. But both Business Areas and Profit centers are created for internal reporting. Each has its own pros and cons but many companies nowadays go for Profit center as there is a feeling that business area enhancements would not be supported by SAP in future versions.
There are typical month end procedures which need to be executed for both of them and many times reconciliation might become a big issue. A typical challenge in both of them is in cases where you do not know the Business Area or Profit Center of the transaction at the time of posting.

30. What are the problems faced when a Business area is configured?
The problem of splitting of account balance is more pertinent in case of tax accounts.

31. Is it possible to default certain values for particular fields?
For e.g.
company code.
Yes it is possible to default values for certain fields where a parameter id is present.
Step 1 Go to the input field to which you want to make defaults.
Step 2 Press F1, then click technical info push button. This would open a window that displays the corresponding parameter id (if one has been allocated to the field) in the field data section.
Step 3 Enter this parameter id using the following path on SAP Easy access screen System ??User profile ??Own data.
Step 4 Click on parameter tab. Enter the parameter id code and enter the value you want as default. Save the usersettings.

32. Which is the default exchange rate type which is picked up for all SAP transactions?
The default exchange rate type picked up for all SAP transactions is M(average rate)

33. Is it possible to configure the system to pick up a different exchange rate type for a particular transaction?
Yes it is possible. In the document type definition of GL, you need to attach a different exchange rate type.

34. What are the master data pre-requisites for document clearing?
The Gl Account must be managed as an ‘open item management’ . This checkbox is there in the General Ledger Master Record called Open Item Management. It helps you to manage your accounts in terms of cleared and uncleared items. A typical example would be GR/IR Account in SAP (Goods Received/Invoice Received Account)

35. Explain the importance of the GR/IR clearing account.
GR/IR is an interim account. In the legacy system of a client if the goods are received and the invoice is not received the provision is made for the same.
In SAP at the Goods receipt stage the system passes an accounting entry debiting the Inventory and crediting the GR/IR Account .Subsequently when an invoice is recd this GR/IR account is debited and the Vendor account is credited. That way till the time that the invoice is not received the GR/IR is shown as uncleared items.

36. How many numbers of line items in one single entry you can have?
The number of line items in one document you can accommodate is 999 lines.

37. A Finance Document usually has an assignment field. This field automatically gets populated during data entry. Where does it get its value?
This value comes from the Sort key entered in the Gl master record.

38. How do you maintain the number range in Production environment?
Do you directly create it in the Production box or do you do it by means of transport?
Number range is to be created in the production client. You can transport it also by way of request but creating in the production client is more advisable.

39. In customizing “company code productive “means what? What does it denote?
Once the company code is live(real time transactions have started) this check box helps prevents deletion of many programs accidentally. This check box is activated just before go live.

40. What is done by GR/IR regrouping program?
The balance in a GR/IR account is basically because of 2 main types of transactions

41. Goods delivered but invoice not received –
Here the Goods receipt is made but no invoice has yet been received from the vendor. In such a scenario GR/IR account will have a credit balance.

42. Invoiced received but goods not delivered –
Here the Invoice is received from the vendor and accounted for, but goods have not been received. In such a scenario GR/IR account will have a debit balance.
The GR/IR account would contain the net value of the above two types of transactions. The GR/IR regrouping program analyses the above
transactions and regroups them to the correct adjustment account. The balance on account of first transactions will be regrouped to another
liability account and the balance on account of second transactions will be regrouped to an asset account.

43. What are the functionalities available in the financial statement version?
In the financial statement version the most important functionality available is the debit credit shift. This is more important in case of Bank overdraft accounts which can have a debit balance or a credit balance. Thus in case of a debit balance you would require the overdraft account to be shown on the Asset side. In case of credit balance you would require the account to be shown on the Liability side.

44. Is it possible to print the financial statement version on a SAPscript form?
Yes. It is possible to print the financial statement version on a SAPscript form.

45. How do you configure the SAPscript form financial statement version?
It is possible to generate a form from the financial statement version and print the financial statements on a SAPscript form. In the customizing for
financial statement version select the FSV you created and choose Goto
??Generate form ??One column or Two column form.
You can also copy form from the standard system.

46. Is it possible to generate a financial statement form automatically?
Yes. It is possible to generate a form automatically.

47. Is it possible to keep the FI posting period open only for certain GL codes?
Yes. It is possible to keep open the FI posting period only for certain GL codes.

48. How do you keep the FI posting period open only for certain GL codes?
In transaction code OB52 click on new entries and maintain an interval or a single GL code for the account type S with the posting period variant. If the GL codes are not in sequence then you need to maintain further entries for the posting period variant and account type S.

49. Can posting period variant be assigned to more than 1 company code?
Yes. Posting period variant can be assigned to more than one company code.

50. How are Vendor Invoice payments made?
Vendor payments can be made in the following manner:
Manual payments without the use of any output medium like cheques etc.
Automatic Payment program through cheques, Wire transfers, DME etc.