90 SAP FICO Interview Question and Answers
Preparing for a SAP FICO (Financial Accounting and Controlling) interview requires a solid understanding of the subject matter and the ability to confidently answer questions related to SAP FICO concepts, modules, and processes. Here are some commonly asked SAP FICO interview questions to help you in your preparation:
What is SAP FICO?
SAP FICO stands for Financial Accounting and Controlling, which are modules of the SAP ERP system. FICO integrates financial accounting and management accounting functionalities, providing businesses with tools to manage financial transactions, analyze financial data, and generate reports.
Explain the basic organizational structure in SAP FICO.
The basic organizational structure in SAP FICO consists of the following elements:
- Company Code: Represents an independent legal accounting entity within an organization.
- Controlling Area: Represents a self-contained organization unit for cost accounting and internal reporting.
- Business Area: Represents a specific area of responsibility within a company, used for internal reporting and analysis.
- Chart of Accounts: Defines the list of general ledger accounts used for recording financial transactions.
- Profit Center: Represents a segment of the company responsible for generating revenue and incurring costs.
What is the chart of accounts?
The chart of accounts is a list of all the general ledger accounts used by an organization to record financial transactions. It defines the structure and classification of accounts based on the company’s requirements. The chart of accounts provides a standardized framework for financial reporting and analysis.
What is a company code in SAP FICO?
In SAP FICO, a company code represents an independent accounting entity within an organization. It is used for legal and external reporting purposes. A company code has its own chart of accounts, fiscal year variant, and is assigned to a specific country or region. Financial transactions are recorded and managed at the company code level.
What is a fiscal year variant?
A fiscal year variant determines the financial year structure for recording and reporting financial transactions. It defines the number of posting periods, the start and end dates of each period, and other fiscal year-specific parameters. The fiscal year variant is assigned to a company code and can vary based on legal requirements or business needs.
Explain the concept of a posting period in SAP FICO.
In SAP FICO, a posting period represents a specific period within a fiscal year during which financial transactions can be posted. The posting period controls the timing of transaction postings and helps ensure that only authorized entries are made. Each posting period has a specific start and end date, and transactions can only be posted within these defined periods.
What are the different types of GL accounts in SAP FICO?
The different types of GL (General Ledger) accounts in SAP FICO include:
- Asset Accounts: Used to record assets owned by the company, such as buildings, equipment, and vehicles.
- Liability Accounts: Used to record the company’s obligations and debts, such as loans and accounts payable.
- Revenue Accounts: Used to record income generated from the company’s primary business activities.
- Expense Accounts: Used to record the costs incurred in running the business, such as salaries, utilities, and rent.
- Equity Accounts: Used to record the company’s ownership interest and retained earnings.
What is the difference between a general ledger account and a sub-ledger account?
A general ledger account represents a summary-level account that captures financial transactions at an aggregated level. It provides an overview of the company’s financial position and is used for financial reporting and analysis. A sub-ledger account, on the other hand, represents a detailed-level account that captures individual transactions within a specific category or sub-group. Sub-ledger accounts provide more granular information and support the reconciliation of transactions.
What is the purpose of a field status group in SAP FICO?
A field status group in SAP FICO is used to define the status of fields (data entry fields) in the financial accounting documents. It determines whether a field is mandatory, optional, or suppressed during document entry. Field status groups help control the data entry process and ensure the completeness and accuracy of financial information.
Explain the terms “reconciliation account” and “non-reconciliation account.”
In SAP FICO, a reconciliation account is a general ledger account used to consolidate and summarize the balances of subsidiary ledgers or sub-ledgers. It serves as a control account and provides a means to verify the accuracy and completeness of transactions recorded in the sub-ledgers. A non-reconciliation account, on the other hand, is a general ledger account that does not require reconciliation with subsidiary ledgers or sub-ledgers.
What is a house bank in SAP FICO?
A house bank in SAP FICO refers to a bank with which a company has a primary banking relationship. It represents the financial institution where the company’s main bank accounts are held. The house bank information is used for processing various financial transactions, such as payment processing, bank reconciliation, and cash management.
What is a customer account group?
A customer account group in SAP FICO is a classification or grouping of customer master records based on common characteristics or attributes. It defines the fields that are mandatory, optional, or suppressed for data entry when creating customer master records. Customer account groups help streamline customer management processes and ensure consistency in data capture.
Explain the concept of a tolerance group in SAP FICO.
In SAP FICO, a tolerance group is used to define the permissible deviation limits for financial transactions. It specifies the maximum allowable differences between amounts entered in a document and amounts posted to financial accounts. Tolerance groups are assigned to users or user groups and help control the accuracy and integrity of financial data.
What is the purpose of a field status variant?
A field status variant is a configuration setting in SAP FICO that determines the field status (i.e., the display and input attributes) of various fields in financial accounting documents. It allows you to define the field status for different organizational units, such as company codes or business areas. The field status variant controls the behavior of fields during document entry and ensures compliance with specific business requirements.
What is the difference between a vendor and a customer in SAP FICO?
In SAP FICO, a vendor represents a party from whom the company purchases goods or services. Vendors are associated with accounts payable and are used for processing purchase orders, receiving invoices, and making payments. A customer, on the other hand, represents a party to whom the company sells goods or services. Customers are associated with accounts receivable and are used for processing sales orders, generating invoices, and managing customer payments.
What is a payment term in SAP FICO?
A payment term in SAP FICO defines the agreed-upon conditions and timeframes for making payments to vendors or receiving payments from customers. It specifies the payment due date, any applicable discounts for early payment, and any additional charges or penalties for late payment. Payment terms provide clarity and consistency in financial transactions and help manage cash flow effectively.
Explain the terms “company code” and “controlling area.”
In SAP FICO, a company code represents an independent legal entity within an organization and is used for external reporting purposes. It is assigned to a specific country or region and has its own chart of accounts, fiscal year variant, and financial statements. A controlling area, on the other hand, represents an organizational unit responsible for cost accounting and internal reporting. It provides a framework for managing and analyzing costs across different company codes.
What is the purpose of a profit center in SAP FICO?
A profit center in SAP FICO represents a segment of the company that is responsible for generating revenue and incurring costs. It is used for internal reporting and analysis purposes to measure the profitability and performance of different business units, divisions, or product lines. Profit centers provide a granular view of financial results and support decision-making processes.
What is the difference between financial accounting and management accounting in SAP FICO?
Financial accounting in SAP FICO focuses on the external reporting of an organization’s financial transactions and the preparation of financial statements, such as the balance sheet, income statement, and cash flow statement. It ensures compliance with accounting standards and provides stakeholders with an accurate view of the company’s financial position.
Management accounting, also known as controlling, in SAP FICO focuses on the internal management and control of an organization’s financial activities. It involves cost accounting, budgeting, variance analysis, profitability analysis, and other tools for decision-making, planning, and performance monitoring. Management accounting provides insights into the company’s operations and helps managers make informed decisions.
Explain the concept of a cost center in SAP FICO.
In SAP FICO, a cost center represents an organizational unit or department within a company that incurs costs. It is used for tracking and controlling expenses related to specific activities or functions, such as production, research and development, marketing, or administration. Cost centers provide visibility into the costs associated with different parts of the organization.
Remember, these are just interview questions, and you should be take SAP FICO Training in Hyderabad. It is essential to have a strong grasp of the concepts, processes, and configuration aspects of SAP FICO to showcase your expertise and increase your chances of success in the interview.
What is the purpose of a cost element in SAP FICO?
A cost element in SAP FICO represents a specific type of cost or revenue that is tracked and analyzed in management accounting. It is used to categorize and classify costs or revenues according to their nature, such as raw materials, labor, utilities, sales revenue, or marketing expenses. Cost elements are essential for cost allocation, cost planning, and cost reporting in SAP FICO.
Explain the terms “profitability segment” and “segment reporting.”
A profitability segment in SAP FICO represents a segment of the business for which profitability analysis is conducted. It can be based on various criteria, such as product lines, customer groups, geographic regions, or distribution channels. Segment reporting refers to the analysis and reporting of financial results and performance metrics for specific profitability segments. It provides insights into the profitability of different business segments and supports strategic decision-making.
What is a controlling area in SAP FICO?
A controlling area in SAP FICO is an organizational unit responsible for cost accounting and internal reporting. It represents a self-contained entity within an organization and is used for management accounting purposes. A controlling area is assigned to one or more company codes and provides a framework for cost management, profit analysis, and performance measurement.
What is the purpose of a profit center accounting (PCA) in SAP FICO?
Profit Center Accounting (PCA) in SAP FICO is a submodule that allows companies to perform profitability analysis at the profit center level. It enables tracking and reporting of revenues, costs, and profits for individual profit centers within the organization. PCA provides insights into the profitability of different business units or segments, facilitating performance evaluation and decision-making.
What is the purpose of a profit and loss statement (P&L) in SAP FICO?
A profit and loss statement (P&L) in SAP FICO, also known as an income statement or statement of comprehensive income, is a financial statement that summarizes the revenues, expenses, gains, and losses incurred by a company during a specific period. It provides an overview of the company’s financial performance, indicating whether it has generated a net profit or incurred a net loss.
Explain the concept of an asset class in SAP FICO.
In SAP FICO, an asset class is a category or group to which fixed assets are assigned based on their characteristics or attributes. It helps classify and organize fixed assets according to their nature, such as buildings, machinery, vehicles, or land. Asset classes define default settings, depreciation rules, and other parameters for managing and valuing fixed assets.
What is the difference between an asset and a sub-asset in SAP FICO?
An asset in SAP FICO represents a tangible or intangible item of economic value owned by a company. It can include buildings, machinery, vehicles, land, patents, or trademarks. An asset is a higher-level category that encompasses individual items, while a sub-asset represents a specific instance or sub-component of an asset.
What is the purpose of depreciation in SAP FICO?
Depreciation in SAP FICO refers to the systematic allocation of the cost of a fixed asset over its useful life. It reflects the reduction in an asset’s value due to wear and tear, obsolescence, or other factors. Depreciation is recorded as an expense in the financial statements and helps in spreading the cost of an asset over its expected usage period.
What is the difference between ordinary depreciation and special depreciation in SAP FICO?
Ordinary depreciation in SAP FICO is a regular depreciation calculation based on the useful life and value of a fixed asset. It represents the standard method of depreciation applied to most assets.
Special depreciation, on the other hand, is an additional depreciation method that can be applied to specific fixed assets. It is used to account for accelerated wear and tear, technological obsolescence, or changes in legal or market conditions. Special depreciation is temporary and typically used for tax purposes or to account for extraordinary circumstances.
Explain the terms “cost element category” and “cost element group.”
Cost element category in SAP FICO is a classification or grouping of cost elements based on their characteristics or attributes. It helps organize cost elements according to their nature, such as direct costs, indirect costs, overhead costs, or sales revenues. Cost element groups are used for cost allocation, cost planning, and cost reporting.
