Top 50 SAP FICO Interview Questions & Answers in…

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Top 50 SAP FICO

Interview Questions &
Answers in 2022
Ryan Bennett September 30, 2022

Here are SAP FICO interview questions and

answers for fresher as well experienced
candidates to get their dream job.

1) Explain the term SAP FICO?

SAP FICO stands for FI ( Financial Accounting)
and CO (controlling). In SAP FICO, SAP FI take
cares about accounting, preparation of financial
statements, tax computations etc, while SAP CO
take cares of inter orders, cost sheet, inventory
sheet, cost allocations etc. It is the so!ware that
stores data, and also computes them and
retrieves the result based on the current
marketing scenario. SAP FICO prevents data lost
and also does the verification and reporting of
data.

Free PDF Download: SAP FICO Interview

Questions & Answers

2) What are the other modules to

which ‘Financial Accounting’ is
integrated?
The other modules to which ‘Financial
Accounting’ is integrated are

a) Sales and Distribution

b) Material Management
c) Human Resource
d) Production Planning
e) Controlling of financial transaction
3) In SAP FI what are the
organizational elements?
The organizational elements in SAP FI are:

a) Company Code
b) Business Area
c) Chart of Account
d) Functional Area

4) Explain what is posting key and

what does it control?
In order to determine the transaction type which
is entered in the line item, a two digit numerical
is used known as ‘Posting Key’

Posting key determines

a) Account Types
b) Types of posting. Debit or Credit
c) Field status of transaction

5) What is the company code in

SAP?
To generate financial statements like Profit and
Loss statement, Balance sheets etc. company
code is used.

6) How many Chart of Accounts can

company code have?
You can have one Chart of Account for one
company code which is assigned.

7) For a Company Code how many

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

8) What are the options in SAP for

Fiscal years?
Fiscal year in SAP is the way financial data is
stored in the system. In SAP, you have 12 periods
and four special periods. These periods are
stored in fiscal year variant that is:

a) Calendar Year: From Jan-Dec, April-March

b) Year dependent fiscal year

9) What is a ‘year shi!’ in SAP

calendar?
SAP system does not know what is broken fiscal
year e.g April 2012 to March 2013 and only
understand the calendar year. If, for any
business, the fiscal year is not a calendar year
but the combination of the di"erent months of
two di"erent calendar year and then one of the
calendar year has to classified as a fiscal year for
SAP and the month falling in another year has to
be adjusted into the fiscal year by shi!ing the
year by using the sign -1 or +1. This shi! in the
year is known as ‘year shi!’.
Example: April 2012 to Dec 2012 is our first
calendar year, and Jan 2013 to March 2013 is our
second year, now if you are taking April-12 to
Dec-12 as your fiscal year, then Jan-13 to March-
13 automatically becomes the second year, and
you have to adjust this year by using -1 shi!, and
vice versa if the scenario is reversed, here you
will use +1 shi!.

10) What is year dependent fiscal

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

11) In SAP how input and output

taxes are taken care?
For each country tax procedure is defined, and
tax codes are defined within this. There is a
flexibility to either expense out the Tax amounts
or capitalise the same to stocks.
12) Explain what is validations and
substitutions in SAP?
For each functional area in SAP Validation or
Substitution is defined eg, Assets, Controlling
etc. at the following levels

a) Document Level
b) Line item Level

13) What are the application areas

that use validation and
substitutions?
a) FI- Financial accounting
b) CO-Cost accounting
c) AM-Asset accounting
d) GL-Special purpose ledger
e) CS-Consolidation
f) PS-Project system
g) RE-Real estate
h) PC-Profit center accounting

14) In SAP what is the use of FSV (

Financial Statement Version) ?
FSV ( Financial Statement Version) is a reporting
tool. It can be used to extract final accounts from
SAP like Profit and Loss Account and Balance
Sheet. The multiple FSV’s can be used for
generating the output of various external
agencies like Banks and other statutory
authorities.

15) What is a field status group?

‘Field status groups’ control the fields which
come up when the user does the transactions. In
FIGL (Financial General Ledger) master, the field
status group is stored.

16) What is FI-GL (Financial- General

Ledger) Accounting does?
To get an overview of external Accounting and
accounts, G L (General Ledger) Accounting is
used. It does the recording of all business
transactions incorporated with all other
operational areas in a so!ware system and also
ensures that the Accounting data is always
complete and accurate.
17) What is the default exchange
rate type which is picked up for all
SAP transactions?
For all SAP transaction, the default exchange
rate is M (Average Rate).

18) What are the methods by which

vendor invoice payments can be
made?
a) Manual payment without the use of any
output medium like cheques etc.

b) Automatic payments like DME (Data Medium

Exchange), cheques, Wire transfer

19) What are the problems when

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

20) For document clearing what are

the customizing prerequisites ?
The customizing pre-requisite for document
clearing is to check the items cleared and
uncleared, and this is done by open item
management. Open item management manages
your outstanding account, i.e account payable
and account receivable. For instance, an invoice
item that has not yet been paid is recorded as
open account until it is paid.

21) What is the importance of GR/IR

( Good Received/ Invoice Received)
clearing account?
GR/IR ( Good Received/ Invoice Received) is an
interim account. In the legacy system, if the
goods are received and the invoice is not
received, the provision is made, in SAP at the
goods receipt. It passes the Accounting entry
debiting the Inventory and crediting the GR/IR
account. Similarly, when an invoice is received
the vendor account is credited, and the GR/IR
account is debited, the GR/IR will show as an un-
cleared items till the time the invoice is not
received.

22) What is parallel and local

currency in SAP?
Each company code can have two additional
currencies, in addition to the company code,
currency entered to the company code data. The
currency entered in the company code creation
is called local currency and the other two
additional currencies are called parallel
currencies. Parallel Currencies can be used in
foreign business transactions. In order to do
international transaction, parallel currency can
be used. The two parallel currencies would be
GROUP CURRENCY and HARD CURRENCY.

23) Where can you use the internal

order?
To track the cost, internal orders are used; they
are proposed to be incurred over on a short term
basis.
24) Is it possible to calculate
depreciation to the day?
Yes, it is possible to calculate depreciation, to do
that you have to switch on the indicator Dep. to
the day in the depreciation key configuration.

25) In Asset Accounting what is the

organizational assignments?
In Asset Accounting, chart of depreciation is
rated as the highest node, and this is assigned to
the company node. All the depreciation
calculations are stored under the chart of
depreciation.

26) What is the importance of asset

classes? What asset classes are
there?
The asset class is the main class to classify
assets. Every asset must be assigned to only one
asset class. Example of asset class is Furniture &
Fixtures, Plant & Machinery, and Computers etc.
The asset class also contains G1 account, when
any asset is procured, G1 account is debited.
Whenever you create and asset master, it
becomes mandatory to mention the assest class
for which you are creating the required assets.
So, whenever any asset transaction occurs, the
G1 account attached to the asset class is
automatically picked up and the entry is passed.
You can also specify the default values for
calculating the depreciation values and other
master data in each asset class.

27) How capital WIP (Work In

Process) and Assets accounted for
in SAP?
‘Capital WIP’ is referred to as Assets under
construction in SAP and is represented under
specific asset class. Depreciation is not charged
under ‘Capital WIP’ usually. The cost incurred on
building a capital asset can be booked to an
‘internal order’ and through the settlement
procedures, and can be posted onto an ‘Asset
Under Construction’.

28) What are the major components

of Chart of Accounts?
The major components of Chart of Accounts are:

a) Chart of account key

b) Name
c) Maintain Language
d) Length GL account number
e) Controlling Integration
f) Consolidation-Group chart of accounts
g) Block indicator

29) What is credit control area in

SAP?
To immune your company from the risk of bad
debts and multiple outstanding receivable, you
can set a credit limit for your customer by using
credit control area in SAP. With the help of SAP,
you can block the deliveries to your customer
based on the credit limit and the accounts
receivable balance in their account which is
maintained by you.
30) How can you create Credit
Control Area in SAP?
By using transaction code OB45 or path you can
create Credit Control Area in SAP

SPRO> enterprise structure >maintain

structure>definition>financial
accounting>maintain credit control area and
then enter the following description

a) Update
b) Name of the credit control area in SAP
c) Currency
d) Description
e) Credit Limit
f) Risk Category
g) Fiscal Variant
h) Rep group

31) What is posting period variants?

In fiscal year posting period is a period for which
the transactions figures are updated. The
posting period variants in SAP is accountable to
control which Accounting period is open for
posting and ensures that the closed periods
remain balanced.

32) Explain in simple terms what is

field status and what does it
control?
Field status group is a group configured in FSV
(Field Status Variant) to maintain field status for
G/L (General Ledger) accounts. It controls which
field should suppress, display, optional and
required.

33) What is short-end fiscal year?

A short-end fiscal year results when you change
from a normal fiscal year to a non-calendar fiscal
year, or other way around. This type of change
happens when an enterprise becomes part of a
new co-corporate group.

34) What is an account group and

where it is used?
To control the data that needs to be entered at
the time of the creation of a master record an
account group is used. Account group exist for
the definition of GL account, Customer Master
the definition of GL account, Customer Master
and Vendor.

35) What is the purpose of

“Document type” in SAP?
The purpose of ” Document type” in SAP is

a) Number range for documents are defined by it

b) Types of accounts that can be posted are
controlled by it, e.g Assets, Vendor, Customer,
Normal GL account
c) It is used for the reversal of entries

36) Is business area at company

code level?
No. Business area is at client level which means
other company codes can also be posted to the
same business area.

37) In SAP, Customer and Vendor

code are stored at what level?
The Vendor and Customer codes are stored at
the client level. It means that by extending the
company code view any company code can use
the customer and vendor code.

38) How are tolerances for invoice

verification defined?
Tolerance determines whether the payable
places matching or tax hold on the invoice. The
following are the instances of tolerance can be
defined for Logistic Invoice Verification.

a) Small di!erences
b) Moving average price variances
c) Quantity variances
d) Price variances

39) What is a country Chart of

Accounts?
Country Chart of Accounts contains G/L (General
Ledger) accounts needed to meet the country’s
legal requirements.
40) What is APP in SAP Fico?
APP stands for ‘Automatic Payment Program’; it
is a tool provided by SAP to companies to pay its
vendors and customers. APP tools help to avoid
any mistakes taken place in posting manually.
Also, when number of employees is more in the
company, payment through APP becomes more
feasible.

41) In SAP FICO what are the terms

of payment and where are they
stored?
Payment terms are created in the configuration
and determine the payment due date for
vendor/customer invoice.

They are stored on the customer or vendor

master record and are pulled through onto the
customer/vendor invoice postings. The due date
can be changed on each individual invoice if
required.

42) What are one-time vendors?

In certain companies, especially the one dealing
with high cash transactions, it is not practical to
create new master records for every vendor
trading partner. One time vendors allows a
dummy vendor code to be used on invoice entry
and also the information which is usually stored
in the vendor master.

43) What are the standard stages of

the SAP payment run?
The following steps are the standard stages of
the SAP payment run

a) Entering of parameters ( Vendor Accounts,

Company Codes, Payment Methods)
b) Proposal Scheduling – the system proposes
the list of invoice paid
c) Payment booking- the booking of the actual
payments in the ledger
d) Printing of payment forms ,example cheques

44) In Accounts Receivable, what is

the di!erence between the
‘Residual Payment’ and ‘Part
Payment’ methods of allocating
cash?
‘Residual payment’ and ‘Part payment’ are the
two methods for allocating partial methods from
customers. For example, an invoice for $100 is
generated, customer has paid $70. Now this $70
will be o!-set and leaving the remaining balance
$30. With residual payment, the invoice is
cleared for the full value of $100 and a new
invoice is generated for the remaining balances
$30.

45) What is “dunning” in SAP?

‘Dunning’ is the process by which payment
chasing letters are issued to customers. SAP can
determine which customers should receive the
letters and for which overdue items. Di!erent
letters can be printed in SAP depending on the
overdue payment date, with a simple reminder.
With the help of dunning level on the customer
master, we can know which letter has been
issued to the customer.

46) What is the purpose of the

account type field in the GL
(General Ledger) master record?
At the end of the year, profit and loss accounts
are cleared down to the retained earnings
balance sheets account. The field contains an
indicator which is linked to a specific GL (General
Ledger) accounts to use in this clear down.

47) Explain what is recurring entries

and why are they used?
Recurring entries can eliminate the need for the
manual posting of Accounting documents which
do not change from month to month. For
example, an expense document can be
generated which can be scheduled for the last
days of each month or whenever an individual
wants it. Usually multiple recurring entries are
created at one go and then processed all
together as a batch month end using
transaction.

48) What is a ‘Value Field’ in the CO-

PA module?
Value fields are number or value related fields in
profitability analysis such as quantity, sales
revenue, discount value etc.
49) What are the statistical internal
orders?
Statistical internal orders are dummy cost
objects used for reporting and analysis
purposes. It must be posted to in conjunction
with a real object such as a cost center.

50) For what purposes internal

orders can be used?
You can use internal orders for

a) Overhead Orders: It monitors internal jobs

settled to cost centres
b) Investment Orders: It monitors internal jobs
settled to fixed assets
c) Accrual Orders: O!setting posting of accrued
costs calculated in CO
d) Orders with Revenue: It display the cost
controlling parts of Sales and Distribution, it
does not a!ect the core business of the company
These interview questions will also help in your
viva(orals)

You Might Like:

FD32 in SAP: Credit Control Area

Tutorial
Step by Step Guide to Create Vendor
Master Data in SAP
How to Create One Time Vendor FK01
in SAP
FB60 in SAP: How to post a Purchase
Invoice
How to perform Dunning: SAP F150
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