SAP INTERVIEW QUESTIONS

SAP INTERVIEW QUESTION

What is SAP Fiori ?

SAP Fiori is an initiative from SAP to offer a faster and more responsive user interface. It is focused on providing  the user an interface which supports all devices such as tablets, desktops and mobile phones. Sap Fiori UX is available to customers at no additional cost.

What is Client  ?

In a three tier client server architecture the uses layer is separated from the processing layer. The user interaction is handled by a front-end application called presentation layer. This is often referred to as client in ERP terminology.

What is Client 000 ?

This is the reference client. It is the master pre-delivered client created by SAP. The original system and configuration is held in this client. Whenever an update is applied to a SAP system the data in this client is also updated. No transaction data can be posted in this client.

What is Client 001 ?

It is a copy of Client 000. This client can be customized as per the requirements of the organisation.

What is Company ?

Company in SAP system refers to a legally independent entity formed as per the local laws of a country. It might   comprise of one or more legally independent entities. You can consider this as a group entity at country level. Group accounting   and consolidation is possible at Company level.

What is Company Code ?

This represents the legal entity defined as per the local laws at which the entity needs to publish its Balance Sheet and Profit and Loss Statement. This is meant t serve the external reporting requirements of the entity. It is the lowest level at which the entity is required to report separate financial statements according to the local laws. It is obligatory to define at least one company code to post FI transactions in SAP system. In SAP system it is designated as unique 4-digit alpha numeric code.

What is Basis ?

It deals with the installation and day to day maintenance of SAP Servers. It covers server maintenance, user maintenance, profile maintenance and overall running of SAP Servers.  The job of keeping the server running and available to all the users through SAP GUI client is of the basis administrators.

What is ABAP ?

ABAP stands for Advanced Business Application for Programming. The latest object oriented version is always referred as ABAP/4. When SAP was developed a need was felt to extend the functionality of SAP depending upon organization requirements. Now the customers can develop their customizations through simple programming language ABAP.

What is Activity Based Costing ?

In process industries it makes sense to track costs by activities. For example a contractor may be more concerned about what it costs for one labour to perform a certain activity. In such cases Activity Based Costing is more preferable as compared to Product Costing.

What is Controlling Area ?

It is the highest enterprise structure element in cost accounting or internal management reporting. It is the enterprise structure element under which the entire CO objects post their values.

What is Cost Centre ?

It deals with the internal cost reporting of the organisation. Cost Centre acts as a sub area within Controlling at which costs can be grouped. There is no set defined rule to create cost centres as it depends on internal management reporting requirements which can vary organisation to organisation. A number of factors need to be considered before defining cost centres. Functional factors like allocation criteria, physical allocation, etc. play an important role while defining Cost Centres.

What is Business Area ?

Business area represents and area, segment, product division, region etc. of a real business entity in SAP System. Defining Business Area is optional.

What is Cost Element Accounting?

Cost Element is the basic entity for capturing the cost in SAP. All the basic data flows from SAP FI through the cost elements to Controlling Module.

What is Cost Centre Accounting?

Cost Elements by themselves don’t serve much purpose as the information required at management level needs to be condensed and not detailed. Hence Cost Centres help in collecting costs of similar nature for example overhead costs like service costs, maintenance costs etc. Further the costs captured at cost centre level can further be allocated to other cost centres or cost objects based on the needs of the organisation. 

What is the function of  COPA ( Profitability Analysis ?

PA is used to study the profitability of individual market segments, product and customers.

What are the components of Costing Variant ?

The components of costing variants are :

Costing Type

Valuation Variant

Date Control

Quantity Structure

Transfer Strategy

What are the options available for entering planning data in Controlling ?

The options available for entering planning data in Controlling are :

Manual Planning – Here the data for profitability  segments are entered manually.

Automatic Planning  - Here the segments are processed automatically by the system based on predefined  parameters.

Integrated  Planning – Here the segments  are processed based on the inputs from other modules, such as MRP and Sales

What is the use of Internal Orders in SAP ?

It is used for  some specific requirements  to analyze certain costs such as advertisement  campaign in which internal and external resources of an organization are involved.

What are the options available for settling production variances to COPA ?

Production variances  can be settled to COPA in the following ways :

Posting the production variances in  FI to COPA

Settlement of variance categories to COPA

Allocation of Production variances through Material Ledger

 What is Lockbox?

Lockbox is a service provided by multiple banks, wherein the payment for Customer invoices are received in mail and they are directed to a special post office box. This post office box is known as lockbox. The Post Office Box is obtained by the Bank. The Bank picks up the payments from the post office box and deposits them into company’s accounts.  A separate notification is also sent by the bank to the company of the deposits made to it’s accounts.

Companies open Lockbox accounts with their Banks and inform the same to their customers. The customers than send their checks to the lockbox. The Bank collects the receipts and informs the company. There are several distinct advantage of this process when mapped in SAP:

Accelerates collection and deposit of checks to Bank Accounts

 Internal processing costs are reduced

Greater automation of the Collection process

Easy Reconciliation of Payments from Customers

What are the different types of cost elements ?

There are 2 types of Cost Elements

Primary Cost Element and Secondary Cost Element

Primary Cost Elements are linked to GL accounts in FI. It is responsible to transfer data from FI to Controlling module. Examples : Rent, Salary Wages etc.

Secondary Cost Element  are not linked to FI. These are used for internal CO processes like allocation.

Examples : Machine Overhead, Labour Overhead etc.

What is Profit Centre Accounting ?

Cost by itself does not provide any meaningful information until and unless they are compared with revenues. Profit Centre Accounting deals with this requirement of the organisation. The information for profitability analysis may vary from organisation to organisation; therefore, the structure of Profit Centre Accounting varies from organisation to organisation. Examples are internal areas of responsibility such as product lines, geographical regions, offices and production sites.

What is FI – CO integration ?

Cost element is the basic link between FI and CO modules. A primary cost element is defined for every G/L  Accounts for which linkage between FI and CO is required. After the linkage, all the entries in FI for the respective G/L  Accounts  are automatically passed on to the cost element in CO. In addition, while posting FI  transactions, you can also specify Cost Centre, Profit Center, Business Area and Segment to which the transaction belongs.

Explain the concept of automatic  account assignment

The linkage between different modules and FI is achieved through automatic account assignment. The module where the transaction  is initiated contains configuration data that helps in determining which G/L account  is affected in FI. Example in MM, when goods are received, simultaneous FI entry for recording the impact on inventory GL account is also initiated form MM.

What is SAP Gui ?

SAP is a powerful tool and holds  the major portion of the world wide market.  SAP applications and functionalities  are accessed easily by a SAP end user through a software providing graphical interface. This is SAP Gui. SAP Gui can run on operating systems like Microsoft Windows,  Apple, Macintosh UNIX.

GUI stands for : Graphical User Interface

SAP Gui allows to access the SAP central server of a company via network.

What is Product Costing ?

Product Costing is one of the important tools in SAP environment. It explains how to  determine the cost of product or a unit. Product costing is used to know the unit cost of the goods manufactured or sold. It helps not only to know the cost of production, but also useful to know the profitability of the product.

How many components  are there in Product Cost Planning ?

There are 4 components  of  Product Cost Planning. They are :

Product Cost Planning

Cost Object Planning

Material Ledger

Information System

What is Product Cost Planning ?

Product cost planning is used to estimate the standard cost of a product. In standard costing we determine the cost of a product, valuation of materials, and finished goods inventories. It further decides the profitability margin thereby we can derive the result analysis in profitability accounting.

 How we can derive  Standard Cost of a Product  from Product Cost Planning  component ?

In product cost planning component, we use to derive the information from the following areas to determine the standard cost of a product.

1. Material management

2. Cost center accounting

3. Production planning.

If we use the information from all three components to know the product cost then it  is called as Cost estimation with quantity structure. Determination of product cost with quantity structure uses the information from production module extensively, like BOMs and routings irrespective of the kind of production activities it undertakes.

How the cost of a product is determined without Quantity Structure ?

The cost estimation without Quantity Structures uses the information of materials and activities manually to determination the product cost or cost of goods sold. The product cost planning considers not only the tangible costs but also value the intangible costs which contributes for determination of product cost. The Product Cost Planning is useful to determine the price floors, optimization of cost of goods sold, valuation of inventories, and also useful in Profitability analysis and profit center accounting.

What is Cost Object Planning ?

The another way of determination of product cost or standard cost is Cost Object Planning. In this method the total costs of a product will be derived through the cost objects for which the actual costs are assigned. Product cost planning is the basis for cost object planning. The cost Object Planning has the following process. First one is preliminary costing in which the cost will determine in normal way. In the second one the costs will be assigned to various cost objects and finally the assigned cost object costs were compared with the planed costs and prepare the variance analysis for the cost of production.

The cost objects are as follows :

1. Production Orders.

2. Process orders

3. Sale orders.

All the costs either directly or indirectly must be assigned to the above cost objects compulsorily.

Define Material Ledger

Material ledger is useful to collect the information in respect of all the materials. It is useful for determining the material costs for various purposes in different valuation area.

The main purpose of either product cost planning or cost object planning is to determine the cost of goods sold.

What is Routing ?

Routing is called the scheduled process of manufacturing in a work centre is called routing.

What is Work Centre ?

The organisational unit where the actual production activities are taking place.

How Material Cost is derived ?

It can be derived from the Bill of Material ( BOM) in the Production Module. The bill of material contains the quantity of raw material used in the process of production. The material price will be taken from Material Master.

What is Cost Sheet ?

Cost Sheet is used to determine the overheads. To determine the Cost of goods sold SAP uses costing variants. In Material Management the cost of goods sold is used to determine the raw material cost and finished goods inventory. In Production Planning module the cost of goods sold is used to determine the price variances and product cost or unit cost or standard cost. Overhead module uses the cost of goods sold as to know the cost of resources.