ENTERPRISE STRUCTURE & GENERAL

LEDGER
1.

Organization structure in FI
Client
|
Operating Concern
|
Controlling area1
Controlling Area 2
|
Co. Code 1 Co. Code 2
|
Bus area 1 Bus area2 Bus Area3 Bus Area 4

2.
CLIENT
The client is the highest level in the R/3 system
hierarchy. Specifications or data which shall be valid for
all organizational units in all R/3 applications are
entered at the client level, eliminating the need to
enter this information more than once (e.g. exchange
rates). Each client is a self-contained unit which has
separate master records and a complete set of tables
and data. Users must enter a client key and have a
user master record in the client in order to log on to the
system.

3.

Company

Smallest organizational unit for which individual

financial statements can be drawn up according to the
relevant commercial law.
A company can consist of one or more company codes.
All company codes within a company must use the
same transaction chart of accounts and the same fiscal
year breakdown.
The company code currencies, on the other hand, can
be different.
A company code has one local currency in which its
transaction figures are recorded.

4.

Company Code

It is the smallest organizational unit in FINANCIAL

ACCOUNTING (FI) for which a complete set of accounts
can be created. It is the central organizational unit of
external accounting within the SAP system. Normally, a
company code is created for each company (legal
entity). It is a mandatory and pre-requisite that at least
one company code must be defined before
implementing the Financial Accounting component. All
business transactions relevant for Financial Accounting
are entered, saved and evaluated at company code
level.
Therefore, it is at company code level wherein a
complete set of financial statements (Balance Sheet,
Income Statement, and Statement of Cash Flows) can
be created

5.

Operating concern

Represents a part of an organization for which the sales

market is structured in a uniform manner. By setting off
the costs against the revenues, you can calculate an
operating profit for the individual market segments,
which are defined by a combination of classifying
characteristics (such as product group, customer
group, country, or distribution channel). The market
segments are called profitability segments. You can
assign multiple controlling areas to one operating
concern.

6.

Controlling area

Controlling area is the central Organizational structure

in controlling and is used in cost accounting. The
controlling area as in the case of Company Code is a
self contained cost accounting entity for internal
reporting purposes. The controlling area is assigned to
one or more company codes so as to ensure that the
necessary transactions posted in FI, are transformed to
controlling for cost accounting processing.

7.

Business Area

A business area is an organizational unit of financial

accounting that represents a separate area of
operations or responsibilities within an organization.
Financial accounting transactions can be allocated to a
specific business area.
Business areas are used in external segment reporting
across company codes based on the significant fields
of operation (for example, product lines) of a business
enterprise.
Business area balance sheets and income statements
are used only for internal reporting purposes.
The use of business areas is optional. When defining a
business area, only a 4 digit alpha-numeric key and a
short description are needed

8.

Profit center accounting

Profit Center is an organizational unit that is

management-oriented use for internal controlling
purposes.
Structuring your company up into profit centers allows
you to monitor and analyze areas of responsibility and
to delegate responsibility to each decentralized units,
thus treating these profit centers as companies within
your company.
Each profit center is assign to one Controlling Area.
Balance sheet and income statements can be
generated for each profit center, thus allows you to
generate a segmental reporting.

9.

New GL Accounting

With ECC 6 lot of new functionalities are introduced in

the General ledger such as New GL.
New GL has now an added dimension of Profit center
and segment accounting in it.
New GL functionality is very useful for companies
which have multiple parallel reporting such as local
reporting, Parent reporting and tax reporting.
Earlier all this was only possible by creating separate
GL codes and different retained earning accounts.
This had reconciliation issues between the various
reporting.
With New GL structure now, no separate GL codes are
required. You configure separate ledgers for each
reporting and manage it in each ledger separately.
We cover one such functionality of maintaining
exchange rates by multiple users at the same time
10. 10.

Segment

11. A business segment represents a partial activity of the

company that delivers a product or a service with risks
and revenues that differs from those of other business
segments.
A geographic segment informs about risks and
revenues that differs from other geographic segments
in terms of economic, political ... etc reasons

11. Advantages of New GL Accounting

1.Any number of ledgers simultaneously

2.Segmental reporting
3.Real time integration
4.Document Splitting
12 Document splitting
Line items are split according to selected dimensions
Profit centers
Segments
Functional areas
Business areas
Document splitting is defined in configuration and is
based on a set of rules
SAP delivers predefined rules, or custom rules you
can maintain
Document splitting is activated by company code

12. Posting key

During posting of entry, a user is required by the

system to specify posting key. It controls how a line
item is entered and processed in the system.
For each posting key, you define among other things:
a. which side of an account can be posted to,
b. which type of account can be posted to, and
c. Which fields the system displays on the entry
screens and whether an entry has to be made
(field status).
Accounts
Dr
Cr
GL Postings
40
50
Vendor Invoice
40
31
Customers
01
50
Assets
70
75
14 Chart of Accounts & its types
Chart of accounts is a grouping of GL accounts that
used to post transaction from cross modules and FI
modules. These can be further used for reporting like
Balance Sheet, P&L, and Trial Balance etc...Chart of
accounts are usually very specific to an organization
and you will not find the same chart of account across
two different companies. SAP does give you standard
set of accounts that can be used as template but it
usually requires detail discussion with accounts so a
list can be finalized.

13.Types of Chart of accounts OB13

Operative Chart of Accounts: The operating chart

of accounts contains the G/L accounts that you use for
posting in your company code during daily activities.
Financial Accounting and Controlling both use this chart
of accounts.
Country Specific Chart of Accounts:
These are structured in accordance with legal
requirements of the country in question
Group Chart of Accounts:
This is structured in accordance with requirements
pertaining to Consolidation.

14. Fiscal year variant

To separate business transactions into different

periods, a fiscal year with posting periods has to be
defined. The fiscal year is defined as a variant which is
assigned to the company code. The fiscal year variant
specifies the number of posting periods and special
periods in a fiscal year and how the system is to
determine the assigned posting periods

15. Fiscal year types

16. Line Item

The part of a document containing information on a

single item. It always includes an amount, an
account number, the assignment to debits or credits

and further specifications which depend on the

business transactions to be posted
17.

Posting Periods & its concepts OBB4

A variant which contains posting periods. A Posting

Period is a period within a fiscal year for which
transaction figures are updated. Every transaction
that is posted is assigned to a particular posting
period. The transaction figures are then updated for
this period. During the time of the closing procedure,
2 period ranges have to be open at the same time.

18. Special Periods & its uses

19. Special Purpose Ledger

Application used for customer-defined ledgers, which
contain information for reporting purposes.
The customer-defined ledger can be used as the
general ledger or as a sub ledger and may contain
the account assignments desired.
The account assignments can be either SAP
dimensions from various applications or customerdefined dimensions
Example SAP dimension: account, business area,
profit center.
Customer defined dimension: region

20.

Retained Earnings ON53

The difference in Profit and Loss account is

transferred to Reserves & Surplus

21.Carry forward concepts

22.Currency & its types

23.

Exchange rate types

Exchange Rate Type: - Key used to define exchange

rates in the system. For each currency pair we can
define different exchange rates. The different
exchange rates are used for the purposes of
Valuation, Conversion, Translation, Planning etc.
Standard Translation at Bank Buying rate G Type
Standard Translation at Bank selling rate B Type
Average rate M Type
Historical exchange rate - 1003

24.Master data & Transaction Data

25.Define Document Principle
26.

Document types

Document types differentiate business transactions

and control document filing. Document numbers are
chosen from this number range key specified in
Document Type. Number range Key contains the
Number Series. Document Type also controls the

accounting area that can be posted

Document Type.
Do TypeDescription
No Range Key
AA
Asset posting
01
AB
Accounting document 01
AF
Dep. postings
03
JV
Journal Voucher
JV

by using the
Account Type
ADKMS
ADKMS
AS
ADKMS

27.Account types
28.Account Assignment Model
29.
Account Groups Customers
When creating a Customer account, an account
group must be specified. The account group
determine.

The interval for the customer account

numbers

Whether the number is assigned internally by

the system or externally by the user (type of
number assignment)

Whether it is a one-time account

Which fields are ready for input or must be

filled when creating and changing master records
(field status)
The fields are grouped as General Data, Company
Code Data and Sales Data.

30.

Tolerance Groups - GL

Tolerance Groups Defines the limits within which

differences are accepted and automatically posted to
predefined accounts.

31.

Value Date

When entering line items, you may need to enter a

value date. In this activity you can determine, per
company code, whether the CPU date is defaulted as
the value date. If you activate, system will propose
the CPU date as Value Date during the document
entry.

32.

a.
b.

Recurring entries

A periodical recurring posting made by the recurring

entry program on the basis of recurring entry original
document.
The procedure is comparable with a standing order
by which, banks are authorized to debit rent
payments,
payment
contributions
or
loan
repayments.
Will be used for Recurring Entries
Amount and Date are fixed for every month

33.

Sample documents

Sample Document is a special type of reference

document.
Data from this document is used to create default
entries on the accounting document entry screen.
A sample document does not update transaction
figures but merely serves as a data source for an
accounting document.
a. Will be used for month end
provisions
b. Account Heads are same, Amounts
vary

34.Parking Vs. Holding of Documents

Holding a Document
Data required to complete a transaction may not
always be available. Some piece of information, such
as the bank charges or cost center, may be missing.
You can enter incomplete documents into the R/3
System by using the Hold function. If you do this, the
system does not update any account balances.
The user will give a temporary document number. It
is not necessary that your debits and credits in the
account should be tallied. The user can call back the
document number at any time and post the same to
books of accounts. However, at the time of posting
the document, debit and credit of the line items must
be tallied.

Parking a Document

Parking the document is also similar that of Holding

the document. However, the basic difference is that
in holding the user will give the temporary document
number (as example external). However, in case of
parking document, the number will be selected by
the system (as example internal). The parked
document does not have any impact on
The user can post the parked document at any time.
However, at the time of posting the debit and credit
amounts of the transaction must be tallied.

35.

Automatic Postings

One of the advantages of an integrated system like

SAP is that the system can be configured so that
when a goods movement is recorded for production
planning
or
materials
management
(PP/MM)
purposes, the R/3 system will automatically
determine the correct G/L account to post to using
the type of transaction and other factors. Automatic
account determination is also referred to as
automatic
posting
and
automatic
account
determination in the SAP R/3 system.

36.Clearing
37.
Document Reversal
A document can only be reversed if it:
Contains no cleared items,
Contains only customer, vendor, and G/L account
items,
Was posted with Financial Accounting, and
Has entered values (such as business area, cost
center, and tax code) that are still valid

38.Open Item Management

39.Define Account Group.
40.Describe Number range interval.
41.Field status Groups
42.Line item Display
43.Archiving, Deletion and Blocking of
accounts
44.House Banks
The banks with which your company (company code)
maintains a bank account are referred to as house
banks. You define these banks in the system under a
house bank key (bank ID). You store the accounts

that you maintain at these banks under an account

ID. For each house bank account, you create a G/L
account in the SAP system

45.Pre closing of Accounts

46.Period closing in SAP

47. 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

48.

Define sort key

Sort keys are stored in customer, vendor and GL

master records.
They determine what value is populated in the
assignment field in the document line items posted.
There are several standard entries in a pre-delivered
SAP system and additional entries can be configured
if required.
A very common use for sort key 014 Purchase Order
number for example, is to allow the GR/IR clearing GL
account to be cleared automatically.

49.Period end closing

50. Validation & Substitutions

Validations are used to check settings and return a

message if the prerequisite check condition is met.
Substitutions are similar to validations; they actually
replace and fill in field values behind the scenes
without the users knowledge unlike validations that
create on-screen msgs. to the user. .

51.

MM FLOW
1. Purchase Requisition

No FI Entry

2. Enquiry, Quotation and Price Comparison

FI Entry

No

3. Purchase Order
FI Entry

No

4. Purchase Order Release Procedure

FI Entry

No

5. Goods Receipt (Will be taken wrt PO) Inventory RM Local A/c. Dr

(BS
CA)
BSX
To GR/IR Clearing A/c.
(BS
CL)
WRX
6. Invoice Verification
GR/IR Clearing A/c. Dr
(BS CL)
WRX
To Vendor A/c.
(BS
CL)
P.O.
7. Consumption
RM Consumption Local A/c. Dr
P&L
Dr)GBB-VBR
To Inventory RM Local A/c.
(BS
CA)
BSX
8. Production Receipt
Inventory FG A/c. Dr
(BS CA)
BSX
To IncreS/Decr in Stocks FG (P&L Cr)GBBZOB
9. FG Delivery
Incr./Dec. in Stocks FG Dr (P&L Cr)
GBBVAX
To Inventory FG
(BS
CA)
BSX
10. Billing SD Area
FI MM Integration Settings (OBYC)
SPRO > Material Management > Valuation and
Account Assignment > Account Determination >
Account Determination without Wizard > Configure
Automatic Postings (OMWB)
Cancel the existing Plant
Select Account Assignment Button (OBYC)

ACCOUNTS RECEIVABLE
1.
2.
3.
4.
5.
6.
7.
8.
9.

10.
11.
12.
13.
14.
15.
16.

Credit Management in SAP

List the Reports in Credit Management
Partial Payment Vs Residual Payment
Lock Box Processing in SAP
Define Reason Codes and its purpose.
Define Dunning and its Procedure
Define Dunning area
17. Describe the dunning process

18. Dunning levels

19. Baseline Date

ACCOUNTS PAYABLE
1.
2.
3.

Define Purchasing procedure in SAP

Define Movement types

Define Valuation Class

The Valuation Class in the Accounting 1 View in
Material Master is the main link between Material
Master and Finance.
This Valuation Class along with the combination of the
transaction keys (BSX,WRX,GBB,PRD ) defined above
determine the GL account during posting.
We can group together different materials with similar
properties by valuation class. Eg Raw material,Finsihed
Goods, Semi Finished
We can define the following assignments in
customizing :
All materials with same material type are assigned to
just one valuation class.
Different materials with the same material type can be
assigned to
different valuation classes.
Materials with different material types are assigned to
a single valuation class

4.
5.
6.

Define Transaction key

Define Material type
Explain the process of invoice verification
in SAP
7.
Define variances and its types in SAP-SDAR
8.
Explain the concept of Automatic Payment
Program
9.
Explain the process of config. relating to
APP.
10. How do you execute automatic payment
program
11. Payment Block
12. Release Strategy for Blocked invoices for
payment
13. Account assignment category
14. What is a credit memo.

Customer / Vendor Master Records

Alternative Payee
In FI module if Customer Credit Memo is linked with
Trading Partner
logistic then it is integrated through SD/MM module.
Tolerance in Transaction Processing
However if any credit memo is raised only in FI it can
Dual Control in Master records
be entered through FI transaction
Sales Cycle Process in SAP
15.
What are special GL transactions?
Automatic Account Assignment in SD
Revenue account determination in SD
Special G/L transactions are special transactions in
Accounting Entries relating to SD / FI Integration
accounts receivable and accounts payable that are

displayed separately in the general ledger and the

sub-ledger. This is achieved by posting to alternative
reconciliation accounts, instead of posting to the
reconciliation accounts for receivables and payables

Examples
Down Payments (Advances )

Bill of Exchange
Travel Advance Guarantees

Security Deposits

16.Noted Items.
Special item that does not affect any account balance.
When you post a noted item, a document is generated:
the item can be displayed via the line item display.
Certain noted items are processed by the payment
program or dunning program.
Example: Down payment requests.

ASSET ACCOUNTING
1. What is Lean Implementation?
2. What are the types of Assets and its
numbering system.
3. Chart of Depreciation Vs Chart of Accounts
4. Define Depreciation and explain the various
types used in SAP
5. Define Depreciation area
6. How to you configure Depreciation area
postings
7. What is an asset class?
8. Asset Class catalog
9.
Is it possible to create asset classes
automatically?
10. Asset value date
11. Asset Master
12. What are the ways of creation Asset Master
Records?
13. Is it possible to create multiple assets in a
single transaction?
14. Time Dependent data
15. Asset Acquisition
16. Blocking of Asset master records
17. How do you delete an asset master data
18. What is a transaction type in Asset Accounting?
19. Explain the concept of AuC?
20. How to capitalize AuC?
21. What do you mean by Low value assets?
22. Explain Asset Transfer in SAP?
23. What is transfer variant?
24. Explain Asset Retirement in SAP.
25. Describe Transfer of Legacy Asset data to SAP.
26. Automatic transfer old assets in SAP
procedure
27. Asset transfer date
28. Define Depreciation key
29. What is periodic processing in Asset
Accounting?
30. What is an internal calculation key?
31. What is Depreciation run?
32. Explain the steps involved in Depreciation run
Program.
33. How the system calculates the depreciation
34. Explain Derived Depreciation.
35. Repeat run with ref to Depreciation Assets
Accounting
36. What is Restart Run?
37. What is Depreciation simulation?
38. What is sort version?
39. Can you select Direct FI posting for a
Depreciation run?
40. Explain the year closing in FI-AA
41. Explain Asset History Sheet
42. What is an Asset Explorer?
43. Explain Production set-up in FI-AA?

Asset Accounting Configuration

Defining Organizational Structures

Copy Reference Chart of Depreciation/Depreciation
areas - Specify Description of COD -Copy/Delete
Depreciation Areas- Assign Input Tax Indicator for
Non-Taxable Acquisitions -Assign Chart of Dep. to
co .code -Specify Ac. Deter-Create Screen Layout
Rules-Define No. Range Interval -Define Asset
Classes

Integration with the General Ledger

Define Dep. Areas- Post to G/L- Assign G/L AccountsSpecify FS V. for Asset Reports-Specify Document
Type for Posting of Dep.-Specify Intervals and Posting
Rules- Activate Add. Acct. Assign. Objects-Specify Ac.
Asgn.t Types for Ac. Asgn. Objects

Valuation
Def.Dep. Areas-Specify Transfer of APC Values
-Specify Transfer of Depreciation Terms -Determine
Dep.Areas in the Asset Class-Def. Screen Layout for
Asset Dep. Areas-Deactivate Asset Class for COD.

Depreciation
Determine Depreciation Areas for Special dep. Calculate Ordinary Depreciation before Special Dep.
Determine Depreciation Areas for Unplanned
Depreciation

Configuring the depreciation key

Define Base Methods -Maintain Period Control
Methods - Maintain Depreciation Key

Special Valuation
Specify Gross or Net Procedure - Assign Accounts

Master data
Define Screen Layout for Asset Master Data

Transactions

Maintain Allocation Structures - Define/Assign

Settlement Profiles

Information system - Define or Assign Forms

Asset data transfer

Specify Transfer Date/Last Closed FY - Specify Last
Period Posted in Prv.System (Transf. During FY) Recalculate Depreciation for Previous Years Create/Change/Display Legacy Asset(AS91, AS92,
AS93

Preparing for Production Startup

Transfer Balances (OASV) - Activate Company Code

Import/Create Master Data

Creating Fixed Assets Master Data -Year End Closing
of Previous Year - Fiscal Year Change
Creating Values for old Assets - Creating Asset Master Data

Investment Order - Direct Capitalization

Creating Investment Order for Direct Capitalization Order Plan for Direct Capitalization (KO12)
Cost Elements for Statistical Autom. Posting of Assets
(OAK7) - Creating Asset Master for Dt. Capitalization