CIN Interview Questions

1.     How does CIN determine the tax rates?

CIN determines taxes based on the chapter-id of the material. There are 2 levels for rate determination. First the system will check if there is an exceptional rate available. If this is available then that rate is picked up. This rate could be for a material or material and customer combination. If there are no exceptions then the system looks for chapter-id of that material.  The customer will have an excise tax status, which along with the plant status will give a final excise status. Based on the excise status and the chapter-id the rates are maintained.

2.      Can I change the tax rates retrospectively?

You can change the excise rates with any given validity period. After making the changes you will have to update the sales orders if the new tax rates have to be considered for future deliveries.

3.      Can I have a different rate for incoming and outgoing transactions for the same material?

You can maintain exceptional rates for either incoming or outgoing based on the volume of exceptions data.

4.      What do I do if I have one chapter-id for incoming and another for outgoing and material code is the same?

Along with exceptional rate maintenance you can maintain the chapter-id, which should be used for the outgoing transactions. This chapter-id will be used only for copying on to the document and will not be used for rate determination.

5.      Can I have some more additional rates?

You can maintain multiple excise indicators and based on that you can have additional rates.

6.      What will happen if I have multiple rates with overlapping validity periods for the same chapter-id and tax indicator?

While picking up the rate for a given transaction system will check for that validity period where the valid from is the maximum but with in the pricing date and based on that pick up the rate applicable.

7.      How does CIN do the pricing?

CIN uses R3 condition technique for pricing along with the pricing formulae. Details are available in the CIN knowledge bank. Template pricing procedures are provided for various sales scenarios.

8.      How many tax codes do I need?

The number of tax codes will directly depend on how you want to account the sales tax. You can have CST and LST being determined by the same tax code if both can be accrued into the same account. Instead if you need separate account determination then you need separate tax codes. Also based on the tax concessions available you need to decide the various tax rates, which need to be mapped.

9.      How do I open up more than one tax classification?

CIN comes with default customization to open up the tax classification fields. The procedure is as follows. You need to define as many condition types as the number of tax classification fields.  The following procedure could be used

SPRO – Sales and distribution -Basic functions-Taxes – Tax determination rules For Country ‘IN’ make entries as follows (This is precustomized in client 000)                                        

          –  Seq 1 – UTXJ                                                          

          –  Seq 2 – JTX1                                                         

          –  Seq 3 – JTX2                                                         

          –  Seq 4 – JTX3                                                          

       o  In SPRO – Sales and Distribution – Basic functions – Taxes              

          Determine tax relevancy of master records                              

10.  How do I handle concessional excise?

This is explained in SAP note 335577. Having opened up the new tax classification fields you might have to do the following

  • Customer taxes maintain the possible values for JTX3 . Each unique  value should denote one concession rate. For eg 1 – normal excise  duty                                                                      
  • Maintain the JTX3 value against the form code in J1IT -Define Form  types                                                                    
  • Maintain the customer tax classification in customer master if the customer has got excise exemption                                        
  • Maintain the excise indicator in J1ID for the customer and form  code and this indicator gives the final indicator                        
  • Forms database is used for determination of whether the form has arrived or not at the time of billing.                              
  • The tax classification value gets defaulted from the customer  master in the sales order. This can be changed in the header  billing data if required                                                                                                                                  
  • 11.  How do I handle sales tax concessions?

  o   SPRO – Sales and distribution -Basic functions-Taxes – Tax determination rules For Country ‘IN’ make entries as follows (This  is precustomized in client 000 )                                                     

     –  Seq 1 – UTXJ                                                                      

     –  Seq 2 – JTX1                                                                       

     –  Seq 3 – JTX2                                                                      

     –  Seq 4 – JTX3

  o  Taxes – Determine tax relevancy of master records – Customer taxes  maintain the possible values for JTX1 and JTX2. Each unique value should denote one concession rate. For eg 1 – 4% . Multiple forms   could correspond to a single rate. JTX1 could be used for CST and       JTX2 for LST. (UTXJ could be freely used by the customers as  earlier )

  o  Maintain the tax classification in customer master as well as material master ( Sales org data 2)

Build access sequences based on these new fields to point to the  correct sales tax code You might have  to have a new access based on region of delivering plant and region of ship to party                                                             

12.  How will CIN handle Indian VAT?

SAP can handle normal VAT regulations. CIN will take a review of the VAT rule when it is implemented in India and suggest the best business process to comply with the same.

13.  When I create a new tax code the excise lines are grey and I cannot maintain any value. What should I do?

This is happening because the Excise conditions for sales are statistical in the tax procedure for India. So while creating a new tax code you need to open the tax procedure remove the statistical flag, maintain 100% for all excise conditions. After saving the tax code you need to make the conditions statistical once again.

14.  When I release the billing document to accounting there is an error that the account key is missing?

This is happening because one or more lines in the tax procedure has a condition with a value but is not marked statistical. You need to check whether the conditions JMOD, JAED, JSED and JCES are marked statistical in the tax procedure. You cannot rectify the documents, which are in error. The correction takes into effect only the future orders.

15.  When I release to accounting I get a message tax amount greater than tax base?

This is happening because the tax base for some tax condition is falling less than the tax base amount. R3 does not allow the tax base to fall below the tax amount. You need to check which condition is giving the problem and based on that you can verify the tax procedure from-to settings.

16.  Do I need to maintain the chapter-ids for each plant or can it be left blank?

If the same chapter-id is applicable for the material in all the plants then you need not maintain the chapter-ids for all the plants. You can leave the plant blank.

17.  When I try printing the excise register nothing comes up?

Check whether you have maintained the opening balance for the item in the corresponding register (Table J_2IACCBAL for register account balances). Next check whether you have maintained the sapscript forms which are used for printing the registers in the CIN configuration. Finally check whether the extraction has been done for the period.

18.  When I try printing the excise invoice the list line turns red and nothing happens?

This is because you have not maintained the condition record for output determination. You need to maintain the condition record for output determination at the sold to party level. Also for the documents created already you can go into Billing header – output and manually enter the output type j1io and save. Later the excise invoices can be printed.

19.  When I try to create RG1 issues entry the line turns red and nothing happens?

This is happening because you are trying to create an issue entry and the stock in the register is not enough to do the issue. So you need to first update RG1 with the receipts and then go into the issues.

20.  I have extracted the register data once but now I have added more transactions. Can I extract once more?

You can re-extract the data if you have added more transaction data for the given period.

21.  I am using another package for printing registers. Can I download the data once again?

To prevent data inconsistency in the third party application CIN does not allow you to re download the register data once it has already been downloaded.

22.  What is the issue classification for RG1?

You need to classify the RG1 entries as to whether they are receipts from manufacture or other receipts, clearances of various types so that they can be reported under the various headings as required by the Excise commissionerate.

23.  How do I maintain the opening balances for my register for the first time?

You need load them manually at the initial data upload.

24.  How do I get the opening balance for every month?

CIN calculates the opening balance for reporting purposes based on the transaction s extracted in any period.

25.  Are opening and closing balances of reghister available for me for reporting?

You must not pick up the opening and closing balances that are calculated by reporting because they might get changed if some one does a re extract. So they need to be recomputed dynamically. They are not stored.

26.  Can I round the duty at the header level?

Duty can be rounded off in CIN only at the item level. Due to technical reasons duty round off is not provided at the header level.

27.  When I create an excise invoice for exports what exchange rate will the system take?

System picks up the exchange rate which is maintained in the CIN configuration data for the company code.

28.  With fortnightly utilization why do I need a part2 entry at the time of Excise invoice creation?

With fortnightly utilization you do not create an entry in the CENVAT or PLA registers. Instead CIN keeps a separate Despatch register and generates continuous serial numbers in this register  that can be used for future reconciliation.

29. Do I need to have balances in my CENVAT accounts at the time of Excise invoice creation?

At the time of excise invoice creation the debit is being made into an Excise payable account. So you need not have balances in the CENVAT account. You need to have enough money at the time of fortnightly utilization or you should have made a debit through TR6 into PLA.

30.  What are the exceptional reports possible?

You can list all the billing documents for which excise invoice is not created. You can get a list of all excise invoices for which billing document has been cancelled., You can also have a report of all cancelled excise invoice for which the billing document is still open.

31.  Can I know which are the billing documents for which there is no excise invoice?

Excise due list gives you all billing documents for which there is no excise invoice.

Number range skipping happens for excise invoice. What could be the reason?

CIN number ranges are defined as not buffered. You need to check if this has been changed. If skipping happens never reset the number range.. you must report the problem to SAP support immediately so that they can help you resolve this.

32.  While doing excise invoice creation I get an error message that system failure during locking. What can I do?

While creating the excise invoice, at the time of saving system tries to lock the GL account that is getting updated with the new balances. S probably some one else could be changing the GL account data at that point of time. This is a very short phenomena and is meant to keep the data consistency.

33.  While doing depot sales invoice selection, list of invoices are not getting displayed. Why?

You need to check the customization settings for LIFOor FIFO and the invoices of which period you have set. Also you need to check the excise group, which is being used. System will show you only those excise invoices, which belong to the same excise group, plant, storage location and batch.

34.  How do I handle the A-certificate at depot?

A- certificates come when the goods are removed after paying a provisional duty. When the final price is decided at the time of the order you need to pay the balance of the duty. There is no facility at the moment to calculate the differential duty. You have to make the payment manually using J1IS at the factory. Once this is done you can go back to the depot and capture this extra payment into your RG23D. This is recorded as a new serial no with in the original folio so that the RG23D register value tally. At the time of selection of excise invoice for sale you have the option to pick up the a-certificates for the excise invoice and then the additional duty gets added into the invoice amount. Also this is reflected in the RG23D register.

35. Is it possible to add some additional duty on to the depot invoice with out A certificate?

No you need an A certificate if you have to get an additional duty in RG23D invoice. Alternative is to write customer specific routines which are not supported by CIN.

36.  How do I handle the returns at depot?

If there are returns to depot, that can be captured as any other receipt. You can enter the material document no of the return receipt and the data gets copid and you can copy into RG23D.

37.  How do I handle returns at factory?

There are no D3 procedures at the moment which is mandated by the excise department. Legally you can take credit for all the receipts and then pay the duty when it goes out after repair or to another customer. You can Excise invoice without PO route to take the credit.

38.  When I do excise invoice creation, the system issues a message not enough balance. Why?

This does not happen any more. There was a need felt that we should check the balance s even though we can pay the duty 15 days hence.

39.  I am not able to save the excise invoice text?

You need to check the object type for the object id J1IN. this can be done by checking the data of the view J_1IVTTXOB. The editor mode has to be set as ‘Application text with SAVE key ‘.

40.  How can I include more text ids for the excise invoice?

You can use the CIN IMG text  maintenance option and add more ids with descriptors.  For excise invoice creation the object is J1II. For depot receipts the object is J1IG and for depot sales it is J1IJ.

41.  Where does the excise invoice get the business area from?

Excise invoice does not allow entry of business area. The business area in the billing document is automatically taken for the excise invoice.

42.  Where does the excise invoice get the profit center from?

Excise invoice picks up the profit center from the billing document if it is available there. If it is not available there then it looks at the plant specific material master data and picks up if available.

43.  Why do I need tax jurisdiction?

Tax jurisdiction codes are one method by which you can maintain tax rates with out having multitude of tax codes. You can maintain the LST effectively with one tax code and multiple jurisdiction.

44.  Can I do away with jurisdiction code?

You have to use tax jurisdiction code with the standard CIN.  If you do not want to make use of that for rate determination you should at least have one jurisdiction at the federal level.

45.  What will the system do if I have not received the form at the time of billing?

The system will first check in the Form type maintenance whether the form is marked as required. This means that the form has to come by the time billing happens. Once you receive the form you need to enter it into the forms data base (J1IU) for the delivery document number. If the form receipt is not maintained then the billing will do a repricing and charge full tax for the particular excise duty.

46.  How does fortnightly utilization determine the accounts to be posted?

There is no transaction type for determining the accounts of the fortnightly utilization. The credit account of the transaction type ‘DLFC ‘ is used as the debit account here. For the credit side we pick the debit accounts from the GRPO, EWPO and TR6C transactions. So it is mandatory that whether you use EWPO or not you should have maintained the account determination for all transaction tyes for a given excise group.

47.  What is transaction type ‘UTLZ’ used for?

Transaction type UTLZ is used for determining the accounts when a JV is posted with an option of fortnightly payment.

48.  Can I have my own transaction types?

Transaction types are used internally by CIN for various pruposes. So you cannot define your WN transaction types. Alternate account assignments can be done using sub transaction types.

49.  Where does RG1 get the data of packed/loose material ?

Initially when you upload the balance in RG1 you need to mention the material form. Later the system assumes the same for for the same material code. If you need to dynamically change this then you can make use of the user-exit. A material can be marked either as packed or loose but not both.

50.  What will batch utilization of modvat do?

Batch utilization is just an interface that helps you to complete the utilization of a set of documents in one step. This simply triggers individual utilization as a BDC so that the user interaction can be minimized.

51.  What is the number range used for export excise invoice?

Export invoices uses the number range object j_1iexcexp where as the local invoices uses the number range j_1iexcloc. Even though customers are free to use the same number series now there is no bar from using separate series.

52.  Can I create a zero duty excise invoice?

Zero duty invoices can be created both from sales as wellas using excise invoice other movements based on the business requirement. These invoices do not generate an accounting document.

53.  Is it possible to cancel an excise invoice with zero duty?

There is no problem in canceling a zero duty excise invoice.

Where does the billing document get the account for excise duty payable?

The account determination rules of R3 billing is used for determining the account for the excise posting line in a billing document. The CIN customization has no role to play here.

54.  How does the stock transfer get the assessable value from?

This is got using the condition base value formula. For this to happen you should have maintained the assessable value in CIN  master data.

55.  How do I know whether SD route or mm route is followed for stock transfer?

You need to check in SPRO – Materials Management – Purchasing – Set up Stock transport order – Assign delivery type/checking. For SD order this will be marked ‘A’

Based on the route followed how do I create an excise invoice?

If SD route is followed for stock transfer then you can use J1IIN to create excise invoice. If MM route is used for creating stock transport order then you need to use J1IS for creation of Excise invoice.

56.  How to configure stock transport order?

Stock transport order is set up in SPRO- Materials management – Purchasing – Set up stock transport order. Here first you have to define the sales area and the default customer code. You have ato assign the order type to the checking rule. Finally you need to maintain the delivery type for the order type.

57.  I cannot create a proforma billing document for a replenishment delivery. What has gone wrong?

Normal R3 setting does not allow a billing document to be created for a delivery type NL. You need to change the customization settings of the item category type NLN so that it becomes relevant for billing.

58.  When I do a receipt at the depot from my factory how do I give the excise invoice number?

If the excise invoice already exists in the R3 system then in the detail screen of RG23D receipt you can directly enter the internal document number of the excise invoice. This will automatically allow the entrie challan details to be copied.

59.  Should I receive the full quantity at depot or transit loss is allowed?

You can receive some goods in the depot which is less than the dispatched. You have the option to enter the receipt quantity as well as the challan quantity at the time of RG23D receipt.

60.  I want to calculate the excise duties at the time of export sales. What should  I do?

There is a calculate tax button on the utilization screen of Excise invoice creation.. This option will calculate the taxes for an export invoice.

61.  Can I use my own layout for printing sales excise invoice?

Yes. If you are using your own layout then you need ot maintain this in the output determination procedure of billing documents for the output type j1i0.

62.  Can I use my own layout for printing Excise invoice other movements?

Excise invoice other movements picks up the report layout from the output type ZEXC which has been maintained against the SD output determination – Sales documents. You can maintain your own layouts here and then they will be used for printing.

63.  Can I use my own layouts for register printing?

Yes you can have your own layouts. You need to maintain the same in the CIN customization against the sap script form maintenance.

64.  Can I change the posting date at the time of fort nightly utilization?

You can enter the posting date as per which you want the system to do the fortnightly  posting.

65.  Should I keep the fi/mm period open at the time of posting fort nightly utilization?

The current period alone should be open at the time of fortnightly utilization. It is also required that both MM as well as FI periods need to be open.

66.When I run fortnightly utilization the system is showing zero balance even though there is some balance in the GL account?

The balances for utilization are picked up in CIN only when the MM period closing is done for the previous period. For eg. If you r posting date is 5th Dec and the November period is still open system will show zero balance.

67.Can I change the document type for the accounting document created at the time of excise invoice creation?

Document type for excise invoice utilization is defined with in CIN customization at the company code level. You can use your own document type

68.  Can I post the fort nightly utilization for individual excise invoices?

You can post the fortnightly utilization for individual invoices also. System give a message that the CENVAT utilization is already doen. But this is configurable and could be made a warning.

69.  Can I reverse the fortnightly utilization done?

No you cannot reverse the posting doen with fortnightly utilization. Simulate option is provided in this option for the user to check whether things are ok so that the chances of error are minimal in the actual run.

70.  Can I have excise rates more than 100%?

Yes you can have excise rates higher than 100% since some of the tobacco items carry higher excise rates.

71.  How do I map the tax classification to form types?

You can maintain it along with Form type definitions in CIN IMG.

Can I decide not to generate folio numbers at the time of RG23D creation?

Yes you can keep the customization option at the Excise group level blank and also you can leave the user-exit  open.

72.  What will happen when I cancel a RG23D selection for sales already made?

If you are canceling a selection before posting then the RG23D register the record will be removed. But if you have already done the posting then the RG23D record is marked cancelled and the balance in the original invoice is inflated by an equivalent amount.

73.  Why there is no transaction type for J2IU?

Transaction type is used for account determination by CIN . This is an internal entity for CIN and has no relevance to the business process. Since there is no account determination need for J2IU there is no transaction type.

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Controlling Q&A

1.      Describe the major differences between Managerial Accounting and Financial Accounting.

Managerial Accounting

Financial Accounting

Generally no constraints. Constrained be GAAP and/or IAS
Future orientation Past orientation
Data is used by managers at various levels within the company. Data is used by outside parties like banks, investors and other stakeholdes. 

2.      Define the term cost object.

A cost object is a responsibility center, project, product or other item for which a separate measurement of cost is desired.  Cost objects are defined by management.  Cost objects can include cost centers, projects and activities.

3.      Describe overhead costs and provide an example.

 Overhead costs are indirect costs that cannot be directly assigned to a cost center.  Utilities, rent and telephone expenses could be examples of overhead costs.

4.      What are the two major components of the controlling module (CO)?

Configuration and application.  The purpose of configuration is to customize CO to meet the specific needs of the client.  The application component supplies the tools necessary for internal reporting and analysis.

5.      Please list the five CO sub modules.

  • Cost Center Accounting (CCA)
  • Overhead Orders and Projects (CO-OPA)
  • Activity Based Costing (CO-ABC)
  • Product Cost Accounting (CO-PC)
  • Profitability Analysis (CO-PA)

6.      True or False?  Activity based costing is primarily used to capture the costs of internal events, such as travel costs and trade fairs.

False.  ABC provides a business process view of overhead costs.  Internal Orders are used primarily for internal company events.

7.      List 3 major functions of the PC module.

Product cost planning enables:

  • Calculation of standard internal cost for manufactured goods
  • Calculation of WIP during month end closing
  • Calculation of period end variances
  • Settlement of Product Costs

8.      True or False?  PCA is generally used for margin reporting and cost of sales accounting.

False.  PA is used for margin reporting and cost of sales accounting.  PCA is used for period based accounting and complete financial statements.

9.      What is the primary integration point between the CO and FI modules?

G/L expense accounts are the primary cost elements in CO.

10.      True or False?  A controlling area has a one to one relationship with company codes.

False.  A controlling area has a one to one relationship with the chart of account and, a one to many relationship with company codes.

11.      After the controlling area has been configured, the assignment of company codes cannot be changed.

[True] or False.

12.      When a number of company codes are assigned to a controlling area, cross company code accounting is possible.  However, each company code must share what three attributes:

  • The same chart of accounts
  • The same fiscal year variant and year end date (the same fiscal year variant must be assigned to the controlling area and to all attached company codes)
  • The same standard hierarchy of cost centers

13.      Name three types of cost objects used in the CO.

  • Cost centers
  • Internal orders
  • Profitability segment

14.      If the controlling area currency is the same as the company code currency, the object currency is freely definable.

[True] or False.

15.      Define the document currency.

The document currency is the currency of the transaction.  The document currency is defined at the time the document is entered.

16.      Define account assignment objects in CO and name three of them.

Account assignment objects in CO represent units to which costs are assigned. They are used to collect costs (‘cost bucket’) and can be planned and budgeted on. Three examples: cost center, internal order, business process.

17.      CO number ranges are defined on company code level.

[True] or [False].

CO number ranges are defined for each controlling area.

18.      List the five types of master data in cost center accounting (CCA).

  • Cost centers
  • Cost elements
  • Activity types
  • Statistical key figures
  • Resources

19.      What characteristics do the master data types in CCA share?

  • Time dependency (except for SKF)
  • Can not be deleted once transaction data has been posted (except for SKF and resources)
  • Can be arranged in groups (except for SKF)

20.      Name the two types of cost elements and explain them.

Primary cost elements: They originate from outside the CO module (i.e. posted through FI). They have counter-parts in FI and are used as a method for moving costs into the CO module.

Secondary cost elements: Originate from within CO and have no FI counter-part. Secondary cost elements are used as a tool for moving costs for internal reporting within CO.  They exist exclusively in CO.

21.      True or False? Once a cost center has been created, the open or validity period of such center cannot be changed.

True.  CCA master data is time dependent and once created cannot be changed.  However, creating a new item and attaching its date range to the original date range may extend the effective date.

22.      Define a cost center group.

A cost center group is a hierarchical structure consisting of nodes and attached cost centers.  Cost center groups can facilitate the analysis of costs by allowing costs to be reported on the cost center level or at the group level.

23.      Define the Standard Hierarchy and explain its use.

The standard hierarchy must, by definition, contain all cost centers from all company codes attached to the controlling area.  This ensures that all costs posted in FI and assigned to a cost center are captured in CO.

24.      True or False? All cost centers must be attached to either the standard hierarchy or an alternate hierarchy (cost center group).

False.  All cost centers must be attached to the standard hierarchy in order to ensure that all costs posted in FI are captured in CO. They may furthermore be attached to as many alternate hierarchies (cost center groups) as desired.

25.      True or False? Cost centers can be attached at any node level within the hierarchical structure.

False.  Cost centers can only be attached to the lowest node levels within the hierarchical structure.

26.      True or False? A cost center cannot be attached to more than one alternate hierarchy.

False.

27.  Define activity types.

Activity types are units of measurement for the internal allocation of costs from within CO.  Activity types define the main cost drivers or services performed by a cost center.  Examples include direct labor hours, machine hours and maintenance hours

28.  Define activity price.

Activity types are used to derive the activity price.  The total costs are divided by the total planned or actual activity quantity to derive the activity price (cost / activity type unit).

29.  Provide two examples of statistical key figures.

Statistical key figures are derived from non-financial statistical data, such as the number of telephones or the square footage of a building.  Statistical key figures are used for the allocation or planning of costs.

30.  What are Resources?

Resources are goods and services, which are supplied internally and externally to an organization in order to produce business activities. They Resources are used to carry out detailed, quantity-based primary cost planning below the cost element level for cost centers, orders and WBS elements

31.  Name the two types of internal orders and explain the major distinctions.

An Individual Order collects costs of a one-time business activity.  This order is typically settled in full at the time of completion and is closed after settlement.

A Standing Order collects costs for smaller, recurring jobs.  These costs are settled on a periodic basis (typically at month-end).  After settlement the order remains open for postings. The benefit of a Standing Order is, not having to create a new order for the same costs each month.

32Define statistical orders.

A Statistical Internal Order can be defined to collect costs for informational purposes only and therefore need a real cost assignment (e.g. to a cost center) at the same time.  The costs posted to a statistical internal order are not settled.

33.      True or False?  In SAP Integrated Planning Cycle the planning process begins with a Profit Plan.

False, in SAP Integrated Planning Cycle the planning process begins with a Sales Plan

 34.      True or False?  Sales volumes calculated in sales planning or order volumes stored in the Sales Information System (SIS) can be fed into Production Process.

True, sales volumes calculated in sales planning or order volumes stored in the Sales Information System (SIS) can be fed into Production Process.

35.    True or False?  A version is a comprehensive set of planning data.

True.  A version is a comprehensive set of planning data.

 36. True or False?  There can be multiple plan versions for “what if analysis”.

True.

37.Each plan version has information set by _____________.

Each plan version has information set by fiscal year.

38.      Describe plan revaluation and its use in CO planning.

Revaluation is the process of increasing or decreasing a plan based on a percentage.  Different percentages may be specified by cost center or by cost element.

Example:  Management states that all planned costs will be at 95% of last year’s planned costs.  To implement this directive, copy last year’s planned data into another version.  Then revalue the new version by -5%.

Revaluation percentages may be changed at any time.  A repeated revaluation with a different percentage reverses all previous revaluations.  Revaluations are always based on the original plan values.  To prevent resetting the results of a revaluation (during a repeated revaluation), a new revaluation with a different percentage can be defined.

  • Value Column: Planning amounts or quantities for the associated lead column(s).
  • Lead Column: Contains information describing the nature of the amount in the associated value column, such as cost center, cost element or activity type.

39.      Describe what a planning layout is.

A planning layout determines the column and row structure for entering plan data.  A layout must be defined for each type of planning to be performed.

40.      Describe what a planning profile is.

Planning profiles are used to group planning layouts together. Planning profiles also determine the effective dates or time frame for planning.  Multiple planning profiles may be created. Planning profiles can be assigned to user groups.

41.      True or False?  The planning profiles must be set in the application side for planning to take place.

True, the planning profile to be used must be set into the system from the application side before planning can occur, this tells the system which profile you will be using and defaults in the correct layouts.

42.  Describe the steps involved in setting up a plan.

  • Define Planner Profile: Assign the layouts previously created to the profile, up to 3 layouts (one for each type of planning), may be assigned.
  • Set Planner Profile: Defaults in the appropriate layouts in each area based on the profile.
  • Planning Transactions: Enter planning data as required.

43.  Define Statistical Key Figure planning.

Statistical Key Figure Planning – Statistical key figures are used in the calculation of plan activity and as allocation bases for distributions and assessments.

44.  Define Activity Type Planning.

Activity Type Planning – Planned activity output for a cost center will determine the planned volume of costs.  Activity for a sending cost center must be planned before secondary cost planning can take place.

45.  Define primary and secondary Cost Planning.

Primary/Secondary Cost Planning – This type of planning is performed last, since activity quantities are required to plan costs.

46.  Define Activity Dependent Cost, Activity Independent Cost and Mixed Cost.

  • Activity Dependent Costs are variable costs and they are costs that fluctuate based on activity.  The greater the activity, the greater the cost.  Example: Direct Labor costs that increase as production increases.
  • Activity Independent Costs are Fixed Costs.  Activity independent costs DO NOT fluctuate based on activity.  Example: Insurance expense – regardless of output, insurance premiums will not change.

Mixed Costs are a combination of both fixed and variable costs, therefore displaying the characteristics of both.  Example: Utilities expense – the basic cost of heating a building (fixed portion) would increase as production increases (variable portion

47.  ___________ are used by the system to spread planned amounts across periods.

Distribution Keys are used by the system to spread planned amounts across periods. It allows for the entry of planned annual figures, which are then automatically spread across months.

48.  The two automated methods for planning primary costs are _____________.

There are two automated methods for the planning of primary costs, imputed cost calculation and distribution. Cost which has no direct equivalent in FI, such as imputed rents. Cost which has a different equivalent in FI, primarily as it relates to the timing of cost.  Imputed cost calculations are used to smooth the effect on cost centers for large, one-time charges, such as insurance premiums or employee bonuses.  By smoothing one-time expenses in CO, price fluctuations from period to period can be avoided.

Distribution is the allocation of primary costs from a clearing cost center to the cost center responsible for incurring them.  The identity of the primary cost is retained at the receiving cost center.  Distribution may be used for allocating planned or actual primary costs only. Distribution simplifies the process of planning primary costs that are attributable to more than one cost center.  Instead of manually planning individual amounts to many different cost centers, the total planned expense is planned to a clearing cost center, and the allocation to the receiving cost centers is performed automatically through a distribution cycle.  Clearing cost centers (also called pooled cost centers) act as temporary holding areas for costs, they are not responsible for the costs but only exist to facilitate distributions and other allocation methods.

49.  Define an Assessment and an Assessment Rule.

Assessment is the allocation of cost from one cost center to one or more other cost centers.  The original cost center or the nature of the costs themselves are not retained, but are reclassified as a secondary cost element.  Assessment is designed to group together and reclassify costs while simultaneously allocating them.  Assessment may be used to allocate both planned and actual primary and secondary costs.

An assessment rule, using fixed amounts, statistical key figures or percentages, is defined to break down the assessment among the receiving cost centers.

50.  Define a Cycle and a Segment

Cycles and Segments are utilized by the SAP system to perform automated allocations, such as distributions, assessments and reposting (covered in Ch.5) of both planned and actual costs.

A cycle may be defined as a holding place for the various rules that will define an automated allocation.  Cycles are comprised of segments; each segment represents one set of data needed to complete the automated allocation.

A segment consists of the following:

  • Allocation Characteristics – Identification of sending and receiving cost centers.
  • Sender Values  – What types of costs will be allocated, whether they are planned or actual amounts, and what percentage of total sender costs will be allocated.
  • Receiver Values (Tracing Factors) – The basis for allocation – percentage, fixed amount or statistical key figure.

51.  Describe plan reconciliation.

The plan reconciliation is used to check and reconcile the internal activity exchange. With the plan reconciliation, you can adjust the entire plan activity quantities automatically on the basis of scheduled activity on the cost centers.

52.  What is done in the final step of the planning process?

The planning process is completed by performing an Activity Price Calculation within the system.  This process calculates an activity price based on planned activities and costs and uses the calculated price to valuate planned secondary costs at receiver cost centers. Alternatively, a political activity price may be used in place of a calculated activity price, but the procedure must still be performed.

Difference between Internal Order & Cost Center

1) Cost Center we used to capture only Expneses not for Revenue ( you can
capture the revenue at cost center also but that is only Static Value)
Internal Order you can capture the Expness & Revenue as well

2) After completation of the project or a event that project needs to close, At that time all the cost contained in the Order need to settle to Cost Center & Revenue needs to settle recenue cost object, such as GL Account, Sales Order or WBS etc.,

Internal Order

1. What is IO?

IO is a cost object that collects costs for the management information system and, in some instances, revenues for an organization. IOs can be used to:

■ Monitor the costs of short-term measures

■ Monitor the costs and revenues related to a specific service

■ Monitor ongoing costs

2. IOs are divided according to function into the following categories:

 

Overhead Orders—Overhead orders monitor subareas of indirect costs arising From short-term measures. They can also be used for detailed monitoring of Ongoing plans and actual costs independent of organizational cost center structures and business processes.

Capital Investment Orders— Capital investment orders monitor investment costs, which can be capitalized and settled to fixed assets.

Accrual Orders— Accrual orders monitor period-based accrual between expenses Posted in FI and accrual costs in CO.

Orders with Revenues— Orders with revenues monitor the costs and revenues arising from activities for partners outside the organizational boundaries, or from activities not belonging to the core business of the organization.

 

3. What is order type? What are the parameters it controls for IO?

An order type contains many kinds of control information important for managing orders. This includes many default values that can be called upon when you create a new order with this order type. You must assign each order to an order type that transfers specified parameters to the order.

The order type is client specific, which means that an order type can be used in all controlling areas.

The order type controls/determines the following fields for an order:

■ Order Category

■ Number Assignment

■ Control Indicator

■ CO Partner Updating

■ Order Classification

■ Commitment Management

■ Revenue Posting

■ Integrated Planning

■ Settlement Profile

■ Planning Profile

■ Budget Profile

■ Status Management

 

4. What is an order category?

An order category is a technical classification criterion for IOs. The order category determines the SAP application to which an order belongs, and controls the functions with which an order can be processed. The standard order categories are:

■ 01—IO (CO)

■ 02—Accrual Calculation Order (CO)

■ 03—Model Order (CO)

■ 04—CO Production Orders

■ 05—Product Cost Collector

 

5. What is a settlement profile?

In a settlement profile you will specify a range of control parameters that define how the order will be settling to other cost objects. You must define the settlement profile before you can enter a settlement rule for a sender. In a settlement profile, you define the following parameters:

■ Permitted settlement receivers (such as cost center or asset)

■ Default values for the settlement structure and the PA transfer structure

■ Allocation bases for defining the settlement shares (using percentages and/or equivalence numbers)

■ Maximum number of distribution rules

■ Retention period of the settlement documents

■ Document type for settlements relevant to accounting, or, more specifically, to the balance sheet

■ Definitions for the settlement of actual costs or the cost of sales

6. What is a planning profile?

A planning profile contains parameters and default values for overall planning. You can also assign an order type to the planning profile at a later date. You need planning profiles for the following planning methods:

■ Overall planning for IOs

■ Hierarchy cost planning for projects

■ Preliminary costing for production orders that do not have a quantity structure (CO production orders)

■ Cost planning for investment programs or investment measures, and for appropriation requests

■ Financial budgeting

7. What is a budget profile?

Budgeting within SAP solutions provides the user with enhanced project management capabilities not provided by IO planning. Where an IO planning is an estimate of expenditures made at the beginning of the fiscal year, a budget represents the actual approved amount of funding for a given order. Because the budgeted amount is maintained separately you have an opportunity to do plan versus budget comparisons. This profile contains parameters and default values for budgeting. You can also assign an order type to a budgeting profile at a later date.

 

8. What are reference orders and model orders?

A model order is not a real order in the commercial sense. It is customized with certain default values to reduce time and effort while creating real IOs. Model orders contain default values for the orders in an order type. You need to enter the model order as the reference order in the order type. When you create a new order, all of the active fields in the relevant order type are copied from the model order to the new order. Model orders make the work of entering new orders considerably easier. The data that recurs in orders from a particular order type is already defined. This reduces the likelihood of errors.

9. What is a settlement rule?

The settlement rule determines what portions of a sender’s costs are to be settled to which receiver(s). You specify this by assigning one or more distribution rules to each sender. Typically there is one distribution rule for each receiver. This is carried out at order level.

10. What is availability control in IO?

Availability control is a process where users of IOs will issue a warning when the order cost reaches a particular stage. The idea behind availability control is that the SAP solution should alert you when you are about to exceed some predefined percentage of the budgeted amount. This activity is carried out through the establishment of spending tolerance levels associated with each budget profile/controlling area relationship.

11. What is a budget manager?

A budget manager is a person who will be informed when an IO reaches a particular spending level. When you are maintaining the action setting for availability control, you are given a choice of whether to return a warning with

or without an email message. If you have chosen a warning with an email, you must have established the proper budget manager setting before the email process will work.

12. What is IO status management?

Status management is an act of determining and managing which transactions are valid for an order at any given time within its life cycle. In SAP solutions, the term life cycle refers to an order’s fluid existence, moving from one phase to another until it is closed. There are two types of status management available:

(1) General status management

(2) Order status management.

13. What settlement types are available for IO?

IO may be settled to other CO objects and/or to G/L in the following ways:

■ 100% validation

■ % settlement

■ Equivalence number

■ Amount settlement

14. Define statistical IOs.

A statistical IO can be defined to collect costs for informational purposes only and therefore needs a real cost assignment (e.g., to a cost center) at the same time. The costs posted to a statistical IO are not settled.

SAP- AR&AP Interview Questions

1. At what level are the Customer & Vendor code stored in SAP?

The customer and Vendor code are at the client level. That means any company code can use the customer and Vendor code by extending the company code View.

2. How are vendor invoice payment made?

Manual payments without the use of any output medium like cheques etc

Automatic payment programme through cheques, Wire transfers, DME etc

3. How do you configure the Automatic payment program?

The following are the step to configure Automatic payment program

Step-1:

Co Code for payment transaction

  • Define sending and paying Company Code.
  • Tolerance days for payable
  • Minimum % for cash discount
  • Special GL transactions to be paid

Step-2:

Paying company code for payment transaction

  • Minimum amount for outgoing payment
  • No exchange rate diff
  • Separate payment for each ref
  • Bill /Exch payment
  • Form for payment advice

Step-3:

Payment method per company

  • Whether outgoing payment
  • Check or Bank transfer or B/E
  • Whether allowed for personal payment
  • Required master data
  • Doc Types
  • Payment medium programs
  • Currencies allowed

Step-4:

Payment method per company code for payment transactions

  • Set up per payment method and Co.Code
  • The minimum and maximum amount
  • Whether payment per due day

Bank Optimization by bank group or by postal code or no optimization

  • Whether Foreign currency allowed
  • Customer/Vendor bank abroad allowed
  • Attach the payment  form check
  • Whether payment advice required

Step-5:

Bank determination for Payment Transactions

Rank the house banks as per the following

  • Payment Method, Currency and give them ranking no’s
  • Setup house bank sub account (GL Code)
  • Available amounts for each bank
  • House Bank, Account id, Currency, Available amount
  • Value date specification

4. Where do you attach the check payment form?

It is attached to the payment method per Company code.

Payment terms for customer master can be maintained at two places i.e. accounting view and The sale view.

5. Which is the payment term which actually gets defaulted in transaction?

The payment term in the accounting view of the customer master comes into picture if the transaction originates from the FI module. If an FI invoice is posted (FB70) to the customer,then the payment terms is defaulted from the accounting view of the Customer master.

The payment term in the sales view of the customer master comes into picture if the transaction originates from the SD module. A sales order is created in the SD module. The payment terms are defaulted in the sales order from the sales view of the Customer master.

Payment terms for Vendor master can be maintained at two places i.e. Accounting view & the Purchasing view

6. Which is the payment term which actually gets defaulted in transaction?

The payment term in the accounting view of the Vendor master comes into picture if the transaction originates from the FI module. If an FI invoice is posted (FB60) to the customer,then the payment terms is defaulted from the accounting view of the Vendor  master.

The payment term in the sales view of the customer master comes into picture if the transaction originates from the MM module. A sales order is created in the MM module.

The payment terms are defaulted in the Purchase order from the Purchasing view of the Vendor Master.

7. Explain the entire process of Invoice verification from GR to Invoice verification in SAP with accounting entries? 

A goods receipt in SAP for purchased material is prepared referring a Purchase Order.

When goods receipt is posted in SAP the accounting entry passed is:

Debit          Inventory A/c

Credit       GR/IR A/c

A GR/IR A/c is a provision a/c which provides for the liability of the purchase. The rates for the valuation of the material are picked up from the Purchase order.

When the invoice is booked in the system through Logistics invoice verification the entry passed is as follows:

Debit           GR/IR A/c

Credit          Vendor

 8. How the Tolerances for Invoice verification defined?

The following are the instances of tolerances that can be defined for Logistics Invoice Verification.

  • Small Differences
  • Moving Average Price variances
  • Quantity variances
  • Price variances

Based on the client requirement, the transaction can be  “BLOCKED” or Posted with a  “Warning” in the event of the Tolerance being exceeded.

Tolerances are nothing but the differences between Invoice amount and Payment amount which is acceptable to the client.

9. How we can change the Reco account in the Vendor Master? If so, and how? What is the impact on the old balances?

Reconciliation account can be changed in the Vendor master provided that authority to change has been configured. Also any change you make to the reconciliation account is prospective and not retrospective. The old items & balances do not reflect the new account only the new transactions reflect the account.

SAP-Enterprise Structure Interview Questions

  1. 1.       What are the various Organizational assignments to a company code?

Company code is a legal entity for which financial statements like profit & loss and Balance sheets are generated. Plants are assigned to a company code, purchasing organization is assigned to the company code, and sales organization is assigned to the company code.

  1. 2.       What is relation between a controlling areas and a company code?

A controlling area can have the following 2 types of relationship with a company code.

  • Single company code relation
  • Cross company code relation

This means that one single controlling area can be assigned to several different Company Codes.

Controlling area can have a one is to one relationship or a one is to many relationship with different company codes.

Controlling area is the umbrella which all controlling activities of cost center Accounting. Product costing, Profit center and Profitability Analysis are sorted.

In a similar way Company Codes is the umbrella for Finance activities.

  1. 3.       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 Genaral ledger Accounts.

  1. 4.       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. You have 12 periods in SAP and also 4 special periods. These periods are stored in what is called the Fiscal year Variants.

There are two types of Fiscal year Variant

  • Calendar year  – Jan to Dec , April to Mar
  • Year dependent Fiscal year
  1. 5.       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.

Example: For the year 2012 the period January ends on 29th, Feb ends on 27th, March ends on 29th. For the year 2013 January ends on 30th, Feb ends on 26th, March ends on 30th. This is applicable to many countries especially USA. Every year Fiscal year variant needs to be configured.

  1. 6.       How does posting happen in MM 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.

  1. 7.       How many currencies can be configured for a company code?

A company code can have 3 currencies in total. One which is called the local currency (ie Company code currency) and 2 parallel currencies can be configured.

  1. 8.       Do you require configuring additional ledger for parallel currencies?

In case 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 configured and is different than the second currency type, you need to configure additional ledger.

  1. 9.       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.

SAP -GL Interview questions

  1. 1.       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 to. In the GL account master record, a check box exists wherein automatic posting option is selected called “Post Automatic only”.

  1. 2.       Where is a account group and where all 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 exists for the definition of a GL account, Vendor and Customer master. It basically controls the fields which pop up during master data creation.

  1. 3.       What is a field status group?

Field status groups control the fields which come up when the user does the transactions. The options available is one can have the fields only for display or one can suppress it or make it mandatory. So there are three options basically. The field status group is stored in the FI GL Master.

  1. 4.       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 ranges of the document
  • It controls the type of accounts that can be posted at eg Assets, Vendor, Customer & Normal GL Account.
  • Document type to be used for reversal of entries
  • Document type can be used for Batch Input sessions
  1. 5.       What is a Financial Statement Version?

An FSV  is a reporting tool and can be used to depict the manner in which the final 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.

  1. 6.       How can Input and Output taxes taken care 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.

  1. 7.       What are Validations  and Substitutions?

Validations /Substitutions in SAP are defined for each functional are eg Assets , Controlling etc at the following levels,

  • Document level
  • 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.

  1. 8.       Is it possible to maintain Plant wise different GL codes?

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 the configuration.

  1. 9.       Is Business area at Company Code Level?

No. Business area is at client level. Which means other Company Codes can also post to the same Business area.

  1. 10.   What are the difference scenarios under which a Business Area or a Profit Center may be defined?

This question in 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 now a days 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.

  1. 11.   What are the problems faced when a Business area is configured?

The problem of splitting of account balance is more pertinent incase of Tax accounts.

  1. 12.   Is it possible to default certain values for particular fields? For e.g. Company Code.

Yes it is possible to default for certain fields where a parameter id is present. Go to the input field to which you want to make defaults. Press F1, and then click Technical info button, This opens a window that displays the corresponding parameter ID(if one has been allocated to the field) in the field data section. Enter this parameter ID using following path on SAP

Easy access screen system > User profile>Own data.

Click on parameter tab. Enter the parameter ID code and enter the value you require to default. Save the user Settings.

  1. 13.   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 type)

  1. 14.   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.

  1. 15.   What are the Customizing prerequisites for document clearing?

Account must be managed on the open item management. This tick 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).

  1. 16.   Explain the importance of the GR/IR clearing account.

GR/IR is an interim account. In legacy system if the goods are received and the invoices 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. Subsequently when an invoice is recd this GR/IR account is debiting 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.

  1. 17.   How many numbers of line items in one single entry you can have?

No of line items in one document you can accommodate is 999 Lines.

  1. 18.   In assignment field in the Document you get some reference, which comes from where?

This is on the basis of sort key entered in the master.

  1. 19.   How do you maintain the number range in Production environment? By creating in Production or by 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?

  1. 20.   In customizing “Company Code Productive” means what? What it denotes?

Once the Company code is live this check box helps prevent deletion of many programmes accidentally. This check box is activated just before go live.