50+ SAP CCA Interview Questions

What do you understand by SAP Cost Centre? Explain with the example?

Answer

A Cost centre is defined as a component in an organization that adds to the cost and indirectly adds to profit if the organization. Examples include Marketing and Customer Service. A company can classify business unit as a profit centre, cost centre or an investment centre. The simple and straight forward division in an organization can be classified as a cost centre as the cost is easy to measure.

How do you create the Cost Center in the system? What are the requirements?

To create a cost centre in the system, you need to define a cost centre hierarchical structure. The structure of the Cost centre and it’s characteristics depend on the accounting objective and on the system you want to use to maintain accounting.

What are the benefits of using Cost Center Accounting?

 Answer

Following are the key uses to create cost centres and performing cost centre accounting in an organization −

• A cost centre is used to align overhead costs to activities performed in an organization. It is possible to assign different activity type to a cost centre.
• You perform cost centre accounting to manage cost in the organization and to check the profitability of each functional area and decision-making data.
• You can manage and analyze the overhead cost in an organization and to verify if they are incurred in the organization activities.
• When you plan costs at cost centre, this allows you to check the cost efficiency at the point when the cost is incurred in the organization.
• You can directly assign the cost to cost centres for products, services and market segments which are involved in performing these activities.

What is Cost Center Hierarchy?

 Answer

In cost centre hierarchy, at the top, you have an organization which is further divided as per the functional areas. Each Functional area is further divided into sub-areas and can be further divided as per activities performed.

What are the different types of data in SAP system?

 Answer

In the SAP system, you generally have two types of data −

Transaction data

Transaction data keeps on changing in the system and is stored in line item tables.

Master data

You can use the following functions to create, change master data −

• Cost Center
• Cost Elements
• Activity Types
• Key Figures
• Resources

What is the Cost element?

 Answer

The cost element is known as cost relevant item in the Chart of Accounts.

What are the different types of Cost elements?

 Answer

Primary Cost Elements

A Primary cost element is defined as elements for which General Ledger Account G/L exists in Finance Accounting FI.

Common primary cost element includes −

• Personnel Costs
• Material Costs

Secondary Cost Elements

These elements are maintained in Cost Accounting. To create a secondary cost element, system checks account already exists in Financial Accounting and if an account exists, secondary cost element can’t be created.

Common examples of secondary cost elements −

• Cost element for Order settlement

 What is direct and In-direct posting?

 Answer

Cost element category is used to define if you can post to cost element directly or not. When you post a fixed amount to cost elements by mentioning account number, it is called direct posting. In a direct posting, you can post directly to all primary cost elements by specifying the account number. When you can’t enter the account number with posting transaction and system determines account at the time of posting automatically, this is known as indirect posting.

What is an Activity Type? For each Work Center, what are different activity types that can be performed?

 Answer

Activity type is defined as an activity performed in cost centre within the controlling area. For each cost centre, you perform the following activities −

• Activities performed by the cost centre.
• Cost is debited to products when they use the activities of the cost centre.
• In Cost Center accounting, to plan and allocate the activities, the system records quantities that are measured in activity units. Each activity in a cost centre contains activity types and if the cost can be allocated to these activity types.
• When you create the activity types, prices of these can be entered manually or this can be calculated in the system as per the cost allocated. The cost planning, allocation and control can be performed while defining activity or can also be performed at the cost centre.

What is Key figure?

 Answer

Key figures can be defined as fixed values and total values. All the key figures that you define as fixed values they are available for positing in full fiscal year. Key figures defined as total values are available only for posting in the defined period.

How do you define Key figures in SAP system?

 Answer

Key figures can be defined manually or you can also transfer it automatically from the information system of SAP system application.

What do you understand by Resources? What is the different resource type?

 Answer

Resources are used to perform quantity-based cost planning for cost centres, orders and WBS element. In SAP system as per the available data, you can select from the following resource type −

• Type R for overhead cost controlling
• Type M represents for Material type
• Type B refers to base planning objects

 What is the structure of Resource master data type?

 Answer

The structure of resource master data contains the following fields −

• Resource key
• Purchasing organization
• Resource type
• The validity period of the resource
• Plant
• Resource units
• Cost element
• Resource name
• Material
• Base object costing

 What is the Transaction Code to create a Cost Center?

 Answer

To create Cost centre, you can use T-code: KS01

What is Cost Center Group?

Answer

You can divide the cost centre into cost centre groups. In system, it should have at least one group that contains all cost centres and represents the entire business organization. This cost centre group is described as the standard hierarchy. You can assign more cost centre groups to the standard hierarchy.

Is it possible to assign a Cost Center to a multiple cost Center group?

Answer

No, in the standard hierarchy, you can only assign each cost centre to one group.

Why do we create an Internal Order?

 Answer

You can create an internal order to monitor the costs of a time-restricted job or the costs for the production of activities. Internal orders can also be used for the long-term monitoring of costs.

What is the difference between Investment Order, Internal Order and Accrual Orders?

 Answer

You can create an internal order to monitor the costs of a time-restricted job or the costs for the production of activities. Internal orders can also be used for the long-term monitoring of costs.Investment cost related to fixed assets is monitored using Investment orders. Period-related accrual calculation between expenses in FI and the costing-based costs debited in Cost Accounting is monitored using Accrual orders.

What do you understand by Profit Center?

 Answer

SAP CO-Profit centre is used for managing internal controlling. When you dividing your company into profit centres, it allows you to delegate responsibility to decentralized units and allows you to treat as separate companies in a company. It also allows you to calculate key figures in cost accounting like- ROI, Cash flow, etc.

Why do we create Profit Centers? What are the key components of the Profit Center?

Answer

The main aim of creating a Profit Center in Controlling is to analyze the cost of a product line or a business unit.

• You can also generate profit and loss accounts according to Profit Center and also generate balance sheets however Profit centre should only be used for internal reporting purposes.

The key components of a profit centre include- the name of the profit centre, the controlling area under which it is assigned, time period, the person responsible for the profit centre, standard hierarchy, etc.

What are the key differences between Cost Center, Profit Center and Internal Order?

 Answer

Cost Center

A Cost centre is defined as a component in an organization that adds to the cost and indirectly adds to profit if the organization. Examples include Marketing and Customer Service. A company can classify business unit as a profit centre, cost centre or an investment centre. The simple and straight forward division in an organization can be classified as a cost centre as the cost is easy to measure.

To create a cost centre in the system, you need to define a cost centre hierarchical structure. The structure of the Cost centre and it’s characteristics depend on the accounting objective and on the system you want to use to maintain accounting.

• The cost centre is used to align overhead costs to activities performed in an organization. It is possible to assign different activity type to a cost centre.
• You perform cost centre accounting to manage cost in the organization and to check the profitability of each functional area and decision-making data.
• You can manage and analyze the overhead cost in an organization and verify if they are incurred in the organization activities.
• When you plan costs at cost centre, this allows you to check the cost efficiency at the point when the cost is incurred in the organization.
• You can directly assign the cost to cost centres for products, services and market segments which are involved in performing these activities.

Profit Center

SAP CO-Profit centre is used for managing internal controlling. When you dividing your company into profit centres, it allows you to delegate responsibility to decentralized units and allows you to treat as separate companies in a company. It also allows you to calculate key figures in cost accounting like- ROI, Cash flow, etc.

Profit Center is part of the Enterprise Controlling module and is integrated with new General Ledger Accounting.

• Profit Center Accounting is used to determine profit for internal areas of responsibility. It lets you determine profits and losses using either period accounting or the cost-of-sales approach
• It allows you to analyze fixed assets by profit centre, thus using them as investment centres. This makes it possible to expand profit centres to investment centres.

Internal Order

• SAP CO internal order monitor the parts of the costs and in a few cases, the revenues of the organization.
• You can create an internal order to monitor the costs of a time-restricted job or the costs for the production of activities. Internal orders can also be used for the long-term monitoring of costs.
• Investment cost related to fixed assets is monitored using Investment orders.
• Period-related accrual calculation between expenses in FI and the costing-based costs debited in Cost Accounting is monitored using Accrual orders.
• Costs and revenues incurred for activities for external partners or for internal activities that do not form part of the core business for your organization are monitored using order with revenues.

Why do we perform Cost Center Planning?

 Answer

You perform Cost Center planning to achieve the following functions −

• To Plan the structure
• To control and monitor business growth
• To perform target comparison-plan/actual or target/actual
• Cost centre planning covers the following planning area −
  • Cost Element
  • Primary Cost
  • Secondary Cost
  • Revenue
  • Activity Type
  • Statistical Key Figures

What is the use of period End Closing? What activities are performed as part of Period End Closing?

 Answer

Period-end closing is work carried out at the period end as part of cost control. To perform period-end closing, it is required to transfer the data from other SAP components. You should perform all the posting in Finance Accounting.

As part of period closing, the following activities are performed −

• Periodic reposting
• Accrual cost calculation
• Pre-distribution of fixed costs
• Transfer of statistical key figures from the LIS
• Overhead calculation
• Periodic allocations
• Variance calculation
• Actual price calculation

What is the meaning of Accrual Calculation?

 Answer

You allocate operating expenses differently in cost accounting as compared to Finance accounting. You can distribute irregular occurring expenses as per cost origin, on the months in which they are incurred. And hence you can avoid all irregularities within cost accounting. Cost allocated in this way is known as Accrual cost.

How Accrual Calculation can be performed in the system?

 Answer

Accrual calculation can be performed in the following way −

• Accruals in the Controlling component based on the costs posted.
• Accruals in the Financial Accounting component (FI) using recurring entries.

What do you understand by Variance calculation in Period end closing?

 Answer

When actual cost on cost centre is different from target cost or planning was over/under, you can see a variance in controlling component.

How do perform variance calculation in Period End closing?

 Answer

• Using Variance calculation, you can analyze the actual balance and find a variance of actual cost from target cost with different activity types.
• To perform variance calculation, navigate to Accounting → Controlling → Product Cost Controlling → Cost Object Controlling → Product Cost by Period or Product Cost by Order → Period-End Closing → Single
• Functions: Product Cost Collector → Single Functions: Cost Object Hierarchy → Variances → Individual Processing or Collective Processing

What is Year-End Closing? How do you perform a carry forward commitment?

 Answer

In year-end closing, you can transfer carry forward to the first period of next fiscal year and this is performed for each Controlling under SAP system.

What is the use of Value Field in the CO-PA module?

 Answer

Value fields are number or value related fields in profitability analysis such as quantity, sales revenue, discount value etc.

What is the use of the account group of the vendor/customer master records?

 Answer

• The number range of the customer/vendor masters

• The status of the fields in the only company code segment

What do you understand by Product costing in SAP Controlling?

 Answer

SAP CO-Product Costing module is used to find the value of the internal cost of products. It is also used for profitability and management accounting for production.

While configuring Product Costing, it involves two areas for setting −

• Product Cost Planning
• Cost Object Controlling

The basics of Product Costing is Cost Center Planning. The goal of cost centre planning is to plan total dollars and quantities in each Cost Center in a Plant.

What do you understand by cost centre, profit centre in Controlling?

 Answer

• A Cost centre is defined as a component in an organization that adds to the cost and indirectly adds to profit if the organization. Examples include Marketing and Customer Service.
• A company can classify business unit as a profit centre, cost centre or an investment centre. The simple and straight forward division in an organization can be classified as a cost centre as the cost is easy to measure.
• SAP CO-Profit centre is used for managing internal controlling. When you dividing your company into profit centres, it allows you to delegate responsibility to decentralized units and allows you to treat as separate companies in a company.

What are the segments of the customer master record?

 Answer

• General data segment

• Sales organization data segment

What is the Maximum Number of Posting Periods in SAP?

 Answer

Under GL accounting, you can have a maximum of 16 posting periods (12 regular plus 4 Special Periods).

How do you ‘Carry-Forward’ Account Balances?

 Answer

If you have already posted into the new fiscal year, you do not need to carry forward the balances manually. But you can use the various ‘carry-forward’ programs supplied by SAP for this task.

How Currencies are maintained in the SAP system?

 Answer

Using 3 character Currency Code

How do you maintain exchange rates in SAP?

 Answer

SAP offers a variety of tools to maintain exchange rates on an on-going basis. The tools include −

• Exchange Rate Spreads
• Base Currency
• Inversion

What do you understand by a Line Item?

 Answer

Line Items contain information relating to account number, amount, debit/ credit, tax code, amount, etc. SAP allows a maximum of 999 line items in a single document.

What is Cost based Profitability Analysis?

 Answer

It is used to group the costs and revenues as per the value fields. It is used to ensure that you access at all times to a complete, short-term profitability report.

What is Account-based Profitability Analysis?

 Answer

• It is used to provide you with a profitability report that is permanently reconciled with financial accounting.
• It is mainly used for getting information related to sales, marketing, product management and corporate planning departments to support internal accounting and decision-making.

What do you understand by Posting Key?

 Answer

A Posting Key in SAP is a 2-digit alphanumeric key that controls the entry of line items. SAP comes with many posting keys for meeting the different business transaction requirements.

What is the use of document reversal in SAP system?

 Answer

To change some of the accounting information relating to an already posted document, you can only achieve this by Reversing option the original document and posting a new one with the correct information.

What is the Number Range interval?

 Answer

Number Range is defined as a number interval defined in the system so that when documents are posted, the system assigns a number from this range.

What are the different Standard reports in SAP CO system?

 Answer

SAP CO: Standard Reports

There are various standard reports that exist in a system for Cost Center Accounting.

1VK Library −

• This contains report related to cost accounting and is based on full costs.

1GK Library −

• This contains reports for cost accounting systems based on marginal costs.

1AB library −

• This is used to maintain the reports for variance analyses.

1 RU library −

• This is used to maintain summary reports related to overall cost centre accounting process.

What are Price Reports? Where do you find them in the SAP system?

 Answer

Price reports in Cost Center accounting are available for activity types and for activity-based costing. Under Activity-Based Costing, price report is used to provide an overview of the process prices for each business process.

To execute price report online, navigate to Information Systems → Accounting → Controlling → Reports for Cost Center Accounting → Prices

What are the different line Item reports?

 Answer

You can use following line item reports −

• Actual line item report
• You can display line item reports for archived actual costs.
• Plan line item report

What is the use of Cost Elements report? How do you access Cost Element reports in SAP system?

 Answer

This report is used to perform a comparison of the figures in internal and external accounting, display the costs incurred for each object class, and see the cost flows between company codes.

Navigate to Information Systems → Accounting → Controlling → Reports for Cost and Element Accounting

What are the common tables in SAP CO? Could you name a few? 

Answer

AUSP	Characteristic Values	MANDT / OBJEK / ATINN / ATZHL / MAFID / KLART / ADZHL
CO-KBAS	Overhead Cost Controlling
A132	Price per Cost Center	MANDT / KAPPL / KSCHL / KOKRS / VERSN / RESRC / KOSTL / DATBI
A136	Price per Controlling Area	MANDT / KAPPL / KSCHL / KOKRS / VERSN / RESRC / DATBI
A137	Price per Country / Region	MANDT / KAPPL / KSCHL / KOKRS / VERSN / RESRC / LAND1 / REGIO / DATBI
COSC	CO Objects: Assignment of Original Costing Sheets	MANDT / OBJNR / SCTYP / VERSN / GJAHR
CSSK	Cost Center / Cost Element	MANDT / VERSN / KOKRS / GJAHR / KOSTL / KSTAR
CSSL	Cost Center / Activity Type	MANDT / KOKRS / KOSTL / LSTAR / GJAHR
KAPS	CO Period Locks	MANDT / KOKRS / GJAHR / VERSN / VRGNG / PERBL

 

What are the components in the Financial Statement version?

 Answer

A Financial Statement Version helps to define the Financial Statements both the Balance Sheet and Profit & Loss statements.

Explain the process of Profitability analysis in SAP CO system CO-PA? What is the use of CO-PA?

 Answer

• SAP CO-PA is used to analyze the market segments classified as products, customers, sales area, business area, etc.
• SAP CO Profitability Analysis (CO-PA) is used for the evaluation of market segments, which is classified according to products, customers, and orders or any combination of these or Strategic business units such as sales organizations or business areas, with reference to company’s profit or contribution margin.