1) Explain Briefly Procumbent Cycle?

Ans :- Firstly Purchase requisition is made, then it will send to Purchase

department.Purchase department finalize vendor and ask vendor for Quotation. Vendors
send quotation to Purchase department. Quotation finalized by Purchase department and
Pur.Department request for P.O to Vendor. Vendor sends PO to Purchase department and
Material at Stores. At that time GR/IR is made…
Inventory A/c …. Dr
To GR/IR A/c
After G/R is made… material sends to Quality Department.Qualty Department check the
material and send it to Production Department. At that time Invoice entry is made by FI …..
GR/IR A/c…. Dr
TO vendor A/c
Invoice is sent to Vendor. And at the time of Due date Payment will be made by FI
Vendor A/c …. Dr
To Bank A/c

2) What is residual payment and part payment?

Ans: Residual payment it clears original invoice with incoming amount and create new line
item for remaining outstanding amount.
Partial payment it leaves the original invoice amount and creates new
line item for incoming amount.

3) Why we assign retain earning account to COA?

It’s nothing but Offsetting GL account. At the year end all the Balances of P & L and Balance
sheet will be carry forwarded to that account.

4) What is tolerance group?

Tolerance group is control the Maximum Posting mentioned

below step.1 Maximum Amount post in SINGLE ACCOUNTING DOCUMENT
2.Maximum amount post Each open Item (Customers & Vendors)
3.Maximum Cash Discount EACH LINE ITEM

5) What you do if you get below errors in SAP?

1) This GL account cannot be posted internally for the company code.

Ans – Deselect the option of Post automatically only from FS00

2) “Withholding Tax number range is not defined for the current Fiscal year “

Ans – in SPRO you need to define Period for the current year in Logistics –Tax on Goods
movement- Basic settings –Maintain company code setting
6) What is difference between depreciation? Accumulated Depreciation?

Depreciation – a decrease in the value of an asset due to wear and tear

Accumulated Depreciation – the total amount of depreciation calculated on a particular

asset.
APC – refers to Asset transactions other than depreciation

7) What is APC?

APC stands for Acquisition and Production costs. Acquisition means any asset which you may
acquire/ purchase externally. It includes invoice price and other related exp. Production cost
means any asset which is created internally within the organisation. This is normally created
by means of AUC and you go on adding cost to the AUC as and when you incurr exp. for the
same.For ex. say addition to the office building.

8) After entering a document is it possible to make a change / delete that?

Document header cannot be changed,/ deleted after posting the document you
cannot change. Only if you want to change the document the reversals date.

9) Define APP? What are the Configuration settings for APP? Where it is done in
SAP?

Automatic Payment Run Program.

Settings:-

1) All Company codes

2) Paying company code
3) Payment method in country
4) Payment method in company code
5) Bank determination
6) House Bank

10) Difference between Cost centre and Proft centre? How will you create in
SAP?

1)Cost Centre is used for controlling purposes within the organization. The costs incurred by
organization should be transparent. This enables you to check the profitability of individual
functional areas and provide decision-making data for management. This requires that all
costs be assigned according to their source. However, source-related assignment is especially
difficult for overhead costs. Cost Centre Accounting lets us analyse the overhead costs
according to where they were incurred within the organization.

2) A profit centre is an organizational unit in accounting that reflects a management-oriented

structure of the organization for the purpose of internal control. We can analyse operating
results for profit centres using either the cost-of-sales or the period accounting approach. By
calculating the fixed capital as well, we can use profit centers as investment centres.

You can create it through T.ocde (KS01 Cost centre and KE51 for Profit centre )
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