Interview Questions on FI-MM-SD

At what level is the FI-MM, FI-SD account determination settings?

They are at the chart of accounts level.

How do you go about setting the FI MM account determination?

FI MM settings are maintained in transaction code OBYC. Within these there are various transaction keys to be maintained like BSX, WRX, GBB, PRD etc. In each of these transaction keys you specify the GL accounts which get automatically passed at the time of entry. Few examples could be: BSX- Stands for Inventory Posting Debit GBB-Stands for Goods Issue/Scrapping/delivery of goods etc PRD- Stands for Price Differences.

Can we change the valuation class in the material master once it is assigned?

Once a material is assigned to a valuation class in the material master record, we can change it only if the stocks for that material are nil. If the stock exists for that material, then we cannot change the valuation class. In such a case, if the stock exists, we have to transfer the stocks or issue the stocks and make the stock nil for the specific valuation class. Then only we will be able to change the valuation class.

What is Valuation and Account assignment in SAP?

This is actually the link between Materials Management and Finance. The valuation in SAP can be at the plant level or the company code level. If you define valuation at the plant level then you can have different prices for the same material in the various plants. If you keep it at the company code level you can have only price across all plants. Valuation also involves the Price Control .Each material is assigned to a material type in Materials Management and every material is valuated either in Moving Average Price or Standard Price in SAP. These are the two types of price control available.

What is 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, and PRD) defined above determines the GL account during posting.

We can group together different materials with similar properties by valuation class.

E.g.: Raw material, Finished 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.

Does the moving average price change in the material master during issue of the stock assuming that the price control for the material is Moving Average?

The moving average price in the case of goods issue remains unchanged. Goods issues are always valuated at the current moving average price. It is only in goods receipt that the moving average price might change. A goods issue only reduces the total quantity and the total value in relation to the price and the moving price remains unchanged. Also read the next question to learn more about this topic.

What is the accounting entry in the financial books of accounts when the goods are received in unrestricted use stock? Also mention the settings to be done in the ‘Automatic postings’ in SAP for the specific G/L accounts?

On receipt of the goods in unrestricted-use stock, the Inventory account is debited and the GR/IR account gets credited. In customization, in the automatic postings, the Inventory G/L account is assigned to the Transaction event key BSX and the GR/IR account is assigned to the Transaction event key WRX.

What is the procedure in SAP for initial stock uploading? Mention the accounting entries also?

Initial stock uploading in SAP from the legacy system is done with inventory movement type 561(a MM transaction which is performed).

Material valuated at standard price: For a material valuated at standard price, the initial entry of inventory data is evaluated on the basis of standard price in the material master. If you enter an alternative value at the time of the movement type 561, then the system posts the difference to the price difference account. Material valuated at moving average price. The initial entry of inventory data is valuated as follows:

• If you enter a value when uploading the initial data, the quantity entered is valuated at this price.
• If you do not enter a value when entering initial data, then the quantity entered is valuated at the MAP present in the material master.

The accounting entries are: Inventory account is debited and Inventory Historical upload account is credited.