[50+] SAP FICA Interview Questions and Answers [ TO GET HIRED ]

Last updated on 12th Nov 2021, Blog, Interview Questions

The interviewer asks the questions for a position in finance, that tests your understanding of the Systems, Applications, and Products (SAP) modules such as SAP FICA. With the knowledge of the Finance and Contract Accounting module, you can approach financial reporting duties with self-confidence. Studying for the interview in advance will help you construct a thoughtful and comprehensive answer to the questions you could encounter. In this article, we will discuss why employers ask SAP FICA interview questions and will show some questions and answers.

1. What is SAP FICA?

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SAP FICO is an important core functional component in SAP ERP Central Component that allows an organization to manage all of its financial data. SAP FICO allows an organization to store a complete version of their financial transaction data. Each of which is used for a specific financial process.

2. What is the use of SAP FICA in the current industrial scenario?

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The SAP FICA is one of the excellent industry-level solutions that are assisting organizations in improving customer relationship management (CRM) at lightning speed. It provides administrators to tackle customer issues and deal with them in enormous amounts and offer resolutions in the most effective way.

3. What does fi ca stand for SAP?

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SAP FI-CA sub module is an application component that stands for Contract Accounts Receivable and Payable in FI. It is coming under the FI module (Financial Accounting). Here is a quick overview tutorial about its sub modules, transaction codes and tables for your training purpose.

4. What is the main transaction and sub transaction in SAP FICA?

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Main Transaction & Sub Transaction Use In FICA convergent invoicing Main Transaction and Sub Transaction are used to determine some dependent data automatically in the system. The below post shows how the main and sub transactions are used in CI posting areas to determine the G/L account(s).

5. What is the Available amount in APP and the principle behind it?

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Available amount	Principle behind
The available amount represents the maximum amount that can be paid out from the APP per entry.	This principle/concept is similar to the process followed by banks to process cheques. A given set of signatories cannot sign a cheque above a certain amount.

6. What is SAP PSCD?

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Purpose. Collection and Disbursement (PSCD) is the industry-specific version of Contract Accounts Receivable and Payable for the public sector. At contract object level, you can create a direct representation of individual receivables or commitments in the system.

7. What is the SAP ISU module?

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SAP IS-U is a sales and information system that supports utility and waste disposal companies. SAP IS-U supports business functions such as meter reading, meter data management, scheduling, billing, invoicing, accounting, customer service, and integration to customer relations management.

8. What is Convergent invoicing?

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Convergent invoicing involves pulling information together from different billing streams and individual-rated events and consolidating charges into a single invoice. Streamline viewing, adjustment, accuracy, and timely generation of invoices with SAP Fiori apps.

9. What are mains and subs SAP?

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Main and sub transactions are categories, which are used to specify items for a document in the Collections/Disbursements system. They are specified with regard to the combination of parameters controlling the processing of these items in the Collections/Disbursements system and account determination.

10. Explain the SAP FICO architecture?

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11. What are the two portions of FICA?

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Unlike federal income tax, FICA tax is a percentage of each employee’s taxable wages. It consists of two types of taxes: Social Security and Medicare. Part of the FICA percentage goes toward Social Security and the other part goes toward Medicare.

12. What is the meaning of parallel and local currency in SAP?

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Local	Parallel
Each company code can have two additional currencies, in addition to the company code, the currency is entered into the company code data. When the currency is added to the company code creation is called local currency	There are two parallel currencies that are used in SAP one is a HARD currency and the other is a GROUP currency. When there is the need to do any international transaction then the parallel currency is used.

13. Does SAP have a CRM?

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In 2007 SAP started to develop a cloud based CRM which has been renamed from SAP Business ByDesign CRM to Sales on Demand to SAP Cloud for Customer and finally to SAP Cloud for Sales. Since 2018 SAP has consolidated all of its cloud based marketing, sales, service and commerce applications as SAP C/4HANA suite.

14. What does SAP mean?

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SAP means “Systems Applications and Products in data processing”. The SAP Software system was developed in 1971 by five IBM engineers, Hopp, Wellenreuther, Hector, Tschira and Plattner, who worked together on an internal project. In June 1972, they left IBM and founded the SAP company.

15. What is the full form of SAP FICO?

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The SAP FICO full form is FI (Financial Accounting) and CO (Controlling). The sub-modules that are often used are accounts receivables, accounts payables, asset accounting, general ledger Accounting and bank accounting. All the sub modules are interlinked and integrate in real time.

16. Can you explain the difference between ‘SAP FICA’ and ‘SAP FICO?

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SAP FICA	SAP FICO
The SAP FICA was first introduced in the year 1999 and is one of the most entrusted modules in today’s industry.	The FICO interface offers the ability to deal with much more critical and complex methodologies required in professional trading bodies.
It was mainly established to reduce pressure and mismanagement when it comes to handling a substantial amount of consumers.	It is often utilized by Tax authority groups, banking businesses, managers, etc

17. Is SAP and ERP the same?

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You’ll sometimes hear the terms SAP and ERP used interchangeably. SAP is a software company, while ERP, an acronym for enterprise resource planning, is one of many solutions SAP provides.

18. What does ERP mean?

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Enterprise resource planning Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.

19. What is an SAP tree?

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Sap comes from a tree’s xylem cells, and is made up mostly of water with some minerals, sugar, nutrients and hormones mixed in. Tree sap can be found in sapwood, which creates carbon dioxide. If the carbon dioxide creates pressure inside the tree, the sap is forced out in openings or wounds.

20. Describe the SAP R/3 architecture ?

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21. Is SAP an ERP software?

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SAP S/4HANA Cloud is a future-ready enterprise resource planning (ERP) system with built-in intelligent technologies, including AI, machine learning, and advanced analytics.

22. What is ERP in e-commerce?

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Enterprise Resource Planning (ERP) is software that can combine the facets and processes of a business into one integrated system. When ERP is paired with e-commerce, they work as one, and you benefit from a single, unified data hub that eliminates silos.

23. What is SAP software used for?

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By centralising data management, SAP software provides multiple business functions with a single view of the truth. This helps companies better manage complex business processes by giving employees of different departments easy access to real-time insights across the enterprise.

24. Why is sap sticky?

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This sticky material is called honeydew, and it is merely sap from the tree that has been ingested by the insect with some of the nutrients removed. Honeydew production, and the sticky mess it makes, sometimes is more of a problem than the small amount of nutrients removed from the plant by sap-feeding insects.

25. How is sap created?

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Sap production begins in warm summer months when the process of photosynthesis creates carbohydrates that get stored in the tree as starch. The starch then gets converted to sugar in the form of sucrose that dissolves into the sap, which is stored for the winter.

26. Why do trees secrete sap?

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Tree sap functions to transport vital mineral nutrients and sugars to all living parts of the tree. Because it is largely water, sap also serves to maintain turgor pressure. During the growing season, water continually flows from the tree’s roots, up through the xylem and to the leaves.

27. What is an SAP example?

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SAP ERP is an enterprise resource planning software developed by the company SAP SE.Some example business processes include Operations, Corporate Services, Finance and Human Capital Management.

28. How do you calculate FICA withholding?

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To calculate FICA tax contribution for an employee, multiply their gross pay by the Social Security and Medicare tax rates. For example, if an employee’s taxable wages are $700 for the week, their social security contribution would be: $700.00 x 6.2% = $43.40.

29. What are the three main types of taxes?

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Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive. Two of these systems impact high- and low-income earners differently. Regressive taxes have a greater impact on lower-income individuals than the wealthy.

30. Describe the architecture of SAP blog?

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31. Is FICA mandatory?

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FICA contributions are mandatory, and rates are set annually, although not necessarily changed every year—they have remained stable between 2020 and 2022, for example. The amount of the FICA payment depends on the income of the employee: the higher the income, the higher the FICA payment.

32. Who is eligible for FICA taxes?

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Children under age 18 who are employed by their parents. Qualified retirement plan contributions from employers. Service performed by students employed by a school, college or university. Some church and qualified church-controlled organization wages.

33. Is FICA the same as Social Security?

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No, but they are closely connected. FICA, the Federal Insurance Contributions Act, refers to the taxes that largely fund Social Security retirement, disability, survivors, spousal and children’s benefits. Employers match workers’ Social Security and Medicare contributions.

34. Is FICA Social Security?

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Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes. Different rates apply for these taxes.

35. What income is subject to FICA?

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Usually, FICA applies to all taxable compensation (salary, wages, commissions, bonuses, tips), including taxable fringe benefits (e.g., reimbursement for moving expenses, taxable prizes and awards) and salary reduction amounts for contributions to 401(k)s and similar plans.

36. Why is FICA not taken out of paycheck?

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Employees do not pay this tax or have it withheld from their pay. That’s because the IRS imposes a 12.4% Social Security tax and a 2.9% Medicare tax on net earnings. Typically, employees and their employers split that bill, which is why employees have 6.2% and 1.45%, respectively, held from their paychecks.

37. How do you stop FICA?

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You may be able to ask your employer to “shut off” part of your FICA contributions before the end of each year if you earn a high income under something called the wage-base limit. Essentially, this means that you’ll hit your threshold for Social Security withholdings for the year before the year ends.

38. Is FICA refundable?

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If you overpay your FICA taxes, you are entitled to a refund of the excess amount. You might overpay if: You aren’t subject to these taxes, but they were withheld from your pay.

39. Where do FICA contributions go?

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The money goes to the Internal Revenue Service first, then is steered into a Social Security fund to pay for Social Security program funding. A portion of your FICA tax also goes into the federal government’s Medicare trust fund. (Medicare didn’t launch until 1965.)

40. Do I have to pay FICA?

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Yes. There is no exemption for paying the Federal Insurance Contribution Act (FICA) payroll taxes that fund the Social Security and Medicare systems. As long as you work in a job that is covered by Social Security, FICA taxes will be withheld from your paycheck.

41. Why did I get a FICA Refund?

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There is a FICA tax refund for immigrants who are exempt from the tax as well as for anyone required to pay FICA, yet who overpay. This usually happens if you change employers. If you owe income tax (this year or previous years), the IRS will apply the refund to that amount first, then refund you any difference.

42. What is FICA vs federal income tax?

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The federal income tax is a progressive tax that is affected by your tax filing status. This means that the higher your income, the higher is the tax rate. In contrast, the FICA taxes which include Social Security tax and Medicare tax, are not affected by your filing status.

43. What is FICA exempt income?

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Under the FICA tax provisions, in 2020, you pay the Social Security portion on earnings of less than $137,700. The Internal Revenue Service notes that any income that you earn over this amount will be exempt from contributions to the Social Security fund.

44. What is FICA Medicare on my paycheck?

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FICA is an acronym for “Federal Insurance Contributions Act.” FICA tax is the money that is taken out of workers’ paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits. It is a mandatory payroll deduction.

45. What does FICA Medicare mean?

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Federal Insurance Contributions Act

FICA refers to the combined taxes withheld for Social Security and Medicare (FICA stands for the Federal Insurance Contributions Act). On your pay statement, Social Security taxes are referred to as OASDI, for Old Age Survivor and Disability Insurance. Medicare is shown as Fed Med/EE.

46. What is FICA withheld?

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FICA stands for the Federal Insurance Contributions Act. It’s the federal law that requires employers to pay and withhold certain taxes from the wages they pay employees 6.2% Social Security tax, withheld from the first $142,800 an employee makes in 2021. 1.45% Medicare tax, withheld on all of an employee’s wages.

47. What is a FICA alternative plan?

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A FICA Alternative Plan is a type of 3121 retirement plan for your seasonal, part-time, and temporary employees that replaces Social Security. Employers avoid the matching 6.2% Social Security contribution, replacing it with an impactful benefit for employees.

48. What is FICA Medicare tax?

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FICA stands for the Federal Insurance Contributions Act, and it’s a federal tax that employers and employees pay. FICA tax includes two taxes: Medicare tax and Social Security tax. The 2021 tax rates for employers are 6.2% for Social Security and 1.45% for Medicare.

49. Where is FICA on w2?

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FICA tax withholding is shown in box 4 for Social Security taxes and in box 6 for Medicare taxes.

50. Explain the architecture of sap fica for beginners?

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51. Is FICA taxable income?

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FICA is a tax that isn’t a tax. Most state, local and other taxes can be deducted from your adjusted gross income, called AGI, when you figure your federal income tax return.

52. How do I report FICA taxes?

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Income and FICA tax return requirements

Most employers are required to file Form 941, Employer’s Quarterly Federal Tax Return, to report both the federal income taxes you withheld and the FICA taxes you withheld and paid during a calendar quarter. (Employers who qualify for annual reporting/payment, file Form 944.)

53. Can an employer get in trouble for not withholding federal taxes?

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No Federal Income Tax Withheld

If your employer didn’t take out enough, you’ll owe on April 15. Although the responsibility for paying your taxes ultimately falls on you, employers face criminal and civil penalties for failing to withhold taxes on employees.

54. Who is exempt from FICA taxes?

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International students, scholars, professors, teachers, trainees, researchers, physicians, au pairs, summer camp workers, and other aliens temporarily present in the United States in F-1,J-1,M-1, or Q-1/Q-2 nonimmigrant status are exempt from FICA taxes on wages as long as such services are allowed by USCIS.

55. Why do I need to pay FICA?

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Paying FICA taxes is mandatory for most employees and employers under the Federal Insurance Contributions Act of 1935. The funds are used to pay for both Social Security and Medicare. If you own a business, you’re responsible for paying Social Security and Medicare taxes, too.

56. When can you stop paying FICA

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Most people make less than $142,800 per year, so they pay the 6.2 percent payroll tax on every paycheck in 2021. But those who make more than $142,800 don’t have to pay into the program once they hit that cap.

57. What is the FICA tax claim?

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FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. Your nine-digit number helps Social Security accurately record your covered wages or self- employment. As you work and pay FICA taxes, you earn credits for Social Security benefits.

58. Can I take FICA off my paycheck?

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The only way to pay less FICA tax (as a dollar amount, not a percentage of pay) is to earn less income. FICA stands for Federal Insurance Contributions Act. However, they also get to deduct 50% of what they pay in self-employment tax as an income tax deduction on IRS Form 1040 (see IRS Pub 334).

59. What happens if you don’t pay FICA?

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Employer Responsibilities

A failure to correctly report and pay FICA taxes can result in both civil and criminal penalties for employers. Late deposits can incur a penalty from 2 percent to 15 percent of the tax due, depending on how many days past due the payment is received.

60. Describe the architecture of SAP public sector collection?

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61. Who qualifies for a FICA Refund?

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If you are in the United States on an F-1, J-1, M-1, Q-1 or Q-2 visa or are classified as a non-resident immigrant, you qualify for a FICA tax refund. The refund also applies to those who overpay the system once they reach the wage base limit of $142,800 in 2021.

62. What is the FICA match?

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The employer FICA match is a requirement for an employer to remit to the government double the amount of social security and Medicare taxes withheld from employee pay. This means that the employee is paying half of the amount remitted, and the employer is paying the other half.

63. What is maximum SS?

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The most an individual who files a claim for Social Security retirement benefits in 2021 can receive per month is: $3,895 for someone who files at age 70. $3,148 for someone who files at full retirement age (currently 66 and 2 months). $2,324 for someone who files at 62.

64. Where can I find my FICA?

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To the employee on each paycheck, including both the withholding amount for the current pay and total amount of FICA tax withheld for the year to date. To the IRS on Form 941- the Employer’s Quarterly Wage and Tax Report. On the employee’s W-2 form at the end of the year.

65. Is FICA taken out before or after taxes?

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Pre-tax deductions: Medical and dental benefits, 401(k) retirement plans (for federal and most state income taxes) and group-term life insurance. Mandatory deductions: Federal and state income tax, FICA taxes, and wage garnishments. Post-tax deductions: Garnishments, Roth IRA retirement plans and charitable donations.

66. What are SAP FICO modules?

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SAP FICO comprises two modules, i.e., SAP Finance (FI) and SAP Controlling (CO), each of these modules are used to carry out specific financial processes. SAP FI module focuses on complete financial reporting and accounting while SAP CO emphasis on planning and monitoring costs.

67. Define the terms TDM and BDM?

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The master data theory model of the IS-U is grouped in two primary categories which include the following.

TDM	BDM
Customers seek a large number of services from organizations, and the act of really catering a particular service to the consumer by utilizing a master data is categorized under the Technical Data model in SAP.	Customers are often charged and billed for several types of services. Organizations handle similar categories of service billings in infinite numbers and hence, they require an order-wise grouping procedure.
For instance, a trading affiliate can be an enterprise or an individual.	Consequently, the master data used for charging consumers are considered under the BDM in the SAP, IS-U model.

68. How can I avoid FICA taxes?

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The percentage of income for FICA tax that workers pay is determined by federal law and is the same for everyone. The only way to pay less FICA tax (as a dollar amount, not a percentage of pay) is to earn less income.

69. In Accounts Receivable, what is the difference between the ‘Residual Payment’ and ‘Part Payment’ methods of allocating cash?

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Residual payment	Part payment
An invoice for $100 is generated, the customer has paid $70. Now this $70 will be off-set and leaving the remaining balance $30.	With residual payment, the invoice is cleared for the full value of $100 and a new invoice is generated for the remaining balances $30.

70. Describe the structure of security challenges in SAP?

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71. What is FICA also known as?

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Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes.

72. What is the importance of the Goods Received / Invoice Received clearing account?

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Invoice received	Goods received
This is an intermediary clearing account. This is used in SAP to record the goods and invoices in transit. It records the goods received but not invoiced	The provision is made in SAP at the receipt of the goods in the legacy system, if the goods are received and the invoice is not received.

73. Explain the SAP CRM architecture?

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74. What is the difference between SAP FICO and S4 Hana?

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The main difference between SAP FICO and S4 HANA Finance is the technology used in them. SAP FICO works on the ECC model, while SAP S4HANA Finance (Simple Finance) is based on the in-memory HANA database which works on cloud technology.

75. What Do You Mean By Year Dependent On Fiscal Year Variants?

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Year dependent	Fiscal year Variants
The financial year is the same as the calendar year. Starting from 1st Jan to 31st Dec (where posting periods and the calendar months are equal).	The financial year is different from the calendar year Starting from 1st April to 31st March (where the posting period months are not equal to calendar year months).

76. What is a sub transaction?

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Noun. sub transaction (plural sub transactions) (databases) A transaction making up part of a larger transaction.

77. What is SAP ABAP and Hana?

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ABAP (development) for SAP HANA refers to all developments which leverage the power of SAP HANA within ABAP-based applications. In this context, the SAP HANA platform is the primary database underlying the ABAP platform. This system deployment option is supported with AS ABAP 7.4 onwards.

78. State the critical difference between an enterprise and enterprise code?

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Enterprise	Enterprise code
An enterprise or company is an organizational field that is being used in the legislative consolidation module to assimilate monetary statements of different enterprise codes.	The enterprise code is a standard terminology often used in SAP. The company or enterprise code is the minor form of unit, in which a group of autonomous accounts can be utilized for extraneous reporting purposes.

79. Define Dmc_jar?

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The dmc_jar object type is a subtype of dm_document, and it is used for JAR archives containing Java code.

80. Describe the architecture of SAP modules?

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81. What federal Medicare withheld?

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The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.

82. Is FICA on gross income?

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Federal income tax and FICA taxes both use the employee’s gross wages as a starting point, and both taxes are calculated independently.

83. Define Relationship Between Controlling Area And Company Code?

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Controlling area	Company code
A controlling area may include one or more company codes which must use the same operative chart of accounts as the controlling area	A Controlling Area can contain multiple company code assignments but a single company code can be assigned to only one controlling area.

84. Who is responsible for FICA tax?

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FICA taxes are an employer’s responsibility. But the employer splits the cost 50/50 with the employee by withholding half of the amount due from employees’ paychecks. The employer periodically sends both the employer and employee portions of FICA to the IRS using the Electronic Federal Tax Payments System (EFTPS).

85. What are the baseline method and decline balance method?

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Baseline method	Decline method
Baseline method is a straight-line depreciation method. The depreciation is calculated based on a defined percentage or life of the asset, which must be maintained in the asset master.	The declining balance method is also referred to as the written down value method. This is because we record significant depreciation expenses in the initial years of an asset’s life and more negligible depreciation during later years of an asset’s life in this method.
For example, the acquisition value of an asset is Rs. 10,000, and the life of the purchase is maintained as 20 years. Therefore, the system will calculate depreciation @ Rs. 500 every year for 20 years.	For example, if a 10% declining balance method is chosen, the depreciation will be calculated @ Rs in the first year. 2,000. In the second year, the base for the calculation of depreciation will be Rs. 18,000 and depreciation will be Rs. 1,800.

86. Explain the architecture of building data for SAP?

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87. What is the use of SAP FICA in the current industrial scenario?

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The SAP FICA is one of the excellent industry-level solutions that are assisting organizations in improving customer relationship management (CRM) at lightning speed. It provides administrators to tackle customer issues and deal with them in enormous amounts and offer resolutions in the most effective way.

88. What is the SAP FI definition?

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SAP FI stands for Financial Accounting and it is one of the important modules of SAP ERP. It is used to store the financial data of an organization. SAP FI helps to analyze the financial conditions of a company in the market. It can integrate with other SAP modules like SAP SD, SAP PP, SAP MM, SAP SCM, etc.

89. What is FICA in SAP?

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SAP FICO is an important core functional component in SAP ERP Central Component that allows an organization to manage all of its financial data. SAP FICO allows an organization to store a complete version of their financial transaction data. … SAP FICO consists of two sections, SAP Finance (FI) and SAP Controlling (CO).

90. What is a contract account in SAP FICA?

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In Contract Accounts Receivable and Payable , each business partner posting is assigned to one business partner and to one contract account. In the contract account master record, you can define, for each business partner, the procedures that apply when posting and processing the line items of a given contract account.

91. What is FICA tax?

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FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. Your nine-digit number helps Social Security accurately record your covered wages or self- employment. As you work and pay FICA taxes, you earn credits for Social Security benefits.,

92. What is the full form of FICA?

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Federal Insurance Contributions Act