Below are some important SAP MM interview questions which are asked in most MNC company interviews for beginners or professionals.
21. What are various types of Stock transfer?
The physical movement of stock between different physical locations is called as ‘Stock transfer’. Stock transfer can be either a single step process or a two-step process. Various Stock transfers are:
Inter Company (Company to Company)
Inter Plant/Intra Company (Plant to Plant)
Intra Plant (Storage location to Storage location)
22. What are various Stock Types?
In SAP, commonly used stock types are:
Unrestricted Stock (Stock that is available for use)
Restricted Stock
Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production)
GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)
23. What are various procedures for counting Physical Inventory?
Physical Inventory procedures in SAP MM are as follows:
Periodic Inventory (All stocks are counted on a pre-determined date)
Continuous Inventory (stocks are counted continuously during the entire fiscal year)
Cycle Counting (Counting is done at fixed intervals)
Inventory Sampling (Randomly selected material stocks are physically counted on the balance sheet key date. If variances are small enough, it is presumed that the book inventory balances for the other stocks are correct.)
24. What is the use of ‘Split Valuation’?
Within a valuation area, sometimes, we need to valuate various stocks of a material separately. It can be because of different origin, quality, status, etc. We use split valuation in such cases. In this case, material is managed at several partial stocks which are sub-stocks of main material stock. Any transaction, relevant for valuation, is carried at this partial stock level. In accounting view, we define if we need split valuation for any material.
25. What are the various stock valuation methods?
Stock revaluation can be done by following three methods:
LIFO(Last In First Out): Materials received last are consumed first. You can assume example of elevator where people who enter last exit first!
FIFO(First In Firs Out): Materials received first are consumed first.
Lowest Value Method: Stocks are valued at their original price or the current market price whichever is lower.
26. How do you set ‘Automatic Account Assignment’ in MM?
Once OBYC settings are properly done, system finds the correct G/L account using the following data:
Chart of Accounts: Chart of Accounts is determined based on plant or company code used in transaction
Valuation Grouping Code: It is determined based on the valuation area. Valuation Grouping Code is maintained in t-code OMWD.
Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from the transaction (invoice verification) or the movement type (inventory management).
Account grouping /Account Modifier (only for offsetting entries, consignment liabilities, and price differences)
Valuation class of material or (in case of split valuation) the valuation type: The valuation class allows you to define automatic account determination that is dependent on the material. This can be achieved by assigning different valuation classes to the materials in material master (Accounting view) and by assigning different G/L accounts to the posting transaction for every valuation class
27. What are ‘Transaction Keys’ while setting OBYC?
Since each movement type is assigned to a ‘value string’ which in turn is identified with a transaction key, the goods movement determines the correct transaction key. Transaction Keys’ are pre-defined in the system to enable transaction postings in Inventory Management and Accounting (Invoice Verification). Examples of pre-defined transaction keys are:
BSX (Inventory Postings)
WRX (GR/IR Clearing Postings)
PRD (Cost/Price differences)
UMB (Revenue/Expenses from revaluation)
GBB (Offsetting entries in Stock postings)
BSX, WRX, and PRD are relevant for a GR with reference to a purchase order for a material with standard price control. The transaction key UMB is used when the standard price has changed and the movement is posted to a previous period. GBB is used to identify the GL account to post to as the offsetting entry to the stock account (when not referencing a purchase order) such as miscellaneous goods receipts, goods issues for sales orders with no account assignment, and scrapping etc.
28. What is a Business Area?
The business area is an organizational unit within financial accounting. It corresponds to a defined business segment or area of responsibility, to which value movements recorded in Financial Accounting can be assigned. It is usually derived automatically as it linked to other organizational units. For eg. Business area for a combination of plant and division is maintained by t-code OMJ7.
29. What is a Cost Center?
Cost Center accounting is used for controlling purposes. It is an organizational unit within a controlling area which represents a defined location of cost incurrence. For example, any department can be a cost center for recording all expenses incurred for that department.
30. What is a Profit Center?
Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization. Profit center is an organizational unit in controlling to recognize your profit. Profit center is attached to material master at plant level.
21. What are various types of Stock transfer?
The physical movement of stock between different physical locations is called as ‘Stock transfer’. Stock transfer can be either a single step process or a two-step process. Various Stock transfers are:
Inter Company (Company to Company)
Inter Plant/Intra Company (Plant to Plant)
Intra Plant (Storage location to Storage location)
22. What are various Stock Types?
In SAP, commonly used stock types are:
Unrestricted Stock (Stock that is available for use)
Restricted Stock
Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production)
GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)
23. What are various procedures for counting Physical Inventory?
Physical Inventory procedures in SAP MM are as follows:
Periodic Inventory (All stocks are counted on a pre-determined date)
Continuous Inventory (stocks are counted continuously during the entire fiscal year)
Cycle Counting (Counting is done at fixed intervals)
Inventory Sampling (Randomly selected material stocks are physically counted on the balance sheet key date. If variances are small enough, it is presumed that the book inventory balances for the other stocks are correct.)
24. What is the use of ‘Split Valuation’?
Within a valuation area, sometimes, we need to valuate various stocks of a material separately. It can be because of different origin, quality, status, etc. We use split valuation in such cases. In this case, material is managed at several partial stocks which are sub-stocks of main material stock. Any transaction, relevant for valuation, is carried at this partial stock level. In accounting view, we define if we need split valuation for any material.
25. What are the various stock valuation methods?
Stock revaluation can be done by following three methods:
LIFO(Last In First Out): Materials received last are consumed first. You can assume example of elevator where people who enter last exit first!
FIFO(First In Firs Out): Materials received first are consumed first.
Lowest Value Method: Stocks are valued at their original price or the current market price whichever is lower.
26. How do you set ‘Automatic Account Assignment’ in MM?
Once OBYC settings are properly done, system finds the correct G/L account using the following data:
Chart of Accounts: Chart of Accounts is determined based on plant or company code used in transaction
Valuation Grouping Code: It is determined based on the valuation area. Valuation Grouping Code is maintained in t-code OMWD.
Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from the transaction (invoice verification) or the movement type (inventory management).
Account grouping /Account Modifier (only for offsetting entries, consignment liabilities, and price differences)
Valuation class of material or (in case of split valuation) the valuation type: The valuation class allows you to define automatic account determination that is dependent on the material. This can be achieved by assigning different valuation classes to the materials in material master (Accounting view) and by assigning different G/L accounts to the posting transaction for every valuation class
27. What are ‘Transaction Keys’ while setting OBYC?
Since each movement type is assigned to a ‘value string’ which in turn is identified with a transaction key, the goods movement determines the correct transaction key. Transaction Keys’ are pre-defined in the system to enable transaction postings in Inventory Management and Accounting (Invoice Verification). Examples of pre-defined transaction keys are:
BSX (Inventory Postings)
WRX (GR/IR Clearing Postings)
PRD (Cost/Price differences)
UMB (Revenue/Expenses from revaluation)
GBB (Offsetting entries in Stock postings)
BSX, WRX, and PRD are relevant for a GR with reference to a purchase order for a material with standard price control. The transaction key UMB is used when the standard price has changed and the movement is posted to a previous period. GBB is used to identify the GL account to post to as the offsetting entry to the stock account (when not referencing a purchase order) such as miscellaneous goods receipts, goods issues for sales orders with no account assignment, and scrapping etc.
28. What is a Business Area?
The business area is an organizational unit within financial accounting. It corresponds to a defined business segment or area of responsibility, to which value movements recorded in Financial Accounting can be assigned. It is usually derived automatically as it linked to other organizational units. For eg. Business area for a combination of plant and division is maintained by t-code OMJ7.
29. What is a Cost Center?
Cost Center accounting is used for controlling purposes. It is an organizational unit within a controlling area which represents a defined location of cost incurrence. For example, any department can be a cost center for recording all expenses incurred for that department.
30. What is a Profit Center?
Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization. Profit center is an organizational unit in controlling to recognize your profit. Profit center is attached to material master at plant level.
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