SAP C_TS4FI_2020 x Exam Dumps & Practice Test Questions

Question 1:

During the year-end closing process in SAP S/4HANA, which of the following tasks is classified as a technical activity rather than a financial or accounting procedure?

A. Carry forward balances to the new fiscal year
B. Post foreign currency revaluation adjustments
C. Record balance sheet adjustments
D. Post accruals for unrecorded expenses

Correct Answer: A

Explanation:

In SAP S/4HANA, the year-end closing process includes both financial/accounting tasks and technical system tasks. Understanding this distinction is important for ensuring that all activities are completed in the correct order and with the right system tools.

Among the listed activities, carrying forward ledger balances (Option A) is a technical year-end procedure. It involves using specific system transactions (like FAGLGVTR) to transfer ending balances from the current fiscal year to the next. This is necessary for the continuity of financial data. Without this step, the opening balances in the new fiscal year would not reflect the correct financial position of the company. Since this task is performed at the system level and is critical for maintaining G/L consistency, it is classified as a technical closing activity.

Let’s now review why the other options are not considered technical:

• Option B (Foreign currency valuation): This process adjusts balances of accounts held in foreign currencies using year-end exchange rates. It is financial in nature, used to ensure compliance with accounting standards like IFRS. While it uses SAP transactions and can be automated, it is considered an accounting adjustment, not a technical system action.

• Option C (Balance sheet adjustments): This involves manual journal entries by accountants to correct or enhance the financial statement presentation. These adjustments could relate to reclassification or provisions. They are part of financial closing tasks, not system configuration or data preparation.
  
  

• Option D (Posting accruals): Accruals are recorded to account for revenues and expenses that belong to the current period but have not yet been documented. This ensures that financial reporting is accurate. Again, this is a financial task handled by accountants or controllers, not a system-level technical operation.

In summary, Option A (carrying forward balances) stands out as the only task that is mandatory at the system level and facilitates the transition to the new fiscal year. It's essential to distinguish this technical step from financial adjustments to ensure proper sequencing and accurate reporting in SAP.

Question 2:

Which two elements are crucial for determining how fixed asset acquisitions integrate with the general ledger in SAP? (Choose two.)

A. Asset class
B. Depreciation key
C. Valuation area
D. Depreciation area

Correct Answers: A, D

Explanation:

In SAP S/4HANA, integrating fixed asset transactions with the General Ledger (G/L) requires specific configurations that define how and where accounting entries are made. Among the many components of Asset Accounting, two of the most critical for ensuring proper G/L integration are the Asset Class and the Depreciation Area.

• Asset Class (Option A): This is the primary classification for assets in SAP. It defines what kind of asset is being acquired—such as buildings, equipment, or vehicles—and it also specifies the default general ledger accounts used during asset postings. These include acquisition, retirement, and depreciation postings. Without this mapping, SAP wouldn’t know which accounts to debit or credit during an asset transaction. Hence, the asset class is fundamental to ensuring seamless integration between Asset Accounting and Financial Accounting.

• Depreciation Area (Option D): This represents different accounting views for an asset’s valuation. For example, an organization may use one area for book depreciation, another for tax reporting, and another for cost accounting. Each depreciation area can be configured to post to the general ledger, allowing organizations to reflect different values in different ledgers. This setup is crucial when aligning SAP with multiple accounting principles or legal frameworks. Thus, depreciation areas control how and where asset values are reflected in the financial books.

Now, let’s review why the other options are not correct:

• Depreciation Key (Option B): While the depreciation key defines how an asset is depreciated (e.g., straight-line or declining balance), it does not determine which G/L accounts are used. It’s a calculation method, not an integration tool.

• Valuation Area (Option C): Valuation areas are relevant in Materials Management (MM) and control inventory valuation across different plants or company codes. They are not used in Asset Accounting and have no direct impact on how fixed assets post to the general ledger.

In summary, the Asset Class provides account mapping, and the Depreciation Area defines how those values are recorded in different books. Both are essential for integrating asset transactions with Financial Accounting in SAP S/4HANA.

Question 3:

You're working with a general ledger account that has been configured with CAD as its designated currency. The company code operates in USD, while the controlling area uses EUR. 

What currency is permitted when entering transactions into this account?

A. Any currency is accepted and will be converted to CAD.
B. Only CAD and USD are allowed.
C. CAD, USD, and EUR are all allowed.
D. Only CAD is permitted.

Correct Answer: D

Explanation:

In SAP Financial Accounting (FI), general ledger (G/L) accounts can be configured to use either the local company code currency or a specified foreign currency. When a G/L account is tied to a specific foreign currency—such as CAD (Canadian Dollar) in this case—it becomes a foreign currency-only account. This means the account is locked to that currency, and all financial entries posted to it must be in CAD only.

In this scenario, while the company code operates in USD (its local currency) and the controlling area uses EUR, the G/L account in question is designated specifically for CAD. Because of this setup, SAP enforces strict rules: the system will reject any postings in a currency other than CAD for this account. This ensures consistency in reporting and prevents discrepancies that could arise from mixed-currency entries.

Let’s examine each option to understand why only one is correct:

• Option A suggests that any currency can be used and SAP will convert it to CAD automatically. This is incorrect. Automatic conversion only occurs when the G/L account is not restricted to a specific foreign currency. If the account is fixed to CAD, then transactions must be made directly in CAD—no automatic conversion will be applied.

• Option B allows posting in both CAD and USD. This is misleading. Although USD is the local company code currency, it cannot be used to post to a CAD-restricted account. SAP only permits postings in the specified currency—in this case, CAD.

• Option C suggests a wider flexibility, allowing CAD, USD, and EUR. This too is incorrect, as EUR (controlling area currency) is used primarily for controlling-related evaluations and is irrelevant in FI postings unless parallel currencies are explicitly configured, which isn't mentioned here.

• Option D is correct. When a G/L account is designated with a specific foreign currency, that currency becomes the only acceptable currency for postings. SAP will reject entries in any other currency to ensure accounting accuracy and prevent inconsistent valuation.

Thus, when a G/L account is fixed to a foreign currency, postings can only be made in that specific currency.

Question 4:

A new G/L account has been created but hasn’t been included in the financial statement version. How will this impact the reporting of net profit or loss?

A. The account’s balance will appear in the notes section and not affect totals.
B. It will be shown in the non-assigned section and still be included in net profit/loss.
C. It will appear in the non-assigned section and be excluded from net profit/loss calculations.
D. It will be shown in the notes section and be included in overall profit/loss totals.

Correct Answer: C

Explanation:

In SAP S/4HANA, the financial statement version (FSV) plays a crucial role in defining how general ledger (G/L) accounts are grouped and reported in financial statements. When building a balance sheet or income statement, each G/L account must be assigned to a specific FSV item to ensure its balance contributes to the correct financial category and totals—like assets, liabilities, revenues, expenses, or profit/loss.

If a newly created G/L account is not mapped to an item in the FSV, its behavior changes during report generation. The account’s balance doesn’t vanish—instead, it appears in a special section called "non-assigned" or "unclassified" accounts. However, this section’s data is not included in the system’s automatic net profit or net loss computations. This safeguard prevents misreporting financial figures due to unreviewed or unclassified accounts.

Let’s assess the provided options:

• Option A is incorrect. The notes section in SAP financial reporting is meant for textual explanations or disclosures, not for housing transactional balances. Unassigned accounts never appear there automatically.
  
  

• Option B is also incorrect. While it's true that unassigned accounts appear in the “non-assigned” section, SAP does not include these in net profit or loss calculations unless they are explicitly assigned to a line item in the FSV.
  
  

• Option C is correct. This option correctly reflects SAP behavior. Unassigned G/L accounts show up in the non-assigned section of the report and are excluded from the profit/loss figures until they’re properly mapped.
  
  

• Option D is wrong. As discussed, the system does not route unassigned accounts into the notes or automatically include their balances in key financial calculations like net income.

This mechanism ensures that only thoroughly vetted and properly categorized accounts affect crucial metrics. If new accounts aren’t included in the FSV, the reported net results may appear understated or inaccurate. It’s essential to update the FSV promptly after creating new G/L accounts to maintain financial reporting integrity.

Thus, the correct interpretation is that unassigned G/L accounts appear in the non-assigned section and are not factored into net profit or loss.

Question 5:

When setting up a substitution rule in SAP Financial Accounting (FI), which two elements must be specified within each individual substitution step? (Choose two.)

A. Substitution values
B. Prerequisite statement
C. Callup point
D. Check statement

Correct Answers: A, B

Explanation:

In SAP Financial Accounting (FI), substitution rules are used to automatically replace data within accounting documents under specific conditions. This mechanism ensures that key financial data complies with corporate policies or reporting standards. When defining a substitution rule, it is structured in steps—each step representing a condition and an associated action to be taken when that condition is met.

Two components must be explicitly defined in each substitution step:

• A. Substitution Values
  This is the core action component of a substitution step. It defines what value will be substituted when the defined condition is met. For example, if a user posts a document with a certain company code and cost center, the system can automatically substitute a different profit center based on those inputs. The substitution value instructs the system on the output or change that should occur once the prerequisites are satisfied.

• B. Prerequisite Statement
  The prerequisite is a logical condition or filter. It determines when the substitution should be applied. For instance, a prerequisite might be that a certain general ledger account is being used or that the document currency equals a specific value. If this logical statement evaluates as true during processing, the system then applies the substitution value. Without a prerequisite, the substitution would execute indiscriminately, potentially leading to incorrect postings.

Now, let’s clarify the incorrect options:

• C. Callup Point
  Although essential in the substitution setup, this is defined at the rule level, not at the individual step level. The callup point determines when during processing (e.g., at line item entry or complete document posting) the substitution should occur. It governs timing, but not the internal logic of each step.

• D. Check Statement
  This is part of SAP validations, not substitutions. Check statements are used to enforce conditions and throw errors or warnings when violated, rather than modifying data.

To summarize, each substitution step in SAP FI must include both a prerequisite to define when the substitution should occur and a substitution value to specify what change should be made. The callup point is defined outside of the step, and check statements do not apply to substitutions.

Question 6:

While configuring document splitting in SAP FI, which two elements are essential to ensure the splitting logic functions correctly? (Choose two.)

A. Field status variant
B. Document number range
C. Business transaction variant
D. Document type

Correct Answers: C, D

Explanation:

Document splitting is a feature within SAP FI that enables more granular financial reporting—especially for segment, profit center, or functional area-based reporting. It ensures that line items in accounting documents are automatically divided and balanced according to these characteristics, even when the source transaction doesn’t provide them on every line item. For document splitting to function effectively, specific system configuration settings are required.

Let’s analyze the correct choices first:

• C. Business Transaction Variant
  This is a crucial configuration setting in document splitting. It determines how SAP interprets and processes different types of financial transactions, such as vendor invoices or G/L postings. Each business transaction variant outlines how the system should split line items based on the nature of the transaction. For example, a vendor invoice might be split differently from an incoming payment. Without these variants, SAP would not know how to perform the split or how to distribute values across dimensions like profit centers. Hence, this is an essential part of the configuration.

• D. Document Type
  While not directly part of the splitting logic itself, the document type plays a supporting role. Different document types (e.g., SA for G/L postings, KR for vendor invoices) can trigger different splitting rules or be tested under different scenarios. Certain document types may be excluded from splitting or treated specially. Moreover, in practice, document splitting scenarios are often validated using various document types to ensure they apply correctly. Therefore, although more indirectly, the document type is relevant in configuring and managing document splitting behavior.

Now, the incorrect options:

• A. Field Status Variant
  This governs which fields are visible, optional, or mandatory during document entry. While important in document processing overall, it has no direct influence on the splitting logic.

• B. Document Number Range
  Number ranges are used to assign document IDs but do not impact splitting behavior. They are purely for tracking and classification purposes and are unrelated to how documents are broken down.

In conclusion, the essential components for successful document splitting are the business transaction variant and the document type, as they define how and when the splitting logic applies within financial transactions.

Question 7:

In SAP Asset Accounting, which specific date does the system use to determine the starting point for calculating depreciation on a newly acquired asset?

A. Posting date
B. Baseline date
C. Document date
D. Asset value date

Correct Answer: D

Explanation:

In the context of SAP S/4HANA Asset Accounting, understanding how and when depreciation begins is critical for maintaining accurate financial records and complying with accounting principles. Among the multiple dates involved in asset transactions, only one serves as the decisive reference for initiating depreciation calculations: the asset value date.

Let’s break down each option:

• Posting Date (A):
  This is the date when the transaction is entered into the SAP system and is used to determine the financial period during which the entry affects the general ledger. While important for accounting postings, the posting date does not control when depreciation begins for the asset.

• Baseline Date (B):
  Typically used in Accounts Payable or Accounts Receivable modules, this date calculates payment due dates based on terms of payment. It has no relevance in depreciation schedules within Asset Accounting.

• Document Date (C):
  The document date usually refers to when the source document (like an invoice or purchase order) was originally created. Although useful for audit purposes, it does not affect the depreciation start in the asset lifecycle.

• Asset Value Date (D):
  This is the correct answer. The asset value date in SAP represents the date on which the asset is considered capitalized and ready for use. It serves as the anchor point for starting the depreciation process. Regardless of the posting or document dates, SAP calculates depreciation based on the asset value date, aligned with the configured depreciation key and asset’s useful life.

Here’s a practical example: Suppose an asset is acquired with an asset value date of April 5 and monthly depreciation is used. Even if the posting date is April 30, SAP will begin depreciating the asset from April. The asset value date ensures that depreciation starts at the time the asset begins to provide economic value, adhering to accounting standards like IFRS and GAAP.

In summary, the asset value date is the definitive trigger for depreciation in SAP, ensuring financial accuracy and compliance. It should be carefully reviewed during asset creation or acquisition postings to avoid errors in depreciation schedules.

Question 8:

In SAP system configuration, at which two levels can you assign a print program to a correspondence type for generating documents like account statements or dunning notices?

A. Client level
B. System level
C. Business partner level
D. Company code level

Correct Answers: A and D

Explanation:

In SAP Financial Accounting, correspondence types are used to manage the generation of predefined communication documents such as customer account statements, payment reminders, and dunning letters. Each correspondence type needs to be linked to a print program, which handles the formatting and printing logic of the output document. These assignments are configured in SAP customizing and can be made at specific organizational levels to allow flexibility in enterprise operations.

Let’s explore the options:

• Client Level (A):
  This is a valid level for assigning print programs. The client is the highest level in SAP’s organizational structure, covering all company codes within the environment. When a print program is assigned at this level, it acts as a default for all company codes unless overridden at a more specific level. This ensures consistency in document generation across the organization.

• System Level (B):
  While SAP operates as a system, there is no "system level" configuration point in customizing for assigning print programs to correspondence types. It’s a misleading term and does not apply in this context. Therefore, this is not a correct option.

• Business Partner Level (C):
  Although business partners receive the correspondence, print program assignment is not made at this level. Business partner data can influence correspondence content or triggering, but the technical link between correspondence types and print programs is handled at higher configuration levels like client or company code.

• Company Code Level (D):
  This is also a correct and valid assignment level. Since a company code represents a legal entity, configuring print programs at this level allows businesses to tailor correspondence output to local legal, linguistic, or operational needs. For instance, different templates or formats may be required for company codes operating in different countries.

In conclusion, print programs for correspondence types are assigned at the client and company code levels in SAP. This two-tiered configuration structure supports both standardization across the enterprise and local customization, ensuring scalable and compliant document handling in financial processes.

Question 9:

In SAP Financial Accounting, document types are used to control how financial transactions are categorized and processed. 

Which of the following are core functionalities directly governed by the document type? (Choose two)

A. Mandating text entry at the line item level
B. Controlling which posting keys can be used in the document
C. Restricting allowed account types for postings
D. Enabling or disabling negative postings

Correct Answers: B, C

Explanation:

In SAP Financial Accounting (FI), a document type is a key control mechanism that influences how financial documents are created, posted, and validated. It defines attributes that impact the posting process, especially in terms of which accounts and posting keys can be used.

Let’s break down the choices:

• Option B is correct. Document types control which posting keys are allowed. A posting key determines whether an entry is a debit or credit, as well as which type of account (e.g., customer, vendor, asset, G/L) is permissible in the line item. Document types restrict these to ensure only relevant posting keys are used, reducing errors and supporting accurate data entry.

• Option C is also correct. Document types define the allowed account types for a specific transaction. For instance, document type KR (vendor invoice) is set up to allow vendor accounts, while SA (general entry) allows only G/L accounts. This prevents misposting and enforces accounting discipline.

Now consider the distractors:

• Option A is incorrect. The requirement for line item text or other field entries is determined by the field status group assigned to the G/L account, not the document type. Field status groups define whether a field is optional, mandatory, suppressed, or display-only.

• Option D is partially true. While document types can be configured to allow negative postings, this behavior also depends on company code-level settings and posting period configurations. Since it requires a combination of settings, it’s not a standalone feature directly governed solely by the document type.

To summarize: when we focus strictly on what the document type itself controls, the account types allowed and the posting keys permitted are the primary configurable elements. These govern the structure and behavior of accounting entries, ensuring compliance and preventing misuse.

Question 10:

Which of the following accurately describe the role of a profit center in SAP S/4HANA Financial Accounting? (Choose two)

A. Profit centers require segments to generate financial statements
B. Profit centers are uniquely derived using segments
C. Profit centers enable independent creation of P&L and balance sheet statements
D. Segments can be consistently derived from profit centers

Correct Answers: C, D

Explanation:

In SAP S/4HANA, profit centers are essential organizational units for internal financial reporting, often used to represent divisions, product lines, or business areas. Their role is to enable detailed analysis of a company’s profitability at a granular level.

Let’s explore each statement:

• Option C is correct. Profit centers support the generation of independent profit and loss and balance sheet reports. With Profit Center Accounting (PCA) activated, companies can create financial statements at the profit center level without needing to rely on segments. This functionality allows organizations to evaluate internal performance by business unit or region, offering transparency and control over operations.

• Option D is also correct. In SAP, segments can be automatically derived from profit centers. This is especially useful in compliance with standards like IFRS 8, which require segment reporting. SAP allows configuration where segments are mapped directly from profit centers in a one-to-one relationship. This ensures uniform and automatic assignment, simplifying reporting and reducing manual entry errors.

Now, let’s address the incorrect options:

• Option A is inaccurate. Profit centers do not require segments to generate financial statements. Although segments can complement profit centers, they are not mandatory for profit center reporting. Financial statements based solely on profit centers can still be created and used internally.

• Option B misrepresents the relationship. Segments do not derive profit centers; rather, profit centers derive segments when the mapping is configured. The reverse is not true. Therefore, this option is incorrect.

In conclusion, profit centers serve as the primary basis for internal financial tracking and reporting in SAP. They are capable of supporting full financial statement generation independently and are commonly used to derive segment data automatically. Hence, C and D are the correct answers.