Livre BOB - Question Chapter 5

Question 1

Explain in your own words why the information gathered for financial accounting might not be readily usable for decision making?

Answer 1

Financial accounting gathers information needed for accurate external financial reporting. This might not always have the level of detail needed for decision-making.

Question 2

Explain why financial accounting might not be well-equipped for the profitability computations.

Answer 2

Financial accounting does not necessarily have disaggregate the information to the extent needed. It only has to do what is necessary for external reporting.

Question 3

Which cost can we directly attribute to the individual products?

Answer 3

Direct labor, cost of dedicated machinery and raw materials.

Question 4

Identify at least one indirect cost.

Answer 4

Rent/Space cost, electricity and other utilities

Question 5

Would it make sens to treat the accounting department of a company as a profit center?

Answer 5

No. Accounting departments do not generate cost revenues. However, it is possible for a company to actually charge user department for use of the services of the account departement.

Question 6

In SAP, a client represents a conglomerate company and can have several company codes within it. Given that scenario, can management accounting cut across company code boundaries?

Answer 6

If the various company codes share common ressources - like a purchasins department, manufacturing, facilities, etc.. then these shared costs will need to be allocated across company code boundaries.

Question 7

What is the difference between a cost element and an occurence of cost element

Answer 7

Cost element is category of a cost. It does not have an actual monetary value associated with it.

When an instance of the cost element occurs, that instance has the monetary value.

Ex: food expense
Ex: When we go out and spend 25$, that becomes an instance of the cost element “food expense”

Question 8

Name a cost that might flow from the noted SAP module to CO. Also indicate the component within CO where it might be used. (5)

Answer 8

FI ( general): utility expense - overhead cost controlling

FI -AA ( Asset Accounting): depreciation - product cost accounting

HCM - Payment - Overhead Cost Controlling

MM - Materials Management : purchasing of material for consumption - Overhead cost controlling

PP: Product cost - Profit Center Accounting

SD : Cost and goods sold - Profitability analysis

Question 9

Indicate one way in which CO might have impact on FI?

Answer 9

Product Costing, which is an aspect of management accounting ( CO ), impacts valuation of finished goods.

Question 10

In which organizational element will you find Overhead Cost Controlling?

Answer 10

Controlling Area

Question 11

In which organizational element will you find Product Cost Accounting CO-PCA

Answer 11

Controlling Area

Question 12

One controlling area can have multiple company codes assigned to it? True or False?

Answer 12

False: A company code can belong to only one Controlling Area.

Question 13

A client has a many controlling Areas with each containing multiple cost centers. Cost Centers can allocate costs between Controlling Areas?

Answer 13

False: Cost allocations can occur only between cost centers belonging to the same Controlling Area.

Question 14

Explain the mechanism used to transfer a accounting information from FI to CO.

Answer 14

Every expense account in FI is now considered a primary cost account. Whenever an expense is posted in FI, the posting to that primary cost account resultsin a posting to a cost object in CO.

Question 15

What type of cost elements exist as account types in FI?

Answer 15

Primary cost element

Secondary Cost elements

Question 16

Which master data in CO is used to track where costs are incurred within the enterprise?

Answer 16

Cost Center

Question 17

How are cost centers structured in SAP?

Answer 17

Cost centers are assigned to cost center groups, which are structured hierarchically in SAP.

Question 18

What do the cost center groups enable?

Answer 18

They enable the ability to track and allocate costs across multiple related cost centers.

Question 19

Cost center + Activity type are us to determine what in Activiti Based Costing?

Answer 19

Unit price

Question 20

Which type of cost element is used to perform an assessment(one)

Answer 20

Primary
Secondary
Revenue

Question 21

In SAP S/4HANA expenses in FI are tracked using which account type?

Answer 21

Primary cost account

Question 22

A company accumulates costs associated with its cafeteria in a cost center and allocates this cost to other cost centers at the end of each month. What is this process broadly called?

Answer 22

Allocation

Question 23

A company accumulated costs for a training event in an internal order and then allocates this cost to other cost centers at the end of the month. What is this process broadly called?

Answer 23

Settlement

Question 24

What is the difference between CO postings to primary cost elements and to secondary cost elements in CO?

Answer 24

Primary cost elements represent the flow of expenses from FI to CO.

Secondary cost elements represent allocations across various cost objects within CO.

Question 25

What two entries must be made for ajournal posting in FI to properly post in CO?

Answer 25

It requires a line entry to a primary cost account as well as the account assignment object responsible in CO.

Question 26

What is the purpose of a periodic allocation?

Answer 26

To accumulate costs in a cost center that will be allocate to ther CO objects at the end of the accounting period.

Question 27

Which of the following is not an example of periodic allocation?

Assessment 
Distribution
Direct activity allocation
Periodic reposting
Template allocation

Answer 27

Direct activity allocation

Question 28

For which of the following scenarios would tou suggest using an Internal Order?

The company is going to produce finished goods and wants to have mechanism to accumulate production costs.

The company is organizing a promotion seminar and needs to track all costs incurrend for this purpose.

The company is buying a new machine and wants an object to which to charge the cost to which to charge the cost of the machine as well as future costs incurred on the machine.

The company is constructing a new parking lot and wants to accumulate the costs incurred.

Answer 28

The company is organizing a promotion seminar and needs to track all costs incurrend for this purpose.

The company is buying a new machine and wants an object to which to charge the cost to which to charge the cost of the machine as well as future costs incurred on the machine.

The company is constructing a new parking lot and wants to accumulate the costs incurred.

Question 29

When does the settlement occur for internal orders?

Answer 29

End of settlement accounting period, or at the end of the life of the order.

Question 30

Which of the following cannot be a receiver when the costs of an internal order are settled?

Asset
Profitability segment
Project
Profit Center
Cost Center

Answer 30

Profit center

Question 31

Explain the difference between a true cost object and a statistical object?

Answer 31

True cost objects can be allocated costs. Statistical costs are only for information purposes and cannot be allocated.

Question 32

What is the purpose of a statistical cost object?

Answer 32

To collect or compute specific cost statistics for information purposes without having a need for reallocation.

Question 33

Which of the following are examples of characteristics used in profitability segments?

Cost of goods sold
Sales revenue
Product
Sales region
Customer

Answer 33

Sales region

Question 34

What is the effect on the material master when the material standard cost estimate is marked?

Answer 34

The material master record has now a “future” standard price.

Question 35

What is the effect on the material master of releasing a material standard cost estimate?

Answer 35

The future standard price becomes the current standard price and the current price becomes the previous price.