50 REAL TIME SAP MM Interview Questions and Answers 2017 PDF

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50 REAL TIME SAP MM INTERVIEW QUESTIONS AND

ANSWERS
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sap mm interview Questions and Answers

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1. What is the difference between a Purchase Requisition and a
Purchase Order?
A PR is an internal document that sends notification to purchase department
when some material is service is required. PR can be generated by department
that needs any material or service.
1 of 19 2/14/2017 7:28 AM
A PO is a document sent to vendor by purchaser which is an official request of
mentioned material or services. POs are generally binding on purchaser, though it
depends on terms and conditions mentioned in PO.
2. What are different Info Records types?
Different Info Record types are Standard, Consignment, Sub-Contracting and
Pipeline.
3. What is a consignment Stock?
The stock supplied by the vendor is in the purchasing company’s premises but the
company has no liability for the same. The liability for the company will only arise
one the goods are issued from the consignment stock for use. However, in this
case, even before the use, purchasing company can check in system how much
stock is lying in inventory.
SAP MM Interview Questions and Answers
4. What is Sub-Contracting cycle in MM?
In Sub-contracting, we send raw material or input material to sub-contractor and
then receive the finished goods. A sub-contracting PO is created with item
category ‘L’. Input material is sent to vendor for processing with movement type
2 of 19 2/14/2017 7:28 AM
541. When GR is done using movement type 101, movement type 543 takes place
automatically and takes care of consumed material.
5. What is meant by Scales in MM?
When we maintain price in Info Records, we can make use of scales. It is used
when price of a material is dependent on quantity purchased. For eg. For 500
pieces of material ABC, price is Rs. 10, however, if the order quantity is more than
500, price is Rs. 9. Scales are maintained in various master data like info record,
quota arrangement etc. from where scales can be pulled in a Purchase Order.
6. How to Flag a material for deletion?
A material must be flagged for deletion before deleting it using Archive and Delete
program. A deletion flag can be set at client level, plant level or storage location
level. Whatever level you flag a material for deletion, it is flagged for deletion at all
corresponding lower levels. Transaction MM06 is used to flag a material for
deletion.
7. Can a material be used after flagging it for deletion?
Yes, even after flagging a material for deletion, it can be used till it is actually
deleted. It will just trigger a warning message whenever the material is used. If
you want a material to be blocked for any use with immediate effect, you should
use a material status which is there in Basic View 1 for general level or in MRP 1
view for plant level blocking.
8. What is the function of OBYC?
OBYC is t-code used for configuring Automatic Account Posting.
Postings are made to G/L accounts automatically in the case of Inventory
Management and Invoice Verification relevant to Financial and Cost Accounting.
3 of 19 2/14/2017 7:28 AM
9. What is valuation grouping code related to OBYC?
Valuation grouping code is used to group the valuation area, In SAP, we can have
valuation level at Company code level or at plant level.
General practice is to use the valuation area at plant level, because valuation may
differ from one plant to another. The valuation grouping code makes it easier to
set automatic account determination. If we need to define common account
determination for several valuation areas, we can assign same valuation grouping
code to all those valuation areas. We can maintain the valuation group code in
OMWD for various valuation areas.
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10. What types of special stocks are available?
Various special stock types available in SAP are Consignment, Subcontracting,
pipeline, project, sales order stock, Returnable transport packaging, stock transfer,
and the third party.
11. What is the difference between Contracts and Scheduling
Agreements?
A contract is a pre-determined long term agreement to supply material or service
for a certain period of time. Specific delivery dates are not mentioned in the
contracts. Contracts can be of two types: Value Contract or Quantity contract
In Scheduling agreements, we can enter scheduling lines which gives details of
quantity that should be delivered on specific date. Plant must be entered in SA so
that materials can be delivered at plant. These are generally used for materials
whose requirements are predictable.
4 of 19 2/14/2017 7:28 AM
12. How can we create new transaction codes in SAP?
New transaction codes can be created using t-code SE93.
13. What are release procedures with and without classification?
Release Strategy with Classification:
PR can be released at header level as well as item level.
It can be used for both internal/external documents.
Can be set on any field available in structure CEBAN
Release Strategy without Classification:
PR can be released only at item level.
It can be used only for internal documents such as PR.
This strategy can be used only on 4 parameters which are Account assignment
category, Plant, Material Group and value of PR.
14. What is meant by batches?
A batch is a subset of the total stock of a material. It represents a homogeneous
unit which has unique specification. Normally, a batch is assigned to the quantity
of material produced during a given production run. A batch number uniqueness
can be assigned at any of the following 3 levels:
At client level: The same batch number can be assigned only once within the
entire client.
At material and plant combination level: Same batch number can be assigned to
material with different specification in each plant.
At material number level: A batch assigned to a material has the same
specification for all plants where material is extended. Batch number can be
reassigned with a different specification for each material.
5 of 19 2/14/2017 7:28 AM
15. How to handle free items in PO?
While creating PO, we can tick the item as free item in item overview section of
PO. The price will be zero for free marked item.
16. What information is maintained in Accounting View of material
master?
Accounting view is a plant specific view. Besides other information, it contains
important information such as valuation class and price control. Valuation class
helps in determining the relevant GL account used for account posting. It is also
used while configuring OBYC settings. Price control indicator determines if
material is maintained at Standard price(S) or Moving average price (V).
17. What is the use of Material types?
‘Material Types’ is used to group various materials based on some common
properties. It helps in maintain material master data for a particular material.
Using material types, we can control which all views are required for a material
type, which fields are required or optional, the material number range etc.
18. What is the use of ‘Partner Functions’ for a vendor?
Partner Function is used to define responsibilities and duties of other business
partners. Some partner functions are AZ(Alternate payee), CR(Carrier),
OA(Ordering address), GS(Goods supplier), PI(Invoice presented by) etc.
19. What is the use of ‘Material Status’?
Material Status helps in determining the usability of a material. It is a 2-digit code
which can be maintained as plant specific material status, cross-plant material
6 of 19 2/14/2017 7:28 AM
status, and distribution material status.
20. What is the ‘Price Control Indicator’?
‘Price Control Indicator’ is maintained in accounting view and is used to
determine how a material will be valuated. It can be Standard Price(S) or Moving
Average Price(V). If the indicator is set to S, all inventory postings are posted at
standard price maintained in material master. If there are variances in any
transaction due to different price, the variance is posted in price difference
account.
If price control indicator is set at V, goods received will be done at GR price. The
moving average price will be adjusted in material master using weighted average
formula. If goods movements or invoice receipts are posted using a price that
differs from the moving average price, the differences are posted to the stock
account.
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)
7 of 19 2/14/2017 7:28 AM
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:
8 of 19 2/14/2017 7:28 AM
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
9 of 19 2/14/2017 7:28 AM
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
10 of 19 2/14/2017 7:28 AM
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.
31. How to create Tax calculation procedure in MM?
Tax can be calculated for each line item of a PO separately based on the tax code.
Earlier TAXINJ, which is a formula based tax procedure, was used. Now,
TAXINN, which is a condition based tax procedure, is generally used. Tax
procedure contains the condition type and necessary specification for each
condition type. Account keys are assigned to condition types and these account
keys determine the G/L to which the tax amount is to be posted(OB40). These
account keys are maintained using t-code OBCN. (All these transactions are under
Financial Accounting Global Settings >> Tax on Sales/Purchases >> Basic
Settings). Tax codes are assigned to country codes and country are linked with tax
procedure. Thus, based on tax code, corresponding tax procedure is determined
and then calculation is done based on condition types in that tax procedure.
32. How is scrap material taken care of in sub-contracting?
Scrap can be maintained in BOM as operational scrap, component scrap,
By-Product or Co-Product. Common practice is to maintain scrap as by-product
and receive it back along with processed material.
33. How are the by-products taken care of in sub-contracting?
11 of 19 2/14/2017 7:28 AM
When you create BOM using CS01, we can maintain main components with + ve
quantities and By Products / Scraps with – ve quantities.
When you make Goods Receipt for Subcontracting Purchase Order with 101
movement type, components are automatically consumed with movement type
543 By Products / Scrap are updated as stock provided to vendor movement type
545. Now we can receive this scrap/ By product back in company’s inventory using
movement type 542 (reversal of 541) with t-code MB1B.
34. What are the commonly used movement types in Sub-Contracting
process?
541 – Issues of goods from warehouse to subcontractoru2019s stock
542 – Reversals of goods issues from warehouse to subcontractoru2019s stock
543 – Consumption from subcontracting stock (Automatic updating during GR)
544- Co-products receiving
545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
101 – Finished good/ Sub-Contracted good received after processing
35. What are accounting entries in standard sub-contracting process?
Accounting entries in standard sub-contracting process are as follows:
For finished goods received:
Debit stock account of assembly(FG) (BSX)
Credit Change in Stock (BSV)
For amount payable to vendor:
Debit SC/JW charges (FRL)
Credit GR/IR (WRX)
For material provided to vendor:
12 of 19 2/14/2017 7:28 AM
Debit Consumption Account of components (GBB-VBO)
Credit Stock account of components (BSX)
If there is a price difference and customization is done for accounting for price
difference in subcontracting, PRD transaction key comes in picture.
36. What are the possible values of procurement type in Material
Master?
Procurement type is maintained in MRP1 view of material master. This is a plant
specific view as MRP is done at plant level. Various procurement types in material
master are as follows:
In-house production (E)
External procurement (F)
No procurement
Both Procurement types (X)
37. What are the requirements for an ‘MRP Run’?
MRP should be activated in that plant
Master Data for MRP should be maintained (Planning Calendar etc.)
MRP data for material should be maintained
MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)
MRP2 view should be maintained (e.g.. Plan delivery time etc.)
MRP can be run using MD03
38. What is a MRP Area?
MRP Area is an organizational unit for which material requirement planning can
be carried out independently. MRP Areas are of three types:
Plant MRP Area
13 of 19 2/14/2017 7:28 AM
MRP Areas for Storage Locations
MRP Areas for Subcontractors
After defining MRP areas, MRP area is assigned to material in material master.
39. What is MRP list?
The system creates MRP lists during the planning run. The MRP list always
displays the future stock/requirements situation at the time of the last planning
run. The MRP list is stored in the system until it is either deleted manually or
replaced by a new list from a subsequent planning run.
40. What MRP procedures in Consumption Based Planning?
MRP procedures in CBP are as follows:
Reorder Point Procedure
Forecast based Planning
Time phased material planning
41. What is the difference between standard purchasing organization
and reference purchasing organization?
Purchasing organization is an organizational unit within Logistics. A standard
purchasing organization must be provided to one or more plants for which it is
directly responsible for procurements.
A purchasing organization is assigned to reference purchase organization to avail
conditions and centrally agreed contracts or release orders contained in the
assigned reference purchasing organization
42. Why do we use document types in SAP?
Document types are used to distinguish the business transactions to be posted. It
14 of 19 2/14/2017 7:28 AM
also helps in determining the account types to be posted and subsequent
transactions to complete the process. Document types are defined at client level.
43. Can we receive the goods before the scheduled delivery date in
scheduling agreement?
No, we cannot receive the goods before scheduled delivery date. GR can be posted
on or after the scheduled dates. Though, SAP has provided some OSS notes to
resolve this. (708973, 741385)
44. Can changes be made in PO once it is released?
This can be controlled by settings given in release indicator in PO release
procedure. If it is a significant change, it will re-trigger approval cycle.
45. What is the use of ‘Info Update’ indicator in purchasing
documents?
This indicator is used to decide if the info record is to be created/updated or not
based on this purchasing document.
46. What is a Material Ledger?
A material ledger retains all transactions that relate to the purchase and use of
materials for producing goods. Material ledger data is valuation and control data
for a material in a plant for a specific posting period. Material ledger contains data
for material movements that are relevant to the valuation of the material.
47. What is a ‘Return Delivery’?
Return Delivery is used if we want to return goods to a vendor for any reason such
as bad quality, or bad packaging etc. In normal cases, return delivery is done by
movement type 122. For creating return delivery, reason for return is a mandatory
15 of 19 2/14/2017 7:28 AM
field.
48. How to deactivate a vendor so that it cannot be used for further
transactions?
A vendor can be blocked at various levels as follows:
All Company Code
Single Company Code
All Purchasing Organization
Single Purchasing Organization
49. What is EAN?
An article can be carried in different units of measure. An European article
number (EAN) is created as a unique indicator for each of these units of measure.
The most important use of EANs within a company is to identify articles at the
point of sale (POS) using the barcode.
50. What are basic tables used for Material Master?
Some of the basic tables used in Material master are:
MAKT: Material Descriptions
MARA: General Material Data
MARD: Storage Location Data for Material
MVER: Material Consumption
MARC: Plant Data for Material
MVKE: Sales Data for Material
MAST: Material to BOM link
MARM: Unit of Measurement
16 of 19 2/14/2017 7:28 AM
MBEW: Material Valuation
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interview-questions/) » 50 REAL TIME SAP MM Interview Questions and

50 REAL TIME SAP MM INTERVIEW QUESTIONS AND

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for freshers beginners and experienced pdf free

download.these are most frequently asked sap mm

sap mm interview Questions and Answers

A PR is an internal document that sends notification to purchase department

when some material is service is required. PR can be generated by department

that needs any material or service.

A PO is a document sent to vendor by purchaser which is an official request of

mentioned material or services. POs are generally binding on purchaser, though it

depends on terms and conditions mentioned in PO.

2. What are different Info Records types?

Different Info Record types are Standard, Consignment, Sub-Contracting and

3. What is a consignment Stock?

stock is lying in inventory.

SAP MM Interview Questions and Answers

4. What is Sub-Contracting cycle in MM?

In Sub-contracting, we send raw material or input material to sub-contractor and

then receive the finished goods. A sub-contracting PO is created with item

automatically and takes care of consumed material.

5. What is meant by Scales in MM?

6. How to Flag a material for deletion?

corresponding lower levels. Transaction MM06 is used to flag a material for

7. Can a material be used after flagging it for deletion?

view for plant level blocking.

8. What is the function of OBYC?

OBYC is t-code used for configuring Automatic Account Posting.

Postings are made to G/L accounts automatically in the case of Inventory

Management and Invoice Verification relevant to Financial and Cost Accounting.

9. What is valuation grouping code related to OBYC?

valuation level at Company code level or at plant level.

set automatic account determination. If we need to define common account

OMWD for various valuation areas.

Books: Discover the Joy of Reading. Shop Now.

10. What types of special stocks are available?

Various special stock types available in SAP are Consignment, Subcontracting,

and the third party.

11. What is the difference between Contracts and Scheduling

A contract is a pre-determined long term agreement to supply material or service

contracts. Contracts can be of two types: Value Contract or Quantity contract

In Scheduling agreements, we can enter scheduling lines which gives details of

quantity that should be delivered on specific date. Plant must be entered in SA so

whose requirements are predictable.

12. How can we create new transaction codes in SAP?

New transaction codes can be created using t-code SE93.

13. What are release procedures with and without classification?

Release Strategy with Classification:

PR can be released at header level as well as item level.

It can be used for both internal/external documents.

Can be set on any field available in structure CEBAN

Release Strategy without Classification:

PR can be released only at item level.

It can be used only for internal documents such as PR.

category, Plant, Material Group and value of PR.

14. What is meant by batches?

A batch is a subset of the total stock of a material. It represents a homogeneous

of material produced during a given production run. A batch number uniqueness

can be assigned at any of the following 3 levels:

material with different specification in each plant.

At material number level: A batch assigned to a material has the same

reassigned with a different specification for each material.