SAP Controlling Certification

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Management Accounting (CO) with SAP ERP 6.0 Application Associate Certification Exam Questions

These questions are similar to the ones asked in the actual Test.

How should I know?  I know, because although I got my FI/CO Certification five years back, I have re certified with the latest version of the Associate Certification test.

Before you start here are some Key features of the CO Associate Certification Exam

– The exam is Computer based and you have three Hours to answer 80 Questions.

– The Questions are (mostly) multiple choice type and there is NO penalty for an incorrect answer.

– Some of the Questions have more than one correct answers. You must get ALL the options correct for you to be awarded points.

– The Official Pass percentage is 65% (But this can vary). You will be told the exact passing percentage before your begin your test.

Sample Questions

Q1. Cost elements classify an organization’s valuated consumption of production factors within a controlling area. A cost element corresponds to a cost-relevant item in the chart of accounts. Which of the following are types of cost elements?
(More than one answer is correct)

A.        Primary cost elements
B.        Revenue cost elements
C.        Secondary cost elements
D.        Personnel cost elements

A, B, C

Cost elements in Controlling (CO) are closely related to the general ledger accounts used in Financial Accounting (FI). This is because the SAP R/3 System is structured as an Integrated Accounting System:

Cost elements document which costs (differentiated by category) are incurred within a settlement period, and in which amount. They provide information concerning the value flow and the value consumption within the organization. Cost Element Accounting and Cost Center Accounting/Internal Orders are closely linked in the R/3 System. Each posting to an account that is also a cost element, is assigned either to a cost center or order. This ensures that at period-end the data is subdivided by cost elements and cost centers/internal orders for analysis purposes.

Primary Cost/Revenue Elements
A primary cost or revenue element is a cost or revenue-relevant item in the chart of accounts, for which a corresponding general ledger (G/L) account exists in Financial Accounting (FI). You can only create the cost or revenue element if you have first defined it as a G/L account in the chart of accounts and created it as an account in Financial Accounting. The R/3 System checks whether a corresponding account exists in Financial Accounting. Examples of primary cost elements include:
• Material costs
• Personnel costs
• Energy costs

Secondary Cost Elements
Secondary cost elements can only be created and administrated in cost accounting (CO). They portray internal value flows, such as those found in internal activity allocation, overhead calculations and settlement transactions.

When you create a secondary cost element, the R/3 System checks whether a corresponding account already exists in Financial Accounting. If one exists, you can not create the secondary cost element in cost accounting.

Examples of secondary cost elements include:
• Assessment cost elements
• Cost elements for Internal Activity Allocation
• Cost elements for Order Settlement

There are no Personnel cost elements in CO

Q2. With reference to the controlling module (CO), which of the following statements are true?
(More than one answer is correct)

A. Controlling provides information for management decision-making
B. Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system.
C. One of the main task of Controlling is planning.
D. Controlling can be implemented completely independently of FI

A, B, C

Controlling provides you with information for management decision-making. It facilitates coordination, monitoring and optimization of all processes in an organization. This involves recording both the consumption of production factors and the services provided by an organization.

As well as documenting actual events, the main task of controlling is planning. You can determine variances by comparing actual data with plan data. These variance calculations enable you to control business flows.

Income statements such as, contribution margin accounting, are used to control the cost efficiency of individual areas of an organization, as well as the entire organization.

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the two components takes place on a regular basis.

Therefore, all data relevant to cost flows automatically to Controlling from Financial Accounting. At the same time, the system assigns the costs and revenues to different CO account assignment objects, such as cost centers, business processes, projects or orders. The relevant accounts in Financial Accounting are managed in Controlling as cost elements or revenue elements. This enables you to compare and reconcile the values from Controlling and Financial Accounting.

Although Controlling can be implemented independently of FI, there is some basic configuration that needs to be done in FI.

(Note: Watch out for the word ‘completely’ in the answer choice!)

Q 3. Overhead Cost Controlling component enables you to plan, allocate, control, and monitor overhead costs. Which of the following fall under Overhead Cost Controlling?
(More than one answer is correct)

A. Cost Element Accounting
B. Cost Center Accounting
C. Internal Orders
D. Activity Based Costing
E. Plant based Costing

A, B, C, D

The key areas of Overhead Cost Controlling are:

Cost Element Accounting

Cost and Revenue Element Accounting details which costs and revenues have been incurred. Accrual is calculated here for valuation differences and additional costs. Cost Accounting and Financial Accounting are also reconciled in Cost Element Accounting. This means that the tasks of Cost and Revenue Element Accounting stretch beyond the bounds of Overhead Cost Controlling.

Cost Center Accounting

Cost Center Accounting determines where costs are incurred in the organization. To achieve this aim, costs are assigned to the subareas of the organization where they have the most influence.

By creating and assigning cost elements to cost centers, you not only make cost controlling possible, but also provide data for other application components in Controlling, such as Cost Object Controlling. You can also use a variety of allocation methods for allocating the collected costs of the given cost center/s to other controlling objects.

Internal orders

Overhead Orders are internal orders used either to monitor overhead costs for a limited period, or overhead incurred by executing a job, or for the long-term monitoring of specific parts of the overhead. Independently of the cost center structure, internal orders collect the plan and actual costs incurred, enabling you to control the costs continuously. You can also use internal orders to control a cost center in more detail. You can assign budgets to jobs. These budgets are then monitored automatically by the SAP system to ensure that they are kept to.

Activity-Based Costing

In contrast to the responsibility and function-oriented basis of Cost Center Accounting, Activity-Based Costing provides a transaction-based and cross-functional approach for activity output in which several cost centers are involved. The emphasis is not on cost optimization in individual departments, but the entire organization.

Q 4. You can use different currencies in the Controlling component (CO). Which of the following currencies are valid in Controlling?
(More than one answer is correct)

A. Controlling area currency
B. Object currency
C. Exchange rate Currency

A, B

The following currencies are valid in Controlling:

• Controlling area currency
The system uses this currency for cost accounting. This currency is set up when you create the controlling area. It is based on the assignment control indicator and the currency type.

• Object currency
Each object in Controlling, such as cost center or internal order, may use a separate currency specified in its master data. When you create an object in CO, the SAP system defaults the currency of the company code to which the object is assigned as the object currency. You can specify a different object currency only if the controlling area currency is the same as the company code currency. There is an object currency for the sender as well as one for the receiver.

• Transaction currency
Documents in Controlling are posted in the transaction currency. The transaction currency can differ from the controlling area currency and the object currency. The system automatically converts the values to the controlling area currency at the exchange rate specified.

The system always translates actual data with the average rate (exchange rate type M).

You store the exchange rate type for each currency. You can specify a different exchange rate type for planning data in the version.

All three currencies are saved in the totals records and the line items. This enables you to use the different currencies for evaluations in the information system. This is only possible if you specified that all currencies should be updated for the given controlling area.

Q 5. Controlling makes use of two different types of controlling objects, True Controlling Objects & Statistical Controlling Objects. Which of the following are Statistical Controlling Objects?
(More than one answer is correct)

A.        Cost  Centers (for account assignment of revenues)
B.        Profit Centers
C.        Projects
D.        Statistical internal Orders

A, B, D

For postings in external accounting that use a cost element as the account, you need to use a special account assignment logic. This enables the system to ensure that data is reconcilable with all the relevant application components. These rules for the account assignment logic always apply for postings in internal accounting (Controlling).

Account assignment distinguishes between true and statistical Controlling objects.

True Controlling Objects
•        Cost centers (for account assignment of costs)
•        Orders (true)
•        Projects (true)
•        Networks
•        Make-to-order sales orders
•        Cost objects
•        Profitability segments
•        Real Estate Objects
•        Business Processes
You can use true Controlling objects as senders or receivers.

Statistical Controlling Objects
•        Cost centers (for account assignment of revenues)
•        Cost centers, if a true account assignment object already exists
•        Statistical Internal Orders
•        Statistical projects
•        Profit centers

You can indicate internal orders and projects in each master record as statistical. You can also specify Statistical Controlling objects as account assignment objects in addition to true Controlling objects. You cannot allocate costs on statistical Controlling objects to other objects. Account assignments are for information purposes only.

Q 6. While working with account assignments, you need to follow certain rules. Which of the following rules need to be followed?
(More than one answer is correct)

A.  You need to specify a true Controlling object in each posting item.
B.  In each posting item, you can specify up to four statistical Controlling Objects in addition to the true Controlling Object.
C.  The same Controlling Object can be specified as True and statistical in the same posting item.
D.  You can make true revenue posting to a real estate object.

A, D

The following rules need to be observed for account assignments:

•        You need to specify a true Controlling object in each posting item. You cannot assign to a objects such as a statistical project without specifying a true Controlling object.

•        In each posting item, you can specify up to three statistical Controlling objects in addition to the true Controlling object. For example, you can post costs to a cost center and also to a statistical order and a statistical project.

•        You cannot specify the same Controlling object as being true and statistical in the same posting item. You cannot post to an order and a statistical order in the same posting item.

•        You can only make postings to profit centers in addition to true Controlling objects. This means that costs and revenues are only posted statistically to profit centers. Profit centers are derived from true Controlling objects. When you enter a profit center, it must match the profit center that is assigned from the Controlling object.

•        You need to create P&L accounts as a cost element if you wish to post to them and a Controlling object.

•        You can make true revenue postings to the following:
–    A profitability segment
–    A make-to-order sales order
–    A project with revenues
–    An order with revenues
–    A real estate object

•        You can only post revenues statistically to cost centers and profit centers. If you specify a cost center or a profit center for a revenue posting, the system treats the object as a statistical Controlling object. This means that you must also specify a true Controlling object to which the revenues are posted. The system can automatically derive such an object if account-based profitability analysis is not active. The system logs the posting under the object type reconciliation object. The reconciliation object is a summarized profitability segment with the characteristics company code, business area, plant, and profit center. The system also updates a reconciliation object by cost element for postings to a profitability segment with costing-based profitability analysis. The system does not post to reconciliation objects if you specify an additional Controlling object on which true revenue postings can be made.

Q 7. The profit center assignment is also passed on from the sales order through the supply chain: sales order  -> delivery note –> goods issue –> billing document. This means that the when a goods issue is posted, the corresponding revenue value for the goods is also passed on to the profit center of the sales order.

A. True
B. False


It is necessary to assign SD sales orders to profit centers in order to reflect receivables, sales revenues, and sales deductions on profit centers.

The profit center assignment is also passed on from the sales order through the supply chain: sales order -> delivery note-> goods issue-> billing document. This means that the when a goods issue is posted, the corresponding revenue value for the goods is also passed on to the profit center of the sales order.

Sales orders are divided into header data and item data. Each order item is assigned separately to a profit center, since this is the finer level of detail.

The system proposes the profit center of the material in the supplying plant as the default profit center. Consequently, you usually do not need to enter a profit center manually. This default supports both a product oriented and geographical division of your organization into profit centers.

You might want to divide your company into profit centers according to a sales-oriented structure. In that case, you can define substitution rules in Customizing of classic Profit Center Accounting or new General Ledger Accounting. The system uses these substitution rules to determine the profit center from sales orders. You also need to activate these substitutions for each individual controlling area.

Q 8. Document splitting allows you to display documents using a differentiated representation. In the representation, line items are split according to selected dimensions. In this way, you can draw up complete financial statements for the selected dimensions at any time. Which of the following functions are part of document splitting?
(More than one answer is correct)

A. Active document splitting: Splitting a document
B. Passive document splitting: Clearing and similar processes
C. Statistical document splitting: Reporting processes

A, C

The following functions are part of document splitting:
•        Passive document splitting: Clearing and similar processes

The system creates a reference to existing account assignments. These account assignments are used as the basis for line items to be split. The system applies all account assignments that you have defined as document splitting characteristics in Customizing.

If you have set the Zero Balance Setting indicator for the document splitting characteristic, the system then creates any necessary clearing lines to ensure that the characteristics produce a balance of zero in each document.

•        Active document splitting: Splitting a document
In this subfunction, the line items are split according to the settings in Customizing (the classification of the document and the splitting rule assigned to the document).

•        Subsequent processes:
¡        Clearing, such as realized exchange rate differences
For example, you can also use the CO account assignments relating to the costs to post the realized exchange rate differences occurring in this subsequent process.
¡        Closing operations, such as foreign currency valuation. You can perform closing operations according to the document splitting characteristics defined.

Q 9. You are not able to create preliminary cost estimate for the product cost collector. What could be the reason? Please choose the correct answer.
(Only one answer is correct)

A.  You are using controlling level “production version”
B.  You are using controlling level “BOM/Routing”
C.  You are using controlling level “production Plant/planning plant”
D.  None of the above


The production process has characteristics whose values are unique to that production process. We specify which characteristics are updated for the production process by means of the controlling level. There is separate controlling level for each plant material and process category. The relevant process category in cost object controlling is production. When we create product cost collector, we decide on which level the costs should be collected on the product cost collector. We can choose from production version, any BOM/Routing combination, material per plant.

When we choose the controlling level production version, the product cost collector is created for the characteristics material, production plant, planning plant and production version and it is always used in repetitive manufacturing. When we choose the controlling level BOM/Routing, the product cost collector is created for the characteristics material, production plant, planning plant routing and BOM and it should only be used if the material doesn’t any production versions. When we choose the controlling level production plant/planning plant, the product cost collector is created for the characteristics material, production plant and planning plant and it is not possible to create a preliminary cost estimate for a product cost collector.

Q 10.  There are several master data in CO-PA. This includes Characteristic derivation & valuation. You have been asked to explain the key points of valuation. What are they? Note: There are more than one correct answers to this question.

A. Valuation strategies must be assigned to record types, point of valuation and plan versions when applicable to be activated
B. It is mandatory.
C. It supplements or overwrites certain automatically mapped values.
D. It can contain CO-PA costing sheets, sales order management pricing procedures, product cost calls, and user exit calls, in a sequence that can be customized.

A, D

The key points of valuation are:
•        Valuation supplements the data being passed directly from transactions into controlling profitability analysis with calculated, retrieved, or otherwise accessed values.
•        A Valuation strategy can contain CO-PA costing sheets, sales order management pricing procedures (in planning), product cost calls, and user exit calls, in a sequence that can be customized.
•        Valuation strategy must be assigned to record types, points of valuation, and plan versions when applicable to be activated.
•        Using valuation is optional. It is merely a tool that can be used in an attempt to get the most complete and useful information out of CO-PA.


More Questions? Have a look at:

SAP Management Accounting (CO) with –Application Associate Certification Exam Questions with Answers & Explanations