ISYS 4213 Exam 1

Revenue

- Sales - Other

Liabilities:

- Short term: payables - Long term: loans

Processes

- recording of value flows ($$) as a result of other processes and transactions

Equity:

- retained earnings - shareholder's equity

Income Statement:

A financial statement showing the revenue and expenses for a fiscal period.

Asset Accounting

Acquisition, depreciation, retirement

Debits

Assets & Expenses + Revenue & Liabilities -

Product Line

Client Company Code Company Code GBI US GBI Germany Business Area Business Area Bicycles Bicycles Business Area Business Area Accessories Accessories

Geographic Region

Client Company Code Company Code GBI US GBI Germany Business Area Business Area GBI North GBI Europe America

Borrow Money:

Debit: Bank Account/Credit Credit: Notes Payable

General Ledger Accounting

G/L postings for rent, utilities, wages, etc.

Income Statement Equation

Revenue - Expenses = Net Income

Invoice

a request for payment for materials shipped

Packing List

accompanies the shipment sent by the vendor

Material Group

includes materials with similar characteristics

Trading Goods

like raw materials, are purchased from a vendor and are resold to customers

CO Documents

record the financial impact of process steps internally

Accounts

represent an organization's income, expenses, assets, and liabilities

Application Layer

what the application allows you to do

Data Layer

where the application stores your work

Procurement Process

"buy"; all the activities involved in buying or acquiring the materials used by the organization

Lifecycle and Data Management Process

"design"; supports the design and development of products from the initial product idea stage through discontinuation of the product

Production Process

"make"; involves the actual creation of the products within the organization; concerned with acquiring materials intentionally vs. procurement, which is externally

Human Capital Management Process

"people"; focus on the people within the organization and include functions such as recruiting, hiring, training, and benefits management

Material Planning Process

"plan"; uses historical data and sales forecasts to plan which materials will be procured and produced and in what quantities

Project Management Process

"projects"; used to plan and execute large projects, such as the construction of a new factory or the production of complex products such as airplanes

Fulfillment Process

"sell"; consists of all the steps involved in selling and delivering the products to the organization's customers

Asset Management and Customer Services Process

"service"; are used to maintain internal assets such as machinery and to deliver after - sales customer service such as repairs

Inventory and Warehouse Management Process

"store"; used to store and track materials

Posting Keys

- Account type for posting the document item - Whether the document item is posted as a debit or a credit - Field status of the additional data

Expenses

- COGS - Payroll - Utilities - Taxes

What goes into Stockholder's Equity?

- Capital Stock - Retained Earnings

Asset Retirement

- Concerned with the disposal or retirement of an asset after its useful life - Retirement may be: + Revenue generating (sold) + Non-revenue generating (scrapped)

Group COA

- Contains group accounts that multiple companies within an enterprise use to consolidate their financial reporting

What goes into Retained Earnings?

- Dividends - Revenues - Expenses

Company Code

- Financial statements are generally prepared at the company code level.

General Ledger Acccounts

- G/L accounts are master data - recording of all accounting-relevant business transactions occurs in a G/L account - data in the general ledger accounts are segmented by organizational level: + Chart of account segment + Company code segment + General ledger = COA data Company code data - balance sheet accounts, income statement accounts, reconciliation accounts (Accounts Receivable, accounts payable, assets)

Business Area

- Internal division of an enterprise that are used to define areas of responsibility or to meet the external reporting requirements of an enterprise segment. - (generate financial statements). - A business area is normally based on either the enterprise's product line or its geographic division.

Standard toolbar

- Located above the ribbon; provides convenient, one-click access to frequently used commands - Icons in the standard toolbar are available on all screens - Icons that you cannot use in the current application are grayed out. - Features 5 important icons: (check mark) = Corresponds to the Enter key and confirms your entries (floppy disk) = Saves your entries on the current screen/transaction (green circle w/ back arrows) = Corresponds to the Escape key and takes you to the previous screen (orange circle w/ up arrows) = Exits the current transactions (red circle w/ X) = Cancels the transaction (in case of system problems)

Cost Center

- Master data in controlling - Location where costs are incurred - Department, individuals, special projects - Cost bucket used to accumulate costs - Accumulated costs are then "charged" to other cost centers - CO process

Client

- SAP systems are client systems - With the client concept several separate companies can be managed in one system at the same time - Clients are the highest organizational level in the system - Each client can represent a group of companies, a company, or a firm (regardless of the size of the organization) - Different clients are identified by their client numbers - A client is therefore a self-contained unit with separate master records and its own set of tables

Business scenario

- a group of related business transactions belonging to a particular organizational area that fulfill a related purpose in the company - for example preparation of the balance sheet, personnel administration, purchasing, service, or production.

Transaction code

- a transaction code is assigned to each transaction (not each screen) in the SAP system - a transaction code has more hints on displaying and finding these codes and other navigation options. - the command field in which you enter transaction codes can be found in the top-left corner. Click the small arrow symbol to display/hide it. - the quickest way to run a transaction in the SAP system is to enter the transaction code - every transaction has a code, which generally has four characters - Extras --> Settings --> Display Technical Names - You may combine the /n and /o with the transaction codes

Posting Keys

- a two-digit code that determines how a line item is posted

Transaction

- an application program that executes business transactions in the system, such as create sales order or post incoming payments.

Chart of Accounts (COA)

- an ordered listing of accounts that comprise a company's general ledger

Organizational Levels

- associated with financial accounting are client, company code, and business area.

Current Assets:

- cash/bank - receivables - inventory - prepaid expenses

Operative COA

- contains the operational accounts that are used to record the financial impact of the organization's day-to-day transactions - the accounts in the operative COA are mapped to alternate accounts

Master data

- data stored in the system over a long period of time for business processes (core data) - represent entities associated with various processes - remember that the goal of financial accounting is to record the financial impact of business activities - chart of accounts, general ledger accounts, and subsidiary ledger accounts are all types of master data. - examples are customer, material, and supplier.

/nMM03

- exits the current session and calls transaction Display Material

/n /i /o

- exits the current transaction - closes the current session - opens a new session

Control Parameters

- influence what happens to the session when you call a transaction - /n /i /o

Fixed (long-term):

- land - building - automobiles

/oMM03

- opens a new session and calls transaction Display Material

Organizational Unit

- organizational grouping of areas of the company that belong together for legal or other business reasons. - examples of organizational units are company, sales office, and plant.

Client

- the highest organizational level in the system; it represents an enterprise that consists of multiple companies - therefore, even the largest enterprise can have only a single client - the various companies within an enterprise are represented by a company code.

Transaction Data

- transaction-specific data that is short-lived and assigned to certain master data, for example a customer. - transaction data created when executing transactions is stored as documents. - examples of documents are sales order, purchase order, material document, and posting document.

Country-specific (COA)

- which are used for special country-specific reporting requirements.

Three types of Chart Accounts

1. Operative COA 2. Country-specific COA 3. Group COA

Credits

Assets & Expenses - Revenue & Liabilities +

Accounting Equation

Assets = Liabilities + Owner's Equity

Accounts Payable Payment

Debit: Accounts Payable Credit: Cash

Accounts Receivable Accounting Credit Sale

Debit: Accounts Receivable Credit: Sales Revenue Debit: Cost of Goods Sold Credit: Merchandise Inventory

Investment in a Company

Debit: Bank account Credit: Common stock

Accounts Receivable Accounting- Payment from customer

Debit: Cash Credit: Accounts Receivable

Asset Depreciation

Debit: Depreciation Expense Credit: Accumulated Depreciation

Payment of Debt

Debit: Notes Payable Credit: Bank account

Purchase of Supplies w/ Cash

Debit: Supplies expense Credit: Bank account

Payments: Rent, Utilities, Wages, etc.

Debit: Wages Expense Credit: Cash

Management Accounting Process

Focus: Internal Purpose: managing the firm in regard to costs and revenues Content: Defined by management needs

Financial Accounting Process

Focus: external Purpose: - legal reporting (financial systems) - tracking financial impact of processes - communicate with investors Content: Defined by laws and regulations - financial accounting is the "heart" of the system because it must accurately reflect the financial status of the firm at any given point in time.

Accounts Receivable Accounting

Part of the fulfillment process

Accounts Payable Accounting

Part of the procurement process

Business Process

a set of tasks or activities that produce desired outcomes; every process is triggered by some event; specific steps in the process are completed in different functional areas

Flexible Analysis

allows users to define the content and format of the analysis; combine available characteristics and key figures as needed to create new key figures

SAP NetWeaver

an application platform that contains the sort of capabilities needed to integrate SAP Systems with non-SAP Systems; SAP Business suite runs on it

Plant

an organizational element that performs multiple functions and is relevant to several processes; factory, warehouse, regional DC, service enter, office; a company code can contain multiple plants, but a plant can only belong to one company code

Accounts Payable

associated with the procurement process; used to track money that is owed to vendors - credit side

Information Structures

capture and store specified transaction data in an aggregated and summarized form that enables users to analyze data as needed

Application Suite

collection of the inter-company systems and the underlying intra-company ERP System

Sales Order

communicates data related to the order to other parts of the organization and tracks the progress of the order

Purchase Order

communicates the company's order to its vendor

Asset Accounting

concerned with tracking financial data related to assets

Supplier Relationship Management

connect a company's ERP system to those of its suppliers

Customer Relationship Management

connects a company's ERP systems to those of its customers

Finished Goods

created by the production process from other materials, such as raw materials and semifinished goods

Period Definition

data collected and aggregated for specific time periods ; quantitative aggregation of data

Selection Parameters

determine which data will be included for the selected documents

Online Lists

display lists of master data and documents that are generated during the execution of a process

Transaction Documents

documents created or utilized as the processes is being executed; ex. Purchase orders, packing lists, and invoices

Reporting

general term used to describe the ways that users can view and analyze both transaction and historical data to help them make decisions and complete their tasks; simple lists and analytics

Service Oriented Architecture

has technical capabilities that allow systems to connect with one another through standardized interfaces called Web Services

Product Lifecycle Management

helps companies administer the process of research, design, and product management

Client

highest organizational level in SAP ERP; represents an enterprise consisting of many companies or subsidiaries

Presentation Layer

how you interact with the software application (using menus, typing, and selecting)

Picking Due List

identifies all customer orders that must be prepared for delivery so that they can be shipped in a timely manner

Work Lists

identify tasks that are scheduled to be completed in a process

Line Items

lists each line item and data specific to line items

Cross-Functional

no single group or function is responsible for their execution

Architecture

of an E.S.; the technical structure of the software, the ways that users interact with the software, and the ways the software is physically managed on computer hardware

Functional Structure

organizations are divided into functions, or departments, each of which is responsible for a set of closely related activities; most common organizational structure; ex. accounting department sends and receives payments, warehouse receives and ships materials

Key Figures

performance measures, like quantities and counts, that are associated with the characteristics ; number of orders, quantities, order value; maintain only statistical summaries, like the total number of orders placed by a customer; aggregated transaction data --> qualitative

Settlement

periodically carried out to assign costs and revenues to appropriate parties

Standard Information Structures

predefined in the SAP ERP system; collect the data needed to generate the most commonly used reports

Online Transaction Processing

primary function is to execute process steps quickly and efficiently; designed to capture and store detailed transaction data; not used to generate sophisticated reports because it lacks the computing power to parse through and analyze the huge amounts of data; used only to generate simple lists and reports

General Ledger

process that records the impacts of various process steps on a company's financial position in the form of accounts

Standard Analysis

provides pre-defined analytics for data in standard information structures

Raw Materials

purchased from an external source and used in the production process

Material Documents

record materials movements; i.e. when materials are received from a vendor

FI Documents

record the financial impact of process steps externally; when a company receives payment from a customer

Transaction Data

reflect the consequences of executing process steps, or transactions; ex. Dates, quantities, prices, and payment and delivery terms A combination of organizational, master, and situational data

Company Code

represents a separate legal entity, the central organizational element in financial accounting; a client can have multiple company codes, but a company code must only belong to one client

Client Server Architecture

separates the three layers into three separate systems; presentation layer, application layer, data layer

Application Platforms

serve as a type of "enterprise operating system" for a company's E.S. landscape by allowing all various systems to communicate seamlessly with one another

Organizational Data

set to represent the structure of an enterprise; ex. Companies, subsidiaries, factories, warehouses, sales regions, etc.

Logistics Information Systems

support all of the logistics processes; acquiring, storing, creating, and distributing materials; purchasing IS, sales IS, inventory control IS, quality management IS, plant maintenance IS, and shop floor (production floor)

Financial Information Systems

supports reporting related to the general ledger, accounts receivable, and accounts payable

Enterprise Resource Planning

systems that are the world's largest and most complex; focus primarily on intra-company processes, or the operations that are performed within an organization, and they integrate functional and cross-functional business processes

Supply Chain Management

systems that connect a company to other companies that supply the materials it needs to make its products

Enterprise Systems

systems that support end-to-end processes and are essential to the efficient and effective execution and management of business processes

Project

temporary in nature and typically associated with large, complex activities

Scalability

the ability of hardware and software to support a greater number of users easily over time

Characteristics

the objects for which data are collected; typically organizational data and master data; an information structure can include up to nine characteristics

Business Intelligence

the overall capabilities a company uses to collect and analyze data from a variety of sources to better understand its operations and make better managerial decisions; SAP Business Warehouse

Header

top part of the document that includes data such as purchase order number, date, and payment terms that are relevant to all line items

Semifinished Goods

typically produced in-house from other materials and are used in production of a finished good

Online Analytic Processing

use information structures to provide analytic capabilities; detailed data analysis

Human Resources Information Systems

used to retrieve information about different HR components such as personnel, positions, and jobs ; Information Systems are part of the OLAP component of SAP ERP

Accounts Receivable

used to track money owed by customers - debit side

User Defined Information Structures

users define their own structures to meet specific reporting requirements

Silo Effect

when workers complete their tasks in their functional silos without regard to the consequences for the other components in the process