BUS331 Exam 2 Study Guide: Financial Accounting, Controlling, and Production Planning

Vocabulary flashcards covering key definitions, organizational units, master data, and operational concepts for Financial Accounting (FI), Controlling (CO), and Production Planning (PP).

Company code

An independent legal accounting unit for which financial statements can be prepared.

General Ledger (G/L)

The main accounting record where financial postings ultimately update G/L accounts.

Chart of accounts

An organized list of G/L accounts available to a company.

Accounts Receivable (A/R)

A subledger integrated with sales that tracks customer amounts owed to the company.

Accounts Payable (A/P)

A subledger integrated with purchasing that tracks amounts owed to vendors.

Subledger

An accounting ledger that maintains individual customer or vendor transaction details.

Reconciliation account

A G/L account updated automatically from customer or vendor subledger postings; normally does not permit direct manual posting.

Financial statement version

A structure that organizes G/L accounts into the hierarchy of a balance sheet or P&L statement.

Audit trail / document principle

The principle stating that each relevant transaction creates an identifiable SAP document that helps users trace posted values back to source transactions.

Balance sheet

A financial statement focusing on assets, liabilities, and equity at a point in time, governed by the formula $\text{Assets} = \text{Liabilities} + \text{Equity}$.

Income statement (P&L)

A financial statement showing revenues, costs/expenses, and profit or loss for a period.

Assets (debit/credit rule)

Accounts that increase with debits and decrease with credits.

Liabilities (debit/credit rule)

Accounts that increase with credits and decrease with debits.

Journal entry

An accounting record consisting of header information plus at least two line items (debit and credit), where total debits must equal total credits.

Controlling area

An organizational unit for internal cost and revenue accounting, potentially spanning across one or more company codes.

Cost center

An ongoing area of cost responsibility, such as IT or Human Resources.

Profit center

An organizational area used to evaluate revenue, associated costs, and overall profitability.

Internal order

A CO cost object often used for a temporary activity or project (such as a marketing campaign) where costs are collected and typically settled.

Primary cost element

A cost element that supports FI-to-CO integration and identifies the nature of a cost originally recorded in FI.

Secondary cost element

A cost element used for internal CO cost movements and allocations, such as assessments.

Statistical key figure (SKF)

A nonfinancial quantity (such as floor area, headcount, or number of computers) used as a basis for cost allocation.

Distribution (cost allocation)

A periodic cost allocation method that transfers costs while retaining the original primary cost elements at the receivers.

Assessment (cost allocation)

A periodic cost allocation method that collects and passes costs to receivers using a secondary cost element, without carrying over the original detailed cost identities.

Forecasting

The process of using historical demand patterns (trend, seasonality, etc.) to estimate future demand.

Sales & Operations Planning (SOP)

A strategic planning step that coordinates forecasted sales with aggregate production and resources.

Product group

A grouping of materials with similar planning characteristics used for aggregate planning.

Demand Management

The production planning step that turns higher-level plans into material- and plant-level demand, including Planned Independent Requirements (PIRs).

Planned Independent Requirement (PIR)

Time-phased anticipated demand for materials, often derived from sales forecasts.

Bill of Materials (BOM)

A structured list specifying the components and quantities needed to produce an assembly or finished product.

Routing

The defined sequence of operations and work centers required to manufacture a product.

Work center

A resource or location where production work is performed, such as machines, production lines, or employee groups.

Material Requirements Planning (MRP)

A detailed planning process that checks supply against requirements, plans material quantities and timing, and creates order proposals.

Safety stock

A level of reserved inventory maintained to help cover demand uncertainty or supply disruptions.

Independent demand

Demand not calculated from the demand for another material; typically applies to finished goods and can be forecast-based or customer-driven.

Dependent demand

Demand derived directly from the requirements of a higher-level assembly; commonly applies to raw materials and components and is calculated during BOM explosion.

BOM explosion

The MRP step that breaks down product structures to identify all required lower-level components and quantities.

Net requirements calculation

The MRP activity that calculates gross requirements against existing inventory and scheduled supply.

Lot-size calculation

The MRP activity that determines the appropriate procurement or production batch quantities.

Scheduling (MRP)

The MRP step that determines the exact timing and dates when materials and orders are needed.

Planned order

An internal proposal generated by MRP for in-house production before it is officially converted into a production order.

Purchase requisition

An internal procurement proposal generated by MRP (or users) to initiate purchasing for externally procured items.

Aggregated Value

Data is summarized or rolled up into a total amount

Asset

what the company owns

Business partner

created as a person, orgnaization or a group in which we have some business interest

Company Code

independent legal accounting unit

Client

highest level of the organization