C_TS4FI_2023 · Question #77
Your company structures its Profit & Loss (P&L) statement according to cost-of-sales accounting. Which organizational unit do you need to define?
The correct answer is B. Functional area. Functional area is required because cost-of-sales accounting organizes P&L expenses by their business function (e.g., manufacturing, sales, administration, R&D) rather than by expense type - and SAP needs functional areas defined to classify and report costs this way. Business…
Question
Your company structures its Profit & Loss (P&L) statement according to cost-of-sales accounting. Which organizational unit do you need to define?
Options
- ABusiness area
- BFunctional area
- CProfit center
- DSegment
How the community answered
(36 responses)- A3% (1)
- B89% (32)
- C6% (2)
- D3% (1)
Explanation
Functional area is required because cost-of-sales accounting organizes P&L expenses by their business function (e.g., manufacturing, sales, administration, R&D) rather than by expense type - and SAP needs functional areas defined to classify and report costs this way. Business area (A) is used for cross-company-code internal reporting of distinct business lines, unrelated to P&L structure method. Profit center (C) supports internal management profitability analysis but doesn't drive the external P&L accounting approach. Segment (D) is tied to IFRS 8 segment reporting and derives from profit centers, not from the cost-of-sales vs. period accounting choice.
Memory tip: Link cost-of-sales to function - "What did we spend it for?" (sales function, admin function, production function). The word "functional" is literally embedded in the answer: Functional Area.
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