SAP Financial Accounting (SAP FI) Certified Application Associate Practice Exam

Which currency types can be set in the customizing activity "define setting for ledgers and currency type"? There are 2 correct answers.

1. Group Currency

2. Local Currency

3. Transaction Currency

4. Material Ledger Currency

The correct answer is: Group Currency

In the customizing activity "define settings for ledgers and currency type," the primary focus is on the different types of currencies that can be utilized within the SAP Financial Accounting system. Group currency is a significant option because it is used to consolidate financial statements across multiple company codes or entities within a group. It allows for a unified view of financial performance across different geographical and operational dimensions, ensuring that all entities can report in a standardized way. This is particularly useful for multinational corporations that operate in various local currencies but need to consolidate financials into one universally accepted currency for reporting purposes. Local currency is another critical currency type available in this context. Each company code within SAP FI generally has its own local currency, which is based on the country of the company’s location. This means that all transactions are recorded in this currency, providing accuracy and compliance with local regulations. The local currency is essential for day-to-day financial operations and reporting at the company code level. Transaction currency and material ledger currency are also valid currency types within SAP; however, they typically relate to more specific transactional contexts or inventory valuation mechanisms rather than being options set at the ledger level. Transaction currency pertains to the currency in which a specific transaction is conducted and may vary from one transaction to another,