SAP Financial Accounting (SAP FI) Practice Exam

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Upon executing year-end closing, what is the outcome for the previous fiscal year?

It can still be modified
It is permanently archived
It is considered closed
It is available for reporting

The correct answer is: It is considered closed

When executing year-end closing in SAP Financial Accounting, the key outcome for the previous fiscal year is that it is considered closed. This means that all financial transactions for that year are finalized, and no further entries or modifications can be made in relation to it. The closing process ensures that the financial statements reflect a complete and accurate picture of the organization's finances for that specific period. While reporting on the previous fiscal year may still be possible, the primary point of year-end closing is to signify that the period has ended officially, which serves various purposes such as preparing for audits, compiling annual reports, and setting the stage for the new fiscal year. Therefore, in this context, once year-end closing is executed, the previous fiscal year is no longer open for changes, which substantiates the classification of it being considered "closed."