Explain about these questions:
 
1. What is client ?
2. What is company ? 
3. What is company code ?
4. Why we are assigning company code to company ?
5. What is business area ?
6. What is chart of accounts ?
7. Why we are assigning company code to chart of accounts?
8. What is account groups ?
9. What is retained earnings account ?

By:- Krishna

Client is highest hierarchy of the organization without client you cannot able to do any thing... Like 755 or 656... 
 
Company is the smallest organizational unit for which individual financial statements are created according to the relevant legal requirements.  A Company can include one or more Company Codes.  The definition of the Company organizational unit is optional.

Company Code is the smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created.  This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements, such as the Balance Sheet and the Profit and Loss Statement.  The definition of the Company Code organizational unit is obligatory.
 
Account Group is a summary of accounts based on the criteria that affect how master records are created.  The Account Group determines (a) the number interval from which the account number is selected when a G/L account is created and (b) the fields that we can configure on the G/L master record.

Chart of Accounts is a list of all G/L accounts used by one or several company codes.  We have to assign a Chart of Accounts to each Company Code.  This Chart of Accounts is the Operating Chart of Accounts and is used for the daily postings in this Company Code.  In addition to the Operating Chart of Accounts, we can use two additional Charts of Accounts, if the individual Company Codes need different Charts of Accounts.  This could be the case if Company Codes lie in multiple countries.

The Group Chart of Accounts contains the group G/L account numbers that are used by the entire corporate group.  This allows the Company to provide reports for the entire corporate group.  The Group Account Number can be entered as additional information in the G/L account being created under the Operating Chart of Accounts. The system checks whether the Group Account Number exists in the Group Chart of Accounts.  

For consolidation purposes, we can define the Balance Sheet and P&L Statement by using Group Account Numbers.  Thus, though a G/L Account of same type exists in different Company Codes with different G/L account numbers, it can be grouped in Company- level Financial Statement with the aid of Group Account Number.  The assigning of a corporate Group Chart of Accounts to a Company Code is optional.

In multi-national companies where there is requirement of corporate/standard Financial Statements as well as Country-specific Financial Statements (to meet the country's legal requirements), we can assign a Country-specific Chart of Accounts to individual Company Codes.  By using Alternative Account Number, the connection between the account in the Operating Chart of Accounts and the account in the Country Chart of Accounts can be set up.  The assigning of a Country-specific Chart of Accounts to a Company Code is optional.
 
Account Group is a summary of accounts based on the criteria that affect how master records are created.  The Account Group determines (a) the number interval from which the account number is selected when a G/L account is created and (b) the fields that we can configure on the G/L master record.  Chart of Accounts, Fiscal Year Variant, Field Status Variant, Posting Period Variant, Foreign Currency Translation for Tax Items, etc. 

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