C_TS4FI Financial Accounting Practice Question
During a period-end close in SAP S/4HANA, an accountant must ensure that all foreign currency vendor invoices are revalued before the financial statements are produced. The company uses the standard foreign currency valuation program. Which prerequisite must be satisfied for the valuation postings to be generated?
⚠ Common exam trap
The trap here is believing that exchange rates must be maintained per vendor master record rather than centrally through the valuation method and currency configuration.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The valuation method and valuation area must be defined and assigned to the company code, and the affected accounts must permit the valuation difference postings.
The foreign currency valuation program depends on a valuation method that is assigned to the company code and controls which accounts are valued, which exchange rate type is used, and where differences are posted. The relevant G/L accounts must also allow automatic postings, so the run can create the adjustment documents required for period-end reporting.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The foreign currency revaluation must be executed only after the fiscal year has been closed in the previous period.
Why it's wrong here
Revaluation is typically performed as part of period-end closing for the current period and does not require the previous fiscal year to be closed. In fact, closing the prior year is unrelated to whether open foreign currency items in the current period can be revalued, so this condition would unnecessarily delay the process and is not a system prerequisite.
- ✓
The valuation method and valuation area must be defined and assigned to the company code, and the affected accounts must permit the valuation difference postings.
Why this is correct
Foreign currency valuation relies on a valuation method assigned to the company code that determines which accounts are valued and where differences are posted. Without the valuation method, the run produces no postings, and the accounts involved must accept the automatically generated adjustment documents, so this combination is the true prerequisite for producing the revaluation entries.
- ✗
All open items in foreign currency must first be cleared so that only zero balances remain before the valuation run.
Why it's wrong here
Clearing the open items would eliminate the very receivables and payables that need to be revalued. The valuation program selects open items in foreign currency precisely because they are still outstanding, so requiring them to be cleared first contradicts the purpose of the run and would produce no valuation postings at all.
- ✗
The exchange rate type used for the valuation must be manually entered in every vendor master record before the run.
Why it's wrong here
Exchange rate types are defined centrally in currency configuration and selected by the valuation method, not stored in vendor master records. Maintaining a rate type per vendor is not a standard concept, and the valuation run derives the appropriate rate from the configured exchange rate table based on the valuation method and valuation date.
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Last reviewed September 2026 · checked against the official SAP exam blueprint
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