Integration of FI with MM and SD

All Materials in SAP have a material master and material master is the heart of all integration.

This material master has various views right from Basic views to Purchasing views, production, sales and distribution and accounting and controlling views. We will not get into the detail of 
In the accounting view of Material master amongst other values we have a Valuation Class field. This Valuation class is the vital link which ensures that Accounting documents are posted automatically. Every material will have a valuation class field. Examples of Valuation Class could be Finished Goods,Semi Finished goods, Raw Material etc.
In transaction MM03, type in the material number and click on accounting 1 view – here the valuation class will be displayed. 
All Material movements in MM happen with respect to a Movement Type.  
For eg 
Goods receipt is defined with movement type  – 101
Goods issue to production order is defined with movement type – 261
Scrapping of goods is defined with movement type – 551
Goods delivered to the customer with movement type – 601
Initial upload of stock is defined with movement type – 561
The combination of valuation class and the movement type helps in determining the GL accounts.