In simple way Meaning of Analogy is “Similarity ” or compassion between one thing and other thing base d on some similarity
Ans.There are two types of business transactions in accounting – revenue and capital.
Ans. A real account is an account of assets and liabilities. E.g. land account, building account, etc.
A nominal account is an account of income and expenses. E.g. salary account, wages account, etc.
Ans. Describe the accounting platforms (QuickBooks, Microsoft Dynamic GP, etc.) that you have worked with and which one you liked the most.
Ans.Double entry bookkeeping is an accounting principle where every debit has a corresponding credit. Thus, the total debit is always equal to the total credit. In this system, when one account is debited then another account gets credited at the same time.
Ans. Working capital is calculated as current assets minus current liabilities, which is used in day-to-day trading.
Ans. Maintaining the accuracy of an organisation’s accounting is an important activity as it can result in a huge loss. There are various tools and resources which can be used to limit the potential for errors to creep in and address quickly if any errors do arise.
Ans. TDS (Tax Deducted at Source) is a concept aimed at collecting tax at every source of income. In a balance sheet, it is shown in the assets section, right after the head current asset.
Ans. A trial balance is the list of all balances in a ledger account and is used to check the arithmetical accuracy in recording and posting. A balance sheet, on the other hand, is a statement which shows the assets, liabilities and equity of a company and is used to ascertain its financial position on a particular date.
Ans. Yes, if it shows an unsustainable improvement in working capital and involves lack of revenue going forward in the pipeline.
Ans.The common errors in accounting are – errors of omission, errors of commission, errors of principle and compensating error.
Ans. Inactive accounts are which that are closed and will not be used in the future. Dormant accounts are not currently functional but may be used in the future.
Ans.There are currently 41 Accounting Standards which are usually issued by the Accounting Standards Board (ASB)
Ans. Accounting Standards play an important role in preparing a good and accurate financial report. It ensures reliability and relevance in financial reports.
Ans.Explain if you have proposed an idea which has affected the company’s finances positively. Tell how you have optimised the process and how you came to such a decision through historical data reviewing.
Ans.Three ledgers for each account for proper accounting and reconciliation processes.
Ans.Some of the popular ways of estimating bad debts are – percentage of outstanding accounts, aging analysis and percentage of credit sales.
Ans.Deferred tax liability signifies that a company may pay more tax in the future due to current transactions.
Ans. A deferred tax asset is when the tax amount has been paid or has been carried forward but has still not been recognized in the income statement. The value is created by taking the difference between the book income and the taxable income
Ans.The equation for Acid-Test Ratio in accounting
Acid-Test Ratio = (Current assets – Inventory) / Current Liabilities
Ans.. I am familiar with accounting apps like CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.
Ans.. I find Microsoft Accounting Professional the best as it offers reliable and fast processing of accounting transactions, thereby saving time and increasing proficiency.
Ans.GST is the acronym for Goods and Service Tax and it is an indirect tax other than the income tax. The seller charges it to the customer on the value of the service or product sold. The seller then deposits the GST to the government.
Ans.A bank reconciliation statement or BRS is a form that allows individuals to compare their personal bank account records to that of the bank. BRS is prepared when the passbook balance differs from the cashbook balance.
Ans.It is an accounting software used by small business and shops to manage routine accounting transactions.
Ans. Fictitious assets are intangible assets and their benefit is derived over a longer period, for example good will, rights, deferred revenue expenditure, miscellaneous expenses, preliminary expenses, and accumulated loss, among others.
Ans.Yes, since we know that accounting is all about assets, liabilities and capital. Hence, its equation can be summarized as:
Assets = Liabilities + Owners Equity.
Ans.There are three branches of accounting –
Ans.As the name suggests, purchase return is a transaction where the buyer of merchandise, inventory or fixed assets returns these defective or unsatisfactory products back to the seller.
Ans.Retail banking or consumer banking involves a retail client, where individual customers use local branches of larger commercial banks.
Ans.Offset accounting is a process of canceling an accounting entry with an equal but opposite entry. It decreases the net amount of another account to create a net balance.
Ans.These are the bills generated against each transaction. It is a part of documentation procedure for all types of transactions.
Ans. As per fair value accounting, a company has to show the value of all of its assets in terms of price on balance sheet on which that asset can be sold.
Ans.It goes into “Deferred Revenue” on the balance sheet as a liability if no revenue has been earned yet.
Ans.. I was good at numbers and accounting since my school days, but it was during my 10+2; I decided to adopt this field as a profession and did Bachelor’s and then Master’s in Accounting
Ans.Yes, I have prepared MIS reports. It is an acronym for Management Information System, and this report is generated to identify the efficiency of any department of a company.
Ans.. It is the time required by the company to pay all its account payables.
Ans.. Scrap Value is the residual value of an asset that any asset holds after its estimated lifetime
Ans. Current liability account is responsible for interest payable.
Ans.It is a type of accounting information system that records all the financial information and activities of the department. This financial information can be used to check profitability and efficiency of every department.
Ans.Perpetual inventory is a methodology that involves recording the sale or purchase of inventory immediately using enterprise asset management software and computerized point-of-sale systems.
Ans.When a company’s current liabilities exceed its current assets, it is named as negative working capital. It is a common terminology in certain industries like retail and restaurant businesses.
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Ans.There are three golden rules of accounting –
Ans.So, this is among the most frequently asked accounting interview questions. Your reply should be –
This principle is used in the case of personal accounts. If a person is giving any amount either in cash or by cheque to an organization, it becomes an inflow and thus that person must be credited in the books of accounts. Therefore, when an organization received the money or cheque, it needs to credit the person who is paying and debit the organization.
Ans.Of course, it is the abbreviation of Institute of Chartered Accountants in India
Ans.Premises refer to fixed assets presented on a balance sheet.
Ans.Executive Accounting is specifically designed for the service-based businesses. This term is popular in finance, advertising and public relations businesses.
Ans.Bills receivable are the proceeds or payments, which a merchant or a company will be receiving from its customers.
When replying to accounting interview questions, be very specific and don’t speak up generic stuff.
Ans.Balancing means equating or balancing both debit and credit sides of a T-account.
Ans.If there is any increase in the number of units produced, the total cost of output is changed. Marginal cost is that change in the cost of an additional unit of output.
Ans.Every transaction is documented and the trade bills are those documents, generated against each transaction.
Ans.Yes, these are the documents such as vouchers, bills, debit and credit notes, or receipts, etc. They serve as the base of every account book.
Ans.There are three different stages of double entry system, which are –
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Ans.It stands for an owner’s or a stockholder’s equity.
Ans. GAAP is the abbreviation for Generally Accepted Accounting Principles (GAAP) issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956. It is a cluster of accounting standards and common industry usage, and it is used by organizations to:
Ans.Some popular examples of liability accounts are –
Ans.Accounts receivable is yet-to be received cash from products or services that are already sold/delivered to customers, whereas, deferred revenue is the cash received from customers for services or goods not yet delivered.
Ans.A cash discount should be recorded as a reduction of expense in cash account.
Ans. . Financial modelling is a quantitative analysis commonly used for either asset pricing or general corporate finance.
Ans.You’ll have to be well-prepared for this question. Start with the net income and go line by line explaining all major adjustments to arrive at cash flow from operating activities. Mention all the necessary parts that are associated with it.
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Ans. Yes. There are two examples –
(i) a company that is selling off inventory but delaying payables will show positive cash flow for a while even though it is in trouble.
(ii) A company has strong revenues for the period but future forecasts show that revenues will decline.
Ans. Working capital is the best defined as current assets minus current liabilities.
Ans.The analysis of expenses and revenue which is predicted to be produced or incurred in future is called quarterly forecasting.
An expense model tells what expense categories are allowed on a particular type of work order.
Ans.The journal is a book where all the financial transactions are recorded for the first time. The ledger is one which has particular accounts taken from the original journal.
Ans. The balance sheet summarises the financial position of a company for a specific point in time. The P&L (profit and loss) statement shows revenues and expenses during a set period of time.
Ans.Cost accountancy is the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and the ascertainment of profitability as well as the presentation of information for the purpose of managerial decision making.
Ans. Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyse the profitability of a projected investment or project.
Ans.There are four main financial statements – 1) balance sheets, 2) income statements, 3) cash flow statements, and 4) statements of shareholders’ equity.
Ans. Adjustment entries are accounting journal entries that convert a company’s accounting records to the accrual basis of accounting.
Ans. You need to be very careful in answering this question. As a financial analyst, following the stock market proves to be beneficial. Also, always be up-to-date with the stocks.
Ans. Also known as the weighted average cost of capital (WACC), a composite cost of capital is a company’s cost to borrow money given the proportional amounts of each type of debt and equity a company has taken on.
WACC= Wd (cost of debt) + Ws (cost of stock/RE) + Wp (cost of pf. Stock
Ans.The capital structure is how a firm finances its overall operations and growth by using different sources of funds.
Ans.Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired business.
Ans.Well, I was quite good at accounting throughout, but in my masters, when I got a distinction, I decided to adopt this field as a profession.
Ans.Yes, I have worked as an accountant at two different places.
Ans. Yes, I have used Advanced Business Solutions and AME Accounting Software in my previous jobs.
Ans.Yes, I am familiar with CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.
Ans.I think all are good though, but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency. It helps with financial analysis as well.
Ans.The debit abbreviation is “dr” and credit abbreviation is “cr”.
Ans.There are two types of transactions in accounting, i.e. revenue and capital.
Ans.It is a statement that states all the liabilities and assets of the company at a certain point.
Ans.Yes, TDS abbreviates Tax Deduction at Source.
Ans.Yes, both are different terms in accounting. Inactive accounts mean that accounts have been closed and will not be used in the future as well. While dormant accounts are those that are not functional today but may be used in the future.
Ans.It is the software used for accounting in small business and shops for managing routine accounting transactions.
Ans.In the first one, i.e. the perpetual inventory system, the accounts are adjusted on a continual basis. In the periodic inventory system, the accounts are adjusted periodically.
Ans.Premises refer to fixed assets that are shown in the balance sheet.
Ans.CPA stands for Certified Public Accountant. To become a CPA, one should have to do many other qualifications as well. It is a qualification with a 150-hour requirement. It means that one should complete 150 credit hours at an accredited university.
Ans. Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for the general public.
Ans.It is a type of accounting that is specifically designed for the business that offers services to users.
Ans.Accounting is all about recording daily business activities while auditing is the checking that whether all these events have been noted down correctly or not.
Ans.It is the term introduced in the records for every defective or unsatisfactory good returned back to its supplier.
Ans.Material facts are the bills or any document that becomes the base of every account book. It means that all those documents, on which account book is prepared, are called material facts.
Ans.Yes, I have prepared a few MIS reports during my previous jobs. MIS reports are created to identify the efficiency of any department of a company.
Ans.It is the time required by the company to pay all its account payables.
Ans.Not much knowledge but basic mathematical background is required in accounting for operations like addition, subtraction, multiplication, and division.
Ans.Consigner is the owner of the goods, or you can say he is the person who delivers the goods to the consignee. The consignee is the person who receives the goods.
Ans.It is a kind of groups made on the basis of the same responses by a system.
Ans.Accounting is all about recording daily business activities while auditing is the checking that whether all these events have been noted down correctly or not.
Ans.Offset accounting is one that decreases the net amount of another account to create a net balance.
Ans.We know that all types of transactions need to be documented. The trade bills are the documents, generated against each transaction.
Ans.When service or goods have been delivered, then revenues are reported in the accounting period.
Ans.A deferred asset refers to a deferred debit or a deferred charge. An example of a deferred charge is bond issue costs. These costs involve all of the fees or charges that an organization incurs in order to register and issue bonds. These fees are paid in a near time when the bonds are issued but it will not be expensed at that time.
Ans.A deposit in transit is a check or cash that have been received and recorded by an entity, but which have not yet been entered in the records of the bank where the funds are deposited.
Ans.An over accrual is a condition where the estimate for an accrual journal entry is too high. This estimate may apply to the accrual of expense or revenue.
Ans.Due to double entry, the “cash account” will increase as such the liability account increases.
Ans.Reversing journal entries are entries made at the beginning of an accounting period to cancel out the adjusting journal entries made at the end of the previous accounting period.
Ans.Deferred taxation is a part of the owner’s equity
Ans.The equation for Acid-Test Ratio in accounting
Acid-Test Ratio = (Current assets – Inventory) / Current Liabilities
Ans.Some asset accounts have a credit balance due to the following reasons,
Ans.A Master Account has subsidiary accounts. A master account receivable could be anything, it could be account receivable for various individual receivable accounts.
Ans.A Bad debt expense is the amount of an account receivable that is considered to NOT be collectible.
Ans.The unpresented cheque will get recorded as a credit to the cash account in the company’s General ledger.
Ans.A certified financial accountant should have knowledge about
Ans.The three factors that can affect your cash flow and business profit includes
Ans.Accrual Accounting is a method for measuring the performance and position of the company by identifying economic events regardless of when the cash transaction happened. In this method, revenue is compared with the expenditures, at the time in which the transaction happens rather than when the payment is made.
Ans.Account payable is referred to as the amount the company owes to its suppliers, its employees, and its partners. In other words, it is the basic cost levied on the company to run a business process that is outstanding. Account payable for one company may be account receivable for another firm or company.
Ans.Long-term notes payable or liabilities are referred for that loan that is not supposed to due for more than a year. These are the loans from banks or financial institution that are secured against various assets on the balance sheet, such as inventories.
Ans.Financial statement of the company includes various information like
Ans. GAAP means Generally Accepted Accounting Principle; it is a framework of accounting, standards, procedures & rules determined by the professional accounting industry and practiced by publicly traded U.S companies all over the U.S.A.
Ans.There are three types of ledger
Ans.Double entry accounting is an accounting system that requires recording business transaction or event in at least two accounts. It is the same concept of accounting, where every debit account should be matched with a credit account.
For example, if a company takes a loan from a bank, it receives cash as an asset but at the same time, it creates a liability on a company. This single entry will affect both accounts, the asset accounts, and the liabilities accounts, such entry is referred to as double entry accounting.
Ans.Cash flow and funds flow: cash flow means direct entry of cash in your business and exit of the same funds flow means entry of funds (cash funds or non cash funds) and their exit non cash funds may mean rise in current assets or fall in current liabilities which was not due to any cash movement.
Ans.Bonds have discounts and premiums and accrued interest. Preferred Stock does not.
Ans.Show your understanding of the invoice verification process. Go through each step in detail such as checking that goods have been received in proper condition or services rendered in a satisfactory manner. Explain the importance of each step.
Ans.Debtors account and bills receivable account are theoretically same. Both are called as receivables. When we sold goods to debtors account is debited. If we receive a bill from that debtor, we open bills receivable account by closing that debtor account. Thus, bills receivable account is nothing but debtor account.
If the bill is dishonored on the due date, we again debit the debtor account in our books. For information and accounting purpose, we use both debtor account and bills receivable account.
Ans.Chartered Accountancy firms put a lot of weight on A-level grades as these have been found to be the best predictors of success in professional examinations.
If your A levels were not outstanding, this may sometimes depend more on the quality of the school you attended than your ability. In some inner-city schools it may be that a mediocre A-level performance that you achieved might have been the best in your school – if this is so, then make it clear. An average performance at a weak school academically may be the equivalent of a much better performance at some prestigious establishments.
Similarly, if there were any other external factors, such as illness, that may have affected your grades, tell the interviewers – but don’t sound as though you are making excuses.
Depreciation
Amortization
Ans.Material facts are the bills or any document that becomes the base of every account book. It means that all those documents, on which account book is prepared, are called material facts.
Ans.Offset accounting is one that decreases the net amount of another account to create a net balance.
Ans.The difference between accumulated depreciation and depreciation expense is that
Ans.A deferred asset refers to a deferred debit or a deferred charge. An example of a deferred charge is bond issue costs. These costs involve all of the fees or charges that an organization incurs in order to register and issue bonds. These fees are paid in a near time when the bonds are issued but it will not be expensed at that time.
Ans.A Master Account has subsidiary accounts. A master account receivable could be anything, it could be account receivable for various individual receivable accounts.
Ans.It is removing items from the income statement or balance sheet that do not normally occur during the course of business to better estimate the value of a company.
Ans.When any employer provides any service to his customer, which income is excess under the tax then company liable for the pay tax.In addition, service tax deposited of in under 5 days who you charged service tax to his customers.In the payment of Service tax amount you can Credit availed during of the month.
Ans.It denotes weighted average cost of capital. It is defined as the overall cost of capital computed by reference to the proportion of each component of capital as weights.
Ans.It denotes the level at which a firm’s EBIT is just sufficient to cover interest and preference dividend.
Ans.It means it is defined as the efficient management of liquidity and financial risk in business.
Ans.It is the maximum amount that banks can lend a borrower towards his working capital requirements.
Ans.A cp is a short term promissory note issued by a company, negotiable by endorsement and delivery, issued at a discount on face value as may be determined by the issuing company.
Ans.It refers to the loans taken by the company normally from commercial banks for a short period pending disbursement of loans sanctioned by the financial institutions.
Ans.Companies can borrow funds for a short period. For example 6 months or less from another company which have surplus liquidity? Such deposits made by one company in another company are called ICD.
Ans. The CD is a document of title similar to a fixed deposit receipt issued by banks there is no prescribed interest rate on such CDs it is based on the prevailing market conditions.
Ans.The euro issues means that the issue is listed on a European stock Exchange. The subscription can come from any part of the world except India.
Ans.It is a management tool which provides a systematic method for evaluating all operations and programmes, current of new allows for budget reductions and expansions in a rational inner and allows reallocation of source from low to high priority programs.
Ans.Hedging means minimize the risk.
Ans.An obligation to an existing condition or situation which may arise in future depending on the occurrence of one or more uncertain future events.
Ans.A condition (or) situation the ultimate out comes of which gain or loss will be known as determined only as the occurrence or non occurrence of one or more uncertain future events.