Interview Questions
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Top accounting Interview Questions

In simple way Meaning of Analogy is “Similarity ” or compassion between one thing and other thing base d on some similarity 

250 + Accounting Question and Answer

Q1. How many types of business transactions are there in accounting?

Ans.There are two types of business transactions in accounting – revenue and capital.

Q2. Explain real and nominal accounts with examples.

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.

Q3. Which accounting platforms have you worked on? Which one do you prefer the most?

Ans. Describe the accounting platforms (QuickBooks, Microsoft Dynamic GP, etc.) that you have worked with and which one you liked the most.

Q4. What is double entry bookkeeping? What are the rules associated with it?

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.

Q5. What is working capital?

Ans. Working capital is calculated as current assets minus current liabilities, which is used in day-to-day trading.

Q6. How do you maintain accounting accuracy?

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.

Q7. What is TDS? Where do you show TDS on a balance sheet?

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.

Q8. What is the difference between ‘accounts payable (AP)’ and ‘accounts receivable (AR)’?

Accounts Payable

  • The amount a company owes because it purchased goods or services on credit from a vendor or supplier.
  • Accounts payable are liabilities                                      

Accounts Receivable

  • The amount a company has right to collect because it sold goods or services on credit to a customer
  • Accounts receivable are assets.

Q9. What is the difference between a trial balance and a balance sheet?

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.

 

Q10. Is it possible for a company to show positive cash flows and still be in grave trouble?

Ans. Yes, if it shows an unsustainable improvement in working capital and involves lack of revenue going forward in the pipeline.

Q11. What are the common errors in accounting?

Ans.The common errors in accounting are – errors of omission, errors of commission, errors of principle and compensating error.

Q12. What is the difference between inactive and dormant accounts?

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.

Q13. Are you familiar with the Accounting Standards? How many accounting standards are there in India?

Ans.There are currently 41 Accounting Standards which are usually issued by the Accounting Standards Board (ASB)

Q14. Why do you think Accounting Standards are mandatory?

Ans. Accounting Standards play an important role in preparing a good and accurate financial report. It ensures reliability and relevance in financial reports.

Q15. Have you ever helped your company to save money or use their available financial resources effectively?

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.

Q16. If our organisation has three bank accounts for processing payments, what is the minimum number of ledgers it needs?

Ans.Three ledgers for each account for proper accounting and reconciliation processes.

Q17. What are some of the ways to estimate bad debts?

Ans.Some of the popular ways of estimating bad debts are – percentage of outstanding accounts, aging analysis and percentage of credit sales.

Q18. What is a deferred tax liability?

Ans.Deferred tax liability signifies that a company may pay more tax in the future due to current transactions.

Q19. What is a deferred tax asset and how is the value created?

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

Q20. What is the equation for Acid-Test Ratio in accounting?

Ans.The equation for Acid-Test Ratio in accounting

Acid-Test Ratio = (Current assets – Inventory) / Current Liabilities

Q21. What are the popular accounting applications?

Ans.. I am familiar with accounting apps like CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.

Q22. Which accounting application you like the most and why?

Ans.. I find Microsoft Accounting Professional the best as it offers reliable and fast processing of accounting transactions, thereby saving time and increasing proficiency.

Q23. Tell me something about GST.

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.

Q24. What is bank reconciliation statement?

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.

Q25. What is tally accounting?

Ans.It is an accounting software used by small business and shops to manage routine accounting transactions.

Q26. What are fictitious assets?

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.

Q27. Can you explain the basic accounting equation?

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.

Q28. What are the different branches of accounting?

Ans.There are three branches of accounting –

  • Financial Accounting
  • Management Accounting
  • Cost Accounting

Q29. What is the meaning of purchase return in 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.

Q30. What is retail banking?

Ans.Retail banking or consumer banking involves a retail client, where individual customers use local branches of larger commercial banks.

 

Q31. What is offset accounting?

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.

Q32. What are trade bills?

Ans.These are the bills generated against each transaction. It is a part of documentation procedure for all types of transactions.

Q33. What is fair value accounting?

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.

Q34. What happens to the cash, which is collected from the customers but not recorded as revenue?

Ans.It goes into “Deferred Revenue” on the balance sheet as a liability if no revenue has been earned yet.

Q35. Why did you choose accounting as your profession?

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

Q36. What is a MIS report, have you prepared any?

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.

Q37. What is a company’s payable cycle?

Ans.. It is the time required by the company to pay all its account payables.

Q38. What is Scrap Value in accounting?

Ans.. Scrap Value is the residual value of an asset that any asset holds after its estimated lifetime

Q39. Which account is responsible for interest payable?

Ans. Current liability account is responsible for interest payable.

Q40. What is departmental accounting system?

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.

Q41. What is a perpetual inventory system?

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.

Q42. What do you mean when you say that you have negative working capital?

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.

Q43. What are the major constraints that can hamper relevant and reliable financial statements?

Ans.

  1. Delay, which leads to irrelevant information
  2. No balance between costs and benefits
  3. No balance between the qualitative characteristics
  4. No clarity in true and fair view presentation

Q44. Tell me the golden rules of accounting, just mention the statements.

Ans.There are three golden rules of accounting –

  • Debit the receiver, credit the giver
  • Debit what comes in, credit what goes out
  • Debit all expenses and losses, credit all incomes and gains

Q45. Please elaborate, what this statement means – “Debit the Receiver, Credit the Giver”.

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.

Q46. Any idea what is ICAI?

Ans.Of course, it is the abbreviation of Institute of Chartered Accountants in India

Q47. What do you mean by premises?

Ans.Premises refer to fixed assets presented on a balance sheet.

Q48. What is Executive Accounting?

Ans.Executive Accounting is specifically designed for the service-based businesses. This term is popular in finance, advertising and public relations businesses.

Q49. What are bills receivable?

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.

Q50. Define Balancing.

Ans.Balancing means equating or balancing both debit and credit sides of a T-account.

Q51. What is Marginal Cost?

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.

Q52. What are Trade Bills?

Ans.Every transaction is documented and the trade bills are those documents, generated against each transaction.

Q53. Can you define the term Material Facts?

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.

Q54. What are the different stages of Double Entry System?

Ans.There are three different stages of double entry system, which are –

  • Recording transactions in the accounting systems
  • Preparing a trial balance in respective ledger accounts
  • Preparing final documents and closing the books of accounts

Q55. What are the disadvantages of a Double Entry System?

Ans.

  • Difficult to find the errors, especially when transactions are recorded in the books
  • In case of any error, extensive clerical labor is required
  • You can’t disclose all the information of a transaction, which is not properly recorded in the journal

Q56. What is Assets Minus Liabilities?

Ans.It stands for an owner’s or a stockholder’s equity.

Q57. What is GAAP?

AnsGAAP 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:

  • Record their financial information properly
  • Summarize accounting records into financial statements
  • Disclose information whenever required

Q58. Can you tell me some examples for liability accounts?

Ans.Some popular examples of liability accounts are –

  • Accounts Payable
  • Accrued Expenses
  • Bonds Payable
  • Customer Deposits
  • Income Taxes Payable
  • Installment Loans Payable
  • Interest Payable
  • Lawsuits Payable
  • Mortgage Loans Payable
  • Notes Payable
  • Salaries Payable
  • Warranty Liability

Q59. What is the difference between accounts receivable and deferred revenue?

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.

Q60. Where should you record a cash discount in journal entry?

Ans.A cash discount should be recorded as a reduction of expense in cash account.

Q61. Explain ‘financial modelling’.

Ans. . Financial modelling is a quantitative analysis commonly used for either asset pricing or general corporate finance.

 

Q62. Walk me through a ‘cash flow statement.’

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.

Q63. Is it possible for a company to have positive cash flow but still be in serious financial trouble?

Ans.

Q64. What do you think is the best evaluation metric for analysing a company’s stock?

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.

Q65. What is ‘working capital’?

Ans. Working capital is the best defined as current assets minus current liabilities.

Q66. Explain quarterly forecasting and expense models?

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.

Q67. What is the difference between a journal and a ledger?

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.

Q68. Mention one difference between a P&L statement and a balance sheet?

AnsThe 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.

 

Q69. What is ‘cost accountancy’?

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.

Q70. What is NPV? Where is it used?

AnsNet 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.

Q71. How many financial statements are there? Name them

Ans.There are four main financial statements – 1) balance sheets, 2) income statements, 3) cash flow statements, and 4) statements of shareholders’ equity.

Q72. What are ‘adjustment entries’?

Ans. Adjustment entries are accounting journal entries that convert a company’s accounting records to the accrual basis of accounting.

Q73. Do you follow the stock market? Which stocks in particular?

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.

Q74. What is a ‘composite cost of capital’?

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

Q75. What is ‘capital structure’?

Ans.The capital structure is how a firm finances its overall operations and growth by using different sources of funds.

Q76. What is a ‘goodwill’?

Ans.Goodwill is an asset that captures excess of the purchase price over fair market value of an acquired business.

Q77. Why did you select accounting as your profession?

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.

Q78. Do you have any professional experience in this field?

Ans.Yes, I have worked as an accountant at two different places.

Q79. Did you use accounting applications at your previous companies or prefer working manually??

Ans. Yes, I have used Advanced Business Solutions and AME Accounting Software in my previous jobs.

Q80 Can you name any other accounting application?

Ans.Yes, I am familiar with CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.

Q81 Which accounting application you prefer most and why?

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.

Q82 What is the abbreviation for the accounting terms debit and credit?

Ans.The debit abbreviation is “dr” and credit abbreviation is “cr”.

Q83 How many types of business transactions are there in accounting?

Ans.There are two types of transactions in accounting, i.e. revenue and capital.

Q84 What is the balance sheet?

Ans.It is a statement that states all the liabilities and assets of the company at a certain point.

Q85 Have you ever heard about TDS, what it is?

Ans.Yes, TDS abbreviates Tax Deduction at Source.

Q86.Do you think there is any difference between inactive and dormant accounts?

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.

Q87.What is tally accounting?

Ans.It is the software used for accounting in small business and shops for managing routine accounting transactions.

Q88. By saying, perpetual or periodic inventory system; what do we mean?

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.

Q89. In accounting, how do you define the premises?

Ans.Premises refer to fixed assets that are shown in the balance sheet.

Q90. What is a CPA?

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.

Q91 Define Public accounting?

Ans. Public accounting offers audits and CPAs to review company financial records to ensure accountability. It is for the general public.

Q92.Define Executive accounting?

Ans.It is a type of accounting that is specifically designed for the business that offers services to users.

Q93. Differentiate Accounting and Auditing?

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.

Q94 What do we mean by purchase return in accounting?

Ans.It is the term introduced in the records for every defective or unsatisfactory good returned back to its supplier.

Q95. Define the term material facts in accounting?

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.

Q96.Have you ever made MIS reports and what are they?

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.

Q97. Define a company's payable cycle?

Ans.It is the time required by the company to pay all its account payables.

Q98. How much mathematics knowledge is necessary or required in accounting?

Ans.Not much knowledge but basic mathematical background is required in accounting for operations like addition, subtraction, multiplication, and division.

Q99. Differentiate between consignor and consignee?

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.

Q100. Define Partitioning in accounting?

Ans.It is a kind of groups made on the basis of the same responses by a system.

Q101. Differentiate Accounting and Auditing?

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.

Q102. Define Offset accounting?

Ans.Offset accounting is one that decreases the net amount of another account to create a net balance.

Q103.Define trade bills?

Ans.We know that all types of transactions need to be documented. The trade bills are the documents, generated against each transaction.

Q104.Under the accrual basis of accounting, when revenues are reported in the accounting period?

Ans.When service or goods have been delivered, then revenues are reported in the accounting period.

Q105. Explain what a deferred asset is and give an example?

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.

Q106.What is "deposit in transit"?

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.

Q107. What is an over accrual?

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.

Q108.) What happens to the company's "Cash Account" if it borrows money from the bank by signing a note payable?

Ans.Due to double entry, the “cash account” will increase as such the liability account increases.

Q109. What is reversing journal entries?

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.

Q110.Deferred taxation is a part of which equity?

Ans.Deferred taxation is a part of the owner’s equity

Q111.What is the equation for Acid-Test Ratio in accounting?

Ans.The equation for Acid-Test Ratio in accounting

Acid-Test Ratio = (Current assets – Inventory) / Current Liabilities

Q112.Mention why some asset accounts have a credit balance?

Ans.Some asset accounts have a credit balance due to the following reasons,

  • Receiving and posting an amount that was higher than the recorded receivable
  • Expenses occurred faster than the agreed upon prepayments
  • An error caused by posting an amount to a wrong account
  • The amount of checks written exceeded the positive amount in the Cash account
  • Continuing to amortize or depreciate an asset after its balance has reached zero

Q113. What is the Master Account?

Ans.A Master Account has subsidiary accounts. A master account receivable could be anything, it could be account receivable for various individual receivable accounts.

Q114. What is Bad debt expense?

Ans.A Bad debt expense is the amount of an account receivable that is considered to NOT be collectible.

Q115.In which account does the unpresented cheque will get recorded?

Ans.The unpresented cheque will get recorded as a credit to the cash account in the company’s General ledger.

Q116.What knowledge should financial accountant have?

Ans.A certified financial accountant should have knowledge about

  • Accounting/Bookkeeping principles and practices
  • Reporting and analysis of financial data
  • Auditing practices and principles
  • Account management
  • Budgets
  • Software knowledge dealing with Accounting
  • Knowledge of relevant laws, codes, and regulations
  • Good soft skills
  • Being a team player
  • Ability to learn quickly and up skill
  • Basic Technical skills

Q117.What are the three factors that can affect your cash flow and business profitability?

Ans.The three factors that can affect your cash flow and business profit includes

  • Cash flows from investing activities: It includes shares, bonds, physical property, machinery, etc.
  • Cash flows from operating activities: It does not include cash received from other sources like investments
  • Cash flow from financing activities: It includes any activities that involve dividend payments that the company made to its shareholders, any money that includes stock to the public, any money borrowed from the lender, etc. in other words, it is a report that tells the firm about the money borrowed and paid out in order to finance its activities.

Q118.Explain what is accrual accounting?

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.

Q119. Explain the term account payable?

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.

Q120.) Explain the meaning of long-term notes payable is or long term liabilities?

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.

Q121.What does the financial statement of the company include?

Ans.Financial statement of the company includes various information like

  • Balance Sheet ( Assets, liabilities, and equity)
  • Income statement ( Profit or Loss statement)
  • Equity statement
  • Cash flow statement

Q122. Explain what is GAAP?

AnsGAAP 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.

Q123. Mention the types of ledgers?

Ans.There are three types of ledger

  • General ledger
  • Debtors ledger
  • Creditors ledger

Q124.Explain what is double-entry accounting? Explain with an example?

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.

Q125.. Explain What Is Cash Flow And Fund Flow?

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.

Q126. Is There A Difference Between Accounting For Conversion Of Bonds And Accounting For The Conversion Of Preferred Stock?

Ans.Bonds have discounts and premiums and accrued interest. Preferred Stock does not.

Q127.How Many Invoices On Average Do You Handle On A Weekly/monthly Basis?

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.

Q128.Explain What Is Customer Account?

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.

Q129.Were You Happy With The Grades You Achieved At A-level?

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.

Q130. What is the difference between depreciation and amortization?

Method Overloading

Depreciation

  • Depreciate means to lose the value of an asset due to their usage, wear and tear, outdated, etc.
  • The depreciation cost is calculated in terms of tangible assets like furniture, plant & machinery, building, etc.
  • The purpose of calculating depreciation costs recovery
  • The easiest way to calculate depreciation is to know the loss of value of an asset over its life.
  • For example, a car worth $30,000 has estimated the lifetime of 10 years after that it will have no value in the market. The cost or loss in value throughout these 10 years is known as depreciation
  • Various method for depreciation includes straight-line depreciation, declining balance method, group depreciation method, unit of     time/production depreciation method, etc.           

Method Overriding​

Amortization

  • Amortize means to write off or pay the debt over a period of time. Amortization can be for loans, or it can be for Intangible assets
  • Amortization cost is calculated in terms of intangible assets like goodwill, trademark, loans, patents, etc.
  • The purpose of calculating amortization is also for cost recovery
  • Amortization calculates the amount spent after the intangible assets throughout the life for that asset
  • For example, Pharmaceutical Company spent $20 million dollars on a drug patent with a useful life of 20 years. The amortization value for that company will be $1 million each year
  • Various method for amortization is negative amortization, zoning amortization, business amortization, etc.

Q131.Define the term material facts in accounting?

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.

Q132. Define Offset accounting?

Ans.Offset accounting is one that decreases the net amount of another account to create a net balance.

Q133.What is the difference between accumulated depreciation and depreciation expense?

Ans.The difference between accumulated depreciation and depreciation expense is that

  • Accumulated depreciation: It is the total amount of depreciation that has been taken on a company’s assets up to the date of the balance sheet
  • Depreciation expense: It is the amount of depreciation that is reported on the income statement. Basically, it is the amount that corresponds only to the period of time indicated in the heading of the income statement.

Q134. Explain what a deferred asset is and give an example?

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.

Q135.What is the Master Account?

Ans.A Master Account has subsidiary accounts. A master account receivable could be anything, it could be account receivable for various individual receivable accounts.

Q136.Tell Me What Is Accounting Normalization?

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.

Q137.. Explain What Is Service Tax?

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.

Q138. What is Wacc?

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.

Q139. What is financial . Financial break-even point?

Ans.It denotes the level at which a firm’s EBIT is just sufficient to cover interest and preference dividend.

Q140.What i s Treasury management?

Ans.It means it is defined as the efficient management of liquidity and financial risk in business.

Q141. What is . Maximum permissible bank finance (MPBF)?

Ans.It is the maximum amount that banks can lend a borrower towards his working capital requirements.

Q142. What are Commercial paper?

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.

Q143. What is Bridge finance?

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.

Q144. What is ICD (Inter corporate deposits)?

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.

Q145. What do you mean by certificate of deposits?

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.

Q146.What is Euro issues?

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.

Q147. What is Zero- base- budgeting?

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.

Q148. What is Hedging?

Ans.Hedging means minimize the risk.

Q149.What is Contingent liability?

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.

Q150. What is Contingency?

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.

Q130. What is the difference between depreciation and amortization?

Method Overloading

Method Overriding​