Basic accounting interview questions with answers pdf

Collecting and Analyzing Data from the occurred transaction. Journalize Transaction. The general journal entries are posted to the General Ledger, which is organized by account.

Prepare an unadjusted trial balance. At the end of the period, double-entry accounting requires that debits and credits recorded in the general ledger be equal. Prepare an adjusted trial balance: As with an unadjusted trial balance, this step tests the equality of debits and credits. Prepare financial statements: Financial statements are prepared using the corrected balances from the adjusted trial balance.

Close the accounts: Revenues and expenses are accumulated and reported by period, a monthly, either quarterly, or yearly 9. Prepare a post-closing trial balance: fold: to determine that all revenue and expense accounts have been closed properly and to test the equality of debit and credit balances of all the balance sheet accounts.

Question 81 What is Control in Accounting? Answer:- A control is some type of device or procedure that attempts to limit the possibility of a transaction to be manipulated. What are different Branches of accounting? The example of the M. The format is not standardized from one business to another and it will be more depending to the need and requirement of the company. Question 82 What is partnership accounting?

Answer:- A business can be a corporation, a partnership, or a sole proprietorship. A corporation is incorporated at the state level. A sole proprietorship is one person in business. A partnership is two or more persons with an agreement on who has which assets and liabilities and income. Partnership accounting is doing the books for the partnership. For IRS purposes, a partnership return must be filed each year. Question 83 What is the definition of accounting?

Answer:- The theory and system of setting up, maintaining, and auditing the books of a firm; art of analyzing the financial position and operating results of a business house from a study of its sales, purchases, overhead, etc. Question 84 What is DD and A in oil and gas accounting? Question 85 What is the Importance of accounting standards? To compare the financial statements of various reporting enterprises poses some difficulties because of the divergence in the methods and principles adopted by these enterprises in preparing their financial statements.

Question 86 Who is considered the father of accounting? Answer:- Generally, Luca Pacioli is considered the father of accounting. For more information about him and double entry system he developed, go to the link below at answers.

Question 87 Explain Accounting ? Answer:- Typically, it involves the theory of credit and debit, balance sheets, income statements, controlling accounting accounts, subsidiary ledgers, work sheets, depreciation methods, and financial accounting theory. Question 88 How is an accounting department structured? A small company may have one person performing more than one sometimes all of the functions. In this case, there needs to be financial controls to reduce the probability of theft or embezzlement.

In a large company, there could be many people working in one functional area; and in that case, that function might be broken down to smaller components. Question 89 What is the meaning of Scrap Value in accounting? Answer:- Scrap value is the residual value of an asset. The value of an asset which exists after its estimated life period Read More Answers. Question 90 What are the differences between accounting and auditing?

Answer:- Accounting records the events. Auditing is a process that checks to see whether the events occurred and it is properly recorded. Question 91 Who created SnapIt accounting? Question 92 What is accounting chart of accounts? Answer:- Accounting chart is where you have all the codes for expenses Read More Answers.

Question 93 What is the difference in Accounting and Marketing and what is so different about them? Answer:- Accounting has to do with the company finances.

Marketing has to do with company public relations, advertising, and product placement. The difference is accounting only deals with financial figures where marketing works on creating those figures.

Question 94 What is peach tree accounting? Answer:- Peachtree Accounting is the name of a computerized accounting software program. Question 95 What are accounting rules called? Answer:- The accounting rules are called the 'golden rules of accounting' i. Debit what comes in, and credit what goes out Debit the receiver and credit the giver Debit all expenses and loss and credit all incomes and gains. Question 96 What is an interlocking accounting system? Answer:- The interlocking accounting is a system where the cost and financial accounts are maintained independently of each other, and in the cost account, no attempt is made a separate record of the financial account transaction.

Question 97 What is accounting for plant assets? Answer:- Plant Assets are mainly installations in a factory. Question 98 What are the basic assumptions in accounting? Question 99 What are Source documents in accounting?

Answer:- Source documents are those documents in which all kinds of business transactions are recorded. These include invoice, sales order, purchase order, debit note, credit note, goods received note; goods dispatched note, quotation, statement, remittance advice, and receipt. Question What is mutual fund sub accounting?

Answer:- Mutual fund sub accounting is a way to "clear" the process of buying and selling the mutual fund transactions. An intermediary record keeps all of the individual shareholder account information, such as the individual balances and individual transactions and dividends in each fund. The account balances roll up to match an omnibus account balance that is record kept by the transfer agent of the fund.

When individual investors buy or sell a particular fund those transactions the intermediary combines those transactions and a minimum number of larger trades are placed with the fund in the omnibus account. Question What is Purchase returns Accounting. Question What is the difference between accounting and bookkeeping?

Answer:- Bookkeepers perform a critical function for the firms and organizations they serve. Regularly challenged to maintain precise and accurate records, bookkeepers produce the vital reports that keep management up to date on the financial condition of their company.

Bookkeepers are responsible for maintaining the "business checkbook", much like a personal checkbook. They record routine money transactions like customer payments into a "cash receipts journal" and checks to vendors into a "cash disbursement journal.

At month end they transfer or "post", the "journal" totals to the "general ledger" in preparation for financial statements prepared by the accountant. Accountants are responsible for the design and management of the financial systems that bookkeepers use.

They prepare monthly financial statements and tax returns at year-end. Accountants may also prepare budgets for management and loan proposals for bankers; and perform cost analysis for the company's products or services.

Trust, reliability, and confidentiality head the list of qualities that employers look for when selecting and promoting Certified Bookkeepers. Strong organization and communication skills are also important. Not only are bookkeepers challenged to record routine money transactions, to reconcile accounts and to locate misguided transitions, they also must be able to paint a picture--both verbally and on paper--of all the activities within their assigned area of responsibility Read More Answers.

Question What are the disadvantages of manual accounting? Question How many accounting standards are currently published? Answer:- There are total of 9 accounting standards. Question What is the basic accounting equation? Question What are the elements of the accounting equation?

Question In which ways is math used in accounting Answer:- Primarily only addition, subtraction, multiplication, and division are used in accounting as follows: Addition: Summing accounts for inclusion in financial statements i. Subtraction: Determine net income and various margins by subtracting expenses from revenues, calculating variances between actual and budgets.

Multiplication: Tax rates by gross pay to calculated and remit correct taxes, extrapolating period results i. Division: Calculate various ratios such as asset turnover, operating margins, etc. Multiplication and Division is used "primarily" for analysis of financial results with some exceptions noted above. Question What are the limitations of accounting ratios?

Answer:- Ratios place significant emphasis on short-term results. Ratios such as EPS and the ROCE are subject to accounting conventions that might deter businesses pursuing policies that are in their long-term interest. Question What qualification do you need to become an accounting professional? Answer:- As an accounting professional in the state of Maryland, the requirements are credit hours in order to sit for the CPA examination.

The exam is given in 4 parts and all 4 parts can be taken separately. Once you have passed all 4 for parts of the exam, you will be qualified as a Certified Public Accountant. Although the CPA exam is required for all states, the credit qualification may differ for your state.

The department of labor and licensing for your particular state will have more information on the items needed in order to sit for the CPA exam.

As an accounting professional in the state of Maryland, the requirements are credit hours in order to sit for the CPA examination. Question What are cost accounting and its applications? Answer:- Cost Accounting is a method by which an accountant can determine the cost of production of a "widget". This is used in accurate reporting of Cost of Goods Sold and consequently the Gross Income of a company.

A Cost Accountant will follow the "widget" throughout the production process tracking any costs associated and breaking them down to a unit level. It gets more complicated than that but this is a good generic answer. Question What is meant by public accounting? Answer:- Public Accounting is best known for providing audits, CPAs who work in public accounting review company financial records for accuracy and accountability.

Question Define Tally Accounting Answer:- Tally is a financial accounting software package designed by Tally Solutions mainly for small businesses and shops. They claim on their website that Tally is used by over 2 million users, in over 90 countries. Tally 9. Question Why are accounting firms needed?

Answer:- Accounting firms come in handy for many reasons. Some of the smaller ones: Businesses will use them to calculate payroll and the accounting firm will calculate the amount of taxes taken out. Company income tax returns, accounting firms will usually represent their work if the company is audited by the IRS. Accounting firms also give advice to companies on how to spend their money to save tax dollars and advice on tax shelters. Question Why does the accounting equation have to balance?

Answer:- Due to its design, it was intended as check that your records were correct - think of it as a barometer of sorts. If you look at your general ledger or trial balance and the assets do not equal the liabilities plus equity the debits don't equal the credits , then you know you have a problem that must be resolved prior to having numbers that should be relied upon for any purpose whatsoever. Question Contrast bookkeeping and accounting Answer:- Bookkeeping is the maintenance of the company's financial records.

Accounting is the presentation and interpretation of those records to be used by management for decision making, improvement, and planning. Question Why Accounting is important in business? Answer:- Because a business is all about money and management of money can only be done through accounting and not otherwise Read More Answers.

Question What do you mean by material facts in accounting? Question What is the definition of manual accounting? Answer:- It is recording accounting transaction without the use of computer. Question How does accounting contribute to the community? Answer:- Accounting helps communities in many ways. Accountants help the communities manage their money and they take care of their taxes yearly. They also manage their money, help set a budget for them and teach them to manage their money wisely.

Question What is the definition of offset accounting? Answer:- The one reduces the gross amount of another account to derive a net balance. Accumulated depreciation, which is a contra account to fixed assets to obtain book value, is an example of an offset account. Question Accounting for VC money in financials Answer:- It depends on the form in which the money comes in. If it was invested as equity either Common or Preferred Stock , it shows up on the balance sheet as Paid in Capital.

If it came in as debt such as bridge loan, secured note, etc. Question What is the relationship between bookkeeping and accounting? Question Explain the concept of responsibility accounting Answer:- They are Collection, summarization, and reporting of financial information about various decision centers responsibility centers throughout an organization; called activity accounting or profitability accounting.

It traces costs, revenues, or profits to the individual managers who are primarily responsible for making decisions about the costs, revenues, or profits in question and taking action about them. Responsibility accounting is appropriate where top management has delegated authority to make decisions. The idea behind responsibility accounting is that each manager's performance should be judged by how well he or she manages those items under his or her control.

Question What is a difference between public and private accounting? Answer:- Public accounting includes any accounting work that a company performs for another company.

Examples would be audits, tax compliance, consulting, etc. Private accounting is accounting work that is done for your own company. Every company has some form of an internal accounting department and those employees would be considered private accountants.

Answer:- Cash float is the time between when you authorize a bank to disperse funds from your bank account and when it actually leaves your account. Question What is the important of computerized accounting to manual?

Answer:- Computerized accounting is quicker and easier than manual accounting and less subject to unintentional error. Question Define social responsibility accounting Answer:- It is a new phase to development of accounting and its birth to increase the social awareness. In addition, it is the social effects of business decisions in addition to the economic effects.

Question What are the disadvantages of back-flush accounting? Answer:- One of the main disadvantages of the system is that it only works under some quite strict requirements.

If these are not met, the system will become unbalanced and may be quite unusable, or a nightmare to maintain. Standard costs must be reliably estimated and variances kept to a minimum. The premise of the system is that a sale triggers the manufacturing process, therefore buildup of work in progress or finished goods needs to be avoided Another drawback is that detailed information for management purposes may not be available where needed, and the production control therefore needs to be all the stronger.

The cost accounts used in back-flush accounting may be more difficult to reconcile to financial accounts needed for reporting Read More Answers. Question Discuss the consistency concept in accounting Answer:- Consistency is a concept used when applying accounting methods to a business, the business must continue to use that particular method.

For an example if a company is charging depreciation using the straight-line method, they must stick with the straight-line method.

Question What is a register when referring to accounting or bookkeeping? Answer:- Register was the name of the Company that mfg. Paper sheet ledgers were originally used to maintain credit records etc.

Question What are the Accounting entries for branch accounts? Question What does the word credit mean in terms of accounting? Answer:- The word "credit" is part of the equation of double entry bookkeeping. In order for bookkeeping entries to balance, there must always be a debit left side, abbreviated by "dr" and credit right side, abbreviated by "cr" entry that equal one another.

Question What does it mean to do accounting training outside of public practice? Answer:- Training outside Public Practice is an alternate route to become a chartered accountant. However, you cannot perform statutory audits; instead, you specialize in financial management.

Question In accounting, are assets a permanent account? Answer:- Assets, Liabilities, and Stockholder's Equity are all permanent accounts. Question Define "book value" as applied to accounting Answer:- Carrying amount original value of the asset minus accumulated depreciation Read More Answers.

Question In terms of accounting the trial balance when is it taken? Answer:- At least once a month Read More Answers. Question What is marginal cost? Answer:- The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output.

More formally, the marginal cost is the derivative of total production costs with respect to the level of output. Marginal cost and average cost can differ greatly. The short movie Derive a Supply Curve 40 seconds shows an excerpt from the Perfect Competition presentation that derives a supply curve from profit maximizing behavior and a marginal cost curve.

Question What steps would you take before approving an invoice for payment? Answer:- Following steps should be taken. Finally, for payments you need to format and build. Question What is meaning of invoice? Answer:- Invoice is a statement which contains the under mentioned details compulsorily. Invoice Number 2. Invoice date 3. Name and address of the person 4. Name and address of the person to whom invoice is made Buyer of goods and service 5.

Applicable rates and taxes with percentages 7. Quantity of the goods and services 9. Quality or any other specifications Invoice must be signed by the person making it Terms and conditions of making the payment Read More Answers. Question What procedure for excess payment to supplier I would like know without adjusting invoice that means how supplier will send back excess amount how do in oracle apps?

Answer:- Excess payment to supplier is treated as Advance paid to supplier. This will show as debit balance in supplier account. Question What is the difference between Consigner and Consignee? Answer:- Consigner is the person who is the owner of the goods and who deliver the goods to the consignee.

Consignee is the person who receives the goods and he just possesses the goods and not the owner. Answer:- The tax payable on a non-salary benefit provided to an employee or an associate of the employee. Know my question is that we want to close the transaction now and how it possible? Answer:- First, there should not be assumptions in transactions.

If you received 25 of worth in exchange of 50 advances, you can close it for a temp. The transaction entry would be Question What are premises in accounting sense?

What is VAT adjustment? Answer:- Premises is and Fixed Assed in the accounting sense which is shown in the balance sheet in final accounts Vat adjustment is out put tax - input tax the vat which is paid on purchase will be deducted from vat collected from sales this adjustment is known as vat adjustment. Question What is the Provision? What is the Entry for Provision? Question What are the advantages of Computer accounting over Paper accounting? Answer:- There are many advantages from computer accounting over manual accounting.

Question How to prepare finalization accounts? Answer:- First, of all post all the journals in the ledger and then post in the trial balance and from that prepare trading account and manufacturing account if necessary and profit and loss account.

And then prepare profit and loss adjustment account and with the help of the trial balance prepare balance sheet and also show the profit under reserves after deducting the previous year losses and show contingencies if any in the notes to accounts.

How will it be charged? Answer:- Service Tax is a form of indirect tax imposed on specified services called Taxable services. Presently it covers 58 services. The service provider but A collected shall pay a service tax from the service receiver. Excise is also a form of indirect tax levied on A goods produced or manufactured in India.

Question What is Capital Budget? Answer:- Capital Budgeting is a way to justify capital expenditures. It was done to see if the added benefit of a capital purchase, i. Question What is purchasing order?

Answer:- Purchasing order means order given to purchase anything. Question What is vendor? Answer:- Vendor means the one who sells Read More Answers. Question What is SLA? Question What is debit and credit note? Answer:- Debit and credit note: while making entry in your books of accounts you need the documentary voucher.

Question What is the difference between Accounts and Finance? Answer:- Account is the detailed record of a particular asset, liability, owners' equity, revenue, or expense.

Financial Accounting is the area of accounting concerned with reporting financial information to interested external parties Read More Answers. Question What is the dual aspect concept? Answer:- Dual aspect concept: Each transaction has two sides. Example: when you buy a shirt, then shirt comes to you while cash leaves you similarly if you sell the same shirt to anyone then cash comes to you while shirt leaves you. Recording both aspects of coming and going is called dual aspect concept Read More Answers.

Please give details? The reason why you will never see depreciation being charged on land is that land has an infinite useful life. Without knowing how many years a fixed asset will last depreciation cannot be charged.

Amortization is only done for Intangible assets, unlike depreciation which is for tangible assets. Reduction in value by prorating the cost of an intangible asset over multiple accounting periods is called amortization.

Example — A small-sized technology company Unreal Corp. If you may wish to deep dive into the topic here is our detailed article on Amortization with an example. This one also stands tall among top finance and accounting interview questions asked in technical rounds by hiring managers.

This is another very common question asked in finance and accounting interviews, especially with entry-level roles. Again, follow the i. Income Statement — It presents a summarized view of revenue, income, profit, and loss of a particular accounting period.

Cash Flow Statement — It shows the movement of cash and cash equivalents for a business during an accounting period. Capital is a Personal Account as it belongs to an individual or a firm owner. Here is our detailed article on Capital along with its Journal Entry here. They are written off in multiple future accounting periods.

Examples — Preliminary expenses, promotional expenses of a business, discount allowed on the issue of shares, the loss incurred on issue of debentures, etc. When a business decides to give goods in charity it also needs to account for those goods in the appropriate financial statement s , in this case, purchases are reduced with the exact cost of goods donated. When a business wants to advertise a new product or a new line of product it may decide to distribute free samples to the customer.

The reduction in the value of a tangible fixed asset due to normal usage, wear and tear, new technology or unfavourable market conditions is called Depreciation. Read more on Depreciation with examples along with types of depreciation. Contingent liabilities are those liabilities that may or may not be incurred by a business depending on the outcome of a future event. The existence of this kind of liability is completely dependent on the occurrence of a probable event in future.

In this case, Samsung will record the estimated amount in their books of accounts as a Contingent Liability. Another very frequently discussed topic in the list of finance and accounting interview questions is accruals.

Accounting basics and interview questions answers. Sample Accounting Interview Questions: Read more http Sample Accounting Interview Questions For more Accountant Interview Questionnaire Sample An accountant Accounting interview questions answers.