Accounting interview questions

What does the abbreviation dr mean in accounting?

Dr' means Debere in Latin stands for 'what comes in' or in simple words whatever assets the business owns or the expenses it has to pay comes under debit.

While 'cr' means credere in Latin means 'what goes out', in simple words whatever liabilities business owns, or the income it earned during the year comes under credit.

Where should TDS received should show in balance sheet?

it should be shown under the head current asset on the asset side of balancesheet.

What is the basic accounting equation?

the basic accounting equation is ----- > asset= liability + owner equit

What is Purchase returns Accounting?

"Purchase returns" is the entry made in the journal that refers to "Unsatisfactory or defective merchandise/goods which is returned back to the supplier".

To pass the entryDr the SupplierCr the Purchase returns ledger

Give me examples of the accounting reports you have prepared?

Demonstrate your experience in maintaining accounting principles, practices and procedures to ensure accurate and timely financial statements and reporting. Discuss your ability to meet tight deadlines and undertake a multitude of accounting activities. Show your understanding of generally accepted and statutory accounting principles.

What is the difference between personal account real account and nominal account?

The total business transactions are divided in to three They are Transactions related to persons, Transactions related to Things, Transactions related to incomes & expenditures. In accountancy we have three types of accounts they are - personal, real, nominal Personal accounts refers to all the transactions related to natural persons, artificial persons and representative persons ex:- rama, ravi, Indian bank, outstanding rent. ,. First category of transactions belongs to personal accounts RULE: debit the receiver and credit the giver Real accounts include things in the business i.e. assets. Second category of transactions related to Real accounts ex: buildings, machinery, cash etc. RULE: Debit what comes in and credit what goes out Nominal accounts includes all the transactions related to expenditures, incomes, losses, and profits. Ex: - rent paid, rent received, bad debts, profit on sale of an asset.

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RULE: Debit all expenses and losses and credit all incomes and profits

What are premises in accounting sense? What is VAT adjustment?

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.

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?

send back excess amount how do in oracle apps?Excess payment to supplier is treated as Advance paid to supplier. This will show as debit balance in supplier account. Supplier can send the payment by way of check/ demand draft without adjusting in his subsequent bills.

What is Service Tax & Excise? How will it be charged?

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.

What are the fictitious assets?

These are like intangible assets, which cannot be seen or touched. Actually, these are not assets but some expenditure, which cannot turn to profit and loss account of a particular period that is why these items are shown on assets side of balance sheet to be written off to P&L account in reasonable years.

What is the difference between Perpetual and Periodic Inventory systems?

In perpetual inventory system, the inventory account is adjusted continually throughout the accounting period.Whereas in the Periodic Inventory System: - Recording inventory transactions periodically than recording them continually.

What is the definition of offset accounting?

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.

What is Departmental Accounting? Give an example?

Departmental accounting means account prepared separately for the department and here ledgers will be opened trial balance will be prepared, also p&l account will be prepared, and profit or loss is included in the main p&l account and shown in the balance sheet.

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What is marginal cost?

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. For example, suppose it costs $1000 to produce 100 units and $1020 to produce 101 units. The average cost per unit is $10, but the marginal cost of the 101st unit is $20The Econ Model applications Perfect Competition and Monopoly emphasize the roles of average cost and marginal cost curves. 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

What are the different branches of accounting ?

There are three types of branch of accounting1. Financial Accounting2. Management Accounting3. Cost Account

Financial accounting refers to accounting for revenues, expenses, assets, and liabilities. It involves the basic accounting processes of recording, classifying, and summarizing transactions.

- Cost accounting is the branch of accounting dealing with the recording, classification, allocation, and reporting of current and prospective costs.

- Managerial accounting is the branch of accounting designed to provide information to various management levels in the hospitality operation for enhancing controls.

What is meant by public accounting?

Public Accounting is best known for providing audits, CPAs who work in public accounting review company financial records for accuracy and accountability.

What is the dual aspect concept?

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.

according to dual aspect concept every business have two concept of business transaction one is debit second is credit transaction.if follow the both aspects (dr,ct) in business that is called dual aspects of business.

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What is Executive Accounting?

Executive Accounting is designed for service type businesses that require a sophisticated accounting system, yet simple to use accounting system. Executive Accounting contains many advanced features such as three styles of invoicing (service, distribution and recurrent), multi-currency capabilities, multiple bank account capabilities and other powerful features. Executive is a single-user system that can be upgraded to an unlimited number of users.

How many accounting standards are currently published?

There are total of 9 accounting standards.

What is retail banking?

Retail banking refers to the banking done with the retail client (e.g. the normal people) rather than business or organizational customers.

What are bills receivable?

Bills Receivable , in merchant accounts, are all promissory notes, bills of exchange, bonds, and other evidences or securities which a merchant or trader holds, and which are payable to him.

What is the difference between the accrual accounting and cash accounting?

The Cash Basis of accounting reports only transactions that have been completed in the current reporting period - or - what has "hit" the checking account (assuming all funds are deposited and disbursed only from that account) - The Accrual Basis of accounting reports all transactions that the entity has entered into and includes the asset, liability, income and expense related them.

In addition, the Cash Basis of accounting is considered OCBOA (Other Comprehensive Basis of Accounting ~ Other than GAAP) and the Accrual Basis (when implemented properly and fully) is considered GAAP (Generally Accepted Accounting Principles).

EDIT - The Accrual Basis is more desirable from a user's standpoint as it includes transactions that may exist were completed after the report dates that were initiated prior to the report date. It is generally more complete and more reliable than the cash basis - however, that does assume that the person preparing the statements has expertise of, not simply a cursory working knowledge of, GAAP and the accrual basis. For example, a set of financial statements printed out of QuickBooks are not necessarily GAAP compliant (or correct) although they may appear to be at first glance or to a layperson.

What does overhead mean in regards to accounting?

It is to describe costs of running a business, e.g. rent rates and salaries

Overheads are the indirect expenses incurred.

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What are the differences between accounting and auditing?

Accounting records the events. Auditing is a process that checks to see whether the events occurred and it is properly recorded.

What is cash flow and fund flow?

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.

What is the difference between Consigner and Consignee?

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.

What is accounting ethics?

Accounting ethics is primarily a field of applied ethics, the study of moral values and judgments as they apply to accountancy. It is an example of professional ethics.

What are the items that are to be debited in accounting and what are the items that are to be credited in accounting?

This depends on the nature of the account and the thing you wish to achieve. For example, to increase cash you would debit the cash account, but if you wanted to decrease it, you would credit it. There are all sorts of accounts and they have different normal balances.

The thing to remember is that every journal entry must have equal debits and credits. So for example to increase a contra asset account like Allowance for Doubtful debts you would credit Bad Debt Expense to increase it and credit Allowance to increase that!

What is the relationship between cost accounting financial accounting and managerial accounting?

Financial accounting relates to the information presented based on past events and records.

Cost and managerial accounting is the presentation of financial information to the management to be used in decision making while in managerial accounting projections are made based on past trends.

Financial accounting relates to the information presented based on past events and records.

Cost and managerial accounting is the presentation of financial information to the management to be used in decision making while in managerial accounting projections are made based on past trends.

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In accounting, are assets a permanent account?

Assets, Liabilities, and Stockholder's Equity are all permanent accounts.

What is accounting chart of accounts?

Accounting chart is where you have all the codes for expenses

What is computerized accounting?

Accounting is the method in which financial information is gathered, processed, and summarized into financial statements and reports.

The purpose of accounting is to provide information used in decision-making. Accounting may be viewed as a system (a process) that converts data into useful information.

Information processes include:

* Recording* Maintaining* Reporting

Every business has numerous processes. Some are simple, others complex and cumbersome. However, as the business grows, acquires new customers, enters new markets, and keeps pace with constant changes in statutory regulations... the company will need to maintain highly accurate and up-to-date accounting, inventory, and statutory records.

This is where a computerized accounting helps simplify, integrate, and streamline all the business processes, cost-effectively and easily.

What do you mean by material facts in accounting?

Material facts are documents pertaining to the historical events of the facts being justified.

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Why are Accounting Standards necessary?

Accounting standards are necessary to promote high quality financial reporting. The fundamental role of accounting is to communicate economic information about businesses and other organization to various stakeholders including government, investors, shareholders, suppliers, lenders, customers, and the public. These stakeholders use such information to take decisions and to assess the stewardship of people appointed to manage such organizations. If this information were not of a high quality standard, then the stakeholders would be unable to take effective decisions that will benefit them. For example, if a financial report were manipulated to show higher profits, investors would hold on to their shares with the belief that the company is doing well.

Accounting standards came to be developed from the mid sixties onwards to promote the integrity of the accounting profession by way of ensuring uniformity in the way accountants report transactions in their books and in their preparation of the final accounts of businesses. This is largely aimed at boosting the confidence of stakeholders, particularly shareholders and potential investors in the accounting profession.

Good and useful information should have the essential characteristics of understandability, comparability, relevance, and reliability in order to play its role effectively.

Accounting standards serve to promote the understandability, comparability, relevance, and reliability of financial reports.

What is a difference between public and private accounting?

Public accounting includes any accounting work that a company performs for another company. Examples would be audits, tax compliance, consulting, etc. The "Big 4" (KPMG, Deloitte & Touch?Price Waterhouse Coopers, and Ernst & Young) are the dominant firms that provide public accounting services.

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.

What is the difference between provision and reverse?

Provisions are created in books as they are anticipated. Example: provision for depreciation

Reserves are created in books as a part of profits, which might used to purchase assets or to declare dividends.

In simple, provision is a charge against the profit whereas reserve is an appropriation of profit.

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What are cost accounting and its applications?

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.

What are the Accounting entries for branch accounts?

DR investments in branch

Cr cash

Cash sent to branch

How to prepare finalization accounts?

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.

What are trade bills?

Every transaction must be supported by any document. A trade bill is a supporting document of business activities like purchases, sales, receipts, payments etc..

Every transaction must be supported by any document. A trade bill is a supporting document of business activities like purchases, sales, receipts, payments etc..

What is bank reconciliation statement?

A Bank reconciliation statements are prepared if balance of bank account as shown in cashbook differs from balance as shown in passbook. This statement shows the reasons or transactions because of which balances as shown in cashbook and passbook are not tallying with each other.

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Bank reconciliation statement statement which reconciles the bank balance as per the cash book with balance as per the pass book or bank statement by showing all causes of difference between the two

Explain the concept of responsibility accounting

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.

How many invoices on average do you handle on a weekly/monthly basis?

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.

What is an operative accounts?

Operative Accounts means Account is running/operating regularly, transaction is running from the account (debit/credit and deposit/withdrawal from account) this is known as Operative Account.

What are MIS reports and do you prepare it?

MIS is management information system. In addition, MIS report is reporting information of reports like efficiency of wing or a department of a company.

IF we take BPO (Call center) sector as example, MIS consists of efficiency of agents, Average time taken hold time etc, and passing this to the management level for their analysis.

What is Use of statistics in accounting?

Well, in many accounting situations, there is too much data to go through all this. For example, if we are looking about Ford motor corp., and looking at some specific data, their may be too much to analyze, so we take a sample. Then we need to know how big a sample to take so we can say with 95% confidence that our results are representative of all the data.Statistics tells us what sample size we need.

What is double entry book keeping?

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In double entry book, keeping method a journal entry is posted to both respective accounts for each transaction.

Let us say for sales transaction, debit entry posted to cash account credit entry posted to sales account.

Therefore, it is one of the methods to post accounting transactions.

Double entry book keeping is a system wherein every transaction has two fold aspects i.e. a single transaction affects two accounts at a time.

What is fiduciary accounting?

Proper accounting for property that is entrusted to the fiduciary acting under the conditions set forth in a deed

What are accounting principles?

The Accounting Principles are the assertion rules of accounting and the application of these rules, method, & procedures to actual practice of accounting. These Accounting principles have been divided into

A. accounting concepts

B. accounting conventions

What is fair value accounting?

Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that, it is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. However, it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial markdown from the prior value. See related links for complete explanations.

What is meant by partitioning?

Partitioning is nothing but grouping based on the cluster, which is similar kind of response by a system.

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What is definition of a cash float in accounting?

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.

What are the Steps involved in Project implementation?

Step involved in project implementation:

► Identification of the need

► Idea generation and screening of ideas

► Feasibility Study

► Project Development

► Implementation

► Controlling

Discuss the consistency concept in accounting?

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.

What is Capital Budget?

Capital Budgeting is a way to justify capital expenditures. It was done to see if the added benefit of a capital purchase, i.e. increased revenue or decreased expense, exceeds the cost of capital.

What are the disadvantages of back-flush accounting?

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

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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

Why do users of accounting Information need accounting information?

External users of accounting information (especially investors) use accounting information like annual and quarterly reports to base their investing decisions on, and to compare different companies with one another.Internal users of accounting (mostly managers) use internal accounting information in order to plan.

Tell me about an invoice discrepancy you discovered and how you resolved it?

Be specific about the type of discrepancy. Discuss the steps you took to identify and sort it out such as obtaining and checking the original order. Focus on the skills required to resolve the discrepancy such as attention to detail, problem analysis and problem resolution.

What is balance sheet and off balance sheet?

Balance sheet is a statement which consists if asset and liabilities balance sheet is not called as account .their are 2 columns in balance sheet left hand side is called liabilities and right hand side is called asset.

How can you do credit control?

1. Make the creditor, your debtor2. For good creditor, give discounts & offers3. For bad creditor, inform your position of willingness but inability to sustain relationship keeping in mind our business position.

What is meaning of invoice?

Invoice is a statement which contains the under mentioned details compulsorily.

1. Invoice Number2. Invoice date3. Name and address of the person4. Name and address of the person to whom invoice is made (Buyer of goods and service)5. Description of goods / services involved6. Applicable rates and taxes with percentages7. Rate of the goods / services8. Quantity of the goods and services9. Quality or any other specifications10. Price / Value of the goods and services

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11. Invoice must be signed by the person making it12. Terms and conditions of making the payment

invoice is a document which is issued the the salesmen to buyer contain information related to purchased good such what purchased,price,quantity,quality,date, invoice no, buyer contract etc,

Is financial accounting necessary?

Yes, the accounting calculates the cost of capital to the business. It compares the current, expected, and historic rates of return. Suppose a company is making 12% returns but borrowing money by using the owner's credit card at 22% be good to know that

What is dividend warrants?

Dividend is the part of profits payable to the owners of the company i.e., Shareholders. Some companies issues warrants to its shareholders instead of paying dividends in the form of cash in the form of document by mentioning the Warrant Price and other details.

The price mentioned in it is also called exercise price. Some times company may not specify the name of the holder. The holder of the document can fill it.

Advantages: It helps to the issuing company from paying the Tax.

It is easy to transfer from one person to other without any formalities

It helps to increase the share/capital of the company

Have you ever been involved in an invoice dispute? How did you manage the problem?

Accounting job interview questions like this explore your conflict management skills. Emphasize your interpersonal skills, your maturity and your ability to stay calm in the face of difficulty. Describe the techniques you use to diffuse disputes such as asking questions to determine the reason for the dispute, not conveying blame and not becoming too emotional. Demonstrate your ability to work together with others to reach an acceptable resolution.

What is meant by daily accrual and booking?

Meaning of Accrual: Revenues and costs are accrued (gathered), that is recognized as they are earned or incurred (and not as money is received or paid) and recorded in the financial statements of the periods to which they relate. Accrual basis of accounting is one of the fundamental accounting assumptions underlying the preparation and presentation of financial statements.

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Discuss the consistency concept in accounting?

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.

What accounts payable applications are your familiar with?

With accounting job interview questions like this first list the applications you have used and then expand on the value of the solutions they offered to your particular business. Look at aspects such as managing vendor information, approval controls and providing payables reports

what is the role of an account assistant?

The role of Asst.is in the work Is Preparing All Record which helpful by Organization & Accountant to Maintained The Financial Activity In Future Planing Accoutering Business Success

How to control purchasing price?

What is Letter of Credit?

LC (Letter of Credit) is a set of documents which are very essential for goods being transported from one country to another. This set includes that of invoices, shipping documents, grantees and others.

What are the uses of journal in accounting?

The journal is most commonly used to record corrections to errors that have been made in writing up the general ledger accounts

Key Difference between Indian accounting standards and international accounting standards is?

In international accounting LIFO and extraordinary items are prohibited.

What is peach tree accounting?

Peachtree Accounting is the name of a computerized accounting software program.

What qualities have you got that would make you a good accountant?

Aside from the obvious ones such as numeracy and interpersonal skills, key skills will include determination and self discipline (to get through the difficult professional examinations) and an interest in the business world generally. An ability to work in (and ultimately lead) teams, strong analytical skills, good verbal and written communication skills and curiosity (particularly on the

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audit side) are some of the others you could mention - if you aren't strong in some of these areas then you may have problems making a persuasive case for yourself.

You are likely to be asked many questions seeking evidence of these particular competencies and will be expected to give examples which are backed up with evidence: for example, if asked about your leadership qualities, you should give an example of where you led a group successfully rather than just stating 'people always look to me to take the lead'.

What is meant by balancing?

Balancing means equalizing debit and credit side totals in a T-account.

If there is a deficit on side that is, debit, or credit a suspense account is opened with the balancing figure.

What do you consider to be the biggest challenge facing the accounting profession today?

A sample answer to accounting interview questions like this is: In response to the changing market accountancy professionals have to provide more management and consulting services, in addition to financial management. They have to assume a greater advisory role and develop more complex and flexible accounting systems. Then continue to explain how you can meet this challenge.

What is an adjusting journal entry?

Adjusting entries are those entries that passed to rectify an error or wrong entry already made some accounting soft wares have disabled edit function in the accounts, so the only way to undo the mistake is to pass a correction entry or adjusting entry.

What other careers are you considering?

The obvious answer would be careers in banking and insurance and other finance areas, but it is OK to mention any career here as long as you can argue your case effectively e.g. by demonstrating that the skills required are similar to those of an accountant.

Interviewers will be looking for evidence that you have analyzed your skills and interests in a logical manner when coming to a career decision, and also for signs of your commitment to accountancy.

However, in an interview you do not HAVE to tell the truth, the whole truth and nothing but the truth. If you admit to also applying for highly-competitive areas such as journalism or the Diplomatic Service, the interviewer is likely to assume that accountancy is your second choice. Similarly, you might find the interviewer challenging your interest in business if you said that social work or nursing was also an option.

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What qualification do you need to become an accounting professional?

As an accounting professional in the state of Maryland, the requirements are 150 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 150 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.

Can I take service tax on freight outward?

Yes, you can take tax on freight outward. Because you are paid freight inclusive of service, tax so you can full credit availed on any expenditure where you paying service tax amount.

What information do you require before you approve an invoice for payment?

Focus on your monitoring and checking skills. Demonstrate your understanding of the documentation required for verification before payment is made.

What is depreciation and how many types are there. Please give details?

Depreciation and its types: Depreciation means reducing/lowering value of an asset because of its use. Like machines/vehicles gets rusty/slow because of consistent use.

What is the definition of manual accounting?

It is recording accounting transaction without the use of computer.

What is meant by turnover?

The turnover refers to the sales volume for a specific period like quarterly, semi annually or annually. It can be measured with sales volume figure or no. of days taken.

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