Accounts Interveiw Question & Answers

7/27/2019 Accounts Interveiw Question & Answers

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1. What are the rules of Account? OrGolden rules of Accounting1. Real Accounts : Debit what comes in

Credit what goes out

2. Nominal Accounts : Debit All Expenses And Losses

Credit All Income And Revenue

3. Personal Accounts: Debit the Receiver

Credit the Giver

2. ReconciliationReconciliation means to reconcile the bank balances, or to match the

cash book and pass book

3. What is BRS?'BRS' stands for Bank Reconciliation Statement. This is prepared in

order to tally the balances of Bank Book maintained by the

Organization and Pass Book Maintained by the Banks for any particular

account and the reasons there off.

4. What is the bill of exchangeBills of exchange may be defined as a commitment subscribed by your

customer to pay a certain amount on a given date upon presentation of

the bill of exchange. They can be used to materialize installment

payments.

5. General entry for credit purchases, credit sales.purchases A/C -dr

To supplier A/C

Debtor A/c-dr

To sales a/c

6. In how many days employees dues should be paid.As per wages act, employee dues should be paid upto 7th day of the day

on which wages become payable

7. What is column cash book?1. cash book is a subsidiary book.

IT IS PREPARED WHEN ONLY CASH & BANK TRANSECTIONS ARE

OCCURED. SOMETIMES ONE PARTY RECEIVES OR ALLOW THE DISCOUNT

ON THE TRANSECTIONS SO THAT PARTY WILL RECORD THAT ENTRY IN

CASH BOOK. CASH BOOK IS NOTHING BUT MINIMISING THE JORNALS.

2. Cash book has one, two and three columns.

(a) One column cash book : only Cash(b) Two column Cash book: Cash & Bank transactions

(c) Three column cash book: Cash, Bank and Cash discount.

8. What is capital?1. Cash or Goods used to generate income either by investing in a

business or different income property.

2. In simple capital means property or material or things of

the business. capital is the amount invested in the

business for acquiring assets to run business

9. How can Calculate Deffred Tax of Any Firm Like Pvt. Ltd.Deferred Tax liability is only a provision in the balance sheet, which will be calculated on the difference amount ofthe WDV of Fixed Assets as per Companies Act and as per Income Tax Act at the end of each financial year.


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10. Contents of a Balance sheetLIABILITIES AND ASSETS WHERE WE HAVE

CAPITAL,LOAN,CREDITORS,RESERVES,O/S, BILLS PAYABLE,ETC IN LIABILITIES

AND FIXED ASSETS LIKE PLANT & MACHINERY ,BUILDING, FURNITURE, CASH

BANK BALANCE, BILLS RECEIVABLE, SUNDRY DEBTORS, CLOSING

STOCK,GOODWILL,PREPAID EXPENSES, ETC.

11. WHAT WILL BE JOURNAL ENTRY OF COST OF GOODS SOLD.lets Take a example

Opening Stock Rs 1000 dr

Purchase Rs 2000 Dr

Closing stock Rs 500 Dr if the same is shown in Trail balance,

The formula for cost of goods sold =opening stock+Purchase - closing

stock. it means ultimately we debit in trading and profit and loss

accont is Rs 2500/-

So the Journal entry would be

Trading and profit and loss account dr Rs 2500

To Cost of goods sold Rs 2500( Being cost of goods sold transferred to P/l Trading account)

12. What is inventoryInventory in a Manufacturing Company relates to Stock in Hand at any

Particular Date which could be of Finished, Semi Finished or

unfinished which can be treated as Current Assets. High accumulation

of Inventory is always risky since it indicates locking up of Funds.

So it should always be at a reasonable level

13. How to create Sundry Creditors and Sundry Debtors Aging analysisAging reports means Dr's or Cr's Pending amt showing below

types. Below 30 Days, 30 to 60 Days and Above 60 days knownas ageing reports created in tally using F6 key .

14. what is the different between Liability and owners equities ?Owner's equity represents the capital i.e., the investment in the form

of cash and assets made by the owner and the returna thereof, viz.,

P&L balance, general reserves etc. However, all other claims accrued

to the business by entities other than owners constitute other's

liabilities.

Total liabilities are sum total of owners and other liabilities.

15. Where do you post Credit Sales in Trading or P& L Account, or should we deduct

from the actual sales and put the net figures in the column. ClarifyWhere do you post Credit Sales in Trading or P& L Account, or shouldwe deduct from the actual sales and put the net figures in the column.

Clarify

16. will preference share holders will have voting right?wat is difference between eqity

holders and preference share holdersNo preference shareholders donot have the right to vote. But in two

circumstences they have voting right .

1.Reduction of Share capital.

2.cumilative preference dividend not paid in last 2 consecutive

years. The both 2 situations they have right to vote...in according

to the comp's Act 1956.


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17. How we will account the preliminary expenses in journal and ledger as well as

balance sheet?Journal: If you wish to written off your Preliminary expenses

Preliminary Exp A/c Dr. 1000

To Cash / Bank 1000

Being Preliminary expenses written off rs 1000)

Ledger: you should have show the written off amount rs 1000 in

debit side of P & L A/c

Balance Sheet: You should have Asset side under the head of

Miscellaneous Expenditure - preliminary Exp. Written of rs 1000.

Otherwise if you not written off any amount during the year, you

should have only show the opening balance of amount in assets side

18. What is the mean of capital in accountFor Each & Every Business, you need Funds to start and run a Business.

So this amount (Whether contributed by the Owners (Director /

Stakeholder) or Financed from elsewhere) is called as Initial Capital.

Later on, the meaning of Capital get Broadens into the Amount of

Assets including Cash & cash equivalents which can be bifurcated into

Current Assets and Fixed Assets.Net Capital can be calculated by

deducting Liabilities from the Assets available. It shows the overall

capacity of the Business Entity

19. PASS JOURNAL ENTRIES PURCHASED GOODS FROM Mr. X ON CREDIT 1000PURCHASE A/C DR 1000

TO Mr X a/c 1000

(Being goods purchased from Mr. X on credit)

20. What is tds and how it is calculatingTDS is Tax Deducted at Source. This rule is introduced by the Govt.

is in order to expedite Tax Collection (At least a part of the Total

Tax Liability) as soon as an assesse earn his income. Normally we pay

Income Tax and File returns of any Financial Year in the Next Year. By

Deducting Taxes in the form of TDS, Govt. can get the revenue (At

least a part thereof before setting off) in advance. At the end of the

FY when you file your IT Return, you can deduct the amount deducted so

far by way of TDS from your overall tax liability and pay only the

balance if anything is due to the Tax Department or you can ask for a

refund if the TDS deducted is more than your liability. TDS is

deducted on salaries, dividend, Insurance, Winning from Lotteries,

Horse Race, Rent, Commission, Professional Income etc.., etc., It is

deducted according to the specified rates as per Finance Act.

21. what is the mean of ABC analysis ?ABC analysis stands for Always Better Control...In this method of

Inventory control.the most valuable materials being of small

quantities yet of high sensitive are Ranked as "A" and the next

category is "B" and the raw materials which are of large volume but of

lower price sensitive are ranked "C".

A- Outstandingly important

B- Of Average ImportantC- Relatively unimportant as a basis for a control

22. What are the difference between P/l a/c and income and expenditureIncome and Expenditure account is created by non profit making

organizations (NPO) and P&L account is created by business like

trading and manufacturing etc.


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23. What is set off and carry forward.1: ---set off and carry forward comes under taxation. I vl take an

e.g. explain set off-- Mr. has got 2 business one is cloth shop and

another is coffee shop...at the end of d year...owner faced a loss of

50000 from cloth shop and profit of 60000 from coffee shop.(60000-

50000) therefore the owner is only liable to pay tax on 10000 rs

because according to income tax act. His loss should be recovered from

his profit. Note: - both the business should come under one head.

2::::: ---carry forward ---taking same scenario if Mr. faced a loss of100000 and profit 0f 30000 ...den his profit amount will be adjusted

to his loss amount and he will not be liable to pay any tax...whereas

(100000-30000) leftover amount vl be again adjusted to next year

profit....if he couldnt recover his loss amount next year...d maximum

time he can take is 8 years..

24. How do you calculate Profit earned per share?Net profit after all taxes and dividend divided by number of shares equal to earning per share

25. What do you mean by depreciation?Depreciation is the decrease in the value of fixed asset due to wear

and tear(usage),obsolesce etc. the important point to note is

deprecation is for fixed assets only

26. What is the Formula of debt equity ratio? Also Define its importance in accountancyDebt equity ratio is a long term ratio; it shows the proportion of

debt over the equity. The formula for debt equity ratio is

DER = Debt/Equity

Here Debt is long-term liabilities and equity is none other than the

share holders fund (Equity+Preference+Reserves-Ficticious assets)

27. What Does Return On Capital Employed - ROCEMean?

ROCE compares earnings with capital invested in the company. It is similar toReturn on Assets (ROA),but takes into account sources of financing.

Operating Income : In the numerator we have pre-tax operating profit oroperating income. However,

it is also possible to adjust the EBIT by deducting the sum of the taxes. In the absence of non-operating

income, operating income agrees with EBIT; otherwise, it can be derived from EBIT by subtracting non-operating income.

Capital Employed: In the denominator we have net assets orcapital employed instead of total assets

(which is the case of Return on Assets). Capital Employed has many definitions. In general it is thecapital investment necessary for a business to function. It is commonly represented astotal assets lesscurrent liabilitiesorfixed assets plus working capital.

ROCE uses the reported (period end) capital numbers; if one instead uses the average of the opening andclosing capital for the period, one obtains Return on Average Capital Employed (ROACE).

OR

A ratio that indicates the efficiency and profitability of a company's capital investments.Calculated as:
http://en.wikipedia.org/wiki/Return_on_assetshttp://en.wikipedia.org/wiki/Return_on_assetshttp://en.wikipedia.org/wiki/Operating_incomehttp://en.wikipedia.org/wiki/Operating_incomehttp://en.wikipedia.org/wiki/Operating_incomehttp://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Capital_employedhttp://en.wikipedia.org/wiki/Capital_employedhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Current_liabilitieshttp://en.wikipedia.org/wiki/Current_liabilitieshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Working_capitalhttp://en.wikipedia.org/wiki/Working_capitalhttp://en.wikipedia.org/wiki/Return_on_assetshttp://en.wikipedia.org/wiki/Operating_incomehttp://en.wikipedia.org/wiki/Earnings_before_interest_and_taxeshttp://en.wikipedia.org/wiki/Capital_employedhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Current_liabilitieshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Working_capital

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Accounts Interveiw Question & Answers