Business Accountant Job Interview Questions
Q.1 Give examples of real
and nominal accounts.
Real account is primarily an account
of assets and liabilities, such as land account, building account, etc. On the
other hand a nominal account is an account of income and expenses such as
salary account, wages account, etc.
Q.2 What are the ways to maintain accounting accuracy?
One of the most important activity
for an organization is to maintain the accuracy of an organisation’s
accounting. There are different tools and resources that can be used to limit
any potential errors and thereby rectify quickly if any errors do arise.
Q.3 Is it possible for an organization to show
positive cash flow and still be in trouble?
Yes it is possible, if it shows an
unsustainable improvement in the working capital and involves lack of revenue
moving forward in the pipeline.
Q.4 What are the most common errors in
accounting?
Some of the most common errors in
accounting are – Errors of omission, Errors of commission, Errors of principle
and Compensating errors.
Q.5 Give the difference between inactive and
dormant account?
Inactive accounts are those accounts
that have been closed and will not be used in the future. On the other hand
dormant accounts are not currently functional but can be used in the future.
Q.6 Are accounting standards mandatory?
Accounting Standards play a key role
in preparing a good and accurate financial report. Since accounting ensures
reliability and relevance in the financial reports.
Q.7 If i present you with a statement:– “Debit
the Receiver, Credit the Giver," what does it means?
So, this is one of the most
frequently asked accounting interview questions. Your reply should be – This
principle is used in respect to the 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
Q.8 What
is the minimum number of ledgers an Organization needs, If the organisation has
three bank accounts for processing payments?
I'd say, three ledgers for each
account for proper accounting and reconciliation processes.
Q.9 To
estimate bad debts, what are some of the ways?
Percentage of outstanding accounts,
aging analysis and percentage of credit sales, are some of the well known ways
of estimating the bad debts.
Q.10 Can
you answer what is a deferred tax liability?
Yes, The situation where a company
is in condition to pay more tax in the future due to current transactions, is
signified as Differed tax liability.
Q.11 Please
explain what is a deferred tax asset and how is the value created?
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
Q.12 Please define the term Material Facts?
Yes, The documents such as:
vouchers, bills, debit and credit notes, or receipts, etc. are considered as
material facts. They serve as the base of every account book.
Q.13 Lets consider the Double Entry System, what
are the different stages of it?
There are three different stages of
double entry system, which are – 1.) Recording transactions in the accounting
systems 2.) Preparing a trial balance in respective ledger accounts 3.)
Preparing final documents and closing the books of accounts
Q.14 Are
there any disadvantages of a Double Entry Systems?
Yes, there a few disadvantages when
it comes to Double Entry Systems: Difficult to find the errors, especially when
transactions are recorded in the books And extensive clerical labor is
required, in case of any error One can’t disclose all the information of a
transaction, which is not properly recorded in the journal
Q.15 What
is GAAP?
Generally Accepted Accounting Principles
(GAAP) abbreviated as GAAP, is 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
Q.16 Can
you tell me some examples for liability accounts?
Yes, there are some popular examples
of liability accounts: Accounts Payable Accrued Expenses Bonds Payable Customer
Deposits Income Taxes Payable Instalment Loans Payable Interest Payable
Lawsuits Payable Mortgage Loans Payable Notes Payable Salaries Payable Warranty
Liability
Q.17 Name
the most preferred accounting application by you and why?
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.
Q.18 Do
you know anything regarding GST?
Yes, As the definition says the GST
stands for Goods and Service Tax. It's an indirect tax other than the income
tax. It charges on the value of the service or product sold to a customer. The
customer/clients pay the GST, and the seller deposits the GST with the
government. Some countries around the Globe have sales, service tax with works
more or less the same as GST.
Q.19 What
is tally accounting?
It is an accounting software used by
small business and shops to manage routine accounting transactions.
Q.20 What
are fictitious assets?
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.
Q.21 Is there any difference between inactive and
dormant accounts?
Yes, both are different terms in
accounting. The accounts have been closed and will not be used in the future as
well are known to be as Inactive accounts. While on the other hand the dormant
accounts are those that are not functional today but may be used in the future.
Q.22 Differentiate between Accounting and
Auditing?
Accounting is all about recording
daily business activities while on the other hand auditing is all about
checking that whether all these events have been noted down correctly or not.
Q.23 Please
define dual aspect term in accounting?
The dual aspect concept states that
every transaction has two sides as implied by its name. For example, when you
buy something, its a give and take of cash and the commodity. Similarly, when
you sell something, you lose the possession of that thing and receive money in
return. So this gaining and losing are basically the two aspects of every
transaction.
Q.24 Have
you ever Prepared any MIS reports, if yes then what are they?
Yes, During my previous jobs, I
'have prepared a few MIS reports. MIS reports are created to identify the
efficiency of any department of a company or an organization.
Q.25 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."
Q.26 Can
you tell what is working capital?
The Working capital can be defined
as current assets minus current liabilities. In banking, working capital is
normally defined more narrowly as current assets less current liabilities.
Q.27 Who
has the authority to remove the first auditor before the expiry of term?
The shareholders in a general meeting
Q.28 Who
regulates the money circulation in India?
RBI
Q.29 Who
will settle the greivances of customers of a bank?
Ombuds Men
Q.30 When
did the Indian Banking Act came into force?
1949
Q.31 The
cost of erection of an old machine will be posted in the credit side of which
account?
Cash Account
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