This document contains 27 accounting interview questions and answers. It begins with common questions about types of business transactions, real and nominal accounts, accounting platforms worked on, double-entry bookkeeping rules, working capital, maintaining accuracy, TDS, accounts payable vs receivable, trial balance vs balance sheet, positive cash flows indicating trouble, common accounting errors, inactive vs dormant accounts, accounting standards in India, deferred tax liability and asset, and acid-test ratio equation. It ends with questions about popular accounting applications, GST, bank reconciliation statements, tally accounting, fictitious assets, and departmental accounting systems.
This document contains 75 questions and answers related to accounting. It covers a wide range of accounting topics from the basic types of accounts and transactions to more advanced concepts like deferred taxes, working capital, accounting standards, and financial statements. The questions are multiple choice or require explanations. They help assess a candidate's accounting knowledge on fundamental as well as complex accounting principles, procedures, and regulations.
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
The document provides information about Tally training offered in Chandigarh, India. It contains questions and answers about various accounting topics such as accounting applications, accounting standards, the differences between accounting and auditing, and definitions of terms like depreciation, provisions, and reserves. The document aims to educate readers on fundamental accounting concepts through a question and answer format. It also provides contact information for CBITS Software Solutions, the company offering Tally training courses in Chandigarh.
The document provides information about various accounting concepts and terms. It begins with definitions of common debit and credit terms used in accounting. It then provides explanations and examples of various accounting concepts such as the basic accounting equation, purchase returns, types of accounts, premises, and VAT adjustment. The document also answers common accounting interview questions regarding the differences between various types of accounts, accounting principles, financial statements, inventory systems, accounting branches, cost terms, and accounting procedures.
The document discusses intercompany reconciliations, which involves reconciling accounts between branches of the same company located in different locations. When one branch sells products to another branch, the selling branch becomes the seller and purchasing branch becomes the buyer. The purpose of intercompany reconciliation is to ensure there is no cash loss within the business entity and to identify any discrepancies between branches. It also keeps the financial status of each branch updated periodically.
Cost & Management Accounting Model Paper Theory Answers.docxParikshitPareek8
This document contains model answers to questions about cost and management accounting. It discusses key topics like the definition of accounting, branches of accounting such as financial accounting and management accounting, and accounting concepts like the accounting equation. It also covers cost accounting topics such as cost elements, standard costing, budgeting and variance analysis. The document provides concise yet comprehensive responses to questions across various modules related to accounting fundamentals, financial statements, ratio analysis, and cost and management accounting principles.
This document provides an overview of accounting basics including:
1. Accounting involves identifying, recording, summarizing and reporting economic information to decision makers through financial statements. The key financial statements are the balance sheet and profit and loss statement.
2. Accounting follows double-entry bookkeeping where every transaction has two equal and offsetting entries - a debit and a credit. This allows for the preparation of trial balances to check accuracy.
3. Key accounting concepts include revenue recognition, matching revenues and expenses, accrual accounting and the going concern assumption. Accounting also follows principles like money measurement and accounting periods.
This document contains 75 questions and answers related to accounting. It covers a wide range of accounting topics from the basic types of accounts and transactions to more advanced concepts like deferred taxes, working capital, accounting standards, and financial statements. The questions are multiple choice or require explanations. They help assess a candidate's accounting knowledge on fundamental as well as complex accounting principles, procedures, and regulations.
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
The document provides information about Tally training offered in Chandigarh, India. It contains questions and answers about various accounting topics such as accounting applications, accounting standards, the differences between accounting and auditing, and definitions of terms like depreciation, provisions, and reserves. The document aims to educate readers on fundamental accounting concepts through a question and answer format. It also provides contact information for CBITS Software Solutions, the company offering Tally training courses in Chandigarh.
The document provides information about various accounting concepts and terms. It begins with definitions of common debit and credit terms used in accounting. It then provides explanations and examples of various accounting concepts such as the basic accounting equation, purchase returns, types of accounts, premises, and VAT adjustment. The document also answers common accounting interview questions regarding the differences between various types of accounts, accounting principles, financial statements, inventory systems, accounting branches, cost terms, and accounting procedures.
The document discusses intercompany reconciliations, which involves reconciling accounts between branches of the same company located in different locations. When one branch sells products to another branch, the selling branch becomes the seller and purchasing branch becomes the buyer. The purpose of intercompany reconciliation is to ensure there is no cash loss within the business entity and to identify any discrepancies between branches. It also keeps the financial status of each branch updated periodically.
Cost & Management Accounting Model Paper Theory Answers.docxParikshitPareek8
This document contains model answers to questions about cost and management accounting. It discusses key topics like the definition of accounting, branches of accounting such as financial accounting and management accounting, and accounting concepts like the accounting equation. It also covers cost accounting topics such as cost elements, standard costing, budgeting and variance analysis. The document provides concise yet comprehensive responses to questions across various modules related to accounting fundamentals, financial statements, ratio analysis, and cost and management accounting principles.
This document provides an overview of accounting basics including:
1. Accounting involves identifying, recording, summarizing and reporting economic information to decision makers through financial statements. The key financial statements are the balance sheet and profit and loss statement.
2. Accounting follows double-entry bookkeeping where every transaction has two equal and offsetting entries - a debit and a credit. This allows for the preparation of trial balances to check accuracy.
3. Key accounting concepts include revenue recognition, matching revenues and expenses, accrual accounting and the going concern assumption. Accounting also follows principles like money measurement and accounting periods.
This document discusses key accounting principles and concepts, including:
- The purpose of key financial statements like the income statement, balance sheet, and cash flow statement.
- Accounting principles like relevance, reliability, and comparability.
- Key terms used in accounting like assets, liabilities, revenues, and expenses.
- The accounting equation that balances assets with liabilities and owner's equity.
- The difference between accrual and cash-basis accounting and how transactions and balances are treated.
Finance for strategic managers day 1- 1Parag Tikekar
This document provides an overview of Parag Tikekar's background and qualifications, including degrees in electronics and business. It then outlines the agenda for a finance course, including introductions to bookkeeping, accounting, accounting methods, trial balances, debits and credits. The document defines key accounting terms and describes the processes of single and double entry bookkeeping systems and cash versus accrual accounting methods. It emphasizes the importance of accurate bookkeeping for preparing financial statements.
Here are the steps to do the opening ledger posting for the given transactions:
1. Create ledger accounts for each item - Asset, Liability and Capital accounts
2. Asset accounts
- Cash on Hand - Debit balance of Rs. 40,000
- Bank OD - Credit balance of Rs. 11,000
- Stock of Goods - Debit balance of Rs. 25,000
3. Liability account
- Capital - Credit balance of Rs. 80,000
4. Pass journal entries to record the transactions:
Cash on Hand A/c Dr. 40,000
To Capital A/c 40,000
Bank OD A/c Dr. 11,000
The document is a 40-page eBook from the Corporate Finance Institute that provides an introduction to accounting principles. It covers topics such as bookkeeping, the accounting equation, debits and credits, journal entries, T-accounts, adjusting entries, the general ledger, accounts receivable, inventory, assets, liabilities, shareholders' equity, the balance sheet, income statement, and statement of cash flows. The eBook is intended to walk readers through all important bookkeeping and accounting principles from basic transaction recording to the full accounting cycle and key financial statements.
Mb0041 financial and management accountingsmumbahelp
This document provides information about an assignment for the course MBA Semester 1, Master of Business Administration. It contains 6 questions related to accounting concepts, principles, and practices. Students are instructed to answer all questions, with answers to 10-mark questions being approximately 400 words each. The questions cover topics like the meaning and objectives of accounting, bookkeeping, GAAP, accounting equation, cash books, trial balance adjustments, and the roles and functions of management accounting.
Chapter 3 ANALYZING AND RECORDING TRANSACTIONSPrinciples of EstelaJeffery653
Chapter 3 ANALYZING AND RECORDING TRANSACTIONS
Principles of Accounting, Volume 1: Financial Accounting
PowerPoint Image Slideshow
Chapter Outline
3.1 Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial Statements
3.2 Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions
3.3 Define and Describe the Initial Steps in the Accounting Cycle
3.4 Analyze Business Transactions Using the Accounting Equation and Show the Impact of Business Transactions on Financial Statements
3.5 Use Journal Entries to Record Transactions and Post to T-Accounts
3.6 Prepare a Trial Balance
Module 3.1 Describe Principles, Assumptions, and Concepts of
Accounting and Their Relationship to Financial Statements
The Financial Accounting Standards Board (FASB) is an independent, nonprofit organization that sets the standards for financial accounting and reporting, including generally accepted accounting principles (GAAP), for both public- and private-sector businesses in the United States.
GAAP are the concepts, standards, and rules that guide the preparation and presentation of financial statements.
US accounting rules are called US GAAP.
International accounting rules are called International Financial Reporting Standards (IFRS).
Some companies that operate on a global scale may be able to report their financial statements using IFRS.
Publicly traded companies (those that offer their shares for sale on exchanges in the United States) have the reporting of their financial operations regulated by the Securities and Exchange Commission (SEC).
Teacher Notes: By having proper accounting standards such as US GAAP or IFRS, information presented publicly is considered comparable and reliable. As a result, financial statement users are more informed when making decisions.
3
The conceptual framework is a set of concepts that guide financial reporting. These concepts help ensure information is comparable and reliable to stakeholders.
Revenue recognition principle: directs a company to recognize revenue in the period in which it is earned; is earned when a product or service has been provided
Expense recognition (matching) principle: states that we must match expenses with associated revenues in the period in which the revenues were earned
Cost principle: states that virtually everything the company owns or controls (assets) must be recorded at its value at the date of acquisition
Full disclosure principle: states that a business must report any business activities that could affect what is reported on the financial statements
The Conceptual Framework
Teacher Notes: Revenue recognition is not dependent on when cash is received.
Expense recognition is not dependent on when cash is paid.
Matching is important so as not to overstate or understate income.
4
Separate entity concept: prescribes that a business may only report activities on financial statements that are specifically rela ...
This document discusses various topics related to accounting as a profession. It begins by defining accounting and describing the wide variety of roles that accountants perform beyond just preparing financial statements, such as analyzing costs and efficiencies, participating in mergers and acquisitions, developing information systems, and managing taxes and benefits. It then outlines some career paths one can take in accounting, such as auditing, budget analysis, and financial accounting. It also notes the expected job growth and outlook for the field.
Accrual accounting is a type of commercial accounting that allows a company to monitor revenue and expenses as they happen, rather than as money changes hands.
Accounting interview questions and answers by m riaz khanM Riaz Khan
This document contains 20 interview questions and answers related to accounting. It discusses key topics like the definition of financial accounting, the role of accounting in business, governance of financial reporting standards, differences between accounting and bookkeeping, objectives of financial accounting, components of financial statements, balance sheets vs. income statements, qualitative characteristics of financial statements, constraints on reliable financial reporting, fundamental accounting equations, GAAP measures in Pakistan, accounts receivables and payables, accounting for goodwill, debenture redemption reserves, deferred revenue expenditures, and contingent liabilities.
Solutions manual for fundamental accounting principles volume 1 canadian 15th...Miller612
Here are the journal entries to record the transactions:
Jan. 1 Accounts Receivable 1,000
Service Revenue 1,000
To record services provided on account
Jan. 5 Cash 400
Accounts Receivable 400
To record collection of account receivable
Jan. 10 Accounts Payable 920
Cash 920
To record payment of accounts payable
Jan. 15 Service Revenue 900
Accounts Receivable 900
To record services provided on account
Jan. 20 Cash 1,800
Accounts Receivable 1,800
To record collection of accounts receivable
Jan. 25 Cash 2,500
Accounts Payable 2,500
To record payment of accounts payable
Jan. 30 Accounts
Week 3Week 3E3-9 and E3-13Total Points 50E3-9 [20 pts]E3-13 .docxmelbruce90096
Week 3Week 3:E3-9 and E3-13Total Points: 50E3-9: [20 pts]E3-13: [30 pts]General Journal(a)Cash(b)GALAXY INC.DateAccount TitlesDebitCreditAug. 1Aug. 1Trial BalanceMay 4Accounts payable70010August 31, 2012Cash70031DebitCredit7Bal.Cash…………………………….Accounts receivable…….8Accounts ReceivableEquipment…………………..Aug. 25Aug. 31Notes payable……………..9Bal.Common Stock……………Service revenue…………..17EquipmentAug. 1222Bal.29Notes PayableAug. 12Bal.Common StockAug. 1Bal.Service RevenueAug. 1025Bal.
study objectives
After studying this chapter, you should be able to:
1 Analyze the effect of business transactions on the basic
accounting equation.
2 Explain what an account is and how it helps in the recording
process.
3 Define debits and credits and explain how they are used to
record business transactions.
4 Identify the basic steps in the recording process.
5 Explain what a journal is and how it helps in the recording
process.
6 Explain what a ledger is and how it helps in the recording
process.
7 Explain what posting is and how it helps in the recording
process.
8 Explain the purposes of a trial balance.
9 Classify cash activities as operating, investing, or
financing.
chapter
THE ACCOUNTING
INFORMATION SYSTEM
3
100
● Scan Study Objectives
● Read Feature Story
● Scan Preview
● Read Text and Answer
p. 110 p. 116 p. 119 p. 128
● Work Using the Decision Toolkit
● Review Summary of Study Objectives
● Work Comprehensive p. 133
● Answer Self-Test Questions
● Complete Assignments
● Go to WileyPLU S for practice and tutorials
● Read A Look at I FR S p. 159
● the navigator
Do it!
Do it!
✓
c03TheAccountingInformationSystem.qxd 9/2/10 1:38 PM Page 100
101
How organized are you financially? Take a short quiz.
Answer yes or no to each question:
• Does your wallet contain so many cash machine
receipts that you’ve been declared a walking fire
hazard?
• Is your wallet such a mess that it is often faster to
fish for money in the crack of your car
seat than to dig around in your wallet?
• Was Steve Nash playing high school
basketball the last time you balanced
your bank account?
• Have you ever been tempted to burn down your
house so you don’t have to try to find all of the re-
ceipts and records that you need to fill out your tax
returns?
If you think it is hard to keep track of the many
transactions that make up your life, imagine what it is
like for a major corporation like Fidelity Investments.
Fidelity is one of the largest mutual fund manage-
ment firms in the world. If you had your life savings
invested at Fidelity Investments, you might be just
slightly displeased if, when you called to find out
your balance, the representative said, “You know, I
kind of remember someone with a name like yours
sending us some money—now what did we do with
that?”
To ensure the accuracy of your balance and the
security of your funds, Fidelity Investments, like all
other companies large and small, relies on a sophisti-
cated.
The document is a 40-page eBook from the Corporate Finance Institute that provides an introduction to accounting principles and concepts. It covers topics such as bookkeeping, the accounting equation, debits and credits, journal entries, T-accounts, adjusting entries, the general ledger, and key accounts in financial statements like assets, liabilities, equity, revenue, and expenses. The eBook is intended to walk readers through all important aspects of accounting and financial reporting.
Basics of Accounting. Principles and concepts of Accounting
what is Double Entry System of Accounting?what Financial Statements?
Accounting is a process of identifying, recording, summarising and reporting economic information
to decision makers in the form of financial statements.
study objectivesAfter studying this chapter, you should be.docxhanneloremccaffery
study objectives
After studying this chapter, you should be able to:
1 Analyze the effect of business transactions on the basic
accounting equation.
2 Explain what an account is and how it helps in the recording
process.
3 Define debits and credits and explain how they are used to
record business transactions.
4 Identify the basic steps in the recording process.
5 Explain what a journal is and how it helps in the recording
process.
6 Explain what a ledger is and how it helps in the recording
process.
7 Explain what posting is and how it helps in the recording
process.
8 Explain the purposes of a trial balance.
9 Classify cash activities as operating, investing, or
financing.
chapter
THE ACCOUNTING
INFORMATION SYSTEM
3
100
● Scan Study Objectives
● Read Feature Story
● Scan Preview
● Read Text and Answer
p. 110 p. 116 p. 119 p. 128
● Work Using the Decision Toolkit
● Review Summary of Study Objectives
● Work Comprehensive p. 133
● Answer Self-Test Questions
● Complete Assignments
● Go to WileyPLU S for practice and tutorials
● Read A Look at I FR S p. 159
● the navigator
Do it!
Do it!
✓
c03TheAccountingInformationSystem.qxd 9/2/10 1:38 PM Page 100
101
How organized are you financially? Take a short quiz.
Answer yes or no to each question:
• Does your wallet contain so many cash machine
receipts that you’ve been declared a walking fire
hazard?
• Is your wallet such a mess that it is often faster to
fish for money in the crack of your car
seat than to dig around in your wallet?
• Was Steve Nash playing high school
basketball the last time you balanced
your bank account?
• Have you ever been tempted to burn down your
house so you don’t have to try to find all of the re-
ceipts and records that you need to fill out your tax
returns?
If you think it is hard to keep track of the many
transactions that make up your life, imagine what it is
like for a major corporation like Fidelity Investments.
Fidelity is one of the largest mutual fund manage-
ment firms in the world. If you had your life savings
invested at Fidelity Investments, you might be just
slightly displeased if, when you called to find out
your balance, the representative said, “You know, I
kind of remember someone with a name like yours
sending us some money—now what did we do with
that?”
To ensure the accuracy of your balance and the
security of your funds, Fidelity Investments, like all
other companies large and small, relies on a sophisti-
cated accounting information system. That’s not to say
that Fidelity or any other company is error-free. In fact,
if you’ve ever really messed up your
checkbook register, you may take some
comfort from one accountant’s mistake
at Fidelity Investments. The accountant
failed to include a minus sign while doing a calcula-
tion, making what was actually a $1.3 billion loss look
like a $1.3 billion gain—yes, billion! Fortunately, like
most accounting errors, it was detected before an.
The document contains definitions and explanations of various accounting terms:
1. Intangible assets are assets that cannot be seen or touched, such as goodwill, patent rights, and trademarks.
2. Contra entries refer to transfers between cash and bank accounts within a cashbook.
3. Working capital is calculated as current assets minus current liabilities and refers to capital available for day-to-day business operations.
4. Ratio analysis simplifies financial statements and allows for comparison within and between firms to aid planning.
Tally.ERP 9 is a comprehensive, flexible and easy-to-use accounting software that provides real-time processing and instant reports. It allows users to set up and manage multiple companies with integrated inventory and accounting features. Tally.ERP 9's key advantages include no accounting codes, speed, power, flexibility, multi-lingual capability and versatility for organizations of all sizes.
Here are the key steps involved in payroll calculations:
1. Calculate basic salary as per employment terms
2. Calculate allowances like HRA, travel allowance, LTA as per company policy and income tax rules
3. Calculate statutory deductions like PF, ESI as prescribed percentages of basic pay
4. Calculate non-statutory deductions like income tax as per applicable tax slabs and rules
5. Calculate other benefits like leave encashment, bonuses, incentives if any
6. Generate payslip showing calculations of gross pay, deductions and net pay
7. Process payment to employees and file statutory returns
The payroll software automates these calculations to ensure accuracy as per rules. It is important to
This document provides an introduction to basic accounting concepts. It begins by defining key terms like assets, liabilities, capital, and accounting periods. It then explains important accounting principles and financial statements, including accrual accounting, accounts receivable/payable, and the balance sheet, income statement, and statement of cash flows. The overall purpose is to familiarize readers with fundamental accounting vocabulary and practices.
The document provides examples of journal entries and explains the accounting process. It discusses how transactions are first recorded in journals before being posted to individual accounts. Debits are listed before credits in journal entries and credits are indented. Accounts record the effects of transactions by showing increases or decreases to asset, liability, equity, expense and revenue accounts.
This document discusses key accounting principles and concepts, including:
- The purpose of key financial statements like the income statement, balance sheet, and cash flow statement.
- Accounting principles like relevance, reliability, and comparability.
- Key terms used in accounting like assets, liabilities, revenues, and expenses.
- The accounting equation that balances assets with liabilities and owner's equity.
- The difference between accrual and cash-basis accounting and how transactions and balances are treated.
Finance for strategic managers day 1- 1Parag Tikekar
This document provides an overview of Parag Tikekar's background and qualifications, including degrees in electronics and business. It then outlines the agenda for a finance course, including introductions to bookkeeping, accounting, accounting methods, trial balances, debits and credits. The document defines key accounting terms and describes the processes of single and double entry bookkeeping systems and cash versus accrual accounting methods. It emphasizes the importance of accurate bookkeeping for preparing financial statements.
Here are the steps to do the opening ledger posting for the given transactions:
1. Create ledger accounts for each item - Asset, Liability and Capital accounts
2. Asset accounts
- Cash on Hand - Debit balance of Rs. 40,000
- Bank OD - Credit balance of Rs. 11,000
- Stock of Goods - Debit balance of Rs. 25,000
3. Liability account
- Capital - Credit balance of Rs. 80,000
4. Pass journal entries to record the transactions:
Cash on Hand A/c Dr. 40,000
To Capital A/c 40,000
Bank OD A/c Dr. 11,000
The document is a 40-page eBook from the Corporate Finance Institute that provides an introduction to accounting principles. It covers topics such as bookkeeping, the accounting equation, debits and credits, journal entries, T-accounts, adjusting entries, the general ledger, accounts receivable, inventory, assets, liabilities, shareholders' equity, the balance sheet, income statement, and statement of cash flows. The eBook is intended to walk readers through all important bookkeeping and accounting principles from basic transaction recording to the full accounting cycle and key financial statements.
Mb0041 financial and management accountingsmumbahelp
This document provides information about an assignment for the course MBA Semester 1, Master of Business Administration. It contains 6 questions related to accounting concepts, principles, and practices. Students are instructed to answer all questions, with answers to 10-mark questions being approximately 400 words each. The questions cover topics like the meaning and objectives of accounting, bookkeeping, GAAP, accounting equation, cash books, trial balance adjustments, and the roles and functions of management accounting.
Chapter 3 ANALYZING AND RECORDING TRANSACTIONSPrinciples of EstelaJeffery653
Chapter 3 ANALYZING AND RECORDING TRANSACTIONS
Principles of Accounting, Volume 1: Financial Accounting
PowerPoint Image Slideshow
Chapter Outline
3.1 Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial Statements
3.2 Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions
3.3 Define and Describe the Initial Steps in the Accounting Cycle
3.4 Analyze Business Transactions Using the Accounting Equation and Show the Impact of Business Transactions on Financial Statements
3.5 Use Journal Entries to Record Transactions and Post to T-Accounts
3.6 Prepare a Trial Balance
Module 3.1 Describe Principles, Assumptions, and Concepts of
Accounting and Their Relationship to Financial Statements
The Financial Accounting Standards Board (FASB) is an independent, nonprofit organization that sets the standards for financial accounting and reporting, including generally accepted accounting principles (GAAP), for both public- and private-sector businesses in the United States.
GAAP are the concepts, standards, and rules that guide the preparation and presentation of financial statements.
US accounting rules are called US GAAP.
International accounting rules are called International Financial Reporting Standards (IFRS).
Some companies that operate on a global scale may be able to report their financial statements using IFRS.
Publicly traded companies (those that offer their shares for sale on exchanges in the United States) have the reporting of their financial operations regulated by the Securities and Exchange Commission (SEC).
Teacher Notes: By having proper accounting standards such as US GAAP or IFRS, information presented publicly is considered comparable and reliable. As a result, financial statement users are more informed when making decisions.
3
The conceptual framework is a set of concepts that guide financial reporting. These concepts help ensure information is comparable and reliable to stakeholders.
Revenue recognition principle: directs a company to recognize revenue in the period in which it is earned; is earned when a product or service has been provided
Expense recognition (matching) principle: states that we must match expenses with associated revenues in the period in which the revenues were earned
Cost principle: states that virtually everything the company owns or controls (assets) must be recorded at its value at the date of acquisition
Full disclosure principle: states that a business must report any business activities that could affect what is reported on the financial statements
The Conceptual Framework
Teacher Notes: Revenue recognition is not dependent on when cash is received.
Expense recognition is not dependent on when cash is paid.
Matching is important so as not to overstate or understate income.
4
Separate entity concept: prescribes that a business may only report activities on financial statements that are specifically rela ...
This document discusses various topics related to accounting as a profession. It begins by defining accounting and describing the wide variety of roles that accountants perform beyond just preparing financial statements, such as analyzing costs and efficiencies, participating in mergers and acquisitions, developing information systems, and managing taxes and benefits. It then outlines some career paths one can take in accounting, such as auditing, budget analysis, and financial accounting. It also notes the expected job growth and outlook for the field.
Accrual accounting is a type of commercial accounting that allows a company to monitor revenue and expenses as they happen, rather than as money changes hands.
Accounting interview questions and answers by m riaz khanM Riaz Khan
This document contains 20 interview questions and answers related to accounting. It discusses key topics like the definition of financial accounting, the role of accounting in business, governance of financial reporting standards, differences between accounting and bookkeeping, objectives of financial accounting, components of financial statements, balance sheets vs. income statements, qualitative characteristics of financial statements, constraints on reliable financial reporting, fundamental accounting equations, GAAP measures in Pakistan, accounts receivables and payables, accounting for goodwill, debenture redemption reserves, deferred revenue expenditures, and contingent liabilities.
Solutions manual for fundamental accounting principles volume 1 canadian 15th...Miller612
Here are the journal entries to record the transactions:
Jan. 1 Accounts Receivable 1,000
Service Revenue 1,000
To record services provided on account
Jan. 5 Cash 400
Accounts Receivable 400
To record collection of account receivable
Jan. 10 Accounts Payable 920
Cash 920
To record payment of accounts payable
Jan. 15 Service Revenue 900
Accounts Receivable 900
To record services provided on account
Jan. 20 Cash 1,800
Accounts Receivable 1,800
To record collection of accounts receivable
Jan. 25 Cash 2,500
Accounts Payable 2,500
To record payment of accounts payable
Jan. 30 Accounts
Week 3Week 3E3-9 and E3-13Total Points 50E3-9 [20 pts]E3-13 .docxmelbruce90096
Week 3Week 3:E3-9 and E3-13Total Points: 50E3-9: [20 pts]E3-13: [30 pts]General Journal(a)Cash(b)GALAXY INC.DateAccount TitlesDebitCreditAug. 1Aug. 1Trial BalanceMay 4Accounts payable70010August 31, 2012Cash70031DebitCredit7Bal.Cash…………………………….Accounts receivable…….8Accounts ReceivableEquipment…………………..Aug. 25Aug. 31Notes payable……………..9Bal.Common Stock……………Service revenue…………..17EquipmentAug. 1222Bal.29Notes PayableAug. 12Bal.Common StockAug. 1Bal.Service RevenueAug. 1025Bal.
study objectives
After studying this chapter, you should be able to:
1 Analyze the effect of business transactions on the basic
accounting equation.
2 Explain what an account is and how it helps in the recording
process.
3 Define debits and credits and explain how they are used to
record business transactions.
4 Identify the basic steps in the recording process.
5 Explain what a journal is and how it helps in the recording
process.
6 Explain what a ledger is and how it helps in the recording
process.
7 Explain what posting is and how it helps in the recording
process.
8 Explain the purposes of a trial balance.
9 Classify cash activities as operating, investing, or
financing.
chapter
THE ACCOUNTING
INFORMATION SYSTEM
3
100
● Scan Study Objectives
● Read Feature Story
● Scan Preview
● Read Text and Answer
p. 110 p. 116 p. 119 p. 128
● Work Using the Decision Toolkit
● Review Summary of Study Objectives
● Work Comprehensive p. 133
● Answer Self-Test Questions
● Complete Assignments
● Go to WileyPLU S for practice and tutorials
● Read A Look at I FR S p. 159
● the navigator
Do it!
Do it!
✓
c03TheAccountingInformationSystem.qxd 9/2/10 1:38 PM Page 100
101
How organized are you financially? Take a short quiz.
Answer yes or no to each question:
• Does your wallet contain so many cash machine
receipts that you’ve been declared a walking fire
hazard?
• Is your wallet such a mess that it is often faster to
fish for money in the crack of your car
seat than to dig around in your wallet?
• Was Steve Nash playing high school
basketball the last time you balanced
your bank account?
• Have you ever been tempted to burn down your
house so you don’t have to try to find all of the re-
ceipts and records that you need to fill out your tax
returns?
If you think it is hard to keep track of the many
transactions that make up your life, imagine what it is
like for a major corporation like Fidelity Investments.
Fidelity is one of the largest mutual fund manage-
ment firms in the world. If you had your life savings
invested at Fidelity Investments, you might be just
slightly displeased if, when you called to find out
your balance, the representative said, “You know, I
kind of remember someone with a name like yours
sending us some money—now what did we do with
that?”
To ensure the accuracy of your balance and the
security of your funds, Fidelity Investments, like all
other companies large and small, relies on a sophisti-
cated.
The document is a 40-page eBook from the Corporate Finance Institute that provides an introduction to accounting principles and concepts. It covers topics such as bookkeeping, the accounting equation, debits and credits, journal entries, T-accounts, adjusting entries, the general ledger, and key accounts in financial statements like assets, liabilities, equity, revenue, and expenses. The eBook is intended to walk readers through all important aspects of accounting and financial reporting.
Basics of Accounting. Principles and concepts of Accounting
what is Double Entry System of Accounting?what Financial Statements?
Accounting is a process of identifying, recording, summarising and reporting economic information
to decision makers in the form of financial statements.
study objectivesAfter studying this chapter, you should be.docxhanneloremccaffery
study objectives
After studying this chapter, you should be able to:
1 Analyze the effect of business transactions on the basic
accounting equation.
2 Explain what an account is and how it helps in the recording
process.
3 Define debits and credits and explain how they are used to
record business transactions.
4 Identify the basic steps in the recording process.
5 Explain what a journal is and how it helps in the recording
process.
6 Explain what a ledger is and how it helps in the recording
process.
7 Explain what posting is and how it helps in the recording
process.
8 Explain the purposes of a trial balance.
9 Classify cash activities as operating, investing, or
financing.
chapter
THE ACCOUNTING
INFORMATION SYSTEM
3
100
● Scan Study Objectives
● Read Feature Story
● Scan Preview
● Read Text and Answer
p. 110 p. 116 p. 119 p. 128
● Work Using the Decision Toolkit
● Review Summary of Study Objectives
● Work Comprehensive p. 133
● Answer Self-Test Questions
● Complete Assignments
● Go to WileyPLU S for practice and tutorials
● Read A Look at I FR S p. 159
● the navigator
Do it!
Do it!
✓
c03TheAccountingInformationSystem.qxd 9/2/10 1:38 PM Page 100
101
How organized are you financially? Take a short quiz.
Answer yes or no to each question:
• Does your wallet contain so many cash machine
receipts that you’ve been declared a walking fire
hazard?
• Is your wallet such a mess that it is often faster to
fish for money in the crack of your car
seat than to dig around in your wallet?
• Was Steve Nash playing high school
basketball the last time you balanced
your bank account?
• Have you ever been tempted to burn down your
house so you don’t have to try to find all of the re-
ceipts and records that you need to fill out your tax
returns?
If you think it is hard to keep track of the many
transactions that make up your life, imagine what it is
like for a major corporation like Fidelity Investments.
Fidelity is one of the largest mutual fund manage-
ment firms in the world. If you had your life savings
invested at Fidelity Investments, you might be just
slightly displeased if, when you called to find out
your balance, the representative said, “You know, I
kind of remember someone with a name like yours
sending us some money—now what did we do with
that?”
To ensure the accuracy of your balance and the
security of your funds, Fidelity Investments, like all
other companies large and small, relies on a sophisti-
cated accounting information system. That’s not to say
that Fidelity or any other company is error-free. In fact,
if you’ve ever really messed up your
checkbook register, you may take some
comfort from one accountant’s mistake
at Fidelity Investments. The accountant
failed to include a minus sign while doing a calcula-
tion, making what was actually a $1.3 billion loss look
like a $1.3 billion gain—yes, billion! Fortunately, like
most accounting errors, it was detected before an.
The document contains definitions and explanations of various accounting terms:
1. Intangible assets are assets that cannot be seen or touched, such as goodwill, patent rights, and trademarks.
2. Contra entries refer to transfers between cash and bank accounts within a cashbook.
3. Working capital is calculated as current assets minus current liabilities and refers to capital available for day-to-day business operations.
4. Ratio analysis simplifies financial statements and allows for comparison within and between firms to aid planning.
Tally.ERP 9 is a comprehensive, flexible and easy-to-use accounting software that provides real-time processing and instant reports. It allows users to set up and manage multiple companies with integrated inventory and accounting features. Tally.ERP 9's key advantages include no accounting codes, speed, power, flexibility, multi-lingual capability and versatility for organizations of all sizes.
Here are the key steps involved in payroll calculations:
1. Calculate basic salary as per employment terms
2. Calculate allowances like HRA, travel allowance, LTA as per company policy and income tax rules
3. Calculate statutory deductions like PF, ESI as prescribed percentages of basic pay
4. Calculate non-statutory deductions like income tax as per applicable tax slabs and rules
5. Calculate other benefits like leave encashment, bonuses, incentives if any
6. Generate payslip showing calculations of gross pay, deductions and net pay
7. Process payment to employees and file statutory returns
The payroll software automates these calculations to ensure accuracy as per rules. It is important to
This document provides an introduction to basic accounting concepts. It begins by defining key terms like assets, liabilities, capital, and accounting periods. It then explains important accounting principles and financial statements, including accrual accounting, accounts receivable/payable, and the balance sheet, income statement, and statement of cash flows. The overall purpose is to familiarize readers with fundamental accounting vocabulary and practices.
The document provides examples of journal entries and explains the accounting process. It discusses how transactions are first recorded in journals before being posted to individual accounts. Debits are listed before credits in journal entries and credits are indented. Accounts record the effects of transactions by showing increases or decreases to asset, liability, equity, expense and revenue accounts.
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The Vadhavan Port Development is poised to be one of the most significant infrastructure projects in India's maritime history. This deep-sea port, located in Maharashtra, promises to transform the region's economic landscape, bolster India's trade capabilities, and generate a plethora of employment opportunities. In this blog, we will delve into the various facets of the Vadhavan Port Development: what to expect in and beyond its completion, and how it stands to influence the future of India's maritime and economic sectors.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
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This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
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In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
1. Here are some of the top accounting
interview questions which are generally
expected:
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.
2. 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 amount
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.
3. Q8. What is the difference between
‘accounts payable (AP)’ and ‘accounts
receivable (AR)’?
Ans.
Accounts Payable Accounts Receivab
The amount a company owes because it
purchased goods or services on credit from a
vendor or supplier.
The amount a company has
collect because it sold goods o
credit to a customer.
Accounts payable are liabilities. 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 that
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 a lack of revenue going forward in the pipeline.
4. 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 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? [Frequently asked accounting
interview question]
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.
5. Check Out >> IFRS vs GAAP: Which is suited
for you?
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 optimized the
process and how you came to such a decision through historical
data review.
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 – the
percentage of outstanding accounts, aging analysis, and percentage
of credit sales.
6. Q18. What is 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
C H EC K O U T P O P U LA R A C C O U N T I N G C ER T I F I C A T I O N S T O LEA R N A C C O U N T I N G
N O W> >
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?
7. 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 a 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 accounting software used by small businesses 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, goodwill, rights, deferred
revenue expenditure, miscellaneous expenses, preliminary
expenses, and accumulated loss, among others.
8. 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 off set accounting?
9. Ans. Offset accounting is a process of cancelling 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 the trade bills?
Ans. These are the bills generated against each transaction. It is a
part of the 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 the 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 a career?
Ans. This could be a tricky accounting interview question so you
can answer like – “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.”
10. Q36. What is an 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 do you mean by the
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.
Prepare for Top Financial Analyst Interview
Questions
Q40. What is the departmental
accounting system?
11. 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 the 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?
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
12. 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 the Institute of Chartered
Accountants in India.
Q47. What do you mean by premises?
13. Ans. Premises refer to fixed assets presented on a balance sheet.
Q48. What is Executive Accounting?
Ans. Executive Accounting is specifically designed for service-
based businesses. This term is popular in finance, advertising and
public relations businesses.
Q49. What are the 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.
Time For Accounting Interview
Question Quiz
14. The right answer is the balance sheet.
The right answer is the 2nd option – the income statement will be
impacted.
The right answer is -Cash flow statement.
15. The right option is the Quick Ratio.
Q51. What is Marginal Cost?
Ans. If there is an 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
the Double Entry System?
16. Ans. There are three different stages of the 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 labour 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?
Ans. GAAP 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
17. Q58. Can you tell me some examples of
liability accounts?
Ans. Some popular examples of liability accounts are –
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
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 a journal entry?
Ans. A cash discount should be recorded as a reduction of expenses
in a cash account.
18. Q 61. What is compound journal entry?
Ans. A compound journal entry is just like other accounting entries;
the only difference is that it affects more than two account heads.
The compound journal entry has one debit, more than one credits,
or more than one of both debits and credits.
Q 62. What is the dual aspect term?
Ans. The dual aspect suggests that every business transaction
requires double-entry bookkeeping. This can be understood with the
example- If you purchase anything, you give the cash and receive
the stuff, and when you sell anything, you lose the stuff and earn
the money. This defines the aspects of every transaction.
Q 63. What is retail banking?
Ans. Retain banking is also known as consumer banking, where
individuals use the local branches of larger commercial banks.
Q 64. Define depreciation.
Ans. Depreciation refers to the decreasing value of any asset that is
in use.
Q 65. What are the different types of
depreciation?
Ans. Depreciation is of two types –
1. Straight Line Method
2. Written Down Value Method
19. Q 66. What is the difference between
the consignor and consignee?
Ans. Consigner – S/he is the shipper of the goods
Ans. Consignee – S/he is the recipient of the goods.
Q 67. Define Partitioning.
Ans. Partitioning refers to the
division/subdivision/grouping/regrouping of financial transactions
in a given financial year.
Q 68. Differentiate between Provision
and Reserve.
Ans.
Provisions – This refers to keeping the money for a given liability.
In short, EXPENSES.
Reserves – Refers to retaining some amount from the profit for
future use. In short, PROFITS.
Q 69. What is an over accrual?
Ans. It is a situation where the estimate for accrual journal entry is
very high, and this may apply to the accrual of revenue or expense.
Q 70. What is reversing journal
entries?
20. Ans. Reversing entries refer to the journal entries that are made
when an accounting period starts. These entries reverse or cancel
the adjusting journal entries that were made at the end of the
previous accounting period.
Q 71. Name some intangible assets.
Ans. Intangible assets include –
Patents
Copyrights
Trademarks
Brand names
Domain names
Q 72. What is Bad debt expense?
Ans. Bad debts expense is asset accounts receivable of a company
and is considered to be uncollectible accounts expense or doubtful
accounts expense.
Q 73. When do you capitalize rather
than expense a purchase?
Ans. An item’s cost is capitalized is it is expected to be consumed
by the company over a long period. This way their economic value
does not depreciate.
Q 74. When does goodwill increase?
Ans. Goodwill can be increased through the acquisition of another
company as a subsidiary, by paying more than the fair value of its
tangible and intangible assets.
21. Q 75. What are Revenue Recognition
and Matching Principles?
Ans. Revenue Recognition Principle – This principle suggests that
the revenue should be recognized and recorded when it is realized
and earned, no matter when the amount has been paid.
Matching Principle – This principle dictates the companies to report
an expense on its income statement the time the related revenues are
earned. It is associated with the accrual basis of accounting.
Q 76. Name different accounting
concepts.
Ans. The most popular accounting concepts are –
Accounting Period Concept
Business Entity Concept
Cost Concept
Dual Aspect Concept
Going Concern Concept
Matching Concept
Money Measurement Concept
Q 77. What is the owner’s equity?
Ans. The owner’s equity is a business owner’s claim against the
assets of the business. It is also called the capital of the business and
is calculated by subtracting equity of creditors from the total equity.
Q 78. What is a debit note?
22. Ans. Debit note or debit memorandum is a commercial document
sent to a seller, by a buyer, formally requesting a credit note. The
original document is sent to the party to whom the goods are being
returned and the duplicate copy is kept for office record.
Q 79. What is a credit note?
Ans. A credit note is a receipt given to a buyer who has returned a
product, by the seller/shop. This intimation suggests that the
buyer’s account is being credited for the purpose indicated.
Q 80. Explain Contingent Liabilities.
Ans. Contingent Liabilities are potential obligations that may or
may not become an actual liability. They may or may not be
incurred by an entity, based on the outcome of an uncertain future
event, e.g. – If an ex-employee of an ABC company sues it for
gender discrimination for any particular sum, the company has a
contingent liability. In case the company is found guilty, it will
have a liability, and if it is not found guilty, the company will not
have an actual liability.
Q 81. What is GST?
Ans. GST or Goods and Service Tax is an indirect tax charged on
the value of the service or product sold to a customer. Here the
consumers pay the tax to the seller, who thereby deposits the GST
to the government.
Q 82. Can you name some common
errors in accounting?
Ans. Some common accounting errors are –
23. Error of omission
Error of commission
Error of original entry
Error of accounting principle
Compensating error
Error of entry reversal
Error of duplication
Q 83. What is project implementation?
Ans. Project implementation is a phase when the plans and visions
come into reality. This includes carrying out the tasks to deliver the
outputs and monitor the related progress.
Q 84. What are the various stages of
project implementation?
Ans. There are six steps involved in project implementation, which
are –
Identifying need
Generating and screening ideas
Conducting a feasibility study
Developing the project
Implementing the project
Controlling the project
Q 85. Are you in favour of having
accounting standards?
Ans. I believe that accounting standards contribute to high quality
and accurate reporting and ensure reliable financial statements.
24. Q86. What do you mean by
Amortization and also mention its
journal entry?
Ans. Amortization is an accounting concept that is used to
gradually write off the cost. Through amortization, over a period of
time, one can allocate the cost of any intangible asset. Also, it can
be done to repay any loan principal. However, those assets which
have an indefinite life like Goodwill can not be amortized.
Below is the journal entry for amortization:
Debit Credit
Amortization expense x~xx
Accumulated amortization xxx
The concept of amortization in accounting is different from
depreciation. The major point of difference between amortization
and depreciation is their usage. Amortization works for intangible
assets whereas depreciation works for tangible assets. Also, unlike
depreciation, amortization has no salvage value. Another key
difference between both is that depreciation can be implemented
using both the straight-line method and accelerated method but
amortization is implemented through the straight-line method.
Using the below transactions solve the
practical accounting questions:
25. Firm’s Name – ABC Ltd. which is 10 years old firm on December
31, 2018. As on January 01, 2019, below are the trial balance
entries
Transactions/entries Amount in INR
Accounts Payable 50,000
Accounts Receivable 20,000
Cash 4,50,000
Merchandise inventory 6,620
Land 60,000
Unearned revenue 10,000
Salaries payable 32,000
Common Stocks 15,000
Prepaid Rent for Office 15,000
Supplies 20,000
Retained Earnings 25,000
Later other transactions which took place in 2019 are:
1.
1. Paid salaries payable from 2018.
2. As of March 2019, the petty cash expense made was Rs
10,000.
26. 3. Advanced payment made for the company’s car which
was on lease Rs, 1,00,000 on May 1, 2019.
4. Paid office rent in advance Rs. 25,000 on May 3, 2019.
5. Supplies purchased for Rs. 10,000 on the account.
6. During the year, purchased 20 CCTV cameras for Rs.
20,000 for cash.
7. Sold 103 CCTV cameras for Rs. 42,000 (calculate the
cost of goods sold using FIFO method)
8. Accounts payable was Rs. 30,000
9. Petty cash replenished and the receipts included office
supply expenses – Rs. 2,000, miscellaneous Rs. 7,000.
Currency left Rs.1000
10. Billed Fixing services for Rs 10,000 for the year.
11. The salaries paid were Rs. 30,000 in cash
12. Accounts receivable were Rs. 60,000
13. Ad and marketing expense Rs. 6,000
14. Utility expense paid Rs. 5,000
15. The dividend paid to the shareholders was Rs.
15,000.
Q87.What is the total value of cash in
the above transactions?
Ans. Here is the total calculation of cash:
All Cash Transactions and balances:
Actual Cash = 4,50,000
Salaries payable = 32,000
Company’s car lease = 1,00,000
Office rent = 25,000
CCTV purchase = 20,000
Accounts payable = 30,000
Petty cash = 10,000
Petty cash replenished = 7,000 + 2000
27. Balance petty cash = 1000
Salaries paid = 30,000
Accounts receivable = 60,000
Ad and marketing expense = 6,000
Utility expense = 5,000
Dividend paid = 15,000
Hence as per the nature, here is the actual calculation of cash:
4,50,000 – 32,000 – 1,00,000 – 25,000 – 20,000 – 30,000 – (10,000
– 1,000) – 1,000 + 60,000 – 5,000 – 15,000 = 2,73,000
Q88. What is the total value of accounts
receivable in the above transactions?
Ans. All entries related to accounts receivable:
Accounts receivable = 20,000
Income from selling CCTV camera = 42,000
Billed Fixing services = 10,000
Accounts receivable = 60,000
Hence, here is the total calculation of accounts receivable:
20,000 + 42,000 + 10,000 + 60,000 = 1,32,000
Q89. What is the value of the total fixed
assets?
Ans. As no other assets apart from land is mentioned we will
consider Land as the only fixed assets:
Value of Fixed Asset:
28. Land = 60,000
Q90. What will all be included in
current assets?
Ans. We will include the following things:
Closing inventory
Bank and cash value
Supplies
Account Receivables
Q91. What will be included in the
Owner’s equity?
Ans. We will include the following things in owners equity:
Capital (Common Stocks)
Retained earnings (balance at the beginning of the year, profits
for the current year, less dividend paid, capital contributed
during the year if any)
Q92. What will be included in the
Current Liabilities?
Ans. Under the current liabilities, we will include the amount for
creditors/payables which is 10,000 in the above case.
Q93. What do you mean by Days
Payable Outstanding (DPO)?
29. Ans. DPO or Days Payable Outstanding refers to the average
number of days which ideally a company takes to clear its credit
purchase in regards to the outstanding suppliers. Most of the time,
DPO is a monthly task for a business, however, each month the day
of clearing the outstanding payment might differ, hence the average
is taken out to estimate the payment period.
Below is the formula for calculating DPO:
Closing accounts payable / Purchase per day
Or
(Average accounts payable / COGS) X Number of days
Q94. Find out the DPO in the below
query.
Ans.
Average accounts payable in June 50,000
Cost of Goods sold in June 5,00,000
As the month of June has 30 days the DPO will be:
(50,000/5,00,000)*30 = 3 days
Hence, the DPO in the above situation is 3 days. This states that a
company takes 3 days on average to clear all its pending invoices.
Q95. What are the different types of
liquidity ratios in accounting?
30. Ans.
Basically, there are five different types of ratios in accounting:
1. Current Ratio
The higher the company has a current ratio, the better is the
company’s strength to handle short term financial issues. It is
calculated by – Current ratio = Current Asset/ Current
Liabilities
2. Net-Working Capital Ratio
It articulates that whether or not a company has sufficient
funds to carry out short term operations. It is calculated by –
Current Asset – Current Liabilities
3. Quick ratio
The quick ratio is also known as the acid test ratio or liquid
ratio which illustrates the company’s short term liquidity to
meet any short term obligations. If the quick ratio is below
1:1, the company is not in a good state to handle short term
debts. Quick ratio = Liquid Assets / Current Liabilities
4. Super-Quick Ratio
Super Quick Ratio = (Cash + Marketable Securities) /
Current Liabilities
5. The operating Cash Flow ratio
It is calculated by dividing cash flow from operations with
current liabilities. It is observed that a sound operating cash
flow ratio makes the firm’s liquidity position better.
Here cash flow from operations will generally include:
All revenues from operations + Non-cash based expenses –
Non-cash based revenue
Whereas Current Liabilities will include:
Balance payments, creditors, provisions, short term loans, etc.
Q96. What is the Accounting
Information System (AIS)?
31. Ans. This is a frequently asked accounting interview question
thus you should know everything about AIS.
AIS is a computer-based method used for tracking accounting
activity and involves – collecting, storing, processing, organizing,
and summarizing accounting data and transactions. It also helps in
cumulating financial transactions and essential financial reports,
which helps stakeholders in decision making. Using AIS for storing
and processing financial data helps in the following tasks:
Measure the financial performance
Evaluate the finances of the company and compare it with the
previous period to draw a conclusion
Avoid any miss-handling of data
Connects Information Technology with GAAP principles
Q97. What do you mean by tangible
real accounts and intangible real
accounts?
Ans.
Tangible Real Account – Those assets which can be touched and
have a physical existence are defined as tangible real accounts.
Example – Machinery A/c, Vehicle A/c, Building A/c
Journal Entry –
Debit what comes in
Credit what goes out
Intangible real account – Those assets which have some monetary
values but can’t be touched are referred to as intangible real
accounts.
32. Example – Goodwill, Patents, Copyrights
Journal Entry –
Debit what comes in
Credit what goes out
Q98. How to perform an income
statement analysis?
Ans. The income statement is the company’s core financial
statement highlighting the profits and losses of the company. It
involves:
All revenues – expenses (both operating and non-operating
activities)
To analyze this statement, financial analysts consider vertical
analysis and horizontal analysis.
1. Vertical analysis:
It involves comparing the up and down of the income
statement to the revenue (in percentage). The key metrics
involved are:
o Cost of Goods Sold (COGS)
o Gross profits
o Depreciation
o Interest
o Earnings Before Tax (EBT)
o Tax
o Net earnings
2. Horizontal analysis
33. It involves comparing the year-over-year (YoY) change of each line
in the income statement. To perform this analysis:
Take the value in Period N and
Divide it by value in Period N-1
Subtract the value by 1 (gives the per cent change)
To learn more about how to conduct a financial analysis you can
consider taking the following courses:
Financial Analysis Fundamentals by CFI
Valuation and Financial Analysis For Startups Specialization
by Coursera
Q99. What is Section 209(4A) in The
Companies Act, 1956?
Ans. Section 209(4A) in The Companies Act, 1956 states that:
Every company must preserve the books of accounts, together with
the vouchers relevant to any entry in such books of account, in good
order, relating to a period of not less than 8 years immediately
preceding the current year.
So of the Current Year Ending is – March 2020 then, the company
needs to store the accounts and vouchers for the following years:
March 2019, 2018, 2017,……, to 2012
Q100. Which latest accounting trends
you think are prevailing in 2020? [one
of the most frequently asked
accounting interview questions]
34. Ans. Below are some of the latest accounting trends:
1. Increased dependency on cloud
Companies are now using cloud computing as a technology
for tracking – tracking inventory, sales, and expenses. A report
by Accounting Age suggests that 78% of small businesses will
rely solely on cloud technology and 67% accountants say that
cloud technology will make their role easier.
2. Automated Data Entry:
As per the Practice of Now 2020 survey, nearly two-thirds of
accountants consider automation of processes, workflows, and
payments the biggest challenge that will impact accountancy
in the next 12 months. That’s why a lot of companies have
started depending upon automation software as they are
efficient and reduce the chances of error or loss of entry.
The Parting Note
Going through the above accounting interview questions will
probably have given you an idea of the type of accounting interview
questions that are asked during an accounting interview. These will
also help you to freshen up your accounting knowledge.
Naukri Learning offers a list of professional online accounting
certifications and courses, which will make you an expert and
improve your chances of acing any accounting interview that you
go for.