Interview Questions.

Question 1. List The Five Heads Of Income To Calculate Total Income Of The Assessee?

Answer :

Income from Salaries
Income from House Property
Profits from Business and Profession
Income from Capital Gains
Income from Other Sources
Question 2. What Is Gratuity?

Answer :

Gratuity is the quantity payable by way of the employer to the employee as reputation for the long term affiliation of the worker with the enterprise.

It may be payable with the aid of the employer in two ways:

On worker's retirement.
On the death of the worker to the criminal heirs of the employee.
But in each the cases the treatment will be one of a kind. The amount paid by means of the organization to the employee on his retirement is taxed as 'Income from Salaries' while the amount paid by using the organisation on the death of the worker is taxed as 'Income from Other Sources'.

Financial Reporting and Analysis Interview Questions
Question three. What Is Pension?

Answer :

Pension is a periodical charge obtained by using the worker from the agency after he ceases to be the worker. It is taxed as Salary. 

Calculation of pension is accomplished in  forms:

Uncommuted Pension - is ordinary periodical pension to worker that's taxable to all sorts of employees.
Commuted Pension is a lump sum charge in lieu of periodical pension.
If such pension is acquired through government employee then it is wholly exempt.
Non government personnel can avail exemption to a sure volume:

If worker is in receipt of gratuity, 1/3 of commuted cost.
If no longer, then one half of commuted value.
Question 4. List The Criterion For Exemption Of H.R.A?

Answer :

H.R.A relies upon upon the subsequent:

Salary of the employee
House Rent Allowance
Rent paid by way of the employee
The location wherein the residence is taken on condo basis.
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Question five. Explain The Difference Between Short Term Capital Asset And Long Term Capital Asset?

Answer :

Short time period capital assets are those assets which might be held by way of an assessee for not more than 36 months, straight away previous to its date of transfer.

But in the following instances an asset help for not more than 365 days is treated as brief term capital asset:

Equity or Preference shared in a business enterprise.
Securities listed in a identified inventory change in Country.
Units of UTI
Units of a mutual fund specific below sec 10(23D)
Financial Accounting Interview Questions
Question 6. Tell Me What Types Of Income Is Included Under The Head Of Income From Other Sources?

Answer :

Bank Interest
Interest on deposits with the companies
Interest acquired on delayed refund of income tax
Interest on Loan
Insurance commission
Agricultural earnings obtained from a land situated out of doors the Country
Sitting prices acquired by means of a director for attending board meetings
Remuneration obtained by a Member of Parliament
Family Pension - The amount of pension acquired by way of the criminal heirs of a deceased worker.
Interest on Income Tax Refund.
Question 7. Describe Allowances Which Are Fully Taxable?

Answer :

Dearness Allowance
City Compensatory Allowance
Medical Allowance
Lunch Allowance
Servant Allowance
Family Allowance
Warder Allowance
Overtime Allowance
Family Allowance
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Question eight. What Is Superannuation Fund?

Answer :

Superannuation fund is an worker welfare scheme that is normally applicable in case of very senior personnel. When the worker ceases to be the worker, employee's contribution, employer's contribution and the interest thereon is paid to the worker and in case of demise of the worker to the criminal heirs of the employee.

Question 9. Which Employers Are Covered Under Voluntary Retirement Scheme?

Answer :

A Public Sector Company
Any other Company
An authority set up under a Central or State Act
A local Authority
A Co-operative Society
A University
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Question 10. What Main Items Are Included In Salary?

Answer :

Wages
Annuity or Pension
Gratuity
Fees fee, perquisites or earnings in lieu of profits or similarly to income or wages
Advance of Salary
Payment acquired from the organisation for the period of leave now not availed.
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Question 11. Explain Incidence Of Tax In The Case Of Resident But Not-by and large Resident?

Answer :

Income that's received or deemed to be acquired in ABC within the preceding year:

Income which accrues or arises or is deemed to accrue or stand up in ABC at some point of the preceding yr.
Income which accrues or arises out of doors ABC from a enterprise managed or career installation in ABC.
Income acquired outside ABC from a business controlled or profession set up in ABC.
Auditing Interview Questions
Question 12. Do You Know Who Is A Resident And Ordinarily Resident (ror)?

Answer :

Individual is handled as Resident and Ordinarily Resident if he satisfies anybody of the basic situations and both the following extra situations.

Basic Conditions:

He is in XYZ(usa) for a length or periods amounting in all to as a minimum 182 days within the applicable preceding 12 months.
He is in XYZ(u . S . A .) for 60 days or greater in the course of the applicable preceding 12 months and has been in XYZ(usa) for one year or extra at some stage in 4 preceding years immediately previous the applicable preceding yr.
Additional Conditions:

He has been Resident in XYZ(u . S . A .) for as a minimum 2 out of 10 previous years straight away previous the relevant previous yr.
He has been in XYZ(country) for 730 days or greater during 7 preceding years without delay previous the applicable previous year.
Financial Reporting and Analysis Interview Questions
Question thirteen. Tell Me What Does The Term Person Includes?

Answer :

The time period Personal includes:

An Individual
Undivided Family
A Company
A Firm
An Association of Persons or A Body of Individuals
A Local Authority
Every Artificial Person now not falling underneath any of the previous sub-clauses.
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Question 14. Explain What Is Inflation And How Is It Measured?

Answer :

Inflation manner an ordinary growth inside the costs of products and services. It is a lower within the cost of a foreign money. There are three sorts of measurement, Core Inflation, CPI, and WPI. Core Inflation is a dimension of non-unstable goods consisting of food and non-treasured metals.

It leaves out goods like oil due to the fact oils rate is subject to wild fluctuations. CPI is the most not unusual size, the usage of a market basket of products and measuring their charge from a point within the past (a CPI of a hundred is arbitrarily the identical fee stage for 1982-1984). Thus, the equation is (Price of most current market basket/charge of same market basket in 1982-1984) X one hundred.

The a hundred is to provide us the variety we generally see. WPI is Wholesale Price Index. It is a measure of wholesalers costs and is generally taken into consideration a pre-cursor to what CPI could be (as it takes time for items to study the purchaser).

Question 15. Explain What Is Ramsay Pricing?

Answer :

It assigns charges based totally at the fee elasticity of call for. Yet better the pliability (elastic), the decrease the rate of fixed prices while allocated among products.

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Question sixteen. What Are The Advantages Of Leaving The Allocation Of A Country Resources To The Price Mechanism?

Answer :

The important situations required are:

Either a finite number of agents or items.
No externalities - That is, the intake of one individual have to not harm or gain each person else.
No depend how tons someone is eating, they ought to be capable of be made barely happier through ingesting a bit extra of something.
Question 17. Explain How Is Education An Investment In Human Capital?

Answer :

The idea of people as capital way that people have a certain worth to a business enterprise (or society). Education increases that really worth, making people extra capable of make a contribution to a employer (or to society).

Therefore, investing in Education... On your personnel, for instance, is profitable due to the fact then your personnel boom their fee to you, as an corporation. In a trendy sense, society sinvestment in instructional applications will increase peoples fee to society in widespread.

Financial Statement Interview Questions
Question 18. Explain The Golden Rules Of Accounting?

Answer :

Real Account : Debit what is available in Credit what goes out

Nominal Account : Debit all charges and lossesCredit all earning and profits

Personal Account : Debit the giver Credit the obtained

Real Account : Debit what is available in Credit what is going out

Nominal Account : Debit all prices and losses Credit all incomes and profits

Personal Account : Debit the Receiver Credit the giver.

Financial Accounting Interview Questions
Question 19. Explain What Are The Disadvantages Of Mixed Economy System?

Answer :

The disadvantages of a combined financial system sincerely depend on how "mixed" it's miles. For example, if it's miles blended extra closer to a free-marketplace, there is little regulation (some may also see this as a terrific, even though), however if it's miles combined extra closer to a command economic system, the control may stifle boom.

Mixed economies also can have distinct characteristics. Each of these will proportion a different set of disadvantages. A will stifle earnings due to its high tax structure, however will encourage new ideas due to its low regulation (this will result in many weird effects inclusive of an economy comprised nearly entirely of small, properly-niche groups).

B will encourage income, but due to its regulation, some new thoughts (and a few growth) will be stifled. For example, if environmental regulations are strict, the constructing of recent flowers or refineries might be reduced. This may want to bring about a small wide variety of very massive and worthwhile agencies.

Question 20. Explain What Is Bop?

Answer :

It is called as Balance of payments - an financial term. (BOP) measures the bills that flow between any character country and all other international locations. It is used to summarize all international financial transactions for that us of a throughout a selected time, generally a year.

The BOP is decided through the countrys exports and imports of products, services, and financial capital, as well as monetary transfers. It displays all payments and liabilities to foreigners (debits) and all bills and responsibilities acquired from foreigners (credit).

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Question 21. Explain Trade Discount, Discount And Rebate?

Answer :

Trade bargain is usually given to the normal clients who are buying the products in huge numbers. It can be like in case you purchase one hundred numbers we can provide you with 10 numbers unfastened or buy for Rs.1500/- and get one hundred fifty/- really worth free.

Discount is similar to above but can be given for Credit clients like if you pay inside one week 15%, within 15 days 10% and greater than 15 days no bargain.

Rebate is like buy for 70/- and pay simplest Rs65/-.

Question 22. Explain What Is The Incidence Of Tax?

Answer :

Tax incidence may be divided into:

Formal prevalence: the celebration liable to the tax
Informal prevalence: birthday party, who actually can pay the tax
The tax incidence is determined via the elasticity of demand and deliver for a very good or service.

Question 23. Explain Why Is Economics Seen As A Social Science?

Answer :

The social sciences are a group of educational disciplines that have a look at human elements of the arena. They diverge from the humanities and humanities in that the social sciences tend to emphasize the use of the clinical approach within the examine of humanity, consisting of quantitative and qualitative methods.

Economics is truly a human phenomenon. Even though a few subjects in economics, consisting of recreation theory, are used within the natural sciences and arithmetic, economics stays a have a look at of simply human phenomenon.

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Question 24. Explain What Is The Importance Of Strategic Management Towards The Success Of A Business?

Answer :

Strategic control used to play a exclusive after the Second Word War. Strategic plans of the past typically range three to five years. Some agencies may want to actually have plans for 10 top years. That is not viable today given rapid evolution of our society.

Financial Management Interview Questions
Question 25. Define Economics And Explain About It?

Answer :

Economics is commonly defined because the trouble of how great to distribute restrained assets, confined due to the fact wishes are characterised as limitless, however common feel tells us that in place of confined resources, there may be an abundance of resources. The difference is one among perspective and that is core to any opportunity understanding of economics.

If needs are the focal point, then of direction sources are limited by means of definition, but if minimal wishes or necessities are used as the muse, then resources are visible to be plentiful. The distinction is among an outline and an evidence. A cognizance on wants or goals describes a marketplace state of affairs, at the same time as a focus on necessities or wishes lets in a proof of selections to start.

Question 26. What Is Ca?

Answer :

Chartered Accountants work in all fields of commercial enterprise and finance. Some are engaged in public practice paintings, others work within the personal zone and a few are hired by means of government bodies.

US Taxation Interview Questions