Interview Questions.

Question 1. List Down The Errors Which Affect Trial Balance And Errors Which Do Not Affect Trial Balance ?

Answer :

Errors which have an effect on the agreement of trial balance:

Wrong totaling of subsidiary books.
Posting on the incorrect side of an account
Omission of posting an amount in the ledger
Posting of wrong quantity
Error in balancing
Errors which do now not have an effect on the agreement of trial balance:
Error of Principle
Errors of Omission
Errors of Commission
Recording of wrong amount in the books of top entry or subsidiary books.
Compensating Errors.
Question 2. What Is The Relation Between Journal And Ledger ?

Answer :

The magazine is the book of first entry whereas the ledger is the ebook of 2nd entry.
The magazine as a ebook of supply entry basically has extra weight as felony proof than the ledger.
The magazine is the book for chronological document while the ledger is the ebook for analytical file.
The unit of class of records in the journal is the transaction; within the ledger the unit of class of facts inside the ledger is the account.
The system of recording in the journal is known as journalizing, the system of recording inside the ledger is known as posting.
Accounts Interview Questions
Question 3. What Are The Common Errors In Accounting? What Steps Will You Follow To Locate Errors ?

Answer :

Following are the not unusual mistakes in accounting:

Errors of Omission
Errors of Commission
Errors of Principle
Compensating Error
To find the errors in the trial balance comply with the below steps:

Check the overall of all of the subsidiary books, coins e-book and trial balance.
Ensure that each one the outlet balances were efficaciously delivered forward inside the current yr’s books of account.
Ensure that each one the ledger debts had been properly balanced and the balances of all of the ledger debts had been contemplated in the Trial Balance.
The difference in trial balance ought to be halved to locate such mistakes.
If the distinction within the trial balance is divisible by 9 with none reminder, it is able to suggest the transposition or transplacement of the amounts.
The trial balance of the modern yr can be in comparison with the trial balance of the previous 12 months to find sure highlighting error.
Question 4. What Are The Important Terms Used In Balance Sheet ?

Answer :

Assets
Current property and glued belongings
Tangible belongings and Intangible property
Equity is a declare which may be enforced towards the belongings of the company in the courtroom. Thus equity refers to a declare held by using
An owner handiest,
A creditor simplest,
An proprietor and the creditor both.
Liability
Current Liability
Long time period Liability or constant Liabilities
Contingent Liabilities
Accounts and Finance for Managers Tutorial
Question 5. Why Is It Easier For Someone To Perpetrate Fraud Using A Journal Entry Than With A Ledger ?

Answer :

Accounting experts, mainly those who've managed ledgers or had jobs as complete-rate bookkeepers for more than more than one years, need to be able to speculate in this situation. A candidate with more formal education specific to auditing or fraud analysis will probably give an explanation for this thoroughly and be able to offer examples.

Accounts and Finance for Managers Interview Questions
Question 6. Which Enterprise Resource Planning (erp) Systems Have You Used ?

Answer :

Most specialists, particularly people with revel in running for medium to big companies, need to have a solution for this. A response would possibly consist of any of the following: Hyperion, Microsoft Dynamics GP or Oracle Enterprise Manager. For access-stage candidates, you may turn this into a dialogue of accounting certifications and destiny education opportunities. For instance, ask which ERP systems they would like to grasp. Discussion of these gear, how the applicants found out them and placed them to paintings, and what programs your company makes use of will monitor how much, if any, education is probably wished.

Question 7. What Is The Difference Between A Trial Balance And A Balance Sheet ?

Answer :

Trial balance is a list of balances from the ledger account even as stability sheet is a statement of belongings and liabilities.

Trial stability incorporates balances of all private, real and nominal bills, whilst balance sheet carries balances of best the ones private and real bills which represent belongings and liabilities.

Trial stability is prepared earlier than education of trading and income and loss account, at the same time as balance sheet is prepared after the guidance of trading and profit and loss account.

Trial stability is ready to check the arithmetical accuracy of posting into ledger whilst balance sheet is ready to signify the monetary role of the business on a selected date.

Debt and credit balances are shown side via side while balance sheet is prepared on a T form foundation, the left hand facet showing liabilities even as right hand side representing assets.

Closing stock does no longer appear within the trial balance at the same time as it's miles proven on the assets aspect of stability sheet.

Accounting Basics Tutorial Accounts Receivable Interview Questions
Question 8. What Do You Consider The Top Three Skills Of A Great Accountant ?

Answer :

Yes, you’re seeking out someone with numerical capabilities, however no longer necessarily a mathematician. You also need someone with analytical expertise, who can talk with others. Look for responses that display a recognition of the significance of general enterprise information, era information, management skills, customer support orientation and specialised enjoy that could practice to the position.

Question nine. What Items Are Included In Profit And Loss Account ?

Answer :

Salaries
Rent
Rates and Taxes
Interest
Commission
Trade Expenses
Printing and Stationery
Advertisement
Carriage out, freight out, carriage out
Repairs
Travelling prices
Samples
Depreciation
Apprentice top rate
Life coverage top rate
Insurance top rate
Income tax
Interest on capital and drawings
Loss or gain on asset bought
Discount received and allowed
Trade bargain
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Question 10. What Is The Difference Between Cash Discount And Trade Discount ?

Answer :

Cash cut price is an allowance made by means of stores to the clients for spark off charge. On the other hand, change cut price is an allowance made by using the wholesaler dealer to retailers off the catalogue or bill charge. This allowance is made among clients and dealers engaged in the equal class of change.

Cash cut price is constantly allowed or received whilst price is made. Trade cut price enables the retailers to sell the products to clients at catalogue or charge list issued by using the wholesaler.

Cash cut price is an allowance in addition to the alternate discount made by using the seller to the purchaser.

Cash bargain is recorded in account books whilst trade cut price isn't proven one at a time.

The essential cause of allowing exchange cut price is to enable the shops to promote the products at list price while the purpose of supplying cash discount is spark off payment with the aid of the debtor to the creditor.

Question eleven. What Is The Adjustment Entries Made While Preparing The Final Accounts From The Trial Balance ?

Answer :

Closing Stock
Depreciation
Outstanding Expenses
Prepaid Expenses
Accrued Income
Income obtained in advance
Bad Debits
Provision for Doubtful Debts
Provision for Discount on Debtors
Interest on Capital
Drawings
Deferred Revenue Expenditure Written off
Abnormal Loss because of fire and so on.
Goods dispensed as loose samples
Goods sent on approval basis
Commission payable to the manager
Chartered accountant Interview Questions
Question 12. What Is Bank Reconciliation Statement? What Are The Steps To Prepare It ?

Answer :

Bank reconciliation statement is a announcement organized at periodical durations, that allows you to indicated the items which purpose war of words between the balances as according to the bank columns of the cash e book and the financial institution skip book on any given date. 

Follow the beneath steps to prepare a bank reconciliation announcement

Take the stability both as in line with cash book or as in keeping with bypass book as a place to begin.
Compare the objects appearing in the bank column of the coins ebook with the item acting inside the bank pass ebook.
Tick off the items within the skip book with the entries inside the coins book. A list of unticked items both in cash e-book or skip e-book could be determined.
Add or deduct items from the stability which has been taken as a starting point.
The resultant parent can be the stability as proven with the aid of the pass e-book or vice versa.
Accounts Interview Questions
Question thirteen. What Are The Accounting Concepts ?

Answer :

Accounting principles are the primary assumptions on which the technique of accounting is based totally. 

Following are the accounting concepts

Business Entity Concept
Dual Aspect Concept
Going Concern Concept
Accounting Period Concept
Cost Concept
Money Measurement Concept
Matching Concept
Question 14. What Is Deferred Revenue Expenditure? Give Some Examples. ?

Answer :

Deferred Revenue Expenditure is a type of expenditure which does now not end result into the purchase of any constant asset and the advantages from such expenditure is not acquired in the course of the duration which they are paid for. 
For example: Initial Advertisement Expenditure, Research and improvement Expenditure, Preliminary Expenses.

Question 15. What Is Accounting Ethics ?

Answer :

Accounting ethics is ordinarily a subject of implemented ethics, the study of ethical values and judgments as they observe to accountancy. It is an instance of professional ethics.

Accounting Reports Interview Questions
Question sixteen. What Is Creative Accounting ?

Answer :

Thinking out of doors the container” while such exercise isn't approved. Creative accounting is truely an amazing description of the practice, as it tends to create a photo, which isn't always technically accurate from the perspective of the data's meant consumer.

Question 17. What Is Fiduciary Accounting?

Answer :

Proper accounting for belongings this is entrusted to the fiduciary appearing underneath the conditions set forth in a deed

Accounting Principles Interview Questions
Question 18. What Is Accounting Transaction ?

Answer :

A transaction is an execution of a person program and is visible through the DBMS as a chain or listing of actions. The moves that may be done via a transaction consist of the analyzing and writing of database.

Accounts and Finance for Managers Interview Questions
Question 19. What Are The Uses Of Journal In Accounting ?

Answer :

The magazine is maximum typically used to document corrections to mistakes that have been made in writing up the overall ledger debts

Question 20. What Is Account In Accounting ?

Answer :

A account is the approach used to visualize the debit credit score accounting method. The account can represent any account regardless of expense, sales, asset, or liability. The debits are located the left facet and the credits on the proper.

Question 21. Explain Which Accounting Applications Are Your Familiar With ?

Answer :

Discuss the applications you've got worked with. Focus on the way you applied the software, the stairs taken in the course of the conversion and integration of the accounting gadget and the schooling of personnel to use the application.

Question 22. What Is An Accounting Transaction ?

Answer :

An accounting transaction is the exchange of request/reaction messages to perform accounting. Accounting can be executed within the shape of accounting transactions that report on aid utilization through a session. Accounting transaction can arise at some point of a session if accounting or charging symptoms are wished [p&l based acct] or best at the start and the give up of the session.

Question 23. What Are The Different Fields Of Accounting ?

Answer :

There is one discipline of accounting, but there are numerous one of a kind jobs inside the field which include auditor, bookkeeper, payroll accountant, value accountant, tax accountants, and so forth. Accountants put on many hats and often do special responsibilities for different clients.

Question 24. What Are The Effects Of International Accounting Standards On Accounting Practices Of Developing Nations ?

Answer :

Adoption of international accounting requirements is extraordinarily costly. Developing counties normally use accounting requirements which might be maximum beneficial to them (based on who they exchange with to ease accounting for transactions) or simply another u . S . A .'s GAAP that works for the growing u . S . A .. Ex. Mexico very carefully resembles U.S. GAAP due to NAFTA and the pleasant of U.S. GAAP.

Should IFRS be implemented in developed counties, developing counties is probably pressured to undertake them as well so that it will preserve alternate family members. This could be extraordinarily expensive for smaller growing counties.

Accounts Receivable Interview Questions
Question 25. Why Are Accounting Standards Necessary ?

Answer :

Accounting standards are important to promote excessive great monetary reporting. The essential role of accounting is to communicate financial facts approximately agencies and other company to numerous stakeholders consisting of authorities, traders, shareholders, providers, creditors, customers, and the general public. These stakeholders use such data to take decisions and to assess the stewardship of people appointed to control such corporations. If this information were not of a excessive best widespread, then the stakeholders could be not able to take effective selections with a purpose to gain them. For example, if a monetary document have been manipulated to expose better income, buyers might keep directly to their stocks with the perception that the company is doing properly.
Accounting requirements got here to be evolved from the mid sixties onwards to sell the integrity of the accounting profession by using way of making sure uniformity within the way accountants record transactions of their books and in their preparation of the final money owed of businesses. This is basically geared toward boosting the confidence of stakeholders, mainly shareholders and ability investors inside the accounting profession.
Good and useful records need to have the essential characteristics of understandability, comparability, relevance, and reliability in an effort to play its position correctly.
Accounting standards serve to sell the understandability, comparability, relevance, and reliability of financial reviews.
Question 26. What Is The Relationship Between Cost Accounting Financial Accounting And Managerial Accounting ?

Answer :

Financial accounting pertains to the information offered primarily based on past occasions and information.

Cost and managerial accounting is the presentation of financial facts to the control for use in selection making whilst in managerial accounting projections are made based on past tendencies.

Financial accounting pertains to the data offered based totally on beyond activities and records.

Cost and managerial accounting is the presentation of economic records to the control to be used in decision making while in managerial accounting projections are made based on past tendencies.

Question 27. Explain Convention Of Materiality ?

Answer :

This conference proposes that even as accounting for the diverse transactions, most effective the ones transactions can be taken into consideration which have cloth effect on profitability or monetary status of the employer and other insignificant transactions may be forget about. In preserving with the principle of materiality, unimportant objects are either set free or merged with other items. Sometimes, such items are shown as footnotes or in parentheses in keeping with their relative significance.

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Question 28. What Is Contingent Liabilities ?

Answer :

Contingent liability is an responsibility, referring to a beyond transaction or different occasion or condition, which could rise up in consequence, as a future occasion now deemed feasible but not in all likelihood. Thus such liabilities as may also stand up in destiny are called contingent liabilities. For instance: assure to a bank for loan advanced to a third birthday celebration, viable penalties, fines and penalties payable to the authorities or earnings tax authorities etc. Future losses from natural calamities are not contingent liabilities. They are not recorded in books of account. They do no longer appear on the liabilities side of the stability sheet. They are proven with the aid of way of a footnote at the bottom of the balance sheet.

Question 29. What Is Debit Note And Credit Note? What Is The Difference Between Them ?

Answer :

Debit word is an intimation despatched to someone managing the business that his account is being debited for the cause indicated therein. It is a word made out with a carbon reproduction. The authentic one is despatched to the party to whom the goods are lower back and the reproduction replica is kept for office file.

Credit be aware is an intimation despatched to someone handling the enterprise that his account is being credited for the cause indicated therein.

Question 30. What Is Double Entry Bookkeeping? What Are Its Rules?

Answer :

Double access bookkeeping follows the principle consistent with which every debit has a corresponding credit; subsequently total of all debits is usually equal to the entire of all credit. In this machine, one account is debited and at the identical time another account is credited through the same amount.

Question 31. What Is Accounting ?

Answer :

Accounting is a method or machine used to hold song of and determine the economic reputation of a person or agency's profits/belongings and outlay of cash/possessions. (An Accountant engages in Accounting: “The profession of preserving and auditing facts and preparing monetary reports for a commercial enterprise”

Question 32. Explain What Is Accounting Normalization ?

Answer :

It is getting rid of items from the earnings statement or stability sheet that don't normally arise throughout the course of enterprise to better estimate the value of a business enterprise.

Question 33. What Is An Accounting Loss?

Answer :

It is whilst sales are much less than fees.

Chartered accountant Interview Questions
Question 34. What Does The Abbreviation Dr Mean In Accounting ?

Answer :

‘Dr' method Debere in Latin stands for ‘what comes in' or in easy words some thing assets the commercial enterprise owns or the fees it has to pay comes below debit.

While ‘cr' method credere in Latin means ‘what is going out', in simple phrases some thing liabilities business owns, or the income it earned at some stage in the yr comes underneath credit.

Question 35. What Is An Ea In Accounting ?

Answer :

EA stands for Enrolled Agent. It is a certification via the Internal Revenue Service given to those certified to exercise before them. To grow to be an EA, one ought to bypass a take a look at given with the aid of the IRS, the cause of which is to try to make certain that best certified people exercise earlier than the IRS. You might not be a Power of Attorney for the IRS except you are an EA or some different licensed character along with a CPA or an legal professional.

Question 36. What Is The Distinction Between Cost Accounting And Management Accounting ?

Answer :

Cost accounting is concerned with price accumulation for inventory valuation to fulfill the necessities of outside reporting and inner income size.

Management accounting pertains to the availability of appropriate data for decision-making, planning, manage and performance assessment.

Accounting Reports Interview Questions
Question 37. What Is Owner’s Equity? How Will You Calculate It ?

Answer :

Owner’s fairness, additionally referred to as capital of the business is the claim of the proprietor of the commercial enterprise in opposition to the belongings of the business. Owner’s fairness is calculated by means of subtracting fairness of lenders from the total equity.

Question 38. What Is Accounts Payable Cycle ?

Answer :

Demonstrate your understanding of this cycle – the period of time it takes the corporation to pay its debts payable – and what the implications of the period of this cycle are for the business enterprise, as an example coins drift.

Question 39. What Is The Difference Between The Accrual Accounting And Cash Accounting ?

Answer :

The Cash Basis of accounting reviews most effective transactions which have been completed inside the modern reporting period – or – what has “hit” the bank account (assuming all budget are deposited and disbursed handiest from that account) – The Accrual Basis of accounting reports all transactions that the entity has entered into and consists of the asset, legal responsibility, income and expense related them.

In addition, the Cash Basis of accounting is taken into consideration OCBOA (Other Comprehensive Basis of Accounting ~ Other than GAAP) and the Accrual Basis (whilst implemented nicely and fully) is considered GAAP (Generally Accepted Accounting Principles).

EDIT – The Accrual Basis is greater suitable from a person's point of view because it includes transactions which can exist have been finished after the file dates that have been initiated previous to the file date. It is usually extra whole and extra reliable than the coins foundation – however, that does assume that the person making ready the statements has understanding of, now not virtually a cursory operating knowledge of, GAAP and the accrual foundation. For example, a set of monetary statements printed out of QuickBooks are not always GAAP compliant (or correct) even though they may look like before everything look or to a layperson.

Question forty. What Are Accounting Principles ?

Answer :

The Accounting Principles are the announcement regulations of accounting and the software of these guidelines, approach, & processes to actual exercise of accounting.

These Accounting standards were divided into

A. Accounting concepts

B. Accounting conventions

Accounting Principles Interview Questions
Question forty one. What Is Computerized Accounting ?

Answer :

Accounting is the technique in which financial statistics is accumulated, processed, and summarized into economic statements and reviews.

The reason of accounting is to offer facts utilized in choice-making. Accounting can be regarded as a gadget (a system) that converts facts into useful data.

Information tactics consist of:

Recording
Maintaining
Reporting
Every business has numerous procedures. Some are easy, others complex and cumbersome. However, as the enterprise grows, acquires new clients, enters new markets, and maintains pace with regular modifications in statutory rules… the enterprise will need to maintain quite correct and up-to-date accounting, inventory, and statutory data.

This is where a automated accounting enables simplify, integrate, and streamline all the commercial enterprise strategies, cost-correctly and effortlessly.

Question 42. What Is Accounting Management ?

Answer :

Accounting Management (Business) is the realistic utility of management techniques to govern and report on the financial fitness of the employer. This involves the analysis, making plans, implementation, and manipulate of programs designed to provide economic statistics reporting for managerial decision-making. This consists of the renovation of financial institution money owed, developing economic statements, cash go with the flow, and financial overall performance analysis. Accounting management is a mandatory knowledge module of any MBA application.

Accounting (IT) management: Accounting is frequently called billing management. The aim is to gather usage facts for customers.

Using the statistics the customers can be billed and usage quota may be enforced.

Examples:

Disk usage
Link usage
CPU time
Question forty three. Explain Me What Is Executive Accounting ?

Answer :

Executive Accounting is designed for service type companies that require a sophisticated accounting machine, yet simple to use accounting system. Executive Accounting consists of many advanced functions consisting of three types of invoicing (carrier, distribution and recurrent), multi-currency talents, a couple of financial institution account abilities and different effective capabilities. Executive is a unmarried-consumer machine that may be upgraded to a vast variety of users.

Question 44. Explain What Are The Functions Of Accounting ?

Answer :

Accounting entails the introduction of monetary data of commercial enterprise transactions, glide of finance, the system of making money in an enterprise, and summarizing the economic function of a business at a given moment in time.

Question forty five. What Are The 4 Phases Accounting ?

Answer :

1. Recording

2. Classifying

3. Summarizing

4. Interpreting

Question forty six. What Is Normative Accounting ?

Answer :

Normative Theory is a principle that prescribes how a method of accounting must be accomplished. This principle isn't always based totally on commentary and can advocate radical modifications to current practices in accounting

Question 47. Who Uses Accounting ?

Answer :

Taxpayers like to use accounting

Question forty eight. What Are Accounting Entities ?

Answer :

Accounting entities are as an example a business do no longer get these blended up with criminal entities

Question 49. What Are The Different Branches Of Accounting ?

Answer :

Following are distinctive branches of accounting:

1.Cost Accounting

2. Financial Accounting

three.Management Accounting

Question 50. Why Do Users Of Accounting Information Need Accounting Information ?

Answer :

External users of accounting information (mainly traders) use accounting information like annual and quarterly reviews to base their investing decisions on, and to examine distinct companies with each other.

Internal customers of accounting (frequently managers) use internal accounting facts so as to plot.

Question 51. What Is The Difference Of Cost Accounting And Financial Accounting ?

Answer :

Financial accounting encompasses all account provided on the face of the monetary statement, its presentation, reputation, size and disclosures. Where as fee accounting is handiest centered at the value of stock.

Question 52. Explain Each Real Account And Nominal Account With Examples ?

Answer :

Real Account is an account of property and Liabilities. 

Types of Real account

Furniture Account
Land Account
Machinery Account
Building Account
Goodwill Account
Patents & Trade Marks Account.
Nominal Account is an account of earning or fees. 

Types of Nominal account

Salary Account,
Commission Paid/Received Account,
Telephone Expenses Account,
Wages Account,
Printing & Stationery Account,
Interest Paid/Received Account.