Interview Questions

Top Interview Questions on Accounting with Answers6 min read

December 28, 2019 5 min read
accounting interview questions

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Top Interview Questions on Accounting with Answers6 min read

Read­ing Time: 5 min­utes

An inter­view is a nerve-wrack­ing time for all can­di­dates irre­spec­tive of their expe­ri­ence or field. This is a moment where one must come to prove that their skills and knowl­edge meet up to the stan­dards and require­ments of the inter­view­er. As dif­fi­cult as it may be, there are always those who have been through this before you and can thus pro­vide you with a look into what the process is like­ly to be and what can be asked of you or from you.

So let us focus on a spe­cif­ic field and look into what are the inter­view­ers seek­ing in the field of account­ing appli­ca­tion. Account­ing inter­view can cov­er every­thing from the­o­ret­i­cal to prac­ti­cal ques­tions. It could cov­er pri­ma­ry account­ing process­es like finan­cial account­ing, fixed assets, lia­bil­i­ty accounts, ledger accounts, type of account­ing, accounts receiv­able, accounts payable, etc.

As a result, it is very cru­cial to clear your basics about account­ing. While there are things that can only be learned by prac­ti­cal expe­ri­ence, the­o­ret­i­cal knowl­edge also holds great impor­tance.

Here is a brief glimpse into the pos­si­ble job inter­view ques­tions on account­ing for those who are right out of col­lege and look­ing for a job, sit­ting for inter­views.

Search for all cur­rent & upcom­ing Account­ing Jobs. Click here to find thou­sands of Account­ing Jobs in India.

Interview Questions on Accounting with Answers:

Q. Is there more than one kind of business transactions in accounting? If yes, name them.

A. Yes, rev­enue and cap­i­tal are the two kinds of busi­ness trans­ac­tions in account­ing.

Q. Explain and give examples of real and nominal accounts?

A. An account made up of assets and lia­bil­i­ties is a real account while one made up of income and expens­es is a nom­i­nal one. An exam­ple of the for­mer is a land account while that of the lat­ter is a wages account.

Q. Name some accounting platforms you know of?

A. Fresh­Books, Sage 50Cloud, Net­Suite ERP, Quick­Books Enter­prise, Tipalti, Zoho Books, Gus­to, FreeAgent, Sage Busi­ness Cloud Account­ing, Xero, ADP Work­force Now.

Q. Double-entry bookkeeping rules are specific. What is it and what are they?

A. An account­ing prin­ci­ple where each deb­it entry has a cor­re­spond­ing cred­it entry to bal­ance the books is known as dou­ble-entry book­keep­ing. The rule states that the total deb­it must always equal the total deb­it. This is pos­si­ble by not­ing that every deb­it from some account leads to cred­it in some oth­er account.

Q. Define working capital?

A. When we sub­tract cur­rent lia­bil­i­ties from cur­rent assets, the amount cal­cu­lat­ed is used for day to day trad­ing and is known as the work­ing cap­i­tal.

Q. How can accuracy be maintained in accounting?

A. To avoid loss­es it is impor­tant that com­plete accu­ra­cy is main­tained in account­ing for a com­pa­ny or even a per­son. There­fore, it is best that the laid town tools and process­es are used in order to ensure errors are not made and cor­rect­ed if made.

Q. What do you understand by TDS and where is it shown in the balance sheet?

A. The Tax deduct­ed at Source (TDS) is a con­cept that was inter­cept­ed to col­lect tax from peo­ple and legal enti­ties at each source of income to ensure tax is not evad­ed or mis­cal­cu­lat­ed. When it comes to a bal­ance sheet, the same is record­ed as an asset fol­low­ing the head of cur­rents assets.

Q. What differentiates a trial balance from a balance sheet?

A. Arith­meti­cal accu­ra­cy in not­ing all bal­ances in a ledger in their record­ing and post­ing is the iden­ti­ty and role of a tri­al bal­ance. Con­trary to this is a bal­ance sheet where all the assets, lia­bil­i­ties, and equi­ty of a com­pa­ny are list­ed to know its finan­cial posi­tion on the giv­en date. It is also true that the for­mer is an inter­nal doc­u­ment to a com­pa­ny while the lat­ter needs to statu­to­ri­ly be pub­lished.

Q. When is a company that has a positive cash flow in trouble?

A. This sit­u­a­tion may devel­op if there is an unsus­tain­able improve­ment in the work­ing cap­i­tal but there is a seri­ous lack of rev­enue in the pipeline for the future.

Q. Are dormant and inactive accounts different?

A. The dif­fer­ence between the two is that of per­ma­nence. The for­mer is tem­porar­i­ly not being used but will be even­tu­al­ly but the lat­ter is one that is closed and will nev­er be used going for­ward.

Won­der­ing what does an accoun­tant do? Click here to read about accoun­tant job descrip­tion, qual­i­fi­ca­tions, key skills & more.

Q. Can you list the Accounting Standards?

A. There are cur­rent­ly 41 Account­ing Stan­dards that have been issued by the Account­ing Stan­dards Board (ASB). The manda­to­ry ones from these are:

  • AS1 Dis­clo­sure of Account­ing Poli­cies
  • AS2 Val­u­a­tion of Inven­to­ries
  • AS3 Cash Flow State­ments
  • AS4 Con­tin­gen­cies and Events Occur­ring After Bal­ance Sheet Date
  • AS5 Net prof­it or loss for the peri­od, Pri­or Peri­od Items and Changes in Account­ing Poli­cies
  • AS7 Con­struc­tion Con­tracts
  • AS9 Rev­enue Recog­ni­tion
  • AS10 Prop­er­ty, Plant and Equip­ment
  • AS11 The Effects of Changes in For­eign Exchange Rates
  • AS12 Gov­ern­ment Grants
  • AS13 Account­ing for Invest­ments
  • AS14 Account­ing for Amal­ga­ma­tions
  • AS15 Employ­ee Ben­e­fits
  • AS16 Bor­row­ing Costs
  • AS17 Seg­ment Report­ing
  • AS18 Relat­ed Par­ty Dis­clo­sures
  • AS19 Leas­es
  • AS20 Earn­ings Per Share
  • AS21 Con­sol­i­dat­ed Finan­cial State­ments
  • AS22 Account­ing for Tax­es on Income
  • AS23 Account­ing for Invest­ments in Asso­ciates
  • AS24 Dis­con­tin­u­ing Oper­a­tions
  • AS25 Inter­im Finan­cial Report­ing
  • AS26 Intan­gi­ble Assets
  • AS27 Finan­cial Report­ing of Inter­ests in Joint Ven­tures
  • AS28 Impair­ment of Assets
  • AS29 Pro­vi­sions, Con­tin­gent Lia­bil­i­ties, and Con­tin­gent Assets

Q. Why are the Accounting Standards mandatory?

A. The applic­a­bil­i­ty of these stan­dards ensures that accu­rate, reli­able and rel­e­vant finan­cial reports are cre­at­ed by com­pa­nies and peo­ple there­fore, they play a very impor­tant role.

Q. What can you tell me about GST?

A. The Goods and Ser­vice Tax (GST) is a form of indi­rect tax apart from the Income Tax. This is charged by the sell­er to the cus­tomer and is cal­cu­lat­ed on the val­ue of the product/ ser­vice and its cat­e­go­riza­tion by the gov­ern­ment. Then the sell­er should deposit the same to them.

Q. Can you name some of the most popular accounting concepts?

A. Some of these con­cepts are:

  • Account­ing Peri­od Con­cept­Busi­ness Enti­ty Con­cept­Cost Con­cept­D­ual Aspect Con­cept­Go­ing Con­cern Con­cept­Match­ing Con­cept­Money Mea­sure­ment Con­cept

Q. Can you name some common errors in accounting?

A. Some of the most com­mon errors in account­ing can be:

  • Error of omis­sion
  • An error of orig­i­nal entry
  • Error of com­mis­sion
  • An error of account­ing prin­ci­ple
  • Com­pen­sat­ing error
  • An error of entry rever­sal
  • Error of dupli­ca­tion

Q. What are the principal financial accounts in an Organization?

  • Prof­it & Loss account: These accounts depict the results of busi­ness oper­a­tions through a cer­tain peri­od. It cov­ers the rev­enues, the costs involved as well as the sur­plus or deficit.
  • Bal­ance Sheet: This tells the posi­tion of assets as well as lia­bil­i­ties as on a par­tic­u­lar date. It is impor­tant to assess what is owned by the con­cern in con­trast to what it owes to the stake­hold­ers.
  • Cash Flow State­ment: This finan­cial account depicts the flow of cash into and out of the three major activ­i­ties of oper­a­tions, financ­ing as well as invest­ing.

These sets of ques­tions are not an exhaus­tive col­lec­tion of inter­view ques­tions on account­ing and thus you should study as much as you can for that. Just like any oth­er field, there are always more things to learn and dis­cov­er in the account­ing field as well. So keep your choic­es open and nev­er miss an oppor­tu­ni­ty to expand your hori­zon.

We wish you the best of luck with your inter­view.

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Anshi Agarwal is a Computer Science Engineer. She is specialized in Digital Marketing. She loves to do research & write content that is focused on Career, as well as, Job Search.