Top Interview Questions on Accounting with Answers6 min readReading 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.
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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.
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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.