Business Accountant Job Interview Questions
Q.1 Give examples of real and nominal accounts.
Real account is primarily an account of assets and liabilities, such as land account, building account, etc. On the other hand a nominal account is an account of income and expenses such as salary account, wages account, etc.
Q.2 What are the ways to maintain accounting accuracy?
One of the most important activity for an organization is to maintain the accuracy of an organisation’s accounting. There are different tools and resources that can be used to limit any potential errors and thereby rectify quickly if any errors do arise.
Q.3 Is it possible for an organization to show positive cash flow and still be in trouble?
Yes it is possible, if it shows an unsustainable improvement in the working capital and involves lack of revenue moving forward in the pipeline.
Q.4 What are the most common errors in accounting?
Some of the most common errors in accounting are – Errors of omission, Errors of commission, Errors of principle and Compensating errors.
Q.5 Give the difference between inactive and dormant account?
Inactive accounts are those accounts that have been closed and will not be used in the future. On the other hand dormant accounts are not currently functional but can be used in the future.
Q.6 Are accounting standards mandatory?
Accounting Standards play a key role in preparing a good and accurate financial report. Since accounting ensures reliability and relevance in the financial reports.
Q.7 If i present you with a statement:– “Debit the Receiver, Credit the Giver," what does it means?
So, this is one of the most frequently asked accounting interview questions. Your reply should be – This principle is used in respect to the 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
Q.8 What is the minimum number of ledgers an Organization needs, If the organisation has three bank accounts for processing payments?
I'd say, three ledgers for each account for proper accounting and reconciliation processes.
Q.9 To estimate bad debts, what are some of the ways?
Percentage of outstanding accounts, aging analysis and percentage of credit sales, are some of the well known ways of estimating the bad debts.
Q.10 Can you answer what is a deferred tax liability?
Yes, The situation where a company is in condition to pay more tax in the future due to current transactions, is signified as Differed tax liability.
Q.11 Please explain what is a deferred tax asset and how is the value created?
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
Q.12 Please define the term Material Facts?
Yes, The documents such as: vouchers, bills, debit and credit notes, or receipts, etc. are considered as material facts. They serve as the base of every account book.
Q.13 Lets consider the Double Entry System, what are the different stages of it?
There are three different stages of double entry system, which are – 1.) Recording transactions in the accounting systems 2.) Preparing a trial balance in respective ledger accounts 3.) Preparing final documents and closing the books of accounts
Q.14 Are there any disadvantages of a Double Entry Systems?
Yes, there a few disadvantages when it comes to Double Entry Systems: Difficult to find the errors, especially when transactions are recorded in the books And extensive clerical labor is required, in case of any error One can’t disclose all the information of a transaction, which is not properly recorded in the journal
Q.15 What is GAAP?
Generally Accepted Accounting Principles (GAAP) abbreviated as GAAP, is 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
Q.16 Can you tell me some examples for liability accounts?
Yes, there are some popular examples of liability accounts: 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
Q.17 Name the most preferred accounting application by you and why?
I think all are good though, but Microsoft Accounting Professional is best because it offers reliable and fast processing of accounting transactions that saves time and increases proficiency. It helps with financial analysis as well.
Q.18 Do you know anything regarding GST?
Yes, As the definition says the GST stands for Goods and Service Tax. It's an indirect tax other than the income tax. It charges on the value of the service or product sold to a customer. The customer/clients pay the GST, and the seller deposits the GST with the government. Some countries around the Globe have sales, service tax with works more or less the same as GST.
Q.19 What is tally accounting?
It is an accounting software used by small business and shops to manage routine accounting transactions.
Q.20 What are fictitious assets?
Fictitious assets are intangible assets and their benefit is derived over a longer period, for example good will, rights, deferred revenue expenditure, miscellaneous expenses, preliminary expenses, and accumulated loss, among others.
Q.21 Is there any difference between inactive and dormant accounts?
Yes, both are different terms in accounting. The accounts have been closed and will not be used in the future as well are known to be as Inactive accounts. While on the other hand the dormant accounts are those that are not functional today but may be used in the future.
Q.22 Differentiate between Accounting and Auditing?
Accounting is all about recording daily business activities while on the other hand auditing is all about checking that whether all these events have been noted down correctly or not.
Q.23 Please define dual aspect term in accounting?
The dual aspect concept states that every transaction has two sides as implied by its name. For example, when you buy something, its a give and take of cash and the commodity. Similarly, when you sell something, you lose the possession of that thing and receive money in return. So this gaining and losing are basically the two aspects of every transaction.
Q.24 Have you ever Prepared any MIS reports, if yes then what are they?
Yes, During my previous jobs, I 'have prepared a few MIS reports. MIS reports are created to identify the efficiency of any department of a company or an organization.
Q.25 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."
Q.26 Can you tell what is working capital?
The Working capital can be defined as current assets minus current liabilities. In banking, working capital is normally defined more narrowly as current assets less current liabilities.
Q.27 Who has the authority to remove the first auditor before the expiry of term?
The shareholders in a general meeting
Q.28 Who regulates the money circulation in India?
RBI
Q.29 Who will settle the greivances of customers of a bank?
Ombuds Men
Q.30 When did the Indian Banking Act came into force?
1949
Q.31 The cost of erection of an old machine will be posted in the credit side of which account?
Cash Account
