Accounting Interview Questions and Answers
Categories: Accountancy
Tell me about yourself!
The employer’s intention is none other than to break the ice and get to know you a little better to steer the conversation in the direction you want. Without a doubt, this is why it is so important. In your answer, you must give examples of circumstances and moments in your life that led you to the accounting field. Were you the treasurer of your soccer team when you were a child? Have you saved for months to buy a car? Anything goes to make a positive first impression.
What are the different types of accounting?
Different types of accounting are –
Financial Accounting – This branch of accounting records, summarises and reports the business transactions that take place over a time period in an organisation. It is required in both the private and public sectors.
Administrative Accounting – Administrative accounting is focused on the administrative aspects of the company and is used above all to assess the fulfilment of the established objectives and improve the implemented strategy. It is very useful for making forecasts and planning the actions and resources to be used.
Tax Accounting -Tax accounting helps to register and prepare reports related to tax returns to the public treasury and payment of taxes.
Cost Accounting – This type of accounting is more focused on companies of an industrial nature. It helps to make a detailed analysis of the unit costs of production, sales, and, in general, the production process that the company carries out.
Management Accounting – Management accounting has a broader vision than cost accounting since it records all the economic and financial information of the company to be able to make short-term and long-term decisions.
Which accounting platforms have you worked on? Which one do you prefer the most?
Describe the accounting platforms (QuickBooks, Microsoft Dynamic GP, etc.) that you have worked with and which one you liked the most.
Show you have a good understanding of the accounting platform you use. You can further specify what type of businesses use them. Generally, small and growing enterprises use the affordable plan of QuickBooks Online for creating invoices, tracking expenses and utilising the software’s built-in reports.
What is working capital?
Working capital is calculated as current assets minus current liabilities, which is used in day-to-day trading.
In a simple accounting scheme, the concept of working capital focuses on the capital resources that a given company can count on in the short term to operate. These resources owned by the company are the cash, the portfolio of financial products, and other investments made by the company.
Give a suggestion to improve the company’s working capital flow.
In my opinion, the stock on hand can be the key to improving the working capital of the company. Of all the components of working capital, the stock is something we can control. We can pressure our debtors to pay us instantly, but we cannot have direct control over them because they are separate legal entities and, in the end, they are the ones who give us business.
We may tend to delay payments from our suppliers, but it ruins business relationships and hinders goodwill in the industry. Also, if we delay payments, they may not supply goods in the future. Maintaining liquidity in the form of funds in the bank can help the flow of working capital, but it comes at an opportunity cost.
How do you maintain accounting accuracy?
Maintaining the accuracy of an organization’s accounting is an important activity as it can result in a huge loss. There are various tools and resources which can be used to limit the potential for errors to creep in and address them quickly if any errors do arise. My favourite is MS Excel.
Some of the most common ways of maintaining accuracy in accounting are:
- Identify revenue streams
- Keep a close eye on invoices and receipts
- Prepare tax returns to avoid penalty
- Prepare financial statements
- Keep tabs on deductible expenses
Since you mentioned that MS Excel is your favourite, please give us three cases where Excel will make your life easier.
Mention these three advantages for this common accounting interview question.
- Excel saves a lot of time. Automating repetitive and predictable tasks with macros is one example. This allows one to format, filter and analyse vast sets of data within seconds.
- Excel is highly customisable. Accountants need to create reports with tables and charts in excel. The same can be re-used for creating other reports without having to use or create new templates.
- Excel is convenient in comparing financial datasets. It helps one in tracking financial records and see from which source the cash flow is generating.
What is TDS? Where do you show TDS on a balance sheet?
Ans. TDS (Tax Deducted at Source) is a concept aimed at collecting tax at every source of income. In a balance sheet, it is shown in the assets section, right after the head current asset.